An invalid joint tenancy.

Plaintiff is a publicly traded closed-end investment company, and the individual defendant is the founder and controlling person of defendant management companies. Plaintiff moved for partial summary judgment declaring that certain brokerage accounts were not valid joint tenancies under New York law. The Appellate Division noted that there are two key features in every joint tenancy. First, during the life of the tenancy, each tenant is entitled to one-half of the assets, even if only one tenant may have established and contributed to the asset. Second, upon the death of one of the tenants, the whole fund will vest in the surviving joint tenant. Accordingly, the Appellate Division affirmed the motion court's conclusion that a valid joint tenancy was never created, regardless of the individual defendant's professed intent, because the Participant Agreement makes it clear that the participants were not entitled to one-half the funds in the accounts. Moreover, at least one version of the Participant Agreement limited the participants' entitlement to only 5%, as opposed to 100%, of the funds in the account in the event he or she outlived the individual defendant.

Prospect Capital Corp. v. Lathen, NY Slip Op 01431 (1st De['t March 4, 2021)

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CPLR 203(d).

The parties agreed in a written stipulation that plaintiffs could discontinue their prior action without prejudice and commence a new action on the same claims, provided it was timely done within 30-days of the discontinuance. Plaintiffs satisfied the stipulation's conditions when commencing this new action, and a stipulation between parties to discontinue a prior action should be given its intended effect. Defendants are not precluded from asserting a counterclaim in this new action despite not having asserted one in the prior action, even though the statute of limitations has run. The CPLR authorizes a defendant to assert any counterclaims or defenses that may arise out of the same transactions or occurrences upon which a claim in the complaint depends, provided such counterclaim or defense serves as only a shield to the extent of the demand in the complaint, and even though the counterclaim may be time-barred. Here, plaintiffs, in their complaint, allege that defendants breached the parties' agreements for providing elevator services and equipment. "Count 1" of defendants' counterclaim sufficiently pleads a counterclaim for quasi contract based on allegations that defendants provided elevator services and materials to plaintiffs and invoiced plaintiffs for such work, but plaintiffs never made payment on such invoices. "Count 2" of the counterclaim, which alleges detrimental reliance and promissory estoppel in connection with plaintiffs' alleged promises to pay defendants for their services and materials, lacks factual allegations of a sufficiently clear and unambiguous promise, reasonable reliance by defendants on the purported promises, and injury caused by the reliance. This claim is dismissed for failure to state a claim.

Rusi Holding Corp. v. Inner City EL, NY Slip Op 01344 (1st Dep't March 4, 2021)

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The City's liability for emergency calls.

The Appellate Division unanimously affirmed the Order which granted defendant City of New York's motion to dismiss the complaint pursuant to CPLR 3211(a)(7) and 3212(a). Plaintiffs claim that the City's agent negligently chose a lower priority radio dispatch code in response to the decedent off-duty police officer's 911 call regarding a possible burglary in the house next door, and that the use of a lower priority code resulted in police arriving later than they might have if a higher priority code had been used. The City established that the defense of governmental function immunity applies in this case, as its agent's duties inherently entailed the exercise of discretion and judgment, and that the assignment of an applicable dispatch code based on the limited information provided by the decedent resulted from discretionary decision-making. The court correctly dismissed plaintiffs' General Municipal Law § 205-e claim for failure to identify noncompliance with a requirement found in a well developed body of law or regulation that imposes clear duties.

Estate of Enchautegui v. City of New York, NY Slip Op 01231 (1st Dep't March 2, 2021)

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Vacatur of a default.

The Appellate Division unanimously reversed, on the law, the Order which granted defendant's motion to vacate the judgment, as defendant failed to demonstrate a reasonable excuse for its default or a meritorious defense to the action to justify vacatur. Plaintiff's service of process was deemed complete when defendant's registered agent in Delaware was served, regardless of whether it ultimately reached defendant. Moreover, the affidavit from defendant's CEO, stating that the email from the registered agent regarding service of process was sent to his "promotions" inbox, is simply insufficient to rebut the presumption of proper service. Defendant does not dispute that it breached its obligation to update its address with its registered agent, which led to its failure to receive service of process. Even if defendant's excuse were deemed reasonable, it failed to demonstrate a meritorious defense to the action. There is no evidence that defendant maintained the payments owed to plaintiff in a purported "reserve fund," or that plaintiff had knowledge of or ever agreed to the creation of such a fund. Indeed, emails from defendant's CEO to plaintiff's representatives suggest that defendant knew that it owed plaintiff the amounts sought.

Practice point: Defendant is also not entitled to relief under CPLR 317. Regardless of whether plaintiff served defendant's agent for service designated under CPLR 318, a meritorious defense is required under CPLR 317.

Salish Lodge LLC v. Gift Mgt. Inc., NY Slip Op 01239 (1st Dep't March 2, 2021)

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Amending an expert's affirmation.

The Appellate Division determined that, on a motion for summary judgment in this medical malpractice action, it was within the motion court's discretion to permit defendants, in their reply, to cure the technical defects in their expert's affirmation with an amended affirmation that included the term "under penalty of perjury."

Bamberg-Taylor v. Strauch, NY Slip Op 01227 (1st Dep't March 2, 2021)

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A storm-in-progress defense.

The Appellate Division unanimously affirmed the Order which granted defendants' motions for summary judgment dismissing the complaint. Their expert meteorologist opined that the icy condition on the staircase where plaintiff fell was the result of snowfall that day, which stopped approximately 35 to 40 minutes prior to the accident. A reasonable amount of time had not elapsed between the end of the snowfall and the accident to charge defendants with notice of the icy condition and a duty to remedy the condition. Further, plaintiff testified that she had not seen ice on the steps at any time before her accident. In opposition, plaintiff failed to raise an issue of fact. Her expert's conclusion that the melting and refreezing of accumulated snow from prior to the snowfall caused plaintiff's fall was speculative.

Ponce v. BLDG Orchard, LLC, NY Slip Op 01215 (1st Dep't February 25, 2021)

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The common interest privilege.

The privilege applies where the communications at issue are otherwise protected under the attorney-client privilege and are made in furtherance of a legal interest or strategy common to the parties invoking the privilege. The proponent of the privilege has the burden of establishing that the information sought is immune from disclosure.

Stafford v. A&E Real Estate Holdings, LLC, NY Slip Op 01956 (1st Dep't March 30, 2021)

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A claim for indemnification.

The Appellate Division unanimously reversed, on the law and the facts, with costs, the Order which denied third-party defendant's motion to dismiss the third-party complaint as against it. This is a putative class action in which plaintiff seeks to recover charges purported to be gratuities allegedly withheld from him and other catering service workers. The complaint alleges that defendant assessed mandatory charges to its customers, allowing them to believe that the charges were gratuities that would be distributed to waitstaff, and, instead, kept the charges for itself. Defendant commenced a third-party action against the company that supplied the waitstaff, seeking indemnification for damages that may be recovered from defendant in the first-party action. However, the third-party complaint alleges that defendant's mandatory charges to its customers were used to cover its own discretionary costs and does not allege that these charges were ever paid to or shared with third-party defendant. Moreover, there is no allegation either in the complaint or third-party complaint that third-party defendant wrongfully withheld any mandatory charges from the waitstaff. Further, defendant does not dispute third-party defendant's contention that it had nothing to do with defendant's decision to impose the mandatory charges or to retain them. Accordingly, defendant has not stated a cause of action for implied indemnification against third-party defendant.

Robinson v. Foremost Glatt Kosher Caterers, Inc., NY Slip Op 01219 (1st Dep't February 25, 2021)

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The emergency doctrine.

Plaintiff was loading garbage into the rear of a garbage truck stopped on the side of the road when the front corner of defendant driver's vehicle struck the rear corner of the truck and plaintiff. A rear-end collision with a stopped vehicle creates a presumption that the moving vehicle's operator was negligent, so that an injured plaintiff is entitled to summary judgment on liability unless the driver of the second vehicle provides a non-negligent explanation for the collision. Defendant's explanation that he was suddenly blinded by the glare of the sun rising in the east as he was driving in that direction is insufficient to raise a non-negligent explanation for the collision. Although sun glare may contribute to an emergency situation, the ordinary circumstance of the sun's rising while a driver is heading east is not an emergency within the meaning of the doctrine. The fact that the truck was partly protruding into the driving lane was merely the occasion for the accident when defendant driver was temporarily blinded by the sun's glare. 

Practice point:  The grant of summary judgment was not premature since defendant did not demonstrate the need for any discovery concerning how the accident occurred.

Rodriguez v. Beal, NY Slip Op 01220 (1st Dep't February 25, 2021)

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A contract for the purchase of real property.

The Appellate Division unanimously affirmed, with costs, the Order which granted defendant's motion for summary judgment dismissing the complaint, finding that the motion court correctly enforced the contract in accordance with its plain terms. Plaintiff's contention that it is entitled to an additional, extra-contractual credit of $120,000, which it claims was paid to defendant two years before the contract was entered into, is insufficient to create an ambiguity, as such a fundamental condition would not have been omitted. In addition, the consideration of plaintiff's extrinsic evidence is contrary to the parol evidence rule. Plaintiff's contention that it was entitled to an adjournment of the closing date because there was no time of the essence language in the contract is unavailing. As the contract had a specific termination provision, a time of the essence provision was unnecessary. Plaintiff's argument that defendant anticipatorily breached the contract is also unavailing. Defendant's counsel prepared all of the documents required to close at the appointed time and place, and it was plaintiff that committed the breach by failing to appear with the required funds.

USA Recycling Inc. v. Baldwin Endico Realty Assoc., Inc., NY Slip O[ 01222 (1st Dep't February 25, 2021)

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Lack of personal jurisdiction in a commercial injury action.

Plaintiffs' contention that World Rugby is subject to jurisdiction pursuant to CPLR 302(a)(3)(ii) is unavailing because plaintiffs did not plead that New York is the situs of the alleged commercial injury they sustained. Instead, plaintiffs allege World Rugby made fraudulent statements and procured USA Rugby's breach of its contract with USA Sevens LLC in Ireland. Thus, the original critical events did not occur in New York, and the fact that plaintiffs may have suffered economic loss in New York is an insufficient basis upon which to base personal jurisdiction. Plaintiffs also contend that World Rugby is subject to jurisdiction pursuant to CPLR 302(a)(1). Plaintiffs argue that World Rugby transacted business in New York by engaging in a 13-year relationship with them and by negotiating the 2014 Host Union Agreement in New York. However, plaintiffs fail to allege a sufficient nexus between the parties' broad, overall relationship and plaintiffs' specific claims in this suit. 

USA Sevens LLC v. World Rugby Ltd., NY Slip Op 01223 (1st Dep't February 25, 2021)

Here is the decision.