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Articles Tagged with “Commercial Litigation”

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Morning Valley View.P.S.R.When someone sues you or your company, you have to pick a lawyer who knows the rules of the game.   The rules are intricate and, even two situations that look similar, are not always governed by the same rules. When even judges can apply the wrong rule,  it is better  to know what should have happened, so you can decide what your options are.  That is what a good attorney does:  she explains what your options are, and  your realistic chances of success with each, so you can best protect your interests.

A recent appellate decision makes this point.  1259 Lincoln Place Corp. v Bank of N.Y., 2018 NY Slip Op 02177, Appellate Division, Second Department, was decided on March 28, 2018.  It really is a fight over a lot of money, disguised as an attempt to quiet title pursuant to RPAPL Art. 15; and the fight ultimately turned on which set of rules should be used to decide the dispute. The trial court selected one, and the Appellate Division determined that another should have been used.

The facts are straightforward:  A bank took a mortgage on a property in Brooklyn.  The mortgage secured a large loan.  The borrower evidently defaulted so the bank attempted to foreclose and filed a notice of pendency against the property.  The problem was, the borrower apparently did not own the property; even worse, the Bank already paid approximately $200,000 in property taxes on it.  The titled owner wanted to keep its property, so it sued the Bank to quiet title; i.e., it asked the court to declare it was the rightful owner of the property and to cancel the notice of pendency. The titled owner made a summary judgement motion, which means it asked the court to declare it the rightful owner of the property without a trial, just based on the motion papers alone.  Faced with losing the case outright, the Bank came up with a backup plan:  It tried to assert a new claim that it should have an equitable lien; i.e., it paid out money to maintain the property (the real estate taxes), which the rightful owner received the benefit of, so it is only fair that the Bank should get the money back.  The problem was that it needed the court’s permission, so it made a cross-motion to assert a counterclaim for an equitable lien to at least recover some of the money it paid.

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the-ardennes-1284651-m.jpgIt is not unusual for a Plaintiff to sue more than one defendant. It happens all of the time in New York.

Think of when a homeowner hires a contractor and the contractor damages a neighbor’s property. The neighbor will most often sue both. In New York City it is not uncommon to have a lawsuit that involves two adjacent buildings. The first one is demolished but, because the shoring used to protect the remaining building is inadequate, the land under the second building shifts a little and the second building cracks. The owner of the second building wants to get paid to repair his damaged property. He sues the owner of the first building, the contractors that performed the work, and possibly even his own insurance carrier if he doesn’t like the way the carrier adjusts his first-party property claim.

What happens, though, when the plaintiff settles with only one defendant and goes to trial against the rest? How does a court decide how much the plaintiff can collect from the remaining defendants?

The rules in New York are fairly straightforward. New York General Obligations Law §15-108 permits a plaintiff to settle a claim with a defendant tortfeasor without risking the discharge of other tortfeasors who might be liable for the injury. When one tortfeasor settles with the injured party, the settlement relieves the settling tortfeasor of liability to any other person for contribution. It entitles the non-settling tortfeasor to assert the settlement as a defense to the injured party’s claim and to obtain an appropriate reduction in damages. In order to keep the rule clear, think of the “tortfeasor” as the party who allegedly did something wrong. In our examples it could be the contractor, the homeowner, or the owner of the first building.

New York General Obligations Law §15-108, provides in relevant part:
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IMG_20140309_191535 - Copy.jpgSometimes you learn something new from unexpected places. Sometimes you have to challenge your assumptions if you want to have any hope of solving an otherwise intractable problem. Sometimes, just because common knowledge is widely accepted, does not mean that it should be. A recent appeal I was working on made this clear.

Every New York attorney knows the test for defeating a motion for summary judgement: a party must offer evidence in admissible form sufficient to create a genuine issue of material fact that requires a trial. Most probably know the citation for the rule by heart. Zuckerman v. City of New York, 49 N.Y.2d 557, 404 N.E.2d 718 (1980), is one of the most frequently cited cases in New York. It is common practice, based on that rule, to disregard inadmissible evidence and, most often, to not even offer it in opposition to a summary judgement motion. After all, why should you offer evidence that will not be considered? There is really only one problem with this idea: it is wrong.

The actual quote from Zuckerman v. City of New York, 49 N.Y.2d 557, 562, 404 N.E.2d 718, 720 (1980) is:

We have repeatedly held that one opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form; mere conclusions, expressions of hope or unsubstantiated allegations or assertions are insufficient (Alvord and Swift v. Stewart M. Muller Constr. Co., 46 N.Y.2d 276, 281-282, 413 N.Y.S.2d 309, 385 N.E.2d 1238; Fried v. Bower & Gardner, 46 N.Y.2d 765, 767, 413 N.Y.S.2d 650, 386 N.E.2d 258; Platzman v. American Totalisator Co., 45 N.Y.2d 910, 912, 411 N.Y.S.2d 230, 383 N.E.2d 876; Mallad Constr. Corp. v. County Fed. Sav. & Loan Ass’n, 32 N.Y.2d 285, 290, 344 N.Y.S.2d 925, 298 N.E.2d 96).

The rule does not mean that a party should self-edit itself from submitting inadmissible evidence in opposition to a motion for summary judgement. Whereas inadmissible evidence is insufficient on its own, it can help turn mere expressions of hope into genuine issues of fact that require a trial.

The case that made this clear is Gier v. CGF Health Sys., Inc., 307 A.D.2d 729, 762 N.Y.S.2d 472 (4th Dept. 2003). It is a medical malpractice/wrongful death action in which the decedent was admitted to the hospital with a diagnosis of a recurrent abdominal hernia and died four hours later of a ruptured abdominal aortic aneurysm. The central issue was whether the Defendant, who was the on-call attending physician at the time the decedent was admitted to the hospital, was notified of her admission before his shift ended. If he was notified then there was the requisite physician-patient relationship; otherwise, there was not. The Defendant testified at his deposition that he had not been notified and he submitted his deposition testimony in support of his motion for summary judgement to dismiss the complaint against him.

In opposition, Plaintiff submitted affidavits of two doctors, Cheng and Bruce. Neither remembered the specific circumstances of decedent’s admission. Instead, they each testified to habit evidence: that it was normal practice and procedure for the attending physician, whoever, that might be, to be notified when a patient is admitted to the hospital. Those two affidavits were insufficient, according to the lower court, to raise a genuine issue of material, triable fact.

Plaintiff also submitted the decedent’s hospital chart, which contained numerous references to the Defendant as the decedent’s attending physician and, more importantly, the last major piece of evidence: an unsworn memorandum of a Dr. Cudmore, which stated that the chief surgical resident told Dr. Cudmore that the Defendant had been notified of the decedent’s admission while he was still on duty. The lower court did not even consider it, because it clearly was inadmissible. It was an unsworn document that relayed two unsworn, hearsay, statements; it was double hearsay, at least.
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