Author: DMG

A Brief CPLR R. 5015 Roundup and CPLR R. 2214(d) Appears For The First Time In this Blog.

CPLR R. 5015 Relief from judgment or order
(a) On motion
(1) excusable default…
(2) newly-discovered evidence…
(3) fraud, misrepresentation, or other misconduct of an adverse party
(4) lack of jurisdiction to render the judgment or order
(5) reversal, modification or vacatur of a prior judgment or order upon which it is based

CPLR R. 2214 Motion papers; service; time
(d) Order to show cause

MBF Leasing, LLC v Sisco, 25 Misc 3d 128(A) (App. Term, 1st, 2009)

Civil Court correctly denied, without a traverse hearing, that branch of defendant's motion seeking vacatur of the default judgment and dismissal of the complaint for lack of personal jurisdiction under CPLR 5015(a)(4) because defendant failed to sufficiently refute the factual averments contained in plaintiff's process server's affidavit of service. Defendant is nonetheless entitled to vacatur of the default judgment and an opportunity to answer the action on the merits. In light of defendant's potentially meritorious defense to the action (see Pludeman v N. Leasing Sys., 10 NY3d 486 [2008]), the absence of any discernable prejudice to plaintiff (which did not oppose defendant's motion and has not filed a respondent's brief on this appeal), defendant's showing that the default was not willful, and our preference for resolving actions on the merits, we vacate the default judgment under our "inherent discretionary power" to relieve defendant of his default "for sufficient reason and in the interests of substantial justice" (Woodson v Mendon Leasing Corp., 100 NY2d 62, 68 [2003]; see Siegel, NY Practice § 426, 725 [4th ed]).

Although the court in its discretionary power may vacate a default even though the party did not satisfy any of the conditions in CPLR R. 5015, I don't understand why the court would say that the defendant was entitled to vacatur.  Going by Webster's definition of entitle, the word hardly seems to fit.  Vacatur was a gift in this case.  Also interesting is that the defendant's motion to vacate was unopposed.  Neither was the appeal.  Unless defendant attached plaintiff's affidavit or service, how was it before the lower court?  Judicial Notice?

Speaking of weird…

Merriwether v Osborne, 2009 NY Slip Op 07602 (App. Div., 2nd, 2009)

By order dated May 22, 2007, the Supreme Court granted, apparently without opposition, the defendants' separate motions for summary judgment dismissing, inter alia, the complaint insofar as asserted against them, and a judgment dismissing the complaint was entered subsequently. Although the plaintiff was duly served with both the order and the judgment with notice of entry, he neither appealed nor moved to vacate. Nearly two years later, the Supreme Court, sua sponte, without explanation, vacated the order dated May 22, 2007, and, in effect, the judgment, and denied the defendants' motions for summary judgment.

On appeal, the defendants contend that the Supreme Court exceeded its authority in, sua [*2]sponte, vacating the order and, in effect, the judgment. We agree.

"A trial court has no revisory or appellate jurisdiction, sua sponte, to vacate its own order or judgment" (Adams v Fellingham, 52 AD3d 443, 444-445; see Armstrong Trading, Ltd. v MBM Enters., 29 AD3d 835, 836; Matter of Owens v Stuart, 292 AD2d 677, 678-679; cf. Liss V Trans Auto Sys., 68 NY2d 15, 20). Here, the court exceeded its powers by its unexplained sua sponte attempt to reconsider the summary judgment motions anew almost two years after the case was dismissed by judgment (see Matter of Owens v Stuart, 292 AD2d at 679).

WTF?

Wells Fargo Bank, N.A. v Leiba, 2009 NY Slip Op 07833 (App. Div., 2nd, 2009)

The Supreme Court properly denied the motion of the defendant Lisa Morris to vacate a judgment of foreclosure and sale dated October 27, 2005, as she failed to serve the order to show cause by which the motion was initiated in the manner specified, and within the time provided (see CPLR 2214[d]; Alden Personnel, Inc. v David, 38 AD3d 697, 698).

A bad employee can be a reasonable excuse.  See below.

Rodriguez v Rodriguez, 2009 NY Slip Op 08150 (App. Div., 1st, 2009)

Defendant's attorney's representation that a former employee had been misdirecting or misplacing mail provides a reasonable excuse for his failure to present such evidence of law office failure on defendant's original motion to vacate the default judgment as well as his failure to appear in court on various dates (see Solowij v Otis Elev. Co., 260 AD2d 226 [1999]). Defendant's affidavit shows a meritorious defense.

The bold is mine.

CPLR R. 4518 — Foundation (including “electronic records”)

CPLR R. 4518 Business records

People v Manges, 2009 NY Slip Op 08258 (App. Div., 4th, 2009)

Defendant appeals from a judgment convicting him, upon a jury verdict, of criminal possession of a forged instrument in the second degree (Penal Law § 170.25) and attempted grand larceny in the third degree (§§ 110.00, 155.35). We agree with defendant that County Court erred in admitting in evidence a printout of electronic data that was displayed on a computer screen when defendant presented a check, the allegedly forged instrument, to a bank teller. The People failed to establish that the printout falls within the business records exception to the hearsay rule (see CPLR 4518 [a]), which applies here (see CPL 60.10). The People presented no evidence that the data displayed on the computer screen, resulting in the printout, was entered in the regular course of business at the time of the transaction (see CPLR 4518 [a]). Indeed, the bank teller who identified the computer screen printout testified that "anyone [at the bank] can sit down at a computer and enter information." Because the computer screen printout was the only evidence establishing the identity of the purported true account owner upon which the check was drawn, we conclude that the evidence is legally insufficient to support the conviction (see generally People v Bleakley, 69 NY2d 490, 495). In the absence of the printout, the People failed to establish an essential element of the crime of criminal possession of a forged instrument, i.e., defendant's knowledge that the check presented to the bank teller was forged (see People v Johnson, 65 NY2d 556, 560, rearg denied 66 NY2d 759; cf. People v Shabazz, 226 AD2d 290, lv denied 88 NY2d 994) and, thus, they also failed to establish an essential element of the remaining crime of attempted grand larceny in the third degree, i.e., that the property was stolen.

Palisades Collection, LLC v Kedik, 2009 NY Slip Op 08259 (App. Div., 4th, 2009)

To establish standing to sue, plaintiff was required to submit admissible evidence that Discover assigned its interest in defendant's debt to plaintiff (see generally Rockland Lease Funding Corp. v Waste Mgt. of N.Y., 245 AD2d 779). Here, plaintiff submitted an affidavit from its agent with exhibits, including a printed copy of several pages from an electronic spreadsheet listing defendant's Discover account as one of the accounts sold to plaintiff. Contrary to the contention of plaintiff, the court properly determined that it failed to establish a proper foundation for the admission of the spreadsheet under the business record exception to the hearsay rule (see generally Speirs v Not Fade Away Tie Dye Co., 236 AD2d 531).

A business record is admissible if "it was made in the regular course of any business and . . . it was the regular course of such business to make it, at the time of the act, transaction, occurrence or event, or within a reasonable time thereafter" (CPLR 4518 [a]; see generally People v Kennedy, 68 NY2d 569, 579-580). "A proper foundation for the admission of a [*2]business record must be provided by someone with personal knowledge of the maker's business practices and procedures" (West Val. Fire Dist. No. 1 v Village of Springville, 294 AD2d 949, 950). Although plaintiff's agent averred that the spreadsheet was kept in the regular course of business and that the entries therein were made in the regular course of business, the agent did not establish that he was familiar with plaintiff's business practices or procedures, and he further failed to establish when, how, or by whom the electronic spreadsheet submitted in paper form was made (see CPLR 4518 [a]; West Val. Fire Dist. No. 1, 294 AD2d at 950). Furthermore, although an electronic record "shall be admissible in a tangible exhibit that is a true and accurate representation of such electronic record" (id.), plaintiff's agent failed to establish that the printed electronic spreadsheet submitted to the court was a true and accurate representation of the electronic record kept by plaintiff.

Others have posted more thorougly on these cases, so I'll leave it at this.

No New Arguments in the Reply, and Res Judicata

Djoganopoulos v Polkes, 2009 NY Slip Op 08173 (App. Div., 2nd, 2009)

Where a dismissal does not involve a determination on the merits, the doctrine of res judicata does not apply (see Maitland v Trojan Elec. & Mach. Co., 65 NY2d 614; Sclafani v Story Book Homes, 294 AD2d 559, 559-560). The complaint in the prior related action was dismissed on the ground that it did "not contain any factual averments against" Jonathan D. Polkes, Ellen G. Polkes, and Megan Strecker. "Rather, the conduct complained of involves only the Village [of Westhampton Dunes and its officials]" (Feder v Polkes,AD3d [decided herewith]). Therefore, the dismissal was not on the merits, and the doctrine of res judicata does not apply in the instant case (see Maitland v Trojan Elec. & Mach. Co., 65 NY2d 614).

We do not consider the defendants' contention that the plaintiffs failed to join necessary parties since it was improperly raised for the first time in their reply papers before the Supreme Court (see Crummell v Avis Rent A Car Sys., Inc., 62 AD3d 825; Luft v Luft, 52 AD3d 479, 480; Medugno v City of Glen Cove, 279 AD2d 510, 511-512).

Hantz v Hillman Hous. Corp., 2009 NY Slip Op 07933 (App. Div., 1st, 2009)

The tenant's second action seeking to compel the Board to grant his request to install an in-wall air conditioning system arose out of the same transaction, and facts, as had been considered in the tenant's prior litigation on the issue. The nature of tenant's proposed air conditioning installation and reasons for its need (i.e., medical, aesthetics, etc.) remained unchanged from the facts available at the time of the Board's original July 2005 determination, as well as at the time of the aforementioned prior litigation. Whether a mistaken factual assumption by the Board in considering Hantz's first application led to an errant determination may not be revisited based upon re-submission of the same facts, pertaining to the same transaction, as had been originally considered by the Board (see e.g. Mchawi v State Univ. of N.Y., Empire State Coll., 248 AD2d 111, 112 [1998], lv denied 92 NY2d 804 [1998]). The applicable statute of limitations period for challenging the Board's 2005 determination having since expired, Hantz's alleged new claim based on the same facts as those previously considered was properly dismissed on res judicata grounds (see e.g. Marinelli Assoc. v Helmsley-Noyes Co., 265 AD2d 1, 4-5 [2000]).

Jericho Group Ltd. v Midtown Dev., L.P., 2009 NY Slip Op 07946 (App. Div., 1st, 2009)

The two actions are based on the same transaction, namely the sale of real property, and the prior action was dismissed on the merits, and not merely because of technical pleading defects (see Heritage Realty Advisors, LLC v Mohegan Hill Dev., LLC, 58 AD3d 435 [2009], lv denied 12 NY3d 830 [2009]; Lampert v Ambassador Factors Corp., 266 AD2d 124 [1999]). Even though this Court, in granting defendant Midtown's motion to dismiss the complaint in the prior action, did not state that it was dismissing the action on the merits (32 AD3d 294 [2006]), an examination of our ruling clearly demonstrates that the claims were dismissed on the merits (see Feigen v Advance Capital Mgt. Corp., 146 AD2d 556, 558 [1989]).

Contrary to plaintiff's contention, this Court's subsequent order denying its motion to, inter alia, vacate the judgment of dismissal (47 AD3d 463 [2008], lv dismissed 11 NY3d 801 [2008]), has preclusive effect for purposes of res judicata, especially since it resulted in the reentry of the judgment of dismissal. This Court's ruling that plaintiff "fails to show fraud in the underlying transaction" (47 AD3d at 464), was not mere dicta and acts as a bar to plaintiff's claim of willful and deliberate breach of the contract (see O'Brien v City of Syracuse, 54 NY2d 353, 357-358 [1981]). Indeed, the claims are based on the same alleged misconduct, namely, defendants' failure to provide documents on an oil spill near the subject property and information regarding the nonexistence of certain exhibits referenced in the contract of sale. With respect to plaintiff's claims that it is entitled to specific performance because it cancelled the contract as a result of defendants' alleged willful and deliberate misconduct and because its attorney did not have the authority to cancel the contract, those claims are barred under the doctrine of res judicata because they could have been raised in the prior action (see Fifty CPW Tenants Corp. v [*2]Epstein, 16 AD3d 292, 293-294 [2005]).

Because plaintiff had reviewed the documents illustrating defendants' alleged fraud prior to commencing the first action, it cannot elude issue or claim preclusion "under the rubric of fraud" (Smith v Russell Sage Coll., 54 NY2d 185, 193 [1981]).

Schloss v Jones, 2009 NY Slip Op 08207 (App. Div., 2nd, 2009)

The doctrine of res judicata operates to preclude the reconsideration of claims actually litigated and resolved in a prior action, as well as claims for different relief against the same party which arise out of the same factual grouping or transaction, and which should have or could have been resolved in the prior action (see Mahler v Campagna, 60 AD3d 1009, 1011; Matter of Kafka v Meadowlark Gardens Owners, Inc., 34 AD3d 676, 677). In the instant action, the plaintiff sets forth the same allegations that were or could have been resolved in a prior action. Accordingly, the Supreme Court properly granted that branch of the defendants' motion which was to dismiss the complaint as barred by the doctrine of res judicata (see QFI, Inc. v Shirley, 60 AD3d 656, 657; Lefkowitz v Schulte, Roth & [*2]Zabel, 279 AD2d 457; Pappas v Cerrone, 281 AD2d 608).

The bold is mine.

CPLR R. 3117 and the Missing Witness Charge

CPLR R. 3117 Use of depositions
(a) Impeachment of witnesses; parties; unavailable witness
(4)  the deposition of a person authorized to practice medicine may be used by any party without the necessity of showing unavailability or special circumstances, subject to the right of any party to move pursuant to section 3103 to prevent abuse

Lauro v City of New York, 2009 NY Slip Op 08186 (App. Div., 2nd, 2009)

Additionally, contrary to the defendants' contentions, the Supreme Court properly gave a missing witness instruction (see Taveras v Martin, 54 AD3d 667; Brown v City of New York, 50 AD3d 937). " [W]hen a doctor who examines an injured plaintiff on the defendant's behalf does not testify at trial, an inference generally arises that the testimony of such witness would be unfavorable to the defendant. The defendant may defeat this inference by demonstrating that the testimony would be merely cumulative, the witness was unavailable or not under the defendant's control, or the witness would address matters not in dispute'" (Hanlon v Campisi, 49 AD3d 603, 604, quoting Brooks v Judlau Contr., Inc., 39 AD3d 447, 449, revd 11 NY3d 204). Here, the defendants failed to defeat the inference (see Taveras v Martin, 54 AD3d 667; Brown v City of New York, 50 AD3d 937).

How do you go about getting the charge.  Taveras is instructive,

The Supreme Court did not err in granting the defendant's request for a missing-witness charge for Leo F. Taveras. A party seeking a missing-witness charge must "promptly notify the court that there is an uncalled witness believed to be knowledgeable about a material issue pending in the case, that such witness can be expected to testify favorably to the opposing party and that such party has failed to call him to testify" (People v Gonzalez, 68 NY2d 424, 427 [1986]). As the party opposing the missing-witness charge, the appellant failed to demonstrate that Leo F. Taveras was "unavailable, not under [his] control, or that [his] testimony would be cumulative" (Adkins v Queens Van-Plan, 293 AD2d 503, 504 [2002]). Leo F. Taveras was the operator of the vehicle in which the appellant was a passenger and he is also the appellant's brother. Thus, it is clear that Leo F. Taveras is favorably disposed to the appellant and under his control (see People v Marsalis, 22 AD3d 866, 868-869 [2005]). The appellant failed to demonstrate that Leo F. Taveras remained ill after his hospital release or was otherwise unavailable (compare People v Turner, 294 AD2d 192 [2002]).

And bringing it on home is Brown,

Contrary to the defendants' contention, the Supreme Court properly granted the plaintiffs' request for a missing witness charge with respect to the defendant Julio A. Torro, the driver of the vehicle that allegedly struck the van of the injured plaintiff Joe S. Brown. Torro, who at all relevant times was represented by counsel, and who had previously given deposition testimony, inexplicably failed to appear at the trial to testify. A jury may, but is not required to, draw the strongest inference that the opposing evidence permits against a party who fails to testify at trial (see Crowder v Wells & Wells Equip., Inc., 11 AD3d 360, 361 [2004]; Farrell v Labarbera, 181 AD2d [*2]715, 716 [1992]; see also Noce v Kaufman, 2 NY2d 347, 353 [1957]).
What happens in cases where a party takes the testimony of a non-treating doctor, perhaps a IME doctor or a peer review doctor, and uses that deposition at trial under CPLR R. 3117(a)(4)?  And assume the doctor is available to testify.  And of course, unavailable doesn't mean that the doctor might have something better to do that day.  What then?  Get your missing witness charge (PJI 1:75).  To sort of conclude:  Can you use the deposition?  Probably.  Can the other side get a missing witness charge?  Probably.  The next question is:  Is it worth it?  I'll get into that in a minute.

*intermission* Or, for the few no-fault types who read this blog, consider the case of the re-peer. */intermission*

A couple of months ago I tried to do some research on 3117(a)(4).  I was more or less trying to understand the impetus behind the provision.  As it turns out, I'm terrible at researching this.  I had a research librarian trying to help me out and I really couldn't get anything on it.  That said, I'm pretty sure it is a patient treating mechanism, not a money saving mechanism.  The only reason to have a rule that allows for doctors' depositions to be used at trial is to keep them out of court and in their offices, treating patients.  Lately, a few insurance companies have been using it as a money saving mechanism.  Have one doctor in their (ins co lawyer's) office all day doing depositions for various cases–the doctors get paid a fixed (lower) rate, and the insurance companies don't have to pay the doctors to appear at trial.  At trial, the insurance company lawyer reads the deposition into the record.  There is no doubt that CPLR R. 3117(a)(4) is being used as a money saving mechanism.  From experience, I can tell you that the doctors are available to testify.  There are days where they are in court to testify on over five cases for various insurers.  Do I blame them?  No, everyone needs to make a living. The point is, they aren't treating patients.  The depositions aren't allowing them to treat more patients.  They still come to court and testify on cases where depositions weren't held.

Like I said, and I could be wrong (but I doubt it) CPLR R. 3117(a)(4) was not intended to be a money saving mechanism.

Finally, and I alluded to this before, is this something a party really wants to do?  Depositions are a completely different animal than trials.  It's part of discovery.  Accordingly, there is a lot of leeway.  All those questions that you could never get away with at trial; you can ask them.  If the insurance company refuses to allow their doctor to answer and bust the deposition, well, that will be their problem.  Th
ere is a lot of interplay between IME doctors, Peer Review doctors, the vendors that work in-between the doctors and the insurance companies, and the insurance companies.  Do you really want these questions asked?  Do you want the answers memorialized?  I'd guess no.  But, I could always be wrong.  In the end, it could wind up costing far more than it would save.

Finally, using this rule is a ballsy move.  One that most parties wouldn't make but for desperation.  We can all agree that a jury wouldn't like it.  Would a Judge?  Would anyone feel comfortable telling the trier of fact, especially one that went to law school, and one who is smarter than your average Joe that, "Yes your honor, I didn't think it important that you see the witness.  No, you don't have to worry about the witness' demeanor.  It's fine, trust me".  And if the other side asked for a missing witness charge, how would you respond?

Something to think about.

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CPLR § 3218(b) Judgment by confession not filed within 3 years

CPLR § 3218 Judgment by confession

Shasho v Pruco Life Ins. Co. of N.J., 2009 NY Slip Op 08000 (App. Div., 2nd, 2009)

The plaintiff seeks a preliminary injunction based, in part, on her
contention that the confession of judgment was obtained in connection
with a usurious promissory note. "No law regulating the maximum rate of
interest which may be charged, taken or received shall apply to any
loan or forebearance in the amount of two million five hundred thousand
dollars or more" (General Obligations Law § 5-501[6][b]). Thus, the
plaintiff failed to establish a likelihood of success on her claim that
a promissory note that she and her late husband executed in favor of
the defendant, and upon which the confession of judgment was
predicated, is usurious, as the face of the note provides that the
amount owed was $3,500,000 (see General Obligations Law 5-501[6][b]; Tides Edge Corp. v Central Fed. Sav., 151 AD2d 741; see also Ujueta v Euro-Quest Corp., 29 AD3d 895; Hochman v LaRea, 14
AD3d 653, 654). Moreover, the confession of judgment was signed and
notarized on December 31, 2005, and, thus, at the time that the Supreme
Court determined that branch of plaintiff's motion which was for a
preliminary injunction, the three-year period for filing the confession
of judgment (see CPLR 3218[b]) had yet to lapse. Consequently,
the Supreme Court properly denied that branch of the plaintiff's motion
which was for a preliminary injunction enjoining the defendant from
entering, filing, and enforcing the confession of judgment. Further,
the Supreme Court properly permitted the release of the proceeds from
certain life insurance policies to the defendant.

Nonetheless, the defendant failed to file the confession of
judgment by December 31, 2008, and thus failed to file it within three
years after the plaintiff's affidavit of confession was executed.
Accordingly, the confession of judgment became void after that date (see CPLR 3218[b]; Ray v Ray, 61
AD3d 442, 443). Thus, in the order dated March 12, 2009, the Supreme
Court erred in granting that branch of the defendant's application
which was, in effect, to permit him to enter, file, and enforce the
confession of judgment.

The bold is mine

UPDATE (after argument): SCOTUS grants cert on CPLR § 901(b) issue

The Civil Procedure & Federal Courts Blog is on top of it.  The SCOTUS blog is all over it as well.

I posted about this case a little while ago here  and it was in the NYLJ Wrap-Up. I’m sure you’ve been wondering about it. I have.

You can read the transcript HERE.
Or, if you don’t want to get it from me, you can go over to The Civil
Procedure & Federal Courts Blog, and get it from them.

This post is a work in progress.  There will be additions and commentary as I continue to review the case and receive (or find) additional information.

CPLR 901(b) Unless a statute creating or imposing a penalty, or a minimum measure
of recovery specifically authorizes the recovery thereof in a class
action1, an action to recover a penalty, or minimum measure of recovery
created or imposed by statute may not be maintained as a class action.

FRCP 23 Class Actions

The Supreme Court of the United States recently granted cert in Shady Grove Orthopedic Associates, P.A. v. Allstate Ins. Co., 129 S.Ct. 2160, 173 L.Ed.2d 1155, 77 USLW 3472, 77 USLW 3605, 77 USLW 3609 (U.S. May 04, 2009) (NO. 08-1008).  It made its way there through the Eastern District (466 F.Supp.2d 467) and the Second Circuit Court of Appeals (549 F.3d 137)

What's this all about? 

The short version:

Shady Grove (a Maryland corporation) brought a class action against Allstate (a Illinois corporation)  in Federal court suing for interest that is overdue from no-fault claims.  The underlying lawsuit involved a New York policy.  Those claims were paid, but for the interest.  Shady Grove argued that it could get into Federal Court through 28 U.S.C. § 1332(d)(2)(A), which gives the federal courts original jurisdiction in a class action where the amount in controversy is more that five-million dollars and diversity exists, and FRCP 23 allows class certification.

Allstate moved to dismiss, arguing that because interest is a "penalty", CPLR § 901(b) expressly prohibits such a class action2 and that because CPLR § 901(b) is a substantive rule, the Federal Court must apply it. Shady Grove argued that (1) it is a procedural rule and it is in conflict with FRCP 23 (the federal equivalent of CPLR § 901), which contains no identical or similar restriction;  (2) because it is a procedural rule, an Erie3 analysis requires that the Federal Court apply its own rule; and (3) it argued that the "unless clause" (see FN 1) of CPLR § 901(b) permits the lawsuit, even if the court finds it to be a substantive rule.

The district court agreed with Allstate and dismissed the action. It found that CPLR § 901(b) is substantive and therefore does not invoke either the Supremacy Clause4 or Erie.  Without class certification, Shady Grove was unable to maintain diversity jurisdiction.

At the Second Circuit, Shady Grove added an argument5 (a request really) in its reply brief; that the Court should certify the following question to the New York Court of Appeals: whether the interest provision is a "penalty within the meaning of CPLR § 901(b)."  The Second Circuit, upon Allstate's motion, struck that portion of the brief, because it should have been brought up in the initial brief.

The Second Circuit discussed each of Shady Grove's arguments.

The Court first addressed the Erie situation.  It found that FRCP 23 does not conflict with CPLR § 901(b); that there is no "direct collision" with § 901.  It reasoned that, because FRCP 23 does not determine which actions can or cannot be brought, "it leaves room for the operation of § 901(b)," finding it to be a substantive rule. 

But would the application of CPLR § 901(b) "serve the twin aims6 of Erie?  The Court answered in the affirmative. Not applying the rule would, according to the Court, encourage plaintiff' to file in the Federal Courts, rather than in New York.  And it would allow them to recover in Federal Court, when they could not in New York.

The Court then discussed Shady Grove's argument that under N.Y. Ins. Law § 5106(a)7 the lawsuit can be maintained via class action because 11 NYCRR § 65-3.9(c)8 contemplated class actions in this context, and therefore satisfies the exception clause of CPLR § 901(b).  In rejecting this argument, the Court found that § 65-3.9(c) did not specifically authorize9 class actions.  "At most,[the] regulation contemplates the recovery of a penalty in a class action."

The "questions presented" in the petition for cert are:

1. Can a state legislature properly prohibit the federal courts from using the class action device for state
law claims?

2. Can state legislatures dictate procedure in the federal courts?

3. Could state-law class actions eventually disappear altogether, as more state legislatures declare them offlimits to the federal courts?

——————-

1.  This is the unless clause.

2.  "…an action to recover a penalty, or minimum measure of recovery
created or imposed by statute may not be maintained as a class action."  CPLR § 901(b)

3. 
Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938).  Under Erie, when a Federal Court sits in diversity jurisdiction, it must apply a states substantive law and the federal procedural law.  It's more complicated than it seems.  More information can be found on the case and the issue on wikipedia.

4. U.S. Const. art. VI, Cl. 2

This Constitution, and the Laws of the United States which shall be
made in Pursuance thereof; and all Treaties made, or which shall be
made, under the Authority of the United States, shall be the supreme
Law of the Land; and the Judges in every State shall be bound thereby,
any Thing in the Constitution or Laws of any State to the contrary
notwithstanding.

5. Shady Grove cited to Sperry v. Crompton Corp., 8 N.Y.3d 204 (Ct. App., 2007) in support of its request for certification.

6. (1) to discourage forum shopping and (2) inequitable administration of the laws.

7. § 5106(a) provides:

(a)
Payments of first party benefits and additional first party benefits
shall be made as the loss is incurred. Such benefits are overdue if not
paid within thirty days after the claimant supplies proof of the fact
and amount of loss sustained. If proof is not supplied as to the entire
claim, the amount which is supported by proof is overdue if not paid
within thirty days after such proof is supplied. All overdue payments
shall bear interest at the rate of two percent per month. If a valid
claim or portion was overdue, the claimant shall also be entitled to
recover his attorney's reasonable fee, for services necessarily
performed in connection with securing payment of the overdue claim,
subject to limitations promulgated by the superintendent in regulations.

8. § 65-3.9(c) provides:

(c) If
an applicant does not request arbitration or institute a lawsuit within
30 days after the receipt of a denial of claim form or payment of
benefits calculated pursuant to Insurance Department regulations,
interest shall not accumulate on the disputed claim or element of claim
until such action is taken. If any applicant is a member of a class in
a class action brought for payment of benefits, but is not a named
party, interest shall not accumulate on the disputed claim or element
of claim until a class which includes such applicant is certified by
court order, or such benefits are authorized in that action by
Appellate Court decision, whichever is earlier. (emphasis added)

9.  The Court is referring to this portion of CPLR § 901(b) (which is quoted in its entirety at the top of this post): "Unless a statute creating or imposing a penalty, or a minimum measure
of recovery specifically authorizes the recovery thereof in a class
action." (emphasis added).  See FN 1.

Forum Non Con: CPLR R. 327

CPLR R. 327 Inconvenient forum

Tiger Sourcing (HK) Ltd. v GMAC Commercial Fin. Corporation-Canada, 2009 NY Slip Op 07828 (App. Div., 2nd, 2009)

CPLR 327 "permits a court to stay or dismiss such actions where it is determined that the action, although jurisdictionally sound, would be better adjudicated elsewhere" (Islamic Republic of Iran v Pahlavi, 62 NY2d 474, 478-479, cert denied 469 US 1108). The defendant bears the burden in a motion to dismiss on the ground of forum non conveniens to "demonstrate relevant private or public interest factors which militate against accepting the litigation" (id.). On such a motion, the Supreme Court is to weigh the parties' residencies, the location of the witnesses and any hardship caused by the choice of forum, the availability of an alternative forum, the situs of the action, and the burden on the New York court system (see Prestige Brands, Inc. v Hogan & Hartson, LLP, 65 AD3d 1028; Turay v Beam Bros. Trucking, Inc., 61 AD3d 964, 966). No one factor is dispositive (see Turay v Beam Bros. Trucking, Inc., 61 AD3d at 966; Brinson v Chrysler Fin., 43 AD3d 846, 848). The Supreme Court's determination should not be disturbed unless the court improvidently exercised its discretion or failed to consider the relevant factors (see Smolik v Turner Constr. Co., 48 AD3d 452, 453-454; Brinson v Chrysler Fin., 43 AD3d at 848).

Under the circumstances of this case, the Supreme Court providently exercised its discretion in granting that branch of the defendants' joint motion which was to dismiss the complaint on the ground of forum non conveniens (see Islamic Republic of Iran v Pahlavi, 62 NY2d 474; Prestige Brands, Inc. v Hogan & Hartson, LLP, 65 AD3d 1028; Turay v Beam Bros. Trucking, Inc., 61 AD3d 964; Smolik v Turner Constr. Co., 48 AD3d 452; Stravalle v Land Cargo, Inc., 39 AD3d 735, 736).

The bold is mine.

Post Appeal Motion to Renew: CPLR R. 2221(e)

CPLR R. 2221(e) Motion for Leave to Renew

Estate of Anna K. Essig v 5670 58 St. Holding Corp., 2009 NY Slip Op 07581 (App. Div., 2nd, 2009)

On prior appeals, this Court, inter alia, affirmed an order granting that branch of the plaintiffs' prior motion which was for summary judgment on their cause of action for a judgment declaring that they are the owners of 225 shares of the capital stock of the defendant 5670 58 Street Holding Corp. and affirmed an order denying the respondents' prior motion for leave to renew their opposition to that branch of the plaintiffs' prior motion (see Estate of Essig v 5670 58 St. Holding Corp., 50 AD3d 948). Thereafter, the respondents moved again for leave to renew based upon documents discovered four months earlier. The Supreme Court granted the motion and, upon renewal, vacated the judgment entered August 7, 2008, and denied that branch of the plaintiffs' prior motion which was for summary judgment on their declaratory judgment cause of action. We reverse.

Pursuant to CPLR 2221(e), a motion for leave to renew "shall be based upon new facts not offered on the prior motion that would change the prior determination . . . and shall contain reasonable justification for the failure to present such facts on the prior motion" (CPLR 2221[e][2],[3]). Moreover, while "a court of original jurisdiction may entertain a motion to renew or to vacate a prior order or judgment on the ground of newly discovered evidence even after an appellate court has affirmed the original order or judgment . . . on [a] postappeal motion [to renew] the [movant] bears a heavy burden of showing due diligence in presenting the new evidence to the [*2]Supreme Court in order to imbue the appellate decision with a degree of certainty" (Levitt v County of Suffolk, 166 AD2d 421, 422-423 [citations omitted][emphasis added]). Here, the respondents failed to offer a reasonable explanation for their failure to present the "new facts" in conjunction either with their opposition to that branch of the plaintiffs' prior motion which was for summary judgment on their declaratory judgment cause of action or with their first motion for leave to renew (see Elder v Elder, 21 AD3d 1055; Renna v Gullo, 19 AD3d 472, 473). Accordingly, the respondents' motion for leave to renew should have been denied.

The bold is mine.

It’s almost impossible to wiggle your way out of a stipulation–CPLR R. 2104

Far more parties are finding their stipulations to be oppressive than in the past few months.  I guess that's not true, but there are more appellate decisions on the issue than there have been in the past few months.  And that's close enough for me.  One of the benefits of blogging is that I have the opportunity to notice patterns in appellate law as it develops.  Eventually I hope to see one.  But for now, I'll keep on noting the obvious.  And hopefully, having made you read this, I've made you a little dumber than you were before.  You're welcome.

CPLR R. 2104 Stipulations

ABA Consulting, LLC v Liffey Van Lines, Inc., 2009 NY Slip Op 07923 (App. Div., 1st, 2009)

Next, defendant urges that the settlement agreement should be
vacated on the ground of mutual mistake, arguing that the parties must
have contemplated reimbursement for tax arrears. However, while mutual
mistake may furnish grounds for vacating a written agreement, there is
a " heavy presumption that a deliberately prepared and executed written
instrument manifest[s] the true intention of the parties'" and the
"proponent of reformation must show in no uncertain terms, not only
that mistake or fraud exists, but exactly what was really agreed upon
between the parties'" (Chimart Assoc. v Paul, 66 NY2d 570, 574 [1986], quoting Backer Mfg. Corp. v Acme Quilting Co.,
46 NY2d 211, 219 [1978]). Defendant has not established that the
parties came to any agreement, or even contemplated the refund of
payments recouped by the taxing authorities, or that either had any
knowledge, at the time the settlement agreement was executed, that
defendant would be audited. Accordingly, the settlement agreement
cannot be vacated on the ground of mutual mistake.

Defendant next argues that the settlement agreement should be
vacated on the ground of unilateral mistake, contending that it was
induced to pay fees upon the mistaken belief that any audit reducing
its tax refunds would entitle it to a proportional refund or credit
from plaintiff. However defendant presents no evidence that plaintiff
fraudulently induced it to enter into the settlement agreement upon the
false representation that it would adjust its fees if additional taxes
were found due, as required for a finding that the contract was the
product of unilateral mistake (Rosen Auto Leasing, Inc. v Jacobs, 9 AD3d 798,
800 [2004]). In fact, the settlement agreement was an arm's length
transaction between businessmen who were represented by counsel, and
the terms of plaintiff's compensation was consistent with that set
forth in the parties original [*3]consulting agreement. We find no basis on this record for vacating that agreement (see Greater N.Y. Mut. Ins. Co. v United States Underwriters Ins. Co., 36 AD3d 441, 443 [2007]).

Dubi v Skiros Corp., 2009 NY Slip Op 07793 (App. Div., 2nd, 2009)

"Stipulations entered into in open court are favored by the courts and
are to be set aside only where there is cause sufficient to invalidate
a contract such as fraud, duress, collusion, or mistake" (Feuer v Darkanot, 36 AD3d 753, 753-754; see Ramnarain v Ramnarain, 46 AD3d 655; Hallock v State of New York, 64 NY2d 224, 230; Chernow v Chernow, 51 AD3d 705, 706; Feuer v Darkanot, 36 AD3d 753, 753-754; Desantis v Ariens Co., 17
AD3d 311). In order to vacate a stipulation on the ground of duress, a
party "must demonstrate that threats of an unlawful act compelled his
or her performance of an act which he or she had the legal right to
abstain from performing'" (Feuer v Darkanot, 36 AD3d at 754, quoting Polito v Polito, 121 AD2d 614, 614-615). "Generalized contentions that a party felt pressured by the court are insufficient" (Desantis v Ariens Co., 17 AD3d at 311; see Matter of Blackstock v Price, 51 AD3d 914; Ross v Clyde Beatty-Cole Bros. Circus, 26 AD3d 321, 322; Shuler v Dupree, 14 AD3d 548, 549; Cavalli v Cavalli, 226
AD2d 666, 667). In the present case, the record fails to support the
plaintiff's contention that the stipulation of settlement was the
product of duress.

Castellano v Castellano, 2009 NY Slip Op 07784 (App. Div., 2nd, 2009)

"Stipulations of settlement are favored by the courts and are not lightly cast aside" (Hallock v State of New York, 64 NY2d 224, 230; see Matter of Siegel, 29 AD3d 914; Shapira v Shapira, 283
AD2d 477, 478 ). "[A]n oral stipulation of settlement with respect to
property issues in a matrimonial action, if spread upon the record and
found to be fair and reasonable by the court, is not to be disturbed
absent a showing of one of the traditional' grounds for vacatur, e.g.,
fraud, duress, mistake or overreaching" (Zafran v Zafran, 28 AD3d 752, 753, quoting Harrington v Harrington, 103 AD2d 356, 359; see Korngold v Korngold, 26 AD3d 358; Leahy v Leahy, 9 AD3d 351, 352).

Applying these principles to the matter at bar, the Supreme
Court properly determined that the plaintiff failed to meet her burden
in seeking to set aside the parties' stipulation of settlement (see Dimino v Dimino, 39 AD3d 799, 800; Brennan-Duffy v Duffy, 22 AD3d 699; Jacobs v Jacobs, 234 AD2d 425), and failed to establish that the stipulation of settlement was the result of duress or [*2]overreaching on the part of the defendant (see Garner v Garner, 46 AD3d 1239, 1240; Rubin v Rubin, 33 AD3d 983, 985-986; Chambers v McIntyre, 5 AD3d 344, 345). Accordingly, the court correctly denied the motion to set aside the stipulation of settlement.

Montgomery Trading LLC v Siegel, 25 Misc 3d 128(A) (App. Term, 1st, 2009)

Civil Court properly denied tenants' motion to vacate the two-attorney, so-ordered
stipulation of settlement resolving the underlying nonpayment summary proceeding since tenants
failed to demonstrate legal cause for such relief, e.g., fraud, collusion, mistake or accident
(see Hallock v State of New York, 64 NY2d 224, 230 [1984]). The belated attempt by
tenants' incoming counsel to inject into the settled litigation an (unpleaded) rent forfeiture
defense not referenced in the stipulation does not provide a proper basis to vacate the binding
stipulation, assented to by tenants upon advice of prior counsel.

Parties should think long and hard before they enter into stipulations, because, once they do, it is extremely difficult to get out of it.  It takes more than a sad story or hindsight.  Much more. 

In some cases, what you thought was an email, might very well be a stipulation.  See, Williamson v Delsener, 2009 NY Slip Op 01333 (App. Div., 1s, 2009).  Remember that.

NTA (CPLR § 3123) and Formal Judicial Admissions

Formal Judicial Admission

CPLR § 3123(a) Notice to admit; admission unless denied or denial excused

Zegarowicz v Ripatti, 2009 NY Slip Op 08004 (App. Div., 2nd, 2009)

Facts admitted by a party's pleadings constitute formal judicial admissions (see Falkowski v 81 & 3 of Watertown, 288
AD2d 890, 891; Prince, Richardson on Evidence § 8-215, at 523-524
[Farrell 11th ed]). Formal judicial admissions are conclusive of the
facts admitted in the action in which they are made (see Coffin v Grand Rapids Hydraulic Co., 136 NY 655).

Here, HVT made a formal judicial admission that it was listed as
owner on the certificate of title. A certificate of title is prima
facie evidence of ownership (see Vehicle and Traffic Law § 2108[c]; Switzer v Aldrich, 307 NY 56; Corrigan v DiGuardia, 166 AD2d 408; Salisbury v Smith, 115
AD2d 840). Although this presumption of ownership is not conclusive,
and may be rebutted by evidence which demonstrates that another
individual owned the vehicle in question (see Aronov v Bruins Transp., 294 AD2d 523; Dorizas v Island Insulation Corp., 254
AD2d 246), there was no evidence in the record to rebut that
presumption. "In reviewing a determination made after a nonjury trial,
the power of this Court is as broad as that of the trial court, and
this Court may render the judgment it finds warranted by the facts,'
bearing in mind that in a close case, the trial judge had the advantage
of seeing the witnesses" (Stevens v State of New York, 47 AD3d 624, 624-625, quoting Northern Westchester Professional Park Assoc. v Town of Bedford, 60
NY2d 492, 499). Based on our review of the evidence, judgment in favor
of the plaintiff and against HVT on the issue of liability is
warranted.

Morreale v Serrano, 2009 NY Slip Op 07992 (App. Div., 2nd, 2009)

The Supreme Court properly denied the plaintiff's motion for summary
judgment on the complaint, inasmuch as the plaintiff failed to meet his
initial burden of establishing, by admissible evidence, his prima facie
entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp.,
68 NY2d 320, 324). To the extent that the plaintiff relied on the
defendant's response to his notice to admit, that notice improperly
sought the defendant's admissions to facts that went to "the heart of
the matter" (Lolly v Brookdale Univ. Hosp. & Med. Ctr., 45 AD3d 537, 537; see Glasser v City of New York,
265 AD2d 526). In light of our determination, we need not examine the
sufficiency of the papers submitted by the defendant in opposition to
the motion (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853).