Vacating a default as a matter of law.

Practice point:  The Appellate Division reversed the denial of the motion to vacate, finding that,  contrary to the Supreme Court's determination, defendant demonstrated a reasonable excuse for its failure to appear at the originally scheduled compliance conference which occurred when a stay of the action was in effect, and that it never received actual notice of the subsequent adjourned compliance conference.

In the absence of such actual notice of the conference date, defendant's failure to appear could not qualify as a failure to perform a legal duty, which is the very definition of a default. The Appellate Division determined that vacatur of the default was required as a matter of law and due process, and that, therefore no showing of a potentially meritorious defense was required.

Student note:  As a general rule, a defendant seeking to vacate a default in appearing at a compliance conference is required to demonstrate both a reasonable excuse for the default and a potentially meritorious defense, pursuant to CPLR 5015[a][1].

Case:   Foley Inc. v. Metropolis Superstructures, Inc., NY Slip Op 05910 (2d Dept. 2015

Here is the decision.

Tomorrow's issue:  Summary judgment based on res ipsa.

An action alleging negligent supervision in a gym class.

Practice point:  In this action alleging negligent supervision in a gym class, the Appellate Division reversed Supreme Court and found that defendants established prima facie entitlement to summary judgment dismissing the action against them. Plaintiffs failed to raise a triable issue of fact to refute defendants' evidence that the infant plaintiff, a seventh grade student, was instructed and shown how to properly navigate the obstacle course in question, which included a two-foot high hurdle. Plaintiff was injured when, after successfully jumping over the hurdle, he suffered a fracture of his right knee upon landing. There was no evidence offered to substantiate the claim that the wooden gym floor was slippery, or that a matted landing area was warranted. Defendants' unrefuted evidence demonstrated that the other students navigated the hurdle without incident, and that there was no known history of injuries occurring in connection with the obstacle course, which the gym teachers regularly used. Moreover, infant plaintiff's two gym teachers jointly observed only half a class at a time, as the boys and then the girls of each class attempted the obstacle course. Plaintiffs offered no evidence, aside from speculation, that plaintiff's injury could have been avoided by having a spotter alongside the hurdle, or a mat on the landing side of the hurdle.

Student note:  The Appellate Division noted that dismissal as to the City is required, in any event, as it is not a proper party.

Case:  Luis S. v. City of New York, NY Slip Op 06022 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue:  Vacating a default as a matter of law.

Design defects and products liability.

Practice point:  For purposes of imposing products liability, the standard is whether, if the design defect were known at the time of manufacture, a reasonable person would conclude that the product's utility did not outweigh the risk inherent in marketing a product designed in that manner.

An interlock on a table saw, which would prevent the saw's operation without the guard in place, could make the saw unusable for certain cuts, thereby impairing its functionality.  So, a theory of liability based upon an allegation that the saw should have been designed with an interlock has been explicitly rejected as a matter of law.

Student note:  Application of the design defect standard demands an inquiry into such factors as (1) the product's utility to the public as a whole; (2) its utility to the individual user;  (3) the likelihood that the product will cause injury; (4) the availability of a safer design; (5) the possibility of designing and manufacturing the product so that it is safer but remains functional and reasonably priced; (6) the degree of awareness of the product's potential danger that can reasonablly be attributed to the injured user; and (7) the manufacturer's ability to spread the cost of any safety-related design changes. Liability attaches when an analysis of these factors leads one to conclude that the utility of the product did not outweigh the risk inherent in marketing it.

Case:  Chavez v. Delta Intl. Mach. Corp., NY Slip Op 05903 (2d Dept. 2015)

Here is the decision.

Tomorrow's issue:  An action alleging negligent supervision in a gym class.

Fraudulent inducement and contracts.

Practice point:  In order to state a claim for fraudulent inducement, there must be a knowing misrepresentation of material present fact, which is intended to deceive another party and induce that party to act on it, resulting in injury.  In a contract case, the pleadings must allege misrepresentations of present fact, not merely misrepresentations of future intent to perform under the contract, in order to present a viable claim that is not duplicative of a breach of contract claim. In addition, the misrepresentations of present fact must be collateral to the contract and must have induced the allegedly defrauded party to enter into the contract.

Student note:  As a general rule, to recover damages for tort in a contract matter, it is necessary that the plaintiff plead and prove a breach of duty distinct from, or in addition to, the breach of contract.

Case:  Wyle Inc. v. ITT Corp., NY Slip Op 05877 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue:  Design defects and products liability.

A Court of Claims determination in a nonjury trial.

Practice point:  The Appellate Division affirmed the Court of Claims' dismissal of this action in which claimant allegedly was injured when he slipped and fell while walking down a path at the Stony Brook University Hospital.

The injured claimant, and his wife suing derivatively, commenced this claim against the defendant, State of New York, as the owner of the property. The claim proceeded to a nonjury trial on the issue of liability, after which a judgment was entered in favor of the defendant and against the claimants, dismissing the claim.

The Appellate Division found that the Court of Claims' determination that claimants failed to establish the existence of a dangerous condition created by the defendant which caused ice to form on the subject path was warranted by the facts and, thus, will not be disturbed. Claimants failed to prove by a preponderance of the evidence that the placement of a pipe at the base of a retaining wall next to the path proximately caused the accident. While the claimant testified at trial that he observed water coming from the pipe and flowing onto the entire width of the path after he fell, he was confronted with his deposition testimony to the contrary. Where the trial court's findings of fact rest in large measure on considerations relating to the credibility of witnesses, deference is owed to the trial court's credibility determinations.

 In addition, claimants introduced into evidence photographs of the accident site which demonstrated that the path and the pipe were located on opposite sides of the retaining wall, at least 12 inches away from each other. Further, claimants submitted no testimony as to the amount of water which allegedly flowed from the pipe so as to cause ice to form across the entire width of the bottom of the path, and claimants' experts' opinion with respect to this theory of liability was speculative.

Student note:  In reviewing a determination made after a nonjury trial, the Appellate Division's power is as broad as that of the trial court.  It may render the judgment it finds warranted by the facts, bearing in mind that the trial judge had the advantage of seeing the witnesses.

Case:  Fernandez v. State of New York, NY Slip Op 05638 (2d Dept. 2015)

Here is the decision.

Monday's issue:  Fraudulent inducement and contracts.

Unlawful termination because of disability.

Practice point:  The Appellate Division affirmed the denial of defendant hospital's summary judgment motion, finding issues of fact as to whether the hospital unlawfully terminated petitioner's employment because of her disability. There is evidence in the record that plaintiff was suffering from a mental illness that was affecting her job performance before the hospital terminated her employment. There is also evidence that hospital employees, including plaintiff's supervisor, were aware of her physical and mental health issues before she took medical leave, and that her supervisor was concerned about her fitness to work upon her return.

Student note:  Plaintiff is not estopped from asserting her discrimination claims under the State and City Human Rights Laws. Her application for, and receipt of, federal and state disability benefits is not inconsistent with her claims. In addition, the hospital has not established, as a matter of law, that plaintiff could not have performed her job duties with a reasonable accommodation.

Case:  Duckett v. New York Presbyt. Hosp., NY Slip Op 05769 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue: A Court of Claims determination in a non-jury trial.

Leave to enter a default judgment.

Practice point:  Defendants failed to answer or appear, and plaintiff moved, in effect, for leave to enter a default judgement as against the individual defendant, pursuant CPLR 3215. The motion court denied the unopposed motion on the ground that the plaintiff failed to supply an affidavit of facts demonstrating  liability. The Appellate Division reversed.

In support of his motion, plaintiff submitted proof of service of the summons and complaint and proof of the default. In addition, the Appellate Division found that plaintiff submitted sufficient confirmation of the facts by submitting, among other things, an affidavit of merit setting forth the facts constituting his claims.

Student note:  On a motion for leave to enter a default judgment, pursuant to CPLR 3215[f], the movant is required to submit proof of service of the summons and complaint, proof of the facts constituting the claim, and proof of the defaulting party's default in answering or appearing. A defendant who has defaulted in appearing or answering will be deemed to have admitted all factual allegations contained in the complaint and all reasonable inferences that flow from them.

Case:  Boudine v. Goldmaker, Inc., NY Slip Op 05629 (2d Dept. 2015)

Here is the decision.

Tomorrow's issue:  Unlawful termination because of disability.

A double-parked vehicle and summary judgment as to liability.

Practice point:  The Appellate Division affirmed the denial of plaintiff's motion for summary judgment as to liability.

It is undisputed that plaintiff's vehicle was double-parked in the lane of travel, in violation of 34 RCNY 4-08(f)(1), when it was struck in the rear by defendants' vehicle. Plaintiff failed to make a prima facie showing that her own negligence in double-parking in the traveling lane was not a proximate cause of the collision.

Student note:  The Appellate Division expressly rejected plaintiff's argument that her double-parked car merely furnished the condition or occasion for the collision, rather than constituting one of its proximate causes.  A reasonable factfinder could conclude that a rear-end collision is a foreseeable consequence of double-parking.

Case:  Pickett v. Verizon N.Y. Inc., NY Slip Op 05607 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue: Leave to enter a default judgment.

A minority shareholders' action.

Practice point:  The corporation's minority shareholders brought this action against the majority shareholders, officers, and directors, alleging among other things, that defendants improperly diverted corporate opportunities to other companies owned by them, excluding plaintiffs from those opportunities.

The Appellate Division reversed the motion court's dismissal. While the complaint fails to set forth with particularity plaintiffs' demand that the board commence an action against defendants, pursuant to Business Corporation Law § 626[c], the complaint adequately sets forth plaintiffs' reasons for not making a demand, also pursuant to § 626[c]. It alleges that defendants, as the corporation's sole directors, were self-interested in the challenged conduct because they received a personal benefit as the owners of the corporations to which they diverted corporate opportunities. In addition, plaintiffs allege that defendants, in their role as directors, ignored plaintiffs' earlier attempts to compel them to cease their alleged wrongdoing.

Student note:  The Appellate Division also found that it was inappropriate for the motion court to dismiss the breach of contract cause of action in light of the allegations that defendants, as directors, did not act in good faith.

Case:  Soho Snacks Inc. v. Frangioudakis, NY Slip Op 05603 (1st Dept. 2015)

Here is the decision.

Tomorrow's issue:  A double-parked vehicle and summary judgment as to liability.

Court Holiday.

Contracts and damages for lost profits.

Practice point:  Where a plaintiff seeks to recover damages for lost profits, those profits must be within the parties' contemplation at the time the contract was entered into. While they must be proven with reasonable certainty, damages resulting from the loss of future profits are often an approximation.

Student note:  To prevail on a cause of action alleging breach of contract, a plaintiff must demonstrate that it sustained actual damages as a natural and probable consequence of the defendant's breach.

Case:  Family Operating Corp. v. Young Cab Corp., NY Slip Op 05437 (2d Dept. 2015)

Here is the decision.

Monday's issue: A minority shareholders' action.