New York Law Review

Tag: 2012

  • Roslyn Union Free School District v. Margaritis, 18 N.Y.3d 650 (2012): Statute of Limitations for School District Claims Against Board Members

    Roslyn Union Free School District v. Margaritis, 18 N.Y.3d 650 (2012)

    A school district is considered a corporation under New York law, and therefore a six-year statute of limitations applies to actions brought by a school district against a former board member for breach of fiduciary duty or negligence related to financial mismanagement.

    Summary

    The Roslyn Union Free School District sued a former board member, Carol Margaritis, alleging breach of fiduciary duty and negligence related to a massive theft of district funds. Margaritis argued the claims were time-barred by a three-year statute of limitations. The New York Court of Appeals held that a school district is a corporation under CPLR 213(7), thus a six-year statute of limitations applied, making the action timely. The Court reasoned that the General Construction Law defines a corporation to include a municipal corporation, which includes a school district.

    Facts

    The Roslyn Union Free School District suffered significant financial losses due to embezzlement by its employees, including the assistant superintendent and superintendent. The school district discovered initial irregularities in 2002. A later audit uncovered approximately $11 million in misappropriated funds between 1998 and 2004. Carol Margaritis was a member of the Board for approximately one year, beginning in 2000, before the criminal activities came to light. There were no allegations that Margaritis directly participated in the theft or benefitted from it, but she was on the board during the period when funds were being stolen.

    Procedural History

    The school district commenced an action in April 2005 against former and current board members, including Margaritis. Margaritis moved to dismiss, claiming the three-year statute of limitations in CPLR 214(4) barred the claims. Supreme Court agreed and dismissed the claims. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether a school district is a “corporation” within the meaning of CPLR 213(7), which would provide a six-year statute of limitations for actions against former officers or directors for waste or injury to property.

    Holding

    Yes, because a school district falls within the definition of “corporation” as defined by the General Construction Law and other provisions of state law, the six-year statute of limitations in CPLR 213(7) applies to actions brought by the school district against a former board member for breach of fiduciary duty and negligence.

    Court’s Reasoning

    The Court reasoned that the General Construction Law defines “corporation” to include a “public corporation,” which in turn includes a “municipal corporation.” The term “municipal corporation” expressly includes a “school district.” Therefore, a school district is a corporation under CPLR 213(7). The Court stated, “Because a school district is both a municipal corporation and a public corporation, it falls within the ambit of the term “corporation” in CPLR 213 (7).” The Court also noted that other state laws and the State Constitution recognize school districts as corporations. The legislative history of CPLR 213(7) supports the conclusion that it applies to both equitable and non-equitable causes of action. The Court rejected the argument that the Legislature’s use of the specific term “school district” in other statutes, such as Education Law § 3813, meant that the general term “corporation” in CPLR 213(7) should not apply to school districts, holding that the legislature would have been redundant to specifically include the term “school districts” in the statute, since they are already included under the definition of “corporation.” The Court did, however, dismiss the claim for an accounting, stating that it was unnecessary given the extensive forensic audit already conducted.

  • Matter of State Farm Mutual Automobile Insurance Company, 20 N.Y.3d 352 (2012): Intentional Acts and Uninsured Motorist Coverage

    Matter of State Farm Mutual Automobile Insurance Company, 20 N.Y.3d 352 (2012)

    Uninsured Motorist (UM) coverage does not apply when the injuries result from an intentional act, assessed from the tortfeasor’s perspective, even though the insured is an innocent victim.

    Summary

    The New York Court of Appeals addressed whether an injury resulting from an intentional act constitutes an “accident” under an uninsured motorist (UM) policy. Spicehandler died from injuries sustained when Popadich intentionally drove his car into him. State Farm denied UM benefits, arguing the death wasn’t an “accident.” The court held that because the act was intentional from the tortfeasor’s viewpoint, it was not an “accident” covered under the UM policy. The court emphasized the purpose of UM coverage is to put the insured in the same position as if the tortfeasor had been insured, and an intentional act would not be covered under a standard liability policy. This ruling reinforces that UM coverage is not a form of general accident insurance but is tied to the nature of the tortfeasor’s actions.

    Facts

    Spicehandler died as a result of injuries he sustained when Popadich intentionally drove his vehicle into him.
    Spicehandler was insured under a policy issued by State Farm that included uninsured motorist (UM) coverage.
    Spicehandler’s estate sought UM benefits under the State Farm policy.
    State Farm denied the claim, contending that the death was not the result of an “accident” as required by the policy’s UM endorsement.

    Procedural History

    The initial court likely ruled on the UM coverage claim.
    The Appellate Division’s decision was appealed to the New York Court of Appeals.
    The New York Court of Appeals modified the order, effectively denying UM coverage, reversing the determination that UM coverage applied.

    Issue(s)

    Whether an injury caused by an intentional act constitutes an “accident” within the meaning of an uninsured motorist (UM) endorsement, where the act is intentional from the perspective of the tortfeasor but not from the perspective of the injured party.

    Holding

    No, because UM coverage is intended to put the insured in the same position they would have been in if the tortfeasor had been insured; a standard liability policy would not cover intentional acts. Thus, the incident does not qualify as an “accident” under the UM policy.

    Court’s Reasoning

    The court reasoned that the term “accident” must be analyzed from the perspective of the tortfeasor. Since Popadich intentionally caused the injuries, it was not an accident. The court stated that “uninsured motorist coverage was created ‘to afford the insured motorist with the same financial protection he would have had if the offending vehicle had been insured.’”
    The court distinguished UM coverage from other types of insurance, noting that UM coverage is specifically designed to provide compensation when the tortfeasor is uninsured. This contrasts with general accident insurance, which focuses on the insured’s perspective. The court stated: “The purpose of UM coverage is to place the insured in the same position as if the tortfeasor had been insured.”
    The court relied on the principle that insurance policies generally do not cover intentional acts. Permitting UM coverage in this situation would expand the scope of UM coverage beyond its intended purpose.
    The court also distinguished the case from situations involving supplementary uninsured/underinsured motorist (SUM) coverage, where a different analysis might apply due to the specific language and intent of those policies. The court stated: “The explicit purpose of UM coverage is to protect persons injured by financially irresponsible motorists.”
    The dissenting opinion argued that the focus should be on the insured’s perspective, and from Spicehandler’s viewpoint, the event was an accident. The dissent cited McCarthy v Motor Veh. Acc. Indent. Corp., arguing that the majority’s attempt to distinguish it was unpersuasive. The dissent further suggested the possibility of modifying the rule against covering intentional torts in cases of compulsory insurance but found it unnecessary to address that issue in this case.

  • New York State United Teachers v. Brighter Choice Charter School, 18 N.Y.3d 560 (2012): FOIL Exemption for Lists Used for Fundraising

    New York State United Teachers v. Brighter Choice Charter School, 18 N.Y.3d 560 (2012)

    Under New York’s Freedom of Information Law (FOIL), an agency may deny access to records, including lists of names, if disclosure would constitute an unwarranted invasion of personal privacy, such as when the list would be used for fundraising purposes.

    Summary

    New York State United Teachers (NYSUT) sought payroll records, including teacher names, from several charter schools via FOIL. The charter schools refused to disclose the teachers’ names, arguing it would be an unwarranted invasion of privacy because NYSUT would use the list for fundraising (i.e., soliciting membership). The New York Court of Appeals held that disclosing the names was not required under FOIL because NYSUT’s intended use of the list to solicit members constituted fundraising, triggering a FOIL exemption. The Court reasoned that the purpose for which the information is sought, not the public or private status of the individuals, determines whether the exemption applies.

    Facts

    NYSUT requested payroll records from six charter schools, including teacher names, titles, salaries, and home addresses. The charter schools partially denied the request, withholding teacher names and home addresses. NYSUT administratively appealed without success and then commenced legal action. NYSUT sought the teacher’s names, titles, and salaries. The Charter Schools agreed to provide titles and salaries but continued to withhold the names.

    Procedural History

    NYSUT commenced a hybrid CPLR article 78/declaratory judgment action in Supreme Court, seeking disclosure of the teacher’s names. Supreme Court ordered disclosure. The Appellate Division affirmed, reasoning that NYSUT dropped its request for home addresses and that the Charter Schools were required to keep basic employee information pursuant to Public Officers Law § 87 (3)(b). The New York Court of Appeals reversed the Appellate Division’s order.

    Issue(s)

    Whether charter schools must disclose the names of their teachers pursuant to FOIL when the requesting party intends to use the names for membership solicitation, which the charter schools argue constitutes fundraising, thus triggering an exemption to disclosure.

    Holding

    No, because NYSUT’s intent in requesting the teacher names is to expand its membership and, by extension, obtain membership dues; thus the request falls within the fund-raising exemption of Public Officers Law § 89 (2)(b)(iii).

    Court’s Reasoning

    The Court of Appeals reasoned that while charter schools are subject to FOIL and must maintain a record of employee names, titles, and salaries under Public Officers Law § 87 (3)(b), there’s an exception. Under Public Officers Law § 89 (2), an agency may deny access to records if disclosure would constitute an unwarranted invasion of personal privacy, including the “sale or release of lists of names and addresses if such lists would be used for commercial or fund-raising purposes.” The court relied on Matter of Federation of N.Y. State Rifle & Pistol Clubs v New York City Police Dept., 73 NY2d 92 (1989), stating that it is the purpose of the solicitation that matters, not what it is called. Giving the term “fund-raising” its “natural and most obvious meaning” (Matter of Capital Newspapers, Div. of Hearst Corp. v Whalen, 69 NY2d 246, 251 [1987]), NYSUT’s intent to expand its membership and obtain dues qualifies as fundraising. The court also noted that ordering disclosure of the names would not further the policies of FOIL, which are to assist the public in making informed choices about governmental activities. The court emphasized that the purpose for which the information is sought drives the analysis. The fact that NYSUT dropped its request for addresses is irrelevant; the fundraising exemption is implicated even when only names are sought, as they can be linked to addresses through other means. The court stated, “it is precisely because no governmental purpose is served by public disclosure’ of this information that section 87 (2) (b)’s privacy exemption falls squarely within FOIL’S statutory scheme”.

  • Kese Industries v. Roslyn Torah Foundation, 19 N.Y.3d 484 (2012): Defines ‘Legal Representative’ in Tax Lien Redemption Notices

    Kese Industries, Inc. v. Roslyn Torah Foundation, 19 N.Y.3d 484 (2012)

    The term “legal representative” in Nassau County Administrative Code § 5-51.0, regarding notice of tax lien redemption, refers to executors or administrators of an estate, not to a party’s attorney in a pending action.

    Summary

    Kese Industries, a mortgagee in a foreclosure action, and Roslyn Gate Corporation, a property owner, challenged the validity of a tax deed issued to Gillen Living Trust. The challenge was based on Gillen’s failure to serve notice to redeem the tax lien on Kese’s foreclosure attorney and the court-appointed referee. The New York Court of Appeals reversed the lower courts, holding that a foreclosure attorney is not a “legal representative” under Nassau County Administrative Code § 5-51.0, and that a referee is not an interested party requiring notice. This decision clarifies the scope of required notice in tax lien foreclosure proceedings, emphasizing the traditional definition of “legal representative.”

    Facts

    Roslyn Torah Foundation (RTF) defaulted on a mortgage held by Kese Industries, leading to a foreclosure action. RTF also defaulted on property taxes, resulting in Nassau County issuing a tax lien to Gillen Living Trust. Gillen served notice to redeem the tax lien on Kese, RTF, and Roslyn Gate Corporation, but did not serve Kese’s foreclosure attorney or the court-appointed referee. Kese and Roslyn Gate then sued, claiming the tax deed issued to Gillen was void due to improper notice.

    Procedural History

    Supreme Court ruled in favor of Kese and Roslyn Gate, voiding the tax deed because Gillen failed to serve Kese’s attorney. The Appellate Division affirmed, relying on precedent that defined a “legal representative” to include a mortgagee’s foreclosure attorney. Gillen appealed to the New York Court of Appeals, arguing that a foreclosure attorney does not fall under the definition of “legal representative” in the relevant statute.

    Issue(s)

    1. Whether the term “legal representative” in Nassau County Administrative Code § 5-51.0 includes a mortgagee’s attorney in a pending foreclosure action.
    2. Whether a court-appointed referee in a foreclosure action is an interested party entitled to notice under Nassau County Administrative Code § 5-51.0.

    Holding

    1. No, because the term “legal representative” ordinarily denotes the executor or administrator of an estate, not a party’s attorney in a pending action.
    2. No, because the referee is an agent of the court performing ministerial duties, not a party with a lien, claim, or interest in the property.

    Court’s Reasoning

    The Court of Appeals reasoned that the term “legal representative,” in its ordinary sense, refers to someone who manages the legal affairs of another due to incapacity or death, such as an executor or administrator. The Court cited its prior decisions, noting that “‘legal representatives’ mean ordinarily executors or administrators, and that meaning will be attributed to them in any instance unless there be facts existing which show that the words were not used in their ordinary sense, but to denote some other and different idea.”
    The court emphasized the principle of noscitur a sociis, interpreting the term in relation to the adjacent words in the statute: “heirs” and “assigns,” all of which relate to the transfer of rights and duties of a property owner. The presence of the term “attorney” in other sections of the Nassau County Administrative Code indicated that the legislature would have used that term explicitly if it intended to include attorneys in the notice requirement. The Court further reasoned that a referee acts as an agent of the court without any independent legal interest in the property. The court stated, “the legislative purpose of requiring service upon a ‘legal representative’ is to ensure that personal representatives, namely executors or administrators of an estate, are notified of a risk of divestiture of title to their property.”

  • People v. Blair, 19 N.Y.3d 343 (2012): Admissibility of ‘Familiarity and Access’ Evidence Under Molineux

    People v. Blair, 19 N.Y.3d 343 (2012)

    Evidence of a defendant’s prior bad acts is admissible only if it is probative of some fact at issue other than the defendant’s criminal propensity; however, even if improperly admitted, a conviction will stand if the error is harmless.

    Summary

    Defendant was convicted of robbery, grand larceny, and criminal impersonation for two incidents where he impersonated a police officer. The prosecution introduced evidence that the defendant possessed a handcuff key while incarcerated awaiting trial, arguing it showed his “access to handcuffs.” The Court of Appeals held that admitting the handcuff key evidence was error because it was not sufficiently relevant and was prejudicial. However, the Court affirmed the conviction, finding the error harmless due to the overwhelming evidence of the defendant’s guilt, including eyewitness testimony and corroborating evidence.

    Facts

    In the first incident, the defendant displayed a badge, claimed to be a police officer, and demanded money from the victim. He pushed the victim and threatened him with handcuffs, ultimately obtaining money from an ATM. In the second incident, the defendant, while driving, impersonated an officer during a traffic stop of a cab driver. Police officers arrived, discovered the ruse, and found fake badges and toy handcuffs in the defendant’s car. Several weeks after the incidents, a corrections officer found a handcuff key on the defendant while he was incarcerated at Riker’s Island awaiting trial.

    Procedural History

    The trial court granted the People’s Molineux application, allowing testimony about the handcuff key. The defendant was convicted. His motion to set aside the verdict was denied. The Appellate Division affirmed, finding the evidence of the handcuff key properly admitted. The Court of Appeals reviewed the Appellate Division’s order.

    Issue(s)

    Whether the trial court erred in admitting evidence of the handcuff key to show “familiarity and access” to the tools of the crime, and if so, whether this error requires reversal of the conviction.

    Holding

    No, although the trial court erred in admitting the handcuff key evidence because its probative value was outweighed by its potential for prejudice, the error was harmless because the proof of the defendant’s guilt was overwhelming and there was no significant probability that the jury would have acquitted the defendant had the evidence been excluded.

    Court’s Reasoning

    The Court of Appeals cited People v. Molineux, stating that evidence of uncharged crimes is admissible only if probative of a fact at issue other than the defendant’s criminal propensity. Such evidence may be admitted to establish motive, intent, absence of mistake, a common scheme, or identity. The Court acknowledged that the Molineux list is not exhaustive, but stressed that the evidence must be more probative than prejudicial. The Court found the handcuff key evidence had little relevance, noting the handcuffs were never used in the first incident and not directly involved in the second. Quoting People v. Richardson, the court stated the evidence’s “limited probative value when compared to its potential for prejudice and the unacceptable danger that the jury might condemn defendant because of his past criminal behavior…makes this evidence inadmissible.” However, the Court found the error harmless, citing People v. Crimmins. The Court noted the overwhelming evidence of guilt regarding both incidents, including the victim’s account, the ATM surveillance video, and the arresting officer’s testimony. Because the evidence of guilt was overwhelming, the Court concluded there was no significant probability that the verdict would have been different had the handcuff key evidence been excluded. The Court also found a single improper statement during the prosecutor’s summation was cured by a curative instruction.

  • People v. Baker, 20 N.Y.3d 269 (2012): Sufficiency of Information for Disorderly Conduct

    People v. Baker, 20 N.Y.3d 269 (2012)

    An information charging disorderly conduct must contain factual allegations establishing a prima facie case that the defendant intended to cause public inconvenience, annoyance, or alarm, or recklessly created a risk thereof.

    Summary

    The New York Court of Appeals reversed the Appellate Term’s order and dismissed the information against the defendant, holding that the factual allegations in the information were insufficient to establish a prima facie case of disorderly conduct. The information stated that the defendant, along with others, stood on a public sidewalk at 2:01 a.m., obstructing pedestrian traffic after being directed to move by a police officer. The court found that the information lacked allegations demonstrating that the defendant acted with the intent to cause public inconvenience, annoyance, or alarm, or recklessly created such a risk.

    Facts

    On June 12, 2004, at approximately 2:01 a.m., the defendant was observed by a police officer standing with a group of people on a public sidewalk at 42nd Street and Seventh Avenue in Manhattan. The group was not moving, causing pedestrians to walk around them. The officer directed the defendant to move, but the defendant refused and then ran away as the officer attempted to stop him.

    Procedural History

    The defendant was charged by information with disorderly conduct under Penal Law § 240.20(5) and resisting arrest under Penal Law § 205.30. The defendant moved to dismiss the information for facial insufficiency, which the court denied. The defendant pleaded guilty to disorderly conduct, and the resisting arrest charge was dismissed. The Appellate Term affirmed the conviction. A Judge of the Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the factual allegations in the information were sufficient to establish a prima facie case of disorderly conduct under Penal Law § 240.20(5).
    2. Whether the charge of resisting arrest can stand when the underlying charge of disorderly conduct is deemed facially insufficient.

    Holding

    1. No, because the information failed to allege facts demonstrating that the defendant acted with the intent to cause public inconvenience, annoyance, or alarm, or recklessly created such a risk.
    2. No, because the resisting arrest charge requires a lawful, “authorized” arrest, and the information was insufficient to establish that the arrest for disorderly conduct was authorized.

    Court’s Reasoning

    The Court of Appeals held that the information was jurisdictionally defective because it failed to set forth a prima facie case of disorderly conduct. The court emphasized that an information must contain non-hearsay allegations that, if proven true, establish every element of the offense charged. The court reasoned that merely standing on a sidewalk at 2:01 a.m., even if it inconveniences pedestrians, is not enough to establish the intent to cause public inconvenience, annoyance, or alarm, or recklessly create a risk thereof. The court quoted People v. Carcel, 3 N.Y.2d 327, 331 (1957) stating that “something more than a mere inconvenience of pedestrians is required to support the charge.” The court further cited People v. Nixon, 248 N.Y. 182, 185 (1928), stating that while congregating on the street may display “atrociously bad manners” by “discommoding some other persons,” such conduct alone does not necessarily give rise to disorderly conduct. Regarding the resisting arrest charge, the court noted that Penal Law § 205.30 requires that the arrest be “an authorized arrest.” Because the information lacked sufficient facts to support the underlying disorderly conduct charge, it could not be deemed sufficient to allege that the arrest was “authorized.”