The Justices of the Appellate Division are back for the Fall 2018 session. Although the color of the leaves change in the fall, nothing has changed for the four Appellate Division departments as they continue to churn out words of wisdom and legal scholarship. Below are some examples. Enjoy!

First Department

Human Rights Law. Does the New York City Human Rights Law's (NYCHRL) prohibition of discrimination based on “actual or perceived … marital status” encompass discrimination based on the identity of a person's spouse? Noting that this was an issue of first impression, the First Department in Morse v. Fidessa, 2018 N.Y. Slip Op. 05975 (1st Dep't Sept. 6, 2018), answered in the affirmative.

Plaintiff alleged he was suspended and then fired because a former co-worker, whom the employer perceived to be plaintiff's spouse, had left to work for a competitor. Plaintiff further alleged he was told he could return to work if he divorced the former co-worker. Noting that a similarly situated, but unmarried, couple was not treated this way, plaintiff asserted a NYCHRL violation. Supreme Court denied the employer's motion to dismiss the complaint.

In an opinion authored by Justice Rolando T. Acosta, the First Department unanimously affirmed. The court noted that the Local Civil Rights Restoration Act of 2005 required a liberal construction of the NYCHRL. To that end, and “[i]n light of the uniquely broad and remedial purposes of the [NYCHRL],” the First Department held that “'marital status' must be given a broader meaning than simply married or not married, and that it must encompass other factors that may be used to deem the relationship 'disqualifying.'” This includes “whether two individuals are married to each other or not married to each other.”

Adverse Possession. Did a community garden, formed in 1985 to clean up and improve a vacant lot strewn with garbage and used needles which was located across the street from an elementary school, state a claim for adverse possession? Addressing what “must be an extremely rare occurrence in Manhattan, to wit, a claim of adverse possession of prime real estate located in the Lower East Side,” the First Department in Children's Magical Garden v. Norfolk St. Dev., 2018 N.Y. Slip Op. 05223 (1st Dep't July 12, 2018), answered in the affirmative.

After one of the defendants purchased the lot in 2014, the community garden association filed suit claiming adverse possession. Defendant moved to dismiss on the grounds that plaintiff's possession was not “continuous” over the required 10-year statutory period because, while formed in 1985, plaintiff had only been incorporated in 2012. Supreme Court denied the motion.

In a unanimous opinion authored by Justice Peter Tom, the First Department affirmed. The First Department noted that the community garden's members had continuously, openly, and in legally hostile fashion possessed the lots for more than 10 years, even prior to 2012. When the community garden was ultimately incorporated in 2012, the members were able to convey their rights as adverse possessors to the new not-for-profit corporation.

Second Department

Evidence. May a defendant introduce, as a prior consistent statement under Evidence Rule 8.31, evidence of a pre-arrest statement that was consistent with defendant's explanation of his conduct at the time of arrest to rebut the prosecution's charge that the explanation was false? In People v. Watson, 2018 N.Y. Slip Op. 05760 (2d Dep't Aug. 15, 2018), the Second Department held that because the defendant did not testify at trial, Evidence Rule 8.31 did not apply and thus the evidence was inadmissible.

After the livery car in which defendant was riding was pulled over for a traffic violation, defendant was searched and arrested for criminal possession of a weapon. At trial, the arresting officer testified that defendant stated he was on his way to the local precinct to surrender the gun (and therefore would be immune from criminal liability). In response, the prosecution introduced evidence from the livery car driver that the destination for the trip was actually half a mile from the precinct house. Defendant sought to introduce evidence from other witnesses that he had told them he intended to surrender the weapon. Supreme Court refused to admit the testimony, and defendant was convicted.

In an unsigned majority opinion, the Second Department held that the proffered testimony did not qualify as a prior consistent statement under Evidence Rule 8.31. That Rule only applies where the defendant's trial testimony is challenged as a recent fabrication. Here, defendant elected not to testify at trial, and the prosecution did not claim a recent fabrication but rather that defendant's explanation was false from the start.

Third Department

Tax Law. Tax Law §15(e) provides a credit for property taxes paid by a qualified empire zone enterprise (QEZE) via “direct payment” to the taxing authority. But are the credits available if the property taxes are paid via a mortgage related tax escrow account? In Balbo v. New York State Tax Appeals Tribunal, 2018 N.Y. Slip Op. 05540 (3d Dep't July 26, 2018), the Third Department concluded that they are.

Petitioner is the sole member of a QEZE which owned an office complex. When the mortgage was refinanced, the lender required that property taxes be remitted to its servicer, which would deposit the funds in an escrow account and then remit payment to the taxing authority on behalf of the owner. Subsequently, when petitioner filed his tax returns and claimed the QEZE property tax credit, the Department of Taxation and Finance denied the credits. The Tax Appeals Tribunal affirmed on appeal, and petitioner commenced an Article 78 proceeding.

In a unanimous opinion authored by Justice John C. Egan, the Third Department held that petitioner had demonstrated an entitlement to the tax credits. The court concluded that payment through the escrow account was the “functional equivalent of a direct payment to the taxing authority,” and “neither the Commissioner of Taxation and Finance nor the relevant legislative history provide any cogent policy argument” as to why using the escrow account should preclude petitioner's ability to claim the credits.

Fourth Department

Civil Procedure. In Cayuga Nation v. Campbell, 2018 N.Y. Slip Op. 05427 (4th Dep't July 25, 2018), the Fourth Department took up the latest dispute over control of the Cayuga Nation and affirmed the Supreme Court's subject matter jurisdiction over a lawsuit by one faction against a competing faction for control of the Nation's offices and other property.

After the U.S. Department of the Interior, Bureau of Indian Affairs (BIA), recognized two of plaintiff's members as the Nation's representatives for purposes of interactions with the federal government, defendants took control of certain property belonging to the Nation, including its offices. Plaintiff's action to regain control of the property was dismissed for lack of subject matter jurisdiction. Thereafter, plaintiff and defendants submitted competing requests to the BIA for federal funding, including funds to maintain the Nation's offices. The BIA reviewed evidence presented by each party that it was the true governing body, decided to recognize plaintiff, and awarded it a federal contract. Plaintiff then brought a new action alleging trespass among other claims and seeking a preliminary injunction directing defendants to vacate the property. This time, Supreme Court denied defendants' motion to dismiss.

A divided panel of the Fourth Department affirmed. The majority concluded that, while New York courts cannot interfere with the Nation's governance and right to self-determination, they were not required to do so here. Rather, the New York courts must defer to the BIA's determination that the Nation has resolved the governance issue in favor of plaintiff and decide the claims on that basis. In dissent, two justices argued that the BIA's limited determination did not preclude defendants from contending they had a legitimate claim to the property. “Inasmuch as … defendants' legitimate authority or justification is material to each of the causes of action … , the court cannot rule on those claims without impermissibly resolving questions of tribal law.”

Due Process. In Hill v. State University of New York at Buffalo, 2018 N.Y. Slip Op. 05104 (4th Dep't July 6, 2018), the Fourth Department delivered a strong reminder to colleges and universities “of their unwavering obligation to conduct student disciplinary proceedings in a manner that comports with fundamental notions of due process for the accused.”

Following a hearing, the University had determined that petitioner possessed weapons and engaged in harassment in violation of its code of conduct, and sanctioned petitioner with 50 hours of community service, two years of disciplinary probation, and exclusion from on-campus housing. Petitioner's Article 78 proceeding was transferred to the Fourth Department. In an unsigned opinion, the Fourth Department annulled the University's determination, which it found to rest “exclusively on a 'seriously controverted' hearsay statement.” The court further rejected the University's request to remit the matter for a new hearing because the University failed to transcribe the initial hearing, a procedural error. “[W]e are compelled to express our dismay at respondent's cavalier attitude toward petitioner's due process rights in this case.”

E. Leo Milonas is a litigation partner at Pillsbury Winthrop Shaw Pittman. He is a former Associate Justice of the Appellate Division, First Department, and the former Chief Administrative Judge of the State of New York. Andrew C. Smith is also a litigation partner at the firm. Pillsbury senior associates Jay D. Dealy and Joshua I. Schlenger and associate Brian L. Beckerman assisted in the preparation of this column.