Lou and The Law

*Supreme Court Adopts “Nerve Center” Test for Determining a Corporation’s “Principal Place of Business,” for Diversity Purposes.

March 2, 2010 · Leave a Comment

Pursuant to 28 USC § 1332, a corporation shall, for the purposes of determining diversity “be deemed to be a citizen of any State by which it has been incorporated and of the State where it has its principal place of business, except that in any direct action against the insurer of a policy or contract of liability insurance, whether incorporated or unincorporated, to which action the insured is not joined as a party-defendant, such insurer shall be deemed a citizen of the State of which the insured is a citizen, as well as of any State by which the insurer has been incorporated and of the State where it has its principal place of business.”

Where a corporation’s “principal place of business” is, has engendered various tests, such as “total activities,” “center of gravity,” “nerve center,” “locus of operations,” or “center of corporate activities.” Judge Breyer, writing for a unanimous Supreme Court, this past week, in Hertz Corp. v. Friend et al., set forth which test is the one to use now.

In Hertz he wrote that “[i]n an effort to find a single, more uniform interpretation of the statutory phrase, ["principal place of business,"] we have reviewed the Courts of Appeals’ divergent and increasingly complex interpretations. … . We conclude that “principal place of business” is best read as referring to the place where a corporation’s officers direct, control, and coordinate the corporation’s activities. It is the place that Courts of Appeals have called the corporation’s “nerve center.” And in practice it should normally be the place where the corporation maintains its headquarters—provided that the headquarters is the actual center of direction, control, and coordination, i.e., the “nerve center,” and not simply an office where the corporation holds its board meetings (for example, attended by directors and officers who have traveled there for the occasion).
… [T]his approach, while imperfect, is superior to other possibilities.”

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*When will New York adopt the Mode of Operation Rule?

February 11, 2010 · 3 Comments

You may not have heard of the Mode of Operation Rule, but this rule, applied in slip or trip and falls cases in self-service retail establishment, such as Wal-Mart, has been adopted by over 20 states including Connecticut, Massachusetts, Vermont and New Jersey.

My research fails to reveal one State Court case in New York*, adopting the rule let alone even mentioning it. Why this is, I don’t know for upon its application a defendant is put in the position of disproving that which the plaintiff was normally required to prove.

The rule provides that If a proprietor could reasonably anticipate a hazard could arise based on the manner in which his business regularly operates, a plaintiff does not have to prove actual or constructive notice of the hazard.

Or said another way in a case where the plaintiff slipped on beans:

“That someone was negligent seems clear enough. Vegetable debris carries an obvious risk of injury to a pedestrian. A prudent man would not place it in an aisle or permit it to remain there.

When greens are sold from open bins on a self-service basis, there is the likelihood that some will fall or be dropped to the floor. If the operator chooses to sell in this way, he must do what is reasonably necessary to protect the customer from the risk of injury that mode of operation is likely to generate; and this whether the risk arises from the act of his employee or of someone else he invites to the premises. The operator’s vigilance must be commensurate with that risk. …

Here the hazard could have been caused by (1) carelessness in the manner in which the beans were piled and displayed; or (2) carelessness of an employee in handling the beans thereafter; or (3) carelessness of a patron. As to (1) and (2), defendant is chargeable whether or not it was aware of its employee’s neglect. Defendant’s knowledge is relevant only as to (3), but even there, since the patron’s carelessness is to be anticipated in this self-service operation, defendant is liable, even without notice of the bean’s presence on the floor, if (4) defendant failed to use reasonable measures commensurate with the risk involved to discover the debris a customer might leave and to remove it before it injures another patron.

The customer is hardly in a position to know precisely which was the neglect. Overall the fair probability is that defendant did less than its duty demanded, in one respect or another. At least the probability is sufficient to permit such an inference in the absence of evidence that defendant did all that a reasonably prudent man would do in the light of the risk of injury his operation entailed. It is just, therefore, to place “the onus of producing evidence upon the party who is possessed of superior knowledge or opportunity for explanation of the causative circumstances.” Wollerman v. Grand Union Stores, Inc. 47 N.J. 426 (1966)

This theory of liability is not like the recurring dangerous condition cases, “where even absent proof that a defendant has actual knowledge of the condition on the date of the accident, a defendant’s actual knowledge of the recurrent condition constitutes constructive notice of each specific recurrence of it,” Erikson v. J.I.B. Realty Corp., 12 A.D.3d 344 (2nd Dept. 2004) as there is no need to show that the condition was recurring in a Mode of Operation Rule case.

* A New York District Court Case, DeLotch v. Wal-Mart Stores, Inc., 2008 U.S. Dist. LEXIS 47134, discusses it but rejects it on the authority of Gordon v. Am. Museum of Natural History, 67 N.Y.2d 836, 837, 492 N.E.2d 774, 501 N.Y.S.2d 646 (1986); and Faricelli v. TSS Seedman’s Inc., 94 N.Y.2d 772, 720 N.E.2d 864, 698 N.Y.S.2d 588 (1999) However, Gordon did not involve a large self service store and it appears that the Mode of Operation Rule was not put forth in Faricelli

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*All you wanted to know about how they fill out a Police Accident Report (MV-104A) but were afraid to ask.

February 6, 2010 · Leave a Comment

The State of New York, Department of Motor Vehicles, Police Accident Report Manual, with Truck and Bus Supplement can be found here. It is broken down into parts and the Cover page and Table of Contents and the first four pages can be found here.

The manual has also been added to my list of links.

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*NYS 2009 Annual Ranking of Automobile Insurance Complaints

January 18, 2010 · Leave a Comment

The New York State Insurance Department has come out with the 2009 Annual Ranking of Automobile Insurance Complaints, which reflects the results for 2008. Of interest to me is that Liberty Mutual Group dropped from 14 in 2007 to 22 in 2008. The lower the number the better. What has happen to Liberty Mutual since I left in late 2007? Also St Paul Travelers Group dropped from 19 in 2007 to 23 in 2008, for those of you who might be interested, and you know who you are.

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*My Additional Notice of Motion Language – In light of 2007 Amendments.

December 31, 2009 · 3 Comments

It has come to my attention that in State Court actions some people are still not using (possibly due to the reliance on forms) the language on notices of motion that require an adversary to serve a cross motion seven days before the return date (instead of three days) and to bring to an adversaries attention the new rules governing the timing for service by mail or overnight delivery of cross motions (although my PLEASE TAKE FURTHER NOTICE speaks to answering papers as well.) I suggest the following (and include the statutory language below.) Any comments regarding changes will be appreciated.

PLEASE TAKE FURTHER NOTICE that pursuant to Rule 2214(b) of the CPLR, answering affidavits, affirmations or any notice of cross-motion, with supporting papers, if any, shall be served at least seven days before the time this motion is noticed to be heard.

PLEASE TAKE FURTHER NOTICE that pursuant to Rule 2215 of the CPLR, if such answering affidavit, affirmation or notice and any supporting papers are served by mailing, as provided in paragraph two of subdivision (b) of rule 2103, they shall be served three days earlier than as prescribed in Rule 2215; and if served by overnight delivery, as provided in paragraph six of subdivision (b) of rule 2103, they shall be served one day earlier than as prescribed in Rule 2215.

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Rule 2214. Motion papers; service; time.
(b) Time for service of notice and affidavits. A notice of motion and supporting affidavits shall be served at least eight days before the time at which the motion is noticed to be heard. Answering affidavits shall be served at least two days before such time. Answering affidavits and any notice of cross-motion, with supporting papers, if any, shall be served at least seven days before such time if a notice of motion served at least sixteen days before such time so demands; whereupon any reply or responding affidavits shall be served at least one day before such time.

Rule 2215. Relief demanded by other than moving party.
At least three days prior to the time at which the motion is noticed to be heard, or seven days prior to such time if demand is properly made pursuant to subdivision (b) of rule 2214, a party may serve upon the moving party a notice of cross-motion demanding relief, with or without supporting papers; provided, however, that:
(a) if such notice and any supporting papers are served by mailing, as provided in paragraph two of subdivision (b) of rule 2103, they shall be served three days earlier than as prescribed in this rule; and
(b) if served by overnight delivery, as provided in paragraph six of subdivision (b) of rule 2103, they shall be served one day earlier than as prescribed in this rule. Relief in the alternative or of several different types may be demanded; relief need not be responsive to that demanded by the moving party.

Rule 2103. Service of papers.
(b) Upon an attorney. Except where otherwise prescribed by law or order of court, papers to be served upon a party in a pending action shall be served upon the party’s attorney. Where the same attorney appears for two or more parties, only one copy need be served upon the attorney. Such service upon an attorney shall be made:
…
2. by mailing the paper to the attorney at the address designated by that attorney for that purpose or, if none is designated, at the attorney’s last known address; service by mail shall be complete upon mailing; where a period of time prescribed by law is measured from theservice of a paper and service is by mail, five days shall be added to the prescribed period; or
…
6. by dispatching the paper to the attorney by overnight delivery service at the address designated by the attorney for that purpose or, if none is designated, at the attorney’s last known address. Service by overnight delivery service shall be complete upon deposit of the paper enclosed in a properly addressed wrapper into the custody of the overnight delivery service for overnight delivery, prior to the latest time designated by the overnight delivery service for overnight delivery. Where a period of time prescribed by law is measured from the service of a paper and service is by overnight delivery, one business day shall be added to the prescribed period. “Overnight delivery service” means any delivery service which regularly accepts items for overnight delivery to any address in the state; or

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*Discovery of a Copy of the Defendant’s Insurance Policy and Then Some.

December 30, 2009 · Leave a Comment

Judge Ruchelsman of Supreme Kings just recently in Madar v 1333 Realty LLC, vacated a settlement of $25,000, because the defendant’s attorneys had mistakenly asserted that the defendant’s coverage was $25,000 instead of $250,000.

What I found interesting in this case was that one of defendant’s arguments against vacating the settlement, was that “plaintiff’s counsel could have requested to examine the declaration page or engaged in some discovery which would have revealed the error, thus, in essence it is the plaintiff who has acted with ‘unclean hands.’”

Why is this interesting? It is because on those occasions when I have requested at a preliminary or compliance conference that defendant produce their insurance policy, and not just the coverage amounts, I have universally been met with a resounding “no way!” So here, defendant’s arguments sounds as viable as that of a child being sentenced for the murder of his parents arguing that compassion should be shown by the Court because the defendant is an orphan.

C.P.L.R. 3101(f) provides that “A party may obtain discovery of the existence and contents of any insurance agreement under which any person carrying on an insurance business may be liable to satisfy part or all of a judgment which may be entered in the action or to indemnify or reimburse for payments made to satisfy the judgment. …”

In the First (Clarendon Natl. Ins. Co. v Atlantic Risk Mgt., Inc. ,) Second (Sullivan v Brooklyn-Caledonian Hospital,) Third (Morris v. Clements,) and Fourth (Anderson v House of Good Samaritan Hosp) Departments this has been interpreted to mean that the statute entitles plaintiff to disclosure of the policies themselves. Why defendants continue to object and why Courts agree with them, will remain a mystery to me.

But the problem that arose in Madar, strongly suggest that plaintiffs obtain a copy of defendant’s policy in all cases. But that is not the end of the story as, there is more that the plaintiff requires. In Folgate v. Brookhaven Memorial Hospital Plaintiff argued and the Court agreed that “he is entitled to know the number of claims brought against the defendant during the applicable policy period, the amount sought in each such claim and the amount already paid. Plaintiff asserts that without this information he cannot determine in advance of judgment the funds which may be available to him from defendant’s policy should he recover.” The Second Department is in agreement with this discovery policy. See Pamela Brandes v North Shore University Hospital. Judge York of Supreme New York, however did not allow such discovery in Weiner v. Lenox Hill Hospital and then the 1st Department in Weiner v. Lenox Hill Hosp., 224 A.D.2d 299 held that the order of Judge York “is unanimously affirmed for the reasons stated by York, J.” So until the Court of Appeals speaks on this issue, the right to obtain this information will depend upon where your case is pending.

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*Vehicle and Traffic Law § 1104 (e) Cannot be Used as a Sword to Ward Off a Comparative Fault Defense

December 17, 2009 · Leave a Comment

Vehicle and Traffic Law §1104 governs the conduct of the driver of an authorized emergency vehicle**, when involved in an emergency operation. And subsection (e) precludes the imposition of tort liability except where the conduct rises to the level of recklessness.

V&TL §1104(e) provides that: “The foregoing provisions shall not relieve the driver of an authorized emergency vehicle from the duty to drive with due regard for the safety of all persons, nor shall such provisions protect the driver from the consequences of his reckless disregard for the safety of others.”

In Ayers v O’Brien, decided on December 17, 2009, a unanimous Court of Appeals held that an emergency vehicle operator may not assert that statute in an action in which he is the plaintiff, to prevent the defendant from raising a comparative fault defense based upon mere negligence and assumption of the risk.

The Court, by way of a footnote, citing Aldrich v Sampier, 2 AD3d 1101, 1103 (3d Dept 2003), points out that had a viable claim been made under General Municipal Law § 205-e, the result would have been different as comparative fault is not a defense in a General Municipal Law § 205-e action.

** An authorized emergency vehicle is defined by V&TL 101 as “every ambulance, police vehicle, fire vehicle, civil emergency vehicle, emergency ambulance service vehicle, environmental response vehicle, sanitation patrol vehicle, hazardous materials vehicle, and ordnance disposal vehicle of the armed services of the United States.”

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*Show Me the Money! Or at a Minimum, Show it to the Sheriff to Stop the Auction.

December 16, 2009 · Leave a Comment

I always love to cite to old cases. The Court of Appeals in Rondack Constr. Servs., Inc. v Kaatsbaan Intl. Dance Ctr., Inc. got to do just that with a case from 1875, when it unanimously held on December 15, 2009 that “a judgment debtor’s tender to the sheriff before its property is auctioned at a judicial sale automatically discharges the execution lien, terminating the sheriff’s authority to sell the property.” In doing so, the Court reaffirmed Tiffany v St. John 65 NY 314 (1875)

In Rondack the plaintiff, prior to an auction of the plaintiff’s property to satisfy a judgment, offered the sheriff “an amount sufficient to satisfy the judgment, together with interest, poundage and other related fees.” but it was declined by the Sheriff and the auction proceeded.

“In Tiffany, the sheriff levied on a judgment debtor’s boat pursuant to an execution and proceeded to sell it at a public auction. Before bidding began, the judgment debtor tendered to the sheriff an amount sufficient to satisfy the judgment and all associated costs. The sheriff refused the tender and sold the boat to the highest bidder. Analogizing to the common-law equity of redemption in the mortgage foreclosure context, this Court held more than a century ago that, under these circumstances, the tender was the equivalent of payment and had the “instantaneous effect” of discharging the lien created by the execution (65 NY at 318). Consequently, the sheriff lost the authority to sell the property, resulting in an improper conveyance.

A property owner who desires to tender the appropriate amount before the actual sale is free to do so without the need to move under CPLR 5240. Stated differently, property owners possess a common-law right under Tiffany to redeem their property before sale without judicial intervention.

Here, as in Tiffany, Kaatsbaan timely tendered an amount sufficient to satisfy the judgment and all fees and expenses. Kaatsbaan’s tender extinguished the lien and foreclosed the sale of the property. The Appellate Division therefore properly granted Kaatsbaan’s motion to set aside the sale and compel the Sheriff to accept its check in full satisfaction of the judgment.”

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*Two HIPAA forms for Interviews and Records

December 13, 2009 · Leave a Comment

I have added a non-fillable Authorization To Permit Interview Of Treating Physician By Defense Counsel required by Arons v Jutkowitz 9 NY3d 393 (2007) and a fillable** Authorization For Release Of Health Information Pursuant To HIPAA.

Note, the Court website states that these forms “may not be used to obtain … release of psychotherapy notes, see 45 CFR section 164.508” as a specific authorization is necessary to obtain psychotherapy notes. One of these can be found here, although as it is perpared for use in Kentucky, some changes will have to be made in this Word™ document.

**Fillable forms usually cannot be saved with the filled in information (if you don’t have Adobe Acrobat™) and thus must be printed before closing the document, as doing so will cause the filled in information to be lost.

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*Claimant’s Authorization to Disclose Workers’ Compensation Board Records

December 12, 2009 · Leave a Comment

A defense firm has asked me to provide them with an authorization to permit them to obtain my client’s Workers’ Compensation Board Records. They graciously provided me with the form that the WCB requires. But better yet, I found a fillable version on the internet and have added it to my links. There are a large number of such fillable and non fillable forms on the internet and as I have occasion to use them, I will add them to my links. If there is a governmental form you would like to see there, just let me know with a comment, and I will try and find it and if successful, will add it to my links.

When providing this form to a defense firm or insurance carrier, I suggest crossing out that portion of the form which states that the claimant/plaintiff “authorize[s] the Workers’ Compensation Board to discuss the above-referenced Workers’ Compensation Board records with” the defense firm or insurance carrier, since it is unlikely that such permission was requested and the authorization should be limited to the request.

LJS

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