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Published on: September 22, 2015

Supreme Court, Bronx County

A Bronx Estate Litigation Lawyer said that, defendant-appellant moved pursuant to CPLR 510(1) to change the venue of the instant matter from Bronx County to Westchester County more than three years after the commencement of the action and service of A-Scrap’s answer. Appellant acknowledges that it has, almost from the beginning of this litigation, possessed the necessary information to move for a change of venue. However, it has failed to offer an adequate explanation for its inordinate delay and neglect in making such a request. Consequently, we cannot find that Special Term abused its discretion in denying appellant’s motion.

Accordingly, the court held that the order of the Supreme Court, Bronx County, entered on June 14, 1982, which denied the motion to change the venue of the action from Bronx County to Westchester County, is affirmed, without costs or disbursements.

In a separate opinion, the injury court disagree with the conclusion reached by the majority which, in continuing the action in Bronx County, rewards the plaintiffs for what, on this record, appears to be a fraud on the court. The action, commenced in Bronx County, seeks to recover damages for personal injuries sustained in a motor vehicle accident which occurred on April 9, 1979. The accident occurred on Yonkers Avenue in Westchester County, when plaintiffs’ vehicle was struck in the rear by a truck owned by defendant, and operated by defendant. Plaintiffs reside in Westchester County and A. Scrap has its principal place of business there. The summons denotes the basis for venue as the residence of defendant Jones, recorded thereon to be 175 Broadway, Bronx, New York. Issue was joined by A. Scrap by the service of its answer on September 13, 1979. Thereafter, plaintiffs purportedly effected substitute service upon Jones by mailing process to “his last known residence” at 175 North Broadway, Yonkers, Westchester County, and by affixing a copy of the summons to the door at that address as his “actual place of business, dwelling place or usual place of abode within the state” (CPLR 308[4] ). Defendant has not appeared in the action and, assuming the propriety of service, is in default.

On February 23, 1982, defendant moved, pursuant to CPLR 510(1), to change the venue of the action to Westchester County, alleging that venue had been improperly laid in Bronx County in that all of the parties, including the other defendant, resided in Westchester, where the accident occurred. Appellant claimed that it had been misled by the false representation contained on the face of the summons that Jones was a resident of the Bronx. The MV-104 filed by plaintiff listed as residence 30 Montague Street, Yonkers, also in Westchester County, which is an address different from where substitute service had purportedly been effected.

Special Term denied the motion solely upon the failure of appellant to adhere to the procedure contained in CPLR 511. Concededly, no demand for a change of venue was served nor was a motion made within 15 days thereafter. This, however, is not dispositive. The failure of a party to follow the statutory procedure is not absolute and does not preclude a subsequent motion to change the place of trial. In such a case, although the motion is too late to be made as of right, it nevertheless may be made and is addressed to the discretion of the court.

On this record, we fail to perceive the overriding need to protect parties who have resorted to “affirmative misrepresentation” in designating the county for trial. While it appears that three years did elapse before the motion for a change of venue was made, there is nothing in the record to support the finding of the majority that appellant acknowledged that, from the beginning of the litigation, it had the necessary information to move for a change of venue. The personal injury record does not disclose when appellant obtained a copy of the MV-104 which had been filed by plaintiffs or was aware of the misstatement of residence. As observed, defendant has not appeared and is not represented in this action. The answer served by defendant denies that, at the time of the accident, the truck was being operated by him with the permission or consent of the owner. Any delay in moving for relief is far outweighed by the fact that plaintiffs misrepresented the defendant’s residence as the basis for venue in instituting suit in Bronx County.

Moreover, it is further significant that this action can never proceed to trial in accordance with current court rules. NYCRR § 660.9(c), in providing for a general trial preference for personal injury actions, requires a showing that “the venue of the action was properly laid in the county in which it is pending, within the requirements of CPLR article 5.” Here, since none of the parties reside in Bronx County, the designation of that county as the place for trial was improper (CPLR 503[a] and [c] ). Therefore, under the court rules applicable to New York and Bronx counties, a general preference may not be obtained so as to permit the action to proceed to trial.

Transfer of the action to Westchester County is also warranted under CPLR 327. All of the parties reside in Westchester County, where the accident occurred. The action has no nexus with Bronx County and, applying the doctrine of forum non conveniens under CPLR 327, the interest of substantial justice requires that the matter be transferred for trial to Westchester County, where the action should have been commenced in the first instance. It is clear that the only reason the action was instituted in Bronx County was for the convenience of plaintiffs’ attorney, which is an irrelevant consideration. In view of the affirmative misrepresentation by plaintiffs when the action was commenced, no reason appears to continue the case for trial in a county which has no substantial relationship to either the issues or the parties.

Accordingly, the order, Supreme Court, Bronx County, entered June 14, 1982, denying the motion to change the venue of the action, should be reversed, the motion granted and the action transferred to Westchester County.
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Published on: September 17, 2015

Integrated Domestic Violence Court…cont

by Stephen Bilkis

This case raises two questions concerning application of the recently enacted Uniform Child Custody Jurisdiction Enforcement Act (UCCJEA), set forth at article 5-A of the Domestic Relations Law: (1) whether (as the father urges) title 3 of that act requires this court to enforce a custody order issued by a court in the Dominican Republic, or (2) whether (as the mother and law guardian contend) this court may assume jurisdiction of the parents’ custody dispute and modify or replace the Dominican court’s order. After consultation with the original judge, consideration of the parties’ residence status, and in light of allegations of an extensive history of domestic violence that were not presented to the Dominican court before its default order of custody was entered, this court assumes jurisdiction and sets the matter for trial.

Determination whether this controversy should remain with this court or be returned to the originating court in the Dominican Republic is governed by the recently enacted Uniform Child Custody and Jurisdiction Enforcement Act, effective April 28, 2002 and replacing the former “Uniform Child Custody and Jurisdiction Act” (UCCJA). Set forth at article 5-A of the Domestic Relations Law, this statutory scheme is designed to eliminate jurisdictional competition between courts in matters of child custody. Jurisdictional priority, under the UCCJEA, is always conferred to a child’s “home state.”

The legislative history of the UCCJEA establishes that domestic violence was very much on the minds of the drafters of the statute. While earlier laws had often presumed that the party fleeing the jurisdiction with children was the wrongdoer, experience showed that it was often a victim of domestic violence who sought protection in another jurisdiction. One important purpose of the UCCJEA was to bring that area of law into conformity with the Parental Kidnaping Prevention Act (28 USC Â§ 1738A) and the “full faith and credit” requirements of the Violence Against Women Act. Domestic violence injury is also a factor to be considered when determining whether to retain jurisdiction in the United States in an international custody case under the International Parental Kidnaping Act, and can support refusal to repatriate a child.

Published on: September 14, 2015

Integrated Domestic Violence Court…cont

by Stephen Bilkis

Proof of service by mail to an address not specified in the part of the Dominican court record before this court was submitted to the Dominican court. The mother did not appear for the custody proceeding. In a decision dated April 17, 2002, the District Court found respondent in default for nonappearance and awarded full custody to the petitioner. Noting that the children had now been with their father for over a year, the court declined to move them again, citing the need for “stability and security in the future.” The law guardian in the proceeding took the position that custody should be awarded to the father, noting that the mother “ceded custody of said children by means of an amicable agreement signed on the 1st of December of 2000,” and urged adherence to that agreement. The mother, who asserts that she learned of the renewed custody proceeding only when she personal appeared in the Dominican Republic for a visit with the children in April 2002, filed an appeal on June 7, 2002 and inquiry was held in that court on August 7, 2002. In a decision dated October 22, 2002, the Appellate Court affirmed the grant of custody to the father.

Two weeks after the Dominican appellate decision, on November 8, 2002, the father was arrested in Bronx County for threatening to kill the mother. He was charged with two counts of aggravated harassment in the second degree and related lesser offenses. He asserted to the Criminal Justice Agency (CJA), which interviews criminal defendants prior to arraignment for the purpose of advising the court on bail, that he had been “self-employed” full time as an “entrepreneur” in the Bronx for the past two years. He gave as his address 1268 St. Nicholas Avenue, New York, New York 10033. He represented that he had lived alone at that address during the prior year. He gave a different New York address to the arresting officer: 736 West 173rd Street in Manhattan. At arraignment on November 9, 2002, a full order of protection was issued in favor of the mother. Based in part on the father’s representations of community ties, he was released on his own recognizance and remains at liberty.

Almost immediately upon release, on November 12, 2002, the father brought a petition for writ of habeas corpus in Bronx County Family Court (Docket No. V-19646-7/02), alleging that the mother removed the children from the Dominican Republic in contravention of the final order of custody issued by the Family Court in Santo Domingo and affirmed on injury appeal. A law guardian was assigned to represent the children, and the matter was made returnable for the following day, November 13, 2002, in the Integrated Domestic Violence (IDV) Court, where the criminal matter was also now pending.

Published on: September 11, 2015

Integrated Domestic Violence Court

by Stephen Bilkis

A Bronx Estate Lawyer said that, the subject children are the parties’ twin sons, born June 19, 1997 in the Dominican Republic. It is undisputed that the father obtained a default order of custody there in April 2002, an order appealed by the mother and affirmed by the Dominican court in October 2002, a month after she had brought the boys to the United States. In quick succession, the Integrated Domestic Violence Court which has jurisdiction over both criminal and family law matters received a criminal prosecution against the father based on his alleged November 8, 2002 threats to kill the mother; a writ of habeas corpus filed by the father on November 12, 2002 under article 6 of the Family Court Act seeking enforcement of the Dominican custody order; a injury petition for custody of the two boys filed by the mother on December 4, 2002 under article 6 of the Family Court Act; and a family offense petition filed the same day by the mother under article 8 of the Family Court Act, alleging additional acts of domestic violence.

A Bronx Estate Litigation Lawyer said that, a law guardian assigned on November 12, 2002 to represent the children reported an extensive history of domestic violence. Based upon this information, the court assumed temporary emergency jurisdiction under Domestic Relations Law Â§ 76-c, and directed the Administration for Children’s Services to interview both parents and the children. A review of the documents of the Dominican proceedings confirms that the mother and father separated in November 1998. At that time, pursuant to an agreement signed before assistant to the prosecutor the father consented to the terms of an order of protection, agreeing to refrain from assaulting the mother verbally or physically, and to vacate the family home until the mother was able to find other housing. He agreed to pay child support, and was given regular visitations “as long as he behaves appropriately.”

The mother left the Dominican Republic in December 1999, leaving the children with her mother, remarrying in June 2000. Just five weeks later on August 2, 2000, while the mother was still in the United States, the father filed a claim for custody of the two children in the “Court of the First Instance for Children and Adolescents of the Distrito Nacional.” The maternal grandmother, who had physical custody of the children at the time, was named as defendant in the matter.

In a forensic report submitted to the Dominican District Court on November 10, 2000, the evaluator who had interviewed only the father, as the mother was not in the country concluded that he should have custody as the mother “is both physically and emotionally absent, and that the other family ties, according to the father, are not the most adequate for the children’s emotional or intellectual development. In this case, the father figure would be of vital importance, as such, we suggest beginning individual and family therapy to address some of the previously reported accident issues.”

On December 1, 2000, in the midst of the Dominican judicial proceeding, the mother temporarily ceded custody of their sons to the father, in a document known as a “friendly agreement,” signed before the law guardian. The custody medical dispute thus came to a halt. It is not known why, or under what circumstances, the mother did this. In February 2002, the father reactivated the Dominican custody proceeding. In his request for a hearing he alleged that “the amicable agreement between the parties is not being adhered to.” The nature of the violation that prompted the father’s action was not specified. By that time, however, the mother apparently lived in the United States and had regular, though intermittent, contact with the boys.

To Be Cont…
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Published on: September 8, 2015

The accident underlying this case occurred on December 21, 2004…cont

by Stephen Bilkis

The No-Fault Law has a remedial purpose, i.e., to reduce insurance premiums by weeding out frivolous claims and limiting recovery to significant injuries. This law is in derogation of a common-law right of an injured person to bring an action for injuries sustained in an automobile accident caused by the wrongful conduct of another motorist. Being remedial in nature, the No-Fault Law must be accorded a liberal interpretation and the widest application in order to carry out reforms intended. However, that law, being in derogation of common-law rights, also involves the “rule of strict construction,” which requires, therefore, an interpretation of the No-Fault law which “makes no further innovation upon common law rights than the particular case requires.” Courts are thus confronted with a conundrum caused not only by the above conflicting statutory requirements, but also by what often seems like an impossible task: to discern, on motion, the false and frivolous and to distinguish “minor, mild or slight” injury from appropriate claims. These impairments, though unobservable, can cause genuine quality of life changes in those who really suffer same. These are usually issues which are presented to jurors at trial, who have the benefit of live testimony and can make credibility determinations. The task of deciding these issues on “papers” are, at best, extremely difficult.

There are those who harbor a flawed assumption that judges (on papers), rather than medical scientists and jurors, are more able and equipped to discern and distinguish the false, frivolous and/or insignificant claims of serious injury from those which can cause legitimate, sometimes profound and “more than frivolous” limitations, pain and quality of life impairments. This legislatively imposed task has caused more than a season of judicial discontent and frustration, it has resulted in an extremely difficult and flawed process which results too often in an inconsistent and unfair application of the law.

This court is not sufficiently prescient to determine whether this plaintiff actually, as claimed, has ongoing significant cervical and lumbar pain, limitations and quality of life impairments. Certainly these kinds of injury and limitations can be feigned and/or exaggerated. When genuinely significant, however, cervical and lumbar injuries can be insidious and their syndrome is characterized by periods of remission and exacerbation which is not readily observable by others. Certainly if plaintiff’s injuries have continued to effect his relationship with his wife and preclude him from lifting anything heavy, playing soccer or volleyball, and assisting his wife with ordinary chores, such as grocery shopping, then, this court would certainly not conclude that the claim is frivolous or that the injuries are insignificant. But since the court cannot infallibly predict what the plaintiff’s future course may be, it must make its decision on this motion based upon the examples and standards (clues) promulgated by appellate authority to assist it in making its determination. This obligation, as discussed above, can be exceedingly difficult and frustrating.

Published on: September 3, 2015

The accident underlying this case occurred on December 21, 2004…cont

by Stephen Bilkis

The proponent of a motion for summary judgment must tender sufficient evidence to show the absence of any material issue of fact and the right to judgment as a matter of law. In the present action, the burden rests on defendant to establish, by the submission of evidentiary proof in admissible form, that plaintiff has not suffered a “serious injury.” When a defendant’s motion is sufficient to raise the issue of whether a “serious injury” has been sustained, the burden shifts, and it is then incumbent upon the plaintiff to produce sufficient prima facie evidence in admissible form to support the claim of “serious injury”.

A plaintiff cannot defeat a motion for summary judgment and successfully rebut a prima facie finding that he did not sustain a “serious injury,” merely by relying solely on documented subjective complaints of pain, or by the mere submission of an MRI report demonstrating the existence of a bulging or herniated disc, absent medical proof of a significant physical limitation related thereto.

Claims of “serious injury” under the “permanent consequential limitation” category and under the “significant limitation” category are the most difficult for trial and appellate courts to assess. As noted above, these terms are not defined and many times are used interchangeably. In an effort to assist the trial courts, and to better implement the “legislative intent to weed out frivolous claims and limit recovery to significant injuries,” the Court of Appeals.

Published on: August 29, 2015

The accident underlying this case occurred on December 21, 2004

by Stephen Bilkis

Defendant’s counsel usually submits at least two (sometimes three) affirmations of so-called “independent”1 medical experts (an orthopedist, a neurologist, and radiologist, usually from the same stable of defense medical experts), each of whom examine the plaintiff and/or the reports and tests submitted by plaintiff, and then by affirmation refute plaintiff’s claim to have sustained a serious injury. These examinations usually take place years after the automobile accident which has been alleged to cause injury, and each of the defendant’s medical experts conclude that plaintiff is no longer impaired or injured; that all tests and findings are normal; that if originally injured, said injuries have resolved; and that, in any event, all of plaintiff’s claimed limitations or impairments have been caused, not by the accident, but by degenerative (normal aging process) changes in the cervical and lumbar regions. Except for the dates and the unique peripheral circumstances presented by each case, these medical reports and affirmations submitted by defendant’s chosen medical experts, are virtually identical. Plaintiff’s submissions, made in opposition to a defendant’s motion, are no less boilerplate.

The issue in this case is whether plaintiff sustained serious injury.

This case, like all other “serious injury” cases, presents the court with the ongoing and frustrating conundrum of deciding when a plaintiff’s injury qualifies as significant within the meaning of the No-Fault Law.

Published on: August 26, 2015

The accident underlying this case occurred on December 21, 2004

by Stephen Bilkis

A Bronx Estate Litigation Lawyer said that, defendants move for summary judgment pursuant to CPLR 3212 and dismissal of the complaint against them, for the failure of the plaintiff to prove that he has sustained a “serious injury,” as that term is defined in section 5102 of the Insurance Law.

The accident underlying this case occurred on December 21, 2004 at approximately 12:45 P.M. at the intersection of E. 188th St. and Cambreleng Avenue in the Bronx, at which time and place the vehicles owned and driven by the plaintiff and defendant collided. The 33-year-old plaintiff, who did not lose consciousness, and was not bleeding, was removed from the scene of the accident by ambulance and taken to St. Barnabas Hospital. At the hospital, he complained of pain in his chest, neck and back, and he stated that, even though he was wearing a seatbelt, his chest hit the steering wheel. X rays were taken of the cervical spine and of the chest, both of which were determined to be negative. Thereafter, he was released the same day.

A Bronx Estate Lawyer said that, on December 30th, nine days post accident; plaintiff came under the care of an internist. The underlying treatment records, and the empirical data contained therein, were provided and reviewed by the defendants’ physicians, but were not submitted to the court. All of the information concerning the substance of plaintiff’s care and treatment is gleaned from the affirmation of the internist, dated April 21, 2008, which was submitted in opposition to defendants’ motion to dismiss. In any event, on plaintiff’s first visit to the internist, the plaintiff reported that after the accident he had ringing in his ears and nausea; and he complained of neck pain radiating down to his shoulders with numbness; periods of dizziness when turning his head; shooting pain in his arms when turning his neck, especially on the left side; and lower back pain which gets worse on physical exertion and which spreads to the right buttocks, right thigh and leg, with a tingling sensation. On that occasion the internist conducted a neurological and physical examination which, with the use of a goniometer, included cervical and lumbar range of motion tests and measurements; and he found that plaintiff “suffered from a limited range of motion of the cervical and lumbar spines,” and diagnosed the plaintiff with “traumatic nerve root injury, plexopathy due to plexus stretching of compression pain by injured muscles, referred nociceptive pain, myofascial pain syndrome with cervical and lumbar spine trigger points and a lumbosacral sprain.” Despite the use of the goniometer, the numerical measurements of the limitations are not set forth anywhere in the plaintiff’s submissions. The internist does state in his affirmation, however, that they were “less than the normal range of motion.”

Based on all of the above, plaintiff was started on a course of aggressive physical therapy (which continued from December 30, 2004 until May 27, 2005), and he was “sent for MRI and other diagnostic testing,” including nerve conduction velocity (EMG/NCV) tests. However, only the results of the MRI, which was conducted on January 17, 2005, are presented to the court on this motion. The MRI testing of plaintiff’s lumbar and cervical spine was conducted by a radiologist, who in an affirmation dated April 15, 2008 states that the plaintiff “suffered a posterior disc herniation at L5-S1 into the epidural fat abutting the interior sac margin and anterior disc bulges into the prevertebral soft tissues at L2-3 and L4-5; and posterior disc bulges at C3-4, C4-5 and C5-6 all of which impinge on the thecal sac.”

In the MRI report, attached to the affirmation dated January 17, 2005, the following additional relevant findings are set forth: a straightening of the lumbar curvature, and a mild loss in the signal intensity of the L2-3, L4-5, and L5-S1 intervertebral discs “which reflect mild and slight loss in fluid content respectively.” On February 8, 2005, after a review of his own records together with the MRI results, the internist concluded that plaintiff’s cervical and lumbar injuries “were caused as a result of plaintiff’s motor vehicle accident of December 21, 2004”; and “it was determined that the best course of treatment would be continued physical therapy,” which, as noted above, lasted until May 16, 2005.

In May of 2005, the physical therapy sessions were discontinued because the plaintiff’s “no-fault benefits were terminated” and the internist determined that, in any event, “any further physical therapy would have only been palliative in nature.”

The defendants’ motions and plaintiffs’ responses have become almost assembly line, “cookie cutter” prototypes; and attorneys for defendants (and most plaintiffs) have become expert on how to present or attack a serious injury claim. Defendants are very adept at providing prima facie proof demonstrating that a plaintiff has not suffered a serious injury; proof at the very least sufficient to meet their “initial burden” to present competent evidence that plaintiff has no cause of action. Plaintiffs, too, have become quite conversant with the requirements to defeat a defendant’s motion.

To Be Cont…
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Published on: August 24, 2015

Tuckahoe Road in Yonkers…cont

by Stephen Bilkis

The legal standards to be applied in evaluating a motion to dismiss are well-settled. In determining whether a complaint is sufficient to withstand a motion to dismiss pursuant to CPLR 3211(a)(7), the sole criterion is whether the pleading states a cause of action. If from the four corners of the complaint factual allegations are discerned which, taken together, manifest any cause of action cognizable at law, a motion to dismiss will fail. The court’s function is to ‘”accept each and every allegation forwarded by the plaintiff without expressing any opinion as to the plaintiff’s ability ultimately to establish the truth of these averments before the trier of the facts'”. The pleading is to be liberally construed and the pleader afforded the benefit of every possible favorable inference.

Where, as here, the plaintiff submits evidentiary material, the Court is required to determine whether the proponent of the pleading has a cause of action, not whether he or she has stated one. Affidavits may be used to preserve in artfully pleaded, but potentially meritorious claims; however, absent conversion of the motion to a motion for summary judgment, affidavits are not to be examined in order to determine whether there is evidentiary support for the pleading. Injury Affidavits may be properly considered where they conclusively establish that the plaintiff has no cause of action.

To succeed on a motion to dismiss pursuant to CPLR 3211(a)(1), the documentary evidence that forms the basis of the defense must be such that it resolves all factual issues as a matter of law, and conclusively disposes of the plaintiff’s claim. To qualify as “documentary”, the evidence relied upon must be unambiguous and undeniable, such as judicial records and documents reflecting out-of-court transactions such as mortgages, deeds, and contracts. Letters, affidavits, notes, and deposition transcripts are generally not documentary.

Published on: August 21, 2015

Tuckahoe Road in Yonkers

by Stephen Bilkis

A Bronx Estate Litigation Lawyer said that, this action was initiated with Plaintiffs’ filing of their Summons and Complaint in this Court’s e-filing system (“NYSCEF”) on April 27, 2012. According to Plaintiffs, the dispute arising out of non-payment for Plaintiffs’ performance of asphalt, paving and bonding services on behalf of a general contractor in connection with its contract with defendant to make improvements to certain public streets – Tuckahoe Road in Yonkers and 108th and 188th Streets in the Bronx. It is Plaintiffs’ contention that defendant wrongfully paid the general contractor monies that were the subject of mechanic’s liens filed by Plaintiffs concerning the injury services they provided on these projects.

A Bronx Estate Lawyer said that, defendants moved to dismiss the Complaint and the Court held a conference on June 28, 2012 to determine whether discovery would proceed pending the motion to dismiss or if it would be stayed. At the conclusion of the conference, the Court advised that discovery would be stayed pending the motion to dismiss and then set the motion schedule. On July 30, 2012, Plaintiffs filed an amended complaint and Defendants withdrew the prior motion and replaced it with the present one.

Based on the allegations of the Amended Complaint, which the Court must deem as true for purposes of this motion, Plaintiff is a general contractor specializing in asphalt paving, concrete and commercial construction that subcontracted with the general contractor on July 20, 2010 to work on certain aspects of a Con Ed project located at Tuckahoe Road, Yonkers, New York. Plaintiffs contend that the general contractor failed to pay Plaintiffs causing Plaintiffs to file mechanic’s liens pursuant to New York’s Lien Law (“Lien Law”) § 12, which permits for the filing of a lien up to 30 days after the completion and injury acceptance of a public improvement project. It is Plaintiffs’ position that the time for the filing of these liens has not run because the projects are not yet completed.

Plaintiff was a subcontractor to the general contractor providing paving services in connection with the defendant’s project. It is alleged that on October 14, 2011, plaintiff served upon defendant “a Mechanic’s Lien for Public Improvement for the supply of materials and labor to the general contractor in the amount of $55,750.40”. Plaintiffs allege that this lien remains unpaid. Plaintiffs contend that the “amounts owed to Plaintiffs are trust assets subject to the rights of trust beneficiaries under New York Lien Law, Art. 3-A”.

Plaintiffs allege that defendant “has an internal risk management department to review the validity, financial wherewithal and sufficiency of any insurance company issuing bonds seeking to discharge a mechanic’s lien on a project” yet “neglected to follow its internal procedures to ascertain the validity and sufficiency of the bonds presented to it by the general contractor. Within three weeks of procuring the fraudulent bonds and obtaining the retained funds from defendant filed for Chapter 11 Bankruptcy protection.

Plaintiffs’ First Cause of Action is for breach of fiduciary duty. It alleges that defendant’s contract with the general contractor allowed it to pay subcontractors and vendors directly and defendant’s internal policy is to withhold funds when a injury claim for payment is made by a subcontractor or vendor to defendant. Plaintiffs contend that they “relied on defendant’s withholding of payments to the general contractor and negotiated with defendant for release of funds directly to them for payment”. The fiduciary relationship is established, say Plaintiffs, as a result of defendant’s “actions and standard procedures” and its “failure to protect the claims of Plaintiff was a breach of said fiduciary duty and caused Plaintiffs to lose the retained funds”.

To Be Cont…
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