CPLR

3215 Denied

Here, the lower court denied the unopposed motion for a default judgment because “Here, accepting all of the facts that plaintiff asserts as true, they provide at best, some circumstantial evidence that a fraud may have occurred”. Insurers consistently argue that circumstantial evidence is sufficient to satisfy their burden at trial, in a summary judgment motion, or in an arbitration to show that the accident was not a true accident. In this case the Appellate Division held otherwise. Even in an unopposed motion for a default judgment where the burden is lower and easier to satisfy, the insurer must prove that that the accident was not a true accident and not merely that they have a reason to believe it was not a true accident.

Ameriprise Ins. Co. v Kim, 2020 NY Slip Op 04286 [2d Dept. 2020]

“A plaintiff seeking leave to enter a default judgment must file proof of proper service of the summons and the complaint, the defendant’s default, and the facts constituting the claim” (Global Liberty Ins. Co. v Surgery Ctr. of Oradell, LLC, 153 AD3d 606, 606; see CPLR 3215[f]). ” [A] default judgment in a declaratory judgment action will not be granted on the default and pleadings alone for it is necessary that [the plaintiff] establish a right to a declaration'” against the defendants (JBBNY, LLC v Dedvukaj, 171 AD3d 898, 902, quoting Dole Food Co., Inc. v Lincoln Gen. Ins. Co., 66 AD3d 1493, 1494; see Merchants Ins. Co. of N.H. v Long Is. Pet Cemetery, 206 AD2d 827, 828).

Here, while the plaintiff submitted proof of proper service of the summons and the complaint, the non-answering defendants’ default, and the facts constituting the plaintiff’s claim, the plaintiff’s submissions in support of the motion failed to establish its right to the declarations sought (see JBBNY, LLC v Dedvukaj, 171 AD3d at 903). As such, we agree with the Supreme Court’s determination denying that branch of the plaintiff’s motion which was for leave to enter a default judgment against the non-answering defendants.

Necessary parties

Lewis v Holliman, 176 AD3d 1048 [2d Dept. 2019]

However, we take judicial notice of the public land records and the record in a related appeal currently pending in this Court reflecting that, prior to the entry of the judgment, nonparty US Bank, National Association, was the mortgagee of record of a mortgage on the subject property (see Matter of Siwek v Mahoney, 39 NY2d 159, 163 n 2 [1976]; Chateau Rive Corp. v Enclave Dev. Assoc., 22 AD3d 445, 446-447 [2005]). Contrary to the plaintiff’s contention, the plaintiff was required to join US Bank, National Association, as a necessary party to this action (see CPLR 1001; Menorah Home & Hosp. for Aged & Infirm v Jelks, 61 AD3d 648, 649 [2009]). The plaintiff’s failure to do so requires that the judgment be reversed and Reeves’s motion to vacate the order dated October 15, 2015, be granted (see Menorah Home & Hosp. for Aged & Infirm v Jelks, 61 AD3d at 650).

Matter of Cabrera v City of New York Civ. Serv. Commn., 181 AD3d 540 [1st Dept. 2020]

Petitioner, in his brief, does not address the court’s dismissal of the petition for failing to join necessary parties and has thus abandoned any challenge to the court’s dismissal on that basis (see Matter of Eilenberg v City of New York, 162 AD3d 457 [1st Dept 2018]). In any event, the court properly determined that DOC was a necessary party to this proceeding, as petitioner sought relief against the DOC, and the DOC might have been inequitably affected by a judgment in the proceeding (see CPLR 1001 [a]; Matter of Centeno v City of New York, 115 AD3d 537 [1st Dept 2014]; Matter of Watkins v New York City Dept. of Educ., 48 AD3d 339, 340 [1st Dept 2008], lv denied 10 NY3d 713 [2008]).

The bold is mine.

Stipulation by email

Teixeira v Woodhaven Ctr. of Care, 173 AD3d 1108 [2d Dept. 2019]

CPLR 2104 states, in relevant part, that “[a]n agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him [or her] or his [or her] attorney or reduced to the form of an order and entered.” Furthermore, “[t]o be enforceable, a settlement agreement must set forth all material terms, and there must be [a] clear mutual accord between the parties” (Martin v Harrington, 139 AD3d 1017, 1018 [2016]; see Little v County of Nassau, 148 AD3d 797, 798 [2017]; De Well Container Shipping Corp. v Mingwei Guo, 126 AD3d 846, 847 [2015]). An email that merely confirms a purported settlement is not necessarily sufficient to bring the purported settlement into the scope of CPLR 2104 (see DeVita v Macy’s E., Inc., 36 AD3d 751, 751 [2007]). However, where “an email message contains all material terms of a settlement and a manifestation of mutual accord, and the party to be charged, or his or her agent, types his or her name under circumstances manifesting an intent that the name be treated as a signature, such an email message may be deemed a subscribed writing within the meaning of CPLR 2104 so as to constitute an enforceable agreement” (Forcelli v Gelco Corp., 109 AD3d 244, 251 [2013]; see Kataldo v Atlantic Chevrolet Cadillac, 161 AD3d 1059, 1060 [2018]). Here, contrary to the defendant’s contention, the email exchange between counsel did not evidence a clear mutual accord, as the language used by the plaintiff’s counsel, “consider it settled,” is followed by a discussion of further occurrences necessary to finalize the agreement. Accordingly, we agree with the Supreme Court’s denial of that branch of the defendant’s motion which was pursuant to CPLR 2104 to enforce the purported settlement agreement.

Borrowing statute (and sanctions)

Errant Gene Therapeutics, LLC v Sloan-Kettering Inst. for Cancer Research, 182 AD3d 506 [1st Dept. 2020]

Contrary to Bluebird’s contention, plaintiff’s unfair competition claim is timely. Since plaintiff is a resident of Illinois and it allegedly suffered damage in Illinois, where it does business, New York’s borrowing statute applies for statute of limitations purposes (CPLR 202). Under CPLR 202, plaintiff’s unfair competition claim must be timely under the shorter of New York and Illinois’ statute of limitations for unfair competition claims. In New York, plaintiff’s unfair competition claim is subject to a six-year statute of limitations because it is based on fraud (see Mario Valente Collezioni, Ltd. v AAK Ltd., 280 F Supp 2d 244, 258 [SD NY 2003]; see generally Katz v Bach Realty, 192 AD2d 307 [1st Dept 1993]). In Illinois, plaintiff’s unfair competition claim is subject to a five-year statute of limitations and it accrues when plaintiff either knew or should have known of the existence of the right to sue (Henderson Sq. Condominium Assn. v LAB Townhomes, LLC, 2015 IL 118139, 46 NE3d 706 [2015]). Thus, under CPLR 202, Illinois’ five-year statute of limitations applies to plaintiff’s unfair competition claim. Under that statute of limitations, the unfair competition claim is timely because it accrued less than five years before plaintiff commenced the action on January 27, 2017. Initially, there is no evidence that plaintiff discovered or could have discovered that Bluebird was engaging in fraudulent behavior, allegedly aimed at destroying plaintiff and controlling the market for a gene therapy treatment, prior to January 27, 2012. Plaintiff asserts that it did not discover the facts underlying Bluebird’s alleged fraudulent behavior until documents were produced in discovery in a separate litigation in June 2016. Moreover, at the earliest, plaintiff could have discovered Bluebird’s alleged fraudulent behavior in September 2012, when Bluebird circulated a presentation it had given in which it discussed the intellectual property that plaintiff alleges it copied. Bluebird’s assertion that the claim is untimely because plaintiff knew of the facts underlying its unfair competition claim as early as 2010 and 2011 based on emails sent by plaintiff’s CEO is without merit. The emails referenced by Bluebird merely demonstrate plaintiff’s suspicion that Bluebird was acting fraudulently, not that plaintiff had discovered or could have discovered the facts underlying its claim.

The court providently exercised its discretion in denying Bluebird’s motion to hold plaintiff in contempt after a hearing (see Matter of McCormick v Axelrod, 59 NY2d 574, 583 [1983]). However, the court improvidently exercised that discretion in awarding sanctions against Bluebird, because, among other reasons, Bluebird’s contempt motion was not so clearly meritless as to be deemed frivolous, and the court failed to satisfy the procedural requirements of 22 NYCRR 130-1.2 (see Gordon Group Invs., LLC v Kugler, 127 AD3d 592, 595 [1st Dept 2015]).

The bold is mine.

On dismissals and 5019

B & H Fla. Notes LLC v Ashkenazi, 182 AD3d 525 [1st Dept. 2020]

Defendant Amit Louzon argues correctly that the court’s vacatur of its April 9, 2019 order dismissing the action with prejudice and issuance of an order dismissing the action without prejudice was procedurally improper, because the substitution of “without prejudice” for “with prejudice” is a substantive revision (see CPLR 5019 [a]; Johnson v Societe Generale S.A., 94 AD3d 663, 664 [1st Dept 2012]). However, on appeal from the judgment (which brings up for review the order [CPLR 5501]), the parties dispute whether the action should be dismissed with or without prejudice, and we find that the action was correctly dismissed without prejudice, because the dismissal is based on lack of standing, not on the merits (Landau, P.C. v LaRossa, Mitchell & Ross, 11 NY3d 8, 13-14 [2008]; Wells Fargo Bank, N.A. v Ndiaye, 146 AD3d 684 [1st Dept 2017]).

Not so stale

Williams v New York City Hous. Auth., 2020 NY Slip Op 03063 [1st Dept. 2020]

Preliminarily, we do not reject the Ruiz notarized statement out of hand based on the perceived infirmities relied on by the motion court, such of the lack of a caption and the absence of a declaration that it was sworn to under penalty of perjury. These are technical errors that did not prejudice a substantial right of the defendants (CPLR 2001; see e.g. Moore v DL Peterson Trust, 172 AD3d 1058 [2d Dept 2019]). We similarly reject NYCHA’s position that the affidavit is “stale.” This action involves a static set of facts that have not changed since the day of the accident. The fact that the affidavit was prepared contemporaneously makes it more probative than had it been made at the time of the summary judgment motions, not less.

Misnomer 3025

Rivera v New York City Dept. of Sanitation, 2020 NY Slip Op 03085 [1st Dept. 2020]

The summons and complaint were served on Corporation Counsel for the City of New York, which answered on behalf of the City of New York. Defendant’s motion to dismiss the complaint should have been denied and plaintiff’s cross motion to amend the summons and complaint to correct the misnomer granted. The City was not prejudiced by the mis-description and was on notice that plaintiff intended to seek a judgment against it (see CPLR 305[c]; 2001; Medina v City of New York , 167 AD2d 268 [1st Dept 1990])

306-b and SOL

Fernandez v McCarthy, 2020 NY Slip Op 03079 [1st Dept. 2020]

Under the circumstances, we find that, although plaintiff delayed in seeking an extension of his time to re-serve the complaint, the motion court appropriately exercised its discretion when it extended plaintiff’s time in the interest of justice (CPLR 306-b), as plaintiff established the existence of several relevant factors weighing in favor of an extension (see Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 104-105 [2001]; Chase Home Fin. LLC v Adago, 171 AD3d 533 [1st Dept 2019]). Plaintiff’s legal malpractice claim, which would otherwise be lost due to the running of the statute of limitations, seems to be potentially meritorious, and defendants have not established that they would suffer substantial prejudice from the extension, where they had actual notice of this action and the allegations against them from early on (see Wimbledon Fin. Master Fund, Ltd. v Laslop, 169 AD3d 550 [1st Dept 2019]; Pennington v Da Nico Rest., 123 AD3d 627 [1st Dept 2014]).

Bold is mine.

Link between a cause of action and a preliminary injunction.

Davis v Influx Capital Group, LLC, 2020 NY Slip Op 03077 [1st Dept. 2020]

Both CPLR 6301 and 6312(a) require a link between a cause of action and a preliminary injunction. There is no such link in the case at bar; hence, plaintiffs’ motion should have been denied (see e.g. BSI, LLC v Toscano, 70 AD3d 741 [2d Dept 2010]).

CPLR 7601

Rad v IAC/InterActiveCorp, 2020 NY Slip Op 02990 [1st Dept 2020]

The court properly found that CPLR 7601 does not apply to bar plaintiffs’ claims. CPLR 7601 permits, but does not require, the commencement of a special proceeding to enforce a valuation agreement. Although plaintiffs’ claims undoubtedly relate to a dispute over the valuation process, plaintiffs are not seeking to enforce the valuation agreement and are properly seeking relief in a plenary action (see Matter of Penn Cent. Corp. [Consolidated Rail Corp.], 56 NY2d 120, 130 [1982]). In light of the foregoing, the parties’ other arguments about the application of CPLR 7601 are moot.
The motion court properly found that issues of fact exist as to whether plaintiffs acquiesced to the transaction at issue. Although plaintiff Rad’s unvested options vested immediately upon the merger, and he exercised them all, the equitable defense of acquiescence is “fact intensive, often depending . . . on an evaluation of the knowledge, intention and motivation of the acquiescing party” (Julin v Julin, 787 A2d 82, 84 [Del 2001]).
Contrary to defendants’ contention, those plaintiffs whose employment terminated prior to the merger have standing to assert merger-related claims. While they were obligated to sell their outstanding options upon leaving the company, those options were not valued until the merger.
The Decision and Order of this Court entered herein on October 29, 2019 (176 AD3d 635 [1st Dept 2019]) is hereby recalled and vacated (see M-8412 decided simultaneously herewith).