New York Civil Law

New York Workers’ Compensation Law/New York Court of Appeals Grants Leave To Appeal - Presumption of Compensability/Unexplained Death

Matter of Cappellino v. Baumann & Sons Bus Co. (Motion for leave to appeal granted on November 18, 2010)

52 A.D.3d 1058 (3d Dep’t 2008)

This particular appeal has been in the works for quite some time.  It concerns an important Workers’ Compensation Law issue -- i.e., what evidence will rebut the presumption of compensability in the context of an unexplained death.  Even were a death that occurs during the court of employment is unexplained, a claimant is entitled to a presumption of compensability.  However, the Appellate Division  has held that such a presumption may be rebutted by an employer with “substantial evidence to the contrary.”

 In Matter of Cappellino, the claimant’s decedent sustained a fatal heart attack while walking through his employer’s bus yard.  After a series of hearings, the Workers’ Compensation Board rendered a decision finding no causal relationship between the decedent’s death and his employment.  An impartial specialist who reviewed the decedent's medical records opined that his death was unrelated to his work activities. This opinion was based upon the decedent's documented medical history which included diagnoses of high blood pressure and high cholesterol and noted a strong family history of coronary artery disease. In addition, these records revealed that the decedent had been a chronic smoker, was markedly obese and had a permanent tracheostomy for obstructive sleep apnea. He had suffered two prior heart attacks for which he had been treated with intracoronary stent insertion and coronary balloon angioplasty.

The claimant submitted contrary medical proof on the issue of causation.  Nevertheless, the Appellate Division concluded that the Board’s determination that the decedent’s fatal heart attack was not work related is amply supported by substantial evidence.

The Court of Appeals on this appeal will address the novel issue regarding rebutting the presumption of compensability.

 

Arbitration/New York Court of Appeals Grants Leave to Appeal - Vacating Award Based on Bias or Partiality

 U.S. Electronics, Inc. v. Sirius Satellite Radio, Inc. (Motion for leave to appeal granted on Nov. 18, 2010)

73 A.D.3d 497 (1st Dep’t 2010)

This appeal addresses the judicial review of arbitration awards and in what instances may a court vacate an arbitration.  The arbitration concerned a contractual dispute between the petitioner and satellite radio company Sirius Satellite Radio, Inc.  By way of background, Sirius and former competitor XM Satellite Radio announced a merger in February 2007.  The merger was subject to the approval of the Federal Communications Commission.

The petitioner in the appeal argued that the chairman of the arbitration panel improperly failed to disclose the relationship between his son, who is a congressman, and Sirius.  The chairman’s son publicly supported the merger between Sirius and XM.

The First Department noted that the chairman should have disclosed his son’s position irrespective of when the petitioner learned of the congressman’s support of the intended merger.  Nevertheless, the First Department held that the petitioner failed to meet its burden of proving by clear and convincing evidence that any impropriety or misconduct of the arbitrator prejudice its rights or the integrity of the arbitration process or award.  It proffered no proof of actual bias or even the appearance of bias on the part of the chairman.

The Court of Appeals will likely address whether the undisclosed facts provided a basis for challenging the arbitration award and set out a bright-line for future matters.

 

New York Workers’ Compensation/Motion for Leave to Appeal to New York Court of Appeals – Interplay Between WCL §§ 15(3)(w) & 27(2)

Matter of Collins v. Dukes Plumbing & Sewer Serv., Inc. (Motion for leave to appeal granted on Nov. 17, 2010

75 A.D.3d 697 (3d Dep’t 2010) 

These appeals concern the interplay between the recent amendments to Workers’ Compensation Law §§ 15(3)(w) and 27(2).  Section 15(3)(w), as amended in 2007, capped the number of weeks for which a claimant could receive that subdivision’s nonscheduled permanent partial disability (“PPD”) benefits.  The new cap on benefits applies only to accidents occurring after March 31, 2007.  Section 27(2) was also amended in 2007 to require that any PPD award under WCL § 15(3)(w) made on or after July 1, 2007 must be paid into the aggregate trust fund (“ATF”).

In each of the cases on these appeals, each claimant’s injury was classified as a PPD and each claimant was awarded benefits under section 15(3)(w).  These PPD awards were not capped because the claimants’ injuries all preceded the March 31, 2007 date applying to section 15(3)(w).  The uncapped PPD awards were made after July 1, 2007 and, therefore, the private insurance carriers for the claimants’ employers were ordered to make a lump-sum payment of the present value of the awards into the ATF pursuant to the amended to section 27(2).

The Third Department disagreed with the carriers’ argument that they should not have been required to make lump-sum payments into the ATF because those injuries were sustained before the effective date to the amendment to WCL § 27(2).  The Court also rejected the carriers’ argument that mandating lump-sum payments of the claimants’ uncapped PPD awards was improper because the actual amounts of their future benefits are unpredictable and there is no reliable way to calculate their present values.  The Court rejected two of the carriers’ constitutional arguments that the amendment violated the Taking Clause of the Fifth and Fourteenth Amendments to the United States Constitution and the Contract Clause of the United State Constitution.

The Court of Appeals will likely focus its decision on the interplay between the two statutes.  Depending on how the carriers’ brief the issues, the Court might also address the constitutional issues.  The constitutional issues appear less noteworthy.

 

Appellate Division, Third Department's Curious Holding Regarding Recurring Dangerous Condition in Premises Liability

Last Thursday, the Appellate Division, Third Department in Black v. Kohl's Dept. Stores, Inc. held that general awareness of that a dangerous condition may be present on its premises  might be enough to hold a premises owner liable.  The case concerns a subset of constructive notice -- i.e., an unsafe recurring dangerous condition.

The plaintiff claimed that she caught her foot on a purse that was lying on an aisle in the defendant's store.  The defendant proffered evidence that an employee inspected the floor at 3:00 p.m. and that there was no merchandise on the floor at that time.  The plaintiff alleged that the accident occurred between 3:15 p.m. and 4:00 p.m., and an accident report indicated that emergency medical services received a call regarding the injury at 3:48 p.m.

The Third Department held that the plaintiff raised a material question of fact as to whether the defendant had constructive notice of a recurring condition regarding its merchandise.  The odd part about the decision is that the evidence does not speak to the fact that there was a recurring dangerous condition that  regularly went unaddressed.

The Court pointed out that one employee "acknowledged that he had seen merchandise, including handbags, on the floor in the store and that customers would commonly knock merchandise onto the floor.  The Court pointed to another employee's affidavit who stated that the "plaintiff's accident occurred in an aisle near a price checker and that customers would occasionally leave clothing hanging near the price checker or on shelves nearby, causing employees to more frequently attend to that aisle and the merchandise misplaced therein."  Based on this evidence, the Court concluded that the plaintiff raised a material issue of fact to defeat the defendant store's summary judgment motion.

Justice Mecure dissented, noting that the Majority's holding on these facts creates a precedent that expands the recurring unsafe condition beyond manageable bounds.  In my opinion, Justice Mecure hits the nail on the head.  The Majority's rule ignores that the plaintiff failed to demonstrate that the defendant had actual notice of this alleged unsafe recurring condition.

(Note: The law firm for which I work represented the defendant in this matter.  I had no involvement in the case, however)

New York Court of Appeals Recently Holds That CPLR 2001 May Cure Defect In Service of Summons and Complaint In Some Instances

Even though the CPLR is clear on this point, litigants still seem to make mistakes when serving their summons and complaints.  In Ruffin v. Lion Corp., 2010 N.Y. Slip Op. 8767, 2010 N.Y. LEXIS 3464 (Nov. 30, 2010), the plaintiff used a process server who was not a New York resident to serve the defendants with the summons and complaint concerning her personal-injury action.  Two years after a default judgment was entered against the defendant, it moved to dismiss the action under CPLR 3211(a)(8) and to vacate the default judgment.  The defendant argued that the process server was not authorized under CPLR 313 to effect service in Pennsylvania because he was not a New York resident, he was not a sheriff authorized to make service by Pennsylvania law, and he was not an attorney, solicitor, barrister or equivalent.

The plaintiff conceded that the process server was not authorized to make service in Pennsylvania but challenged the jurisdictional implication of the improper service by relying on CPLR 2001.  CPLR 2001, among other things, applies to the commencement of an action regarding mistakes in the filing process. The Court of Appeals concluded that the error regarding the plaintiff’s failure to fulfill the service requirements of CPLR 313 could be disregarded.  Analyzing CPLR 2001 and the legislative history of its recent amendment, the Court concluded that CPLR applies to both non-prejudicial defects in filing and service of initiatory papers such as a summons and complaint.

The Court pointed out that the CPLR 2001 point was not dispositive because the service of initiatory papers also implicated due process concerns of notice.  The Court noted that courts should analyze whether the error is merely technical or one that impacted whether notice was reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford them an opportunity to present their objections.  The Court provided two examples where an error was more than just a technicality: (1) simply mailing the document to the defendant or e-mailing them to the defendant’s web address, or (2) the delivery of a summons and complaint to the wrong person.  The Court noted that delivery of a summons and complaint by a process server who is unauthorized to serve simply because of his place of residence will not affect the likelihood that the summons and complaint will reach defendant and inform him that he is being sued.  As such, the Court concluded that a defect related to the residence of a process server has no effect on the likelihood of defendant's receipt of actual notice, and the court may choose to correct or disregard it as a technical infirmity under CPLR 2001.

 This opinion serves as a reminder that these procedural details should be followed closely when initiating an action to avoid unnecessary motion practice.  On the other side of the caption, defendants should not gloss over analyzing these details upon receiving these initiatory papers.

 

Appellate Division, Third Department Recently Finds An Question of Fact As To Sole Proximate Cause in Labor Law Context

In Silvia v. Bow Tie Partners, LLC, the Appellate Division, Third Department addressed a sole proximate cause issue within the Labor Law sec. 240(1) context.  In Silvia, the plaintiff was allegedly injured when a plank on which he was standing as part of a makeshift scaffold broke beneath him, causing him to fall several feet.  Notably, the defendant D & B Acoustical -- the plaintiff's employer -- supplied deposition testimony of a carpenter it employed.  The testimony revealed that the carpenter observed the plaintiff with the plank that ultimately broke and told him not to use it because it was cracked.  The testimony also revealed that the plaintiff told the carpenter that he did not care if the board was cracked.  D & B proffered evidence that there were OSHA complaint planks next to a dumpster just outside a doorway adjacent to the area where the plaintiff was working.  A expert also opined that (1) scaffolds are safety devices for the purposes of sec. 240(1), and (2) the scaffold planking used here was compliant with applicable regulations and that to the plaintiff's injuries were caused by his failure to use a sound plank that was available.

The Third Department concluded that D & B raised questions of fact with regard to whether there was a statutory violation and whether the plaintiff's conduct was the sole proximate cause of his injuries.  Between Panels, the Third Department is inconsistent as to the sole proximate cause defense (a point discussed in the next post regarding Murray v. Arts Center & Theater of Schenectady, Inc.)

New York Court of Appeals Grants Leave to Appeal Regarding Emergency Doctrine Instruction

Last week, the New York Court of Appeals granted leave to appeal in Lifson v. City of Syracuse.  The issue likely to be decided is whether a trial court can instruct a jury on the emergency doctrine where the evidence does not support that a weather or lighting condition was sudden or unforeseen.

In Lifson, the defendant driver injured the decedent pedestrian after striking her with his motor vehicle.  The defendant stopped at a stop sign at the intersection in question.  He looked to the left and to the right and the proceeded to make a left turn.  The defendant claimed that, as he was in the process of making the left turn, his vision was momentarily obstructed by sun glare.  He took his eyes off the road and, when he looked back up again, he observed decedent approximately one foot in front of his vehicle.  The defendant "slammed" on the brakes but was unable to avoid hitting the decedent.

The Fourth Department Majority concluded, among other things, that the trial court did not err by giving an emergency instruction with respect to the assertion of the defendant that he failed to observe the decedent because he was blinded by sun glare.  The Court reasoned that there was a reasonable view of the evidence establishing that the sun glare was a sudden and unforeseen circumstance justifying the emergency instruction.

Justice Peradotto dissented, noting that she agreed with the plaintiff that Supreme Court erred in giving an emergency instruction with respect to the assertion of the defendant that he failed to observe the decedent because he was blinded by sun glare.  Justice Peradotto noted that the defendant never testified at trial that he was unaware that the sun was out or that he did not expect to be driving into the sun when he turned left to travel west.  

Justice Peradotto concluded that

[The] defendant should have anticipated the possibility that he might encounter glare from the sun when he began to turn his vehicle to travel west into the setting sun.  Because the condition defendant faced was not unexpected in light of the sunny weather and the time of day, [the] defendant was not entitled to the benefit of an emergency instruction.

New York Civil Law will keep you apprised of the developments on this appeal 

New York Court of Appeals Will Hear Oral Arguments on Important Corporate Issues

The New York Court of Appeals will hear arguments next Tuesday (September 14, 2010) in Kirschner v. KPMG LLP on whether, under New York law, the acts of the corporate insiders can be imputed to the corporation, in which event, pursuant to the Wagoner rule, the trustee for a debtor corporation lacks standing to recover against third parties for damage to the creditors.  Those third parties can be accountants, law firms, investment banks, and other various professional firms.

The United States Circuit of Appeals for the Second Circuit certified an unusual amount of certified questions, eight in total.  As framed by the Second Circuit, the questions are:

(1) the over-arching question whether the allegations of the complaint in this case satisfy the "adverse interest" exception to the Wagoner rule of imputing insiders' misconduct to their corporation, and the following subsidiary questions subsumed within that ultimate question: (2) whether the adverse interest exception is satisfied by showing that the insiders intended to benefit themselves by their misconduct; (3) whether the exception is available only where the insiders' misconduct has harmed the corporation; (4) if harm is required, whether the analysis of such harm may include any detriment to a corporation resulting from the eventual unmasking of the misconduct; (5) if harm is required, whether such harm may be determined by considering a corporation and its related corporations as a single enterprise; (6) if harm is required and is to be determined with respect to separate though related corporations, whether the allegations of the complaint adequately allege such harm; (7) whether the exception is precluded where the misconduct conferred some benefit upon the corporation; and (8) if the adverse interest exception were otherwise available, would it be precluded by the "sole actor" rule? If the Court of Appeals is disinclined to answer or at least discuss all of these questions, we hope it will focus its attention on questions (2) and (3).

The certified questions focus on the Wagoner rule and the "adverse interest exception" to the rule.  The rule holds that bankruptcy trustees and other corporate representative have no standing to sue third-party professional advisers to a company for actions they may have taken in connection with the management-led misconduct.  The exception is an extremely narrow one and applies only when the agent has totally abandoned the principal's interests.

NYCL will report on the decision in October or when the decision is handed down.

New York Times Article On Clerkships at the Supreme Court of the United States

The New York Times today published a good article on clerkships at the Supreme Court of the United States.  The article does not uncover anything new, but I always enjoy a peek behind the Supreme Court curtain.

New York Law Reporting Bureau Adds Real Simple Syndication Feeds

The New York Law Reporting Bureau has stepped up its game once again.  The LRB now offers Real Simple Syndication Feeds for the New York Court of Appeals; the Appellate Division, First Department; the Appellate Division, Second Department; the Appellate Division, Third Department; the Appellate Division, Fourth Department; the Appellate Term, First Department; the Appellate Term, Second Department; and various trial court decisions.  It also has a feed for new filings at the New York Court of Appeals.

You can use these feeds to get New York case updates straight to your R.S.S. Aggregator.