On Dec. 22, 2016, the Court of Appeals issued its decision in Matter of Newcomb v. Middle Country Sch. Dis., 28 N.Y.3d 455 (2016), addressing one of the required elements to obtain leave to file a late Notice of Claim. Before Newcomb, all four departments of the Appellate Division demonstrated inconsistent treatment of the substantial prejudice element of the late Notice of Claim inquiry. All four departments had decisions on the books in which petitioners bore the burden to demonstrate that the municipality would not be substantially prejudiced. Id. at 466. However, all four departments also issued decisions in which this burden was initially placed on the municipality to demonstrate the lack of substantial prejudice or shifted the burden from the petitioner to the municipality when the petitioner met its initial burden. Id. In Newcomb, the court resolved, for the most part, this split.

The Court's Decision in 'Newcomb'

Newcomb arose from a March 23, 2013 hit-and-run accident. Shortly after the accident, petitioner notified his son's school, within the respondent school district, of the accident, including the location. Petitioner's counsel requested a copy of the police department's investigation of the accident but was informed it would not be released until the investigation concluded. Petitioner's counsel also retained an investigator who photographed the scene of the accident, and Notices of Claim were served on the State, County, and Town.

In September 2013, petitioner's counsel obtained the police investigation file, which included photographs depicting a “large sign” at the corner of the intersection where the accident occurred and which did not appear in the photographs taken by petitioner's investigator. Due to the size of the police photographs, petitioner's counsel was unable to read the sign and requested enlarged copies or negatives, which he received in November 2013. Petitioner's counsel determined that the sign advertised a play at another school in the school district. Based on this information, petitioner served a Notice of Claim on the school district and moved for leave to file a late Notice of Claim or to have the served Notice of Claim deemed timely.

Petitioner argued that the school district was not substantially prejudiced because it: (1) placed the sign at the accident location and removed it (within 90 days of March 23); (2) knew about the accident “within a few days of its occurrence;” (3) had access to the police investigation; and (4) could inspect the scene on its own, which was unchanged except for the removal of the sign. An affirmation from the school district's counsel argued that petitioner had the burden to demonstrate the absence of substantial prejudice, which could be inferred from the delay in serving the Notice of Claim.

Supreme Court denied petitioner's application, holding that petitioner did not satisfy his burden of demonstrating the lack of substantial prejudice. The court presumed that the “matriculation and graduation of students … as well as personnel changes” hindered the school district's ability to investigate the sign. The court further concluded that substantial prejudice could be “inferred” solely from the passage of time. The Appellate Division affirmed.

The Court of Appeals reversed, noting that the decision to grant leave to file a late Notice of Claim is discretionary but must be supported by “record evidence,” which did not exist in Newcomb. While the court acknowledged “lengthy delays” should be considered when evaluating the substantial prejudice element, the inquiry is still subject to the “record evidence” requirement. Moreover, the court recognized that it could be possible for a municipality to have actual knowledge but still to be substantially prejudiced by a late Notice of Claim.

Resolving the split in the Appellate Division departments, the court held that the burden initially lies with the petitioner to demonstrate the lack of substantial prejudice. This burden does not require “extensive” evidence but must include “some evidence or plausible argument” that there is no substantial prejudice. If met, the municipality must demonstrate, with “particularized evidence,” substantial prejudice. The court described this framework as striking a “fair balance” between petitioners and municipalities, which are “in the best position to know and demonstrate whether it has been substantially prejudiced.”

Applied to Newcomb, the court found the petitioner met its initial burden by submitting the photographs from the police investigation file, which would permit the school district to “reconstruct the conditions on the date of the accident.” As to the school district, the court held speculation and inference relied upon by the lower courts failed to satisfy the “particularized evidence” standard.

'Substantial Prejudice' and Late Notice of Claim Motions After 'Newcomb'

The court's decision in Newcomb was an important clarification of where the burden of proof regarding substantial prejudice lies, and what proof satisfies that burden. That the burden should initially lie with a petitioner and then shift to the municipality should come as no surprise, as this is how the burden of proof is handled in many situations. What is surprising, and potentially concerning for municipalities, is the imbalance in the evidence that will satisfy petitioner's initial burden and the municipality's burden.

In addition to photographs, the petitioner's burden will also be met when a claim is based on “easily verifiable, well-documented, objective facts” within the control and knowledge of the municipality. See Matter of City of New York v. County of Nassau, 146 A.D.3d 948 (2d Dept. 2017). A petitioner may rely on an investigation conducted by a municipality, see Matter of Kerner v. County of Nassau, 150 A.D.3d 1234 (2d Dept. 2017), or that the municipality repaired the alleged condition, see Camins v. New York City Hous. Auth., 151 A.D.3d 589 (1st Dept. 2017). There will not be substantial prejudice where a repair is started before an investigation can be conducted but during the repair. See Daprile v. Town of Copake, 155 A.D.3d 1405 (4th Dept. 2017). A petitioner may demonstrate a lack of substantial prejudice by identifying the precise location of the underlying incident during a GML §50-h hearing. See Matter of Kranick v. Niskayuna Cent. Sch. Dist., 151 A.D.3d 1262 (3d Dept. 2017).

Actual knowledge an accident occurred has been found to demonstrate a lack of substantial prejudice. See Matter of Jaffier v. City of New York, 148 A.D.3d 1021 (2d Dept. 2017). Substantial prejudice may also be determined by the amount of time that elapsed after the 90-day period to file a Notice of Claim. See Matter of Cruz v. City of New York, 149 A.D.3d 835 (2d Dept. 2017).

The “some evidence or plausible argument” requirement will not be met if the fact that the condition of the location is unchanged is irrelevant to a claim. See Matter of A.C. v. West Babylon Union Free Sch. Dist., 147 A.D.3d 1047 (2d Dept. 2017). Records describing the underlying occurrence or the petitioner's injuries but that do not connect either to negligent conduct are insufficient to meet the initial burden. Id.; see also Kennedy v. Oswego City Sch. Dist., 148 A.D.3d 1790 (4th Dept. 2017); cf. Matter of McClancy v. Plainedge Union Free Sch. Dist., 153 A.D.3d 1413 (2d Dept. 2017). The awareness of a municipal employee may also be insufficient to qualify as “some evidence or plausible argument.” See Matter of Ramos v. Bd. of Educ. of the City of New York, 148 A.D.3d 909 (2d Dept. 2017).

In Matter of Grajko v. City of New York, 150 A.D.3d 595 (1st Dept. 2017), appeal dismissed 2017 NY Slip Op 08039 (Ct. App. Nov. 16, 2017), the majority held that the petitioner failed to establish a lack of substantial prejudice because the petitioner did not point to any specific evidence the City was aware the accident occurred. Rather, the petitioner cited construction documents but did not point to any specific documents or provide the names of any witnesses.

The two-justice dissent found that the petitioner established a lack of substantial prejudice, relying on the petitioner's affidavit that described the scaffold and the nature of the petitioner's work in detail, including the fact that the scaffold was disassembled daily and could not be inspected. The dissent also noted that the petitioner relied upon several witnesses who could testify regarding the condition of the scaffold and his injuries, and photographs that could be used to “reconstruct and investigate the accident.” Finally, the dissent noted that the City could obtain records from its contractor to investigate and defend against the petitioner's claim, and to identify potential witnesses.

Other than the fact that speculation and inference will not suffice, it is less clear what satisfies the “particularized evidence” standard a municipality must meet. Few decisions since Newcomb address the municipality's burden. An affirmation from counsel without any supporting affidavits from a person with knowledge is not “particularized evidence.” Further, the appellate courts do not appear hesitant to overrule decisions where the lower court does not rely on evidence in the record.

Rather than being a “fair balance,” the burden placed on municipalities is far greater than that placed on petitioners. The court's stated rationale behind the substantial prejudice inquiry assumes that a municipality will be able, at the time a petitioner chooses to seek leave to file a late Notice of Claim, to articulate and present “particularized evidence” as to how it has been substantially prejudiced. Conceivably, in the short time in which a municipality would have to respond to such an application, it would not be possible to gather the necessary information and evidence to meet its burden. It is also possible that such evidence simply does not exist due to the passage of time. The true impact of Newcomb will only be clear as the lower courts apply the new substantial prejudice test in the future.

Bradley M. Wanner is an associate at Harris Beach. Andrew J. Orenstein is a partner at the firm.