Notification of Insurer Created Gaps

The Second Department recently decided a case which expands the notification requirements set forth in New York Insurance Law § 3425(d)(1). Statutory interpretation of this section supports that a “change of limits” includes an umbrella policy’s change of the required underlying limits in a primary automobile policy. Insurance providers should be sure to understand the Gotkin ruling when providing notice for renewing policies.

In the Gotkin v. Allstate Insurance case, the plaintiff maintained both automobile and umbrella insurance policies with Allstate since 1990. In 2004, he changed his automobile insurance to a policy under Nationwide, but decided to keep the automobile policy with Allstate. Upon making this change, and without adequately informing the policy holder, Allstate increased the underling primary limits that the insured was required to maintain, creating a gap of $150,000 in the policies. After being involved in an automobile accident, Allstate informed the plaintiff that due to his failure to comply with the increased limits he was not sufficiently covered.

The insured sued, and the court found that the notice requirement of § 3425(d)(1) of the New York Insurance Law applies to an umbrella policy when certain amounts of underlying coverage are required to be maintained. A failure to send the required notice provides a basis for reforming the policy. In accordance with this section, Allstate was required to provide written notice of the new conditions at a minimum of 45 days prior to the end of the policy. Included in this notice must be the reasons for the new conditions.

Upon reviewing the circumstances of this case, the Court explained that if a “change to the requirements of the underlying limits to a primary automobile insurance policy…create a gap in coverage in an umbrella policy upon which renewal is conditioned, [it] requires that the insurer provide proper notice… and the failure to do so provides a basis to grant reformation of the umbrella policy.” This requirement is not dependent on whether the insured knew of the gap or had read the policy. By creating a gap in coverage, the insurer implemented a “change” of the limits of the policy which required the mandated notice. The Court granted the insured’s motion of summary judgment for reformation of the policy in accordance with § 3425(d)(1).

Is Mere Speculation Of Cause Of Accident Enough To Establish The Cause Of Plaintiff’s Injuries?

In Hahn v. Go Go Bus Tours, Inc., 2016, NY Slip Op 07294, the Second Department recently reversed a Supreme Court, Queens County case in which it had denied defendant’s motion for summary judgment.

Here, the plaintiff fell while attempting to board a bus that was parked along a sidewalk. Plaintiff was unable to identify the cause of his accident without speculation. As a result, defendant moved for summary judgment arguing “its prima facie showing of entitlement to judgment as a matter of law by establishing that the plaintiff cannot identify the cause of his or her fall without engaging in speculation” (Ash v City of New York, 109 AD3d at 855; see Mitgang v PJ Venture HG, LLC, 126 AD3d at 863-864).

The Court held that although proximate cause may be established by inferences from the circumstances of the accident, where there could have been many possible causes, mere speculation as to the cause of the accident is fatal to a cause of action. See Patrick v. Costco Wholesale Corp., 77 AD3d 810; McFadden v. 726 Liberty Corp., 89 AD3d 1067; Costantino v. Webel, 57 AD3d 472; Alabre v. Kings Flatland Car Care Ctr., Inc. 84 AD3d 1286. The Court noted that it could have been just as likely that plaintiff had a misstep or a loss of balance which attributed to plaintiff’s trip and fall accident.

As a result, the Court held defendants were entitled to summary judgment as a matter of law since plaintiff could not identify the cause of his accident without mere speculation.

In A Slip And Fall Case, Is A Slippery Surface Enough To Support A Cause Of Action For Negligence?

In Kapoor v. Randlett, 2016, NY Slip Op 07927, plaintiff testified that he slipped on wax that was applied to the top step of a wooden staircase inside an apartment he was renting. Plaintiff commenced suit alleging defendants negligently applied wax to the staircase.

Defendants moved for summary judgment as to the alleged negligent application of wax or polish to the staircase.

The Court, citing to Mroz v. Ella Corp., 262 AD2d 465, held “in the absence of evidence of a negligent application of floor wax or polish, the mere fact that a smooth floor may be slippery does not support a cause of action to recover damages for negligence”.

In opposition, plaintiff contended that the staircase was in violation of Administrative Code of the City of New York, Section 27-375(h). However, the Court noted, since the subject staircase did not serve as a required exit from the building, the cited Administrative Code did not apply.

Therefore, the Court reversed the Supreme Court’s decision and held defendants’ submitted evidence sufficient to “establish their prima facie entitlement to judgment as a matter of law dismissing so much of the complaint as was based on the defendants’ alleged negligent application of wax or polish to the subject staircase.”

Negligence Action against Municipality Should Not Have Been Dismissed Where Fire Rekindled After Assurance by Fire Department Personnel That Fire Had Been Extinguished

By James Brodie, Esq.

In a decision dated November 23, 2016, the Appellate Division, Third Department decided the issue of whether the plaintiff’s negligence cause of action should have been dismissed by the Supreme Court.

 On the evening of February 2, 2013, the plaintiff’s home caught fire in the City of Albany prompting him to call 911 immediately. Shortly thereafter, the defendant City of Albany Fire Department responded to the scene and undertook efforts to stop the fire. Notably, the plaintiffs alleged that, “some time later, the Department’s lead investigator advised them that the fire had been fully extinguished and that it was therefore safe to reenter the premises.” Trimble v. City of Albany (2016 NY Slip Op 07912). Based on the investigator’s statement, the plaintiffs reentered their home, gathered some belongings, and then left to sleep at a relative’s home for the night.

 At some point during the night, the fire rekindled and the home was completely destroyed. As a result of their investigation, the Department “concluded that the rekindling of the fire was caused by embers from the initial fire that had gone undetected in a window well beneath the kitchen.”

 Because of that fact, the plaintiffs filed a claim for negligence against the City of Albany. Thereafter, the defendant made a motion to dismiss the complaint, arguing that the plaintiffs “failed to establish the existence of a special relationship giving rise to a duty of care and, further, that the firefighters on the scene were performing discretionary governmental function for which liability cannot be imposed.” The trial court granted the defendant’s motion, finding that (1) no special relationship existed between the parties, and (2) the defendant was entitled to governmental immunity.

 Case law provides that a municipality may not be held liable for the negligent performance of a governmental function such as fire protection unless the municipality “voluntarily undertakes to act on behalf of a specific citizen, who relies on a promise of protection offered by the municipality to his or her detriment.” Id. A special relationship exists where the plaintiff can establish the following elements: (1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the part who was injured, (2) knowledge on the part of the municipality’s agents that inaction could lead to harm, (3) some form of direct contact between the municipality’s agents and the injured party, and (4) the party’s justifiable reliance on the municipality’s affirmative undertaking.

 On appeal, the Appellate Division found for the plaintiffs and reversed the Supreme Court’s decision. In particular, the Court found that a special relationship was established through the Fire Department’s affirmative representations to the plaintiffs that the fire had been fully extinguished and that it was safe to reenter the home. The second and third elements were simply be inferred from the circumstances. Lastly, the Court held that, under the circumstances, a jury could “find that the plaintiff’s reliance on the Department’s assurances was reasonable and that such assurances ‘lulled [them] into a false sense of security and . . . thereby induced [them] . . . to forego other available avenues of protection with regard to the property.”

 The defendant also asserted the defense of governmental immunity which shields public entities from liability for discretionary actions taken during the performance of governmental functions. In particular, this defense is only available when the conduct giving rise to the claim is related to an exercise of discretion (meaning the exercise of reasoned judgment which would typically produce different acceptable results).

 While the function of firefighting undoubtedly involves the exercise of discretion, the plaintiff asserted that the defendant was negligent through its specific failures (1) to overhaul the area underneath the window well where it was determined that the second fire had originated and (2) remove loose debris and damaged material from the window well area following the first fire (a violation of its own standard operating procedures and protocols). The Court agreed, holding that the failures listed above were not the consequence of an actual decision or choice on the part of the Department, but instead that the Fire Department had not made a judgment of any sort. As a result, the defense of governmental immunity was deemed inapplicable to the present circumstances.

Court of Appeals Forces Significant Change for Title Insurance Companies

By Christopher Connors

The well-established precedent in New York has long been to apply a six-year statute of limitations on fraud applied to deed forgery claims.  A recent decision by the Court of Appeals would likely require title insurance companies to develop new policies in response to a critical change in a claim for deed forgery.  In a closely contested decision, the Court of Appeals made a drastic change from its traditional application of the statute of frauds in deed forgery cases.

 In a recent 4-3 ruling by the Court of Appeals, it was decided that the six-year statute of limitations set forth in CPLR 213, does not deny the plaintiff from setting aside a forged deed.  The Court in Faison v. Lewis, 25 N.Y.3d 220, went on to explain that a deed containing a forged signature is void initially and will not convey good title.  They also explained that what is void at its inception cannot be validated by the use of a statute of limitations defense.

 First cousins, Faison and Lewis were each set to receive a one-half interest in a property from their respective parents upon the parent’s death.  In 2001, a “correction deed” was created with the intentions of conveying the entire property to Lewis.  Shortly thereafter, Faison’s father passed away, and Faison challenged the deed, claiming that her father’s signature had been acquired through an act of forgery.  At the time she challenged the deed, however, Faison was not the administrator of her father’s estate, and the case was properly dismissed.  Despite Faison’s efforts to alert the estate’s attorney to pursue her claim, the attorney never took action. The attorney has since been disbarred from the practice of law.  In 2009, now in sole possession of the property, Lewis acquired a loan from Bank of America secured by a mortgage on the property.  Faison went on to challenge the validity of the deed and the newly acquired loan a year later when she was appointed the administrator of the estate by the Surrogate’s Court.  However, she failed when the court ruled that the claim was barred by a six year statute of limitations for fraud applied to forgery claims.

 Bank of America was successful in the lower courts, blocking Faison’s attempts to disregard the statute of limitations in this case.  On appeal however, the Court of Appeals reversed the intermediate and trial court’s decision, and established a new precedent in these types of cases.  It was determined that a statute of limitations defense may not be used to protect a document that was established by fraudulent means. The majority believed that “barriers” should not be placed around a forged deed to protect it given its fraudulent nature.    The court followed the belief that a forged deed is “void ab initio” or null at its inception, and therefore the statute of limitations defense does not apply.

 While the decision may be good news for those seeking to recover property lost by a forged deed many years ago, it exposes title insurers to increased litigation expenses and greater risk.  Regardless of how old a deed may be, claims for forgery may now be brought to set the deed aside, increasing the potential liability title insurance companies face. Title insurance companies should be mindful of this decision when developing policies and assuming risk.  For further information on this issue, please contact Flink Smith.

First Department Refuses to Grant Defendant’s Motion for Summary Judgment on the issue of Constructive Notice for the Hazardous Wet Condition Consisting of “Beads of Water” on a Gym Floor

To establish a defendant’s liability in a slip and fall case, a plaintiff must show that the plaintiff’s injury was caused by a hazardous condition on the defendant’s premises of which the defendant had actual or constructive notice.  Heavy litigated is whether there is sufficient evidence of such notice.

Plaintiff alleged he slipped and fell on beads of water as he had left the pool area and was heading into the men’s locker room. Plaintiff had testified at his examination before trial that he had used the gym’s pool and poolside shower.  After plaintiff rinsed off, he proceeded from the poolside corridor to head into the men’s locker room.  However, plaintiff testified that as he stepped off a Dri-Dek covered matt onto the glossy ceramic floor tile, he was caused to slip and fall.

It was established that the location of plaintiff’s fall was in a central spot in which patrons could access the showers, sinks, sauna, steam room and the pathway leading to the pool.  From the pool-side into the corridor, the ceramic tile floor was covered with matts. However, as the corridor approached the locker room, there was a drain and no matts where in place.  Furthermore, the men’s locker room consisted of two separate locker areas with one area containing carpet on the floor. There were not any “wet floor” signs in the proximity of where plaintiff slipped and fell.

Defendant’s employees had inconsistent testimony in that one employee testified the area where plaintiff slipped and fell was mopped every 15-20 minutes; however another employee testified the maintenance staff would put out “wet floor” signs in an effort to avoid frequent mopping.  Furthermore, there was no written schedule or written confirmation of any mopping performed.  Additionally, plaintiff testified that at times towels would be placed on the floor in front of the entrance to the carpeted area of the men’s locker room to protect the carpet from getting wet. The Court held there is an “inference that the staff did not mop up the main locker room tile floor with sufficient frequency to keep hazardous conditions from developing”.

Seeking a reversal of the lower Court’s denial of defendant’s motion for summary judgment, the defendant cited previous First Department case law in which the Court dismissed actions where water was “necessarily incidental to the use of the area”. Here however, the Court distinguished the facts, and held that defendant’s cited cases did not stand for the “ broader proposition that any water on a tiled floor anywhere in a locker room must preclude a claim for negligence because water is “necessarily incidental” to the entire locker room’s intended use”.  The Court held the evidence at hand “precludes determination as a matter of law regarding whether defendant had constructive notice of a hazardous wet condition”, denying a reversal of the lower court decision and the motion for summary judgment.  See Grossman v. TCR, 2016 NY Slip Op 06114 (1st Dept. 2016).

Does a Special Relationship Exist Between an Insurance Agent and Client Giving Rise to a Duty to Guide and Advise the Client?

In the context of a recent insurance malpractice action, the Third Department was asked to determine if a special relationship existed between an insurance agent and an insured.  See Finch v Steve Cardell Agency, 136 AD3d 1198 [3d Dept 2016].

 Dating back to 2006, the plaintiff owned bulls and other animals and was in the business of operating rodeos.  At about that time, he began obtaining homeowners’ insurance and liability and auto coverage for his business operations from the defendant insurance agency located in New York.  In particular, he secured liability coverage for rodeos before each event by calling the defendant, with the defendant thereafter providing the plaintiff with an insurance certificate.

 In August of 2012, the plaintiff called the defendant and spoke to an office assistant to obtain coverage for an upcoming rodeo in Pennsylvania.  The carrier that had previously issued policies to the plaintiff declined to do so on this occasion due to event’s location.  As a result, the office assistant found what she believed to be equivalent coverage from another carrier.

 At the conclusion of the Pennsylvania rodeo, multiple animals escaped while being led from a holding pen to the plaintiff’s trailer.  Several individuals were injured and subsequently filed suit against the plaintiff.  After reviewing the policy issued to the plaintiff for the event, the defendant discovered an exclusion for injuries caused by animals.  As a result, the carrier denied coverage, also relying upon an exclusion for losses arising from the “use of an auto” (defined to include loading and unloading operations).

 When the plaintiff sought coverage under a separate automobile insurance policy that defendant had furnished through a different company, that carrier also denied coverage on the ground that the trailer into which the bulls were being loaded was not listed in the policy’s schedule of covered vehicles. Although the plaintiff’s trucks were listed and covered, on that occasion he had used a borrowed truck owned by two co-defendants in the case to tow his trailer to the rodeo.

 The plaintiff filed an insurance malpractice action, alleging that the defendant was negligent in procuring a policy for the rodeo with an exclusion for injuries caused by animals. The plaintiff additionally alleged that defendant negligently failed to advise him of the “gap in coverage” created by the auto exclusion, and that this failure resulted in his lack of coverage.  The plaintiff and defendant each moved for summary judgment.  The trial court granted the defendant’s motion and the plaintiffs appealed.

 As case law has established, “[a]n insurance agent has a common-law duty to provide requested coverage within a reasonable time and may be held liable for negligence or breach of contract when a client establishes that a specific request was made for coverage that was not provided in the policy (citations omitted). A breach of this duty will give rise to liability if it is shown to be the proximate cause of a client’s loss (citations omitted).  Finch at 1200.

 “Although an insurance agent’s common-law duty to his or her clients does not include a continuing duty to advise the clients on appropriate coverage or to recommend additional coverage that the clients did not request (citation omitted), an agent may be liable for failing to provide appropriate advice in circumstances where there is a special relationship . . . [S]uch a relationship may arise when ‘there is a course of dealing over an extended period of time which would have put objectively reasonable insurance agents on notice that their advice was being sought and specially relied on’ (citation omitted). The question of whether a special relationship exists between an insurance agent and a client giving rise to a duty to guide and advise the client is a factual determination that ‘is governed by the particular relationship between the parties and is best determined on a case-by-case basis’ (citation omttied).”  Finch at 1200-01.

 In Finch, the plaintiff alleged claimed (1) to have purchased his personal and business insurance from the defendant agency for over six years, (2) that he knew very little about the policies previously issued to him, and (3) that he relied upon the defendant to obtain adequate/appropriate coverage for his rodeo events.  He further stated that he had never seen any of the rodeo insurance policies that defendant procured on his behalf, that insurance certificates were the only documents ever provided to him, and that “with [Cardell] being [his] agent for years, [he] took that as he was representing [him] and making sure that [he] was covered.”

As for the defendant’s failure to include the trailer as a covered vehicles in the plaintiff’s automobile insurance policy, which the defendant had also procured, the plaintiff stated that “he understood that his trailers were covered by his truck insurance and that he was never advised that his trailers should be separately listed as covered vehicles until after the Pennsylvania incident.”

 Steve Cardell, principal of the defendant, testified and “acknowledged that the presence of the animal exclusion in the policy was an error, stating that the assistant ‘overlooked’ the exclusion, that he did not discover it until after the incident, and that an employee of the [ ] agency was later fired for issuing the policy with the animal exclusion.” Notably, nothing in his testimony contradicted the plaintiff’s allegations that he had relied upon defendant to procure adequate coverage, or that defendant had not advised him of any need for additional protection because of the auto exclusion.

 As to the auto exclusion, the Court held that the language at issue in the policy was “not a coverage provision in an automobile liability policy, but an exclusion from coverage in a general liability insurance policy” and that “such exclusions are subject to a strict and narrow construction and can be ‘enforced only when the insurer establishes that the pertinent language is ‘subject to no other reasonable interpretation’. ”

 The record contained no specific information “as to the circumstances in which the plaintiff’s bulls caused injuries after their escape, or how closely related those circumstances were to the operation of transferring the bulls from the holding pen to the trailer. “ As a result, the record did not establish as a matter of law that the carrier would necessarily be able to show that the injuries fell within the scope of the exclusion.

 In conclusion, the decision stated that (1) the question of  “whether negligence on the part of an insurance agent or broker proximately caused a client’s losses should generally be resolved by the factfinder” and (2) based upon the record of the case, there was a question of fact as to that issue.

The First Department Further Addresses the Unsettled ? “Open and Obvious” Doctrine

Generally, the “open and obvious” doctrine holds that a property owner has no duty to warn of open and obvious dangers. Although there is consensus regarding the above general rule, the rule regarding whether a property owner is generally entitled to summary judgment when it is shown that the plaintiff’s fall was caused by an “open and obvious” condition appears to be unsettled.

 The First Department recently addressed this issue in Johnson-Glover v Fu Jun Hao Inc. There, the plaintiff alleged that she tripped over a wheeled shopping bag placed along an aisle of defendant’s store. Plaintiff testified that the store’s aisles were frequently cluttered with merchandise, resulting in only a narrow pathway for shoppers to walk. She also testified that she fell when her foot got caught on a metal stand protruding from the bag. Significantly, plaintiff admitted that she saw the bag before she tripped, therefore making it an “open and obvious” condition. However, the First Department found that defendant failed to demonstrate that it fulfilled its obligation to maintain the store in a reasonably safe condition. As such, the First Department found an issue of fact as to whether the placement of the bag with its protruding metal stand, along with the other merchandise in the store’s aisles, constituted an inherently dangerous condition that presented a tripping hazard. The First Department held that the fact that the bag was “open and obvious” does not require dismissal of the complaint, but is relevant to and can create an issue of fact concerning plaintiff’s comparative fault. The First Department thereby affirmed the Order of the Supreme Court denying defendant’s motion for summary judgment.

 The above decision, decided on April 12, 2016 appears to be the First Department’s most recent statement on the issue. The decision confirms that the First Department rule generally is that an “open and obvious” danger does not obviate a property owner’s duty to plaintiff to keep the premises reasonably safe, but does raise issues of fact as to the plaintiff’s comparative fault”.

 The Fourth Department appears to follow the same general rule as followed by the First Department. See Pelow v. Tri-Main Dev., 303 A.D.2d 940, 941 (4th Dept. 2003); Holl v. Holl, 270 A.D.2d 864, (4th Dept. 2000).

By comparison, the Third Department appears to be considerably less friendly to plaintiffs who are injured as a result of an “open and obvious” condition. The Third Department has stated that the duty to maintain property in a reasonably safe condition extends only to those conditions that are not readily observable. Costello v. Grand Central Plaza, 268 A.D. 2d 722, (3d Dept. 2000); Hopson v. Turf House, Inc.,  252 A.D.2d 796 (3d Dept. 1998); Russell v. Archer Building Centers Inc., 219 A.D. 2d 772 (3d Dept. 1995). For example, in Costello, the plaintiff admitted that she observed the condition of the parking lot upon entering and exiting the store, and thus could have avoided it. The Third Department affirmed the Supreme Court’s decision and found that the gravel was an “open and obvious” condition, thereby necessitating dismissal of plaintiff’s complaint. The rule in the Third Department therefore appears to be that if a danger is “open and obvious”, the landowner has neither a duty to warn nor to otherwise take measures to remedy the defect. Note, however, that the Third Department appears to have softened the rule to some degree. For example, in Spannagel v. State of New York, 298 A.D. 2d 687 (3d Dept. 2002), the Third Department refused to dismiss the plaintiff’s complaint where plaintiff had fallen on a wet floor that was an “open and obvious hazard”. The Third Department noted that although a property owner’s duty to warn generally does not encompass “open and obvious” dangers, the duty to warn may arise “where the landowner has reason to expect or anticipate that a person’s attention may be distracted, so that he will not discover what is obvious, or will forget what he has discovered, or fail to protect himself against it.” Therefore, it appears that the determination in the Third Department will be dependent on the particular facts of each case.

The Second Department rules also appear to be unsettled. The holdings appear to indicate that a property owner has no duty to protect or warn against an “open and obvious danger” that is not inherently dangerous as a matter of law. Baron v. 305-323 E. Shore Rd. Corp., 121 A.D.3d 826, 827 (2d. Dept. 2014); Czorniewy v. Mosera, 298 A.D.2d 352 (2d Dept. 2002). Note, however, that the rule appears to be applied somewhat inconsistently in the Second Department. For example, in Clark v. AMF Bowling Centers, Inc., 83 A.D.3d 761 (2d Dept. 2011), the Second Department the fact that a defect may be “open and obvious” does not obviate the property owner’s duty to maintain the premises in a reasonably safe condition, but may raise an issue of fact as to the plaintiff’s comparative negligence. The Second Department noted that “whether a dangerous condition exists on real property so as to create liability on the part of the landowner depends on the peculiar facts and circumstances of each case and is generally a question of fact for the jury” and that a condition that is generally apparent “to a person making reasonable use of their senses may be rendered a trap for the unwary where the condition is obscured or the plaintiff is distracted.” See also Cupo v. Karfunkel, 1 A.D.3d 48 (2d Dept. 2003) (“. . .proof that a dangerous condition is open and obvious does not preclude a finding of liability against a landowner for the failure to maintain the property in a safe condition but is relevant to the issue of the plaintiff’s comparative negligence. Accordingly, our decisions which stand for the broad proposition that liability under a theory of common-law negligence will not attach when the allegedly dangerous condition is open and obvious should no longer be followed.”)

Navigating the above rules can be a difficult task especially considering that the rules appear to be unsettled. If you or a loved one has been injured as a result of a dangerous condition, please do not hesitate to contact our firm for assistance.

Court of Appeals Takes Major Shift on the Definition of Parent to the Advantage of the LBGT Community

By Christopher A. Guetti

 Since 1991, the law of the land as a result of the ruling in the matter of Allison D. v. Virginia M., has been that when there is an unmarried couple, a partner without a biological or adopted relation to a child is not considered that child’s parent for purposes of standing to seek custody or visitation under the Domestic Relations Law. This had a devastating impact on partners in same-sex couples, since the lack of any biological or adopted connection to the subject children prevented that person from being able to seek custody or visitation as a matter of law, notwithstanding an established relationship with a child.

 The limited definition of parent can be traced back to the Legislature’s failure to provide a definition under Domestic Relations Law Section 70 (a). The statute indicated that only a parent could petition for custody or visitation, but did not define that critical term, leaving it up to the Courts to define. It did so in Allison D. case, and reaffirmed it as late as 2010 in the Debra H. v. Janice R. case. That definition has had major impacts on family relations ever since, or at least until now.

 In Brooke SB v. Elizabeth ACC, 2016 N.Y. Slip Op. 05903 (2016), the Court of Appeals acknowledged maintaining the limited definition for almost 25 years, noting that the reasoning to date was generally to show respect for the role of legislature in defining who a parent is.

 Several intervening decisions, however, which were reviewed by the Court and influential in changing the definition of parent for purposes of custody and visitation, realized that they had been either modifying that definition in other contexts or making carve out exceptions in an attempt to get around the holding. Notably was the Matter of Shondel J. v. Mark D. in 2006. In that case, a man who mistakenly represented himself as a child’s father was estopped from denying paternity, and was made to pay child support. The man was initially raising a child, but then stopped when he found out the child was not biologically his. The holding was based on the best interest of the child standard, and was in the child support context and not custody, but ultimately considered someone a parent would have otherwise been a nonparent in a custody situation. Following that ruling was the review of several other concurring opinions, which are not controlling law, but espoused the need to change the law, which did not occur.

 The Court, in an effort to right that which seemed inconsistent with some of its own holdings, and in light of the change with the New York Legislature’s passage of the Marriage Equality Act, which granted same-sex couples the right to marry and ended all sex-based distinctions in the law, as well as the recent United States Supreme Court decision giving same-sex couples the right to marry, held that to continue limiting the definition of parent solely on biology as a key to visitation rights inflicted a disproportionate hardship on a growing number of non-traditional families across the State. Further, recent census statistics reflected large numbers of same-sex couples raising children related to only one partner by birth or adoption.

 Overruling Allison D., the Court of Appeals now permits a non-biological, non-adoptive parent to achieve standing to petition for custody and visitation. To do so, that person must prove by clear and convincing evidence that he or she has agreed with the biological parent of a child to conceive and raise a child as co-parents.

 Of course sufficient proof on that point only provides the person with the necessary standing to make an application for custody. The Court still has the sound discretion to make a determination as to what that custody will look like based upon the best interests of the child.

 What was been left unaddressed by this decision is whether a partner without such an agreement can establish standing and if so, what factors a petitioner must establish to achieve standing based on equitable estoppel. Those matters were left for another day.

Appellate Division Upholds Damages and Fine Imposed Upon Wedding Venue for Discrimination Based Upon Sexual Orientation

By Joseph Juidiciani

Cynthia and Robert Gifford own and operate a 100-acre farm (Liberty Ridge) in Rensselaer County, New York that is registered as a limited liability corporation. In addition to harvesting and selling crops, Liberty Ridge rents a portion of the farm to the public as a venue for wedding receptions and ceremonies. Liberty Ridge also provides several wedding-related event services.

In October 2011, Melisa McCarthy contacted Liberty Ridge concerning Liberty Ridge as a possible venue for her and her fiancée’s same-sex wedding ceremony and reception. During the conversation, Cynthia Gifford said that there was “a problem” and that the farm would not hold same-sex marriages.

The McCarthys filed complaints with the State Division of Human Rights (SDHR) alleging unlawful discriminatory practices based upon sexual orientation. After an investigation and a hearing, an Administrative Law Judge found that Liberty Ridge is a place of public accommodation within the meaning of the Human Rights Law and that Liberty Ridge unlawfully discriminated against the McCarthys on the basis of their sexual orientation. The agency awarded the McCarthys $1,500 in compensatory damages and imposed a civil fine of $10,000 on the Giffords. The Giffords then commended a proceeding pursuant to Executive Law §298 to annul the decision, and the matter was transferred to the Appellate Division, Third Department. See Gifford v. McCarthy, 137 A.D.3d 30 (3rd Dept. 2016)

On appeal, the Giffords argued that they did not violate the Human Rights Law, which declares it an “unlawful discriminatory practice” for any “owner, lessee, proprietor, manager, superintendent, agent or employee of any place of public accommodation, resort or amusement, because of the . . . sexual orientation . . . of any person, directly or indirectly, to refuse, withhold from or deny to such person any of the accommodations, advantages, facilities or privileges thereof.” The Appellate Division rejected the Giffords’ claim that they are not subject to the Human Rights Law because Liberty Ridge’s wedding facilities do not constitute a “place of public accommodation”, the critical factor being that the facilities are made available to the public at large. The Appellate Division also rejected the Giffords’ challenge to the SDHR’s determination that they engaged in unlawful discrimination on the basis of sexual orientation. The Appellate Division held that the Giffords discriminated on the basis of sexual orientation when they refused to host the wedding. The Court rejected the Giffords’ argument that they did not discriminate because they would “happily” host wedding receptions, parties or other events for couples in same-sex relationships, but would only not host same-sex wedding ceremonies. In its decision, the Appellate Division held that the statute “does not permit businesses to offer a ‘limited menu’ of goods or services to customers on the basis of a status that fits within one of the protected categories.”

Turning to the constitutional claims, the Appellate Division disagreed with the Giffords that their rights under the Free Exercise Clause of the Federal and State Constitutions had been violated. With regard to the Giffords’ claims under the Federal Free Exercise Clause, the Appellate Division found that the Human Rights Law does not target religious beliefs as the Human Rights Law forbids discrimination against a protected class in places of public accommodation regardless of motivation. The Court similarly rejected the Giffords’ claims that under New York’s Free Exercise Clause. The Court concluded that the Giffords failed to show that SDHR’s determination constituted an unreasonable interference with their religious freedom.

The Appellate Division also found that the Human Rights Law did not compel speech by the Giffords. The law does not require the Giffords to endorse or promote same-sex marriages and they were free to express their views on the issue. They were simply required to offer the same goods and services to same-sex couples as they would to other couples. Finally, the Appellate Division found that the law does not violate expressive association because there was no indication that Liberty Ridge was “organized for specific expressive purposes” rather than for the purpose of making a profit.

Business owners in New York who make their facilities available to the general public should be mindful of this decision, as it may face a discrimination claim if it does not offer identical goods or services to all customers, particularly those that fit within a protected category or class. If found to have discriminated against such a class, the business may face civil fines and be compelled to pay compensatory damages.