New York Legal Update

Town's Repavement Of Street Onto Plaintiff's Property Constituted A De Facto Taking Not A Trespass

Your Town repaves your street. Suppose in doing so the Town paves over part of your property. What just happened. Is it a nuisance?, a trespass?, a taking? just negligence? This issue was confronted today in the Third Department's decision in Smith v Town of Long Lake, 2007 NY Slip Op 04555. In that case, in the fall of 1997, the defendant Town repaved a street. Almost seven years later, in April 2004, the plaintiffs, who owned a house adjacent to that street, filed a notice of claim and subsequently in September 2004, commenced an action in trespass, nuisance and negligence alleging that the repaving encroached on their property by 5 to 10 feet and caused an increased volume of surface water to be discharged onto their property. According to plaintiffs, this runoff eroded their property and compromised the structural integrity of their home. Plaintiffs sought injunctive relief as well as monetary damages. Since the case was initiated seven years after the repavement, the Town obviously moved for summary judgment dismissing the complaint as barred by the statute of limitations. The Supreme Court granted the Town's motion. In doing so, the Supreme Court found that the paving constituted a de facto taking and rejected the plaintiffs' notion there was a continuing trespass. The Third Department affirmed stating that entry onto the property of another cannot be both a trespass and a taking, and that a de facto appropriation differs from a trespass by the extent of its egregiousness and permanence. Here, the Third Department found that there was no question of fact that a de facto taking occurred because the Town permanently interfered with plaintiffs' physical use, possession and enjoyment of their land. The Court stated, "In short, if the interference with the owner's use of the land is complete, it can only be a de facto taking not a trespass."

Department of Agriculture and Markets Extends Quarantine of Asian Long Horned Beetle To Staten Island

The Asian Long Horned Beetle is a destructive wood-boring insect native to parts of Asia. It can cause serious damage to healthy trees. The beetle was first detected in the Greenpoint section of Brooklyn in 1996. Subsequent infestations were found in other parts of Brooklyn, Amityville, Queens and Manhattan. As a result, 1 NYCRR Part 139 was adopted establishing a quarantine of the areas in which the beetle was observed. Recently, the beetle has been discovered in Staten Island. Thus, yesterday, the Department of Agriculture and Markets extended the quarantine of the beetle to Staten Island. The beetle is controlled by the removal of infested trees and materials and then chipping or burning them. Chemical treatments are also used to suppress the beetle population. Under the quarantine: (1) nurseries exporting material from the quarantine area will require an inspection; (2) tree removal services will have to chip host material or transport material under permit to a disposal site; (3) firewood from the quarantine area may not be removed from the area; and (4) certain yard waste, storm clean-up, and normal tree maintenance will require proper handling and disposal. The full text of the Department's rule making can be read by Clicking Here (see pages 1-4).

Spitzer Creates Commission To Help New York Maintain Its Status As The World Financial Capital

Governor Spitzer has been on a tear creating various commissions seeking to streamline and update various state laws and agencies. Yesterday in a Press Release the Governor announced the creation of yet another commission. This commission will be charged with identifying ways for New York to retain and enhance its status as a world financial capital. "The financial world has changed and we must change with it to retain our leadership position,” Governor Spitzer said. “This panel will help the state bring its regulatory structure into the 21st Century, encouraging the use of cutting edge technology and techniques to provide capital, insurance and other services to companies and individuals around the country and the globe.” The New York State Commission to Modernize the Regulation of Financial Services, which will include representatives from industry, consumer groups and government, will review all current financial services statutes, regulations, rules and policies and propose legislative and other necessary changes. State Insurance Superintendent Eric Dinallo will chair the new commission.

Four separate New York state agencies—the Insurance Department, the Banking Department, the Department of State and the Attorney General’s Office—currently all regulate the financial services industry. The Commission will be charged with identifying ways in which these regulatory powers can be integrated, rationalized, and changed in order to promote economic innovation while also protecting the consumer. The commission will make detailed recommendations for administrative and legal reform by June 30, 2008. For the text of the Governor's Executive Order Click Here.

Proposed Changes In Standards For IOLA Accounts

The Board of Trustees of the Interest on Lawyer Account Fund (IOLA) is proposing to revised the standards for IOLA accounts. It is proposing the repeal Part 7000 of 21 NYCRR, and to replace it with an entirely new part 7000.

The purpose of the IOLA Fund is to provide funding to not-for-profit entities that provide civil legal services to the poor. Created in 1983, the IOLA program requires an attorney to open an IOLA bank account to deposit nominal or short term funds held by the attorney on behalf of a client or third party. Funds that would thus otherwise generate no net interest can be pooled to generate interest income. The banks where the IOLA accounts are created are then required to send the interest earned to the IOLA fund, and this money is used to award grants to civil legal service providers. Historically, the interest rates paid on IOLA accounts have been equivalent to the type of interest on accounts bearing the lowest interest rates, i.e. "NOW" accounts. In the proposed new standards, the IOLA Board is seeking to increase the interest rates payable on IOLA accounts.

Thus, the most significant revision will be to require attorneys to maintain their IOLA accounts only in banks that meet a "best customer" standard for the interest paid on such accounts. In other words, the interest rate paid on the IOLA account must be at least as great as the rate the bank offers its best customers on similarly-sized accounts at the bank. Thus, if an attorney or law firm maintain their IOLA account at a bank that will no longer be eligible to maintain IOLA accounts because they do not pay the best customer interest rate required by the rule, the attorney or law firm will need to change the location of their IOLA account to an eligible institution.

The full text of the proposed rule changes is published in today's release of the State Register. Scroll down to pages 13 through 19. Public comment on the proposed changes will be received for 45 days. See also the Governor's Press Release.

Court Dismisses Plaintiff's Cause Of Action Based On Inadequate Safety Chains Between Subway Cars

It is not a good idea to walk between subway cars. An interesting little personal injury decision issued by the First Department yesterday demonstrates this. In Nowack v New York City Tr. Auth., 2007 NY Slip Op 04539, the plaintiff was injured when he fell between subway cars. Part of his complaint alleged that the safety chains between the subway cars were inadequate. The New York City Transit Authority moved for summary judgment, on qualified immunity grounds, to dismiss that part of the complaint. The Transit Authority submitted evidence from an expert engineer that the safety chain restraint at issue was a rational, efficient and practical design utilized for generations in New York City's narrow, twisting and undulating subway tunnels. This opinion from the expert was also corroborated by a 1982 National Transportation Safety Board study as well as by internal Transit Authority correspondence and memoranda included in that study. The Supreme Court granted the motion and the First Department affirmed as the plaintiff failed to raise an issue of fact that the safety chain restraint system evolved without adequate study, or that its design and use lacked a reasonable basis under the circumstances.

Nassau County's Civil Forfeiture Provision Does Not Violate State Civil Rights Law

Civil Rights Law § 79-b provides in part that, "A conviction of a person for any crime, does not work a forfeiture of  any  property, real  or  personal, or any right or interest therein." In contrast to this provision, CPLR article 13-A, which was enacted in 1984, specifically authorizes that, "A civil action may be commenced by [an] appropriate claiming authority against a criminal defendant to recover the property which constitutes . . . an instrumentality of a crime."

Under the exception provided by CPLR article 13-A, Nassau County adopted a civil forfeiture provision - Administrative Code of the County of Nassau § 8-7.0(g). That provision authorizes the County to commence a civil forfeiture action to obtain title to the "instrumentality" of a crime, which is defined as "any property, other than real property and any buildings, fixtures, appurtenances, and improvements thereon, whose use contributes directly and materially to the commission of any offense."

In County of Nassau v Pazmino, 2007 NY Slip Op 04436, the Second Department held last week that Nassua's § 8-7.0(g) does not violate Civil Rights Law § 79-b. In that case, the defendant was convicted of driving while ability impaired, in violation of Vehicle and Traffic Law § 1192(1). Thereafter, pursuant to § 8-7.0(g) Nassau County commenced this civil forfeiture action, seeking title to the vehicle the defendant was driving when he was arrested. The defendant and the titleholder of the vehicle moved to dismiss the complaint on the grounds that § 8-7.0(g) violated Civil Rights Law § 79-b. The Supreme Court denied the motion and the Second Department affirmed. The Court suggested that the real purpose of Civil Rights Law § 79-b was to prevent a general forfeiture of a defendant's interest in any property simply because of a conviction. Since § 8-7.0(g) was couched in terms of an "instrumentality" of a crime, as specifically allowed by CPLR article 13-a, it did not run afoul of Civil Rights Law § 79-b.

Court Vacates Orders Terminating Parental Rights Because Of Inordinate Delay Of Proceedings

How long should a proceeding to terminate parental rights (Social Services Law § 384-b) take? Last week the Second Department was unsatisfied with a proceeding that took nearly six years (Matter of Dustin H. v Raymond H., 2007 NY Slip Op 04493). In that case it took over a year to begin a fact-finding hearing after the filing of the petition, it took four years to complete the fact-finding hearing, and it took another nine months for a disposition. After this length of this time, the Family Court issued orders of permanent neglect and placed the children at issue up for adoption. The Second Department noted that a timely procedure serves the best interests of the child as obviously the sooner a child can receive the benefits of a nurturing relationship the better. And in this case the Court found that the inordinate amount of time it took to complete the procedure contravened "fundamental fairness." What remedy did the Second Department impose? It reversed the fact-finding and dispositional orders, and remitted the matter to the Family Court for new fact-finding and dispositional hearings before a different judge, which the Court directed, "shall be reached with all convenient speed" [Note: there was also an evidentiary issue which swayed the Court]. Isn't it ironic that the Court's remedy would only result in more delay. Was the Court without any other authority to finally dispose of the matter? It is unclear from the Court's decision why it simply it did not use its factual review power to either agree with or disagree with the finding of neglect. This at a minimum would have obviated the need for an additional fact-finding hearing.

First Department Issues Conflicting Decisions On Whether Davis-Bacon Allows Private Right Of Action

The Davis-Bacon Act (now 40 USC § 3141 et seq.) is a federal law which requires the payment of prevailing wages on federally funded public works projects. In Gonzalez v D & S Zaffuto Joint Venture, 271 AD2d 356 [2000], the First Department held that "no private right of action exists to enforce contracts requiring payment of Federal Davis-Bacon Act . . . prevailing wages."

Yesterday, the First Department revisited Gonzalez in two separate appeals, before two separate panels, and came to completely opposite conclusions; one upholding Gonzalez and one holding that Gonzalez was wrongly decided and should not be followed.

The first case yesterday was Araujo v Tiano's Constr. Corp., 2007 NY Slip Op 04401 [before Justices Tom, Andrias, Marlow, Williams, and McGuire(dissenting)]. There the plaintiff brought causes of action for breach of contract, quantum meruit and unjust enrichment, based on their claims that they were paid less than the minimum prevailing wages set pursuant to the Davis-Bacon Act. In a brief decision, the majority, citing Gonzalez, briefly stated that no private right of action existed to enforce, either directly or indirectly, contracts requiring payment of federal prevailing wage schedules, and that the plaintiffs' remedy lied in administrative proceedings.

The second case was Cox v NAP Constr. Co., Inc., 2007 NY Slip Op 04402 [before Justices Sullivan, Williams(concurring and dissenting in part), Buckley, Catterson, and McGuire]. At issue in that appeal was the plaintiffs' causes of action under Labor Law § 190, § 191 and § 198-c for failure to pay agreed-upon wages, overtime compensation, benefits and wage supplements, and Labor Law § 655 and 12 NYCRR 142-3.2 for failure to pay overtime compensation all in violation of the prevailing wages requirements under the Davis-Bacon Act. The majority of this panel found that Gonzalez was wrongly decided, and found that the Davis-Bacon Act did not preempt or otherwise preclude state law causes of action, be they common law or statutory, seeking payment of the very wages the Davis-Bacon Act required. It thus declined to follow Gonzalez, and allowed the causes of action at issue to proceed.

The Court of Appeals will obviously have to address and resolve this conflict. Stay tuned.

Evidence Of Subsequent Slips And Falls Held Admissible

Personal injury lawyers out there, you'll want to put this case in your tool box - Petrilli v Federated Dept. Stores, Inc., 2007 NY Slip Op 04389. The plaintiff slipped and fell on clean, dry tile flooring at the entrance of a department store owned by defendants. Before trial, the defendants made a motion to preclude the plaintiff from introducing evidence of subsequent accidents at the same location. The Supreme Court denied the motion, permitting the evidence at trial, and the  jury returned a verdict in favor of plaintiff. On appeal, the defendants argued that the Supreme Court erroneously permitted plaintiff to introduce evidence of subsequent similar accidents. However, the Third Department rejected the argument and affirmed the verdict. Because the plaintiff did not allege that he tripped over a deformity in the tile or slipped on a wet floor, but instead premised his claim on the allegation that the tiles were inherently slippery and, thus, inappropriate for use at a store entrance, the Court found that the evidence was probative on the issue of whether a dangerous condition existed. The Court also rejected the defendant's assertion that proof of subsequent accidents was only admissible in design defect cases. While the Third Department acknowledged that design defect cases present a situation where both prior and subsequent accidents are potentially relevant to establish that a dangerous condition existed, it also stated that it is possible for a plaintiff to allege that a defendant used a product in such a manner as to create a permanent, or inherent, dangerous condition, without alleging any defect in the product itself. Here, the plaintiff submitted expert testimony which established that the tile was not defective, but was being negligently misused because it was an inappropriate choice of tile for the entrance to a store. Under such circumstances, the Court found that records of subsequent accidents were relevant to establish whether the condition created by defendants was unreasonably unsafe.   

September 11th Survivor Denied Accidental Death Benefits For Subsequent Heart Attack

The attacks of September 11th continue to reverberate. Yesterday a woman who died of lung disease five months after Sept. 11th was added to New York City's medical examiner's list of attack victims, marking the first time the city has officially linked a death to the toxic dust caused by the World Trade Center's collapse. For that story Click Here.

In another development today, the Third Department decided a case concerning a survivor of the attack who suffered a heart attack some 6 months after the attack - Matter of Varriano v Hevesi,  2007 NY Slip Op 04396. The man at issue worked as a general manager of operations and maintenance for the Port Authority at the World Trade Center. He was working on the 88th floor of World Trade Center One when the attack occurred. He survived the attack as he escaped the structure immediately before it collapsed. Many of his coworkers did not survive however. In the months that followed, his work reportedly became, at times, virtually around the clock as he took on duties some formerly done by his many deceased coworkers. He also took on the task of notifying families when remains were found and attending over 50 funerals. As explained by his wife, the pressures of this work and the anguish from losing so many friends and coworkers caused a formerly cheerful and energetic man to become moody, melancholy and exhausted. Sadly, on March 31, 2002, at the age of 44, he suffered a fatal heart attack while at home with his family.

Thereafter, his wife filed an application for accidental death benefits with the New York State and Local Employees Retirement System. The application was denied and his wife filed an appeal. At the ensuing hearing, the Retirement System acknowledged that the events of September 11th constituted an "accident," but maintained that the death was not the natural and proximate result of that event. Conflicting medical evidence was presented at the hearing. The wife's expert concluded that decedent's death was "at least in part due to stresses which he sustained in the course of his employment." The Retirement System's expert disagreed and concluded that decedent's death was the result of a preexisting condition and unrelated to September 11th or the events thereafter. The Hearing Officer found the Retirement System's expert to be "credible and persuasive" and, accordingly, denied the application for death benefits. The proceeding mentioned above ensued.

In affirming the denial of the benefits, the Third Department found that there was substantial evidence in the record to support the Retirement System's conclusion, and that it was not at liberty to substitute its  assessment of the medical evidence for that of Retirement System's so long as there was adequate evidence to support that determination. The Court reviewed the Retirement System's expert's evidence which indicated that the autopsy report put the cause of death as coronary arteriosclerosis, which the expert characterized as a preexisting disease of the coronary arteries. The expert added that decedent's medical records revealed several risk factors associated with arteriosclerosis, including excess weight, high blood pressure, hypertension, high cholesterol and heavy smoking. He opined that the development of arteriosclerosis takes decades and that emotional stress over the length of time implicated in the case would not have a significant effect in causing a heart attack. While the wife presented conflicting expert testimony, the Court again noted that when varying medical opinions are offered, the Retirement System was "vested with the authority to weigh conflicting medical evidence and credit the opinion of one expert over that of another."

As these two incidents illustrate, it will take a very long time before all the myriad physical (and emotional) effects on the survivors of the attacks are fully appreciated, understood, quantified, and addressed. Thus, it is important that we always keep that horrible day in mind so that we may better empathize with the survivors.