Veterans’ Rights


veterans rights

The Veterans Administration has just issued new Eligibility Rules for Aid and Attendance Benefits for veterans and their spouses.

What are “Aid and Attendance” Benefits? Aid and Attendance
provides home health care benefits and financial assistance with nursing home costs.

These changes set new asset limits and penalties for transfers of assets.

The regulations go into effect October 18, 2018, so there is still time to plan to protect your assets prior to the effective date!

Contact our attorneys at 631.694.2400 to discuss setting up a Veterans Benefit Asset Protection Trust.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such.

Grandparent-Caregivers | Sexual Harassment | No Jurisdiction Over Foreign Corp.

What Grandparent-Caregivers Need

What Grandparent-Caregivers Need

Over the next few weeks, those with school-age children will settle into familiar routines, and we will begin to see children boarding and departing the yellow busses in our neighborhoods. More and more, with the increase in the number of dual-income households, there are grandparents waiting to greet the children at the end of the day. According to recent statistics, grandparents are the main child-care arrangement for 42% of families with young children.

Many grandparents happily pitch in with providing meals, helping with homework, and shuttling the kids to soccer and dance. But families should consider what would happen in the event of an mergency. If the child needed medical attention while under a grandparent’s care, would the grandparent have the ability to authorize treatment? In a true emergency situation, doctors would certainly treat the child. In the case of a non-life-threatening injury or illness, however, medical professionals would require a parent’s consent.

In New York, parents can provide this authority to caregivers in advance of an emergency by executing a “Designation of Person in Parental Relationship.” The document can provide authority for a specified period of time (for vacationing parents), or upon the occurrence of certain events (i.e., parental absence or incapacity).

As our lives become increasingly hectic, having certain safeguards in place can give us peace of mind. Contact our estate planning attorneys at 631.694.2400 to discuss which documents are right for your family.

Sexual Harassment Complaints Supported Employer’s Breach of Contract Action

Sexual Harassment Complaints Supported Em ployer’s Breach of Contract Action

In Pozner v. Fox Broadcasting Company, Pozner, a former employee of Fox, who was terminated from his executive vice president position at the broadcasting company based on sexual harassment complaints, brought an action against Fox alleging breach of his employment contract. Fox counterclaimed for breach of contract and breach of fiduciary duty, based on the policies and standards of conduct in its handbooks incorporated into the employment agreement. On Pozner’s motion to dismiss the counterclaims, the Court held that Fox’s allegations supported a breach of contract claim against its former employee, but that it failed to allege that the employee acted directly against the employer’s interests. The motion was granted in part and denied in part.

According to the decision, from 1994 through 2016, Pozner was employed by Fox in various executive positions. From 2014 until his employment was terminated, he was employed in the capacity of Executive Vice President, Pricing, Planning and Inventory Management. On January 13, 2015, Pozner and Fox entered into a letter agreement, setting forth the terms and conditions of his employment providing that he agreed to abide by, and was provided copies of, the policies set forth in both the Standards of Business Conduct and a document entitled Fox Facts. The Standards defined prohibited sex-based harassment, required Pozner to refrain from harassing conduct, and to report such conduct by others to Fox’s human resources or legal departments. Fox Facts stated that Fox did not tolerate sexual harassment by managers, supervisors or co-workers, defined such harassment, and, again, required that members of management report such conduct to the company’s human resources or legal departments.

In August 2016, Fox received internal complaints from two employees concerning Pozner’s conduct towards them and during its investigation into the allegations, Fox obtained information from other current and former employees corroborating the harassing conduct regarding the two female employees, as well as others. Fox interviewed Pozner and found him to be evasive and defensive. Fox determined that Pozner violated the Standards and the policies and expectations set forth in Fox Facts, including by repeatedly making unwelcome and inappropriate sexually explicit comments in the workplace, and terminated his employment.

The Court held that Fox’s first counterclaim for breach of contract was sufficient to withstand dismissal because Pozner expressly agreed to comply with the Standards and Fox Facts, both of which were incorporated into his employment contract. The Court rejected Pozner’s argument that because he had no input in the drafting of the Standards and Fox Facts they should not bind him. This counterclaim sufficiently alleged that as an “executive employee, he was familiar with Fox’s workplace expectations, and he was provided with copies of the Standards beginning as early as 1998, and the Fox Facts as early as 2006,” and sufficiently stated a cause of action.

As for Fox’s breach of fiduciary duty counterclaim, however, the Court found it was “not tenable.” “Pozner had a contractual employment relationship with Fox. As a Fox executive and employee, he owed a duty of loyalty to Fox, which bound him to exercise ‘the utmost good faith and loyalty in the performance of his duties.’ Further, he was prohibited from acting in any manner that was inconsistent with his agency.”

The Court concluded that this duty of loyalty “has only been extended to cases where the employee ‘acts directly against the employer’s interests—as in embezzlement, improperly competing with the current employer, or usurping business opportunities.’” Because there were no such allegations against Pozner in the breach of fiduciary duty counterclaim, the Court dismissed it for failure to state a claim.

Foreign Corporation’s Registration with Secretary of State Does Not Confer Court with General Jurisdiction

Foreign Corporation’s Registration with Secr etary of State Does Not Confer Court with  General Jurisdiction

In Amelius v. Grand Imperial LLC, rent-stabilized tenants in a 227–unit, single-room occupancy (“SRO”) building, brought an action against the owner and operator of the building alleging they used the building for short-term stays in violation of multiple dwelling law and in contravention of the warranty of habitability.

On a motion to compel Yelp, Inc., a non-party, to comply with a subpoena to produce records that would demonstrate the short term stays, the Court concluded that Yelp’s registration with the State’s Secretary of State to do business in New York, did not confer the Court with general jurisdiction over the foreign corporation.

According to the decision, Yelp is a Delaware corporation with a principal place of business in San Francisco, California. It has registered to do business in New York. Yelp objected to a request for an order compelling compliance with a subpoena on, among other things, the ground that the Court lacked personal jurisdiction over it.

In agreeing with Yelp, the Court said that a registration to do business “in and of itself, does not confer general personal jurisdiction.” The Court reasoned that “for a court to have any power over an individual or entity, it must have both subject matter jurisdiction over a live case or controversy as well as personal jurisdiction over the individuals or entities involved. Authority for personal jurisdiction in the courts of New York must first be found in a statute, and then must not violate any due process considerations. Personal jurisdiction falls into two main categories: specific jurisdiction and general jurisdiction. Specific jurisdiction, sometimes referred to as long-arm jurisdiction, refers to jurisdiction over an individual or entity for the purpose of adjudicating a particular controversy that arises from the entity’s contacts with the forum State. General jurisdiction is all-purpose jurisdiction to adjudicate disputes regardless of where they took place or whether they bear any relationship to the entity’s contacts with the forum State.”

The Court found that it was “essentially undisputed that there is no basis for specific jurisdiction over Yelp under these circumstances,” and that “in the absence of a basis to assert general jurisdiction over Yelp,” the “Court would be powerless to enforce the subpoena against it.”

Although the Court found that New York courts and federal courts sitting in New York State have traditionally held that registration to do business under Business Corporation Law §§ 304 and 1304 constitutes consent to general jurisdiction, this Court determined that New York’s statutory law “does not contain any explicit language in reference to consent to jurisdiction—specific or general. Although New York courts have held that the registration has the effect of constituting consent, it is true that the statute itself does not notify registrants that it will carry such a onsequence. Business Corporation Law § 1304(a) requires a foreign corporation applying to do business here to provide its name, jurisdiction and date of incorporation, purpose for which it has been formed, county in this State where its office is to be located, a designation of the Secretary of State as its agent for the service of process, an address within or without the State where process can be forwarded, and, if so desired, a registered agent. Nothing in the statute requires the corporation to execute a form in which it explicitly consents to subject itself to unlimited jurisdiction in the courts of this State. Business Corporation Law § 1305, titled ‘Application for authority; effect,’ merely provides that, ‘upon filing by the Department of State of the application for authority, the foreign corporation shall be authorized to do in this state any business set forth in the application.’”

Because the statutes do not adequately apprise foreign corporations that they will be subject to general jurisdiction in the courts of this State and that foreign corporations are required to register for conducting a lesser degree of business in this State than the Supreme Court of the United States has ruled should entail general jurisdiction, the Court concluded that Yelp is not
subject to general jurisdiction merely because it has registered to do business in New York.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Adverse Possession | Down Payment | Subpoenas Quashed

Nonprofit Community Garden Owns Manhattan Lot Through Adverse Possession

Nonprofit Community Garden Owns Manh attan Lot Through Adverse Possession

In Children’s Magical Garden Inc. v. Norfolk St. Dev.LLC, the plaintiff nonprofit Children’s Magical Garden, Inc. (the “Garden”), is a community garden founded by its members in 1985 on three lots in Manhattan’s Lower East Side. The defendants are allegedly one of those lot’s record owners. Challenging their application to build on that lot, the plaintiff sought a declaration that it owned the lot by adverse possession. Adverse possession is a process by which real property can change ownership. It is governed by statute. By adverse possession, title to another’s real property can be acquired without compensation, by holding the property in a manner that conflicts with the record owner’s rights for a specified period.

On appeal, the Appellate Division, First Department, affirmed the Supreme Court’s finding, that the plaintiff adequately asserted a claim of right to Lot 19 under adverse possession.

As the Appellate Court framed it, the appeal involved “what must be an extremely rare occurrence in Manhattan, to wit, a claim of adverse possession of prime real estate located in the Lower East Side neighborhood of Manhattan. Specifically, we are presented with a dispute over a vacant corner lot located at 157 Norfolk Street at its intersection with Stanton Street, one block south of East Houston Street in lower Manhattan. Plaintiff Garden, a not-for-profit corporation incorporated in 2012, is a community garden founded by its members in 1985 on Lots 16, 18, and 19 in Block 154. The Garden was founded by activists outraged by the accumulation of garbage and used needles on the lots located across the street from an elementary school.”

The defendants Norfolk Street Development, LLC, S & H Equities (NY), Inc., and Serge Hoyda are alleged to have been the record owners of Lot 19 during the prescriptive period. The defendant 157, LLC is alleged to have purchased the property from Norfolk Street Development on or about January 6, 2014.

In order to establish a claim of adverse possession, the Appellate Court explained that a plaintiff must prove the possession was: (1) hostile and under a claim of right; (2) actual; (3) open and notorious; (4) exclusive; and (5) continuous throughout the 10-year statutory period. “In addition, where, as here, the claim of right is not founded upon a written instrument, the party asserting title by adverse possession must establish that the land was ‘usually cultivated or improved’” or that the land “has been protected by a substantial enclosure” (see former RPAPL 522; Estate of Becker v. Murtagh, 19 NY3d 75, 81 [2012]).

According to the Court, the central issue presented by the appeal was whether the plaintiff had stated a claim for adverse possession of Lot 19 by sufficiently pleading the “continuous possession element.”

The complaint alleged that more than 30 years ago, in 1985, the Garden was founded by community activists who sought to improve their neighborhood. Because crime plagued the neighborhood at that time, and used needles and piles of garbage littered the abandoned corner lot in question — across the street from elementary school P.S. 20 — these neighborhood activists decided to build what plaintiff describes is now a “neighborhood icon,” and that the defendants and their predecessors “abandoned Lot 19” as a “shameful eyesore” and that the plaintiff and its members took possession and “by their tremendous efforts transformed the Premises into a vibrant community garden where generations of children have thrived.” The Garden included a fish pond, playground equipment, a stage, trees and plants and was fenced off with access to its members only.

The defendants had argued the “plaintiff failed to plead sufficient facts evidencing continuous possession by its predecessor members for the statutory period, through an unbroken chain of privity, by tacking periods between anonymous possessors who are not alleged to have intended to transfer title to the incorporating members.” This argument was based on the fact that the plaintiff was incorporated in 2012 and the defendants’ contention that there is no allegation that plaintiff had the necessary “privity” with the Garden members prior to incorporation.

In rejecting this argument, the Appellate Court held that it is “well settled that an unincorporated association may adversely possess property and later incorporate and take title to it because ’although the unincorporated society could not acquire title by adverse possession, its officers could for its benefit, and when the corporation is duly organized the prior possession may be tacked to its own to establish its title under the statute of limitations.’”

Buyers Fail to Timely Cancel Contract and Denied Down Payment Refund

Buyers Fail to Timely Cancel Cont ract and Denied Down Payment Refund

In Sanjana v. King, the plaintiffs-buyers sued for summary judgment in an action arising from a failed condo sale with defendants-sellers. The contract contained a standard mortgage contingency clause and allowed the plaintiffs to cancel if they were unable to secure a commitment, but it required them to notify the sellers within five business days after the commitment date or they waived their right to cancel and receive their down payment refund.

The plaintiffs were conditionally approved for a mortgage, but later denied after their time to cancel expired. Their counsel notified the sellers the mortgage approval was revoked and requested the return of the $110,000 down payment. The sellers denied the request because the buyers failed to give the required notice and the buyers sued the sellers for the refund.

The Court found the buyers never obtained a mortgage commitment under the contract, only a preliminary approval, and in lieu of notifying the sellers, or seeking to extend their time to cancel, did nothing until their time to cancel expired and their conditional approval was revoked. It granted the sellers’ cross-motion for summary judgment dismissing the complaint as the buyers neither obtained a mortgage commitment, nor timely canceled the contract.

In granting summary judgment to the sellers, the Court reasoned that “any consideration of whether the conditional approval constitutes a commitment must begin with the definition of a mortgage commitment. ‘According the term mortgage commitment its ordinary dictionary meaning, a formal written communication setting forth the terms and conditions of the mortgage loan was required to satisfy the mortgage contingency clause’ At least one Court has held under similar circumstances that a conditional mortgage commitment letter is not a mortgage commitment”

The Court found that the initial letter granting the conditional approval identified 18 separate items the buyers were required to send in, and emphasized that “[o]nce we receive the items from you and the third parties, we will conduct a final review of the loan documents. As soon as we complete the review and issue a final approval, we will contact you to coordinate closing.” The second letter denying financing stated that “[w]e are unable to offer you financing at this time.” Under these circumstances, the Court found that the buyers never obtained a mortgage commitment pursuant to the terms of the contract. “Plaintiffs only received a letter from a lender offering preliminary approval and detailing the steps that were required in order to receive a commitment. There is no logical way to construe the initial letter from Quicken Loans as a written commitment pursuant to the contract.”

The Court noted that “while losing the entire downpayment might be a harsh outcome, this Court cannot rewrite a term of a contract signed by the parties. The parties agreed that plaintiffs would not be obligated to purchase and would get their downpayment back if they failed to get a mortgage commitment as long as they gave the sellers notice within five days of the commitment date. Otherwise, if plaintiffs did not timely exercise their option to cancel, then plaintiffs waived the contingency and were obligated to purchase with or without a mortgage. It is undisputed that they did not exercise their right to cancel. Plaintiffs chose to take a risk that Quicken Loans would agree to finance their purchase of the apartment. When the purchasers failed to close, the contract gives the sellers the right to keep the downpayment.”

FOX’s Subpoenas Regarding Plaintiff’s Past Sexual Relationships with Other Men Quashed

FOX’s Subpoenas Regarding Plaintiff’s Past Se xual Relationships with Other Men Quashed

In Hughes v. Twenty–First Century Fox, Inc., a female guest television contributor brought a federal action against the mass media corporation, its television news channel, a news anchor, its general counsel, and the head of corporate communications, alleging gender discrimination and retaliation under Title VII, New York State Human Rights Law, and New
York City Human Rights Law, defamation, and violation of New York City Gender-Motivated Violence Act. In a recent decision, the federal court addressed the television contributor’s motion to quash non-party subpoenas.

According to the decision, plaintiff Scottie Nell Hughes moved to quash four non-party subpoenas. The subpoenas were served on men formerly involved in affairs with her. The subpoenas sought sexual or romantic communications between Hughes and each of the men, information regarding her personal background and reputation, and media files of a sexual or romantic nature depicting Hughes.

Hughes moved to quash these subpoenas on the ground that none of subpoenaed parties was ever a Fox employee or a contributor on Fox programs with Hughes, and therefore has no information bearing on Hughes’ claims against the defendants. She also claimed that the subpoenas were issued to “shame and harass her.”

In response, the defendants argued that these subpoenas were designed to elicit information relevant to their defenses. As the Court explained: “First, Defendants maintain that evidence of Hughes’ extramarital sexual relationships will undermine her claim that Defendants’ statement to the National Enquirer—and its effect of characterizing her as sexually immoral—was false. Second, Defendants contend that information obtained from these men will establish a pattern of Hughes pursuing conservative media figures and politicians who she believed could advance her career. This defense would essentially counter Hughes’ claim that she was coerced into a sexual relationship with Payne.

In addressing the motion, the Court recognized that parties to an action generally do not have standing to object to subpoenas issued to non-party witnesses. However, “exceptions are made for parties who have a claim of some personal right or privilege with regard to the documents sought. Examples of such personal rights or privileges include the personal privacy right and privilege with respect to the information contained in psychiatric and mental health records, claims of attorney-client privilege, and other privacy interests, including those relating to salary information and personnel records. An individual’s sexual history with other men, especially the lurid details of their relationships and media files depicting their activities, is clearly a personal matter in which Hughes possesses a privacy interest. Therefore, as a threshold matter, this Court concludes that Hughes has standing to object to the non-party subpoenas.”

The Court framed the “relevant question” as “whether the four non-parties have information demonstrating that Hughes was a serial seductress who engaged in a pattern of pursuing relationships with men—like Charles Payne—for the purpose of advancing her career. To substantiate their position, defendants submitted third party affidavits attesting to Hughes’ sexual proclivities with these men.”

The Court found that “injecting this case with Hughes’ rendezvous with non-parties who have no connection to the subject matter of this litigation will only detract the parties—and later, a jury—from the real issues underlying Hughes’ grievance. Defendants’ purported strategy is superficially appealing, but advances a boorish, reductive narrative that Hughes was predisposed to engaging in self-serving sexual relationships. Hughes’ prior sexual history has no relevance to her claims against Payne, or the defense that she used Payne to advance her career at Fox.”

It further reasoned that “if Defendants seek to raise the defense that Hughes used Payne to advance herself at Fox, they need only seek discovery from Hughes, Payne, and others at Fox. The prejudice arising from Hughes’ prior sexual history with other men would outweigh what little relevance it may bring to this case. To the extent Defendants seek to draw on Hughes’ reputation for engaging in self-aggrandizing conduct with other men, they may directly depose Hughes, who has ‘acknowledged in a cover story interview with her home town paper’ that rumors of such conduct ‘have long dogged her career.’”

The Court granted Hughes’ motion to quash the defendants’ non-party subpoenas because the prejudice arising from her sexual history would outweigh what little relevance it could bring to the case.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

College Bound | Law Firm Name | Public Housing

Sending A Child To College This Fall?

Sending A Child To College This Fall?

During this time of year, parents of college students are inundated with advice, along with checklists of items needed for college. But one of the most important items is frequently overlooked: a Health Care Proxy. A Health Care Proxy is a legal document which names an agent to make health care decisions if the adult patient cannot communicate his or her wishes. The proxy also authorizes the agent to receive confidential information under the Health Insurance Portability and Accountability Act (“HIPAA”). HIPAA, which kicks in when your child turns 18, requires medical personnel to
keep health information confidential unless the physician deems it in the best interest of the patient to disclose the information. More often than not, medical professionals come down on the side of patient privacy.

“But I’m his mother, what do you mean you can’t tell me over the phone?” If your child has not signed a Health Care Proxy naming you as agent, you may be denied access to your child’s medical information and may be prevented from weighing in on decisions regarding treatment.

Before you send your child off to college, contact our office (631.694.2400) to schedule an appointment, and we will work with you and your child to have the document prepared and signed in a single visit.

No First Names for Law Firms

No First Names for Law Firms

Why is it that we expect our pizza parlors to have friendly “just folks” names like “Little Vincent’s” and our law firms to have solid, sober and impressive names like “Sullivan & Cromwell”? Why don’t we see more pizza parlors called “Mutual of Omaha Pizza” and more law firms called “Ben & Jerry’s Law Firm”?

Recently, the New York State Bar Association Committee on Professional Ethics told an inquiring attorney, in a matter of first impression, that the use of a first name as the sole name of a law firm was prohibited. The Committee recognized that no rule of professional ethics, on its face, required this result, but nonetheless reasoned that there exists an “understanding that a law firm’s name consists of surnames of lawyers who either practice there or once did” and that “customary usage teaches that the public in general and the legal profession in particular expect that the name of a law firm reflects the surnames of lawyers currently or formerly associated with the firm.” According to the Committee, use of a lawyer’s first name, not followed by the lawyer’s surname, constituted an impermissible “trade name.” N.Y.S. Bar Ass’n. Comm. Of Prof. Ethics Op. 1152 (2018).

It may surprise us to think that our first names are trade names but, in the context of naming a law firm, that is the rule in New York. It will be interesting to see if other states reach the
same ethical conclusion, which seems driven by a sense of preserving the dignity of the legal profession. So far, only in New York has a lawyer sought to jettison a surname and hang up a shingle proclaiming that he practices, say as, “Larry Law.”

Discrimination Suit Over Denial of Public Housing’s Rental Dismissed

Discrimination Suit Over Denial of  Public Housing’s Rental Dismissed

In Byrd v. Rochester Housing Auth., a federal Court recently granted summary judgment to the Rochester Housing Authority, dismissing the plaintiff’s complaint for an alleged violation of the Fair Housing Act (FHA), in which she claimed that after her request to be placed on a waiting list for public housing, the Rochester Housing Authority manager refused to rent to her for discriminatory reasons.

According to the Court, the FHA “prohibits discrimination across a spectrum of housing-related activities, including the provision of brokerage services, real estate transactions, and housing sales and rentals.”

The Court explained that “claims of housing discrimination are evaluated under the burden-shifting framework articulated by the Supreme Court in McDonnell Douglas Corp. v. Green.” The elements of a prima facie case of housing discrimination were itemized by the Court as follows: “(1) the plaintiff is a member of a
protected class; (2) the plaintiff sought and was qualified to rent or purchase the housing; (3) the defendant denied the plaintiff the opportunity to rent or purchase the housing; and (4) the housing opportunity remained available to other renters or purchasers. ‘Once a plaintiff has established a prima facie case of discrimination, the burden shifts to the defendant to assert a
legitimate, nondiscriminatory rationale for the challenged decision.’ ‘If the defendant makes such a showing, the burden shifts back to the plaintiff to demonstrate that discrimination was the real reason for the defendant’s action.’ Importantly, ‘although the McDonnell Douglas presumption shifts the burden of production to the defendant, the ultimate burden of persuading the trier of fact that the defendant intentionally discriminated against the plaintiff remains at all times with the plaintiff.’”

Applying this McDonnell Douglas standard, the Court found the plaintiff had failed to show that a reasonable jury could find unlawful discrimination to be the real reason her rental application was rejected. Learning of a prior landlord’s judgment against the plaintiff for non-payment of rent, the Housing Authority had given plaintiff “the benefit of the doubt” on her claim the judgment would be vacated, and extended her administrative appeal deadlines so that she could submit proof of vacatur. Because she failed to provide such proof, the Housing Authority upheld its denial of her rental application. “Under the burden-shifting framework applicable to FHA claims, ‘the ultimate burden rests with the plaintiff to offer evidence sufficient to support a reasonable inference that prohibited…discrimination occurred.” No such inference is reasonable on the present record. In light of all of the evidence the Court has reviewed, Plaintiff has failed to show that a reasonable jury could conclude that unlawful discrimination was the real reason her rental application was rejected.” Thus, the plaintiff did not show the Housing Authorities legitimate reason for denying her rental application was a pretext for discrimination.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Mailbox Rule | Fraud and Contract | Spousal Insurance

“Mailbox Rule” Presumption Not Overcome in Suit Over Car Insurance Cancellation

“Mailbox Rule” Presumption Not Overcome in Suit Over Car Insurance Cancellation

In Tarnarider v. 21st Century Ins. & Fin. Servs. Inc., the plaintiff sued for a declaratory judgment that defendants 21st Century Insurance & Financial Services, Inc. and Farmers Group, Inc. have an obligation to indemnify him for his liability in a State court car accident action. The insurance companies refused to indemnify the plaintiff because they cancelled his policy before the accident. The crux of plaintiff’s complaint was that the defendants mailed the notice of cancellation to the wrong address, making it technically deficient. Defendants’ motion for summary judgment was granted.

Parties may seek a “declaratory judgment” after a legal controversy has arisen but before any damages have occurred or any laws have been violated. A declaratory judgment differs from other judicial rulings in that it does not require that any action be taken. Instead, the court, after analyzing the controversy, simply issues an opinion declaring the rights and obligations of each of the parties involved. The only caveat is that there must be an actual, rather than hypothetical, controversy that falls within a court’s jurisdiction.

According to the decision, the plaintiff did not deny that he failed to pay his premiums, but claimed he did not receive the required notice of cancellation from the defendants. After defendants refused to indemnify plaintiff, plaintiff’s attorney requested a copy of the notice of cancellation that the defendants allegedly sent to plaintiff. The defendants sent two faxes to plaintiff’s attorney, each containing copies of the notice of cancellation and the certificate of mailing for the notice. Both copies of the notice set forth the plaintiff’s correct address, but the first faxed copy of the certificate of mailing appeared to contain the wrong address: The plaintiff’s address was 445 Neptune Ave, Apt. 19C, but the certificate appeared to read 446 Neptune Ave., Apt. 19O — the 5 and the C were replaced with a 6 and an O, respectively. The second fax was sent approximately nine minutes after the first fax, and the address on the second certificate of mailing appeared to be correct.

The plaintiff argued that the alleged error on the first fax showed the defendants mailed the notice of cancellation to the wrong address, and that the defendants had noticed the incriminating mistake on the fax and attempted to cover it up by doctoring the certificate of mailing and faxing a second copy. To support this theory, the plaintiff submitted his own affidavit denying receipt of the notice.

In response, the defendants argued that the apparent error on the first fax was due to a distortion of the characters by the fax machine. They noted that the name “21st Century” appears on both faxes and that — just as the “C” in the plaintiff’s address looks like an “O” in the first fax — the “C” in “21st Century” appears as an “O” in both. They produced to the Court the original “un-faxed” copy of the certificate of mailing with the correct address clearly visible, along with affidavits from two employees — James Bryant and Brandon Debyle — outlining the defendants’ system for mailing notices. Defendants also provided the notice of cancellation that was allegedly sent and which states the correct address, and stated that plaintiff’s notice was properly mailed to the correct address.

On their motion for summary judgment, the defendants argued that they were entitled to summary judgment based on the “mailbox rule” and that neither the plaintiff’s denial that he received the notice nor the apparent discrepancy on the first fax sent to plaintiff created a genuine issue of fact to overcome the mailbox rule’s presumption of receipt.

The Court explained that “under the mailbox rule, proof of an office procedure followed in the regular course of business which establishes that a notice was properly addressed and mailed gives rise to a rebuttable presumption that the notice was actually received by the person to whom it was addressed. Under New York law, only personal knowledge of mailing procedures is required to establish the regular office procedure, not personal knowledge of the particular mailing.”

The Court further explained that “once the mailbox rule presumption arises, a party’s mere allegation that it did not receive the letter or notice does not rebut the presumption. ‘There must be — in addition to denial of receipt — some proof that the regular office practice was not followed or was carelessly executed so the presumption that notice was mailed becomes unreasonable.’”

Here, the Court found that the Bryant and Debyle affidavits submitted by the defendants were sufficient to invoke the mailbox rule presumption that plaintiff received the notice of cancellation. “These affidavits establish that the notice was created and mailed in the usual course of defendants’ business, according to established procedure, and addressed to plaintiff’s correct address. Plaintiff’s denial of receipt does not rebut the presumption, nor create any factual dispute” and the plaintiff had “not provided any other meaningful evidence to rebut the presumption.”

No Fraud Cause of Action; Only Breach of Contract

No Fraud Cause of Action; Only Breach of Contract

In Lattarulo v. Industrial Refrigeration Inc., the defendants moved to dismiss an action alleging unjust enrichment and fraud claims, arguing that these claims were duplicative of the plaintiffs’ breach of contract claim.

The complaint alleged that the plaintiffs were approached by a non-party to develop land into an ice distribution facility, and had recommended the defendant Industrial Refrigeration. The defendants allegedly stated that the development would cost $130,000, and the plaintiffs provided two checks. But the project fell apart and the defendants failed to reimburse the plaintiff. The Court found the complaint failed to state a fraud cause of action, and did not allege a separate and distinct duty from defendants’ contractual obligations which the Court found was properly alleged.

As for the fraud claim, the Court relied upon New York’s CPLR §3016 which requires particularity in the pleading of fraud and the circumstances constituting the wrong to be stated in detail. The Court concluded that dismissal of the fraud claim “was warranted as plaintiff failed to set forth the time and place of the alleged misrepresentation. It is well settled that an action predicated on fraud must be particularly pled whereby the circumstances constituting the wrong shall be stated in detail. The essential elements of a cause of action for fraud are representation of a material existing fact, falsity, scienter, deception and injury. Each element of fraud must be supported by factual allegations sufficient to satisfy CPLR §3016(b). ‘Bare conclusory allegations of fraud are
insufficient to sustain a cause of action sounding in fraud.’ A complaint devoid of any facts to support the allegation that the brokers knowingly misrepresented or omitted material facts to
induce insureds to purchase an insurance policy from them failed to state a fraud claim.”

Additionally, the Court reasoned that the “plaintiff has already pled a cause of action for breach of contract, and has not alleged a duty distinct and separate from the defendants’ contractual obligations, and has not plead sufficient facts to assert a cause of action sounding in fraud. It is well established that a party may not recover in quantum meriut or unjust enrichment where the parties have entered into a contract which governs the subject matter.”

How Well Does Your Spouse Drive?

How Well Does Your Spouse Drive?

There was a time when it was considered against public policy for a motor vehicle liability insurance policy to cover a claims between spouses. Even if the driver husband’s negligence caused an accident, the passenger wife could not recover under the couple’s insurance policy. This limitation was considered necessary to avoid “collusive” lawsuits.

However, although not widely known, Section 3420(g) of the Insurance Law today requires that insurance carriers offer “supplemental spousal liability insurance” in automobile accident insurance policies. Since 2003, insurance carriers have been required to give prominent annual notice of the availability of such supplemental coverage. But the onus remains on the insured to request the supplemental coverage in writing. If you don’t ask, you don’t get.

This supplemental insurance will allow one spouse to sue the other spouse for economic loss and non-economic loss (pain and suffering) sustained as a result of “serious injury” as defined in the Insurance Law. Of course, “culpable conduct” on the part of the defendant spouse (i.e., negligence) must also be established, as in any other auto accident case.

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

5 Reasons to Create an Estate Plan NOW

Planning a summer vacation?
Protect your family first!
As summer gets under way, many
of us will be planning trips
to destinations near and far. Before you head out,
make sure your estate plan is in order.

5 Reasons to Create an Estate Plan NOW

5 Reasons to Create an Estate Plan NOW

1. To choose those who will inherit your property: If you die without a Will, assets pass to your heirs according to state intestacy laws. A Will not only names beneficiaries, but can set up trusts to direct when and how your beneficiaries receive the assets.

2. To provide for minor children: Who will raise your children if you die? You can nominate guardians of your choice to care for your children through your Will. Without such a designation, a court will choose.

3. Blended families: If your family is the result of multiple marriages, your estate plan can determine what goes to your current spouse and to the children from prior marriages.

4. Children with special needs: Without a plan, a child with special needs risks being disqualified from receiving Medicaid or SSI benefits. A properly crafted estate plan can set up a Supplemental Needs Trust to preserve the child’s benefits while using trust assets to pay for non-covered expenses.

5. Loss of capacity: What if you become incompetent and unable to manage your own affairs? Without a plan, a prolonged court proceeding is required to appoint someone to manage your affairs. With a plan, you choose the person through a power of attorney.

Regardless of the size of your estate, a plan is necessary to protect yourself, your family and your assets. Our attorneys are available to consult with you to develop a plan which addresses all of your concerns (631.694.2400).

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such

Easement | Facebook Discovery | Landlord/Tenant

The Right To Use Driveway Was Not Permanent

The Right to Use Driveway Was Not Permanent

In Serafin Props. v. Amore Enters. Inc. a court recently concluded that the plaintiff did not have a prescriptive easement in the defendant’s property.

Unlike the law of adverse possession, by which an individual in possession of land owned by another may over time become fully vested with title to the land, a prescriptive easement acquired over time provides only a limited interest in the land, but once acquired, that limited interest may not be involuntarily abridged or divested.

A prescriptive easement is a property interest acquired through a party’s unauthorized use of another’s real property for a certain period of time. If that party can prove their use met the required elements, the easement grants the party a right to use a specific portion of the property for a specific use. Because a prescriptive easement is by definition established without the landowner’s consent, an easement by prescription is generally demonstrated by proof of the adverse, open and notorious, continuous, and uninterrupted use of the subject property for the rescriptive period.

By contrast, New York’s adverse possession statute provides that an “adverse possessor gains title to the occupied real property upon expiration of the statute of limitations for an action to
recover real property pursuant to [CPLR §212], provided that the occupancy…has been adverse, under claim of right, open and notorious, continuous, exclusive, and actual.”

Although the period within which a prescriptive easement ripens is the same 10-year period required to vest title by adverse possession, the claimant to a prescriptive easement is not required to prove that his or her use of the land was exclusive.

Here, the plaintiff sought a prescriptive easement in a portion of defendant’s abutting commercial real property. The dispute arose from plaintiff’s use of a 30-foot strip of defendant’s property—a driveway. Both parties moved for summary judgment before trial. The Court noted that where “the party seeking a prescriptive easement establishes an open, notorious, and continuous use of property for the prescriptive period, a presumption arises that such use was hostile. Where the presumption of a hostile use arises, the burden shifts to the owner of the servient estate, here Defendant, to show that the use was permissive. The presumption of hostility has arisen in this matter.” The Court found material issues of fact existed over whether plaintiff’s use of the driveway during the prescriptive period was “hostile” or “permissive,” and directed that was the sole issue to be tried.

At the trial the Court found the testimony of defendant’s president, Mr. ModicaAmore, credible and consistent with testimony of non-party members of the industrial park complex. It noted the witnesses’ use of words and phrases, including “no disputes over it,” and “agreed upon,” connoted a permissive, rather than hostile, use of the premises, and were consistent with Mr. ModicaAmore’s testimony. Also, such testimony was consistent with a letter from an attorney to plaintiff’s predecessor in interest indicating they were allowed to use a portion of the driveway for ingress and egress. It ruled plaintiff did not currently have, nor ever had, a prescriptive easement in defendant’s property, dismissing the complaint.

Facebook is Opened Wide in Discovery

Facebook is Opened Wide in Discovery

In Forman v. Henkin, New York State’s highest Court held that the “threshold inquiry” for social media disclosure is whether the materials sought are “reasonably calculated to contain relevant information.” The Court rejected the “heightened threshold” previously applied by lower courts. That higher threshold had “conditioned discovery of material on the
‘private’ portion of a Facebook account on whether the party seeking disclosure demonstrated there was material in the ‘public’ portion that tended to contradict” plaintiff’s claims. The Forman case involved a horseback rider, who fell from a horse and allegedly suffered spinal and traumatic brain injuries, and brought a personal injury action against the owner of the horse. Although this case involved discovery in a tort action, there is no reason why it should be limited to that type of case and may, for example, be used by employers defending discrimination claims in which the plaintiff claims “emotional distress.” Social media accounts may be a good source of evidence of claimant’s feelings, thoughts, and mental impressions.

At her deposition, plaintiff stated that she previously had a Facebook account on which she posted “a lot” of photographs showing her pre-accident active lifestyle but that she deactivated the account about six months after the accident and could not recall whether any post-accident photographs were posted. She maintained that she had become reclusive as a result of her injuries and also had difficulty using a computer and composing coherent messages. She produced a document she wrote that contained misspelled words and faulty grammar in which she represented that she could no longer express herself the way she did before the accident. She contended that a simple email could take hours to write because she had to go over written material several times to make sure it made sense.

The defendant sought an unlimited authorization to obtain plaintiff’s entire “private” Facebook account, arguing the photographs and written postings would be material and necessary to his defense of the action, and when the plaintiff failed to provide the authorization, the defendant moved to compel, asserting that the Facebook material sought was relevant to the scope of plaintiff’s injuries and her credibility. The defendant noted that plaintiff alleged that she was quite active before the accident and had posted photographs on Facebook reflective of that fact, thus affording a basis to conclude her Facebook account would contain evidence relating to her activities. The defendant cited the claims that plaintiff can no longer cook, travel, participate in sports, horseback ride, go to the movies, attend the theater, or go boating, contending that photographs and messages she posted on Facebook would likely be material to these allegations and her claim that the accident negatively impacted her ability to read, write, word-find, reason and use a computer.

The plaintiff opposed the motion arguing that defendant failed to establish a basis for access to the “private” portion of her Facebook account because the “public” portion contained only a single photograph that did not contradict plaintiff’s claims or deposition testimony.

The Court of Appeals was faced with the Appellate Division’s conclusion in the discovery dispute that the defendant had not met his threshold burden of showing that the materials from plaintiff’s Facebook account that were ordered to be disclosed by the Supreme Court’s order “were reasonably calculated” to contain evidence “material and necessary” to the litigation. In reversing the Appellate Division, the Court of Appeals ruled that the Appellate Division “erred in modifying Supreme Court’s order to further restrict disclosure of plaintiff’s Facebook account, limiting discovery to only those photographs plaintiff intended to introduce at trial. With respect to the items Supreme Court ordered to be disclosed (the only portion of the discovery request we may consider), defendant more than met his threshold burden of showing that plaintiff’s Facebook account was reasonably likely to yield relevant evidence. At her deposition, plaintiff indicated that, during the period prior to the accident, she posted “a lot” of photographs showing her active lifestyle. Likewise, given plaintiff’s acknowledged tendency to post photographs representative of her activities on Facebook, there was a basis to infer that photographs she posted after the accident might be reflective of her post-accident activities and/or limitations. The request for these photographs was reasonably calculated to yield evidence relevant to plaintiff’s assertion that she could no longer engage in the activities she enjoyed before the accident and that she had become reclusive. It happens in this case that the order was naturally limited in temporal scope because plaintiff deactivated her Facebook account six months after the accident and Supreme Court further exercised its discretion to exclude photographs showing nudity or romantic encounters, if any, presumably to avoid undue embarrassment or invasion of privacy.”

In addition, the Court stated “it was reasonably likely that the data revealing the timing and number of characters in posted messages would be relevant to plaintiff’s claim that she suffered cognitive injuries that caused her to have difficulty writing and using the computer, particularly her claim that she is painstakingly slow in crafting messages.”

100% Abatement For Warranty Of Habitability Breach Found Excessive

100% Abatement for Warranty of Habi tability Breach Found Excessive
In Israel Realty v. Shkolnikov, a Sublessor (i.e., the “landlord” of the subtenant) appealed from a final judgment awarding its subtenant a 100 percent rent abatement, dismissing the nonpayment summary proceeding, and awarding the subtenant over $28,000 in attorney fees. The Subtenant cross-appealed the judgment limiting her attorney fees recovery to the amount the trial court had found reasonable.


The Appellate Court found evidence supported the trial court’s decision of a “breach of the warranty of habitability” when the subtenant’s ground floor terrace was closed to be used as a staging area to erect scaffolding to perform mandatory Local Law 11 repair work on the building facade.


New York’s Real Property Law § 235-B, titled “Warranty of habitability” provides, in part, as follows:

In every written or oral lease or rental agreement for residential premises
the landlord or lessor shall be deemed to covenant and warrant that the
premises so leased or rented and all areas used in connection therewith in
common with other tenants or residents are fit for human habitation and for
the uses reasonably intended by the parties and that the occupants of such
premises shall not be subjected to any conditions which would be dangerous,
hazardous or detrimental to their life, health or safety. When any such
condition has been caused by the misconduct of the tenant or lessee or
persons under his direction or control, it shall not constitute a breach of
such covenants and warranties.

The Court rejected the sublessor’s attempt to avoid liability for breach, and recognized that a “subtenant may properly assert the warranty of habitability as a defense to a nonpayment claim by a sublessor/proprietary lessee of an apartment” and it made no difference that “the ‘culprit’ is the cooperative, since the statutory warranty of habitability can apply to conditions resulting
from events beyond a landlord’s control.” Additionally, the Court recognized that an “exculpatory clause in the parties’ sublease agreement was not a bar to the defense of the breach of the warranty of habitability, ‘since section 235-b of the Real Property Law voids any lease provision that purports to modify any tenant’s rights arising thereunder.’”

However, the Court concluded that the 100 percent abatement was excessive, ruling instead that a 60 percent abatement more closely represents “the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach.” The Court reasoned: “This reduced batement, though substantial, was warranted by the evidence, which showed, inter alia, that respondent was completely deprived of use of the patio area, which was nearly twice the size of the interior of the apartment, and that the scaffolding work and the resulting dust accumulation prevented respondent from opening her windows and reduced the amount of light, air and ventilation inside the partment.”

The Court concluded that as the “prevailing party in this proceeding,” the subtenant “was entitled to attorneys’ fees pursuant to paragraph 28 of the proprietary lease, which was incorporated by reference into the sublease, and the reciprocal provisions of Real Property Law §234. Viewing the evidence presented in light of all relevant factors, including the time and labor required, the difficulty of the questions involved, and the lawyer’s experience, ability and reputation, we find, based upon our independent review of the record, that the fee award was reasonable under the circumstances.”

This newsletter is provided by Hamburger, Maxson, Yaffe & McNally LLP to keep its clients, prospective clients, and other interested parties informed of current legal developments that may affect or otherwise be of interest to them, and to learn more about our firm, our services and the experiences of our attorneys. The information is not intended as legal advice or legal opinion and should not be construed as such