APPELLATE DIVISION CASE UPDATE

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Four of Mark’s cases have recently been decided by appeals courts in the First and Second Judicial Departments. Collectively, they teach lessons in aggressive litigation strategies.

In three of the cases, Mark made pre-answer motions to dismiss the complaints. Each of the motions was successful in the Supreme Court. Two of the three were affirmed on appeal, and the other was reversed.

In one case, Mark successfully appealed a $1.75 million dollar judgment entered against Mark’s client, resulting in the reversal of the judgment and the underlying summary judgment order.

First, the good news for Mark’s clients:

In GMP Fur Trade Finance, LLC v. Brenner, 2019 WL 454346 (2d Dep’t Feb. 6, 2019), plaintiff moved for summary judgment against defendant for breach of fiduciary duty and related claims arising from a failed financing venture. The Supreme Court granted the motion and entered judgment against the defendant for $1.75 million. Mark appealed, arguing that plaintiff’s motion for summary judgment improperly relied on inadmissible hearsay in support of its motion. The Appellate Division agreed, reversed the judgment, and denied the motion for summary judgment.

In Elias v. Massimillo, 166 A.D.3d 726 (2d Dep’t 2018), Mark moved to dismiss an action for defamation and malicious prosecution. Mark argued, among other things, that the communications attributable to Mark’s client were not actionable because they did not have a sufficiently defamatory meaning. The malicious prosecution claim was fatally defective because the underlying cases were not terminated favorably to plaintiff (discussed in another context, below). The Supreme Court agreed and dismissed the case. The dismissal was affirmed by the Appellate Division, which held that the communications did not have a cognizable defamatory meaning. Plaintiff abandoned her malicious prosecution claim on appeal.

New York defamation law requires that to be actionable, a plaintiff must demonstrate that the communications have a defamatory meaning and the plaintiff suffered ascertainable “special damages.” Words have a defamatory meaning when they tend to expose a person to public contempt, hatred, ridicule, aversion or disgrace. However, if the statements are not “defamatory per se,” a plaintiff must plead and prove “special damages,” which is actual and ascertainable pecuniary harm. Statements are “defamatory per se” when they accuse another of an identifiable serious crime, impute a loathsome disease, or injure that person in his or her trade, business or profession. When words are defamatory per se, damages are presumed, and no special damages are required to be pleaded or proved. In Elias, the court determined that the words were not defamatory per se and plaintiff failed to plead special damages.

In Mohyi v. Brand, 160 A.D.3d 559 (1st Dep’t 2018), leave to appeal denied, 32 N.Y.3d 911 (2018), Mark defended an attorney against several claims, including a malicious prosecution claim, brought by another attorney. All claims were initially dismissed on Mark’s motion to dismiss, except for the malicious prosecution claim. Mark moved for leave to reargue, and, upon reargument, the malicious prosecution claim was also dismissed by the Supreme Court. Plaintiff appealed, arguing that the malicious prosecution claim was improperly dismissed because the termination of a criminal case against her was resolved favorably to her. The Appellate Division disagreed and affirmed dismissal. The Court of Appeals denied leave to appeal.

In New York, a claim for malicious prosecution requires a demonstration of the following elements: the initiation of a criminal proceeding by the defendant against the plaintiff; termination of the proceeding in favor of the accused; lack of probable cause; and malice. Favorable termination is limited to a final disposition of a proceeding which involves the merits and indicates the accused’s innocence. As a result, dismissals for insufficiency of an accusatory instrument are not favorable terminations, and neither is an Adjournment in Contemplation of Dismissal. In Mohyi, the court concluded that the circumstances of the dismissal of criminal charges against plaintiff did not constitute a favorable termination.

Now, the bad news.

In Boliak v. Reilly, 161 A.D.3d625 (1st Dep’t 2018), plaintiff teachers and a guidance counselor in a Catholic high school in New York City brought discrimination, hostile work environment, retaliation, and defamation claims against Mark’s client, the principal of the school, and other defendants. Mark moved to dismiss all claims, presenting documentary evidence belying many of plaintiffs’ allegations. Plaintiffs requested permission to file a Second Amended Complaint, which attempted to tailor allegations to meet deficiencies identified in Mark’s motion. The Supreme Court granted Mark’s motion and dismissed all claims against all defendants. The Supreme Court agreed with Mark that the claims were contradicted by documentary evidence and were otherwise insufficient and conclusory. Plaintiffs appealed, and the Appellate Division reversed and permitted the filing of the Second Amended Complaint. Among other things, the Appellate Division determined that the claims were sufficiently stated under the very liberal standards of the New York City Human Rights Law. The case is being litigated.

So, when is it advisable to aggressively litigate by filing dispositive motions? The Elias and Mohyi cases presented opportunities to attack a complaint early on in the litigation without engaging in discovery. The pre-answer motions to dismiss were granted in both cases, and the dismissals were affirmed on appeal. Caution and discretion must be exercised, however, and the probability of an early win must be balanced against the expense involved in making the motion and then defending a later appeal. In Boliak, the tactic was initially successful, but, ultimately, overly aggressive, according to the Appellate Division. Any motion, of course, must be supported by competent and admissible evidence. Improper motions, such as the summary judgment motion filed by plaintiff in the GMP Fur Trade Finance case, are wasteful of time and expense.

If you have any questions about litigation or the cases discussed above, please contact me.

 

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