Author: DMG

Is Judiciary Law § 470 unconstitutional?

Schoenefeld v State of New York, 2015 NY Slip Op 02674 [2015]

In this case, the United States Court of Appeals for the Second Circuit has asked us to set forth the minimum requirements necessary to satisfy the statutory directive that nonresident attorneys maintain an office within the State "for the transaction of law business" under Judiciary Law § 470. We hold that the statute requires nonresident attorneys to maintain a physical office in New York.

Plaintiff Ekaterina Schoenefeld is a New Jersey resident who was admitted to the practice of law in New York in 2006. Schoenefeld is also admitted to practice in New Jersey and maintains her only law office in Princeton. According to the complaint, in 2007, Schoenefeld attended a continuing legal education class entitled Starting Your Own Practice, which was offered by the New York State Bar Association in New York City. There, she learned of the statutory requirement that nonresident attorneys must maintain an office within New York in order to practice in this State. Specifically, under Judiciary Law § 470, "[a] person, regularly admitted to practice as an attorney and counsellor, in the courts of record of this state, whose office for the transaction of law business is within the state, may practice as such attorney or counsellor, although he resides in an adjoining state."

Schoenefeld commenced this action in federal district court in July 2008, alleging that Judiciary Law § 470 was unconstitutional on its face and as applied to nonresident attorneys in violation of the Privileges and Immunities Clause of the United States Constitution (US Const, art IV, § 2)[FN1]. She alleged that she was unable to practice in the State, despite her compliance with all admission requirements, because she does not maintain an office in New York. She further maintained that there was no substantial state interest served by the office requirement, which was not applicable to New York resident attorneys.

The district court granted plaintiff's motion for summary judgment and held that section 470 violated the Privileges and Immunities Clause (see Schoenefeld v New York, 907 F Supp 2d 252, 266 [ND NY 2011]). The court determined that the office requirement implicated nonresident attorneys' fundamental right to practice law. The court then rejected the state interests proffered by defendants as insubstantial and found that, in any event, the statute did not bear a substantial relationship to the interests asserted as there were less restrictive means of accomplishing those interests.

The Second Circuit determined that the constitutionality of the statute was dependent upon the interpretation of law office requirement (see Schoenefeld v New York, 748 F3d 464, 467 [2d Cir 2014]). The court observed that the requirements that must be met by nonresident attorneys in order to practice law in New York reflect an important state interest and implicate significant policy issues. The court therefore certified the following question for our review: "Under New York Judiciary Law § 470, which mandates that a nonresident attorney maintain an 'office for the transaction of law business' within the state of New York, what are the minimum requirements necessary to satisfy that mandate?" (Schoenefeld, 748 F3d at 471). We accepted certification (23 NY3d 941 [2014]) and, as noted above, we interpret the statute as requiring nonresident attorneys to maintain a physical law office within the State.

Traffic Tickets

Matter of Matter of Nestle Waters N. Am., Inc. v City of New York, 2014 NY Slip Op 05609 [1st Dept. 2014]

The Court of Appeals has required strict compliance with the requirements of VTL § 238(2). For example, in Ryder Truck Rental, the Court of Appeals reversed the Appellate Division and reinstated the Supreme Court's decision annulling a PVB Appeals Board decision which upheld notices of violation that failed to include the expiration date for the vehicle's registration, as required by the statute. The Court said: "The provisions explicitly prescribed by the Legislature in the statute are mandatory . . . To hold all these elements directory only would evidently be to eviscerate the legislative enactment" (id. at 669—670).

Further, in Matter of Wheels, the Court of Appeals amplified its decision in Ryder Truck by holding that the five mandatory identification elements, which may not be omitted from a parking summons if it is to avoid dismissal, may also not be misdescribed (80 NY2d 1014). Thus, a misdescription of any of the five mandatory identification elements also constitutes a jurisdictional defect mandating dismissal (id.).

Similarly, this Court is bound by the plain language of VTL 238(2). We must conclude that the New York City Parking Violations Bureau's policy of deeming "IRP" an accurate description of out-of-state "APPORTIONED" license plates for purposes of adjudicating parking violations violates the statute. As indicated, VTL § 238(2) requires that a notice of parking violation shall include the "plate type as shown by the registration plates of said "vehicle" (emphasis added). It is undisputed that each ticket here described the "vehicle type" as "IRP," while the corresponding license plate described the vehicle type as "APPORTIONED." The choice of the words in the statute "as shown" by the vehicle plate is evidence that the legislature intended strict compliance with the statute, and "new language cannot be imported into a statute to give it a meaning not otherwise found therein" (McKinney's Cons Laws of NY, Book 1, Statutes § 94, at 190); see Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98, 104—105 [1997], quoting § 94).

We are cognizant that the terms "IRP" and "APPORTIONED" are used interchangeably by the New York City Parking Violations Bureau as a convenience. For instance, the automatic coding machines issued to New York City parking enforcement personnel contain the short cut key of "IRP," whereas "APP" or "APPORTIONED"' must be keyed in manually. Nevertheless, the statute simply does not allow for such administrative expedience, and neither this Court nor an administrative agency is permitted to effectively amend a statute to permit such shortcut. That is a task for the Legislature, if it sees fit.

In short, the petition should have been granted because the final determination made by respondent to adjudicate petitioners guilty on each of the summonses was contrary to well established law. Dismissal of the traffic summonses was warranted since they failed to comply with the mandatory requirements of VTL § 238(2) (see Matter of Wheels, 80 NY2d 1014; Ryder Truck Rental, 62 NY2d 667).

Accordingly, the judgment of the Supreme Court, New York County (Eileen A. Rakower, J.), entered March 8, 2013, which denied the petition and dismissed the hybrid CPLR article 78 and declaratory judgment proceeding challenging respondents' policy of deeming "IRP" an accurate description of out-of-state "APPORTIONED" license plates and registrations for purposes of adjudicating parking summonses, should be reversed, on the law, without costs, the petition granted, the determination annulled, the violations vacated and dismissed, and it is declared that respondents' policy of deeming "IRP" an accurate description of "Apportioned" license plates issued outside of New York State is violative of § 238 of the Vehicle and Traffic Law.

counsel were primarily engaged in claims handling [CPLR 3126]

CPLR 3126

National Union Fire Ins. Co. of Pittsburgh, Pennsylvania v TransCanada Energy USA, Inc., 19 AD3d 492 [1st Dept. 2014]

The record shows that the insurance companies retained counsel to provide a coverage opinion, i.e. an opinion as to whether the insurance companies should pay or deny the claims. Further, the record shows that counsel were primarily engaged in claims handling—an ordinary business activity for an insurance company. Documents prepared in the ordinary course of an insurer's investigation of whether to pay or deny a claim are not privileged, and do not become so " 'merely because [the] investigation was conducted by an attorney' " (see Brooklyn Union Gas Co. v American Home Assur. Co., 23 AD3d 190, 191 [1st Dept 2005]).

We need not reach the question of whether the common interest exception to the attorney client privilege applies, because the documents at issue are not privileged.

CPLR 2003

CPLR 2003

Mooring Capital Fund, LLC v Bronx Miracle Gospel Tabernacle, Inc., 119 AD3d 490 [1st Dept. 2014]

In the order on appeal, Bronx Miracle's fourth motion was granted. Citing CPLR 2003, the motion court (Aarons, J.), reasoned that a discrepancy between the foreclosure Referee's testimony that the property was sold on October 18, 2010 and the Memorandum of Sale on which the date of July 15, 2010 is typewritten was sufficient to set aside the sale, pursuant to the court's equitable powers to prevent fraud, collusion, mistake or misconduct.

We reverse, and deny the motion. CPLR 2003 provides as follows: "At any time within one year after a sale made pursuant to a judgment or order, but not thereafter, the court, upon such terms as may be just, may set the sale aside for a failure to comply with the requirements of the civil practice law and rules as to the notice, time or manner of such sale, if a substantial right of a party was prejudiced by the defect."

Bronx Miracle's motion was made outside the one-year statutory time limit. Even if it had been timely, we would deny it. The typographical error in the Memorandum of Sale, which was executed following the sale, appears to have been a scrivener's error and does not constitute the kind of irregularity contemplated by CPLR 2003. In addition, Bronx Miracle's claimed prejudice resulting from the unconscionably low sale price is unrelated to the scrivener's error, and the alleged inadequacy of the sale price alone "does not furnish sufficient grounds for vacating a sale" (Guardian Loan Co. v Early, 47 NY2d 515, 521 [1979]).

This is often ignored

CPLR 3212

Hecht v Saccoccio, 014 NY Slip Op 05628 [2nd Dept. 2014]

To demonstrate prima facie entitlement to judgment as a matter of law in a premises liability case, a defendant owner must establish that it did not create the condition that allegedly caused the fall or have actual or constructive notice of that condition (see Gordon v American Museum of Natural History, 67 NY2d 836, 837). Only after the defendant has satisfied his or her threshold burden will the court examine the sufficiency of the plaintiff's opposition (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851). On a defendant's motion for summary judgment, it is not the plaintiff's burden in opposing the motion to establish that the defendants had actual or constructive notice of the hazardous condition; rather, it is the defendant's burden to establish the lack of notice as a matter of law (see Giuffrida v Metro N. Commuter R.R. Co., 279 AD2d 403, 404). Thus, a defendant seeking summary judgment dismissing the complaint based on the lack of notice must establish, prima facie, the absence of notice (see Goldin v Riker, 273 AD2d 197, 198).

 

CPLR § 5205

CPLR 5205(j)(2)

Country Bank v Broderick, 2014 NY Slip Op 05621 [2nd Dept. 2014]

The Supreme Court providently exercised its discretion in granting the plaintiff's motion pursuant to CPLR 5240 for a determination that the funds sought to be levied upon—college savings accounts established under the laws of the State of New Hampshire (see NH Rev Stat Ann, ch 195-H)—are not exempt from levy in connection with the satisfaction of an underlying Connecticut money judgment that was docketed in New York pursuant to CPLR 5402.

The parties do not dispute that the protection from creditors afforded by CPLR 5205(j)(2) to college tuition savings program accounts defined in 26 USC § 529 (hereinafter 529 savings plans) does not apply where, as here, the accounts are not qualified college savings program accounts established pursuant to the New York State College Choice Tuition Saving Program, as set forth in Education Law article 14-A. The Supreme Court correctly concluded that the distinction made in CPLR 5205(j) between 529 savings plans established under the laws of New York, and those established in other states, or under the laws of other states, does not violate the equal protection clause of the United States Constitution. Since the classification "is not based on an inherently suspect characteristic and does not impermissibly interfere with the exercise of a fundamental right, it need only rationally further a legitimate state interest to be upheld as constitutional" (Affronti v Crosson, 95 NY2d 713, 718-719; see Nordlinger v Hahn, 505 US 1, 10; New Orleans v Dukes, 427 US 297, 303; Archbishop Walsh High School v Section VI of the N.Y. State Pub. High School Athletic Assn., 88 NY2d 131, 136). Applying this standard of rational basis review, the court properly determined that CPLR 5205(j) was not unconstitutional, as the disparate treatment is not " so unrelated to the achievement of any combination of legitimate purposes'" as to be irrational (Affronti v Crosson, 95 NY2d at 719, quoting Kimel v Florida Bd. of Regents, 28 US 62, 84).

Contrary to the defendant's contention, the statute is not antithetical to the public policy of the State of New York, and "the choice between conflicting policy values is best made by the Legislature" (Anonymous v Bureau of Professional Med. Conduct/State Bd. for Professional Med. Conduct, 2 NY3d 663, 669 [internal quotation marks omitted]).

CPLR 3012; 3216

CPLR 3012

CPLR 3216

Dutchess Truck Repair, Inc. v Boyce, 2014 NY Slip Op 05768 [2nd Dept. 2014]

"Upon the application of a party, the court may extend the time to appear or plead, or compel the acceptance of a pleading untimely served, upon such terms as may be just and upon a showing of reasonable excuse for delay or default" (CPLR 3012[d]; see EHS Quickstops Corp. v [*2]GRJH, Inc., 112 AD3d 577, 578). Similarly, a court may relieve a party from an order on the basis of "excusable default, if such motion is made within one year after service of a copy of the . . . order with written notice of its entry upon the moving party" (CPLR 5015[a][1]). However, relief from a default is proper only where the party seeking relief demonstrates a reasonable excuse for the default and a potentially meritorious defense (see Farhadi v Qureshi, 105 AD3d 990, 991; Deutsche Bank Natl. Trust Co. v Gutierrez, 102 AD3d 825; Deutsche Bank Natl. Trust Co. v Pietranico, 102 AD3d 724, 725).

Here, even assuming that the plaintiffs' excuse of law office failure was sufficient to excuse their failure to serve a timely reply to the counterclaim of the defendants Joe Boyce, Sally Boyce, and Trans Star Enterprises, Inc. (hereinafter collectively the defendants) (see Michaels v Sunrise Bldg. & Remodeling, Inc., 65 AD3d 1021, 1023; CPLR 2005), the Supreme Court properly declined to vacate their default and to compel acceptance of their reply. The record establishes that, after the defendants' rejection of the plaintiffs' reply to the counterclaim and the court's finding that they were in default, the plaintiffs waited nearly two years before moving to vacate their default and to compel the defendants to accept their reply. Because the plaintiffs proffered no reasonable excuse for their failure to promptly seek relief, the court providently exercised its discretion in denying those

branches of the plaintiffs' motion (see Nash v Port Auth. of N.Y. & N.J., 22 NY3d 220, 226; Karalis v New Dimensions HR, Inc., 105 AD3d 707, 708).

"Where a party unreasonably neglects to proceed generally in an action or otherwise delays in the prosecution thereof against any party who may be liable to a separate judgment, or unreasonably fails to serve and file a note of issue, the court, on its own initiative or upon motion, may dismiss the party's pleading on terms" (CPLR 3216[a]). Before doing so, the court or the party seeking such relief must serve a written demand to resume prosecution and to serve and file a note of issue within 90 days of receipt of such demand, and further advise the party upon whom such notice was served that failure to do so may result in dismissal of the action (see CPLR 3216[b][3]). Pursuant to 22 NYCRR 202.21(a), an action will not be deemed ready for trial or inquest unless a note of issue is first filed, accompanied by a certificate of readiness stating that there are no outstanding requests for discovery and the case is ready for trial (see 22 NYCRR 202.21[a], [b]; Furrukh v Forest Hills Hosp., 107 AD3d 668, 669).

On March 26, 2012, the Supreme Court, on its own initiative, and based upon the plaintiffs' repeated failure to file a compliant note of issue as directed, issued a 90-day notice requiring the plaintiffs to produce all outstanding discovery and file a note of issue. Although the plaintiffs filed a note of issue on June 9, 2012, the accompanying certificate of readiness, which stated that an appeal was pending with respect to discovery issues, did not comply with 22 NYCRR 202.21(a) and (b) (see Furrukh v Forest Hills Hosp., 107 AD3d at 669; Brown v Astoria Fed. Sav., 51 AD3d 961, 962; Blackwell v Long Is. Coll. Hosp., 303 AD2d 615, 615-616). The plaintiffs also failed to demonstrate that the complaint should not be dismissed based upon their failure to prosecute the action by proffering "a justifiable excuse for the delay and a meritorious cause of action" (Blackwell v Long Is. Coll. Hosp., 303 AD2d at 616; see Sharpe v Osorio, 21 AD3d 467, 468). Accordingly, the court properly granted that branch of the defendants' motion which was to strike the note of issue and, upon so doing, providently exercised its discretion granting that branch of the defendants' motion which was to dismiss the complaint insofar as asserted against them pursuant to CPLR 3216 for failure to prosecute (see Blackwell v Long Is. Coll. Hosp., 303 AD2d at 616; Perez v Long Is. Jewish-Hillside Med. Ctr., 173 AD2d 530, 530-531).

Bennett v Patel Catskills, LLC, 2014 NY Slip Op 05616 [2nd Dept. 2014]

The process server's affidavit of service created a rebuttable presumption that the plaintiffs served the defendant by delivering a copy of the summons and complaint to the Secretary of State (see CPLR 311-a[a]; Limited Liability Company Law § 303; Kolonkowski v Daily News, L.P., 94 AD3d 704, 705; Thas v Dayrich Trading, Inc., 78 AD3d 1163, 1164; Trini Realty Corp. v Fulton Ctr. LLC, 53 AD3d 479). In opposition, the defendant denied receipt of the summons and complaint. The fact that the summons and complaint, which had been sent by certified mail, return receipt requested, to the address on file with the New York Secretary of State, had been returned to the Secretary of State as "unclaimed," raised a triable issue of fact as to whether the defendant received notice of the certified mail sent to it by the Secretary of State, and the matter must be remitted for a hearing and new determination of that issue and of the motion and cross motion (see Avila v Distinctive Dev. Co., LLC, ___ AD3d ___ [decided herewith]; Henniger v L.B.X. Excavating, 176 AD2d 917, 918; Rodriguez v Bridge Realty, 155 AD2d 271, 272; Rifenburg v Liffiton Homes, 107 AD2d 1015, 1016).

Contrary to the defendant's contention, the plaintiffs did not waive the issue of the late service of the answer and the alleged default when they failed to reject the answer in a timely manner. Since the plaintiffs notified the defendant that it was in default prior to service of an answer and promptly moved for leave to enter a default judgment after receiving the answer, the plaintiffs could not be deemed to have thereafter waived the issue of late service and the alleged default (see Hosten v Oladapo, 44 AD3d 1006, 1007; Katz v Perl, 22 AD3d 806, 807).

Grouping of contacts

Matter of Matter of Unitrin Direct/Warner Ins. Co. v Brand, 2014 NY Slip Op 05887 [2nd Dept. 2014]

At the time of the accident, Collins maintained automobile liability insurance in Florida with Allstate Insurance Company with liability limits for bodily injury in the amount of $100,000 per person/$300,000 per occurrence and supplementary uninsured/underinsured motorist (hereinafter SUM) coverage for bodily injury in the amount of $100,000 per person/$300,000 per occurrence. Allstate tendered the bodily injury policy limit in the amount of $100,000 in settlement of Brand's claim.

At the time of the accident, Brand maintained automobile insurance coverage with the petitioner Unitrin Direct/Warner Insurance Company (hereinafter Unitrin) with policy limits for bodily injury also of $100,000 per person/$300,000 per occurrence and SUM coverage for bodily injury also of $100,000 per person/$300,000 per occurrence. Brand claimed that his injuries exceeded the limits of Collins' policy, and demanded from the American Arbitration Association in New York arbitration of a claim for SUM benefits under his Unitrin policy. In response to Brand's demand for arbitration, Unitrin moved for a permanent stay of arbitration on the ground that the SUM coverage was not triggered under New York law because the offending vehicle was not underinsured since Collins' bodily injury liability coverage under the Allstate policy equaled Brand's bodily injury liability coverage under the Unitrin policy. Unitrin argues that the "center of gravity"/"grouping of contacts" analysis demonstrates that New York is the forum that has the most significant contact to the dispute such that New York law should govern this matter. Brand contends, however, that under the "center of gravity"/"grouping of contacts" analysis, Florida law should control.

It is undisputed that this conflict of law question, although arising in the context of a motor vehicle accident, must be resolved by the conflict of law rules relevant to contracts, not torts (see Matter of Eagle Ins. Co. v Singletary, 279 AD2d 56). Generally, "the courts apply the more flexible center of gravity' or grouping of contacts' inquiry, which permits consideration of the spectrum of significant contacts' in order to determine which State has the most significant contacts to the particular contract dispute" (id. at 58-59, quoting Matter of Allstate Ins. Co. [Stolarz-New Jersey Mfrs. Ins. Co.], 81 NY2d 219, 226). "In general, significant contacts in a case involving contracts, in addition to the place of contracting, are the place of negotiation and performance, the location of the subject matter of the contract, and the domicile or place of business of the contracting parties" (id. at 59). As to insurance contracts specifically, significance has been attached to the " local law of the state which the parties understood was to be the principal location of the insured risk . . . unless with respect to the particular issue, some other state has a more significant relationship under the principles stated in § 6 [of the Restatement] to the transaction and the parties'" (Zurich Ins. Co. v Shearson Lehman Hutton, 84 NY2d 309, 318, quoting Restatement [Second] of Conflict of Laws § 193). In the case of a noncommercial vehicle, which is by its nature mobile, the principal location of the insured risk is the place where the vehicle is to be principally garaged (Matter of Eagle Ins. Co. v Singletary, 279 AD2d at 59).

Here, as the Supreme Court correctly noted, the insurance contract at issue was written to conform to the laws, rules and regulations of New York State, and was obtained in New York by Brand, a New York resident, from an insurance company doing business in New York. Furthermore, Brand served the demand for SUM arbitration upon the American Arbitration Association in New York. Applying the grouping of contacts inquiry to these facts, New York has the most significant contacts with the parties and the contract. Indeed, such a conclusion would be in conformity with the reasonable expectations of the contracting parties.

Brand's reliance on Florida as the situs of the accident confuses the contacts that might be significant in a tort case with those that are material in a contract dispute (see Matter of Allstate Ins. Co. [Stolarz-New Jersey Mfrs. Ins. Co.], 81 NY2d 219). New York law applies herein.

Under New York law, SUM coverage is only triggered where the bodily injury liability insurance limits of the policy covering the tortfeasor's vehicle are less than the liability limits of the policy under which a party is seeking SUM benefits (see Insurance Law § 3420[f][2][A]; Matter of Allstate Ins. Co. v Rivera, 12 NY3d 602, 607-608; Matter of AIU Ins. Co. v Hibbert, 85 AD3d 779). Here, Collins' Allstate policy limits for bodily injury were identical to Brand's Unitrin policy limits for bodily injury. Hence, Collins does not qualify as an underinsured driver.

Accordingly, the Supreme Court properly granted the petitioner's application to permanently stay arbitration of a claim for SUM benefits.

Brand's contention that Unitrin's payment of first party benefits constituted an agreement that Florida law controls is without merit, as Unitrin's payment of first party benefits in the first instance was required pursuant to 11 NYCRR 65-3.12(a)(3) and (b). To the extent there was a dispute between Unitrin and Allstate as to the priority of first party benefits, that is a matter to be resolved between the insurers (see Insurance Law § 5105; 11 NYCRR 65-3.12[b]; 65-4.11).

 

not so moot

Mannino v Wells Fargo Home Mtge., Inc., 2014 NY Slip Op 05846 [2nd Dept. 2014]

While it is the general policy of New York courts to simply dismiss an appeal which has been rendered academic, vacatur of an order or judgment on appeal may be an appropriate exercise of discretion where necessary "in order to prevent a judgment which is unreviewable for mootness from spawning any legal consequences or precedent" (Matter of Hearst Corp. v Clyne, 50 NY2d at 718; see Matter of Adirondack Moose Riv. Comm. v Board of Black Riv. Regulating Dist., 301 NY 219; E-Z Eating 41 Corp. v H.E. Newport L.L.C., 84 AD3d 401; Funderburke v New York State Dept. of Civ. Serv., 49 AD3d 809). Here, the plaintiffs sold the premises and satisfied the subject mortgage under threat of foreclosure. They " ought not in fairness be forced to acquiesce in'" the unreviewable order, which could spawn adverse legal consequences due to its res judicata effect (Matter of Ruskin v Safir, 257 AD2d 268, 273, quoting U.S. Bancorp Mortgage Co. v Bonner Mall Partnership, 513 US 18, 25). Accordingly, we vacate so much of the order dated July 5, 2012, as awarded the defendants summary judgment dismissing the complaint.