New York Business Lawyer Blog

October 22, 2013

ARSON AS A DEFENSE TO INSURANCE CLAIMS IN NEW YORK

by The Law Firm of Grasing & Associates

Arson is only one of many types of Insurance Fraud. Unfortunately, it is one of the most dangerous; and it just never goes away. As we previously mentioned, whenever a big pot of money is available, people will try to find a way to take it, or at least grab a big share of it; making a fraudulent insurance claim is just one way. Intentionally setting a fire to defraud an insurance company, though, is something different; it’s inherently dangerous in a way most other types of Insurance Fraud are not. You never know what’s going to happen once the flames begin to catch. People, whether running to escape or rushing to the rescue, often will get hurt; they simply are hard to put back together.

Unfortunately, there have been many examples of intentionally set fires in the New York area. Most recently, three 19 year olds were arrested for allegedly setting fire to a convent on Staten Island. They reportedly broke into it to see what they could steal and one allegedly set the fire when he lit two religious candles and dropped one on a closet floor and one on an upper floor. As always, not everyone made it out safely. One of the two nuns who were sleeping in the convent escaped, apparently without harm. When the second nun had to jump out a second floor window to get away from the fire, though, she broke her back and reportedly will have to learn how to walk again.

Sometimes, insureds set fire to their own houses in order to collect the policy proceeds. Not that long ago, a mother and her adult daughter were arrested in Connecticut for allegedly setting fire to the mother’s house in Stratford. This evidently involved a first-party property claim; the mother allegedly recovered $337,000.00 for damage the fire caused to her house and personal property and the daughter recovered almost $2,000.00 for damage to her car that had been parked in the mother’s garage at the time of the fire.

Reportedly, the mother and the daughter originally said that they were nowhere near the mother’s house; they were at the daughter’s house miles away and didn’t learn about the fire until the next day. The police, however, first grew suspicious when they found valuables and food from the mother’s refrigerator in the daughter’s car. Evidently, neither the mother nor the daughter had a good explanation for why two televisions, frozen food, a digital camera, jewelry, and four cellphones from the house, were inside the daughter’s car. It didn’t help that the fire reportedly was started by gasoline that was poured throughout the house.

The unnamed insurance companies in the Connecticut case paid the insureds’ claims; a total of almost $340,000.00 worth. There’s also no indication whether the carriers investigated the claims or, if they did, what their investigations consisted of. But it’s fair to ask whether, based on the facts the police reportedly developed, the insurance companies would have been able to deny the mother’s and daughter’s insurance claims and make those denials stand up in court.

In New York, a carrier has to establish the affirmative defense of arson by clear and convincing evidence. See Van Nevius v. Preferred Mut. Ins. Co., 280 A.D.2d 947, 721 N.Y.S.2d 210 (4th Dept. 2001). This is the same burden of proof as for fraud. See Rudman v. Cowles Commc’ns, Inc., 30 N.Y.2d 1, 10, 280 N.E.2d 867, 871 (1972). It’s no easy task, however. The carrier has to do more than merely show that the evidence makes it more likely than not that the insured caused the fire; it must show that the evidence makes it highly probable that the insured caused the fire.
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October 14, 2013

RECENT EXAMPLES OF INSURANCE FRAUD IN NEW YORK: THE CLEVER, THE BAD, AND THE SILLY

by The Law Firm of Grasing & Associates

If anyone wants to know how prevalent Insurance Fraud is, all they have to do is take a look at the recent arrests and convictions for it in New York, as reported by the state. Nothing much has changed since the last time we looked at them. Some schemes are dangerous; some are complex; some are straightforward; and some, simply, are silly. That people will go to great lengths to steal money is no surprise; it’s always been that way. The really surprising thing is that people think they can get away with some of this; greed doesn’t just cloud good judgement, it can blind it. Insurance Fraud Investigators, however, can use these examples to learn how to better spot Insurance Fraud and, maybe, carriers can use them to better learn how to prevent it.

One of the most dangerous, and hard to prove, Insurance Fraud schemes is back in the news. Eight people were arrested in May 2013, for their alleged involvement in staged accidents, where they allegedly caused accidents for money. Their idea was simple: rent U-Haul trucks and either intentionally strike another car or have another car strike them. The only saving grace was that, reportedly, the only people they hit, or that hit them, were co-conspirators. Many times unsuspecting people are targeted; cars will stop short in front of them or fail to stop behind them. Here, apparently, no innocent victims were involved, just paid participants.

The 8 people arrested allegedly made more than $2 million of claims, to recover for phony injuries, to insurers, including U-Haul’s insurer; the insurers paid out more than $1 million for treatment of non-existing injuries. As always, it looks like it took a lot of work to crack the scheme and bring the charges; fitting the pieces together, connecting the various people and accidents, through the car registrations, rental records, medical providers, and insurance companies, is no easy task. The fact that the claimants used rental vehicles with the rental company’s insurance, rather than their own, probably made it even more difficult. The large number of agencies involved in the investigation shows just how hard it is to uncover this type of fraud. The arrests were the result of a joint investigation by the U.S. Attorney for the Eastern District of New York, the New York City Police Department, the United States Postal Inspection Service, and the New York Insurance Frauds Bureau.

One of the most straightforward types of Insurance Fraud is also perhaps one of the least well thought out. A New York City Transit worker was arrested in May 2013 because he allegedly faked a disability. He was hurt in a car accident in February 2011 and claimed he couldn’t work until May 2012. It seems that if he couldn’t work he had a credit disability insurance policy that would pay his loans. Evidently the policy did what it was supposed to: it made $4,335.50 of loan payments for him. The only problem was that he allegedly did work, and worse, there were records of it. He evidently forgot that there was a record of every time he got paid for being a subway conductor, and those same records showed that he worked when he said he couldn’t. The investigator remembered, though, and the conductor was arrested. Paper trails and fraud do not mix.

Sometimes, even when you alter the records, you still get caught. A man was arrested in May 2013 after he submitted nine claims to recover medical benefits for services he said he received at four different hospitals. He even submitted statements from the hospitals showing they performed, and charged him for, the services. The statements were legitimate, at least when he first received them back in 2005. The only problem was that he tried to pass them off as being recent, and allegedly altered the documents in order to do it. Evidently the investigator from the Insurance Frauds Bureau didn’t accept the documents at face value, did a little legwork, and discovered they were phony. After all, the hospitals probably had the original billing statements or at least records of the original treatment. Sometimes all you have to do is remember to ask. Good record keeping is always difficult to get around.
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September 30, 2013

ANSWER: VACATING A DEFAULT JUDGEMENT IN NEW YORK. QUESTION: WHAT’S EASIER SAID THAN DONE?

by The Law Firm of Grasing & Associates

It is not always easy to obtain a default judgement in New York. It is harder, still, to vacate one, especially when the defaulting party has a history of missing deadlines or otherwise not doing what the court wants. A recent case from the Third Department, Wood v. Tuttle, 106 A.D.3d 1393, 968 N.Y.S.2d 613 (3rd Dept. May 30, 2013), shows just how tough it is. The case has everything you could want in a good story: a bouncer, a bar, and a brawl. Evidently everyone showed up for a good fight, just some forgot to fight it out in court, at least until it was too late. No one knows who was right and who was wrong, at least not from the decision; but somebody won and somebody lost, and therein lies the lesson.

Courts, as we previously mentioned, don’t like to be ignored; they want their orders, and rules, to be followed. Though they often will give a party the benefit of the doubt, and a second, or even a third, chance, that does not always happen. It is far better to establish a track record of complying with the rules, because then when you do make a mistake it often will be forgiven. It’s worse to be known for violating them, because sooner or later the court will penalize you, harshly. It’s important to stay in the trial court’s good graces. Whether to impose or vacate a default is within its sound discretion, and its decision is difficult to overturn on appeal. See Woodson v. Mendon Leasing Corp., 100 N.Y.2d 62, 68, 790 N.E.2d 1156, 1160 (2003).

It’s really not that hard for a party to default in New York. A court can dismiss a case if the plaintiff fails to appear for a court conference or calendar call. If a defendant fails to appear, it can order an inquest to determine damages or grant the plaintiff a default judgement for everything it asks for in the complaint. See 22 NYCRR 202.27. Perhaps the harshest example is when a defendant is served with a summons and complaint and has only 20 or 30 days to answer or otherwise appear. If he misses the deadline, the plaintiff is well on his way to obtaining a default judgement against him. A court also can grant a motion on default, though it often will closely examine even an unopposed motion before deciding it.

New York courts generally prefer to decide cases on the merits. That, however, does not immunize a party against a history of ignoring rules and foregoing second chances. As the Third Department’s decision in Wood v. Tuttle, supra, points out, if you ask a court to bend over backwards one too many times, it will make sure that you lose because you violated the rules, without even considering whether you might win on the merits.

In Wood v. Tuttle, supra, the plaintiff alleged that he had been seriously injured in a bar fight. He sued the bar’s bouncer and its owner to recover his damages, reportedly because both took part. Neither, however, seemed all that interested in the court case. The defendants answered the complaint, but apparently did not do much of anything else, at least until it was too late. Due to their decided lack of participation, plaintiff obtained a judgement against them, which was based not on the merits of the case, but on their repeated procedural violations:
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September 27, 2013

What Does a Boundary Line Dispute Really Amount To? Adverse Possession and the Intentional Infliction of Emotional Distress In New York

by The Law Firm of Grasing & Associates

Boundary Line disputes often turn nasty. Two neighbors who live next to each other for years suddenly discover that the fence they each thought was on one property actually is on the other’s land. The titled owner often will sue to quiet title; i.e., to have a court declare that the disputed land still belongs to her, and, possibly, for trespass against the neighbor to clear him off it. The neighbor, on the other hand, will assert that he has obtained title to the property through adverse possession. In other words, there’s a fight, between one person who says the land is hers because she bought and paid for it, and the other, who says it’s his because he always used it like he owned it. Even without more, and there always is more, this is a recipe for disaster, which often leads to allegations that one side has intentionally made the other’s life a living nightmare. Even after the court determines who really owns the land, it’s not uncommon for one party to sue the other for the intentional infliction of emotional distress.

Boundary line disputes are more common than you might think. States even get into them. Recently, the boundary between North Carolina and South Carolina has been recalculated or at least clarified. Homes and businesses, which thought they were in one state have found out that they are in the other. The boundary originally was set hundreds of years ago, by surveyors who used rudimentary tools including stone markers and markings on trees. Over time things got fuzzy; the trees died and the stones became overgrown with moss. The modern day surveyors often had to peel moss off stones and search land grant records but, now that they have re-set the line, the boundary is marked in high-tech GPS coordinates. Importantly, the states reportedly worked together to get the job done and soften the blow to the affected property owners. Not all boundary disputes, however, foster such a spirit of cooperation.

The whole concept of adverse possession breeds contempt between neighbors. In New York, there’s a five part test you have to meet in order to gain title to land through adverse possession. Chances are, neighbors won’t stay friends once they are done fighting it out. As we talked about previously, your occupation of the property must be:

(1) Hostile and under a claim of right, which really amounts to your belief that the property actually does belong to you rather than anyone else and you treat it as you would your own;

(2) Actual;

(3) Open and notorious;

(4) Exclusive; and

(5) Continuous for at least 10 years.

See Estate of Becker v. Murtagh, 19 N.Y.3d 75, 81, 968 N.E.2d 433, 437 (NY 2012).

Think about how hard it is to stay civil with someone who’s trying to take your land. Then realize that both sides believe the disputed land is theirs. Then remember that no matter what else happens, both sides still have to live next to each for years to come, unless one decides to sell, which itself often is traumatic. What comes to mind is trying to put a grease fire out with a bucket of water; it’s a pretty sure bet that the only thing you’ll do is spread the damage.

It’s not uncommon for the bad blood between neighbors to spill over; even after one side wins and the other loses the disputed land, there will be allegations and recriminations on both sides. The years of dispute often will turn into a follow up lawsuit alleging that one side has intentionally inflicted emotional distress upon the other; through its actions in trying to get or keep the land; the names and the taunts it has directed at the other side; through its constant, vigilant harassment.

What everyone should remember is that a cause of action for intentional infliction of emotional distress is easier to allege than to prove. In New York, you have to establish:

1. Extreme and outrageous conduct;

2. Intent to cause or disregard of a substantial probability of causing severe emotional distress;

3. A causal connection between the conduct and injury; and

4. Severe emotional distress.

See Howell v New York Post Co., Inc., 81 NY2d 115, 596 NYS2d 350, 612 NE2d 699 (NY 1993).
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September 25, 2013

What Does a Trademark Really Mean? Truth on the Horizon

by The Law Firm of Grasing & Associates

Trademarks are tricky things. Everyone recognizes them when they see them. Who doesn’t know what the Golden Arches are? Who doesn’t think to themselves, “I’m Lovin’ It”? But did you ever think about why? What do arches really have to do with hamburgers? For that matter, what does a Coke have to do with a smile, or a sneaker with a swish? What does the Mercedes Benz emblem really have to do with a car? That is the key, the safety, and the difficulty involved in a good trademark, all wrapped up into one. And, if you get it right, your business, any business, can make sure it comes to mind every time someone sees its symbol or hears its song, and that’s priceless.

We previously wrote about Verizon Communications’ deal to buy out Vodafone’s minority stake in Verizon Wireless. That was a deal a long time in the making, in which Vodafone got its asking price even though Verizon Communications seemingly had the better bargaining position. Though Verizon might have overplayed its hand and negotiated itself out of several billion dollars in the process, it definitely got one thing right: its name.

Did you ever wonder where the name “Verizon” came from? Today it’s ubiquitous and everyone knows it’s a communications company. Though landline copper wired phones seem to be going the way of the payphone (does anyone else remember when payphones used to be on almost every corner?) Verizon Wireless is the country’s largest cellphone service provider and Verizon FiOs is a growing cable and internet service provider which provides significant competition to traditional cable companies in many areas, including here in New York. Its name and logo have become, to many, synonymous with communications.

September 20, 2013

Business Negotiations: BATNA Beware – Overconfidence Not Allowed

by The Law Firm of Grasing & Associates

We’ve spent a lot of time this past summer talking about how important negotiations are to businesses and individuals alike, and how various negotiation strategies work together to produce desired, and sometimes unintended, results. This time, we’re coming back to one useful strategy in particular, which is known by the ever impressively indecipherable acronym BATNA, to show how it can be used, abused, and overplayed. Put another way: BATNA Beware.

BATNA is shorthand for Best Alternative to a Negotiated Agreement; i.e., your best fallback position if negotiations fail and you have to walk away from the negotiating table without getting a deal done. Everyone’s been involved in that situation before; no negotiator is immune from sometime, someday, someway, simply not being able to reach a deal. For years Verizon Communications and Vodafone could not reach an agreement to end their joint venture in Verizon Wireless. Started in 2000, after Bell Atlantic merged with GTE Corp., both of which had a large East Coast presence, and Vodafone purchased Air Touch Communications, which had a large customer base on the West Coast, Verizon Wireless is the largest cellular service provider in the United States. Verizon Communications reportedly owns 55% and Vodafone 45% of the joint venture. According to those same reports, Verizon Communications had a long standing desire to buy out Vodafone but did not want to pay Vodafone’s $130 billion asking price. It instead wanted to pay only $100 billion for the minority stake in the company. As a result, no agreement was reached until earlier this month when Verizon agreed to buy out Vodafone for the $130 billion Vodafone reportedly had been seeking all along. You can learn a lot by looking at the facts behind this apparent change of heart.

You would think that Verizon Communications had the better bargaining position. The way Verizon Wireless reportedly is structured, Vodafone has little say in the day to operations of the company. With effective control over the company, Verizon Communications apparently should have been able to operate the wireless carrier to its benefit with Vodafone having little say, or veto power, over the decisions. What Vodafone apparently had was an investment, with little opportunity to chart the path of the company to maximize the profits in its own interest. That’s a lot of trust to place in another company. You would think that Verizon Communications could have held out for as long as it needed to in order to pay what it wanted, $100 billion, to get what it wanted, sole ownership of Verizon Wireless. After all, Verizon Communications’ fallback position looked a lot better than Vodafone’s; if they couldn’t reach a deal, then Vodafone would be left with an investment it had little control over, but Verizon Communications would still have effective operational control over the nation’s largest wireless carrier, with its inherent possibilities for growth, marketing, and cross-promotion.

The problem apparently was that Verizon Communications overestimated its bargaining power and underestimated Vodafone’s fallback position. If no deal was done, and everything stayed the same, Verizon Communications would still be in charge, but Vodafone would still receive a large share of the wireless company’s profits. Reportedly, Verizon Communications wanted those profits on its books, not Vodafone’s. When you think about it from Vodafone’s point of view, is it really that bad to have a large investment in a profitable company with a good rate of return? Why walk away unless you can cash-out at or close to your asking price? After all, it might be difficult to find another place to put your money that will get you close to the same return. Maybe Vodafone really could afford to hold out longer than Verizon. What reportedly got the deal done was Verizon Communications’ concern about the effect rising interest rates will have on the cost of raising the money necessary to finance it. When you’re talking about purchases of about $100 billion, even minor fluctuations of bond prices and interest can quickly make a difference.
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August 29, 2013

Enforcing An Injunction In New York: A Matter Of Mutual Contempt

by The Law Firm of Grasing & Associates

We previously spoke about injunctions; the court orders that most often forbid one party from doing something either temporarily or permanently. They are the subject of often heated controversies, the ones you see on the news where two sides in a passionate dispute go to court to settle their differences in the modern day equivalent of the Roman Coliseum, otherwise known as the courtroom. The losing party never does like it. He’s the one with his head slumped as the winner too often, and often too early, gloats over his victory. What happens when the losing party ignores the court order and goes ahead and does what he wants anyway? What happens when he violates the temporary restraining order, the temporary injunction, or the permanent injunction? In New York, the right way to enforce an injunction is for the aggrieved party to make a motion to hold the other in contempt for violating the court order. What everyone should remember is that contempt is a two way street; the rules are fair but the punishment can be harsh.

A recent high profile case here in New York that involves an alleged violation of a temporary restraining order, or TRO, concerns Long Island College Hospital in downtown Brooklyn. It was sold to SUNY Downstate Medical Center in 2011. Instead of keeping it open as it said it would when it bought the hospital, SUNY Downstate reportedly has tried to shut the hospital down. New York City Public Advocate Bill de Blasio obtained a temporary restraining order preventing SUNY Downstate from taking any action which could facilitate the shutdown. According to de Blasio, SUNY Downstate violated that TRO by transferring patients and diverting ambulances from the hospital; the hospital staff went so far as to call the police to prevent their patients from being transferred in violation of the TRO. De Blasio even wrote a letter to the New York City Fire Commissioner, Salvatore J. Cassano, asking him to stop diverting ambulances from the hospital. The state court judge that approved the 2011 sale, the Hon. Carolyn Demarest J.S.C., now has invalidated the sale because she reportedly determined that SUNY Downstate did not buy the hospital in good faith; i.e., it did not really intend to keep the hospital open as it claimed.

The rules for holding a party in civil contempt are simple and fair. A recent case, decided by the New York Appellate Division, Second Department on June 5, 2013, illustrates this. Suiss v. Baron, 107 A.D.3d 690, 966 N.Y.S.2d 481, 482 (2nd Dept. 2013), was an action to partition real property. The court ordered the defendant, who occupied the property, to pay money due for the use and occupancy of the real property to a temporary receiver or to give up possession of the property; i.e., she either had to pay to use the property or get out. The defendant, evidently, did not like the order and refused to obey it. The plaintiff tried to enforce the court order by making a motion to hold the defendant in civil contempt, which the lower court granted. In upholding the civil contempt finding, the Second Department held that:

“To prevail on a motion to punish a party for civil contempt, the movant must demonstrate that the party charged with contempt willfully violated a clear and unequivocal mandate of a court’s order, with knowledge of that order’s terms, thereby *691 prejudicing the movant’s rights” (Rubin v. Rubin, 78 A.D.3d 812, 813, 911 N.Y.S.2d 384; see Judiciary Law § 753[A] [3]; McCain v. Dinkins, 84 N.Y.2d 216, 225-226, 616 N.Y.S.2d 335, 639 N.E.2d 1132; McGrath v. McGrath, 85 A.D.3d 742, 924 N.Y.S.2d 805; Matter of Philie v. Singer, 79 A.D.3d 1041, 1042, 913 N.Y.S.2d 745). Additionally, the movant has the burden of proving contempt by clear and convincing evidence (see Matter of Philie v. Singer, 79 A.D.3d at 1042, 913 N.Y.S.2d 745; Vujovic v. Vujovic, 16 A.D.3d 490, 491, 791 N.Y.S.2d 648).

It is only fair that before a court can hold a party in contempt, it has to be certain that the offending party knew what it should not do and went ahead and did it anyway. Putting the order into the party’s hands, and making sure the order is clear, normally takes care of this. It also is fair that the offending party has to cause harm before he can be punished; no harm, no foul, is a reasonable rule. The higher burden of proof, that the violation be established by clear and convincing evidence, rather than the normal preponderance of the evidence, is another way to try to ensure that only the truly deserving are held in contempt.
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August 20, 2013

The Power of Choice: Using Multiple Simultaneous Offers To Succeed In Business Negotiations

by The Law Firm of Grasing & Associates

As we’ve spoken about in the past, negotiations are an important part of everyday life for businesses, consumers, and lawyers alike. Today we’re going to talk about how respect, trust, and confidence are the keys to successful business negotiations and how you can harness the natural urge to compare, and the common preference for choice, to attain them.

Chances are, you all have felt the urge to comparison shop; how else to tell whether you’re going to get your money’s worth out of the bargain? No matter what you are in the market for, be it clothes, groceries, a new car, or a home, most people want to take a look at multiple options before deciding which one to buy. How many people buy the first house they look at with a realtor, the first car they see in a showroom, or even the first pair of jeans they pick up in a store?

People’s urge to compare is strong, even when they are standing in one store. Think of the last time you bought a new cellphone. Picture yourself standing there, tied to one carrier, in front of a display with many different phones. Do you look at the cost and different features of each, to see which one you like better, before you make up your mind? When you finally make your decision, do you feel more confident that you bought the right phone because you made the effort to educate yourself by evaluating the choices first, or do you regret not buying the first decent looking phone that you saw? What if there is only one phone and the only choice you have is to take it or leave it? How confident are you that it is worth the money?

If having more choices to compare makes you feel more confident in your ultimate selection, then you’re not alone. Even Apple, which perennially has offered one new version of its iPhone at a time, apparently has recognized the power of choice; it reportedly is set to introduce two very different versions of its newest iPhone, one high-end and one low-end, at the same time this September.

A recent episode of the popular National Geographic Channel television show Brain Games points out just how strong the urge to compare is and how much more confident it makes people feel in their ultimate decision. To demonstrate how people make decisions, the show gave a few samples of the same type of clothing to small focus groups and asked each person to decide which one they would buy. Everyone diligently compared the items and every person had a well thought out reason for picking the item he did; the reasons inevitably had to do with the person’s decision that the particular item he chose was better than every other item he could choose from. The reason it was better was based on what the particular person considered to be important; for some it might have been that the clothing was softer, for others it might have been that the item was more durable or its colors were brighter. The reasons weren’t important, because, it turns out, each item was exactly the same as the others. The key was the way the reasons were arrived at; i.e., by comparing options and deciding which one was best, even if there was no real difference between them. If you use that urge to compare in the right way, as part of a win-win strategy, it can help you succeed in business negotiations.

According to Harvard Business School professor Max H. Bazerman, writing in Negotiation, the monthly newsletter of Harvard Law School’s Program on Negotiation, one way to successfully negotiate a deal is to present multiple simultaneous offers. Each offer should benefit you, but, importantly, each should give your negotiating partner something different in return. Let him decide for himself whether it would be better to have faster delivery, a lower unit price, or better payment terms. It’s one way to learn what is important to him; if he immediately knocks one or two of the offers off the table, at least you will know what you have to work with and what you have to work on; you can use it as a framework to better your offer and finalize a deal. When you make those offers, you also demonstrate your flexibility, confidence in your product or service, and commitment to make a deal. If he takes one of the offers, of course, then the deal is done.
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August 13, 2013

What Does a Trial Attorney Really Do?

by The Law Firm of Grasing & Associates

What does a trial attorney do and what does it mean to be a trial attorney? These two seemingly simple questions, with their seemingly simple answers, actually go a long way towards uncovering some of the most common misperceptions about one of the most passionate, and arduous, fields in law. To put it simply, a trial attorney persuades and learns, or learns and persuades; however you put it, he never stops doing either.

Business owners, homeowners, friends and acquaintances have asked those questions many times; often with a knowing smile, an implied understanding that a trial lawyer really is a jack of all trades and master of none. It takes skill to conduct a trial, to be sure, the reasoning goes, but it’s not as if a trial lawyer has to know any one particular area of substantive law, or any one particular industry or type of dispute, well, in order to conduct a trial. If you ask anyone that has tried cases, you will find out how far off base that really is. To know how to be a good trial attorney you have to know not only the “how” but also the “what;” in fact, the “what” is so intertwined with the “how” that they really are one and the same thing.

When you try a case the procedure is important. It’s a battle and you have to know the rules of engagement so you can use them honestly and fairly to your client’s advantage. Every trial lawyer knows that what you don’t know can and will hurt you, but realizes that knowing more than your opponent helps tip the scales in your favor. Of course you need to know the mechanics; how to pick a jury, conduct a direct and cross-examination, give an opening statement and closing argument are all important. The better the trial lawyer the better each is executed.

August 2, 2013

CAN YOU USE EXPERTS TO OPPOSE SUMMARY JUDGEMENT MOTIONS IN NEW YORK? ONLY IF YOU PAY ATTENTION TO THE RULES

by The Law Firm of Grasing & Associates

The rules regarding expert’s disclosure in New York, concerning when a Plaintiff or Defendant has to disclose to its opponent an expert witness that it intends to testify at trial if it hopes to use the expert’s affidavit in support of or opposition to a motion for summary judgement, might seem confusing. The rules have caused so much misunderstanding that the Appellate Division, Second Department, went out of its way to clarify them, in a recent decision, Rivers v. Birnbaum, 102 A.D.3d 26, 953 N.Y.S.2d 232 (2nd Dept. 2012). The key to understanding the rules is to understand the decision, both its rationale and the reasons the Second Department went out of its way to explain it in the first place.

As we have previously discussed, if a party serves expert’s disclosure after the Note of Issue and Certificate of Readiness has been filed, without moving to vacate the Note of Issue first, the trial court has the discretion to refuse to consider an expert’s affidavit served in regard to a timely motion for summary judgement. See Rivers v. Birnbaum, supra,102 A.D.3d 26, 953 N.Y.S.2d 232 (2nd Dept. 2012), and Constr. by Singletree, Inc. v. Lowe, 55 A.D.3d 861, 866 N.Y.S.2d 702 (2nd Dept. 2008). In other words, a party might still be able to use the expert’s affidavit or it might not; it depends on the trial court and, as long as the trial court does not abuse its discretion, the party has to live with whatever the trial court decides. The real trick is to figure out what constitutes an abuse of discretion.

Before the Second Department decided Rivers v. Birnbaum, supra, last October, there was a widespread, mistaken, belief that a court would not and could not consider an expert’s affidavit in conjunction with a summary judgement motion unless the party that wanted to rely on it disclosed the expert before the Note of Issue and Certificate of Readiness were filed. Many read Constr. by Singletree, Inc. v. Lowe, supra, as creating such a hard and fast rule. Whether that was wishful thinking or panic, it was reading something into the court’s decision that was not there. As we discussed last time, Constr. by Singletree, Inc. v. Lowe, supra, only held that it was not an abuse of discretion for the trial court to refuse to consider such an expert’s affidavit.

Rivers v. Birnbaum, supra, was the perfect vehicle for the Second Department to clarify the rule. It was a medical malpractice action that had a sympathetic plaintiff, a mother who claimed the doctors, hospital, and other health professionals, who cared for her during her pregnancies missed obvious warning signs of gynecological cancer she since has suffered from. At the conclusion of discovery, after the Plaintiff filed the Note of Issue and Certificate of Readiness, many of the defendants moved for summary judgement; they used affidavits from experts, however, that they had not previously disclosed. If there had been a hard and fast rule, as many believed Constr. by Singletree, Inc. v. Lowe, supra, provided, then the defendants would have been precluded from relying on those experts’ affidavits. The trial court, however, even though the plaintiff cried foul, considered the defendants’ experts’ affidavits and granted the defendants summary judgement. The Second Department upheld the decision, and its reasoning is enlightening.

The main point behind the Second Department’s decision in Rivers v. Birnbaum, supra, is that the central purpose of a motion for summary judgement is to determine whether there is a genuine issue of material fact that requires a trial; if there is one, the motion must be denied. As the court said, precluding a party from relying on an expert’s affidavit merely because it did not disclose the expert prior to the conclusion of discovery, would not necessarily achieve that goal. Rivers v. Birnbaum, supra,102 A.D.3d at 42, 953 N.Y.S.2d at 243 (2nd Dept. 2012). In other words, an arbitrary decision to uphold an unclear deadline, may not be the best way to ensure that justice between the parties to a given lawsuit is done. What makes this guiding principal even clearer is that the Second Department explicitly stated that a trial court could impose strict deadlines for the completion of expert’s disclosure and, as long as the deadline was clearly set beforehand, the trial court could sanction a party for violating it. Rivers v. Birnbaum, supra, 102 A.D.3d at 39, 953 N.Y.S.2d at 241 (2nd Dept. 2012).

In Rivers v. Birnbaum, supra, the court found that the defendants, through the use of their experts, had made a prima facie showing, as they were required to in this medical malpractice action, that, in treating plaintiff, they had not deviated from the accepted standard of medical care. It also found that plaintiff had not raised a triable issue of fact about this; it was not even a close call. As the court pointed out in great detail, plaintiff’s experts’ affidavits were vague, conclusory, and otherwise deficient.

Therein lies the key. Why would the court deny summary judgement, and either require a trial or let plaintiff win, when plaintiff could not establish even the arguable existence of a genuine issue of material triable fact in opposition to the summary judgement motions? Precluding the defendants from relying on their experts’ affidavits merely because they had failed to disclose their experts prior to the filing of the Note of Issue and Certificate of Readiness, especially when the trial court had not set that point as the deadline for expert’s disclosure, would be a waste of time and a miscarriage of justice.
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