Vacating a default.

Defendants' motion to vacate the default judgment is granted in the interest of justice. Although defendants have a history of defaults and delays, many were readily excusable and the motion court was entitled, in its discretion, to accept their proffered excuse of law office failure, especially considering the stipulation to adjourn the motion for a default judgment. In affirming, the Appellate Division noted the policy of deciding actions on the merits, the existence of potentially meritorious defenses, the extreme prejudice to defendants if vacatur is denied, the comparatively lesser prejudice to be suffered by plaintiff if the default is vacated, and the court's efforts to mitigate such prejudice by awarding plaintiff a trial preference and monetary sanctions, pursuant to CPLR 2005.

Walton v. Perez, NY Slip Op 05081 (1st Dep't October 15, 2024)

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Dismissal by the court.

A court may not dismiss an action based on neglect to prosecute unless the CPLR 3216 statutory preconditions to dismissal are met. Here, the Supreme Court failed to serve a written demand upon the plaintiff to resume prosecution of the action and to serve and file a note of issue within 90 days of receipt of the demand, pursuant to CPLR 3216[b][3]. Since at least one precondition set forth in CPLR 3216 was not met, the court was without power to direct dismissal of the complaint pursuant to that statute.

Pursuant to 22 NYCRR 202.27, a court has discretion to dismiss an action where a plaintiff fails to appear at any scheduled call of a calendar or at any conference. In this case, however, the court attorney referee did not recommend dismissal of the complaint based upon a failure to appear at a conference, but, rather, for failure to move for an order of reference by a date certain without good cause shown. Thus, the dismissal order, which confirmed the report of the court attorney referee, did not direct dismissal of the complaint based upon a default in appearing at a scheduled conference or calendar call, and 22 NYCRR 202.27 could not have provided the basis for dismissal of the complaint.

In addition, a court's power to dismiss a complaint, sua sponte, is to be used sparingly and only when extraordinary circumstances warrant dismissal. Here, the plaintiff's failure to comply with a court conference order directing the plaintiff to move for an order of reference was not a sufficient ground upon which to direct dismissal of the complaint.

Bank of Am., N.A. v. Banu, NY Slip Op 04940 (2d Dep't October 9, 2024)

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Appellate practice.

Plaintiff's motion for sanctions was granted on default and, as such, was non-appealable, pursuant to CPLR 5511. Defendant's one-page email to plaintiff's counsel discussing various housekeeping issues, with a mention of the pending discovery dispute, which was never filed, did not constitute opposition to the motion for sanctions. In addition, it did it comply with the court's order to respond to the motion.

LW Holdco V, LLC v. Puls, NY Slip Op 05026 (1st Dep't October 10, 2024)

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Court holiday.

Contract law.

In order to invoke the doctrine of frustration of purpose, the frustrated purpose must be so completely the basis of the contract that, as both parties understood, without it, the transaction would have made little sense. Frustration of purpose is found where there is a change in circumstances making one party's performance virtually worthless to the other, thus frustrating that party's purpose in making the contract. A contractual party cannot rely on the failure of another to perform a condition precedent where that party has frustrated or prevented the occurrence of the condition.

Matter of Fein v. Langer, NY Slip Op 04906 (1st Dep't October 8, 2024)

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Extensions of time to answer.

A motion pursuant to CPLR 3012(d) to extend the time to answer a complaint requires the movant to demonstrate both a reasonable excuse for its delay and a potentially meritorious defense to the claims to which it is responding. The determination of what constitutes a reasonable excuse lies within the sound discretion of the Supreme Court. In making that discretionary determination, the court should consider relevant factors, such as the extent of the delay, prejudice or lack of prejudice to the opposing party, whether there has been willfulness, and the strong public policy in favor of resolving cases on the merits.

209 Barbey St. Trust v. Scotland, NY Slip Op 04938 (2d Dep't October 9, 2024)

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Spoliation.

On a motion for spoliation sanctions involving the destruction of electronic evidence, the party seeking sanctions must establish that: (1) the party with control over the evidence had an obligation to preserve it at the time it was destroyed; (2) the records were destroyed with a culpable state of mind;  and (3) the destroyed evidence was relevant to the moving party's claim or defense.

Here, Supreme Court providently exercised its discretion in imposing sanctions against plaintiff on the ground that plaintiff's majority shareholder had deliberately deleted relevant emails. At a hearing, defendant showed that the shareholder had deleted the emails after June 7, 2022, the date on which plaintiff had sent a prelitigation notice of default and demand for payment, threatening imminent litigation. The evidence at the hearing further showed that the emails were permanently removed from the hard drive by taking affirmative steps to delete them from the deleted items folder or recycle bin. This evidence was sufficient to demonstrate that the emails were deleted deliberately.

Coney Is. Auto Holdings, Corp. v. Parts Auth., LLC, NY Slip Op 04900 (1st Dep't October 8, 2024)

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Discovery sanctions.

Pursuant to CPLR 3126, a court may impose discovery sanctions, including the striking of a pleading or preclusion of evidence, where a party refuses to obey an order for disclosure or willfully fails to disclose information which the court finds ought to have been disclosed. The nature and degree of the penalty is a matter within the discretion of the motion court.  However, the Appellate Division is vested with its own discretion and corresponding power to substitute its own discretion for that of the trial court, even in the absence of abuse.

Public policy strongly favors the resolution of actions on the merits whenever possible.  Thus, before a court invokes the remedy of precluding evidence, there must be a clear showing that the failure to comply with discovery was willful and contumacious. The willful or contumacious character of a party's conduct can be inferred from the party's repeated failure to respond to demands or to comply with discovery orders, and the absence of any reasonable excuse for its failures.

Gibson v. Delemos, NY Slip Op 04761 (2d Dep't October 2, 2024)

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Rescission.

A unilateral mistake can be the basis for rescission if failing to rescind would result in unjust enrichment of one party at the expense of the other, and the parties can be returned to the status quo ante without prejudice.

Gaetano v. 1210 Troy Schenectady Rd., LLC, NY Slip Op 04760 (2d Dep't October 2, 2024)

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Adding a party.

Pursuant to CPLR 1003, "[p]arties may be added at any stage of [an] action by leave of court or by stipulation of all parties who have appeared." CPLR 3025(b) provides that "[a] party may amend [its] pleading . . . at any time by leave of court or by stipulation of all parties." A plaintiff's failure to comply with CPLR 1003 when attempting to add a new defendant is a jurisdictional defect, and an amended complaint that is not filed in accordance with CPLR 1003 and 3025 is a legal nullity.

Braylovskaya v. Skazka Rest., NY Slip Op 04756 (2d Dep't October 2, 2024)

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Suing the Housing Authority.

Service of a notice of claim within 90 days after accrual of the claim is a condition precedent to commencing an action against NYCHA. Pursuant to General Municipal Law § 50-e(5), upon application, the Supreme Court, in its discretion, may extend the time to serve a notice of claim upon a public corporation as required by General Municipal Law § 50-e(1).

In determining whether to grant leave to serve a late notice of claim or to deem a late notice of claim timely served nunc pro tunc, the court must consider all relevant circumstances, including whether: (1) the public corporation acquired actual knowledge of the essential facts constituting the claim within 90 days from its accrual or a reasonable time thereafter; (2) the injured child was an infant at the time the claim arose, and, if so, whether there was a nexus between the infancy and the failure to serve a timely notice of claim; (3) the plaintiff demonstrated a reasonable excuse for the failure to serve a timely notice of claim; and (4) the public corporation was substantially prejudiced by the delay in its ability to maintain a defense on the merits. No single factor is determinative, although it is generally recognized that the question of whether the public corporation timely acquired actual knowledge is of great importance. 

In order to have actual knowledge of the essential facts constituting the claim, the public corporation must have knowledge of the facts that underlie the legal theory on which liability is predicated in the notice of claim; the public corporation need not have specific notice of the theory. Here, the record did not demonstrate that NYCHA acquired timely, actual knowledge of the essential facts constituting the claim that the infant plaintiff sustained personal injuries as a result of NYCHA's negligence. Moreover, the plaintiffs failed to provide a reasonable excuse for their failure to serve a timely notice of claim. 

J.B. v. City of New York, NY Slip Op 04755 (2d Dep't October 2, 2024)

Here is the decision.