Appellate Division

Common interest privilege

Scott v Thayer, 2018 NY Slip Op 02524 [3d Dept. 2018]

Although plaintiff alleged that Thayer made numerous defamatory statements, the only one relevant to this appeal is a statement that Thayer purportedly made to Anthony Posca — a doctor who treated decedent at Albany Memorial Hospital — that "[plaintiff] . . . was very abusive to [decedent], would not take [her] anywhere for checkups, would not let Adult Protective Services or other aides into the house, . . . and that [plaintiff] would not allow [decedent] to be place[d] anywhere." Supreme Court granted Thayer's motion pursuant to CPLR 3211 (c) and dismissed the amended complaint against her finding, in relevant part, that the statement that she allegedly made to Posca was protected by the qualified common interest privilege and that plaintiff had not tendered evidence of malice sufficient to defeat the privilege. Thereafter, Supreme Court denied plaintiff's subsequent motion for leave to renew his opposition to Thayer's motion to provide evidence of malice. Plaintiff now appeals from the order granting defendant's motion for summary judgment and from the order denying his motion to renew.

Supreme Court properly determined that the statement that Thayer allegedly made to Posca is protected by the qualified privilege. "A qualified privilege arises when a person makes a good-faith, bona fide communication upon a subject in which he or she has an interest, or a legal, moral or societal interest to speak, and the communication is made to a person with a corresponding interest" (Cusimano v United Health Servs. Hosps., Inc., 91 AD3d 1149, 1150 [2012] [internal quotation marks and citations omitted], lv denied 19 NY3d 801 [2012]). To invoke the qualified privilege, "[t]he parties need only have such a relation to each other as would support a reasonable ground for supposing an innocent motive for imparting the information" (Anas v Brown, 269 AD2d 761, 762 [2000]).

Subsequent appeals

US Bank Natl. Assn. v Conroy, 2018 NY Slip Op 02496 [2d Dept. 2018]

As a general rule, this Court does not consider an issue on a subsequent appeal which was raised or could have been raised in an earlier appeal which was dismissed for failure to perfect, although this Court has the inherent jurisdiction to do so (see Rubeo v National Grange Mut. Ins. Co. , 93 NY2d 750; Bray v Cox , 38 NY2d 350). We decline to exercise our discretion in this case.

Appealable sua sponte order

Yi Jing Tan v Liang, 2018 NY Slip Op 02497 [2d Dept 2018]

The plaintiffs were awarded a default judgment, and an inquest on damages was directed. The inquest was scheduled for November 18, 2015, and the parties appeared for the inquest on that day. The Supreme Court adjourned the matter to the next day, November 19, 2015, over the plaintiffs' objection and despite a request of the plaintiffs' counsel for an adjournment to a different day because she was unavailable on November 19. On November 19, 2015, the plaintiffs were represented by a per diem attorney, who was unprepared to proceed with the inquest. The court, sua sponte, directed dismissal of the complaint pursuant to 22 NYCRR 202.27. The plaintiffs appeal.

A sua sponte order is appealable if leave to appeal is granted (see CPLR 5701[c]). Moreover, although the order appealed from was entered upon the plaintiffs' purported default, the issues of the plaintiffs' lack of readiness to proceed, and whether it was excusable, were "the subject of contest below" (Matter of Andrew J.U.M. [Jelaine E.M.], 154 AD3d 758, 759 [internal quotation marks omitted]; see James v Powell, 19 NY2d 249, 256 n 3) and, therefore, are subject to review on appeal.

Pursuant to 22 NYCRR 202.27(b), a court has the discretion to direct dismissal of a complaint where the plaintiff fails to appear or is not ready to proceed. Here, the Supreme Court based its decision to dismiss the complaint upon the plaintiffs' lack of readiness to proceed on November 19, 2015, a date to which the court adjourned the matter despite its awareness that the plaintiffs' counsel would not be available. Under the circumstances presented, the court improvidently exercised its discretion in, sua sponte, directing dismissal of the complaint (see Bank of N.Y. v Castillo, 120 AD3d 598, 599).

3211(a)(7) standard

Yu Chen v Kupoint (USA) Corp., 2018 NY Slip Op 02498 [2d Dept. 2018]

On a motion pursuant to CPLR 3211(a)(7) to dismiss for failure to state a cause of action, the court must afford the complaint a liberal construction, accept all facts as alleged in the complaint to be true, accord the plaintiff the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory (see Leon v Martinez, 84 NY2d 83, 87; Murphy v Department of Educ. of the City of N.Y., 155 AD3d 637). Accordingly, a motion to dismiss made pursuant to CPLR 3211(a)(7) must fail if, upon taking all the facts alleged in the complaint as true and according them every possible inference favorable to the plaintiff, "the complaint states in some recognizable form any cause of action known to our law" (Shaya B. Pac., LLC v Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, 38 AD3d 34, 38). While a court is permitted to consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7) (see Phillips v Taco Bell Corp., 152 AD3d 806, 807), "affidavits submitted by a defendant will almost never warrant dismissal under CPLR 3211 unless they establish conclusively that [the plaintiff] has no cause of action" (Bokhour v GTI Retail Holdings, Inc., 94 AD3d 682, 683 [internal quotation marks omitted]; see Phillips v Taco Bell Corp., 152 AD3d at 808; Dolphin Holdings, Ltd. v Gander & White Shipping, Inc., 122 AD3d 901, 902). The plaintiff "may not be penalized for failure to make an evidentiary showing in support of a complaint that states a claim on its face" (Miglino v Bally Total Fitness of Greater N.Y., Inc., 20 NY3d 342, 351, citing Rovello v Orofino Realty Co., 40 NY2d 633, 635). Indeed, if a plaintiff chooses to stand on his or her pleading alone, "confident that its allegations are sufficient to state all the necessary elements of a cognizable cause of action, he [or she] is at liberty to do so and, unless the motion to dismiss is converted by the court to a motion for summary judgment, he [or she] will not be penalized because he [or she] has not made an evidentiary showing in support of his [or her] complaint" (Rovello v Orofino Realty Co., 40 NY2d at 635).

emphasis is mine

Perils of not having the client verify the answer

CPLR § 105 Definitions

(u) Verified pleading. A “verified pleading” may be utilized as an affidavit whenever the latter is required.

Loughran v Giannoti, 2018 NY Slip Op 02451 [2d Dept 2018]

"On a motion for leave to enter judgment against a defendant for the failure to answer or appear, a plaintiff must submit proof of service of the summons and complaint, proof of the facts constituting its claim, and proof of the defendant's default" (Triangle Props. #2, LLC v Narang, 73 AD3d 1030, 1032; see CPLR 3215[f]; Liberty County Mut. v Avenue I Med., P.C., 129 AD3d 783, 784-785; Atlantic Cas. Ins. Co. v RJNJ Servs., Inc., 89 AD3d 649, 651). "To demonstrate the facts constituting the cause of action, the plaintiff need only submit sufficient proof to enable a court to determine if the cause of action is viable" (Clarke v Liberty Mut. Fire Ins. Co., 150 AD3d 1192, 1194; see Woodson v Mendon Leasing Corp., 100 NY2d 62, 70-71). Here, the plaintiff satisfied all of the requirements for demonstrating her entitlement to enter a default judgment (see Jing Shan Chen v R & K 51 Realty, Inc., 148 AD3d 689, 690; Mercury Cas. Co. v Surgical Ctr. at Milburn, LLC, 65 AD3d 1102).

To successfully oppose a facially adequate motion for leave to enter a default judgment based on the failure to appear or timely serve an answer, a defendant must demonstrate a reasonable excuse for its delay and the existence of a potentially meritorious defense (see Clarke v Liberty Mut. Fire Ins. Co., 150 AD3d at 1195; Fried v Jacob Holding, Inc., 110 AD3d 56, 60). Similarly, "[t]o compel the plaintiff to accept an untimely answer as timely, a defendant must provide a reasonable excuse for the delay and demonstrate a potentially meritorious defense to the action" (Ryan v Breezy Point Coop., Inc., 76 AD3d 523, 524; see CPLR 3012[d]; Clarke v Liberty Mut. Fire Ins. Co., 150 AD3d at 1194; Mannino Dev., Inc. v Linares, 117 AD3d 995, 995; Juseinoski v Board. of Educ. of City of N.Y., 15 AD3d 353, 356-358). Here, although the defendants demonstrated a reasonable excuse for the delay in serving their answer (see Lehrman v Lake Katonah Club, 295 AD2d 322), they failed to establish that they had a potentially meritorious defense to the action. The defendants submitted a proposed answer which was verified only by their attorney, and an affirmation from their attorney who did not have personal knowledge of the facts. These documents were insufficient to demonstrate a potentially meritorious defense to the action (see State Farm Mut. Auto. Ins. Co. v Austin Diagnostic Med., P.C., 153 AD3d 576, 577; Ryan v Breezy Point Coop., Inc., 76 AD3d at 524).

emphasis is mine

Stipulations [2104] – Authority

Chae Shin Oh v Jeannot, 2018 NY Slip Op 02446 [2d Dept 2018]

On March 7, 2017, the plaintiff's new counsel sent a stop work letter and consent to change attorneys to the plaintiff's prior counsel. On April 7, 2017, the plaintiff moved by order to show cause, inter alia, to vacate the stipulation, contending that the plaintiff did not authorize her prior counsel to enter into the stipulation. The Supreme Court granted that branch of the motion which was to vacate the stipulation. The defendant appeals.

The Supreme Court improvidently exercised its discretion in granting that branch of the plaintiff's motion which was to vacate the stipulation. The stipulation, signed by counsel for each party in this action during a court appearance, is a binding contract (see CPLR 2104; Daibes v Kahn, 116 AD3d 994, 995; Cervera v Bressler, 85 AD3d 839, 841; Kirkland v Fayne, 78 AD3d 660, 660; Utica Mut. Ins. Co. v Swim Tech Pool Servs., Inc., 37 AD3d 706; Aivaliotis v Continental Broker-Dealer Corp., 30 AD3d 446, 447). Contrary to the plaintiff's contention, her counsel at the time of the stipulation had the apparent authority to enter into the stipulation. This prior counsel signed and verified the summons and complaint, appeared for the plaintiff at the preliminary conference and the compliance conference, and filed a note of issue, all before entering into the stipulation on the plaintiff's behalf. The presence of an attorney at pretrial conferences constitutes "an implied representation by [the client] to defendants that [the attorney] had authority" to bind the [*2]client to a stipulation (Hallock v State of New York, 64 NY2d 224, 231-232). Indeed, only attorneys who are authorized to enter into binding stipulations may appear at pretrial conferences (see 22 NYCRR 202.26[e]; cf. 22 NYCRR 202.12[b]). Here, the plaintiff's engagement of her prior counsel to represent her throughout the litigation and to appear on her behalf at pretrial and compliance conferences precludes her from arguing that prior counsel lacked the authority to bind her to the stipulation. "A stipulation made by the attorney may bind a client even where it exceeds the attorney's actual authority if the attorney had apparent authority to enter into the stipulation" (Davidson v Metropolitan Tr. Auth., 44 AD3d 819, 819, citing Hallock v State of New York, 64 NY2d at 231).

Thus, only where there is cause sufficient to invalidate a contract, such as fraud, collusion, mistake, or accident, will a party be relieved from the consequences of a stipulation made during litigation (see Hallock v State of New York, 64 NY2d at 230). It was the plaintiff, as the party seeking to set aside the stipulation, who had the burden of showing that the agreement was the result of fraud, duress, or overreaching, or that its terms were unconscionable (see Cervera v Bressler, 85 AD3d at 841). The plaintiff failed to present any such evidence in this case (see Kirkland v Fayne, 78 AD3d at 660; Utica Mut. Ins. Co. v Swim Tech Pool Servs., Inc., 37 AD3d at 706).

Halstead v Fournia, 2018 NY Slip Op 02525 [3d Dept. 2018]

We begin our analysis with the recognition that courts have long favored and encouraged the fashioning of stipulations by parties to litigation and that "[s]trong policy considerations" favor the enforcement of such agreements (Denburg v Parker Chapin Flattau & Klimpl, 82 NY2d 375, 383 [1993]; see Hallock v State of New York, 64 NY2d 224, 230 [1984]). As the Court of Appeals has explained: "Stipulations not only provide litigants with predictability and assurance that courts will honor their prior agreements, but also promote judicial economy by narrowing the scope of issues for trial. To achieve these policy objectives, a stipulation is generally binding on parties that have legal capacity to negotiate, do in fact freely negotiate their agreement and either reduce their stipulation to a properly subscribed writing or enter the stipulation orally on the record in open court" (McCoy v Feinman, 99 NY2d 295, 302 [2002] [citations omitted]; see Hallock v State of New York, 64 NY2d at 230; Mitchell v New York Hosp., 61 NY2d 208, 214 [1984]; Mann v Simpson & Co., 286 NY 450, 459 [1941]). When a stipulation satisfies these requirements, as it does here, it is to be construed as an independent contract subject to principles of contract interpretation (see Matter of Banos v Rhea, 25 NY3d 266, 276 [2015]; McCoy v Feinman, 99 NY2d at 302; Rainbow v Swisher, 72 NY2d 106, 109 [1988]; Fulginiti v Fulginiti, 127 AD3d 1382, 1384 [2015]). So construed, a valid stipulation may not be set aside "absent a showing of good cause such as fraud, collusion, mistake or duress; or unless the agreement is unconscionable or contrary to public policy; or unless it suggests an ambiguity indicating that the words [do] not fully and accurately represent the parties' agreement" (McCoy v Feinman, 99 NY2d at 302 [internal citations omitted]; accord Matter of Badruddin, 152 AD3d 1010, 1011 [2017], lv dismissed 30 NY3d 1080 [2018]; Matter of Kaczor v Kaczor, 101 AD3d 1403, 1404 [2012]; see Tverskoy v Ramaswami, 83 AD3d 1195, 1196 [2011]).

Notice of motion

Bank of Am., N.A. v Diaz, 2018 NY Slip Op 02421 [1st Dept 2018]

As an initial matter, plaintiff asserts that defendant's motion was procedurally improper, in that he did not specify the CPLR provision under which his cross motion was made. Although defendant did not cite a specific section of the CPLR, it is abundantly clear, from his affirmation in support of his cross motion to dismiss and opposition to judgment of foreclosure and sale, that he is asserting that plaintiff failed to obtain jurisdiction over him as the grounds for dismissal. It is clear from the content of the motion papers that defendant intended to make his motion under CPLR 5015(a)(4) (cf. Caba v Rai, 63 AD3d 578 [1st Dept 2009], finding that defendant was not entitled to relief under CPLR 5015(a)(4) because "[n]owhere in her motion papers, however, did defendant suggest that the action should be dismissed because the court lacked personal jurisdiction…").

Usury waived. CPLR 3211(e)

Power Up Lending Group, Ltd. v Cardinal Resources, Inc., 2018 NY Slip Op 02351 [2d Dept 2018]

The Supreme Court erred when it severed those provisions of the agreements which it found to be illegal pursuant to the criminal usury statute. Usury is an affirmative defense which a defendant must either assert in an answer or as a ground to move to dismiss the complaint pursuant to CPLR 3211. Otherwise, the defense is waived (see CPLR 3211[e]; 3018[b]; Whittemore v Yeo, 112 AD3d 475, 476; Hochman v LaRea, 14 AD3d 653, 654).

7503(b)

Matter of Jewish Ctr. of Forest Hills W., Inc. v Goldberg, 2018 NY Slip Op 02325 [2d Dept 2018]

Pursuant to CPLR 7503(b), "a party who has not participated in the arbitration and who has not made or been served with an application to compel arbitration, may apply to stay arbitration on the ground that a valid agreement was not made or has not been complied with or that the claim sought to be arbitrated is barred by [the statute of] limitation[s]" (emphasis added). The statute requires that a party raise these threshold issues before participating in arbitration (see Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79; cf. CPLR 7502[b]). Consequently, a party, such as the Jewish Center, which participates in arbitration, waives the right to later object to the arbitration on the grounds that a valid agreement to arbitrate was not made or that the claim sought to be arbitrated is barred by the statute of limitations (see Matter of Silverman [Benmor Coats], 61 NY2d 299, 307; Matter of Tri State Consumer Ins. Co. v High Point Prop. & Cas. Co., 127 AD3d 980, 981; Matter of Allstate Ins. Co. v New York Petroleum Assn. Compensation Trust, 104 AD3d 682; Matter of Utica Mut. Ins. Co. v Incorporated Vil. of Floral Park, 262 AD2d 565, 566). Inasmuch as the Jewish Center argues that the arbitrator is exceeding the scope of its authority in the course of a pending arbitation, these arguments are more properly the subject of a motion to vacate an arbitration award (see CPLR 7511[b][1][iii]; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d at 79; Matter of Silverman [Benmor Coats], 61 NY2d at 307). Accordingly, the Supreme Court properly denied the petition and dismissed the proceeding.

CPLR 3025(c): Conform to the proof

Metropolitan Lofts of NY, LLC v Metroeb Realty 1, LLC, 2018 NY Slip Op 02319 [2d Dept 2018]

The Supreme Court improvidently exercised its discretion in denying the plaintiff's motion to conform its complaint to the proof at trial (see CPLR 3025[c]). "[A]bsent prejudice, courts are free to permit amendment even after trial" (Kimso Apts., LLC v Gandhi, 24 NY3d 403, 411). "The burden of establishing prejudice is on the party opposing the amendment" (id. at 411). "Prejudice, of course, is not found in the mere exposure of the defendant to greater liability. Instead, there must be some indication that the defendant has been hindered in the preparation of his case or has been prevented from taking some measure in support of his position" (Loomis v Civetta Corinno Constr. Corp., 54 NY2d 18, 23; see Kimso Apts., LLC v Gandhi, 24 NY3d at 411). Here, in opposition to the plaintiff's motion, the defendants failed to show that the amendment would hinder the preparation of their cases or prevent them from taking some measure in support of their positions at trial and, therefore, the plaintiff's motion to conform its complaint to the proof should have been granted.