Complex Litigation

Appellate Division Rulings Clarify CPLR Article 16, E-Filing Issues

By Michael Hoenig - New York Law Journal - January 14, 2013

This column focuses on two Appellate Division, Second Department, rulings issued in mid- and late December. In Hendrickson v. Philbor Motors,1 the court considered the effects upon a codefendant's CPLR Article 16 remedies to limit liability to the plaintiff after another defendant has moved for dismissal of the complaint for failure to state a cause of action, as opposed to a motion for summary judgment. The precise nature of the motion matters greatly. In Biscone v. JetBlue Airways,2 the court's interesting analysis of federal preemption of suits by disgruntled passengers against air carriers has potential to obscure a major lesson for counsel who rely on e-filing practices to omit annexing a copy of the original motion papers when making a motion for leave to renew or reargue. Just because the action was filed electronically does not mean counsel can simply make reference to electronic docket entry numbers. CPLR 2214(c) requires complete copies of the initial supporting papers to be filed with the new motion. If this step is not taken the new motion can fail at the outset.

In Hendrickson, the Second Department tackled an issue addressed "for the first time at an appellate level," namely, whether a defendant's failure to oppose a codefendant's motion to dismiss a complaint and cross-claims pursuant to CPLR 3211 precludes the silent defendant from later asserting that its liability is limited under CPLR article 16 governing relative apportionment of liability among tortfeasors. CPLR 1601, subdivision one, generally limits the liability to be imposed on a defendant that is jointly and severally liable for non-economic loss, for example an award of damages for pain and suffering, where that defendant's liability is found to be 50 percent or less of the total liability assigned to all persons liable. This is an attempt by the Legislature to make less culpable tortfeasors pay only an equitable share of the total "pain and suffering" damages in accordance with their relative fault. Some exceptions exist in CPLR 1602 but they were not involved in this case.

When a not-so-culpable defendant is held jointly and severally liable with other tortfeasors for noneconomic damages, that defendant's liability shall not exceed its proportionate share of the total liability for the noneconomic loss. Assessment of a defendant's equitable share as a percentage of the total liability assigned to "all persons liable" takes into account not only persons who are parties to the action, but also nonparties over whom jurisdiction could be obtained.

Because pain and suffering damages can result in enormous jury awards, multiple defendants often cross claim against each other seeking to establish as low a proportionate share of the noneconomic loss as possible. Such incentive for in-fighting creates tactical dilemmas for codefendants who otherwise might prefer to present a common front to the plaintiff. Pleading a cross-claim to preserve rights of proportionately limited liability is a formal, protective step which then permits strategic alliances by codefendants in other aspects of the litigation.

The Hendrickson case asks what happens when one codefendant moves to dismiss the plaintiff's action but one cross-claiming defendant does not and, further, does not even oppose in any way the motion of the defendant seeking dismissal of the complaint. If the motion to dismiss is granted and the moving defendants are out of the case, does the liability-limiting defense of the cross-claiming codefendant still remain viable? Can he still try to lessen his proportionate share of liability for the noneconomic loss under CPLR 1601? Or, as plaintiffs contended, does the dismissal of the defendant tortfeasor end the quest of the cross-claiming defendant to limit his liability.

The Appellate Division's answer is: "it depends." If the motion to dismiss the pleading is made under CPLR 3211(a)(7) for failure to state a cause of action, then the article 16 rights of the cross-claiming defendant are not extinguished. If the motion were one for summary judgment under CPLR 3212, then the non-objecting tortfeasor's rights to limit liability proportionately would be foreclosed. The reasons why are detailed in Justice Mark Dillon's opinion for the Second Department, an informative guide about the interface between Article 16 relief, dismissal motions and factual "gray" areas complicating the picture.

Here, in simplified form, is how the issue got teed up for the Appellate Division's review. Plaintiffs were the driver and occupants of a 1996 Ford Explorer when the left rear tire suffered a tread separation. The vehicle swerved, left the highway and rolled over several times. Plaintiffs, in two actions, sued Ford Motor Company, the Ford selling dealer and the tire manufacturer, Cooper Tire. In both actions, Cooper asserted, as an affirmative defense, that its liability should be limited pursuant to CPLR article 16. Dealer moved for summary judgment in both actions. Ford cross-moved pursuant to CPLR 3211(a)(7) to dismiss the complaints and all cross-claims. Dealer's and Ford's motions were unopposed by any party. Indeed, Ford's cross-motion to dismiss was supported with plaintiffs' interrogatory responses, in which they conceded that the Ford Explorer was not defective in a manner related to the accident.

Defense Dismissed

Plaintiffs trained their guns on Cooper. While the foregoing motions were pending, plaintiffs separately cross-moved to dismiss Cooper's affirmative defense of limited liability under CPLR article 16, contending that any dismissal of Dealer and Ford would terminate Cooper's defense. The trial court granted Dealer's and Ford's motions and also struck Cooper's affirmative defense seeking apportionment of fault with Dealer or Ford. Adding to the confusion as to precisely what Ford's cross-motion to dismiss was—a motion for failure to state a claim under CPLR 3211(a)(7) or a motion for summary judgment under CPLR 3212—was the trial court's recitation that it had awarded "Rule 3211(a)(7) summary judgment" to Ford.3 Cooper appealed the order striking its affirmative defense.

Plaintiffs maintained that, since Cooper failed to contest the award of "summary judgment" to Ford, that defendant received the "functional equivalent of a trial" that collaterally estops Cooper from attributing a portion of liability to Ford in calculating the apportionment otherwise required by CPLR article 16. Cooper argued that the complaints and cross-claims were dismissed against Ford not via summary judgment under CPLR 3212 but, rather, pursuant to CPLR 3211(a)(7), for plaintiffs' failure to state a cause of action against Ford. Since CPLR 3211(a)(7) dismissals merely address the adequacy of the complaint, and do not reach the substantive merits of the cause of action or defenses, Cooper argued that there never was the "functional equivalent" of a trial that would bar Ford's inclusion in the calculus of CPLR 1601, subdivision one, which is applicable to "all persons liable."

Ford's cross-motion presented the issue that plaintiffs' complaint "failed to state a cause of action upon which relief could be granted," seeking relief under CPLR 3211(a)(7). However, Ford did not argue that the complaint was deficient per se. Rather, Ford supported its cross-motion with plaintiffs' interrogatory responses conceding "no defect" or other basis for liability against the vehicle manufacturer. In its totality, Ford's cross-motion "suggests a lack of clarity" as to whether its cross-motion was addressed "only to the four corners of the pleadings" or whether it was, in reality, a CPLR 3212 cross-motion for summary judgment that relied on substantive discovery responses, "and was merely mischaracterized" by Ford as a motion governed by CPLR 3211. The trial court's award of a "Rule 3211(a)(7) summary judgment" to Ford was a disposition that was "a contradiction in terms," as a successful CPLR 3211(a)(7) motion will result in the dismissal of the complaint or other pleading "without addressing the merits, while a successful CPLR 3212 motion awards judgment to the moving party on the merits as a matter of law."4

Further, at no time did the trial court notify the parties that it was treating Ford's cross-motion as one for summary judgment, as courts are statutorily required to do under CPLR 3211(c) when a motion to dismiss is to be treated as a summary judgment motion. The Second Department said the critical question was, what was Ford's motion? If a motion to dismiss, "then there has been no functional equivalent of a trial here, and Ford may be considered to be among all persons liable." If the motion was treated by the court and parties as one for summary judgment, then Ford cannot be assessed liability for plaintiffs' damages "to any degree." The court observed that, until now, no New York appellate court has been called on to distinguish between the effect of dispositions under the two types of motions in the context of CPLR article 16 limitations on liability.

The Second Department analyzed all the factors, pro and con, for one view or the other, providing rich commentary on procedural niceties that litigators would do well to study. For example, in discussing when a court may be excused for failing to provide CPLR 3211(c) notice that it was converting a motion to dismiss to one for summary judgment, the court identified three circumstances: (1) when CPLR 3211(c) treatment is specifically requested not by one party, but by all of the parties (or at least by the party aggrieved by the summary judgment determination); (2) when a dispute involves no questions of fact but only issues of law argued by all parties; and (3) when the respective submissions of both parties demonstrate that they are laying bare their proof and deliberately charting a summary judgment course.5 The foregoing is one informational nugget, among many, from which litigators can learn valuable lessons.

None of these circumstances could excuse failure to apply CPLR 3211(c) notice in this case. Absent such notice from the court, Cooper "was never made aware" that the disposition might later be argued as having been "on the merits," or the "functional equivalent of trial." Indeed, Cooper cannot be said to have charted a summary judgment course. The content of plaintiffs' interrogatory responses merely results, in effect, as a withdrawal of plaintiffs' causes of action against Ford, further supporting a conclusion that the order of dismissal was not the functional equivalent of a trial.

Accordingly, the "particular facts of this case" warrant a conclusion that Ford's cross-motion was one to dismiss rather than one seeking summary judgment. Cooper's affirmative defense of limited liability under CPLR Article 16 should not have been struck. Cooper may seek to attribute any liability to Ford as part of the total liability assigned to "all persons liable." Finally, the court cautioned that some CPLR 3211 dismissals are considered to be on the merits, such as dismissals under subdivision (a)(5) for actions commenced beyond the statute of limitations and actions barred by the statute of frauds. Therefore, the court limited "the scope of our determination here to uncontested motions brought under CPLR 3211(a)(7)."

E-Filing Issue

In Biscone, the Second Department held preempted by federal law a putative class action suit alleging that the named plaintiff passenger and others were confined in an airplane remaining on the tarmac for some 11 hours without adequate food, water, clean air and toilet facilities. The plaintiff alleged intentional tort and fraud claims. Issued on Dec. 26, Justice Leonard B. Austin's opinion for the court is a thorough analysis of federal preemption law applicable to a variety of claims filed against airlines. His analysis explores a range of decisions in other jurisdictions. The question usually is whether the state action or a lawsuit is "related to a price, route, or service" of an air carrier as set forth in the Airline Deregulation Act (ADA).

Plaintiff argued that the confinement of passengers in a grounded aircraft for an 11-hour period against their will is not related to the provision of "services," since passengers do not bargain for or anticipate such lengthy confinement against their will. She also contended that the conduct underlying her tort claims are too attenuated from the ADA's objective of ensuring economic deregulation of the airline industry. The Second Department rejected these arguments and held the claims preempted. Reflected in Austin's comprehensive survey of case law are interesting tales of woe by passengers. Consider, for example, the claim of a passenger injured when a case of rum fell from an overhead bin. The Fifth Circuit held against preemption of that claim.6 Other factual scenarios are described. Those contemplating a suit against air carriers or defending one should review the Biscone decision.

Here we focus on a procedural nicety tucked away in the opinion that has practical value to litigators using electronic filing (e-filing) of an action. The question is whether the failure to annex a complete set of the originally submitted papers in support of a motion for leave to renew or reargue a motion for class certification warrants denial of that motion. In other words, does the advent of e-filing of suits permit counsel, in a motion to renew or reargue, to simply refer to e-filed documents in lieu of annexing a complete set of the originally submitted motion papers? The Second Department held that compliance with CPLR 2214(c) requires annexation of a complete set of the originally submitted papers. Failure to do so warrants denial of the motion for leave to renew or reargue the class certification motion.

Plaintiffs' counsel did not attach exhibits to his affirmation, but simply referred to documents by electronic docket entry numbers. When a document has been filed and served electronically7 there is no authority compelling a court to consider papers which were not submitted in connection with the motion on which it is ruling. E-filing does not dispense with the need to annex a copy of the original motion papers. The motion court should not be compelled to locate previously submitted documents in the electronic record.8

Michael Hoenig is a member of Herzfeld & Rubin.

Endnotes:

1. 2012 NY Slip Op 08489 (2d Dept., Dec. 12, 2012).

2. 2012 NY Slip Op 09019 (2d Dept., Dec. 26, 2012).

3. Hendrickson, 2012 NY Slip Op 08489, at p. 6.

4. Id.

5. Id. at p. 8.

6. Biscone, Id. at p. 14 (citing Hodges v. Delta Airlines, 44 F.3d 334, 336 (5th Cir.)).

7. 22 NYCRR 202.5-b[d][i].

8. Biscone, NY Slip Op 09019, at pp. 20-21.

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