Majority of Appellate Panel Holds That Immigration Status of Resident Alien is Immaterial to Future Medical Expenses

In Angamarca v. New York City Partnership Hous. Dev. Fund, Inc., the 34 year-old plaintiff was injured in a two-story fall through an improperly covered opening. He suffered severe injuries, including a traumatic brain injury and multiple fractures of the vertebrae. As relevant here, the jury awarded plaintiff $100,000 for past pain and suffering, $1,000,000 for future pain and suffering and $16,721,684 for future medical expenses.

On appeal from the judgment entered after trial, defendant argued that it was improperly precluded by the trial court from raising the fact that plaintiff was an undocumented alien who had expressed a desire to return to his native country, and the plaintiff cross-appealed for addittur of his pain and suffering awards.

In a 3-2 decision, the majority of the First Department held that the trial court had properly precluded the defendant from raising the issue of plaintiff’s immigration status. The majority found that the Court of Appeals’ decision in Balbuena v. IDR Realty LLC (6 NY3d 338 [2006]), was controlling. According to the majority, the Balbuena-Court held that, when a plaintiff has suffered such severe injuries that he is unable to work, mitigation of damages is no longer an issue and therefore the immigration status of the plaintiff is irrelevant.

The majority also increased the plaintiff’s past and future pain and suffering awards to $1,500,000 and $3,500,000, respectively.

The two dissenting justices disagreed with the majority, stating that Balbuena had no application to the present appeal. The dissent found that Balbuena does not limit consideration of plaintiff’s immigration status in regard to any item of damages, noting that the prevailing appellate authority is to permit the jury to consider the plaintiff’s immigration status (Coque v. Wildflower Estates Devs. Inc., 58 AD3d 44 [2nd Dept. 2008]).

The dissent further observed that the purpose of “compensatory damages” is to reimburse the injured party for the actual costs incurred as the result of his injuries, “not to bestow a windfall.” Here, since plaintiff testified that he had planned to stay in the United States for only a short period of time to earn $20,000 to return to his country:

"it is not prejudicial to require that. . . plaintiff present the jury with an accurate portrayal of the likely cost of his future medical treatment, wherever it is to be rendered. To the contrary, it is unfair to prevent. . . defendant from putting. . . plaintiff to his proof by precluding the defense from presenting facts material to the accurate assessment of damages."

Labor Law 240(1) Dismissed on Sole Proximate Cause for Failing to Obey Instructions

In Paz v. City of New York, a rope scaffold was elevated and tied to a building overnight to prevent pedestrians from accessing the scaffold. Plaintiff was instructed to ascend a ladder, climb onto the scaffold and lower it to the ground. Plaintiff instead elected to remain on the scaffold as he attached his safety harness. Plaintiff fell and was injured.

In affirming the dismissal of plaintiff's Labor Law 240(1) cause of action, the First Department held that plaintiff was the sole proximate cause of his accident because he was aware of the procedure that he was supposed to follow, but he "chose for no good reason not to do so."

The Court went on to affirm the dismissal of plaintiff's Labor Law 200 claim on the basis that general instructions as to what needs to be done, but not how to do it, coupled with oversight of the timing and quality of the work and authority to stop work, is an insufficient basis upon which to prove control over plaintiff's work.

Lastly, the Court found that the Industrial Code provisions relied upon by plaintiff did not apply to the facts of the case to support his Labor Law 241(6) claim.

"Lien Waiver" Not Broad Enough To Support Contractual Indemnity For Bodily Injury Claim

In Suazo v. Maple Ridge Assoc. LLC, the owner and developer of a construction site sought contractual indemnity from the employer of a delivery driver who was injured while delivering doors to the construction site. The owner/developer based its claim on a "Waiver of Liens and Indemnity Agreement" executed by plaintiff's employer. In dismissing the owner/developer's claim, the First Department found that the parties' agreement pertained only to payment for labor and materials provided at the construction site, and that the employer agreed to indemnify owner/contractor for any non-payment claims or liens filed by its subcontractors or suppliers. The Court held that, given the overall purpose of the Agreement, the reference to "any claim" in the Agreement was not broad enough to encompass claims for bodily injury.

Use of CPLR 4401 Motion During Trial

In Botwinik v. Moseson, after the jury was empaneled, but before opening statements, the defendant orally moved in limine to preclude plaintiff's expert nurse from testifying on the basis that the nurse was not qualified to give a medical opinion on the issue of lack of informed consent (CPLR 4401-a). The plaintiff cross-moved to substitute the testimony of a physician if the court determined that the nurse's testimony would be insufficient. The court granted the defendant's motion and dismissed plaintiff's case.

On appeal, the First Department reversed. The Court noted that a CPLR 4401-a motion must be made "at the end of plaintiff's case" (see also CPLR 4401 - motion "after the close of evidence presented by an opposing party"). Here, since the motion was made before plaintiff had the opportunity to present her case, the trial court abused its discretion when it granted the defendant's motion.

The Court also observed that courts favor disposition of cases on their merits, rather than on oral application made while the jury is waiting (see Murray v. Brookhaven Mem. Hosp. Med. Ctr, 73 A.D.3d 878 [2010]).

Second Department Issues Big Foreclosure Decision

In a case having potentially enormous implications on foreclosure actions in New York State and throughout the country, the Second Department in Bank of New York v. Silverberg, addressed whether a party has standing to commence a foreclosure action when that party's assignor, Mortgage Electronic Registration Systems, Inc. (MERS), was listed in the underlying mortgage instruments as a nominee and mortgagee for the purpose of recording, but was never the actual holder or assignee of the underlying notes.

As Judge Leventhal described MERS in the Court's decision: "'In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages' (Matter of MERSCORP, Inc. v Romaine, 8 NY3d 90, 96). MERS was intended to 'streamline the mortgage process by using electronic commerce to eliminate paper.'  MERS's implementation followed the delays occasioned by local recording offices, which were at times slow in recording instruments because of complex local regulations and database systems that had become voluminous and increasingly difficult to search (see Peterson, Foreclosure, Subprime Mortgage Lending, and the Mortgage Electronic Registration System, 78 U Cin L Rev 1359, 1366 [2010]).

'Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system' (Matter of MERSCORP, Inc. v Romaine, 8 NY3d at 96 [internal footnotes omitted]).

The MERS system facilitated the transfer of loans into pools of other loans which were then sold to investors as securities (see Peterson, at 1361-1362). MERS delivers savings to the participants in the real estate mortgage industry by allowing those entities to avoid the payment of fees which local governments require to record mortgage assignments (see Peterson at 1368-1369).

Lenders identify MERS as nominee and mortgagee for its members' successors and assignees. MERS remains the mortgagee of record in local county recording offices regardless of how many times the mortgage is transferred, thus freeing MERS's members from paying the recording fees that would otherwise be furnished to the relevant localities (id.; see Matter of MERSCORP, Inc. v Romaine, 8 NY3d at 100). This leaves borrowers and the local county or municipal recording offices unaware of the identity of the true owner of the note, and extinguishes a source of revenue to the localities. According to MERS, any loan registered in its system is 'inoculated against future assignments because MERS remains the mortgagee no matter how many times servicing is traded.'  Moreover, MERS does not lend money, does not receive payments on promissory notes, and does not service loans by collecting loan payments."

Judge Leventhal speaking for the Court held:

"because MERS was never the lawful holder or assignee of the notes described and identified in the consolidation agreement, the corrected assignment of mortgage is a nullity, and MERS was without authority to assign the power to foreclose to the plaintiff. Consequently, the plaintiff failed to show that it had standing to foreclose.

MERS purportedly holds approximately 60 million mortgage loans (see Michael Powell & Gretchen Morgenson, MERS? It May Have Swallowed Your Loan, New York Times, March 5, 2011), and is involved in the origination of approximately 60% of all mortgage loans in the United States (see Peterson at 1362; Kate Berry, Foreclosures Turn Up Heat on MERS, Am. Banker, July 10, 2007, at 1). This Court is mindful of the impact that this decision may have on the mortgage industry in New York, and perhaps the nation. Nonetheless, the law must not yield to expediency and the convenience of lending institutions. Proper procedures must be followed to ensure the reliability of the chain of ownership, to secure the dependable transfer of property, and to assure the enforcement of the rules that govern real property."

Is Electronic Filing Of Notice Of Entry Sufficient To Start Clock For Appeal?

In Fazio v. Costco Wholesale, the plaintiffs claimed that the defendant's appeal was untimely because defendant filed its Notice of Appeal 32 days after it was served electronically with Notice of the Entry.  The First Department held that electronic filing did not satisfy the requirement of notice by a party.  According to the court, "New York State Court Electronic Filing (NYSCEF) site confirmation shows the date on which the order with notice of entry was filed electronically and e-mail notifications were sent to counsel for the parties. However, the NYSCEF site's transmission of notification of the entry to e-mail service addresses 'shall not constitute service of notice of entry by any party' (22 NYCRR 202.5b[h][3]). 'A party shall serve notice of entry of an order . . . on another party by serving a copy of the notification . . . and an express statement that the transmittal constitutes notice of entry' (id.). The only affidavit of service in the record shows that the notice of entry was served on defendant by mail. Thus, defendant had 35 days to notice its appeal (see CPLR 2103[b][2])."