Extension of time to respond to discovery demands

Posted on February 20, 2023 by Richard Klass

C Castle Group Corp. v Herzfeld & Rubin, P.C., 211 AD3d 1006, 1007 [2d Dept 2022] serves as a good reminder to ask for an extension of time to respond to discovery demands, such as a notice to admit in that case, when appropriate. The court held:

CPLR 2004 provides: “Except where otherwise expressly prescribed by law, the court may extend the time fixed by any statute, rule or order for doing any act, upon such terms as may be just and upon good cause shown, whether the application for extension is made before or after the expiration of the time fixed.” “In exercising its discretion to grant an extension of time pursuant to CPLR 2004, a court may consider such factors as the length of the delay, the reason or excuse for the delay, and any prejudice to the opponent of the motion” (Ibrahim v. Nablus Sweets Corp., 161 A.D.3d 961, 963, 77 N.Y.S.3d 439 [internal quotation marks omitted]; see Tewari v. Tsoutsouras, 75 N.Y.2d 1, 11–12, 550 N.Y.S.2d 572, 549 N.E.2d 1143).

Similarly, to be relieved of the adverse impact of the conditional order, a party must demonstrate “(1) a reasonable excuse for the failure to produce the requested [discovery] and (2) the existence of a meritorious claim or defense” (Gibbs v. St. Barnabas Hosp., 16 N.Y.3d 74, 80, 917 N.Y.S.2d 68, 942 N.E.2d 277; see Fortino v. Wheels, Inc., 204 A.D.3d 756, 757–758, 166 N.Y.S.3d 660). “The determination of what constitutes a reasonable excuse lies within the Supreme Court’s discretion” (Burro v. Kang, 167 A.D.3d 694, 698, 90 N.Y.S.3d 298 [internal quotation marks omitted]). “The court has discretion to accept law office failure as a reasonable excuse (see CPLR 2005) where that claim is supported by a detailed and credible explanation of the default at issue” (Scholem v. Acadia Realty L.P., 144 A.D.3d 1012, 1013, 42 N.Y.S.3d 214).

Richard A. Klass, Esq.
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Richard A. Klass, Esq., maintains a law firm engaged in civil litigation at 16 Court Street, 28th Floor, Brooklyn, New York. He may be reached at (718) COURT●ST or RichKlass@courtstreetlaw.com with any questions.

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Harm caused by professional negligence

Posted on February 2, 2023 by Richard Klass

In Betz v Blatt, 211 AD3d 1004 [2d Dept 2022], the court held:

Although an attorney representing the executor of an estate, generally, is not liable to the beneficiaries of the estate (see Kramer v. Belfi, 106 A.D.2d 615, 616, 482 N.Y.S.2d 898), as the attorney does not represent the estate itself (see Betz v. Blatt, 116 A.D.3d at 816, 984 N.Y.S.2d 378; Matter of Hof, 102 A.D.2d 591, 593, 478 N.Y.S.2d 39), when fraud, collusion, malicious acts, or other special circumstances exist, an attorney may be liable to those third parties, even though not in privity with them, for harm caused by professional negligence (see Davis v. Farrell Fritz, P.C., 201 A.D.3d 869, 871, 163 N.Y.S.3d 82; Betz v. Blatt, 160 A.D.3d at 698, 74 N.Y.S.3d 75).

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No single statute of limitations for causes of action alleging breach of fiduciary duty

Posted on January 20, 2023 by Richard Klass

In Jadidian v Goldstein, 210 AD3d 969, 969-70 [2d Dept 2022], the court affirmed the dismissal of a claim against an attorney based on the statute of limitations, holding:

Contrary to the plaintiffs’ contention, the Supreme Court properly granted that branch of the defendants’ motion which was to dismiss the cause of action alleging breach of fiduciary duty. There is no single statute of limitations for causes of action alleging breach of fiduciary duty (see IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d 132, 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; Matter of Hersh, 198 A.D.3d 766, 769, 156 N.Y.S.3d 243). “Where the relief sought is equitable in nature, the statute of limitations is six years, and where the relief sought is purely monetary, the statute of limitations is generally three years” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243). However, “regardless of the relief sought, ‘where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213(8)’ ” (id., quoting IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 139, 879 N.Y.S.2d 355, 907 N.E.2d 268; see McDonnell v. Bradley, 109 A.D.3d 592, 594, 970 N.Y.S.2d 612). A cause of action alleging breach of fiduciary duty “accrues at the time of the [alleged] breach, even though the injured party may not know of the existence of the wrong or injury” (Matter of Hersh, 198 A.D.3d at 769, 156 N.Y.S.3d 243 [internal quotation marks omitted]; see Sternberg v Continuum Health Partners, Inc., 186 A.D.3d 1554, 1557, 131 N.Y.S.3d 356).

Here, the cause of action alleging breach of fiduciary duty was subject to a three-year statute of limitations since the relief sought was monetary in nature and the complaint failed to allege all the requisite elements of fraud, including justifiable reliance (see Eurycleia Partners, LP v. Seward & Kissel, LLP, 12 N.Y.3d 553, 562, 883 N.Y.S.2d 147, 910 N.E.2d 976; IDT Corp. v Morgan Stanley Dean Witter & Co., 12 N.Y.3d at 140, 879 N.Y.S.2d 355, 907 N.E.2d 268; Oppedisano v. D’Agostino, 196 A.D.3d 497, 499, 151 N.Y.S.3d 150). As the plaintiffs maintain, the cause of action alleging breach of fiduciary duty began to run, at the latest, on January 11, 2016, when the defendants allegedly commenced the prior legal malpractice action “to cover up their … negligence.” Thus, since the plaintiffs did not commence the instant action until March 24, 2021, more than three years later, the cause of action alleging breach of fiduciary duty was time-barred.

Richard A. Klass, Esq.
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Dismissal of action on statute of limitations grounds

Posted on January 10, 2023 by Richard Klass

In Kreutzberg v Law Offices of John Riconda, P.C., 210 AD3d 884, 884-85 [2d Dept 2022], the court upheld the dismissal of the client’s action on statute of limitations grounds, holding:

On a motion to dismiss a cause of action pursuant to CPLR 3211 (a) (5) on the ground that it is barred by the statute of limitations, a defendant bears the initial burden of establishing, prima facie, that the time in which to sue has expired (see Van Der Velde v New York Prop. Underwriting Assn., 205 AD3d 970, 971 [2022]; Joseph v Fensterman, 204 AD3d 766, 769 [2022]; Tulino v Hiller, P.C., 202 AD3d 1132, 1134-1135 [2022]; Deutsche Bank Natl. Trust Co. v Blank, 189 AD3d 1678, 1679 [2020]). “If the defendant satisfies this burden, the burden shifts to the plaintiff to raise a question of fact as to whether the statute of limitations was tolled or otherwise inapplicable, or whether the plaintiff actually commenced the action within the applicable limitations period” (Deutsche Bank Natl. Trust Co. v Blank, 189 AD3d at 1679 [internal quotation marks omitted]).

The statute of limitations for a cause of action to recover damages for legal malpractice is three years (see CPLR 214 [6]; Tulino v Hiller, P.C., 202 AD3d at 1135), which accrues at the time the malpractice is committed, not when the client discovers it (see Shumsky v Eisenstein, 96 NY2d 164, 166 [2001]; Goodman v Weiss, Zarett, Brofman, Sonnenklar & Levy, P.C., 199 AD3d 659, 661 [2021]; Sclafani v Kahn, 169 AD3d 846, 848 [2019]).

Richard A. Klass, Esq.
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Act like Audrey. Dress like Jackie. Party like Gatsby. LawCURRENTS Winter 2023

Posted on January 3, 2023 by Richard Klass

She rented a Hamptons house for the summer. At the time of entering into the lease with the landlord, she paid $12,000 for the security deposit required under the lease.[1]

Failure to return the security deposit

At the end of the summer, the tenant requested the return of her security deposit. The landlord failed to comply with the lease and return the money. The landlord never provided the tenant with an itemized statement alleging any basis to retain any portion of the money. The tenant retained Richard A. Klass, Esq., Your Court Street Lawyer, to sue the landlord, claiming she was liable to Plaintiff for the amount of the security deposit with interest from the date the tenant vacated the premises.

NYS Security Deposit Law

On June 14, 2019, the New York State Legislature enacted the Housing Stability and Tenant Protection Act of 2019 (HSTPA), which made widespread changes to various laws affecting tenants’ rights. One of the major changes made under the HSTPA was to strengthen the rent security deposit laws. General Obligations Law § 7-108 provides that, within 14 days after a tenant has vacated the premises, the landlord has to provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and return any remaining portion of the deposit to the tenant. If the landlord fails to provide the itemized statement and deposit within 14 days, then the landlord forfeits any right to retain a portion of the security deposit.[2]

Motion for Summary Judgment

Once discovery proceedings were completed and both parties exchanged documentation concerning the claim, the tenant moved for summary judgment. It was urged that summary judgment be granted in favor of the tenant against the landlord for the full return of her security deposit. According to the tenant’s affidavit, at the end of the lease term and after she vacated the premises, the landlord failed to return her security deposit despite her repeated demands.

Summary judgment is proper when there are no issues of triable fact (Alvarez v. Prospect Hospital, 68 N.Y.2d 320, 324, 508 N.Y.S.2d 923, 501 N.E.2d 572 [1986]). Issue finding rather than issue determination is its function (Sillman v. Twentieth Century–Fox Film Corp., 3 N.Y.2d 395, 165 N.Y.S.2d 498, 144 N.E.2d 387 [1957]). The evidence will be construed in the light most favorable to the one moved against (Weiss v. Garfield, 21 A.D.2d 156, 249 N.Y.S.2d 458 [3rd Dept.1964]). “Where the court entertains any doubt as to whether a triable issue of fact exists, summary judgment should be denied.” (Daliendo v. Johnson, 147 A.D.2d 312, 543 N.Y.S.2d 987 [2d Dept.1989]). To prevail on a summary judgment motion, the moving party must produce evidentiary proof in admissible form sufficient to warrant the direction of summary judgment in his or her favor (GTF Mktg., Inc. v. Colonial Aluminum Sales, Inc., 66 N.Y.2d 965, 967, 498 N.Y.S.2d 786, 489 N.E.2d 755 [1985]). Once this burden is met, the burden shifts to the opposing party to submit proof in admissible form sufficient to create a question of fact requiring a trial (Kosson v. Algaze, 84 N.Y.2d 1019, 622 N.Y.S.2d 674, 646 N.E.2d 1101 [1995]).

Landlord failed to provide any proof

It was incumbent on the landlord to put forward in opposition to the motion her evidence in admissible form in order to raise an issue of fact. She has failed to do so. As held by the NYS Court of Appeals in Zuckerman v City of New York, 49 NY2d 557, 562 [1980], “We have repeatedly held that one opposing a motion for summary judgment must produce evidentiary proof in admissible form sufficient to require a trial of material questions of fact on which he rests his claim or must demonstrate acceptable excuse for his failure to meet the requirement of tender in admissible form.”

In her affidavit the landlord made the unsupported allegation that the tenant was notified of all damage “with [sic]” 14 days of the lease termination. However, she did not provide proof of compliance with General Obligations Law § 7-108(1-a)(e). There was NO itemized statement as required by statute (“the landlord shall provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and shall return any remaining portion of the deposit to the tenant.”). The email exchanges produced by the landlord in opposition did not indicate why certain areas and items needed to be cleaned or even whether items needed to be cleaned due to damage resulting from the tenancy or just being dirty from normal wear and tear. It was pointed out that General Obligations Law § 7-108(1-a)(f) provides: “In any action or proceeding disputing the amount of any amount of the deposit retained, the landlord shall bear the burden of proof as to the reasonableness of the amount retained.”

Summary Judgment Granted

In granting the tenant’s motion for summary judgment, the judge determined that the landlord “failed to proffer evidence to sufficiently rebut the plaintiff’s prima facie case. The emails nor the itemized invoices submitted indicated the basis for retaining the security deposit.” The judge granted judgment directing that the landlord pay the tenant back her $12,000 security deposit.

_____

Endnotes

[1] 3 (a) SECURITY DEPOSIT: Upon signing this lease agreement, Tenant shall pay the amount of $12,000 to the order of Landlord by bank/cashier’s check drawn on a U.S. bank or by electronic wire transfer, to be held as security by Landlord in a segregated account, as required by law. The security deposit may not be used as payment of rent. It is expressly understood and agreed that Tenant’s liability to perform the terms of this lease is in no way limited to the amount of the security deposit. Within fourteen (14) days after the tenant has vacated the premises, Landlord shall provide Tenant with an itemized statement indicating the basis for the amount of any deposit retained and shall return any remaining portion of the deposit to the Tenant.

[2] General Obligations Law § 7-108 provides, in relevant part:

This section shall apply to all dwelling units in residential premises, unless such dwelling unit is specifically referred to in section 7-107 of this title.

1-a. Except in dwelling units subject to the city rent and rehabilitation law or the emergency housing rent control law, continuing care retirement communities licensed pursuant to article forty-six or forty-six-A of the public health law, assisted living providers licensed pursuant to article forty-six-B of the public health law, adult care facilities licensed pursuant to article seven of the social services law, senior residential communities that have submitted an offering plan to the attorney general, or not-for-profit independent retirement communities that offer personal emergency response, housekeeping, transportation and meals to their residents:

(a) No deposit or advance shall exceed the amount of one month’s rent, unless the deposit or advance is for a seasonal use dwelling unit as provided for in subdivisions four and five of this section, or unless the deposit or advance is for an owner-occupied cooperative apartment as provided for in subdivision six of this section.

(b) The entire amount of the deposit or advance shall be refundable to the tenant upon the tenant’s vacating of the premises except for an amount lawfully retained for the reasonable and itemized costs due to non-payment of rent, damage caused by the tenant beyond normal wear and tear, non-payment of utility charges payable directly to the landlord under the terms of the lease or tenancy, and moving and storage of the tenant’s belongings. The landlord may not retain any amount of the deposit for costs relating to ordinary wear and tear of occupancy or damage caused by a prior tenant.

(c) After initial lease signing but before the tenant begins occupancy, the landlord shall offer the tenant the opportunity to inspect the premises with the landlord or the landlord’s agent to determine the condition of the property. If the tenant requests such inspection, the parties shall execute a written agreement before the tenant begins occupancy of the unit attesting to the condition of the property and specifically noting any existing defects or damages. Upon the tenant’s vacating of the premises, the landlord may not retain any amount of the deposit or advance due to any condition, defect, or damage noted in such agreement. The agreement shall be admissible as evidence of the condition of the premises at the beginning of occupancy only in proceedings related to the return or amount of the security deposit.

(d) Within a reasonable time after notification of either party’s intention to terminate the tenancy, unless the tenant terminates the tenancy with less than two weeks’ notice, the landlord shall notify the tenant in writing of the tenant’s right to request an inspection before vacating the premises and of the tenant’s right to be present at the inspection. If the tenant requests such an inspection, the inspection shall be made no earlier than two weeks and no later than one week before the end of the tenancy. The landlord shall provide at least forty-eight hours written notice of the date and time of the inspection. After the inspection, the landlord shall provide the tenant with an itemized statement specifying repairs or cleaning that are proposed to be the basis of any deductions from the tenant’s deposit. The tenant shall have the opportunity to cure any such condition before the end of the tenancy. Any statement produced pursuant to this paragraph shall only be admissible in proceedings related to the return or amount of the security deposit.

(e) Within fourteen days after the tenant has vacated the premises, the landlord shall provide the tenant with an itemized statement indicating the basis for the amount of the deposit retained, if any, and shall return any remaining portion of the deposit to the tenant. If a landlord fails to provide the tenant with the statement and deposit within fourteen days, the landlord shall forfeit any right to retain any portion of the deposit.

(f) In any action or proceeding disputing the amount of any amount of the deposit retained, the landlord shall bear the burden of proof as to the reasonableness of the amount retained.

(g) Any person who violates the provisions of this subdivision shall be liable for actual damages, provided a person found to have willfully violated this subdivision shall be liable for punitive damages of up to twice the amount of the deposit or advance.

Richard A. Klass, Esq.
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