All posts by tuf37jim

Jim Tuffin is a lawyer licensed to practice in Arizona and New York.

NYAD2: Plaintiff cannot repudiate settlement made by counsel of record at mediation.

Plaintiff was not present at a mediation when her lawyers settled her trip and fall case for $ 150,000 at mediation. She refused to sign closing papers, and claimed she was unaware of the settlement. The Supreme Court saw things her way, but the Appellate Division reversed and said the settlement must be enforced.

The appeals panel noted that lawyers from the firm that was counsel of record were cloaked with apparent authority, and that the plaintiff failed to demonstrate that terms of the settlement agreement were so unfair or one-sided as to “shock the conscience and confound the judgment of any person of common sense” or that it was based on a mistake made despite the exercise of ordinary care.

Amerally v Liberty King Produce, Inc. (03/06/2019).

A Wee Dram for Naught

In his 1785 poem Scotch Drink, the great Robert Burns urged displacement of lawyers by alternative dispute resolution in the form of alcoholic beverage:

When neibors anger at a plea,

An’ just as wud as wud can be,

How easy can the barley brie

Cement the quarrel!

It’s aye the cheapest lawyer’s fee,

To taste the barrel

 It didn’t work out that well for the plaintiff in Esposito v Rail Bar & Grill Corp, decided 2/20/2019 by the Appellate Division, Second Department.

Espositio got into a verbal disagreement with Kral in the defendant bar. Espositio then bought Kral a drink. It seems that didn’t patch things up, because “tensions . . . erupted again” leading to an altercation with Kral and another person.

Espositio sued the bar, claiming Dram Shop Act violations because Kral was too intoxicated to be served.

Alas, not only did Espoito’s generosity fail to “cement the quarrel”, it also put him out of court, since “plaintiff’s procurement of the allegedly unlawful drink for Karl precludes the plaintiff from recovering under the Dram Shop Act.”

NY High Court Draws Careful Distinction Between 6 Months to Re-File after Non-Merits Dismissal and Relation Back of Claims in Amended Complaint; Warns that it Cannot Review Issues Not Addressed at Nisi Prius

Precedents established in personal injury cases loomed large in a Court of Appeals decision arising from a dispute involving mortgage backed securities.

If the original complaint gives sufficient notice, CPLR 203(f) uses the date of interposition of the original claims to calculate the statute of limitation for claims contained in a later amendment. Under CPLR 205(a), if an otherwise timely action is dismissed for non-merits reasons, a new action commenced within 6 months of the dismissal will be deemed timely. The Court reiterated that these provisions are not interchangeable.

In Goldberg v Camp Mikan-Recro, 42 NY2d 1029 [1977], the Court held that a wrongful death claim asserted in an amended complaint could not relate back to the original complaint that was brought by the decedent’s father solely in his individual capacity. The Court held that since the original suit was brought without capacity to sue for the decedent’s injuries, there was no pre-existing action to which the claims in the amended complaint could relate back.

In George v Mt. Sinai Hosp., 47 NY2d 170 [1979] and Carrick v Cent. Gen. Hosp., 51 NY2d 242 [1980], the Court established that a dismissal of an action for the same lack of capacity was a non-merits dismissal, so that an action commenced within six months of the dismissal by a properly appointed representative was timely.

So, when a trustee brought an untimely action for breach of representations and warrantees against the sponsor of some mortgage backed securities, the trustee argued that under CPLR 203(f) it should relate back to a certificate holder’s previously filed action. No dice says the Court. Under the transaction documents, the certificate holder was subject to a no-action clause, so that there was no valid pre-existing action to relate back to.

In a chilling reminder to all of us, the Court refused to consider the alternative argument for a toll under CPLR 205(a), because the trustee never raised it below. The sponsor said in a footnote in its motion papers that 205(a) wouldn’t apply should the trustee raise it. This did not help the trustee on appeal; the Court says this obligated the trustee to address it. The Court reminds us that “[w]hile in some circumstances the Appellate Division has interest of justice jurisdiction to review an issue raised for the first time on appeal, this Court “ha[s] no power to review either the Appellate Division’s exercise of its discretion to reach that issue, or the issue itself” U.S. Bank Natl. Assn. v DLJ Mtge. Capital, Inc., 2019 NY Slip Op 01168 (2/19/2019)

In a separate case decided between the same parties but apparently arising from a different transaction, the trustee’s original action was dismissed for failure to comply with a contractual notice to cure or repurchase condition precedent.  CPLR 205(a) saved the day for the trustee. The statute of limitations did not bar a second action because the trustee was able to comply with the provision and commence a new action within six months. U.S. Bank Natl. Assn. v DLJ Mtge. Capital, Inc.,  2019 NY Slip Op 01169 (2/19/2019). 

NY AD 1 Takes Dim View of Doctor Non-compete

A medical group, an employed physician and the physician’s new group wound up in court arguing about restrictive covenants in an employment contract. The old group asked the court to stop the doctor from violating the restrictions, and to order the  new group not to interfere, while the lawsuit progressed.

The Appellate Division, First Department, said the old employer was not entitled to the preliminary injunction. The court said that non-compete clauses will not be enforced against individual doctors unless it is necessary for the protection against misappropriation of the employer’s trade secrets or of confidential customer lists, or protection from competition by a former employee whose services are unique or extraordinary. 

While the doctor was probably happy to hear that the court would not stop her from working for the new practice,  the court based it decision on a finding that her ob/gyn services were not so unique or extraordinary as to give her an unfair advantage.

Harris v. Patients Med, P.C. (Feb 7, 2019).


The Arizona Department of Insurance issued a regulatory bulletin noting that commercial policy holders are only entitled to 30 days’ notice of changes or reduction in coverage.  This does not leave a whole lot of time to shop.

The bulletin stresses that mere warning of possible changes is not enough. The communication must be “sufficiently specific to allow policyholders to make an informed decision”. Nevertheless, notice is considered given if the “insurer delivers new policy terms and conditions thirty days before the expiration of the policy”.

So, thirty days before renewal you might get (or get online access to) a renewal package and a bill. If you are like most business owners and professionals, you have enough to do taking care of clients and customers. It would be normal to look for the bill and make sure it gets paid, but otherwise ignore the other stuff. This could be a costly mistake. It is important to compare the renewal offer to your current coverage to make sure there are no changes. Contact your broker or the insurance company promptly if there are any discrepancies or if you have any questions.


The typical credit card agreement requires that you make a minimum monthly payment. If you miss a monthly payment, the issuer can declare a default and demand immediate payment of the full balance (legal jargon: “accelerate”) with fees, etc. But what if the bank just lets it slide?

In Arizona, the bank has six years to sue on credit card debt (A.R.S. § 12-548(A)(2)).  In a case decided Thursday, the Arizona Court of Appeals said that the six-years do not start to run until the bank notifies the consumer that it has elected to accelerate.

The consumers missed a payment in 2007, made their last payment in 2008, and the balance was charged off. The bank eventually assigned the debt to a company that sued the consumers in 2014. The consumers argued that that the six years started to run when they first missed a payment in 2007. The Arizona Court of Appeals said the clock does not start until a demand for payment in full is issued.

The court said that this rule is not bad for consumers because it gives space to work things out if the consumer falls behind. The court said banks are unlikely to ignore dormant accounts just to allow interest to pile up. The court mentioned that the consumers might have “equitable” defenses (laches) if unreasonable delay by the bank is prejudicial. The burden of proving an equitable defense would be on the consumer and I would not count on it.

So just because you haven’t heard anything for a few years does not mean you’re off the hook.

Mertola v Santos (3/2/2017)

“Quixotic”, “self-absorbed”, “narcissistic”, “ungrateful”, “delusional”, and a “paranoid pompous ass” (sorry, it’s not who you think).

These words were not used to describe a public figure. The operator of an apartment complex allegedly used them to describe a resident after a dispute over entitlement to a third parking space.  The resident sued for defamation, harassment, and intentional infliction of emotional harm.

The New York Appellate Division, Second Department, said these terms were not defamatory per se since they did not connote a serious crime or loathsome disease, and did not tend to injure the resident in his trade or profession. Furthermore, they were readily understood as expressions of opinion, and were not statements of fact. Statements of opinion are not actionable.

The court threw out the harassment claim because, in this context, no such claim exists under New York law.

The court also held that these expressions were no so outrageous in character, and so extreme in degree, as to go beyond all possible bounds of decency, and to be regarded as atrocious, and utterly intolerable in a civilized community. Thus, there was no case for intentional infliction of emotional distress.

Scialdone v DeRosa  (March 1, 2017)


A dispute arose over the terms of a commercial lease, and the landlord sued the tenant for certain operating expenses. The tenant then stopped paying rent and sought a preliminary injunction against any eviction proceedings. The landlord responded with an amended complaint for forcible detainer (eviction). The trial court granted the preliminary injunction and denied the eviction. Appeal ensued.

The Court of Appeals, Division 2, reversed, holding that the trial court did not have authority to enjoin eviction. The Forcible Detainer statute, A.R.S. §12-1171 et. seq., gives the landlord the right to an expeditious adjudication, and “the only issue shall be the actual right of possession”, A.R.S. §12-1177(A). Since claims for equitable relief inject additional considerations, such as relative hardship to the parties, a request for an injunction runs afoul of the express language of the statute.

Tucson Lot 4 v Sunquest Info. Sys (11/22/16)


The Empire State will implement licensure of pathologists’ assistants on November 28, 2017, under new Article 168 of the New York Education Law approved on November 28, 2016. Applicants for the new license will need at minimum a bachelor’s degree in an approved program and will have to pass an examination.

Licensees will be authorized, under the supervision of a physician who practices anatomic pathology, to prepare tissues samples, perform post-mortem examinations, and perform other related tasks to be determined by the State Education Department.

The bill’s sponsor explained that individuals currently doing this work often try to qualify as laboratory technicians under a law that soon going to sunset, even though they are certified by national bodies or hold international medical degrees.

2016 NY Laws Ch. 497




Parents sued an emergency room physician for malpractice after their son died from a methadone overdose. The defendants made a Rule 68 offer of $10,000.00. The jury found in favor of the doctor.

The parents argued that they should not have to pay the Rule 68(g) sanctions because the offer was made in bad faith. They asserted that the amount offered was not reasonable if measured against the damages that would have been awarded if they had won.

The Court of Appeals held that there was no standard of reasonableness in the rule,  that the sanctions are “both mandatory and punitive”, and that “it is solely within the purview of the parties to prudently evaluate their causes of action and defenses”.

Stafford v Burns (Nov. 29, 2016);    Ariz. R. Civ. P. 68