Motion Practice

Failure to Confirm Judgment Leads to Defense Victory (NY)

When a plaintiff obtains a default judgment against a defendant, sometimes the fight is far from over. While the discretion ultimately remains with the court, a default judgment may be vacated against a defendant, or an inquest will be held if the motion to vacate is denied. However, even after an inquest is held and damages are determined, a plaintiff must submit a notice of settlement and proposed judgment within 60 days or else it will be void. 22 NYCRR 202.48(a) For example, in Cruz v. Pierce, 2022 NY Slip Op 07054 (2^nd Dep’t December 14, 2022) the plaintiff was injured while performing work at real property that was owned by the defendant. After being served with the summons and complaint, the defendant failed to answer. Plaintiff subsequently moved for leave to enter a default judgment. The Court not only granted the motion but directed an inquest for damages. At the close of the inquest, Plaintiff was entitled to recovering $274,541.54. The Court directed the plaintiff to settle judgment on notice. Thereafter, the plaintiff failed to submit a notice of settlement and proposed judgment until nearly 2 years after the order. Accordingly, the defendant moved to vacate the decision made after the inquest based upon the plaintiff’s failure to submit the notice of settlement and proposed judgment within 60 days as the Court directed them to. Accordingly, the Second Department granted the Defendant’s motion on the grounds that the plaintiff failed to timely settle the judgment pursuant to 22 NYCRR 202.48(a) and on plaintiff’s failure to show good cause for his lengthy delay in submitting the notice. This case shows that the procedural rules must always be followed – or not, at your own peril. Thanks to Lauren Howard for her contribution to this article.  Should you have any questions, contact Matthew Care.Read More

A Motion to Amend the Complaint in NY Leads to Dismissal of Action

When a plaintiff seeks to recover damages for personal injuries from the defendants and thereafter, moves for leave to amend the complaint, the Court must not only consider the motion for leave to amend but must also consider any defendant’s motion for dismissal. For example, in Langley v. Melville Fire Dist., 2023 NY Slip Op 00656 (2d Dep’t February 8, 2023), the plaintiff was standing in a roadway in Melville when he was struck by a tree limb that fell from a tree adjacent to the roadway. Plaintiff subsequently commenced a lawsuit against the defendants, Melville Fire District and Melville Fire Department to recover damages for personal injuries. The defendants moved pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action. Subsequently, the plaintiff cross-moved pursuant to CPLR 3025(b) for leave to amend the complaint. In opposition, the defendants’ argued the amended complaint should be dismissed because the evidentiary submissions demonstrated there was no cause of action for plaintiff to recover. The lower court held that the defendants’ motion should be denied, but the second department recently reversed this decision. The Second Department reasoned “[w]here a court considers evidentiary material in determining a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), but does not convert the motion into one for summary judgment, the criterion becomes whether the plaintiff has a cause of action, not whether the plaintiff has stated one, and unless the movant shows that a material fact as claimed by the plaintiff is not a fact at all and no significant dispute exists regarding the alleged fact, the complaint shall not be dismissed.” Accordingly, the Second Department held that the amended complaint was predicated on a special relationship existing between the plaintiff and Fire Department and the evidentiary proof established there was no special relationship wherein defendants had no duty to maintain or prune the tree because it was not on their land. As such, the Supreme Court should have granted the defendants’ motion to dismiss. Thanks to Lauren Howard for her contribution to this article.  Should you have any question, contact Matthew Care.Read More

Can A Verdict Render An Appeal Moot? (NY)

In a noteworthy decision, the Court of Appeals recently held that where a triable issue of fact is litigated and a final verdict reached, that issue of fact is rendered moot on pending appeal.  Meaning, if 1) a party moves for summary judgment on liability, 2) that motion is denied, 3) the movant appeals that decision, and 4) a trial verdict decides liability before the appeal is heard, that verdict becomes the law of the case, and the appeal is rendered moot.  This is a big deal. The recent decision of Bonczar v. American MultiCinema Inc., 38 N.Y.3d 1023, 1025, 188 N.E.3d 1000, reargument denied, 38 N.Y.3d 1170, 195 N.E.3d 526 (2022), presented a plaintiff who sought damages against the defendant for violating Labor Law §240(1) and moved for partial summary judgment on that claim. While the lower court granted plaintiff’s summary judgment motion, the Appellate Division reversed finding issues of fact as to whether a statutory violation occurred.  Subsequently, plaintiff’s Labor Law §240(1) was brought before a jury. At the conclusion, the jury held in favor of the defendant finding that plaintiff’s acts were in fact the sole proximate cause of his injury. The Appellate Division affirmed the jury’s verdict on appeal. Thereafter, plaintiff brought both the order denying his partial summary judgment motion and the order affirming the jury’s verdict before the Court of Appeals. The Court of Appeals held that pursuant to CPLR 5501(a) the denial of plaintiff’s summary judgment motion may be reviewed on appeal only if the nonfinal order necessarily affects the final judgment. In a matter of first impression, the court explained that to determine whether a nonfinal order necessarily affects the final judgment, the question is: “whether the nonfinal order necessarily removes a legal issue from the case so that there is no further opportunity during the litigation to raise the question decided by the prior non-final order.” The court explained that here, when the Appellate Division reversed the plaintiff’s motion for summary judgment, finding issues of fact, that nonfinal order did not remove any issues from the case; rather, it was left undecided. Instead, the parties had the opportunity to litigate those issues at trial, and in fact did so.   Therefore, the Court of Appeals held that the Appellate Division’s order denying plaintiff summary judgment did not necessarily affect the final judgment and thus, the Court of Appeals could not review it now on appeal. The decision is a big deal, because if a trial takes places while a summary judgment appeal is still pending — which can happen — the verdict trumps the appeal, and therefore.  Bonczar significantly reduces the leverage held by the appealing party in the scenario described above.    To that end, we recently attended a CAMP Conference at the 2nd Department, and the presiding judge was pressing the importance of Bonczar, to further incentivize settlement to all parties. Thanks to Gabi Scarmato for her contribution to this post.  For any questions about Bonczar, or how we expect it will be applied in the future, please contact Brian Gibbons.  Read More

Court Dismisses Defamation Suit Stemming From Negative Google Review (NY)

This past week, in DeRicco v Maidman, the First Department of the Appellate Division of the Supreme Court of New York reversed a trial court decision that denied a defendant patient’s motion to dismiss an orthodontist’s defamation claims against them.  The claims were brought by the orthodontist and his professional corporation against the patient and his parents after the parents posted an unfavorable (but anonymous) Google review. The First Department held that the review, which asserted that the orthodontist charged hidden fees, was not open during his stated business hours, and “did a horrible job” on the patient’s braces rendering the patient’s teeth “crooked and misplaced”, contained elements of both fact and opinion but was not actionable under New York law. Generally, NY courts presented with defamation suits must consider the “circumstances and [ ] the broader social context (i.e., the factual background)” to evaluate whether the message would be taken literally or figuratively by the ordinary person. Steinhilber v. Alphonse, 501 N.E.2d 550, 555 (N.Y. 1986). Here, the First Department considered the review in its overall context; for more than a decade, New York courts have noted that readers “give less credence to allegedly defamatory remarks published on the Internet than to similar remarks made in other contexts.” With this in mind, the court held that the review of the orthodontist posted by the patient’s parents would be understood by a reasonable reader to be “pure opinion” based on its anonymity and its “arguably loose, figurative, or hyperbolic tone.” Thus, the First Department ordered the trial court to dismiss the orthodontist’s complaint against the patient and his parents.   Thanks to Jason Laicha for his contribution to this post.   Please email Brian Gibbons with any questions about defamation claims and the defenses thereto.Read More

Summary Judgment Without Deposition discovery Permitted In NY Labor Law Case

Courts often deny early summary judgment motions on the basis that they are premature pending completion of discovery on the issues in dispute. In Lapota v. PPC Commercial, LLC, the Appellate Division, First Department took a different approach in examining a trial court’s decision to deny plaintiff’s early motion for summary judgment as to his Labor Law §240 (1) claim against the defendant. The Court based its determination on affidavits of the plaintiff and his co-worker which stated that plaintiff’s accident occurred when an unstable ladder he was using, which was missing rubber feet, shifted and caused plaintiff to fall. The work performed by the plaintiff was covered under Labor Law section 240 (1). In reversing the lower court’s decision, the First Department rejected defendant’s argument that plaintiff’s motion was premature since depositions had not been taken. The Court reasoned that though depositions were not taken, summary judgment was not precluded since the defendant failed to show that discovery might lead to facts that would support its opposition to the motion and that facts essential to its opposition were exclusively within the knowledge of the plaintiff. The Court did not agree with defendant’s argument that plaintiff’s deposition testimony might further illuminate issues raised by the affidavits. The Court reasoned that mere hope that evidence sufficient to defeat summary judgment may be uncovered during discovery was insufficient to defeat summary judgment. This case serves as a reminder of the vulnerability of defendants under the Labor Law and the importance of conducting prompt discovery in Labor Law cases where the possibility of early motion practice exists. Please contact John Diffley with any questions.Read More

Hope And Speculation Is Insufficient To Defeat Pre-Discovery Summary Judgment Motion (NY)

In Mauro v. City of New York, the Second Department recently addressed whether the defendants’ pre-discovery motions for summary judgment were premature. Plaintiffs in that case were involved in a motor vehicle accident when they came in contact with “an opening in the roadway caused by a missing manhole cover.” Defendants Keyspan Corporation and National Grid USA moved for summary judgment, introducing evidence to show that they were not the proper parties.

In reversing the Supreme Court’s denial of the motions, the Appellate Division held that plaintiffs’ contention that the motion was premature is without merit. “A party contending that a motion for summary judgment is premature is required to demonstrate that additional discovery might lead to relevant evidence or that the facts essential to oppose the motion are exclusively within the knowledge and control of the movant.” The court further held that “the mere hope or speculation that evidence sufficient to defeat a motion for summary judgment may be uncovered during the discovery process is insufficient to deny the motion.”

The Mauro case serves as a reminder that mere “hope or speculation” will not be enough to defeat a pre-discovery summary judgment motion, and that defendants should consider making such motions in appropriate cases.

Thank you to Corey Morgenstern for his contribution to this post. Please contact Andrew Gibbs with any questions.

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Court Rejects GC’s Summary Judgment Motion on Additional Insured Issue (NY)

In Gemini Insurance Company v. Certain Underwriters at Lloyd’s, et al. New York County Supreme Court examined whether a general contractor was entitled to additional insured coverage from a plaintiff’s employer, who was a third-party defendant in the underlying personal injury action.

Hernandez, an employee of Source, was injured while working at a jobsite.   Hernandez sued CM (general contractor) and Aventis (project owner).   A declaratory judgment action ensued, where plaintiff Gemini (CM’s insurer) sought a declaration that Lloyd’s (Source’s insurer) owed additional insured coverage to CM.

The court denied Gemini’s motion finding plaintiff did not establish all conditions to qualify as additional insureds were satisfied as Hernandez’s complaint did not allege his injuries were caused in whole or part by acts or omissions of Source.   

Notably, Source’s policy with Lloyd’s designates additional insureds “only with respect to liability for ‘bodily injury’…caused, in whole or in part by: 1. [Source’s] acts or omissions, or 2. The acts or omissions of those acting on [Source’s] behalf.” (NYSCEF No. 43 at 47.) And Gemini failed to establish, either through pleadings or discovery, that Source’s acts or omissions caused Hernandez’s injury.

This decision comes down to the wording of the contract between Source and CM, in conjunction with the Source policy language.  The policy calls for AI coverage for body injury stemming from Source’s acts or omissions — which Gemini failed to establish.   Now, had the policy language called for AI coverage for all liabilities “arising out of” Source’s work, the Court’s decision may have been different.

Please email Brian Gibbons with any questions.

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This and That–and a Significant WCM Appellate Victory for Jeweler’s Block and Fine Art Insurers Everywhere

As background to this important win in Crown Jewels Estate Jewelry, Inc. d/b/a Stephen Russell v. The Underwriters at Interest at Lloyd’s London  (a claim in which Crown sought indemnity for over $2 Million in stolen jewelry), I remind our readers of the wise admonition of the late Supreme Court Justice Scalia:  Never present to an Appellate Court the question to be decided as an actual question; that is, if framed correctly, the correct answer ought to be evident in the question.  And so, our Brief in Crown to the Appellate Division, First Department, framed the question in this fashion:

COUNTERSTATEMENT OF QUESTIONS PRESENTED

    The insurance contract here at issue bars coverage – using the disjunctive “or” – for theft on the part of any person to whom any insured property “may be delivered or entrusted by whomsoever for any purpose whatsoever.”  On agreed facts, the insured goods were delivered (handed over) to co-conspirators of the confessed thief. Analyzing controlling New York law and related precedent, the Trial Court (Honorable Barry Ostrager) ruled that no coverage existed for the theft of jewelry by a convicted felon, who created a fictitious presence on the internet as a Sony Music producer, because the insured property was, again on agreed facts, delivered by the insured to the thief’s co-conspirators.  Is there any reason to disturb this well-supported decision?

Answer: No.  The ruling below must be affirmed.

The wording in this exclusion in some form or other appears in most Jeweler’s Block and Fine Art policies.  But relying on a California Appellate ruling, Crown contended that entrustments to an “imposter” created an exception to the Dishonest Entrustment exclusion.

In an era of cybercrime, creating a false identity is child’s play for tech savvy thieves–and Sabatino, an alleged associate of the Gambino crime family, was a master con artist and a techno guru.  The Court’s ruling and the legal press described Sabatino’s skullduggery in great detail, and I urge you to read the colorful details of Sabatino’s exploits recounted in the Court’s decision.

The key to the Court’s ruling was the recognition, embedded in settled New York jurisprudence, that the act of entrustment is to be determined by the state of mind of the insured rather than that of the imposter recipient.

With phishing and like scams growing by the day, the above distinction reaffirmed by the Court, is a distinction that truly makes a difference.  We hope this precedent from the highly respected First Department, which is already getting press coverage in the world of insurance, aids other insurers facing imposter or other deception claims.

And that’s it for this This and That.  If you have any questions about this important ruling, please call or email Dennis Wade.

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COVID-19 Illness is a Reasonable Excuse for Default (NY)

Solomon v. Gun Hill Assoc Trust, No. 24150, 2021 WL 923114 (Bronx Cty. Sup. Ct. Feb. 26, 2021) is a personal injury case, wherein Plaintiff alleged damages after a trip-and-fall in a driveway leading to a parking lot jointly used by several businesses. Defendant Dunkin’ Donuts Franchising, LLC (“Dunkin”) previously moved for summary judgment on the grounds that – by virtue of its franchise agreement – it did not own, operate, maintain, or manage the subject premises or location at the time of the accident. Plaintiff failed to timely oppose Dunkin’s motion, which resulted in a default. In Solomon, Plaintiff moved to vacate the Court’s decision and order, which granted Dunkin’s motion for summary judgment upon default.

It is well-established that a party seeking to vacate a default must establish: (1) a reasonable excuse for the default; and (2) a potentially meritorious claim or defense. Here, Plaintiff’s counsel argued that he personally suffered illness during the COVID-19 pandemic and that the Court’s order of default was in contravention of the Governor’s Executive Orders, which tolled some legal deadlines. The Court determined counsel’s illness was “uncontroverted” proof to satisfy the reasonable excuse prong. However, the Court refuted that its order of default violated the Governor’s relevant executive orders, which – according to the Solomon Court – did not toll “all deadlines,” including the time to serve answering papers on a motion.

However, notwithstanding the foregoing, the Court continued, that Plaintiff failed to satisfy the meritorious claim prong. Specifically, Dunkin’s supporting papers established it did not own, care for, operate, manage, or control the premises. Dunkin also established it did not control or engage in the “day-to-day activities necessary to carry on the business operations of the Dunkin’ franchise at issue in this action.” Thus, Plaintiff failed to raise questions of fact to the contrary, since the franchise agreement did not address Dunkin’s duty to maintain the driveway. Plaintiff also failed to establish summary judgment was premature, since Plaintiff’s mere hope he would uncover evidence to prove the case provided no basis for postponing a decision on a summary judgment motion. See Jones v. Surrey Coop. Apts., Inc., 263 A.D.2d 33, 38 (1st Dep’t 1999). Accordingly, Plaintiff’s motion to vacate the dismissal was denied, on the grounds that the action lacked merit against Dunkin.

The main takeaways from Solomon are twofold: (1) illness caused by COVID-19 can establish the “reasonable excuse” portion of a motion to vacate a default judgment; but (2) once a default is granted, the defaulting party remains disadvantaged by having to overcome the meritorious claim or defense prong. Lastly, it is plausible numerous appeals will follow from similar decisions with respect to the interpretation of the Governor’s COVID-19 executive orders. Defaulting litigants who disagree with the Solomon Court’s interpretation will likely consume multiple cups of coffee as they await appellate adjudication of such executive orders, which – vis-à-vis artful lawyering – are open to reasonable interpretations.

Thanks to John Amato for his contribution to this post. If you have any questions or comments, please contact Colleen Hayes.

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Trivial Defects: A Bar to Plaintiff’s Recovery (NY)

In Speredowich v. Long Island Rail Road Company, the plaintiff commenced a personal injury action against defendant after the heel of her shoe got caught in a crack on a platform in Penn Station. The plaintiff fell and sustained injuries.  At trial, the plaintiff testified that the crack was “approximately ½ inch wide, 9 to 12 inches long, and ¼ inch deep.”

Following plaintiff’s testimony, the Court granted defendant’s motion for judgment as a matter of law. The court determined that the crack was “trivial and non-actionable as a matter of law.”

The Appellate Division upheld the dismissal, noting that property owners may not be held liable for trivial defects  that merely cause an individual to stumble, stub their toes or trip.  Additionally, the Court noted that the trial judge has discretion to determine whether a trivial condition exists as a matter of law.

Thanks to Marysa Linares for her contribution to this post. Please contact Heather Aquino with any questions.Read More