Monthly Archives: June 2016

Matter of Tonawanda Seneca Nation v Noonan,___ NY3d___, 2016 NY Slip Op 04974 [2016]

The ultimate issue here will be a challenge to Surrogate Noonan’s jurisdiction to determine disputes over tribal lands arising from the probate of the will of  a tribal member. That will have to await another day, however, since the Seneca Nation commenced their Article 78 proceeding in the Appellate Division and not the Supreme Court. The Court of Appeals held here that an Article 78 against a Surrogate must be commenced in the Supreme Court, even where the Surrogate in question also wears a County Court robe. Accordingly, the Appellate Division lacked jurisdiction over the proceeding and properly dismissed it.

Supreme Court is, of course, the appropriate forum for most Article 78s. Even where the case involves issues that must ultimately be determined by the Appellate Division, the proceeding should normally begin in Supreme, which will effect the transfer itself after determining the issues within its jurisdiction. (CPLR 7804[g])

Among the limited class of cases which should begin directly in the Appellate Division are those against Supreme and County Court judges. (CPLR 506[b][1]) As to Supreme Court Justices, the reason for this is evident: a Supreme Court Justice should not be placed in the position of passing on the actions of another Justice. As to County Court judges, the reason is murkier, but as explained by the Court of Appeals the legislative history shows a reluctance to have a Supreme Court Justice, with primarily civil jurisdiction, review the actions of a County Court Judge, whose jurisdiction is primarily criminal.

In any event, notably absent from the list of proceedings directly commenced in the Appellate Division are those against Judges of the Surrogate’s Court. Surrogate Noonan also sits as a Judge of the County Court, but that doesn’t matter. Venue for the Article 78 against a multi-robe judge depends on the robe he or she was wearing when the challenged action was taken, and here that means Judge Noonan was wearing his Surrogate’s Court robe. Venue was in the Supreme Court, and the Appellate Division properly dismissed the proceeding.

Parenthetically, may I note that I find this justification incomprehensible. Most of my experience has been with the Supreme Court in Queens County, where Supreme Court Justices exercise both civil and criminal jurisdiction, and are in fact transferred from Civil to Criminal Terms and back, at the will of the court administrators. There is no County Court. A Supreme Court Justice is assumed to be capable of applying the totality of the law, whether or not there is also a County Court in the Justice’s home county. Why shouldn’t a Supreme Court Justice be fully capable of passing on the actions of a County Court Judge? They are not, after all, judges of the same Court. If the difficulty is to be found in the coordinate jurisdiction of the Supreme Court and the County Court, Supreme Court and the Surrogate’s Court likewise have coordinate jurisdiction. I have noted elsewhere my dismay at the pointlessly fractured nature of our supposedly Unified Court System and the unnecessary procedural issues it engenders, and here is another instance of it.

CRP/Extell Parcel I, L.P. v Cuomo, ___ NY3d___, 2016 NY Slip Op 04251 [2016]

The Court of Appeals issued a short decision here about a court’s lack of authority to entertain a post-judgment motion for statutory interest. Before universalizing it and jumping to the conclusion that the courts’ general authority to amend an erroneous or incomplete judgment has somehow been restricted, it is important to realize is that this was an Article 78 proceeding, and its specific and unusual procedural situation renders the decision of limited scope.

Petitioner was the sponsor of a condominium in Manhattan, and filed an offering plan with the respondent Attorney General requiring the purchasers’ down payments to be placed in escrow. If the first closing did not take place by September 1, 2008, the purchasers were entitled to their down payments back, with accumulated interest.

The first closing did not take place by September 1, 2008, and the purchasers demanded the return of their down payments, but the Petitioner refused, arguing that the 2008 date was a scrivener’s error. The correct date, it argued, was September 1, 2009. The purchasers applied to the Attorney General, who held in their favor and directed the return of the down payments with accumulated interest.

That order was the subject of this Article 78 proceeding. Supreme Court denied the petition, directed the return of the down payments with accumulated interest (that is, with the interest earned by the escrow fund, saying nothing about interest at the statutory rate under CPLR 5001), and dismissed the proceeding. The Appellate Division affirmed.

While that appeal was pending, the purchasers moved for the imposition of interest at the statutory rate, and it is that motion which concerns us now. Supreme Court granted the motion and entered a judgment for $4.9 million in interest. The Appellate Division reversed, holding that once the Attorney General’s order had been upheld and the proceeding dismissed, all issues had been resolved and Supreme Court was without jurisdiction to address the question of interest. Additionally, it held that CPLR 5001 did not apply, and the purchasers would not have been entitled to pre-judgment interest anyway, since the offering plan was not a contract.

The Court of Appeals affirmed, holding simply that the order dismissing the proceeding was a final judgment, and Supreme Court was thereafter without jurisdiction to entertain the Post-judgment motion for interest. It did not address the issue of whether interest would have been appropriate had the purchasers moved for it prior the the entry of the order.

The Court’s lack of elaboration of its holding might lead some to conclude that it applies to all situations. It should not be inferred from this decision that a court never has jurisdiction to amend a judgment after it has been entered. The key is that the Court cited to CPLR 7806 and not a more general section such as CPLR 5016. This decision should be regarded as applying to its specific fact pattern and context in an Article 78 proceeding where the issues directly presented by the petition had been resolved by the order.

Wesco Ins. Co. v Vinson, 137 A.D.3d 1114, 26 N.Y.S.3d 870 [2d Dept., 2016]

All this has happened before, and no doubt it will all happen again, but the error is so basic that it bears repeated comment.

A motion can exist only in the context of an action or special proceeding. It follows that before a motion can be made, the initiatory papers for an action or proceeding must be filed. That means a summons and complaint or summons with notice (for an action) or a petition (for a special proceeding). Without them, there is no action or special proceeding. Even if the court signs an order to show cause in the non-existent action, it lacks subject-matter jurisdiction and the order to show cause and any resulting orders are nullities.

Here, an insurance company moved to fix a Worker’s Compensation lien. It obtained an index number (and paid the fee), and filed a proposed Order to Show Cause on the motion, which the court signed and eventually decided. The missing step was that the insurer never filed or served a summons, complaint or petition.

The failure to file is a non-waivable, jurisdictional defect. It means that the court’s jurisdiction was never invoked, and the entire proceeding was a nullity.

Note, particularly, that CPLR 2001 is no help to the insurer. That allows mistakes or irregularities in the commencement to be corrected, but only if the initiatory papers were in fact filed. Where, to take the most common example, they are filed under the wrong index number CPLR 2001 will allow correction of the error by the purchase of a new index number (and payment of the fee). Here, by contrast, the initiatory papers were never filed at all. Or, in Dealy-Doe-Eyes Maddux v Schur, where the pro se plaintiff filed a complaint but no summons, the defect went to subject-matter jurisdiction and could not be corrected.

We saw this just last year, in O’Brien v Contreras. There, too, the purported plaintiff meant to obtain an order (to modify the terms of an agreement), and so obtained an order to show cause without first filing a summons or complaint. The OSC did not commence an  action or proceeding, and so the court lacked subject-matter jurisdiction.

Contrast these with another of last year’s cases, Heath v Normile, where a summons with notice was filed, but only a naked summons was served. Since the action had been properly commenced, the defect went to personal jurisdiction only, not subject matter jurisdiction. While the chain of events took some untangling, the court’s jurisdiction had been properly invoked and the errors could all be corrected. Defendant had demanded a complaint, which plaintiff had not served, and defendant then moved to dismiss for failure to serve a complaint. The service of the naked summons having been a nullity, the demand for a complaint was premature and dismissal on that ground was not available. The time to serve the summons with notice had expired, and the plaintiff clearly had not acted diligently, but the interests of justice allowed an extension of time to serve.

Red Zone LLC v Cadwalader, Wickersham & Taft, LLP, ___ NY3d ___, 2016 NY Slip Op 04249

When we reported on this legal malpractice case in 2015, the Appellate Division had invalidated the limitations defense as a matter of law. The Court of Appeals has now found factual issues that require a trial of the defense.

In 2005, Cadwalader had drafted an agreement with one of Red Zone’s advisers which was supposed to cap fees at $2 million, but proved ineffective. The litigation between Red Zone and the adviser, in which Cadwalader consulted but did not actually represent Red Zone, played out over a period of years, including a period from 2005 to 2007 in which there was no contact between them at all. The Appellate Division found a continuous course of representation notwithstanding the gap between contacts.

The point we made at the time was that the lapse of time between contacts, by itself, did not rule out continuous representation where the relationship itself continued. The Appellate Division concluded that there had simply been nothing to talk about during that time.

The Court of Appeals held to the contrary, finding that the “significant gap in time” was one of several factors indicating that Red Zone had not sustained its burden on summary judgment of showing that the limitations defense was meritless as a matter of law. That is, the gap doesn’t rule out the application of the continuous representation doctrine, but it provides an obstacle that cannot be leaped over without specific proof.