Recent decisions out of the Appellate Division, Second Department

December 4, 2024 Robert Abruzzese, Courthouse Editor

The home of the Appellate Division, Second Department, on Monroe Place in Brooklyn Heights. Eagle file photo by Rob Abruzzese

Conflicting testimony blocks summary judgment in dram shop case

The Appellate Division, Second Department, upheld a Kings County Supreme Court decision denying summary judgment to Rao’s Bar & Grill in a lawsuit under New York’s Dram Shop Act. The court ruled that conflicting deposition testimony created triable issues of fact.

The case stems from a 2009 car accident in which Stephen Simmons alleged he was injured by an intoxicated driver, Anthony Vecchiano, who initially testified that he drank only at Rao’s on the night of the crash. Years later, Vecchiano contradicted this testimony, claiming he had never been to the restaurant.

Rao’s Bar argued that the later testimony disproved the claims against it, but the appellate court found the contradictions left unresolved questions about whether the restaurant contributed to Vecchiano’s intoxication. The ruling allows the case to proceed to trial.

~ Simmons v. Vecchiano ~

Estate’s intervention upheld in dispute over allegedly fraudulent property deed

The Appellate Division, Second Department, upheld a Kings County Supreme Court decision allowing the Estate of Abdulla Elazzwaer to intervene in a dispute over a deed alleged to be fraudulent. The appellate court also affirmed the denial of a motion for summary judgment filed by the plaintiffs, citing unresolved factual questions.

The case involves a 2005 deed purporting to transfer a one-sixth interest in a property from Hussein El-Rowmeim, who passed away in 2004. The plaintiffs, El-Rowmeim’s sons and administrators of his estate, claim the deed is fraudulent and sought its nullification. The Estate of Abdulla Elazzwaer contends the interest was legitimately purchased decades earlier and moved to intervene, citing its potential ownership stake.

The plaintiffs argued that the estate had no valid interest and sought summary judgment to declare the deed void. The appellate court, however, found that issues such as the intent behind the deed and whether it was unconscionable or prejudicial remain unresolved. The court explained that the plaintiffs’ motion was premature, as discovery had yet to take place, and relevant evidence could emerge during that process.

~ Al-Rowmeim v. Alazwear ~

Constructive notice doctrine bars challenge in foreclosure dispute

The Appellate Division, Second Department, has upheld a Kings County Supreme Court order and judgment of foreclosure and sale against a Brooklyn property, rejecting claims from YPL Realty Corp. that it was a necessary party in the foreclosure action.

The case involves a mortgage foreclosure initiated by Bank of America in 2012, with a notice of pendency filed at that time. YPL Realty acquired the property later that year, with its deed recorded in January 2013. YPL argued that it should have been included as a party to the foreclosure action, but the court found otherwise, citing the doctrine of constructive notice.

Under CPLR 6501, the filing of a notice of pendency binds subsequent property purchasers to the proceedings as though they were parties. The appellate court determined that YPL, having acquired the property after the notice was filed, was bound by all subsequent legal proceedings and was not a necessary party.

YPL never sought leave to intervene in the case, which effectively waived its right to participate in the litigation. The foreclosure and sale of the property will proceed.

~ Bank of America, N.A. v. Burton ~

Court examines “Time of the Essence” in property sale dispute

The Appellate Division, Second Department, modified a Kings County Supreme Court decision in a dispute over the sale of a Brooklyn property, addressing whether a buyer had sufficient notice to meet a “time of the essence” closing date. The court partially reversed the lower court’s dismissal of a claim for specific performance of the contract.

The “Time of the Essence” standard in real estate contracts means that deadlines for completing the deal, like the closing date, are strict and must be met exactly. If one party doesn’t meet the deadline, they can be considered in default, potentially losing their rights under the contract. However, the deadline must give the other party a reasonable amount of time to act, and clear notice must be provided to enforce it.

The case arose after a 2021 contract for the sale of property between buyer Moshe Fink and seller 218 Hamilton, LLC. Disagreements about the terms for closing, including the assignment of an existing mortgage, led to delays. In October 2021, the seller set November 4 as the closing date, with time of the essence, but the buyer rejected the date and did not appear. The seller declared the contract terminated, and the buyer filed suit seeking specific performance.

The appellate court held that the seller failed to prove that the designated closing date provided the buyer with a reasonable time to act, rendering dismissal of the specific performance claim inappropriate. However, the court also upheld the denial of the buyer’s motion for summary judgment, citing unresolved factual issues regarding the buyer’s readiness and ability to close.

~ Fink v. 218 Hamilton, LLC ~

Emergency doctrine shields NYC Transit Authority in Bus injury case

The Appellate Division, Second Department, upheld a Kings County Supreme Court decision dismissing a personal injury lawsuit against the New York City Transit Authority, finding the bus driver’s response to a sudden emergency reasonable under the circumstances.

The case arose from a 2019 incident in which plaintiff Wanda Kinard claimed she was injured as a passenger when a Transit Authority bus stopped abruptly to avoid a collision. The bus driver, Shubert Stanley, testified that a sedan unexpectedly swerved in front of the bus, forcing him to brake.

Initially, the Supreme Court denied the Transit Authority’s motion for summary judgment, but upon reargument, it granted the motion, citing the emergency doctrine. This legal standard protects individuals from negligence claims when their actions are deemed reasonable and prudent in the face of sudden and unexpected circumstances not of their own making.

The appellate court affirmed, finding the Transit Authority had demonstrated that the bus driver’s braking was a reasonable response to an emergency caused by the sedan’s sudden movement. The court also held that the plaintiff failed to present evidence raising a factual dispute.

~ Kinard v. New York City Transit Authority ~

Foreclosure case time-barred under statute of limitations and new foreclosure rules

The Appellate Division, Second Department, upheld a Kings County Supreme Court decision dismissing U.S. Bank’s foreclosure action against Maureen and Hugh Jarrett as untimely. The court ruled that the bank’s claims were barred by the six-year statute of limitations and could not be revived under newly enacted foreclosure rules.

The case stemmed from a 2011 foreclosure action filed by the bank’s predecessor in interest, which accelerated the mortgage debt, starting the statute of limitations clock. That case was dismissed in 2017 after the bank’s predecessor failed to act on court orders. U.S. Bank, which acquired the mortgage later that year, attempted to file a new foreclosure action in 2020.

The appellate court agreed with the defendants that the statute of limitations expired in 2017. U.S. Bank argued for an extension under the savings provision of CPLR 205(a), which allows refiling within six months of a prior dismissal. However, the court found that under CPLR 205-a, enacted as part of the Foreclosure Abuse Prevention Act, the bank was ineligible for the extension because the original case was dismissed due to neglect, and the bank was not the original plaintiff.

~ U.S. Bank National Association v. Jarrett ~