Monthly Archives: February 2015

113 A.D.3d 432, 978 N.Y.S.2d 162 [1st Dept., 2014]

Where is the line in compensating a fact witness?

“In an attempt to settle the claims and counterclaims between them, plaintiff and defendant Emanuel Panitz entered into a Memorandum of Understanding (MOU) pursuant to which Panitz’s legal fees would be paid, provided that the claims of defendants Allan Klein, Lobby Design Group, and Steeltech SA (the LDG defendants, collectively) failed. In exchange for this, Panitz assigned plaintiff his remaining cross claims against the LDG defendants. This agreement is void and unenforceable as against public policy. Although his claims against plaintiff have been settled, Panitz is still a witness in this action. Permitting the MOU to stand as it is, with the payment of Panitz’s legal fees conditioned on the failure of his former co-defendants’ claims, creates an incentive for Panitz to falsify his testimony, an incentive that has long been disfavored.”

In 2013, we saw Caldwell v Cablevision Sys. Corp., where the Court of Appeals allowed a fact witness, who happened to be a physician, to demand and collect a fee of $10,000 for one hour of testimony. Read More

Collateral Estoppel, Sanctions and Attorney Discipline

February 25, 2015

Collateral Estoppel/Res Judicata

Matter of Dunn,

___ NY3d ___, 2015 NY Slip Op 01556 [February 24, 2015]

The other day I had the privilege of giving a CLE presentation at a joint meeting of the General Practice Section and the Committee on Professional Discipline of the NYS Bar Association. After I finished my “CPLR Update,” I sat down and listened to a panel discussion of “Sanctions in Criminal and Civil Proceedings and the Implications for Ethics and Professional Discipline.”

One of the major points made by the panel was that disciplinary committees can, and frequently do, accept findings of sanctions imposed against lawyers as establishing the fact of ethical violations by way of collateral estoppel. In other words, in such a case the lawyer will not be able to re-litigate the issue of whether there was any misconduct. The only question left will be the form and extent of discipline to be imposed.

I was aware, of course, that a conviction of a crime establishes the underlying facts for the purpose of disciplinary proceedings. That sanctions might be given the same effect was new to me, and put them in a whole new light. The stakes on a motion for sanctions against an attorney are raised exponentially. There are situations where it might pay not to contest sanctions too strongly, since the procedural apparatus surrounding the sanctions bears directly on the potential for collateral estoppel. As one of the panelists put it, “Money is only money, but an admonition is forever.” (I’m paraphrasing.) Much the same can be said for a motion to disqualify counsel for a conflict of interest.

One of the many cases discussed by the panel was the Third Department decision here, where the lawyer had been sanctioned by a US Magistrate Judge for making certain “knowingly false” statements. The Magistrate Judge imposed the sanction of admonishment. The Second Circuit dismissed the lawyer’s appeal, finding the Magistrate Judge’s order to be non-final and hence non-reviewable.

The Third Department gave the Magistrate Judge’s findings collateral estoppel effect, precluding relitigation of the facts. Accepting, therefore, that the lawyer had made a false statement “knowingly and in bad faith,” the court imposed the sanction of public censure.

As the panel spoke, the matter was still before the Court of Appeals, and the question was whether the Court would accept that sanctions can ever be given collateral estoppel effect in disciplinary matters. We didn’t have long to wait. The Court’s decision was handed down yesterday.

The Court restated the general proposition that “the doctrine of collateral estoppel has been applied to attorney disciplinary matters in the past and can continue to be applied where the necessary prerequisites have been met — i.e., where the attorney has had a full and fair opportunity to litigate in the prior proceeding.” That is, after all, the basis for giving preclusive effect to criminal convictions.

Here, however, the Court found that the sanctions had been imposed after a motion heard on papers only, with no opportunity to cross-examine the movant’s witnesses or call witnesses for the attorney. The Court found that the proceeding before the Magistrate Judge had been “cursory,” and that the attorney had not had a full and fair opportunity to litigate the issue. The Court rejected the notion that the disciplinary proceeding had to be delayed until the underlying action reaches a conclusion. The continued pendency of the action is no bar to proof of misconduct. Therefore, the order imposing censure was reversed, and the matter remitted to the Appellate Division.

The attorney, of course, is far from out of the woods. The Committee on Professional Standards can still present its own case that discipline is merited. It will not be able to take the collateral estoppel shortcut.

A Person of Suitable Discretion

February 23, 2015

CPLR 308, Jurisdiction

City of New York v VJHC Dev. Corp.,

___ AD3d ___, ___ NYS ___, 2015 NY Slip Op 00819 [1st Dept., 2015]

CPLR 308 (2) and (4) are on my short list of the worst-written, needlessly muddled sections of the CPLR. One of these days I’ll get around to ~~ranting~~ explaining why, and proposing a rewrite to make them clearer. The issues here, however, are not part of my problem with 308 (2).

Service of process pursuant to CPLR 308(2) requires delivery of the process to “a person of suitable age and discretion.” The term is undefined, deliberately made elastic so as to be interpreted according to the circumstances. Here, the process server delivered a summons and complaint to the defendant’s daughter Vera, at the defendant’s actual place of business, and followed up by mailing the summons and complaint, in a “personal and confidential” envelope.

The defendant tried to avoid service by claiming that the daughter was not “authorized” to accept service on his behalf. The CPLR doesn’t require an “authorized” recipient, merely one of “suitable age and discretion.” Vera was at the time 47 years old, and nothing is mentioned to indicate that she did not have “suitable discretion.” Vera apparently tried to refuse to accept the summons and complaint, but that didn’t matter either. The process server properly left the summons and complaint in her general vicinity.

Unified Trial or Bifurcated?

February 20, 2015

Trials

Patino v County of Nassau,

___ AD3d ___, ___ NYS2d ___, 2015 NY Slip Op 00509 [2d Dept., 2015]

Two golf carts collided on a turn in a path at the Garden City Country Club. The plaintiff, driver of one cart, was injured, severely enough to need “numerous surgeries.” The driver of the other cart claimed that the plaintiff was speeding on the cart path.

Plaintiff here moved for a unified trial, on the grounds that proof of the injuries he sustained would support his claim that he was not speeding and hence bore significantly on the issue of liability. As proof, he submitted an affidavit from an expert in mechanical engineering, accident reconstruction and biomechanics claiming that the injuries proved that he could not have been traveling more than three miles per hour. Supreme Court agreed, and ordered a unified trial.

The Appellate Division, however, wasn’t buying it and reversed.

Appeals from expired Orders of Protection may not be moot

February 18, 2015

Appellate Practice

Matter of Veronica P. v Radcliff A.,

___ NY3d ___, ___ NYS2d ___, 2015 NY Slip Op 01300 [February 12, 2015]

The Court of Appeals holds here that an order of protection from the Family Court, based on a finding of a family offense, is not rendered moot and unappealable solely because it has expired. The continuing consequences to the respondent, both in legal proceedings and to his reputation, require the availability of appellate review.

Even though the terms of the order do not contain an explicit finding of guilt, the issuance of the order itself implies a finding of a family offense, which may work against the respondent in future proceedings. The underlying oral decision, containing the explicit finding, is likely to come to light and have adverse consequences. The existence of the order may be used to impeach his credibility. The order remains in police databases, and increases the likelihood of his being arrested in the future. Moreover, the order carries with it the stigma of a family offender, and adversely affects the respondent both socially and in the job market.

Therefore, the Court reversed the order of the Appellate Division dismissing the appeal for mootness, and remitted for a consideration of the merits.

Two Actions Pending

February 16, 2015

CPLR 3211, Dismissal Motions, Motion Practice

Jadron v 10 Leonard St., LLC,

___ AD3d ___, ___ NYS2d ___, 2015 NY Slip Op 00730 [2nd Dept,. 2015]

There were two actions pending between the parties, and the question was whether the second action should be dismissed pursuant to CPLR 3211 (a)(4), on the grounds that the first action was already pending.
The plaintiff had been injured while working on the roof of a building owned by the defendants, and sued in Supreme Court, Suffolk County, alleging various Labor Law violations. The defendants included two LLCs which plaintiff alleged owned and maintained the building, the sole member of the LLCs, and the general contractor. Two days after the personal injury action was commenced, one of the LLCs transferred half of its assets to the other.
Two years later, while the action was in full swing, plaintiff commenced another action, in Supreme Court, Dutchess County, seeking to set the conveyance aside as fraudulent under the Debtor and Creditor Law. The defendants moved to dismiss the second action, on the grounds of the pendency of the first.

Read More

Dismissal on the Openings is Rarely a Good Idea

February 13, 2015

Trials

Fudge v North Shore-Long Is. Jewish Health Servs. Plainview & Manhasset Hosps.,

117 A.D.3d 783, 986 N.Y.S.2d 490 [2d Dept., 2014]

Dismissal of a cause of action is only rarely warranted on opening statements alone. Here, in a medical malpractice wrongful death case, the court went so far as to dismiss a case during the plaintiff’s opening, on its own motion. Unsurprisingly, the Appellate Division reversed, and sent the matter back for a new trial, before a different Justice. Read More

Summary Judgment – Timeliness – Court-Ordered Deadlines

February 11, 2015

CPLR 2004, CPLR 2005, CPLR 3211, CPLR 3212

Quinones v Joan & Sanford I. Weill Med. Coll.,

114 A.D.3d 472, 980 N.Y.S.2d 88 [1st Dept., 2014]

When the court sets a deadline for summary judgment motions, shorter than the statutory 120 days, what standard governs applications for extensions of time? Is it the strict “good cause” provided for summary judgment motions generally, or is it the more lenient “procrastinator’s friend” standard of CPLR 2004? The First Department held here that the strict standard applies, no matter how the deadline was set. The purported “good cause” here, which was nothing more than the attorney’s confession of error, did not suffice. Read More

Limitations in Attorney-Deceit Cases

February 9, 2015

CPLR 213, CPLR 214, Judiciary Law § 487, Limitations

1 Comment

Melcher v Greenberg Traurig, LLP,

23 N.Y.3d 10, 988 N.Y.S.2d 101 [2014]

The Court of Appeals here revisits the ancient history behind the attorney-deceit statute, Judiciary Law § 487, to determine the applicable statute of limitations for claims arising under it. Since that statute imposes treble damages for claims arising out of attorney deceit, one might consider that such claims are to recover on a liability or penalty created or imposed by statute, and hence subject to the three-year limitations period of CPLR 214 (2).

The Court held, however, that the cause arises from New York common law and therefore falls within the six-year catch-all limitations period of CPLR 213 (1). This action, commenced more than three years after the allegedly deceitful acts, but less than six years, was therefore held to be timely.

There is an important caveat for claims asserted as part of legal malpractice actions, which I will discuss at the end. Read More

Notice of Appearance

February 6, 2015

Appearances, CPLR 320

1 Comment

Tsionis v Eriora Corp.,

123 A.D.3d 694, 998 N.Y.S.2d 117 [2d Dept., 2014]

A defendant against whom no specific claims are made in the complaint need not serve an answer. There is, in fact, nothing in the complaint for him to deny. If he wishes not to default, he may simply serve a notice of appearance and thereby preserve his right to notice of all proceedings in the action. The notice of appearance may simply be served on the plaintiff, and there is no requirement that it be filed with the clerk of the court.

Here, the action was to foreclose on property owned by the defendant Eriora, and Soo I Young was named in the complaint as the holder of a second mortgage. Young was not required to answer, and his service of a notice of appearance was sufficient. The plaintiff moved for a default judgment without notifying Young, alleging that none of the defendants had appeared or answered. The motion was granted, and the resulting order determined that Young’s second mortgage was invalid and that he was barred from redeeming any interest in the property.

Since Young had, in fact, appeared via the notice of appearance, the order should have been vacated on his application.

—Arguments & Demonstrations

A New York Civil Procedure Blog by David H. Rosen

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