[App Div 1st Dept]

Personal Knowledge: probative value

Gogos v Modell's Sporting Goods, Inc., 2011 NY Slip Op 05435 (App. Div., 1st 2011)

The dissent refers extensively to a second affidavit by Michael Feeley, dated August 31, 2009, submitted in opposition to plaintiffs' motion dated July 8, 2009, to strike defendant's answer for failure to preserve evidence. This affidavit, which was submitted 20 months after the court ordered defendant to produce the tapes and approximately 36 months after the accident, states, inter alia, "Each tape would be recycled and taped over on a constant thirty day basis. It appears that this is what happened to the videotapes from the store on the date of the plaintiff's accident." This affidavit completely contradicts the deposition testimony of defendant's store manager, Cesar Abreu, who testified more than a year earlier that a videotape was made on the day of the accident and was kept in a safe in the office of the store. Abreu also testified at his deposition, taken six months after the court order has issued, that the tapes made at that time were in the store. Despite the glaring inconsistencies between Feeley's testimony and that of manager Abreu, the dissent continues to argue, by selective reading of Abreu's testimony, that Feeley's testimony is not inconsistent with that of Abreu, an indefensible position.

The Feeley affidavit is nothing more than a last-minute attempt by defendant to tailor the facts and present a feigned factual issue to avoid the consequences of the admission by manager Abreu, six months after the court order was issued, that the subject tapes were retained on defendant's premises, and is, thus, without probative value (Capraro v Staten Is. Univ. Hosp., 245 AD2d 256, 257 [1997]). Further, a self-serving affidavit by the vice president of a subsidiary of defendant offered to contradict the deposition testimony — here, the testimony of defendant's own general manager — or to retract a previous admission does not raise a bona fide issue of fact and will be disregarded (see Lupinsky v Windham Constr. Corp., 293 AD2d 317, 318 [2002]).

It appears that Feeley was not the vice president of defendant's Modell's II subsidiary at the time of plaintiff's accident, nor did he work at the premises where the accident occurred. On the other hand, Cesar Abreu was defendant's general manager at the subject store, interviewed the injured plaintiff immediately after the accident, called an ambulance for her, investigated the accident, and prepared the accident report. As opposed to Feeley, Abreu is a witness with actual personal knowledge of the facts, and he testified as to how the videotapes on the date of the accident were prepared and retained by defendant.

The affidavit by Michael Feeley is deficient. Throughout its writing, the dissent at times refers to Feeley as "defendant's vice president," a misidentification conveying the false and misleading impression that Feeley was employed in a capacity giving him personal knowledge of the facts of this case. Once again, Michael Feeley is not the vice president or even an employee of defendant corporation. In both of his affidavits, he avers that he is the current "Vice President of Modell's II, Inc., a subsidiary of [defendant corporation]." Nowhere in his affidavits does he state whether there was any operational connection between Modell's II and defendant corporation, two separate and distinct entities, a fact that the dissent does not want to acknowledge. In any event, the dissent misses the point. Feeley, who is not an employee of defendant corporation, makes the conclusory allegation that he is "fully familiar with the operations of this store, including the surveillance cameras located in certain parts of the store," without any explanation of the source of his knowledge (see Peacock v Kalikow, 239 AD2d 188, 190 [1997]). He does not state the nature of his duties, if any, with respect to defendant, a corporation he apparently has no connection with, so as to shed light on the manner in which he allegedly obtained knowledge of the facts of this case. Thus, his affidavit is without probative value (id.). This Court is empowered to decide, sua sponte, that an affiant is without personal knowledge of the facts in a case by simply reviewing the substance of the affidavit (see e.g. Adam v Cutner & Rathkopf, 238 AD2d 234, 238 [1997]). We are not required to accept Feeley's testimony as competent evidence merely because he "swore to the fact . . .," as the dissent urges. It is the burden of the proponent of an affidavit to demonstrate the basis of the affiant's knowledge (see id. at 239-240), and here, defendant failed to meet that burden. It appears that the dissent is placing the burden of proof on the wrong party when it states that "[p]laintiffs' counsel offered no factual basis for his assertion that the vice president had no personal knowledge of the facts . . ." It further appears that the dissent is advancing a legal concept that anyone remotely related to a party to an action can claim to have personal knowledge of the facts of the internal workings of that party by merely reciting, without more, his or her remote connection, to that party. That is not the law. Thus, the dissent's conclusion that Feeley has personal knowledge of the facts based solely on Feeley's statement that he is the current vice president of defendant's subsidiary corporation is without factual or legal basis and must be rejected as untenable.

The dissent is incorrect when it states that "at no time have plaintiffs ever argued that the vice president's position as an officer of the subsidiary was at all relevant, let alone that it provided a ground for disregarding his affidavit." In the reply affirmation dated September 10, 2009, plaintiffs' attorney stated that "the Court should not be misled by the improper self-serving and speculative affidavits from defendant's two off-site executives with no personal knowledge of the facts." Because the dissent's arguments are premised on the self-serving statements by Michael Feeley, its entire position falls along with the affidavits, which lack merit and probative value.

Policy terms and orther language related nuances

Cragg v Allstate Indem. Corp., 2011 NY Slip Op 04767 (Ct. App. 2011)

Insurance contracts must be interpreted according to common speech and consistent with the reasonable expectations of the average insured (see Matter of Mostow v State Farm Ins. Cos., 88 NY2d 321, 326-327 [1996]). To the extent that there is any ambiguity in an exclusionary clause, we construe the provision in favor of the insured. Moreover, "'exclusions or exceptions from policy coverage . . . are not to be extended by interpretation or implication, but are to be accorded a strict and narrow construction. Indeed, before an insurance company is permitted to avoid policy coverage, it must satisfy the burden which it bears of establishing that the exclusions or exemptions apply in the particular case, and that they are subject to no other reasonable interpretation'" (Pioneer Towner Owners Assn. v State Farm Fire & Cas. Co., 12 NY3d 302, 307 [2009], quoting Seaboard Sur. Co. v Gillette Co., 64 NY2d 304, 311 [1984]). Allstate has not met that burden here.

The language of the policy exclusion — excluding coverage "whenever any benefit of this coverage would accrue directly or indirectly to an insured" — is ambiguous. It could be interpreted, as Allstate urges, to mean that bodily injury to an insured is not covered whenever any benefit — including coverage itself in the form of defense and indemnification — would accrue to an insured. However, as plaintiff points out, this interpretation ascribes meaning only to the first clause of the exclusion — "[w]e do not cover bodily injury to an insured person." Since the right to defense and indemnification universally accrues to an insured, under Allstate's interpretation the condition of the second clause of the exclusion would always be met. However, the second part of the exclusion must somehow modify the first part of the clause in order to have any meaning. In this context, a benefit must mean something other than coverage itself and is more naturally read to mean proceeds paid under the policy. In light of our obligation to interpret the exclusion in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless (see County of Columbia v Continental Ins. Co., 83 NY2d 618, 628 [1994]), we find plaintiff's interpretation of the clause to be more in keeping with these well-settled principles of contract interpretation.

The current version of the exclusion at issue was brought about in response to the decision in Allstate Ins. Co. v Pestar (168 AD2d 931 [4th Dept 1990]). The prior version of the exclusion had excluded coverage for bodily injury to an insured. In Pestar, a child was injured when she dove into a State-owned lake. Her parents filed a negligence action against the State and the State counterclaimed seeking contribution. Despite the policy exclusion, the Appellate Division determined that Allstate had a duty to defend and indemnify the parents on the State's counterclaim, finding that "the liability at issue . . . is not the parents' liability to [the insured child] but rather the parents' potential liability to the State on a claim of equitable apportionment" (Pestar, 168 AD2d at 931-932). The insurer subsequently added language to the exclusion stating that bodily injury to an insured is not covered "whenever any benefit of this coverage would accrue directly or indirectly to an insured person" (see 9A Couch on Insurance 3d § 128:4).

Assuming the insurer intended this language to exclude coverage under the policy entirely for bodily injury to insureds, it did not accomplish the desired result. Instead of making the exclusion broader, the additional language can be read as limiting the application of the exclusion to situations where an insured would receive a benefit (i.e. payment) under the policy. The amendment, then, can be seen as the insurer's attempt to cut off indirect claims, such as claims for contribution. As relevant to this appeal, however, the exclusion fails to bar unambiguously payment to a noninsured plaintiff, that is to say it does not clearly cut off the nonresident distributee's wrongful death claims arising from the fatal injury to an insured.

Other jurisdictions have observed that there are valid policy reasons for excluding coverage in cases such as this one. They have noted that homeowner's insurance is generally meant to cover bodily injury to noninsureds (see Cincinnati Indem. Co. v Martin, 85 Ohio St 3d 604, 608; 710 NE2d 677, 680 [1999]) and that coverage is excluded in these types of situations in order to avoid imposing liability on the insurer in a case where the insured, due to a close relationship with the injured party, might be unmotivated to assist the insurer in defending against the claim (see Whirlpool Corp. v Ziebert, 197 Wis 2d 144, 149; 539 NW2d 883, 885 [1995])^[FN1]. However, faced with a very similar case addressing the identical exclusion, the Wisconsin Supreme Court recently held that "Allstate has failed to meet its burden to demonstrate that the policy term 'benefit' unambiguously includes the contractual right to receive a defense or the contractual right to indemnification" (Day v Allstate Indem. Co., 2011 WI 24, ¶57 [decided April 29, 2011]). We agree with this analysis.

We therefore find that judgment should have been granted in plaintiff's favor, as the exclusion did not operate to bar coverage for the noninsured plaintiff's wrongful death claim for the death of the insured decedent.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

Brennan Beer Gorman/ Architects, LLP v Cappelli Enters., Inc., 2011 NY Slip Op 04825 (App. Div., 1st 2011)

On May 19, 2008, plaintiff submitted a proposal for architectural and engineering services to defendants relating to a proposed casino resort project (the project). Four days later, plaintiff informed defendants that it was still "working on a formal agreement," but nonetheless asked defendants to provide authorization to proceed. Defendants authorized plaintiff to start working, but expressly noted that plaintiff's "proposal and associated pricing" were "still under review and . . . subject to a formal agreement." Although plaintiff proceeded to work on the project, the parties continued to exchange contract drafts and comments for several months, never coming to an express agreement on price and other terms. It is thus evident on this record that the parties' minds never met on the material terms of their agreement, including price (see Yenom Corp. v 155 Wooster St. Inc., 23 AD3d 259, 259-260 [2005], lv denied 6 NY3d 708 [2006]). Accordingly, defendants are entitled to summary judgment dismissing plaintiff's first and third causes of action for breach of an express contract.

Defendants are also entitled to summary judgment dismissing plaintiff's fourth cause of action for breach of an implied contract. As noted, the record establishes that the parties never reached an express agreement on the material term of price. Moreover, defendants' statement that they would be bound only by a formal agreement and their repeated rejection of plaintiff's proposal for lump-sum pricing overrides their act of paying plaintiff's August 2008 invoice, which billed for work performed in June 2008 on a lump-sum basis (see Jordan Panel Sys. Corp. v Turner Constr. Co., 45 AD3d 165, 179 [2007]).

Defendants' consistent objections to plaintiff's invoices requires dismissal of the fifth cause of action for an account stated (cf. Herrick, Feinstein LLP v Stamm, 297 AD2d 477, 478-479 [2002]).

Because plaintiff's express and implied contract claims should be dismissed, plaintiff's second cause of action for attorneys' fees should also be dismissed, as that claim is premised exclusively on the attorneys' fees provision contained in plaintiff's May 2008 proposal.

Supreme Court properly declined to dismiss plaintiff's sixth cause of action for quantum meruit, since triable issues of fact exist as to whether plaintiff could have reasonably expected to be compensated for its services and the reasonable value of those services (see generally Fulbright & Jaworski, LLP v Carucci, 63 AD3d 487, 488-489 [2009]). Although the parties never reached an agreement on price, the record indicates that defendants acknowledged the need to pay plaintiff at least some amount for its services. Indeed, on July 3, 2008, defendants directed plaintiff to bill "for now on a [time and materials] basis until we have reached conclusion on the contract," and, on August 18, 2008, defendants asked plaintiff to prepare a summary of spending and payment status, noting that they wanted "to make sure we are staying current."

We reject defendants' contention that plaintiff cannot establish that defendants benefitted from plaintiff's services. The plaintiff asserting a valid claim in quantum meruit "recovers the reasonable value of his performance whether or not the defendant in any economic sense benefitted from the performance" (Martin H. Bauman Assoc. v H & M Intl. Transp., 171 AD2d 479, 484 [1991] [internal quotation marks and citation omitted]).

We also reject defendants' contention that plaintiff cannot establish the reasonable value of its services because it did not maintain itemized billing records detailing how it spent the asserted 5,800 man-hours of work. There are other means of establishing the reasonable value of services rendered, including the plaintiff's invoices and evidence of the number of hours of service rendered (see Paul F. Vitale, Inc. v Parker's Grille, Inc., 23 AD3d 1147, 1147 [2005], lv denied 6 NY3d 707 [2006]; Clark v Torian, 214 AD2d 938, 938 [1995]), both of which are available in the record. Moreover, plaintiff has submitted the affidavit of a licensed architect who, based on his review of the record, opined that plaintiff's schematic design work had a fair market value of at least $1.3 million.

We note that, on appeal, plaintiff does not seek summary judgment on its quantum meruit claim. In any event, we find that plaintiff is not entitled to such relief due to unresolved issues of material fact. We further note that defendant makes no argument with respect to plaintiff's seventh cause of action for a declaratory judgment.

Goldman Sachs Group, Inc. v Almah LLC, 2011 NY Slip Op 04725 (App. Div. 1st 2011)

Before any discovery was conducted, GS moved to dismiss the counterclaims pursuant to CPLR 3211(a)(1) and (7)(21)^[FN1]. GS argued that it was entitled to dismissal of the first counterclaim (breach of contract) because all the transaction documents submitted established that it "received" no "payment" of any kind as a result of the assignment and sublease. Preliminarily, the motion court acknowledged that, because Art. 12.6(a) of the lease speaks in terms of actual payment, GS's interpretation limiting the profit-sharing obligation to money received was reasonable. Nevertheless, the court denied the motion to dismiss as to the first counterclaim, finding that the term "other consideration" was ambiguous and should be interpreted with the aid of extrinsic evidence, reasoning that, since "sum" means money, if "other consideration" is to have any non-redundant meaning, it must mean more than just money, in accordance with the broad legal concept that consideration may be many forms of value.

Whether a contract is ambiguous is a question of law for the court and is to be determined by looking "within the four corners of the document" (Kass v Kass, 91 NY2d 554, 566 [1998], citing W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162-163 [1990]). A contract is unambiguous if "on its face [it] is reasonably susceptible of only one meaning" (Greenfield v Philles Records, 98 NY2d 562, 570 [2002]; see also Breed v Insurance Co. of N. Am., 46 NY2d 351, 355 [1978]). Conversely, "[a] contract is ambiguous if the provisions in controversy are reasonably or fairly susceptible of different interpretations or may have two or more different meanings" (Feldman v National Westminster Bank, 303 AD2d 271, 271 [2003], lv denied 100 NY2d 505 [2003] [internal quotation marks and citations omitted]).

The existence of ambiguity is determined by examining the "entire contract and consider[ing] the relation of the parties and the circumstances under which it was executed," with the wording to be considered "in the light of the obligation as a whole and the intention of the parties as manifested thereby" (Kass at 566 [internal quotations marks and citation omitted]). The " intent of the parties must be found within the four corners of the contract, giving a practical interpretation to the language employed and the parties' reasonable expectations'" (Del Vecchio v Cohen, 288 AD2d 426, 427 [2001], quoting Slamow v Del Col, 174 AD2d 725, 726 [1991], affd 79 NY2d 1016 [1992]).

Applying these principles, we find that the language of Article 12.6, when considered as an integrated whole and not in isolation, conveys the parties' intent that only actual "payment" made by the assignee and "receipt" by the assignor as consideration would trigger the profit-sharing clause. Indeed, Article 12.6 lists several types of "consideration" and all of the examples consist of amounts payable, for one reason or another, to the Tenant. The examples of "other consideration" include "sums paid for the sale or rental of Tenant's fixtures, leasehold improvements, equipment, furnishings or other personal property . . . " Additionally, Article 12.6 indicates that any "consideration" would consist of "sums" that a Tenant "receives" and against which the Tenant's expenses can be netted. This language in Article 12.6 conveys the parties' clear intent that only tangible consideration such as cash or notes payable to the tenant could trigger the profit-sharing clause, and that any intangible benefits inuring to the tenant from the assignment and sublease, as the owner posits, in the form of inherent "value" does not suffice. Even though the word "consideration" might seem to suggest a broader meaning in general, the word should be limited to the particular object that the parties intended here. Accordingly, because it is undisputed that no "payment" was "received" as consideration for the assignment of the lease, tenant GS was entitled to a dismissal of the counterclaim in its entirety.

Ellington v Sony/ATV Music Publ. LLC, 2011 NY Slip Op 04733 (App. Div., 1st 2011)

Plaintiff failed to set forth a basis for terminating the parties' copyright royalties agreement. Viacom's sale of defendant Famous Music, a party to the agreement, to defendant Sony/ATV did not repudiate the agreement by assigning plaintiff's rights and rendering Famous incapable of performing its obligations. In any event, an assignment is permissible in the absence of an express prohibition (see Eisner Computer Solutions v Gluckstern, 293 AD2d 289 [2002]; Matter of Stralem, 303 AD2d 120, 122 [2003]). Plaintiff's conclusory characterization of the agreement as an unassignable personal services contract (see Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471, 482 [2006], cert dismissed 548 US 940 [2006]) was contradicted by the overall tenor of the agreement, which was cast as a sale of "assets" and did not provide for the management of plaintiff's artistic career or talents. The extraordinary remedy of rescission was unwarranted since, among other reasons, there was an adequate remedy at law (see Rudman v Cowles Communications, 30 NY2d 1, 13 [1972]).

The fiduciary breach claim was duplicative of the contract claims (see William Kaufman Org. v Graham & James, 269 AD2d 171, 173 [2000]), plaintiff's artificial separation of the royalty mis-routing allegation from the "negative adjustment" contract claims notwithstanding. The unjust enrichment claim was not viable in light of the undisputedly valid contract claims (see EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 23 [2005]).

Malekan v Sakai, 2011 NY Slip Op 04751 (App. Div., 1st 2011)

Supreme Court correctly determined that Sakai is the rightful owner of the antique. Plaintiff Malekan's contention that the agreement in Farsi was an agreement to forbear, akin to a covenant not to sue, lacks support in the record. Furthermore, there is no dispute that Malekan also signed a bill of sale written in English concerning the antique, and under the circumstances, Malekan is bound by what he signed (see Shklovskiy v Khan, 273 AD2d 371, 372 [2000]).

Suazo v Maple Ridge Assoc., L.L.C., 2011 NY Slip Op 04762 (App. Div., 1st 2011)

The right of a party to recover indemnification on the basis of a contractual provision depends on the intent of the parties and the manner in which that intent is expressed in the contract (see Kurek v Port Chester Hous. Auth., 18 NY2d 450 [1966]). The promise to indemnify should not be found unless it can be clearly implied from the language and purpose of the entire agreement and the surrounding facts and circumstances (see Hooper Assoc., Ltd., v AGS Computers, 74 NY2d 487 [1989]). A contract that provides for indemnification will be enforced so long as the intent to assume such role is sufficiently clear and unambiguous (see Bradley v Earl B. Feiden, Inc., 8 NY3d 265 [2007]).

999

3101, Disclosure, Experts, and Expert rebuttal not required (last decision)

CPLR R. 4401 Motion for judgment during trial

CPLR § 3101 Scope of disclosure

CPLR § 3103

Motion not made on notice

CPLR R. 3108 Written questions; when permitted

Botwinik v Moseson, 2011 NY Slip Op 04809 (App. Div., 1st 2011)

Judgment, Supreme Court, Nassau County (F. Dana Winslow, J.), entered on or about September 28, 2009, in favor of defendants, dismissing the complaint, and bringing up for review an order, same court and Justice, entered on or about May 18, 2009, which granted defendants' oral motion in limine to preclude the testimony of plaintiff's expert and dismiss this medical malpractice action, unanimously reversed, on the law without costs, the motion denied, and the complaint reinstated.

In making their oral motion, after the jury was empaneled and before opening arguments, defendants argued that plaintiff's proposed expert, though a highly qualified registered nurse, lacked the necessary qualifications to give a medical opinion as to the requisite standard of informed consent (see CPLR 4401-a; Orphan v Pilnik, 15 NY3d 907 [2010]).

In opposition, plaintiff relied partially upon the deposition testimony of the defendant doctor which was not before the court, and the CPLR 3101(d) disclosure of the nurse's opinion. In addition, plaintiff orally cross-moved to substitute the testimony of a medical doctor for the testimony of the nurse, if the court ruled that plaintiff's offer was inadequate to establish the requisite prima facie claim. Apparently the court gave plaintiff's counsel a break to research the issue of the nurse's qualification to give an opinion under New York law, but did not read the deposition testimony. The court granted defendants' in limine motion and sub silentio denied plaintiff's.

CPLR 4401-a states that "[a] motion for judgment at the end of the plaintiff's case must be granted as to any cause of action for medical malpractice based solely on lack of informed consent
if the plaintiff has failed to adduce expert medical testimony in support of the alleged qualitative insufficiency of the consent" (emphasis added).

The grant of dismissal pursuant to CPLR 4401-a was an abuse of discretion, given that the timing of defendants' oral application was not at the end of plaintiff's case, the record on which the court ruled was sparse and the court failed to consider plaintiff's offer to substitute a medical doctor's opinion for the nurse's (see Jean-Louis v City of New York, 60 AD3d 737, 738 [2009] [court erred in dismissing the complaint before the plaintiff had completed her proof]; Greenbaum v Hershman, 31 AD3d 607 [2006] ["plaintiff should have been afforded the opportunity to conclude her case" and present expert medical testimony regarding the qualitative insufficiency of her consent]).

Because defendants chose to move orally as opposed to making a formal motion on notice, plaintiff had little opportunity to develop a full record and be heard. Moreover, courts favor disposition of cases on the merits rather than on oral application made after a jury is impaneled and waiting (see Murray v Brookhaven Mem. Hosp. Med. Ctr, 73 AD3d 878, 879 [2010]; Williams v Naylor, 64 AD3d 588, 589 [2009]).

Accordingly, we reverse, deny defendants' motion and reinstate the complaint.

Coventry Real Estate Advisors, L.L.C. v Developers Diversified Realty Corp., 2011 NY Slip Op 04750 (App. Div., 1st 2011)

The motion court providently exercised its discretion in denying plaintiffs' motion for the issuance of commissions pursuant to CPLR 3108, since they failed to demonstrate that commissions were "necessary or convenient" (CPLR 3108; Reyes v Riverside Park Community [Stage I], Inc., 59 AD3d 219, 219 [2009]). The motion court stated that plaintiffs could submit new papers if they wanted commissions for out-of-state depositions on a topic other than uncharged crimes; hence, the current appeal concerns only uncharged crimes. Although "a witness may be cross-examined [at trial] with respect to specific immoral, vicious or criminal acts which have a bearing on the witness's credibility" (Badr v Hogan, 75 NY2d 629, 634 [1990]), here, due to the affidavits plaintiffs obtained, they already have a good-faith basis to cross-examine an executive of one of the defendants about an uncharged crime. If the executive denies the uncharged crime, plaintiffs will not be allowed to use extrinsic evidence solely to impeach his credibility (see People v Schwartzman, 24 NY2d 241, 245 [1969], cert denied 396 US 846 [1969]).

We reject plaintiffs' argument that they can use evidence of the uncharged crime and a cover-up thereof to show intent for their fraud claim.

Plaintiffs failed to preserve their argument that the motion court should have considered a protective device pursuant to CPLR 3103, rather than deny its motion in its entirety, and we decline to consider it.

Because the first four pages of the anonymous document concern the uncharged crime, for the reasons stated above, the motion court providently exercised its discretion in denying plaintiff's motion to use those pages in discovery. The pages are also not discoverable because they are privileged (see CPLR 3101[b],[c]; 4503). However, the last page is not privileged, and it has relevance beyond the uncharged crime since it alleges that an executive of one of the defendants ordered a "data dump" on his computer. Indeed, plaintiffs may use the last page to discover if the executive deleted from his computer material relevant to this case. Accordingly, plaintiffs are entitled to use the last page in discovery.

Accent Collections, Inc. v Cappelli Enters., Inc., 2011 NY Slip Op 04609 (App. Div., 2nd 2011)

CPLR 3101(a) provides that "[t]here shall be full disclosure of all matter material and necessary in the prosecution or defense of an action, regardless of the burden of proof." The phrase "material and necessary" should be interpreted liberally, and the test is one of "usefulness and reason" (Kooper v Kooper, 74 AD3d 6, 10 [internal quotation marks omitted]). Unlimited disclosure, however, is not required (see Spohn-Konen v Town of Brookhaven, 74 AD3d 1049; Palermo Mason Constr. v Aark Holding Corp., 300 AD2d 460), and the rules provide that the court may issue a protective order "denying, limiting, conditioning or regulating the use of any disclosure device" to "prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person or the courts" (CPLR 3103[a]).

Generally, the supervision of disclosure is left to the broad discretion of the trial court, which must balance the parties' competing interests (see Kooper v Kooper, 74 AD3d at 17; Palermo Mason Constr. v Aark Holding Corp., 300 AD2d 460). On appeal, "this Court has the authority to review a discovery order to determine whether the trial court has abused its discretion as a matter of law, or in the absence of abuse, has exercised its discretion improvidently" (Kooper v Kooper, 74 AD3d at 17).

A motion to compel responses to demands and interrogatories is properly denied where the demands and interrogatories seek information which is irrelevant, overly broad, or burdensome (see Merkos L'Inyonei Chinuch, Inc. v Sharf, 59 AD3d 408; Gilman & Ciocia, Inc. v Walsh, 45 AD3d 531; Paradis v F.L. Smithe Mach. Co., Inc., 25 AD3d 594). While the failure of a party to challenge the propriety of a notice for discovery and inspection within the time prescribed by the CPLR forecloses inquiry into the propriety of the information sought, there is an exception with regard to requests that are palpably improper (see Otto v Triangle Aviation Servs., 258 AD2d 448; see also During v City of New Rochelle, N.Y., 55 AD3d 533; Velez v South Nine Realty Corp., 32 AD3d 1017; Cipriano v Righter, 100 AD2d 923).

Here, the Supreme Court providently exercised its discretion in denying those branches of the plaintiff's motion which were to compel the defendants to produce responsive documents and information in response to the plaintiff's interrogatories one through five and demands one through four, and in denying that branch of the motion which sought an order deeming the defendants' objections waived, as the demands and interrogatories at issue were palpably improper, because they sought irrelevant information, or were overbroad and/or burdensome (see Merkos L'Inyonei Chinuch, Inc. v Sharf, 59 AD3d 408; Gilman & Ciocia, Inc. v Walsh, 45 AD3d 531; Velez v South Nine Realty Corp., 32 AD3d 1017; Otto v Triangle Aviation Servs., 258 AD2d 448).

The Supreme Court providently denied that branch of the plaintiff's motion which sought costs and attorneys' fees, as the plaintiff failed to demonstrate that the defendants' conduct was frivolous (see 22 NYCRR 130-1.1[c]), and also providently denied those branches of the motion which were to deem the issues resolved in favor of the plaintiff and/or strike the defendants' second amended answer, since there was no showing that the defendant's conduct was willful and contumacious (see Nieves v City of New York, 35 AD3d 557; Brandes v North Shore Univ. Hosp., 22 AD3d 778; Jenkins v City of New York, 13 AD3d 342; Fellin v Sahgal, 268 AD2d 456).

Fazio v Costco Wholesale Corp., 2011 NY Slip Op 04740 (App. Div., 1st 2011)

Plaintiffs were not required to produce an expert to refute defendant's expert's conclusions (see e.g. Hendricks v Baksh, 46 AD3d 259 [2007]).

Does CPLR R. 3212(f) work with CPLR R. 3123

CPLR R. 3212 Motion for summary judgment

CPLR § 3213 Motion for summary judgment in lieu of complaint

Citibank, N.A. v Silverman, 2011 NY Slip Op 04810 (App. Div., 1st 2011)

Assuming, arguendo, that CPLR 3212(f) applies to an action commenced under CPLR 3213, defendant's affidavit failed to show that "facts essential to justify opposition may exist but cannot then be stated" (CPLR 3212[f]; see also Global Mins. & Metals Corp. v Holme, 35 AD3d 93, 103 [2006], lv denied 8 NY3d 804 [2007]).

The motion court properly dismissed defendant's counterclaim alleging a violation of the Bank Holding Company Act (BHCA), (12 USC § 1972[1][C]). When a bank engages in traditional banking practices, it cannot be liable under the BHCA (see BC Recreational Indus. v First Natl. Bank of Boston, 639 F2d 828 [1st Cir 1980]). "The anti-tying provisions [of the BHCA] were not intended to interfere with or impede appropriate traditional banking activities through which banks safeguard the value of their investment" (In re Adelphia Communications Corp., 365 BR 24, 76 [SD NY 2007] citing Nordic Bank PLC v Trend Group Ltd., 619 F Supp 542, 554 [SD NY 1985]).

To demand additional collateral from a debtor who is in default in exchange for extending that debtor's letter of credit is well within traditional banking practices. Indeed, it is commonplace (see F.D.I.C. v Blankinship, 986 F2d 1427 [10th Cir. 1992] ["As a condition to renegotiating debts, banks can properly require additional collateral and impose other terms designed to ensure payment"] [citations omitted]). That the demand for additional collateral concerned the property of other family members does not take it out of the realm of traditional banking practices (see Sanders v First Natl. Bank & Trust Co., 936 F2d 273, 278 [6th Cir. 1987]).

Defendant's counterclaim for breach of the implied covenant of good faith and fair dealing fails because, as we have found, there was no oral forbearance agreement (see Societe Nationale D'Exploitation Industrielle Des Tabacs Et Allumettes v Salomon Bros. Intl., 251 AD2d 137 [1998], lv denied 95 NY2d 762 [2000]). Even if, arguendo, plaintiff orally agreed to forbear while the parties negotiated, we would still reject defendant's claim of bad faith on the part of plaintiff (see Massachusetts Mut. Life Ins. Co. v Gramercy Twins Assoc., 199 AD2d 214, 218 [1993]).Defendant's counterclaims for negligent misrepresentation and breach of fiduciary duty also fail. His conclusory allegations that his relationship with plaintiff was more than that of lender and borrower and that he relied on plaintiff's advice are insufficient to raise the inference that this bank-borrower relationship was special (see e.g. Korea First Bank of N.Y. v Noah Enters., Ltd., 12 AD3d 321, 323 [2004], lv denied 4 NY3d 710 [2005]). Even if, arguendo, there were a special relationship between the parties, defendant failed to raise the inference that he reasonably relied on incorrect information imparted by plaintiff (see J.A.O. Acquisition Corp. v Stavitsky, 8 NY3d 144, 148 [2007]; Global Mins., 35 AD3d at 99; P. Chimento Co. v Banco Popular de Puerto Rico, 208 AD2d 385, 385 [1994]).

Defendant also fails to make a prima facie case of age discrimination under the ECOA. Even if plaintiff raised defendant's age as an issue during negotiations, it subsequently offered him a term sheet and a loan modification agreement. As for defendant's claim of discrimination on the basis of marital status, essentially based on 12 CFR 202.7(d)(5), his own affidavit and his lawyer's affidavit show that plaintiff did not require his wife to furnish collateral. Rather, plaintiff gave defendant various options, one of which was to give plaintiff a lien against his cooperative apartment, that he co-owned with his wife.

Bond v DeMasco, 2011 NY Slip Op 04615 (App. Div., 2nd 2011)

Contrary to the plaintiffs' contention, the Supreme Court properly denied, as premature, their motion for summary judgment on the issue of liability (see CPLR 3212[f]; Lambert v Sklar, 61 AD3d 939, 940; Aurora Loan Servs., LLC v LaMattina & Assoc., Inc., 59 AD3d 578). The plaintiffs moved for summary judgment on the issue of liability prior to the parties' depositions. The defendants did not have an adequate opportunity to conduct discovery (see Amico v Melville Volunteer Fire Co., Inc., 39 AD3d 784, 785). Moreover, the plaintiff Anne F. Bond and the defendant Rita J. DeMasco submitted, among other things, affidavits containing certain discrepancies pertaining to the circumstances of the subject accident (see Gardner v Cason, Inc., 82 AD3d 930; Cardone v Poidamani, 73 AD3d 828).

Hearsay, standing alone, is not enough. Excited Utterance.

Mermelstein v Singer, 2011 NY Slip Op 04736 (App. Div., 1st 2011)

The record demonstrates that the IRA account was solely in plaintiff's name and that all the funds and securities in the account came from other IRA accounts solely in his name (see Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 50 [2006]). In support of her argument that her late father had some ownership interest in the account, defendant relies solely on hearsay conversations and a hearsay document, which, without more, cannot withstand summary judgment (see Narvaez v NYRAC, 290 AD2d 400, 400-401 [2002]).

Matter of Odalis F., 2011 NY Slip Op 04738 (App. Div., 1st 2011)

The presentment agency's case rested on a 911 call made by a nontestifying complainant, who was appellant's older brother. We conclude that the call was improperly admitted as an excited utterance.

An extrajudicial statement is admissible under the excited utterance exception to the hearsay rule when the declarant is "so influenced by the excitement and shock of [a startling] event that it is probable that he or she spoke impulsively and without reflection" (People v Caviness, 38 NY2d 227, 231 [1975]). "[T]he time for reflection is not measured in minutes or seconds, but rather is measured by facts" (People v Vasquez, 88 NY2d 561, 579 [1996] [internal quotation marks omitted]).

In People v Robinson (282 AD2d 75 [2001]) we considered the admissibility of a 911 call under the analogous present sense impression exception to the hearsay rule. We held that a victim's 911 call made several minutes after a robbery was inadmissible where the declarant called her employer to report the robbery before calling the police; it could not be said that she did not have time to reflect on the event before calling 911.

Notwithstanding the different bases for presuming the trustworthiness of statements under the respective hearsay exceptions, a declarant's activities before making the statement at issue are relevant under both. Here, the complainant's conduct prior to calling 911, like that of the declarant in Robinson, indicates a capacity for deliberation and reflection. Although the testimony did not establish how much time passed between the time appellant allegedly threatened the complainant with a knife and the time he placed the 911 call, it is clear that several intervening events occurred. The complainant called his mother on the phone and waited for her to get home. When his mother arrived, the complainant asked her whether he should call the police.

Moreover, other than the recording of the 911 call itself, there is no evidence of the existence of the allegedly startling event that led to the alleged excited utterance.

Disclosure, lots of it

CPLR § 3126 Penalties for refusal to comply with order or to disclose

CPLR § 4504. Physician, dentist, podiatrist, chiropractor and nurse

CPLR R. 3120 Discovery and production of documents and things for inspection, testing, copying or photographing

CPLR § 3101 Scope of disclosure

CPLR R. 3124 Failure to disclose; motion to compel disclosure

22 NYCRR 202.21 Note of issue and certificate of readiness

Congel v Malfitano, 2011 NY Slip Op 04406 (App. Div., 2nd 2011)

Contrary to the defendant's contentions, the Supreme Court providently exercised its discretion in denying that branch of his cross motion which was for leave to amend his answer to assert counterclaims pursuant to Partnership Law §§ 73 and 74. Although leave to amend should be freely given in the absence of prejudice or surprise to the opposing party (see CPLR 3025[b]), the motion should be denied where the proposed amendment is palpably insufficient or patently devoid of merit (see Brooks v Robinson, 56 AD3d 406, 407; Scofield v DeGroodt, 54 AD3d 1017, 1018; Lucido v Mancuso, 49 AD3d 220, 227). Here, the defendant's proposed amended counterclaims were patently devoid of merit.

CPLR 3101(a) provides for, inter alia, "full disclosure of all matter material and necessary in the prosecution or defense of an action." Although the phrase "material and necessary" must be "interpreted liberally" in favor of disclosure so long as the information sought meets the test of "usefulness and reason" (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406; see Scalone v Phelps Mem. Hosp. Ctr., 184 AD2d 65, 69-70), a party does not have the right to uncontrolled and unfettered disclosure (see Merkos L'Inyonei Chinuch, Inc. v Sharf, 59 AD3d 408, 410; Gilman & Ciocia, Inc. v Walsh, 45 AD3d 531, 531). Further, the Supreme Court has broad discretion over the supervision of disclosure, and its determination will not be disturbed absent an improvident exercise of discretion (see Spodek v Neiss, 70 AD3d 810, 810; Reilly Green Mtn. Platform Tennis v Cortese, 59 AD3d 694, 695; Cabellero v City of New York, 48 AD3d 727, 728).

On the defendant's prior appeal, this Court remitted the matter to the Supreme Court, Dutchess County, for, inter alia, further proceedings on the issue of damages caused to the plaintiffs by the defendant's wrongful dissolution of the Poughkeepsie Galleria Company Partnership, as well as a determination of the value of the defendant's interest in that partnership at the time of the wrongful dissolution (see Congel v Malfitano, 61 AD3d 810; Partnership Law § 69[2][c][II]). Given that the remaining issues to be resolved in this matter are narrow (see Partnership Law § 69[2][c][II]), the Supreme Court did not improvidently exercise its discretion in limiting the scope of discovery and providing for an expedited discovery schedule.

Thompson v Dallas BBQ, 2011 NY Slip Op 04451 (App. Div., 2nd 2011)

Pursuant to CPLR 3126, "[a] court may strike an answer as a sanction if a defendant refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed'" (Mazza v Seneca, 72 AD3d 754, 754, quoting CPLR 3126). The nature and degree of the penalty to be imposed pursuant to CPLR 3126 lies within the sound discretion of the trial court (see CPLR 3126[3]; Kihl v Pfeffer, 94 NY2d 118, 122-123; Bernal v Singh, 72 AD3d 716). The drastic remedy of striking a pleading is not appropriate absent a clear showing that the failure to comply with discovery demands is willful and contumacious (see CPLR 3126[3]; Kyung Soo Kim v Goldmine Realty, Inc., 73 AD3d 709; Moray v City of Yonkers, 72 AD3d 766).

Here, there was no such clear showing that the defendants' conduct was willful and contumacious (see Dank v Sears Holding Mgt. Corp., 69 AD3d 557). Accordingly, the Supreme Court providently exercised its discretion in denying the plaintiff's motion to strike the defendants' answer.

Gille v Long Beach City School Dist., 2011 NY Slip Op 04202 (App. Div., 2nd 2011)

While it is unclear whether the school district negligently lost or intentionally destroyed key evidence (see Denoyelles v Gallagher, 40 AD3d 1027; Baglio v St. John's Queens Hosp., 303 AD2d 341, 342-343), it is uncontested that the school district is unable to locate the window shade, the very instrumentality giving rise to the infant plaintiff's injuries. However, because the determination of spoliation sanctions is within the broad discretion of the trial court (see Iamiceli v General Motors Corp., 51 AD3d 635; Barnes v Paulin, 52 AD3d 754; Dennis v City of New York, 18 AD3d 599), the matter must be remitted to the Supreme Court, Nassau County, for its determination of the cross motion on the merits (see American Fed. of School Adm'rs, AFL-CIO v Council of Adm'rs & Supervisors, 266 AD2d 417, 418; Polera Bldg. Corp. v New York School Constr. Auth., 262 AD2d 295).

Lopez v Retail Prop. Trust, 2011 NY Slip Op 04008 (App. Div., 2nd 2011)

The Supreme Court, in its discretion, may grant permission to conduct additional discovery after the filing of a note of issue and certificate of readiness where the moving party demonstrates that "unusual or unanticipated circumstances" developed subsequent to the filing requiring additional pretrial proceedings to prevent substantial prejudice (22 NYCRR 202.21[d]; see Wigand v Modlin, 82 AD3d 1213; Owen v Lester, 79 AD3d 992; Audiovox Corp. v Benyamini, 265 AD2d 135, 140). The compliance conference order dated February 17, 2010, warning the plaintiff that failure to file a note of issue within 90 days would result in dismissal of the action, did not mandate that all discovery be complete prior to the filing of the note of issue. Even though the defendant Kone, Inc. (hereinafter the defendant), was impeding discovery, the plaintiff filed a conditional note of issue as directed by the compliance conference order. It was not until after the filing of the conditional note of issue that the defendant moved for a protective order with respect to the plaintiff's discovery requests, on the ground that they were untimely. Under these circumstances, the plaintiff's cross motion to compel the defendant to comply with outstanding discovery should have been granted (see Karakostas v Avis Rent A Car Sys., 306 AD2d 381, 382; Schmitt v Carl Meyer's Hof, Inc., 86 AD2d 985).

Olkovetsy v Friedwald Ctr. for Rehabilitation & Nursing, LLC, 2011 NY Slip Op 04015 (App. Div. 2nd 2011)

Pursuant to CPLR 4504(a), information obtained by, among others, professional nursing personnel in attending to a patient in a professional capacity and "which [is] necessary to enable him [or her] to act in that capacity" is privileged. As a general rule, disclosure of the name and address of a nonparty patient who may have been a witness to an alleged act of negligence or malpractice does not violate the patient's privilege of confidentiality of treatment (see Rabinowitz v St. John's Episcopal Hosp., 24 AD3d 530; Hirsch v Catholic Med. Ctr. of Brooklyn & Queens, 91 AD2d 1033, 1034; see also Matter of Grand Jury Investigation in N.Y. County, 98 NY2d 525, 530-531), provided that the requesting party "is not seeking to identify the patient by reference to the medical treatment he [or she] received" (Matter of Seymour, 288 AD2d 894, 894).

Contrary to the defendants' contention, in light of the broad range of services provided in a nursing home, the information requested by the plaintiff did not fall within the ambit of CPLR 4504(a) (see generally Rabinowitz v St. John's Episcopal Hosp., 24 AD3d 530; cf. Gunn v Sound Shore Med. Ctr. of Westchester, 5 AD3d 435, 437). Additionally, the information demanded by the plaintiff was necessary to the prosecution of the action and, as limited by the Supreme Court to the period from January 1, 2005, through February 28, 2005, and to only the residents of the decedent's particular unit of residency, the demand was not overly broad or unduly burdensome (see Grant v PALJR, LLC, 64 AD3d 750, 751).

Trueforge Global Mach. Corp. v Viraj Group., 2011 NY Slip Op 04040 (App. Div., 2nd 2011)

The Supreme Court properly denied the defendants' cross motion for summary judgment dismissing the complaint pursuant to General Obligations Law § 5-701(a)(10). "[I]n a contract action[,] a memorandum sufficient to meet the requirements of the Statute of Frauds must contain expressly or by reasonable implication all the material terms of the agreement, including the rate of compensation if there has been agreement on that matter" (Morris Cohon & Co. v Russell, 23 NY2d 569, 575; see Intercontinental Planning v Daystrom, Inc., 24 NY2d 372, 378-379). "If an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract" (Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 482, cert denied 498 US 816; see Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d 105, 109). Thus, "a mere agreement to agree, in which a material term is left for future negotiations, is unenforceable" (Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d at 109; see 2004 McDonald Ave. Realty, LLC v 2004 McDonald Ave. Corp., 50 AD3d 1021; Andor Group v Benninghoff, 219 AD2d 573). Further, while General Obligations Law § 5-701(a)(10) applies to contracts implied in law to pay reasonable compensation (see Snyder v Bronfman, 13 NY3d 504), in an action to recover reasonable compensation, "a sufficient memorandum need only evidence the fact of plaintiff's employment by defendant to render the alleged services" (Morris Cohon & Co. v Russell, 23 NY2d at 575-576)."The obligation of the defendant to pay reasonable compensation for the services is then implied" (id. at 576). Contrary to the defendants' contention, they failed to establish their prima facie entitlement to judgment as a matter of law based on the statute of frauds, as certain e-mail correspondence (see General Obligations Law § 5-701[b][4]; Newmark & Co. Real Estate Inc. v 2615 E. 17 St. Realty LLC, 80 AD3d 476, 477; see also Intercontinental Planning v Daystrom, Inc., 24 NY2d at 379; Aloisi v Coin Phones, 157 AD2d 688) was sufficient to set forth an objective standard for determining the compensation to be paid to the plaintiff as a finder's fee, since it was tied to an extrinsic event, i.e., it was expressed as a percentage of the price paid by the defendants for the located acquisition opportunity, thus rendering the terms definite and enforceable (see Tonkery v Martina, 78 NY2d 893; Novello v 215 Rockaway, LLC, 70 AD3d 909; Edge Mgt. Corp. v Crossborder Exch. Corp., 304 AD2d 422; cf. MP Innovations, Inc. v Atlantic Horizon Intl., Inc., 72 AD3d 571).

Furthermore, the Supreme Court did not improvidently exercise its discretion in granting, upon reargument, the plaintiff's motion to compel a deposition of nonparty Neeraj Kochhar. "[A] corporation has the right in the first instance to determine which of its representatives will appear for an examination before trial" (Barone v Great Atl. & Pac. Tea Co., 260 AD2d 417, 417-418; see Aronson v Im, 81 AD3d 577, 577; Nunez v Chase Manhattan Bank, 71 AD3d 967; Mercado v Alexander, 227 AD2d 391). The moving party that is seeking additional depositions has the burden of demonstrating "(1) that the representatives already deposed had insufficient knowledge, or were otherwise inadequate, and (2) there is a substantial likelihood that the persons sought for depositions possess information which is material and necessary to the prosecution of the case" (Zollner v City of New York, 204 AD2d 626, 627; see Thristino v County of Suffolk, 78 AD3d 927; Spohn-Konen v Town of Brookhaven, 74 AD3d 1049; Seattle Pac. Indus., Inc. v Golden Val. Realty Assoc., 54 AD3d 930, 932-933; Nazario v City of New York, 27 AD3d 439; Barone v Great Atl. & Pac. Tea Co., 260 AD2d at 418). Here, the plaintiff satisfied this burden by demonstrating that the representative produced by the defendants for deposition did not have sufficient knowledge of the events giving rise to the complaint (see Nunez v Chase Manhattan Bank, 71 AD3d 967), and that there was a substantial likelihood that Neeraj Kochhar possessed information which was material and necessary to the issue of whether the plaintiff was entitled to payment of a finder's fee (see Nazario v City of New York, 27 AD3d 439; cf. Seattle Pac. Indus., Inc. v Golden Val. Realty Assoc., 54 AD3d at 932-933).

Waiver

Fernandez v City of New York, 2011 NY Slip Op 04111 (App. Div., 1st 2011)

Plaintiff has waived her claim that defendants' failure to produce "legible" photographs of the underside of the desk after the accident required an adverse inference that such photographs would have provided notice. The record shows that she was aware of the photographs yet filed a note of issue certifying that discovery was complete (see Escourse v City of New York, 27 AD3d 319 [2006]). In any event, the photographs would not have been probative as to notice, since the track was not visible until after the drawer fell.

Oh, the Experts

Corcione v John Dominick Cusumano, Inc., 2011 NY Slip Op 04193 (App. Div., 2nd 2011)

The defendants failed to establish their prima facie entitlement to judgment as a matter of law (see Alvarez v Prospect Hosp., 68 NY2d 320, 324; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 852; Zuckerman v City of New York, 49 NY2d 557, 559). The defendants' examining physician, Dr. Isaac Cohen, concluded in his affirmed report that the plaintiff presented with resolved cervical and lumbar sprains, and that herniations and bulges noted in the plaintiff's magnetic resonance imaging (hereinafter MRI) reports were "of no clinical significance" and caused "no neural compromise." However, the MRI reports, which were reviewed by Dr. Cohen, refer to impingements on the lumbar and cervical neuro canal. Dr. Cohen's report fails to reconcile his conclusion of no neural compromise with the MRI reports reflecting cervical and lumbar neural canal impingements, rendering his opinion conclusory, speculative, and insufficient (see Damas v Valdes, ___ AD3d ___, 2011 NY Slip Op 03022 [2d Dept 2011]; Singh v City of New York, 71 AD3d 1121; Nicholson v Allen, 62 AD3d 766, 767; Zarate v McDonald, 31 AD3d 632, 633; Bennett v Genas, 27 AD3d 601; Giraldo v Mandanici, 24 AD3d 419, 420).

Artis v Lucas, 2011 NY Slip Op 03983 (App. Div., 2nd 2011)

The defendant failed to meet his prima facie burden of showing that the plaintiff did not sustain a serious injury within the meaning of Insurance Law § 5102(d) as a result of the subject accident (see Toure v Avis Rent A Car Sys., 98 NY2d 345; Gaddy v Eyler, 79 NY2d 955, 956-957). In support of his motion, the defendant relied upon, inter alia, the affirmed medical report of Dr. Alan M. Crystal. When this doctor examined the plaintiff in February 2010, he noted significant limitations in the range of motion of the lumbar region of the plaintiff's spine (see Ortiz v Orlov, 76 AD3d 1000, 1001; Cheour v Pete & Sals Harborview Transp., Inc., 76 AD3d 989; Smith v Hartman, 73 AD3d 736; Leopold v New York City Tr. Auth., 72 AD3d 906). Although Dr. Crystal indicated that the limitations noted were subjective in nature, he failed to explain or substantiate the basis for his conclusion that the noted limitations were self-imposed with any objective medical evidence (see Iannello v Vazquez, 78 AD3d 1121; Granovskiy v Zarbaliyev, 78 AD3d 656; cf. Perl v Meher, 74 AD3d 930; Bengaly v Singh, 68 AD3d 1030, 1031; Moriera v Durango, 65 AD3d 1024, 1024-1025; Torres v Garcia, 59 AD3d 705, 706; Busljeta v Plandome Leasing, Inc., 57 AD3d 469).

Since the defendant failed to meet his prima facie burden, it is unnecessary to determine whether the plaintiff's papers submitted in opposition were sufficient to raise a triable issue of fact (see Iannello v Vazquez, 78 AD3d at 1121; Ortiz v Orlov, 76 AD3d at 1001; Bengaly v Singh, 68 AD3d at 1031; Coscia v 938 Trading Corp., 283 AD2d 538).

Mazil v Quinones, 2011 NY Slip Op 04010 (App. Div, 2nd 2011)

In opposition, the plaintiffs submitted an affirmation from the injured plaintiff's treating physician, Dr. Benjamin Cortijo, inter alia, affirming the truth of his "initial examination report" also submitted in opposition. Dr. Cortijo conducted contemporaneous and recent examinations of the lumbar region of the injured plaintiff's spine. During each examination, he performed certain testing, including range-of-motion testing, which, each time, revealed certain significant range-of-motion limitations of the lumbar region of the injured plaintiff's spine. Based on his findings, he concluded that the injured plaintiff sustained a permanent injury to the lumbar region of her spine as a result of the accident.

The plaintiffs also provided an adequate explanation for the cessation of the injured plaintiff's treatment (see Pommells v Perez, 4 NY3d 566, 574). Dr. Cortijo affirmed that any further treatment would have been merely palliative in nature (id. at 577).

The plaintiffs' submissions raised a triable issue of fact as to whether the injured plaintiff sustained a serious injury to the lumbar region of her spine under the permanent consequential limitation of use and/or significant limitation of use categories of Insurance Law § 5102(d) (see Dixon v Fuller, 79 AD3d 1094, 1094-1095). Accordingly, the Supreme Court should have denied the defendants' separate motions for summary judgment dismissing the complaint.

Kukic v Grand, 2011 NY Slip Op 04168 (App. Div., 1st 2011)

In any event, the opinions in plaintiff's expert's affirmation identifying the manner in which the hospital staff deviated from good and accepted medical practice are speculative and wholly unsupported by the record (see DeFilippo v New York Downtown Hosp., 10 AD3d 521 [2004]).

Kopeloff v Arctic Cat, Inc., 2011 NY Slip Op 04007 (App. Div. 2nd 2011)

Contrary to the plaintiff's contention, the Supreme Court did not improvidently exercise its discretion in rejecting as untimely the expert affidavit he submitted in opposition to the motion for summary judgment (see CPLR 3101[d]). The plaintiff did not provide any excuse for failing to identify the expert in response to the plaintiff's discovery demands. Indeed, the defendant was unaware of the expert until the defendant was served with the expert's affidavit in response to its summary judgment motion, even though the record discloses that the expert had been retained by the plaintiff approximately 18 months earlier. Under such circumstances, the Supreme Court properly declined to consider the affidavit (see Vailes v Nassau County Police Activity League, Inc., Roosevelt Unit, 72 AD3d 804, 805; Yax v Development Team, Inc., 67 AD3d 1003, 1004; Gerardi v Verizon N.Y., Inc., 66 AD3d 960; cf. Saldivar v I.J. White Corp., 46 AD3d 660, 661; Hernandez-Vega v Zwanger-Pesiri Radiology Group, 39 AD3d 710, 711; cf. also Browne v Smith, 65 AD3d 996; Howard v Kennedy, 60 AD3d 906). In any event, even if the affidavit of the plaintiff's expert could have properly been considered, the result would not have been different, inasmuch as the Supreme Court correctly concluded that it was speculative, conclusory, and partially based on evidence which is not in the record (see Micciola v Sacchi, 36 AD3d 869, 871; Guarino v La Shellda Maintenance Corp., 252 AD2d 514, 515; see also Wartski v C.W. Post Campus of Long Is. Univ, 63 AD3d 916, 917).

Stewart v World El. Co, Inc, 2011 NY Slip Op 03895 (App. Div., 1st 2011)

Defendants failed, prima facie, to establish entitlement to summary judgment. "An elevator company which agrees to maintain an elevator in safe operating condition may be liable to a passenger for failure to correct conditions of which it has knowledge or failure to use reasonable care to discover and correct a condition which it ought to have found" (Rogers v Dorchester Assoc., 32 NY2d 553, 559 [1973]). Defendants submitted virtually no evidence regarding the maintenance and inspection history of the elevator, either pre or post-accident. The only document produced in response to discovery requests was a "work log" which was referenced during the deposition of Kavanagh — who, notably, was not competent to testify concerning defendants' maintenance and inspection practices at the time of the incident — and which does not even appear in the record. A defendant is not entitled to summary judgment on notice grounds where there is a failure to present sufficient evidence regarding its maintenance procedures in respect of an allegedly malfunctioning elevator (see Green v City of New York, 76 AD3d 508 [2010]).

Even without defendants' failure, plaintiff's invocation of the doctrine of res ipsa loquitur raised a triable issue of material fact. Plaintiff testified that the elevator dropped suddenly, causing him to fall. When he regained consciousness, he notified the building superintendent of the emergency, and had to be lowered to the lobby level, where several persons had to pry the door open. Certainly, this is the type of event that does not ordinarily happen in the absence of negligence, and plaintiffs are entitled to invoke the doctrine as against defendants based on plaintiff's testimony concerning the elevator malfunction (see e.g. Kleinberg v City of New York, 61 AD3d 436, 438 [2009] [free-falling elevator is not an event that ordinarily happens in the absence of negligence]; Miller v Schindler Elev. Corp., 308 AD2d 312 [2003] [applying doctrine where plaintiff testified that elevator dropped suddenly, causing her to fall, notwithstanding defendant's evidence that the elevator was functioning immediately after the incident]).

The case of Williams v Swissotel N.Y. (152 AD2d 457 [1989]) is instructive. In Williams, the plaintiff was injured when the elevator on which he was riding dropped nine stories and abruptly stopped just below the lobby floor landing. Although one of defendant's principals maintained, as here, that the accident as described by the plaintiff was "physically impossible" due to the existence of certain safety features and the findings of a post-accident inspection revealing no "telltale markings" on the elevator cable, this Court found that the testimony of plaintiff was sufficient to support application of the res ipsa doctrine, stating "the testimony of [plaintiff] as to how the elevator fell is sufficient evidence, if found credible by the trier of fact, to support the application of the doctrine" (id. at 458).

Plaintiff's testimony, as corroborated by the contemporaneous incident report and witness statement, was sufficient to allow a fact finder to determine that the misleveling and/or free-fall of the elevator was the kind of accident that would not ordinarily happen in the absence of negligence. Defendants had exclusive control over the mechanisms and devices in the elevator, and there is no evidence that the incident was due to any action on the part of plaintiff. The motion court thus erred in refusing to allow the case to proceed to trial on res ipsa loquitur grounds and in dismissing the complaint as a matter of law.

It was also error to dismiss the affidavit of plaintiffs' expert Clarke as "speculative." Clarke's affidavit was not speculative, but rather, constituted legitimate opposition by an opposing expert, refuting and challenging the claim that the accident was "physically and mechanically impossible." Mr. Clarke, who had 38 years of experience in elevator construction, installation, maintenance and repair, directly challenged the statements of D'Ambra that the accident was not physically or mechanically possible, and provided a list of possibilities that could have caused the misleveling, including mechanical functions that D'Ambra never ruled out, mentioned, or addressed. Further, D'Ambra, in rendering his expert opinion, entirely ignored the undisputed fact that it took twenty minutes to bring the elevator down to the lobby after it became stuck and that plaintiff's supervisor and several other security guards had to forcefully pry the doors open in order to free plaintiff.

2221

CPLR R. 2221 Motion affecting prior order
(d) A motion for leave to reargue
(e) Motion for Leave to Renew

Jordan v Yardeny, 2011 NY Slip Op 04423 (App. Div., 2nd 2011)

A motion for leave to renew must be based upon new facts not offered on a prior motion that would change the prior determination, and set forth a reasonable justification for the failure to present such facts on the prior motion (see CPLR 2221[e]; Swedish v Beizer, 51 AD3d 1008, 1010). The Supreme Court properly denied that branch of the defendant's motion which was, in effect, for leave to renew his prior motion to vacate the default judgment, as the new facts proffered would not have changed the prior determination (see CPLR 2103[b]; Cole v Young, 28 AD3d 702, 703; Jackson-Cutler v Long, 2 AD3d 590; Barbagallo v Nationwise Exterminating & Deodorizing, 260 AD2d 518, 519). Furthermore, the defendant failed to set forth a reasonable justification for the failure to present the new facts on the prior motion.

Zito v Jastremski, 2011 NY Slip Op 04240 (App. Div., 2nd 2011)

The Supreme Court providently exercised its discretion when it, in effect, denied that branch of the plaintiff's motion which was for leave to renew her opposition to the defendants' respective motions for summary judgment (see CPLR 2221[e]; O'Connell v Post, 27 AD3d 631; Renna v Gullo, 19 AD3d 472). The plaintiff sought leave to renew her opposition to the defendants' motions for summary judgment so that she could submit the dental records relied upon by her expert, which she failed to submit with her original opposition. The plaintiff failed to offer a reasonable justification as to why the proffered evidence was not submitted at the time of the prior motion. A motion for leave to renew is not a second chance freely given to parties who have not exercised due diligence in making their first factual presentation (see Renna v Gullo, 19 AD3d 472; Hart v City of New York, 5 AD3d 438; Rubinstein v Goldman, 225 AD2d 328, 328-329). In addition, the records sought to be submitted would not have changed the prior determinations (see CPLR 2221[e][2]). Accordingly, that branch of the motion which was for leave to renew was properly denied.

Haque v Daddazio, 2011 NY Slip Op 04041 (App. Div., 2nd 2011)

The Supreme Court improvidently exercised its discretion in granting that branch of the plaintiff's motion which was for leave to reargue his opposition to that branch of the defendant's prior motion which was for summary judgment dismissing the cause of action to recover damages for conscious pain and suffering, since the plaintiff failed to show that the Supreme Court overlooked or misapprehended the relevant facts or misapplied any controlling principle of law and, moreover, he improperly presented arguments not previously advanced (see CPLR 2221[d][2]). A motion for leave to reargue "shall be based upon matters of fact or law allegedly overlooked or misapprehended by the court in determining the prior motion, but shall not include any matters of fact not offered on the prior motion" (CPLR 2221[d][2]). A motion for leave to reargue "is not designed to provide an unsuccessful party with successive opportunities to reargue issues previously decided, or to present arguments different from those originally presented" (Mazinov v Rella, 79 AD3d 979, 980, quoting McGill v Goldman, 261 AD2d 593, 594).

Too late to attach transcript.

Suits v Wyckoff Hgts. Med. Ctr., 2011 NY Slip Op 03894 (App. DIv., 1st 2011)

Defendant's motion to renew was correctly denied since the deposition transcript proffered upon renewal existed at the time the original motion was made, and defendant failed to proffer any reasonable excuse for its failure to obtain a copy of the transcript from co-defendant's counsel before making that motion (see CPLR 2221[e]; Silverman v Leucadia Inc., 159 AD2d 254 [1990]).

3211(e): Standing waived, and other 3211 shenanigans

CPLR R. 3211(e) Number, time and waiver of objections; motion to plead over

1007

1008

JP Morgan Chase Bank, N.A. v Strands Hair Studio, LLC, 2011 NY Slip Op 04424 (App. DIv., 2nd 2011)

Contrary to the third-party defendant's contention, the Supreme Court properly denied that branch of her motion which was for summary judgment dismissing the main complaint on the ground that the plaintiff lacked standing. Although a third-party defendant has the right to assert against the plaintiff "any defenses which the third-party plaintiff has to the plaintiff's claim" (CPLR 1008), here, the third-party defendant failed to raise the issue of the plaintiff's standing in a pre-answer motion to dismiss or as an affirmative defense in her answer. Thus, she waived her right to raise the argument at all subsequent phases of the litigation pursuant to CPLR 3211(e) (see Wells Fargo Bank Minn., N.A. v Perez, 70 AD3d 817, 817-818, cert deniedUS, 131 S Ct 648; Countrywide Home Loans, Inc. v Delphonse, 64 AD3d 624, 625; HSBC Bank, USA v Dammond, 59 AD3d 679, 680; Wells Fargo Bank Minn., N.A. v Mastropaolo, 42 AD3d 239, 241-243; Gilman v Abagnale, 235 AD2d 989, 990).

The Supreme Court also properly denied that branch of the third-party defendant's motion which was for summary judgment dismissing the main complaint on the ground that the plaintiff's service upon the defendant Strands Hair Studio, LLC (hereinafter the LLC) did not comport with Business Corporation Law § 306 (b)(1). Even assuming that the third-party defendant did not waive this objection by failing to raise it in her answer or in a pre-answer motion to dismiss (see CPLR 3211[e]), the court's personal jurisdiction over the LLC is not a "defense[] which the third-party plaintiff has to the plaintiff's claim," and, accordingly, it is not a defense the third-party defendant is entitled to raise here pursuant to CPLR 1008.

The Supreme Court also properly denied that branch of the third-party defendant's motion which was for summary judgment dismissing the third-party complaint. Contrary to the third-party defendant's contention, the third-party plaintiff's claims against her may be asserted pursuant to CPLR 1007. CPLR 1007 "should not be read as allowing recovery solely for claims sounding in strict indemnity" (George Cohen Agency v Donald S. Perlman Agency, 51 NY2d 358, 365). The statute "places no limit . . . upon the legal theories which may be asserted as a basis for the claim" (id. at 365), and "[t]he third-party complaint may be based on a theory of liability different from and independent of the cause of action pleaded against the primary defendant" (Zurich Ins. Co. v White, 129 AD2d 388, 390, citing Garrett v Holiday Inns, 58 NY2d 253, 262-263]).

Shaw v Club Mgrs. Assn. of Am., Inc., 2011 NY Slip Op 04034 (App. Div., 2nd 2011)

However, the Supreme Court erred in dismissing the fifth cause of action alleging defamation. The Supreme Court correctly determined that the alleged statements tend to injure the plaintiffs in their trade, business, or profession (see Wasserman v Haller, 216 AD2d 289, 289-290). Thus, the statements are slander per se and damages are presumed (see Liberman v Gelstein, 80 NY2d 429, 435). The Supreme Court then held that the alleged statements were protected by a qualified privilege. However, the shield provided by a qualified privilege may be dissolved if a plaintiff can demonstrate that a defendant spoke with spite or ill will (common-law malice) or with a high degree of awareness of the statements' probable falsity (constitutional malice) (see Liberman v Gelstein, 80 NY2d at 437-438; Kotowski v Hadley, 38 AD3d 499, 500). Here, the complaint alleged, inter alia, that certain of the individual defendants spoke with knowledge that such statements were false or spoke with reckless disregard for the statements' truth or falsity. "Since . . . the burden does not shift to the nonmoving party on a motion made pursuant to CPLR 3211(a)(7), a plaintiff has no obligation to show evidentiary facts to support [his or her] allegations of malice on a motion to dismiss pursuant to CPLR 3211(a)(7)'" (Sokol v Leader, 74 AD3d 1180, 1182, quoting Kotowski v Hadley, 38 AD3d at 500-501; see Arts4All, Ltd. v Hancock, 5 AD3d 106, 109). Thus, dismissal of the fifth cause of action alleging defamation pursuant to CPLR 3211(a)(7) was not warranted.

Correa v Orient-Express Hotels, Inc., 2011 NY Slip Op 04375 (App. Div., 1st 2011)

Neither the affidavit nor the deposition testimony defendant offered constitutes the type of documentary evidence that may be considered on a motion pursuant to CPLR 3211(a)(1) (see Weil, Gotshal & Manges, LLP v Fashion Boutique of Short Hills, Inc., 10 AD3d 267, 271 [2004]; Berger v Temple Beth-El of Great Neck, 303 AD2d 346, 347 [2003]). The remainder of the evidence does not "conclusively establish[] a defense to the asserted claims as a matter of law" because it does not irrefutably establish that defendant neither owned nor controlled the premises (Leon v Martinez, 84 NY2d 83, 88 [1994]; see Wright v C.H. Martin of White Plains Rd., Inc., 23 AD3d 295, 296 [2005]).

O'Callaghan v Brunelle, 2011 NY Slip Op 04095 (App. Div., 1st 2011)

The documentary evidence in support of the motion, including decisions from the NYSE and SEC, refuted plaintiff's allegations that defendants' failure to call the witness, who consented to the NYSE's Hearing Panel's finding that he engaged in conduct constituting improper trading arrangements and violated various rules, constituted legal malpractice and established a defense as a matter of law warranting dismissal of the complaint (see Minkow v Sanders, __ AD3d __ , 2011 NY Slip Op 02120 [2011]; see also CPLR 3211[a][1]). Contrary to plaintiff's contention, it is apparent from the motion court's decision that it properly treated the instant motion as one to dismiss and not one for summary judgment (compare Sokol v Leader, 74 AD3d 1180 [2010]).

3211(a)(8) Long Arm 302(a)(1)

CPLR R. 3211(a)(8)the court has not jurisdiction of the person of the defendant

CPLR § 302 Personal jurisdiction by acts of non-domiciliaries
(a) Acts which are the basis of jurisdiction
(1) transacts any business within the state or contracts anywhere to supply goods or services in the state

Andrews v Modell, 2011 NY Slip Op 03982 (App. Div., 2nd 2011)

Pursuant to CPLR 302(a)(1), "long-arm jurisdiction over a nondomiciliary exists where (i) a defendant transacted business within the state and (ii) the cause of action arose from that transaction of business" (Johnson v Ward, 4 NY3d 516, 519; see CPLR 302[a][1]). Here, the defendant did not conduct "sufficient purposeful activities in New York, which bore a substantial relationship to the subject matter of this action, so as to avail [himself] of the benefits and protections of New York's laws" (Transportation Ins. Co. v Simplicity, Inc., 61 AD3d 963, 964; see e.g. Spanierman Gallery, PSP v Love, 320 F Supp 2d 108, 111; PaineWebber Inc. v Westgate Group, Inc., 748 F Supp 115, 117, 119; Standard Wine & Liq. Co. v Bombay Spirits Co., 20 NY2d 13, 17; CK's Supermarket Ltd. v Peak Entertainment Holdings, Inc., 37 AD3d 348, 348; American Recreation Group v Woznicki, 87 AD2d 600, 601; J. E. T. Adv. Assoc. v Lawn King, 84 AD2d 744, 745; Pacific Concessions v Savard, 75 Misc 2d 219, 221; cf. Ulster Scientific v Guest Elchrom Scientific AG, 181 F Supp 2d 95, 102; Barclays Am./Bus. Credit v Boulware, 151 AD2d 330, 331). Accordingly, the Supreme Court lacked personal jurisdiction over the defendant and, thus, erred in denying that branch of the defendant's motion which was pursuant to CPLR 3211(a)(8) to dismiss the complaint for lack of personal jurisdiction (see Sanchez v Major, 289 AD2d 320, 321; Foley v Roche, 68 AD2d 558, 565).

Magwitch, L.L.C. v Pusser's Inc., 2011 NY Slip Op 03973 (App. Div., 1st 2011)

On May 9, 2002, plaintiff entered into an assignment agreement with Barclays Bank PLC, whereby plaintiff purchased $3,300,000 of the debt owed by Pusser's Ltd. to Barclays in exchange for $1,500,000. Plaintiff was assigned the note and all security held by Barclays in Pusser's Ltd.'s assets. The agreement was governed by BVI law, and was signed by all parties in the BVI except plaintiff, which executed the agreement in New Jersey. The assignment of the security agreements, which provided for the collateral in the United States that secured the note, was executed by defendant Charles S. Tobias in the BVI and was governed by BVI law.

Following Pusser's Ltd.'s default on the note, plaintiff commenced an action in New Jersey federal court to recover on the note against the same defendants sued herein, namely, Pusser's Ltd., two entities affiliated with Pusser's Ltd. (one incorporated in Florida and the other in the BVI), and Tobias, a resident of the BVI who controls the corporate defendants. After the New Jersey action was dismissed for lack of personal jurisdiction, plaintiff commenced this action in Supreme Court, New York County. Defendants timely removed the action to federal court, based on the alleged existence of federal diversity jurisdiction; the removal was effected before the expiration of defendants' time to respond to the complaint by answer or motion. Plaintiff moved to remand the action to New York Supreme Court for lack of diversity, and defendants moved to dismiss for lack of personal jurisdiction. The federal court granted plaintiff's motion and directed that the entire matter, including defendants' pending motion to dismiss, be remanded to state court. Upon remand, Supreme Court granted the motion to dismiss. We affirm.

Contrary to the argument of plaintiff and the dissent, defendants did not waive any defenses based on lack of personal jurisdiction by removing the action to federal court. We agree with the view of the Third Department, expressed in a decision issued after this appeal was argued, that Farmer v National Life Assn. of Hartford, Conn. (138 NY 265 [1893]), relied on by plaintiff and the dissent, is no longer binding because it was "based on the outdated distinction between special and general appearances . . . and also on the removal procedure applicable at that time, long since superseded by the CPLR, the Federal Rules of Civil Procedure and 28 USC § 1446" (Benifits by Design Corp. v Contractor Mgt. Servs., LLC, 75 AD3d 826, 828 [2010]; see also Siegel, NY Prac § 109 [4th ed] [under prior law "(a) special appearance was used by the defendant for the sole purpose of objecting to the court's jurisdiction of his person," but "(t)he CPLR abolished the special' appearance, and since the general' appearance was used only to differentiate it from the special one, both categories have disappeared under the CPLR"]). "Moreover, though not controlling, we note that removal does not waive the defense of lack of personal jurisdiction in federal court" (Benifits by Design, 75 AD3d at 828 [citations omitted]). While this Court rejected a similar argument against Farmer's continuing viability in Quinn v Booth Mem. Hosp. (239 AD2d 266 [1997]), we find the reasoning of the Third Department in the more recent Benifits by Design case persuasive and, given the desirability of uniform construction of the CPLR throughout the state, follow the latter decision.

The motion court properly dismissed the action for lack of personal jurisdiction. Although CPLR 302(a)(1) permits a court to exercise personal jurisdiction over any non-domiciliary who, in person or through an agent, "transacts any business within the state or contracts anywhere to supply goods or services in the state," defendants' actions here did not amount to purposeful activity by which they availed themselves of the privilege of conducting business in New York. The acts of sending payments to a New York bank account and correspondence to a New York address, and engaging in telephone discussions with plaintiff's principal, who also was defendants' legal advisor while he was in New York, were not a sufficient basis to satisfy the statutory requirements (see Kimco Exch. Place Corp. v Thomas Benz, Inc., 34 AD3d 433, 434 [2006], lv denied 9 NY3d 803 [2007]).

The court also properly found that it could not exercise personal jurisdiction over defendants pursuant to CPLR 302(a)(3). That section provides for jurisdiction over a defendant who (1) commits a tortious act outside New York (2) that causes injury within New York (3) where the defendant either (i) does or solicits business, or engages in any other course of conduct, or derives substantial revenue from activities in New York, or (ii) expects or should expect that its tortious act will have consequences in New York, and derives substantial revenue from interstate or international commerce (see CPLR 302[a][3]; see generally Cooperstein v Pan-Oceanic Mar., 124 AD2d 632, 633 [1986], lv denied 69 NY2d 611 [1987]). The determination of whether a tortious act committed outside New York causes injury inside the state is governed by the "situs-of-injury" test, requiring determination of the location of the original event that caused the injury (see Bank Brussels Lambert v Fiddler Gonzalez & Rodriguez, 171 F3d 779, 791 [2d Cir 1999]; see also Kramer v Hotel Los Monteros S.A., 57 AD2d 756 [1977], lv denied 43 NY2d 649 [1978]).

Here, the original event that caused the injury was not, as plaintiff maintains, the disbursement of funds from New York to purchase the note from Barclays, since there would not have been any injury if payment had been made when due. Rather, the injury was caused by misrepresentations about the transfer of assets and the transfer and diversion of funds, which occurred in the BVI and locations other than New York, and resulted in the unavailability of funds to pay plaintiff the amounts due on the note. The second part of the test also cannot be satisfied, since defendants do not either: regularly do or solicit business, or engage in any other persistent course of conduct, or derive substantial revenue for goods or services used or rendered in New York; or reasonably expect the alleged tortious act to have consequences in the state, and derive substantial revenue from interstate or international commerce (see CPLR 302[a][3]).

All concur except McGuire, J. who dissents

in a memorandum as follows:
McGUIRE, J. (dissenting)

This appeal is controlled by Farmer v National Life Assn. of Hartford Conn. (138 NY 265 [1893]) and our decision in Quinn v Booth Mem. Hosp. (239 AD2d 266 [1997]). In Farmer, the plaintiff commenced an action in state Supreme Court, the defendant removed it to federal court, and the federal court remanded it to Supreme Court. The defendant then moved to dismiss on the grounds that it had not been properly served and that the admission of service was defective. On the defendant's appeal to the Court of Appeals from the denial of its motion, the Court held that the defendant had waived this objection when it removed the action to federal court:

"It is unnecessary to consider what force, if any, the objections to the mode of service of process in this case and to the sufficiency of the admission of service might have had, if they had been seasonably made, for we think it must be held that the defendant necessarily submitted itself to the jurisdiction of the state court and waived any defect there may have been in the procedure to acquire jurisdiction of its person, by the proceeding which it initiated and consummated for the removal of the action into the United States Circuit Court. There could be no transfer of the cause from the state to the federal jurisdiction, unless there was an action pending. The federal statute required it, and the petition must so allege, and must also aver that the petitioner is a party to the action . . . [The rule recognizing the right of a defendant to challenge service after certain special appearances] has no application where the defendant becomes an actor in the suit and institutes a proceeding which has for its basis the existence of an action to which he must be a party. He thereby submits himself to the jurisdiction of the court" (138 NY at 269-70).

As is evident, the Court concluded both that the act of removing the case necessarily entailed a concession by the defendant that jurisdiction of its person had been properly acquired by the state court, and that the concession was conclusive. The Court reiterated this rationale in the course of discussing with approval a federal case in which, following the removal of an action commenced in state court, the court denied the defendant's motion to dismiss on the ground of defective service, reasoning that, "[b]y bringing it here, he voluntarily treats it as properly commenced and actually pending in the state court, and he cannot, after it is entered here, treat it otherwise" (id. at 271 [quoting Sayles v North Western Ins. Co., 2 Curtis C.C. 212 [1856]). The Court stated:

"The principle thus formulated, is, we think, sound, reasonable and just. It cannot be tolerated that a defendant shall question the jurisdiction of a state tribunal over his person, after he has effected a transfer of the cause to another court, by placing upon its records an affirmation under oath of the pendency of the action, and of his relation to it as a party, and obtained the approval of the court of the bond required as a condition of its removal. If the cause is subsequently remanded, he cannot be heard to say that his own proceedings have in effect been coram non judice" (id. at 271-272).

We followed Farmer in Quinn, holding that the defendants' "filing of a removal petition to Federal court effected a general appearance precluding their objections to defective service under CPLR 308(1) or (2) after the case was remanded to State court" (Quinn, 239 AD2d at 266). Moreover, we rejected the "suggest[ion] that Farmer is no longer valid" (id.).

Defendants argue that Farmer and Quinn are not controlling because "both cases involv[e] a challenge to [personal jurisdiction based on] service of process only," not a "challenge to personal jurisdiction under the long-arm statute or the due process clause." They cite no authority in support of this effort to create different classes of challenges to personal jurisdiction. Nor do they explain why an objection to personal jurisdiction based on improper (or even a complete lack of) service of process is of lesser moment than or otherwise stands on a different footing from objections to personal jurisdiction based on either the inapplicability of a long-arm statute or the want of sufficient contacts to satisfy due process ^[FN1]. Aside from these difficulties with defendants' argument, nothing in Farmer suggests that its waiver analysis turned on the specific reason personal jurisdiction allegedly was lacking. The insurmountable difficulty, however, flows from the rationale of Farmer —- removal to federal court entails a concession that personal jurisdiction properly was obtained by the state court —- and our obligation to accept its validity. That rationale applies with the same force to all objections to personal jurisdiction, be they based on the inapplicability of a long-arm statute, the insufficiency of contacts or improper service.

Defendants also argue that: (1) "a combined reading of CPLR 320 . . . and 3211 . . . establishes that removal does not constitute an appearance which . . . waives jurisdictional objections" and (2) "[c]onsistent with [federal precedents], the Federal Rules of Civil Procedure plainly allow objection to personal jurisdiction once a case is removed from state to federal court." The latter argument was raised unsuccessfully in Quinn (Reply Brief at 7, Quinn v Booth Mem. Hosp., 239 AD2d 266 [1997], supra). Moreover, both arguments apply with equal force to the waiver analysis in Farmer. Whatever their force, acceptance of either of these arguments would require us either to refuse to follow Farmer or to limit its holding to its particular facts without identifying a basis for doing so that does not equally undermine that holding.

At least implicitly, the majority rejects defendants' attempt to distinguish Farmer and Quinn. The majority, however, chooses to follow the recent decision of a panel of the Third Department in Benifits by Design Corp. v Contractor Mgt. Servs., LLC (75 AD3d 826 [2010]), because its reasoning is persuasive and a "uniform construction of the CPLR throughout the state" is desirable. The rationale of Farmer certainly is open to question, its inconsistency with federal law is clear, and it arguably unduly burdens the exercise of a federal right. But it has not been overruled by the Court of Appeals, and Quinn and Benifits by Design come to different conclusions on the question of whether Farmer was superseded by the CPLR. Moreover, defendants do not contend that Farmer is no longer good law but seek only to distinguish it, and thus the majority decides this appeal on a ground not raised by defendants (see Misicki v Caradonna, 12 NY3d 511, 519 [2009] ["to decide this appeal on a distinct ground that we winkled out wholly on our own would pose an obvious problem of fair play"]). For these reasons, I would follow Farmer despite my reservations about its rationale.

Accordingly, I would reverse and deny defendant's motion to dismiss for lack of personal jurisdiction.

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