Each year the Court of Appeals has the opportunity to grapple with issues in the area of negligence. This article discusses some of the Court's most significant 1994 decisions. Decisions in the area of labor law injury claims, limitations on actions, liability of municipalities and schools and periodic payments are issues which have been addressed this past year. Perhaps any observable trends and policy considerations that led the Court's opinions may, to some extent, foreshadow the Court's decisions in 1995.

In Ackerman v. Price Waterhouse, 84 NY 2d. 535, the Court of Appeals held that the Statute of Limitations in a malpractice action against an accountant begins to run on the date that the accountant's work product is received by the client, since this is the date that the taxpayer relies on the accountant's advice or work product. Although this would seem a likely holding, on the facts of this case, the Court of Appeals was faced with a most difficult problem which it has been forced to address in the past: Often the injured party--in this case the taxpayer--will not have discovered the injury until after the expiration of the applicable Statute of limitations. See e.g., Goldsmith v. Howmedica, Inc., 67 NY 2d. 120. In this case the plaintiffs relied on the defendant's advice regarding the availability of an accrued interest deduction, employed by the defendants in the plaintiffs' tax returns, for each of several tax years from 1980 to 1988. The fact that the plaintiffs were not entitled to this deduction did not become apparent to the plaintiffs some years later when the IRS assessed a deficiency.

Both the trial court and the Appellate Division held that the action was timely based on the Texas Supreme Court case of Atkins v. Crosland, 417 S.W.2d. 150 (1967), which held that a cause of action against an accountant for negligent preparation of a tax return accrues at the time that the IRS assesses a tax deficiency. But the Court of Appeals held that this departed from established New York principles--that a malpractice cause of action sounds in tort and accrues when an injury occurs "even if the aggrieved party is then ignorant of the wrong or injury." The Court saw no reason to distinguish actions involving claims of professional negligence from the general proposition that a legal right to relief arises in a tort action, and the Statute of limitation begins to run, upon injury.

The Court reasoned that when the client receives the accountant's work product, this is the time "when all the facts necessary to the cause of action have occurred, and an injured party can obtain relief in court." The Court thus rejected the plaintiffs' proposition that the Statute of limitations can only accrue in a malpractice action against an accountant when the IRS assesses a deficiency and therefore when the plaintiff becomes aware of the malpractice. The Court gave deference to the policy of temporal finality embodied in the Statutes of limitation. The Court noted that if it were to uphold the plaintiffs' reasoning, the limitations period would be "subject to manipulation" with an "utter lack of predictability" were it based on the date that the IRS assessed a deficiency, causing defendant to perhaps remain liable for work performed a decade prior.

In Gordon v. Magun, 83 NY 2d. 881, the Court held that the continuous treatment doctrine was inapplicable to toll the Statute of limitations in this medical malpractice action since the alleged negligent treatment was "for a purpose wholly independent of" subsequent treatment rendered, and the alleged negligent treatment "involved neither ongoing provision of services by defendant, nor the expectation of any future contact between the patient and physician." The first and only visit for which negligence was alleged involved an examination by the defendant, who was called in as a consultant, to determine whether the patient's liver would be harmed by continuing drug treatments prescribed for psoriasis. The defendant concluded that the proposed drug treatment would have no ill effects on the patient's liver. No further examinations or consultations were contemplated. Nine months later, however, the patient was again referred to the defendant from complaints of abdominal swelling. This time, cancer of the liver was diagnosed. Although the physician ultimately diagnosed and treated what he allegedly failed to diagnose earlier, since the earlier consultation was undertaken for a specific purpose, a purpose which necessitated only a single visit, the Court held that the continuous treatment doctrine did not apply to toll the Statute of limitations against the physician.

Schools are under a duty to adequately supervise students and they can be held liable for foreseeable injuries which are proximately related to the lack of adequate supervision. In Mirand v. City of New York, 84 N.Y.2d 44, one female student accidentally bumped into another female student which precipitated some hostile remarks and began to escalate into a fight when a bystander intervened. The student threatened to kill the plaintiff. The plaintiff proceeded to the school security office, but apparently no one was there. She saw a teacher in the hallway and told the teacher of the altercation with the other student, and that the other student had threatened to kill her and that there was no one in the security office. Although she was not allowed to testify regarding what the teacher told her, following this discussion she returned to the security office, but again could not find any security personnel. She left the building and went to wait on the building veranda for her sister. This was a place where security officers were sometimes present, although none were present on that day. She met her sister and they both proceeded to descend the staircase when their path was blocked by the other student, along with two male companions. The plaintiff was struck on the elbow and head with a hammer and she also was stabbed through the wrist with a knife, which has resulted in permanent injury.

The trial court set aside a verdict in plaintiff's favor and dismissed the complaint concluding that the plaintiffs had not established that the defendant-school was on notice of the specific danger and also that there was a failure of proof concerning inadequate supervision and proximate cause. The Appellate Division reversed, however, and reinstated the verdict since the evidence could support a finding that the school, recognizing the need for a security plan, put such a plan in effect and breached its duty to provide the plaintiff with adequate supervision at a critical time; additionally, one of the teachers was made aware of the specific death threat to the student, but did nothing about it other than to send her back to the security office, which was still closed.

The Court of Appeals affirmed the decision of the Appellate Division, holding that schools are under a duty to adequately supervise the students and will be held liable for foreseeable injuries proximately related to the absence of adequate supervision. The High Court clarified that schools are not insurers of safety and are not to be held liable for every careless act by which one pupil may injure another. The teacher and the school effectively take the place of parents and "in determining whether the duty to provide adequate supervision has been breached in the context of injuries caused by the acts of fellow students, it must be established that school authorities had sufficient specific knowledge or notice of the dangerous conduct which caused injury; that is, that the third-party acts could reasonably have been anticipated." In this instance the Court noted that the school had "actual or constructive notice" of prior similar conduct. This appeared to be key to the High Court's decision since they acknowledged that school personnel "cannot reasonably be expected to guard against all of the sudden, spontaneous acts that take place among students daily; an injury caused by the impulsive, unanticipated act of a fellow student ordinarily will not give rise to a finding of negligence absent proof of prior conduct that would have put a reasonable person on notice to protect against the injury-causing act." The Court further specified that even where such a breach of duty and supervision is established, proximate cause must be shown. Here the jury could find that the complete absence of security or supervisory personnel at a time and place when vigilance was absolutely essential constituted the proximate cause of plaintiff's injuries.

Similarly, in Shante D. v. City of New York, A.D.3 N.Y.2d 948, the plaintiff, a third-grade student, was sexually assaulted by two other girls in the school bathroom. The trial court set aside the jury's verdict in plaintiff's favor. The Appellate Division reversed and reinstated the jury verdict. The Court of Appeals affirmed and found that "it was not irrational for the jury to conclude that defendant's failure to provide the requisite supervision was the legal cause of plaintiff's injuries" citing to Mirand v. City of New York, supra.

With its decision in Ross v. Curtis-Palmer Hydroelectric Company, 81 N.Y.2d 494, the Court of Appeals clarified and arguably limited the application of Labor Law § 240(1). Construction accident victims are afforded this statutory protection only against extraordinary elevation risks. In Rodriguez v. Margaret Tietz Center For Nursing Care, Inc., 84 N.Y.2d 841, the High Court held that the plaintiff, in placing a 120 lb. beam onto the ground from 7 inches above his head with the assistance of three other co-workers, was not faced with the special elevation risks contemplated by the Statute. The decision in Rodriguez was unusually short, indicating that the Court has not altered its interpretation of the Statute, nor is it in need of further clarification by the facts of this case; the Court saw fit to hear the case and, in applying the reasoning of Ross, dismissed plaintiff's cause of action based on Labor Law § 240.

In Campbell v. City of Elmira, 84 N.Y.2d 505, the Court of Appeals dealt with the difficult and amorphous standard used to determine whether a jury's verdict is supported by sufficient evidence as a matter of law. Although the Court did not change the standard to be applied in determining whether a verdict is sufficient as a matter of law, this case makes apparent that it is often difficult to apply this standard. Although the verdict was affirmed by the Appellate Division, it was with two justices dissenting; the Court of Appeals also affirmed, but it was with a four to three split in the Court's opinion, with the dissent voting to reverse and dismiss the complaint. The difference of opinion, however, was only in the application of the facts to the particular standard of care employed.

In this case there was a disagreement over the level of culpability required to hold the driver of an emergency vehicle liable for abuse of the statutory right of way privilege. The dissent stated that "no rational view of the evidence supports the finding that the fire truck driver's conduct was reckless." This case is instructive as to the application of Vehicle and Traffic Law § 1104(e) which states that the driver of an authorized emergency vehicle, such as a fire truck in this case, has "the duty to drive with due regard for the safety of all persons," but the driver is not protected "from the consequences of his reckless disregard for the safety of others." In applying the specific statutory standard of § 1104(e), the Court reiterated the approach which an Appellate Court must take to determine whether the evidence is sufficient as a matter of law. This includes whether "there is simply no valid line of reasoning and permissible inferences which could possibly lead rational [people] to the conclusion reached by the jury on the basis of the evidence presented at trial." The Court also reiterated the minimal standard for Appellate review that the verdict is "not utterly irrational."

The dissent applied to these same standards, and in reaching a different result, found that in order for defendant's conduct to rise to the level of recklessness within the context of the exercise of the emergency privilege afforded by Statute, "something greater than the deliberate risks normally associated with the suspension of the usual right-of-way rules must have been contemplated." The dissent felt that the evidence did not "demonstrate the type of culpable conduct that rises to the level of reckless disregard for the safety of others," as is contemplated by the Statute.

In Joseph v. City of Buffalo, 83 N.Y.2d 141, the High Court had to determine whether the defendant, City of Buffalo, was entitled to summary judgment on the issue of its vicarious liability for the acts of an off-duty police officer. While in his child's bedroom, the officer placed his unlocked, loaded revolver underneath the child's mattress. Later, while he was elsewhere in the house, his infant son had apparently found the revolver which had discharged causing a gunshot wound to the infant's head.

The High Court held that summary judgment is not precluded under General Municipal Law, Section 50-j. This Statute governs the ultimate responsibility for negligence in the performance of duties by police officers. A city will assume liability for the negligence of its police officer "provided such police officer, at the time of the negligent act or tort complained of, was acting in the performance of his duties and within the scope of his employment." The Court noted that according to the Statute, a police officer is deemed to be acting in the scope of his employment "when engaged in the immediate and actual performance of a public duty imposed by law and such public duty performed was for the benefit of the citizens of the community." On the facts presented, the Court held that the police officer was not acting in the performance of his duties, nor within the scope of his employment when he placed the gun under his son's mattress, and when the accident occurred, since "it cannot be said that [the police officer] was engaged in the immediate and actual performance of a public duty imposed by law." The Court also supported their position by the fact that the Rules for the Government and Discipline of the Police Department of the City of Buffalo state that police officers "shall be responsible for the security of their firearms at all times."

Another issue which has arisen in New York's periodic payment statutes is the issue of the proper handling of inflation. Most courts, but not all, have permitted evidence of inflation to be admitted at trial and considered by the jury despite the fact that the statute imposes a 4% adjustment compounded annually under CPLR '5031(e) and '5041(e). Defendants have claimed that this amounts to a double counting of inflation. Unfortunately, the Court of Appeals found that this issue had not been preserved for its review and must remain for another day.

The High Court partially addressed the issue of proper calculation of interest on the annuity portion of the award. Since the annuity portion of the award is payable in the future, should the Court calculate interest on the future portion of the award which is not yet due and owing? The Court held that with regard to CPLR '5002 interest, i.e., interest calculated from date of verdict to date of judgment, which is typically added to the judgment by the judgment clerk, interest should be calculated on the present value of the future annuity.

Unfortunately, the Judgment in Rohring did not raise as an issue the calculation of interest beyond the date of judgment (Section 5003 interest). Hence, it was not properly before the Court. It is not immediately apparent that interest from judgment to execution of judgment would be calculated in the same manner. An important question which needs to be answered is when are these periodic payments deemed to begin? If they begin at the time of entry of Judgment, then perhaps a different result is warranted. This is because at the time of execution of judgment, the plaintiff will be due all back payments due and owing in the Section 5003 time period. It would appear that the plaintiff would be due these back payments with interest on these payments only and that no interest would be due on the payments which have yet to be paid, since these payments are not yet due and owing. Unlike the Section 5002 time period, prior to entry of Judgment, no annuity has begun and no back payments are due.