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Friday, March 20, 2020
COURT FUNCTION UPDATES
FOR THIS HEALTH CRISIS - FOR SMALL BUSINESSES
Thursday, March 19, 2020
LAWYERS WITHDRAWING FROM LITIGATION
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Matter of Cassini, 2020 NY Slip Op 01057, Decided on February 13, 2020, Appellate Division, Second Department:
"Legal Analysis
VIII. The Pathways for Replacing an Attorney of Record
CPLR 321 provides three pathways by which the attorney of record for a party may seek to be replaced. The client always has the option of discharging the attorney, in which event the discharge is immediate (see Farage v Ehrenberg, 124 AD3d 159, 165). Of course, some further action must be taken in order for the discharge to be made known to the other parties to the action and to the court.
First, pursuant to CPLR 321(b)(1), the attorney of record may withdraw or be changed by a stipulation signed by the outgoing attorney and signed and acknowledged by the client, with notice to be provided to the other parties to the action (see CPLR 321[a]). The use of a stipulation of substitution, which avoids expense and delay, is common where the client, the outgoing attorney, and the incoming attorney (who could be the client pro se) are entirely in agreement on the substitution (see Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B, CPLR C321:2 at 181 [2010 ed]). Since the client is, by executing the stipulation of substitution, in effect, consenting to the discharge of the attorney of record and simultaneous replacement with another, there is no entitlement to an automatic stay of proceedings by reason of the change in counsel (see Shurka v Shurka, 100 AD3d 566), although incoming counsel could always seek a stay from the court (see CPLR 2201).
Second, CPLR 321(b)(2) permits the attorney of record for a party to be changed by order of the court. This pathway requires the attorney of record to move, by order to show cause, [*13]on such notice as the court may direct, to be relieved [FN8]. Withdrawal is not, however, available for the mere asking, particularly when some significant court action is pending, such as the commencement of a trial. The attorney must demonstrate that good cause exists to end the relationship with the client, such as by showing an irretrievable breakdown in the relationship or a failure of cooperation by the client (see Farage v Ehrenberg, 124 AD3d at 165). Whether a stay of proceedings should be granted upon an order relieving counsel of record is a matter to be considered further.
Third, pursuant to CPLR 321(c), if an attorney dies, "becomes physically or mentally incapacitated," or is removed, suspended, or otherwise becomes disabled at any time before judgment, no further proceedings may be taken against the party for whom the attorney appeared, without leave of court, until 30 days after notice to appoint another attorney has been served upon the party either personally or in such manner as the court directs. Under this provision, where an attorney becomes functionally disabled from representing the client, a stay of all proceedings automatically attaches, with that stay remaining in effect until a notice to appoint a replacement attorney is served. However, the court has the authority to grant leave for proceedings to be conducted despite the stay.
Unlike CPLR 321(b)(1), where a substitution is with the outgoing attorney's consent, and CPLR 321(b)(2), where an attorney may seek to be relieved, CPLR 321(c) becomes applicable upon the occurrence of an event that is typically outside the outgoing attorney's control. By the terms of the statute, the termination of the stay is dependent upon service of a notice to appoint by the adverse party or parties, with the notice to be served personally or as the court directs. Nothing precludes the court from serving the notice to appoint.
IX. The Interplay Between CPLR 321(b) and (c)
In approaching our analysis of the interplay between CPLR 321(b) and (c), there are two anomalous circumstances in this matter which require notation. Both CPLR provisions address the replacement of an attorney of record, approaching the topic as if there is but one singular attorney who represents the party in question.
In this case, Marianne had two distinct attorneys of record. However, absent special circumstances, there may be only one attorney of record for a party in a single action (see Stinnett v Sears Roebuck & Co., 201 AD2d 362, 364; Matter of Kitsch Riker Oil Co., 23 AD2d 502; but see Itar-Tass Russian News Agency v Russian Kurier, Inc., 140 F3d 442, 452 [2d Cir] [recognizing second attorney of record for the purpose of charging lien]). Here, both RK and Sills Cummis described themselves and were simultaneously recognized without objection as being attorneys of record for Marianne, although Sills Cummis's role, as described by Kaplan, was to assist Reppert and RK. The controversy at issue herein might have been less confusing had Sills Cummis served strictly in an of counsel capacity to RK, with the latter firm being the sole attorney of record. It might further be said that, while Reppert's illness gave rise to appropriate cause for Reppert to withdraw under CPLR 321(b), it did not necessitate granting Sills Cummis's motion for leave to withdraw. Likewise, it could be argued, if Reppert was disabled for the purpose of CPLR 321(c), an automatic stay of proceedings was not triggered because of Sills Cummis's status as a second attorney of record. However, since none of the parties have addressed, much less given any significance to, the duality of counsel, we note the circumstance but do not comment further on it.
Additionally, RK is a law firm which had at least two attorneys affiliated with it, Reppert and Kelly. In dealing with death, removal, or disability of an attorney of record for a party, CPLR 321(c) postulates the existence of a singular individual who has died, has been removed or suspended, or has become disabled. It may be questioned whether, as here, CPLR 321(c) has any application at all to a circumstance where the attorney of record is a law firm composed of multiple individual attorneys. Where a client is represented by a law firm with multiple attorneys, it may be argued that the death, suspension, or disability of one attorney in that law firm does not trigger application of CPLR 321(c). However, the parties here do not argue that Kelly's unhampered ability to continue to represent Marianne precludes the application of CPLR 321(c) as the result of [*14]Reppert's personal circumstances.
Consequently, despite these anomalous facts, we approach our analysis upon the predicate that Reppert was, in effect, a solo practitioner and the exclusive attorney of record for Marianne. We do so because "[f]or us now to decide this appeal on a distinct ground that we winkled out wholly on our own would pose an obvious problem of fair play. We are not in the business of blindsiding litigants, who expect us to decide their appeals on rationales advanced by the parties, not arguments their adversaries never made" (Misicki v Caradonna, 12 NY3d 511, 519; see Green Tree Servicing, LLC v Molini, 171 AD3d 880, 882).
We see no reason why, in a circumstance where an attorney of record has become incapacitated, CPLR 321(c) would apply to the exclusion of the other pathways provided in CPLR 321 for replacing the attorney of record. Stated differently, where an attorney of record becomes disabled from further participating in the case, the attorney may seek to be replaced by consent through a stipulation of substitution (CPLR 321[b][1]), or the attorney could seek to be relieved by court order (CPLR 321[b][2]), or the party represented by the attorney could be compelled to replace the attorney by service of a notice to appoint by the adverse party (CPLR 321[c]). The statute does not make any one of these three pathways exclusive, though, as a practical matter, where an attorney has died or has become so incapacitated to be unable to execute an instrument, that attorney would not be able to effectively execute a stipulation of substitution or an affirmation in support of a motion for leave to be relieved. On the other hand, an adverse party may not always be in a position to know that the attorney of record for the other side has become disabled or disabled to such an extent as to preclude the attorney from continuing to provide representation to the client.
Where an attorney is allowed to be relieved by court order under CPLR 321(b)(2), it is preferable for the court to direct that the order be served by the adverse party, just as service of a notice to appoint by the adverse party or the court itself is required by CPLR 321(c). By directing that the adverse party serve the order upon the client previously represented by the relieved attorney, the court can assure that the client is on notice that his or her attorney is relieved of further representation and that a new attorney should be retained.
As will be discussed further infra, where an attorney seeks leave to withdraw under CPLR 321(b)(2), the court may stay proceedings pending the determination of the motion and after the determination. In contrast, where CPLR 321(c) is triggered, an automatic stay takes hold upon the occurrence of the triggering event. In both instances, it is preferable for the adverse party to serve notice of any stay and notice to appoint a new attorney upon the client of the relieved attorney in order to prevent the situation, as happened here, where a court-imposed stay lapsed before the client was on notice that a stay had been granted.
X. The Applicability of CPLR 321(c)
The most extensive treatment of CPLR 321(c) by our Court of Appeals is found in Moray v Koven & Krause, Esqs. (15 NY3d 384). In Moray, this Court affirmed the Supreme Court's order granting the defendant's motion pursuant to CPLR 3012(b) to dismiss the action for failure to timely serve a complaint, holding, inter alia, that the plaintiff's contention that the action had been stayed pursuant to CPLR 321(c) was raised for the first time on appeal and, thus, was not properly before us (see Moray v Koven & Krause, Esqs., 62 AD3d 765, revd 15 NY3d 384). The Court of Appeals reversed, stating:
"The command of CPLR 321(c) is straightforward: if an attorney becomes disabled, no further proceeding shall be taken in the action against the party for whom he appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs' (emphasis added). As the Practice Commentaries explain, CPLR 321(c) brings about an automatic stay of the action,' which goes into effect with respect to the party for whom the [disabled] attorney appeared' (Alexander, Practice Commentaries, McKinney's Cons. Laws of NY, Book 7B, CPLR C321:3, at 183). As a result, [d]uring the stay imposed by CPLR 321(c), no proceedings against the party will have any adverse effect. It lies within the power of the other side to bring the stay to an end by serving a notice on the affected party to appoint new counsel within 30 days . . . If, at the end of the period, the party has failed to obtain new counsel (or elected to proceed pro se), the proceedings may continue against the party' (id.).
"The stay is meant to afford a litigant, who has, through no act or fault of his own, been deprived of the services of his counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against him in the action' (Hendry v Hilton, 283 App Div 168, 171 [2d Dept 1953] [discussing Civil Practice Act § 240, the predecessor statute to CPLR 321(c)])" (Moray v Koven & Krause, Esqs., 15 NY3d at 388-389 [footnote omitted]).The Court applied the law to the facts.
"This lawsuit was automatically stayed by operation of CPLR 321(c) on January 24, 2008, the date when plaintiff's attorney was suspended from the practice of law. Defendant never acted to lift the stay by serving a notice upon plaintiff to appoint new counsel within 30 days. Thus, Supreme Court's order dismissing the action must be vacated (see e.g. Galletta v Siu-Mei Yip, 271 AD2d 486, 486 [2d Dept 2000] [ Since the judgment entered upon the defendants' default in appearing at trial was obtained without the plaintiff's compliance with CPLR 321(c), it must be vacated']; McGregor v McGregor, 212 AD2d 955, 956 [3d Dept 1995] [ The record reveals no compliance with the leave or notice requirements of CPLR 321(c). The appropriate remedy for a violation of CPLR 321(c) is vacatur of the judgment'])" (Moray v Koven & Krause, Esqs., 15 NY3d at 389).The Court explained why it rejected two arguments the defendant made. First, the defendant pointed out that CPLR 321(c) permits further proceedings by leave of the court, and contended that the Supreme Court exercised that express statutory authority to hear and grant the defendant's motion to dismiss after the plaintiff's attorney was suspended from the practice of law. The Court of Appeals found that argument to be wanting:
"The drafter's notes on CPLR 321(c), however, state that the words without leave of the court' were designed to allow the court to vary the [30-day] rule in cases where the stay of proceedings would produce undue hardship to the opposing party, as where the time to take an appeal or other action would run or where a provisional remedy is sought and speed is essential' (4th Preliminary Rep of Advisory Comm on Prac and Pro, 1960 NY Legis Doc No. 20 at 191). No remotely comparable situation existed at the time Supreme Court dismissed this action. Moreover, Supreme Court did not mention CPLR 321(c), much less articulate a basis for exercising its discretion to relax the 30-day notice requirement" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).Second, the defendant contended that the plaintiff was foreclosed from raising CPLR 321(c) for the first time on appeal. The Court of Appeals did not agree:
"While we do not as a general rule resolve cases on grounds not raised in the trial court, the context here is unusual. We are dealing with a statute intended to protect litigants faced with the unexpected loss of legal representation. And there is no indication in this record that plaintiff sought to raise CPLR 321(c) only after having conducted his lawsuit pro se for some period of time after his attorney became disabled (cf. Telmark, Inc. v Mills, 199 AD2d 579, 580-581). As a general rule, unrepresented litigants should not be penalized for failing to alert a trial court to the existence of an automatic stay created for the very purpose of safeguarding them against adverse consequences while they are unrepresented. And as the Practice Commentaries point out, all it takes to end the automatic stay is service of a 30-day notice on the affected party" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).CPLR 321(c) applies to circumstances in which an event occurs which is personal to the attorney of record which involuntarily prevents the attorney of record from continuing to represent the party, notwithstanding the attorney's willingness to do so (see Hendry v Hilton, 283 App Div at 171). The statute is designed for the protection of a litigant who, through no fault of his or her own, has been deprived of the services of one's attorney of record and who, therefore, should be given a reasonable opportunity to obtain new counsel before further proceedings are taken against [*15]such party. The protection of the statute is confined to causes which, as to the client, may be said to arise from a force majeure or one over which the client has no control (see id.).
Moray involved the circumstance where the attorney of record was suspended from the practice of law. In McGregor v McGregor (212 AD2d at 956), the attorney of record was disbarred. Where the attorney of record has died, been disbarred, or has been suspended from practice, the fact of the attorney's inability to proceed further is readily established by a documentary record, such as a death certificate or court order. The disability of the attorney of record is also within the purview of CPLR 321(c), whether that disability be mental or physical (see Winney v County of Saratoga, 252 AD2d 882, 883). The disability, whatever its nature, must be such that effectually prevents the attorney from continuing the representation of the client (see Hendry v Hilton, 283 App Div at 171; see also Winney v County of Saratoga, 252 AD2d at 883). Whether such a disability has occurred, and when it occurred, may not always be readily known and, in particular, known to the adverse party. There also may be no available record that documents the nature and extent of the disability or establishes when the disability arose.
Here, in moving for leave to withdraw from representing Marianne, Reppert asserted that, for medical reasons, he had been unable to fully return to the practice of law full-time since July 2015. He offered to "provide an in camera affirmation for the Court to review or make [himself] available to discuss the medical issues privately that prevent [him] from continuing at this time with the Court." He asserted that he was "physically unable to provide the representation that is necessary to properly represent [his client]," Marianne. In an affirmation executed two week later, in support of Sills Cummis's motion for leave to withdraw, Kaplan asserted that his firm's role in the matter was ending "[n]ow that Mr. Reppert's health prevents him from continuing to represent Marianne before this Court." The objectants did not oppose the withdrawal motions. While it does not appear that the Surrogate's Court took Reppert up on his offer to share medical information with the court privately, the court, in granting Reppert's motions for leave to withdraw, made the specific finding and determination that Reppert was "unable to continue to represent [Marianne] due to health reasons." In making this finding and determination, the court provided the basis for a discretionary withdrawal of counsel under CPLR 321(b)(2) and simultaneously activated the automatic stay provisions of CPLR 321(c), as Reppert's judicially determined inability to continue to represent Marianne for health reasons constituted a finding of disability for the purpose of CPLR 321(c). Further, in making this finding in its orders, the court put the objectants on notice that Reppert was unable to continue his representation of Marianne and was thus disabled, leading to the applicability of CPLR 321(c).
The objectants argue that CPLR 321(c) does not apply because there was no force majeure and there is no evidence that Reppert was effectively prevented from practicing law. This contention is unpersuasive. The statements by Reppert and Kaplan made in affirmations submitted in support of the withdrawal motions are evidence that Reppert was unable to effectively continue with the representation of Marianne. While no medical testimony or documentation was provided, and the Surrogate's Court might well have denied the withdrawal motion for that reason (see Matter of Plaro Estates, Inc. v Assessor, 101 AD3d 886, 888; Winney v County of Saratoga, 252 AD2d at 883), or requested the submission of supporting medical documentation, the court evidently was satisfied that Reppert's condition was serious and substantial, as evidenced by its unchallenged finding that Reppert was unable to continue with the representation. In this regard, we note that the previous Surrogate had granted a lengthy delay in the trial partly due to Reppert's representation that he was required to undergo surgery. The finding by the court on the motions for leave to withdraw that Reppert's condition precluded his continued participation in the matter, coupled with the facts that Reppert's health condition was a cause over which Marianne had no control and was not due to any fault on her part, established the existence of a disability for the purpose of CPLR 321(c) (see Hendry v Hilton, 283 App Div at 171). Reppert's condition, contrary to the objectants' argument, constituted a force majeure, that is, an unexpected event that prevented him from doing or completing something he had agreed or planned to do (see Black's Law Dictionary [11th ed 2019]). The objectants contend that, even if Reppert was disabled, the statutory stay was not implicated because Marianne failed to oppose or object to RK's withdrawal motion. Again, we disagree.
Where counsel is permitted to withdraw, pursuant to CPLR 321(b)(2), over the client's objection, the 30-day stay of proceedings generally attaches since the court has effectively [*16]"removed" counsel for the purpose of CPLR 321(c) (Albert v Albert, 309 AD2d 884, 886; see Matter of Wiley v Musabyemariya, 118 AD3d 898, 899-900; Sarlo-Pinzur v Pinzur, 59 AD3d 607). However, none of our cases stand for the proposition that the CPLR 321(c) stay applies only where the client objected to counsel's motion for leave to withdraw. Indeed, CPLR 321(c) provides that the "removal" of the attorney of record brings about a stay, without regard to whether the removal was with or without the client's consent. It would make little sense to construe the statute as conferring a stay to protect a client who opposed counsel's application to withdraw due to disability, despite knowing of the attorney's incapacity, while denying a stay to a client who, recognizing that the attorney was disabled, did not object to the attorney's request to withdraw. Either way, the stay attaches, but subject to the court's authority to vary it in appropriate cases.
CPLR 321(c) expressly permits the court to grant leave to continue the proceedings, and deny a stay, in particular cases where the attorney of record has been removed or suspended. Certainly, where the attorney's withdrawal is caused by a voluntary act of the client, the court has the discretion to permit the matter to proceed without a stay (see Matter of Wiley v Musabyemariya, 118 AD3d at 899-900 [no stay where client voluntarily discharged attorney]; Sarlo-Pinzur v Pinzur, 59 AD3d at 608 [no stay where client refused to cooperate with counsel in preparing for trial]; Graco Constr. Corp. v Eves, 232 AD2d 370, 370-371 [no stay where client voluntarily discharged attorney on the first day of trial]). Likewise, a stay may be refused where the removal of counsel was the product of the client's own wrongful act (see RDLF Fin. Servs., LLC v Bernstein, 93 AD3d 421 [attorney, representing both himself and his law firm, was disbarred after pleading guilty to stealing client funds; no stay because his removal from the bar was the product of his own wrongdoing]). Here, however, there is nothing in the record indicating that Marianne's voluntary act or wrongdoing caused Reppert's withdrawal.
Also unavailing is the objectants' contention that the legislative purpose underlying the enactment of CPLR 321(c) is to protect an unknowing client whose counsel failed to inform the client of counsel's suspension or disability. Here, there is no evidence that Marianne knew that Reppert had a health impairment at the time she initially retained him some 10 years earlier. Nor is there any evidence as to whether and when Reppert advised Marianne of his health condition, apart from his disclosures to the court. In any event, the Court of Appeals has said that "[t]he stay is meant to afford a litigant, who has, through no act or fault of his own, been deprived of the services of his counsel, a reasonable opportunity to obtain new counsel before further proceedings are taken against him in the action'" (Moray v Koven & Krause, Esqs., 15 NY3d at 389, quoting Hendry v Hilton, 283 App Div at 171). Reppert's medical condition, which deteriorated well after he began representing Marianne in lengthy, protracted proceedings, was a cause over which Marianne had no control and was not due to fault on her part.
XI. The Duration of the Stay
CPLR 321(c) provides that, where an attorney becomes disabled, "no further proceeding shall be taken in the action against the party for whom he [or she] appeared, without leave of the court, until thirty days after notice to appoint another attorney has been served upon that party either personally or in such manner as the court directs." Where the stay has been violated, the remedy is to vacate the judicial determinations rendered in contravention of the statute (see Livore v Malik, 305 AD2d 641, 642; Galletta v Siu-Mei Yip, 271 AD2d at 486; McGregor v McGregor, 212 AD2d at 956; see also Moray v Koven & Krause, Esqs., 15 NY3d at 389; Vincent C. Alexander, Practice Commentaries, McKinney's Cons Laws of NY, CPLR C321:3 ["A party against whom an order or judgment is entered in violation of CPLR 321(c) may have the order or judgment vacated"]). The stay provided for in CPLR 321(c) went into effect upon the Surrogate's Court's finding that Reppert was disabled, which was first made in its orders dated February 16, 2016, relieving RK in the Turnover and SNT Proceedings. Even if it is assumed that this finding was not imported into the Accounting Proceeding until the March 14, 2016, order relieving RK made in that proceeding, and that the stay did not take effect in that proceeding until March 14, 2016, there is no significant consequence as it does not appear that any judicial determinations were rendered in the interval between February 16 and March 14, 2016.
It is undisputed that no party sought leave of the Surrogate's Court to take further proceeding against Marianne and that no formal notice to appoint another attorney was served on her. The March 14, 2016, order, granting RK's withdrawal from representing Marianne in the Accounting Proceeding, did not explicitly state that Marianne had to find new counsel. In any event, [*17]no one served her with it. However, even though Marianne was never formally served with a notice to appoint, it does not necessarily follow that the statutory stay of proceedings continued on ad infinitum, as Marianne contends.
In Telmark, Inc. v Mills (199 AD2d 579), the Appellate Division, Third Department, found, on the facts presented, that there was no violation of CPLR 321(c)[FN9]. There, the defendant's attorney notified the parties that he had been suspended from practice and had advised the defendant to obtain the services of another attorney. The defendant then sent a letter to the plaintiff's attorneys in which she acknowledged that her counsel had been suspended and directed that the plaintiff "send any papers directly to [her] until notified to the contrary" (Telmark, Inc. v Mills, 199 AD2d at 580 [internal quotation marks omitted]). The defendant then proceeded pro se, which she had the right to do (see id. at 580-581).
In Moray, the Court of Appeals referenced Telmark by stating:
"We are dealing with a statute intended to protect litigants faced with the unexpected loss of legal representation. And there is no indication in this record that plaintiff sought to raise CPLR 321(c) only after having conducted his lawsuit pro se for some period of time after his attorney became disabled (cf. Telmark, Inc. v Mills, 199 AD2d 579, 580-581 [3d Dept 1993])" (Moray v Koven & Krause, Esqs., 15 NY3d at 390).Thus, in Moray, the Court of Appeals distinguished Telmark but did not overrule Telmark or call into doubt its conclusion on the facts there presented that there was no violation of CPLR 321(c).
Telmark is instructive in several respects. First, in Telmark, the defendant's attorney did give his client notice that she needed to appoint a new attorney. Second, the defendant responded to that notice by voluntarily electing to proceed pro se."
Wednesday, March 18, 2020
FOR THIS HEALTH CRISIS - NYS SUSPENSION OF CERTAIN DEBTS
From Governor Cuomo:
"Governor Andrew M. Cuomo and Attorney General Letitia James today announced that — effective immediately — the state will temporarily halt the collection of medical and student debt owed to the State of New York and referred to the Office of the Attorney General for collection, for at least a 30-day period, in response to growing financial impairments resulting from the spread of 2019 novel coronavirus, or COVID-19. Countless New Yorkers have been impacted — directly or indirectly — by the spread of COVID-19, forcing them to forgo income and business. In an effort to support these workers and families and ease their financial burdens, the OAG will halt the collection of medical and student debt owed to the State of New York and referred to the OAG for collection from March 16, 2020 through April 15, 2020. After this 30-day period, the OAG will reassess the needs of state residents for a possible extension. Additionally, the OAG will accept applications for suspension of all other types of debt owed to the State of New York and referred to the OAG for collection.
"As the financial impact of this emerging crisis grows, we are doing everything we can to support the thousands of New Yorkers that are suffering due to disruptions caused by the COVID-19 pandemic," Governor Cuomo said. "This new action to temporarily suspend the collection of debt owed to the state will help mitigate the adverse financial impact of the outbreak on individuals, families, communities and businesses in New York State, as we continue to do everything we can to slow the spread of the virus."
"In this time of crisis, my office will not add undue stress or saddle New Yorkers with unnecessary financial burden," said Attorney General James. "New Yorkers need to focus on keeping themselves safe and healthy from the coronavirus, and therefore can rest assured that state medical and student debt referred to my office will not be collected against them for at least 30 days. This is the time when New Yorkers need to rally around each other and pick each other up, which is why I am committed to doing everything in my power to support our state's residents."
The OAG collects certain debts owed to the State of New York via settlements and lawsuits brought on behalf of the State of New York and state agencies. A total of more than 165,000 matters currently fit the criteria for a suspension of state debt collection, including, but not limited to:
- Patients that owe medical debt due to the five state hospitals and the five state veterans' home;
- Students that owe student debt due to State University of New York campuses; and
- Individual debtors, sole-proprietors, small business owners, and certain homeowners that owe debt relating to oil spill cleanup and removal costs, property damage, and breach of contract, as well as other fees owed to state agencies.
The temporary policy will also automatically suspend the accrual of interest and collection of fees on all outstanding state medical and student debt referred to the OAG for collection, so New Yorkers are not penalized for taking advantage of this program.
New Yorkers with non-medical or non-student debt owed to the State of New York and referred to the OAG, may also apply to temporarily halt the collection of state debt. Individuals seeking to apply for this temporary relief can fill out an application online or visit the OAG's coronavirus website to learn more about the suspension of payments. If an individual is unable to fill out the online form, they can also call the OAG hotline at 1-800-771-7755 to learn more."
Tuesday, March 17, 2020
FOR THIS HEALTH CRISIS......
This can be done without an attorney, you just need 2 independent witnesses, although it may be a good idea to consult with an attorney. Here is a link to the form and instructions:
https://www.health.ny.gov/publications/1430.pdf
Monday, March 16, 2020
UPDATED PROTOCOL FOR NY COURTS
Only essential matters will be handled starting 5pm today.
See https://www.nycourts.gov/whatsnew/pdf/Updated-Protocol-AttachmentA2.pdf
Friday, March 13, 2020
MORTGAGE FORECLOSURE - AGAIN THE EVIDENCE RULES APPLY IN SUMMARY JUDGMENT MOTIONS
American Home Mtge. Servicing, Inc. v Carnegie, 2020 NY Slip Op 01590, Decided on March 11, 2020, Appellate Division, Second Department:
"We agree with the Supreme Court's determination, upon reargument, that the plaintiff failed to establish, prima facie, that it had standing, as the plaintiff's asserted basis in its May 2016 motion—that standing was established through an affidavit of an employee of the plaintiff's current loan sub-servicer—is without merit (see Citibank, N.A. v Cabrera, 130 AD3d 861, 861; see also US Bank N.A. v Hunte, 176 AD3d 894, 896). The affidavit failed to lay the requisite foundation under the business records exception to the hearsay rule to support the admissibility of the records relied upon by the affiant for her assertion that the note was transferred to the plaintiff's custodian prior to the commencement of the action and remained in the possession of the plaintiff's custodian at the time of commencement (see US Bank N.A. v Hunte, 176 AD3d at 896; Aurora Loan Servs., LLC v Mercius, 138 AD3d 650, 651-652). Moreover, the affiant's assertions as to the contents of the records were inadmissible without the submission of the records themselves (see Deutsche Bank Natl. Trust Co. v Elshiekh, 179 AD3d 1017; Bank of N.Y. Mellon v Gordon, 171 AD3d 197, 205)."
Thursday, March 12, 2020
COMMENTS AND SPAM
Comments on this blog are being turned off for the time being due to spam. Comments can be made on Facebook where this blog is also posted:
https://www.facebook.com/TheLawOfficesOfJonMichaelProbstein/
Wednesday, March 11, 2020
COVID -19 AND THE NEW YORK FEDERAL COURTS
Both the Southern and Eastern District courts have new restrictions.
For the Southern District, see https://nysd.uscourts.gov/sites/default/files/2020-03/Notice%20to%20Bar%20Revised%20-%20COVID19%20Courthouse%20Restrictions.pdf
For the Eastern District, see https://img.nyed.uscourts.gov/files/general-ordes/ADMINISTRATIVE%20ORDER%202020-05.pdf
Tuesday, March 10, 2020
HOSPITAL VISITING RIGHTS OF DOMESTIC PARTNER
Here, the domestic partner was not the designated health care proxy and it appears that the plaintiff and the blood relatives of the patient were at odds. A notice of appeal has been filed.
DELISI v. Memorial Sloan-Kettering Cancer Ctr., 2020 NY Slip Op 30350, Supreme Court, NY County, February 4, 2020:
Plaintiff Suzanne Delisi, who was the life partner of Louis Bradford Paar, commenced this action against the defendant Memorial Sloan-Kettering Cancer Center based on its alleged refusal to allow plaintiff to visit Mr. Paar while he was hospitalized at the defendant's facility from January 25, 2018 until his death in February 2018. In her complaint, plaintiff asserts three causes of action against defendant: (1) violation of Public Health Law § 2805-q; (2) tortious interference with contract; and (3) intentional infliction of emotional distress. Defendant now moves pursuant to CPLR 3211(a)(7) to dismiss the complaint for failure to state a cause of action.
Public Health Law § 2805-q provides that "[n]o domestic partner ... shall be denied any rights of visitation of his or her domestic partner ... when such rights are accorded to spouses and next-of-kin at any hospital, nursing home or health care facility." Defendant argues that they are immunized from liability under Public Health Law § 2986(1), which provides that "[n]o health care provider or employee thereof shall be subjected to criminal or civil liability ... for honoring in good faith a health care decision by an agent...." According to defendant, the hospital employees were acting pursuant to the directives of Mr. Paar's health care proxy and, in any event, Public Health Law § 2805-q does not give plaintiff a private right of action.
Public Health Law § 2805-q does not expressly permit recovery by a domestic partner for damages based on the alleged improper denial of visitation rights. "Consequently, recovery may be had only if a legislative intent to create such a right of action is fairly implied in the statutory provision and its legislative history. Haar v. Nationwide Mutual Fire Ins. Co., 2019 N.Y. Slip. Op. 08445, 2019 WL 6183610, at *2 (2019) (holding that Public Health Law § 230(11)(b) does not imply a private right of action to a physician based on alleged lack of good faith in reporting misconduct) (internal citations and quotations omitted). Courts consider three essential factors in determining whether a private right of action can be implied from a statute and its legislative history: "(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme." Id. (internal citations and quotations omitted). All three factors must be satisfied before an implied private right of action will be recognized. Id.
With respect to the first factor, plaintiff alleges she is a "domestic partner" in her complaint. Based on the plain text of the statute and its legislative history, the legislature made clear that the provision was intended to protect domestic partners and patients against discrimination by affording them with the same visitation rights as those afforded to patients and their spouses. (Sponsor's Mem, Bill Jacket, L 2004, ch 471).
With respect to the second factor, "whether recognition of a private right would promote the legislative purpose" of the statute, the answer is less clear. Obviously, giving domestic partners the right to bring a private cause of action under this statute would help ensure that their visitation rights are not improperly denied. However, the parties did not cite any statute or case permitting the spouse or next of kin of a patient to recover damages based on the hospital's refusal to permit visitation and the court's independent research resulted in no such statute or case. Since the stated purpose of the statute was to prevent discriminatory practices, giving such rights to domestic partners where no such rights are available to a patient's spouse or next of kin would not promote the legislative purpose of the statute.
Finally, the third factor of the analysis, "whether creation of such a right would be consistent with the legislative scheme," also militates against recognition of an implied right of action. The Public Health Law explicitly confers a private right of action to patients based on the alleged denial of "any right or benefit," including, notably, the patient's right to authorize those family members and other adults who will be given priority to visit. Public Health Law §§ 2801d(1) and 2803-c(3)(o). These two sections explicitly give patients the right to sue for damages for the alleged deprivation of a patient's rights or benefits. See Zeides v. Hebrew Home, 300 A.D.2d 178, 179 (1st Dep't 2002). By contrast, Public Health Law § 2805-q does not include explicit language granting domestic partners the right to sue for damages "and none may be judicially engrafted." DeCintio v. Lawrence Hosp., 299 A.D.2d 165, 166 (1st Dep't 2002) (citing Patrolmen's Benevolent Assn. v. City of New York, 41 N.Y.2d 205, 208 (1976); holding that Public Health Law 29-C does not permit recovery by a health care proxy for his individual damages); see also McKinney's Cons. Laws of N.Y., Book 1, Statutes §§ 240, 310(c).[1] Moreover, even if plaintiff could sue for damages under the statute, Public Health Law § 2986(1) immunizes defendant from any liability for honoring the directives of a patient's health care proxy, as plaintiff admits occurred in this case. Complaint, ¶ 69. Thus, the first cause of action must be dismissed as it does not afford plaintiff with a private cause of action for damages against the hospital.
In the second cause of action, plaintiff alleges that defendant tortuously interfered with her alleged agreement with Mr. Paar whereby plaintiff and Mr. Paar allegedly agreed that plaintiff would manage Mr. Paar's medical and financial affairs. Complaint, ¶¶ 9, 86. In order to state a claim for tortious interference with contract, a plaintiff must plead that its contract with a third party has been breached. NBT Bancorp Inc. v. Fleet/Norstar Financial Group, 87 N.Y.2d 614 (1996). Here, plaintiff has not pled the basic elements of her contract with Mr. Paar as she fails to set forth what consideration was provided by Mr. Paar in exchange for plaintiff's alleged agreement to manage his affairs. Moreover, plaintiff has not pled that the defendant's actions caused Mr. Paar to breach any such alleged agreement, which is required to state a claim for tortious interference with contract. See Farkas v. River House Realty Co., 173 A.D.3d 405, 406 (1st Dep't 2019). Accordingly, this claim will be dismissed.
Finally, plaintiff's cause of action for intentional infliction of emotional distress must also be dismissed as the pleading falls short of the extreme and outrageous conduct required to support this claim, particularly given plaintiff's admission in her allegations that defendant was acting pursuant to the wishes of Mr. Paar's health care proxy. Brankov v. Hazzard, 142 A.D.3d 445, 447 (1st Dep't 2016).
Monday, March 9, 2020
AN ORAL DOMESTIC PARTNER AGREEMENT WAS ENFORCEABLE
Breaking up is hard to do.
Sheinker v Quick, 2020 NY Slip Op 20049, Decided on February 6, 2020, Appellate Term, Second Department:
"In this action, plaintiff seeks to recover the principal sum of $15,000, based on causes of action for breach of contract and fraudulent concealment or fraudulent inducement. In the complaint, plaintiff asserted that she had resided in New York with her two children and with defendant, in a domestic relationship, for several years when, in April 2015, defendant had received an offer of employment in Florida. Plaintiff alleged that, since defendant lacked the financial means to relocate to Florida, the parties had made an oral contract (the Agreement), pursuant to which plaintiff had agreed to pay defendant's expenses to relocate from New York to Florida and the majority of his living expenses for a year, in consideration of defendant's payment to plaintiff of 80% of his net earnings for the same period. Pursuant to the Agreement, plaintiff paid defendant's moving expenses, which she estimated at approximately $15,000, rented and furnished an apartment in Florida, and obtained utility contracts and renter's insurance for the Florida apartment in her name, among other expenses. Plaintiff and her children continued to reside in New York. Defendant went to work in Florida, following which plaintiff began receiving payments in furtherance of the Agreement, initially, by ATM withdrawals that she made from defendant's bank account, and, after several weeks, by wire transfers that defendant made into plaintiff's bank account.
Plaintiff stated that, on June 27, 2015, she became aware that defendant had breached the Agreement by concealing a portion of his earnings from her and paying her less than the amount [*2]to which she was entitled. Subsequently, she learned that defendant had also concealed from her his romantic involvement with a woman in Florida, to whom he had become engaged before he had entered into the Agreement, as well as a prior criminal conviction and a civil judgment that had been rendered against defendant based on fraud. Plaintiff indicated that, had she been aware of defendant's romantic involvement with another woman or his prior financial malfeasance, she would not have entered into the Agreement with defendant.
Defendant denied liability, and, following discovery, moved for summary judgment dismissing the complaint, asserting, first, that since plaintiff admitted to having received payments from defendant that exceeded the $15,000 she seeks to recover in this action, she had no viable claim for relief, and second, that plaintiff's cause of action for fraudulent inducement was barred because it was essentially duplicative of her cause of action for breach of contract.
In opposition, plaintiff stated that, although she had only demanded $15,000, because it is the jurisdictional limit for actions brought in the District Court, defendant's payments to her had not covered the full amount due, and his outstanding contractual debt to her exceeded that sum. With respect to her cause of action for fraudulent inducement, plaintiff indicated that she had entered into the Agreement based on the parties' history of living together in a familial relationship, and with the understanding that if defendant's job worked out in Florida, she and her children would join defendant and make Florida their primary residence. She stated that she had relied on the parties' confidential relationship when she had entered into the Agreement, and that, if defendant had not concealed his relationship with and engagement to the woman in Florida as well as his past record of financial malfeasance, she would not have entered into the Agreement. By order dated August 2, 2018, the District Court granted defendant's motion and dismissed the action, upon a sua sponte finding that plaintiff was, in effect, seeking "palimony," which is not recognized in New York.
While New York will not imply a contract pertaining to earnings and assets from the relationship of an unmarried couple living together, sometimes denominated "palimony," the express contract of such a couple is enforceable (see Morone v Morone, 50 NY2d 481, 484 [1980]; see also Dee v Rakower, 112 AD3d 204, 210-211 [2013]). Here, plaintiff pleaded the elements of a cause of action for breach of contract, including its existence, her performance under the contract, defendant's breach of his contractual obligations, and plaintiff's resulting damages (see 143 Bergen St., LLC v Ruderman, 144 AD3d 1002, 1003 [2016]). Consequently, the District Court erred in, sua sponte, dismissing the action on the ground that it constituted an unenforceable action for "palimony."
A plaintiff may, if she so chooses, seek a recovery in a court with a lower jurisdictional limit than the amount of her damages, provided that the plaintiff confines her demand to the court's jurisdictional limit (see Wallach v Flood, 54 Misc 3d 127[A], 2016 NY Slip Op 51789[U] [App Term, 2d Dept, 9th & 10th Jud Dists 2016]). Here, plaintiff alleged contract damages substantially in excess of the sum which defendant had paid her. The fact that she had confined her demand to the jurisdictional limit of the District Court did not provide a valid basis for the dismissal of the action.
By alleging in the complaint that the parties were in a confidential relationship at the time they entered into the Agreement (see Sharp v Kosmalski, 40 NY2d 119, 121 [1976]; Mei Yun Chen v Mei Wan Kao, 97 AD3d 730 [2012]), from which it could be inferred that defendant had [*3]a duty to disclose any material information (cf. Sanford/Kissena Owners Corp. v Daral Props., LLC, 84 AD3d 1210, 1211 [2011]; Manti's Transp., Inc. v C.T. Lines, Inc., 68 AD3d 937, 940 [2009]), and that defendant had concealed facts from her—to wit, his engagement to another woman and his prior history of financial fraud—which were collateral to the Agreement but the concealment of which served as an inducement for plaintiff to enter into the Agreement, plaintiff pleaded a cause of action for fraudulent inducement which was not duplicative of her cause of action for breach of contract (see Greenberg v Meyreles, 155 AD3d 1001, 1003 [2017]). Since, in his motion, defendant failed to provide evidentiary materials to eliminate any material issues of fact from the case (see Winegrad v New York Univ. Med. Ctr., 64 NY2d 851, 853 [1985]) or otherwise to establish his entitlement to judgment as a matter of law, his motion should have been denied."
Friday, March 6, 2020
MORTGAGE FORECLOSURE - POST JUDGMENT ACTIONS TO SET ASIDE FORECLOSURE
Besides an appeal from the judgment of foreclosure and sale, some homeowners have tried other approaches to set aside the foreclosure. Here are two recent examples that failed.
In Monterosso v Garguilo, 2020 NY Slip Op 01488, Decided on March 4, 2020. Appellate Division, Second Department - the homeowners commenced an action, inter alia, to impose a constructive trust upon certain real property to which they lost title in a previous foreclosure action, and for a judgment declaring that the referee's deed transferring title to the property to the defendants was void as the product of a usurious loan transaction. The defendants moved pursuant to CPLR 3211(a) to dismiss the complaint, and the Supreme Court granted the motion. The Second Department affirmed.
In Pusey v Morales, 2020 NY Slip Op 01519, Decided on March 4, 2020, Appellate Division, Second Department, after the foreclosure judgment and sale, the homeowner commenced an action against the bank and another defendant, seeking, inter alia, a judgment declaring that the assignment of mortgage was null and void and to remove the cloud on title to the premises. The court held that:
""[A] judgment of foreclosure and sale entered against a defendant is final as to all questions at issue between the parties, and concludes all matters of defense which were or might have been litigated in the foreclosure action" (SSJ Dev. of Sheepshead Bay I, LLC v Amalgamated Bank, 128 AD3d at 675 [internal quotation marks omitted]). Thus, subsequent claims are barred by the doctrine of res judicata where, as here, the granting of the requested relief "in the present action would destroy or impair the rights established by the judgment of foreclosure in the prior action" (id. at 675-676; see Chapman Steamer Collective, LLC v KeyBank N.A., 163 AD3d 760, 761-762)."
Thursday, March 5, 2020
CHILD CUSTODY - A TRIAL AND REVISING A PRIOR CUSTODY AND VISITATION ORDER
This case illustrates the degree of work, time and specificity that is required in a custody trial. The parties, at least the father, were certainly high income.
See EK v. PK, 2020 NY Slip Op 50068 - Nassau County Supreme Court January 7, 2020
Wednesday, March 4, 2020
CHILD SUPPORT WHEN CUSTODY IS SHARED
Alliger-Bograd v Bograd, 2020 NY Slip Op 01315, Decided on February 26, 2020, Appellate Division, Second Department:
"The defendant contends that the Supreme Court erred in determining the amount of his child support obligation based on the Child Support Standards Act (hereinafter CSSA) guidelines, as the parties have shared custody of the children, and that the parties should split all child support obligations evenly. The CSSA "sets forth a formula for calculating child support by applying a designated statutory percentage, based upon the number of children to be supported, to combined parental income up to a particular ceiling" (Matter of Murray v Murray, 164 AD3d 1451, 1453 [internal quotation marks omitted]). "Where the combined parental income exceeds that ceiling, the court, in fixing the basic child support obligation on income over the ceiling, has the discretion to apply the factors set forth in Domestic Relations Law § 240(1-b)(f), or to apply the statutory percentages, or to apply both" (Candea v Candea, 173 AD3d at 664; see Domestic Relations Law § 240[1-b][c][3]; Matter of Cassano v Cassano, 85 NY2d 649, 655). In Bast v Rossoff (91 NY2d 723, 728), the Court of Appeals held that the CSSA was applicable to shared custody arrangements. The CSSA is also applicable to situations where each party has equal custodial time with the children (see Baraby v Baraby, 250 AD2d 201, 204). In cases where custody is shared equally, the parent having the greater share of the support obligation after applying the statutory formula is identified as the "noncustodial" parent for the purposes of support (see id. at 204). However, if the statutory formula "yields a result that is unjust or inappropriate," the court "can resort to the paragraph (f)' factors and order payment of an amount that is just and appropriate" (Bast v Rossoff, 91 NY2d at 729, citing Domestic Relations Law § 240[1-b][f], [g]; see Baraby v Baraby, 250 AD2d at 204). Here, the court appropriately applied the CSSA to determine the award of child support, and we find no basis to disturb the court's determination."
Tuesday, March 3, 2020
MORTGAGE FORECLOSURE: TRIAL MOD DID NOT REVIVE DEBT
The Third Department held otherwise in a similar matter but, depending on the language in the trial modification, this would be the rule in the Second Department
Nationstar Mtge., LLC v Dorsin 2020 NY Slip Op 01354 Decided on February 26, 2020 Appellate Division, Second Department:
"An action to foreclose a mortgage is governed by a six-year statute of limitations (see CPLR 213[4]; Ditech Fin., LLC v Naidu, 175 AD3d 1387). Even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the statute of limitations begins to run on the entire debt (see Bank of N.Y. Mellon v Craig, 169 AD3d 627, 629; Kashipour v Wilmington Sav. Fund Socy., FSB, 144 AD3d 985, 986). Here, the mortgage debt was accelerated on April 23, 2009, when GreenPoint commenced the 2009 action and elected in the complaint to accelerate the debt (see Pennymac Corp. v McGlade, 176 AD3d 963, 965). The instant action was commenced on October 29, 2015, more than six years later.
Nevertheless, the plaintiff contends that the defendant's execution of a Home Affordable Modification Trial Period Plan (hereinafter the Plan) after commencement of the 2009 action, as well as payments made pursuant to that Plan, served to renew the running of the statute of limitations, thus making this action timely, as it was commenced less than six years after the Plan was executed and the payments made.
" General Obligations Law § 17-101 effectively revives a time-barred claim when the debtor has signed a writing which validly acknowledges the debt'" (Yadegar v Deutsche Bank Natl. Trust Co., 164 AD3d 945, 947, quoting Lynford v Williams, 34 AD3d 761, 762). "The writing, in order to constitute an acknowledgment, must recognize an existing debt and must contain nothing inconsistent with an intention on the part of the debtor to pay it" (Lew Morris Demolition Co. v Board of Educ. of City of N.Y., 40 NY2d 516, 521; see Yadegar v Deutsche Bank Natl. Trust Co., 164 AD3d at 947). "In order to demonstrate that the statute of limitations has been renewed by a partial payment, it must be shown that the payment was accompanied by circumstances amounting to an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise may be inferred to pay the remainder'" (U.S. Bank N.A. v Martin, 144 AD3d 891, 892-893, quoting Lew Morris Demolition Co. v Board of Educ. of City of N.Y., 40 NY2d at 521; see General Obligations Law § 17-107; Petito v Piffath, 85 NY2d 1, 9).
Here, under the Plan, which the defendant admitted having executed, the defendant represented, among other things, that he was unable to afford his mortgage payments, and agreed to make three trial payments, at a reduced rate, over the course of three months. If the defendant complied, and his representations continued to be true, then the Plan provided that the defendant would be offered a permanent modification agreement. Modifications pursuant to the Home Affordable Mortgage Program can include interest rate reduction, principal forbearance, and principal forgiveness (see US Bank N.A. v Sarmiento, 121 AD3d 187, 198). In this case, the defendant made all of the trial payments but was not offered a permanent modification agreement.
Contrary to the plaintiff's contention, the Plan did not constitute an "unconditional and unqualified acknowledgment of [the] debt" sufficient to reset the statute of limitations (Hakim v Peckel Family Ltd. Partnership, 280 AD2d 645; see Yadegar v Deutsche Bank Natl. Trust Co., 164 AD3d at 947). While the writing arguably acknowledged the existence of indebtedness, the defendant merely agreed to make three trial payments so as to receive a permanent modification offer. Any intention to repay the debt was conditioned on the parties reaching a permanent modification agreement, which condition did not occur. Under these circumstances, it cannot be said that the writing contained "nothing inconsistent with an intention on the part of the debtor to pay" the debt (Lew Morris Demolition Co. v Board. of Educ. of City of N.Y., 40 NY2d at 521; see [*3]Sotheby's, Inc. v Mao, 173 AD3d 72, 81; Hakim v Peckel Family Ltd. Partnership, 280 AD2d 645; National Westminster Bank USA v Petito, 202 AD2d 193, 195; Sichol v Crocker, 177 AD2d 842, 843; Flynn v Flynn, 175 AD2d 51, 52; cf. Bank of N.Y. Mellon v Bissessar, 172 AD3d 983, 985; U.S. Bank, N.A. v Kess, 159 AD3d 767, 768-769). Indeed, the defendant represented in the Plan that he was unable to afford the mortgage payments.
Similarly, contrary to the plaintiff's further contention and the Supreme Court's conclusion, the trial payments made pursuant to the Plan did not constitute an absolute and unqualified acknowledgment by the debtor of more being due, from which a promise could be inferred to pay the remainder. Rather, the payments were made for the purpose of reaching an agreement to modify the terms of the parties' contract (cf. Petito v Piffath, 85 NY2d at 9; Lew Morris Demolition Co. v Board of Educ. of City of N.Y., 40 NY2d at 521-522), and any promise to pay the remainder of the debt that could be inferred in such circumstances would merely be a promise conditioned upon the parties reaching a mutually satisfactory modification agreement (see U.S. Bank N.A. v Martin, 144 AD3d at 893). Just as an express conditional promise or acknowledgment does not serve to reset the statute of limitations, an implied conditional promise also does not have that effect. Although the Appellate Division, Third Department, held to the contrary in Wells Fargo Bank, N.A. v Grover (165 AD3d 1541), we disagree and decline to follow that holding.
Accordingly, the Supreme Court should have denied those branches of the plaintiff's motion which were for summary judgment on the complaint insofar as asserted against the defendant and for an order of reference, and should have granted those branches of the defendant's cross motion which were for summary judgment dismissing the complaint insofar as asserted against him as time-barred and for summary judgment on his counterclaim to cancel and discharge of record the mortgage pursuant to RPAPL 1501(4) (see BH 263, LLC v Bayview Loan Servicing, LLC, 175 AD3d 1375, 1376; Bank of N.Y. Mellon v Bissessar, 172 AD3d at 985).
Lastly, the Supreme Court should have granted that branch of the defendant's cross motion which was for summary judgment on his counterclaim for an award of attorneys' fees and expenses pursuant to Real Property Law § 282 (see 21st Mtge. Corp. v Nweke, 165 AD3d 616, 619)."
Monday, March 2, 2020
OWNER'S LIABILITY FOR AIRBNB FINE
Richard Breslaw Family LP v. NYC Dep't of Bldgs, NYLJ February 26, 2020, Date filed: 2020-02-14, Court: Supreme Court, New York, Judge: Justice Laurence Love, Case Number: 152499/2019:
"......One who objects to the act of an administrative agency must exhaust all available administrative remedies before being permitted to litigate in a court of law (see Lehigh Portland Cement Co v. NY State Dept of Envtl Conservation, 87 NY2d 136, 140 [1995]). Per 48 RCNY §6-19(a)(1)(iii), before appealing, petitioner was required to pay the penalties imposed on it by hearing officer Roake’s Order. Petitioner failed to perfect an appeal of OATH hearing officer Roake’s decision and order because petitioner did not submit proof of payment of the penalty imposed or a waiver from OATH of prior payment due to financial hardship.
As petitioner failed to exhaust all administrative remedies by not perfecting a proper and timely appeal, the Court finds this matter should be dismissed for lack of subject matter jurisdiction.
If the Court was considering the merits of said petition, the Court notes that petitioner alleges OATH’s decision was arbitrary and capricious. In deciding whether an agency’s determination was arbitrary, capricious, or an abuse of discretion, courts are limited to an assessment of whether a rational basis exists for the administrative determination and their review ends when a rational basis has been found (see Heintz v. Brown, 80 NY2d 998, 1001 [1992]). An action or determination is arbitrary if it was made without sound basis in reason and without regard to the facts (id. at 1001).
Petitioner represents it was the tenant who operated the subject premises as an illegal short-term rental of the two units within their property. This is not a defense to the violations charged in the 2018 summonses. Courts have also upheld a building owner’s non-delegable responsibility to maintain its building in a code-compliant manner and found building owners vicariously liable for breaching this obligation (see Guzman v. Haven Plaza Housing Dev Fund Co, 69 NY2d 559 [1987]).
Petitioner admits that as early as November 2017, when it was issued the November 2017 summons, that it was aware of the use of the subject premises for short-term rental. Petitioner waited four months to commence eviction proceedings against the offending tenant and offered no proof that any of the violations had been corrected.
The subject premise is classified for permanent residence, and violations of the building code occurred when the apartments were illegally converted into short-term rental units as advertised on AirBNB. The hearing officers properly applied the appropriate building code violations and did not make an arbitrary nor capricious decision."
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