A shareholder may not recover individually for wrongs against the corporation.

Practice point:  The defendants established their prima facie entitlement to judgment as a matter of law by submitting evidence that all of the plaintiff's losses arose from his status as a shareholder of a nonparty corporation. A shareholder, even in a closely-held corporation, may not recover in his or her individual capacity for wrongs against the corporation. The evidence established, prima facie, that the moving defendants were not liable to the plaintiff for any of the relief sought, and that the plaintiff's claims should have been brought on behalf of the nonparty corporation in a derivative action.

 Student note:  The appeals from the two intermediate orders were dismissed because the right of direct appeal therefrom terminated with the entry of the judgment in the action. The issues raised on the appeals from those orders were brought up for review and were considered on the appeal from the judgment, pursuant to CPLR 5501[a][1].

Case:  Barbaro v,  Spinelli, NY Slip Op 06786 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue: Summary judgment in a medical malpractice action.

An allegedly loose handrail, and defnedant's summary judgment motion is denied.

Practice point:  The Appellate Division reversed the motion court's granting defendant's motion to dismiss. Plaintiff was allegedly injured when she fell down a flight of stairs in defendant's apartment building. She alleges that the accident was caused by a loose handrail that she was holding while descending the stairs. The handrail's looseness was confirmed by the deposition testimony of defendant's superintendent who checked it shortly after plaintiff was injured. Defendant failed to satisfy its initial burden of establishing a lack of notice of the defect inasmuch as it offered no testimony as to when the admittedly loose handrail was last inspected or repaired.

Student note:  The Appellate Division expressly rejected plaintiff's alternative theory that the allegedly worn marble tread on the stairway constituted an actionable defective condition.

Case:  DiPini v. 381 E. 160 Equities LLC, NY Slip Op 06868 (1st Dept. 2014)

Here is the decision.

Tomorrow's issue: A shareholder may not recover individually for wrongs against the corporation

Lien law, unjust enrichment, and quantum meruit.

Practice point:  Lien Law § 11 provides that within 5 days before or 30 days after filing the notice of lien, a lienor "shall" serve a copy of such notice upon the owner, as relevant here, at the owner's "last known place of residence." Here, the plaintiff's affidavit of service of the mechanic's lien demonstrates that the plaintiff failed to serve the notice in compliance with Lien Law § 11, as the notice was not sent to the defendants' last known place of residence. As strict compliance with the statutory requirements is mandated, the Appellate Division determined that the Supreme Court should have granted that branch of the defendants' motion which was pursuant to Lien Law § 11 to dismiss the sixth cause of action, which was to foreclose a mechanic's lien.

Student note:  Where, as here, there is a dispute as to whether there is a contract, the plaintiff may allege causes of action to recover for unjust enrichment and in quantum meruit as alternatives to a cause of action alleging breach of contract, pursuant to CPLR 3014.

Case:  Thompson Bros. Pile Corp. v Rosenblum, NY Slip Op 06577 (2d Dept. 2014)

Here is the decision.

Tomrorrow's issue: An allegedly loose handrail, and defendant's summary judgment motion is denied.

Court holiday.

The courts are closed to mark Columbus Day.

Tomorrow's issue:  Lien law, unjust enrichment, and quantum meruit.

Motion to vacate raising a jurisdictional objection and, alternatively, seeking a discretionary vacatur.

Practice point:  When a defendant seeking to vacate a default judgment raises both a jurisdictional objection, pursuant to CPLR 5015(a)(4),  and, alternatively, seeks a discretionary vacatur pursuant to CPLR 5015(a)(1), the court must resolve the jurisdictional question before determining whether it is appropriate to grant a discretionary vacatur.  Here, the process server's affidavit constituted prima facie evidence of proper service, pursuant to CPLR 308(4) . In her affidavit in support of her motion, the defendant did not deny that she was served with process and did not swear to specific facts to rebut the process server's affidavit.

The defendant was not entitled to relief pursuant to CPLR 5015(a)(1), as she failed to set forth any reasonable excuse for her default, since the only excuse proffered was that she had no recollection of being served with process.

Student note:  As to the jurisdictional question, since the defendant did not rebut the process server's affidavit, a hearing was not necessary.  As to the discretionary vacatur, in the absence of a reasonable excuse, it is unnecessary to determine whether the defendant demonstrated a potentially meritorious defense.

Case:  Servpro Indus., Inc. v. Anghel, NY Slip Op 06572 (2d Dept. 2014)

Here is the decision.

Tuesday's issue: Lien law, unjust enrichment, and quantum meruit.

Denial of a petition to file a late notice of claim.

Practice point:  The Appellate Division reversed the motion court, and denied the petition for leave to file a late notice of claim and dismissed the complaint. Even if the mistaken identification of the municipal agency were an excusable error, the petitioner failed to proffer any excuse for the additional delay of more than seven months between the time that he discovered the error and the filing of his petition. In addition, the City did not acquire timely, actual knowledge of the essential facts constituting the petitioner's claim. The petitioner contends that the City acquired such knowledge by virtue of a police accident report made by a police officer at the accident scene. However, for a report to provide actual knowledge of the essential facts, one must be able to readily infer from that report that a potentially actionable wrong had been committed by the public corporation. Here, the report did not provide the City with actual notice of the essential facts constituting the petitioner's claim that the City was negligent in the happening of the subject accident, or that the petitioner sustained any injuries as a result of the City's alleged negligence. Finally, the petitioner failed to rebut the City's assertion that the overall 10-month delay in commencing the proceeding deprived it of the opportunity to find witnesses promptly, or otherwise conduct a timely and meaningful investigation.

Student note:  In determining whether to grant leave to serve a late notice of claim, the court must consider whether (1) the public corporation acquired actual knowledge of the essential facts constituting the claim within 90 days after the claim arose or a reasonable time thereafter; (2) the claimant made an excusable error concerning the identity of the public corporation; (3) the delay would substantially prejudice the public corporation in its defense; and (4) the claimant demonstrated a reasonable excuse for the failure to serve a timely notice of claim, pursuant to General Municipal Law § 50-e[5].

Case:  Kuterman v. City of New York, NY Slip Op 06560 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue: Motion to vacate raising a jurisdictional objection and, alternatively, seeking a discretionary vacatur.

The motion court is limited to the issues on the motion before it.

Practice point:  The only noticed application before the Supreme Court was the plaintiff's order to show cause seeking a finding that the defendants had violated an earlier court injunction and holding the defendants in civil contempt. The Appellate Division determined that, as there was no motion by any party seeking a determination of whether the easement encroachments were necessary, or, alternatively, de minimis, the motion court was without jurisdiction to award the plaintiff what was, in effect, dispositive relief consisting of an easement by necessity and a finding that there were de minimis encroachments, pursuant to CPLR 2214.

Student note:  Generally a court is limited to the  issues or defenses that are the subject of the motion before it. See Dunham v. Hilco Constr. Co., 89 NY2d 425, 429.

Case:  DiDonato v. Dyckman, NY Slip Op 06556 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue:  Denial of a petition to file a late notice of claim.

Defective service and dismissal

Practice point:  The Appellate Division affirmed dismissal on the basis that no personal jurisdiction was acquired over respondents. Petitioner failed to comply with CPLR 311(a)(1)'s requirement hat the process server tender process directly to an authorized corporate representative, rather than an unauthorized person who later hands the process to an officer or other qualified representative.

Petitioner also failed to properly effectuate service of process by mail. Although he mailed the summons and petition to respondents, he did not include two copies of a "statement of service by mail" and an "acknowledgement of receipt" as required by CPLR 312-a.

Student note:  The Appellate Division noted that petitioner's status as a pro se litigant does not excuse the defective service, and the fact that respondents received actual notice does not confer jurisdiction upon the court.

Here is the decision.

Tomorrow's issue: The motion court is limited to the issues on the motion before it.

Summary judgment on breach of contract and account stated.

Practice point:  The plaintiff made a prima facie showing of entitlement to judgment as a matter of law on its breach of contract claiim by tendering sufficient evidence that there was an agreement, which the defendant accepted by his use of a certain credit card issued by the plaintiff and payments made thereon, and which was breached by the defendant when he failed to make the required payments.

The plaintiff also established prima facie entitlement to judgment as a matter of law on its account stated claim by tendering sufficient evidence that it generated account statements for the defendant in the regular course of business;  that it mailed those statements to the defendant on a monthly basis; and that the defendant accepted and retained these statements for a reasonable period of time without objection, and made partial payments on them.

Student note:  The appeal from the intermediate order must be dismissed because the right of direct appeal therefrom terminated with the entry of judgment.

Case:  Citibank (South Dakota), N.A. v. Keskin, NY Slip Op 06553 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue: Defective service and dismissal.

An account stated claim to recover legal fees, and a malpractice counterclaim.

Practice point:  Defendant is trustee of a family trust, the beneficiaries of which retained plaintiff-firm to handle intellectual property matters. The Appellate Division found that, contrary to the motion court's ruling, there was a valid fee agreement between plaintiff and the Trust. The better practice would have been to send the engagement letter to the trustee, rather than only to the beneficiaries. However, the record, including email exchanges between the trustee and plaintiff, shows that the trustee was well aware of and approved of the beneficiaries' authority to act on the Trust's behalf with regard to plaintiff's retainer and representation. It is irrelevant that the original engagement letter was not signed by the client, pursuant to 22 NYCRR 1215.1[a].

The Appellate Division also found that defendant's timely written objection to one invoice creates triable issues of fact as to the amount due under that invoice only. Defendant's oral and undocumented objections to the remaining bills do not suffice to create triable issues as to the remaining amount owed. What is more, the Trust made partial payments to plaintiff throughout plaintiff's representation.

Student note:  As to the counterclaim, the Appellate Division found that, even if plaintiff's failure to complete a chain-of-title report or to resolve the underlying intellectual property disputes before withdrawing, amounts to negligence, the Trust failed to demonstrate causation. The Trust failed to show how it would have successfully opposed the underlying trademark cancellation proceeding, or would otherwise have protected its intellectual property rights, but for plaintiff's omissions.

In addition, the resulting inability to efficiently market the trademarks is too speculative to constitute the actual ascertainable damages required to support the counterclaim.

Case:  Fross, Zelnick, Lehrman & Zissu, P.C. v. Geer, NY Slip Op 06547 (1st Dept. 2014)

Here is the decision.

Monday's issue: Summary judgment on breach of contract and account stated.

The Labor Law § 740(7) election of remedies provision in a retaliation action.

Practice point:  The plaintiffs alleged retaliation pursuant to Labor Law § 740 in a prior action against the defendants. The claim asserted here, pursuant to Administrative Code of the City of New York § 8-107, arises out of and relates to the same underlying claim of retaliation as asserted in the prior action. Therefore, the Appellate Division found it to be barred by the Labor Law § 740(7) election of remedies provision. The Appellate Division noted that the waiver may not be avoided by amending the complaint to withdraw the section 740 claim.

Student note:  Labor Law § 740(7) provides that "the institution of an action in accordance with this section shall be deemed a waiver of the rights and remedies available under any other contract, collective bargaining agreement, law, rule or regulation or under the common law." The waiver applies to causes of action arising out of or relating to the same underlying claim of retaliation.

Case: Charite v Duane Reade, Inc., NY Slip Op 06292 (2d Dept. 2014)

Here is the decision.

Tomorrow's issue: An account stated claim to recover legal fees, and a malpractice counterclaim.