New York State Law Digest: July 2025

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New York State Law Digest: July 2025

CASE LAW DEVELOPMENTS

Court of Appeals Holds that Petitioners Not Entitled to Judgment on Promissory Estoppel Cause of Action

Finds There to be No Clear and Unambiguous Promise

New York City is required by law to provide health insurance coverage for City retirees. Prior to 2021, and for more than 50 years, the City offered a choice of health insurance plans. For Medicare-eligible retirees that included Medicare supplemental plans (Medigap plans) and Medicare Advantage plans (MAPs). A Medigap plan supplements traditional Medicare by paying additional out-of-pocket costs. A MAP is an all-in-one alternative to traditional Medicare, funded primarily via Medicare subsidies. Senior Care, a Medicare supplemental plan, was the most popular plan offered by the City.

In 2021, in a cost-cutting measure, the City decided to discontinue Senior Care and most other options and enroll all retirees in a custom-designed MAP, which was negotiated with and to be managed by insurer Aetna Life Insurance Company.

In Matter of Bentkowski v. City of New York, 2025 N.Y. Slip Op. 03690 (June 18, 2025), petitioners are retired New York City employees and the NYC Organization of Public Service Retirees, an association with tens of thousands of members. They commenced this proceeding seeking to enjoin the City from discontinuing the City retirees’ existing City-funded Medicare supplemental insurance plans and automatically enrolling the retirees in the Aetna MAP. City retirees can opt out of the City’s plan, but would then be required to pay their own Medicare Part B premiums and Medicare supplemental insurance costs.

The primary issue before the Court of Appeals was whether the petitioners were entitled to judgment on their promissory estoppel claim. Promissory estoppel is a legal doctrine permitting a promise to be enforced, in the absence of a formal contract where someone relies on that promise to his or her detriment. In essence, the petitioners claim that throughout their City employment “the City repeatedly promised them that upon retirement it would provide and pay for a Medicare supplemental plan, that they reasonably relied on those promises by making financial, employment, and retirement decisions based on the guarantee of Medicare supplemental coverage for life, and that they will suffer injury if removed from their existing health insurance plans due to higher copays, prior authorization requirements, and their preferred providers’ refusal to accept the Aetna MAP.”

Id. at *1.

Some claimed that they did not set aside funds for health insurance coverage in retirement and cannot afford at this point to opt out of the Aetna MAP and obtain Medicare supplemental coverage elsewhere. “Others alleged that they had relocated to states where insurers can legally deny Medicare supplemental insurance coverage based on preexisting health conditions, meaning that those retirees in the direst circumstances would not be able to obtain such coverage elsewhere, even if they could afford to do so.” Id.

Among their submissions, the petitioners pointed to language in Summary Program Descriptions (SPDs) provided annually to retirees to advise of their health insurance options, which contained language such as: “These benefits are intended to provide you with the fullest possible protection that can be purchased with the available funding . . .”. They submitted other documents, including for example, hundreds of affidavits of Medicare-eligible retirees, each alleging that during their employment “the City repeatedly promised that when I retired and became eligible for Medicare, the City would pay for my Medicare Part B premium plus my choice of a Medicare Supplemental plan. This promise was made to me in writing in [SPDs] and various other brochures.” Id.

The Court of Appeals noted that while it has never “recognized promissory estoppel as a standalone cause of action,” the Appellate Division has in some circumstances, finding that “an essential element of a promissory estoppel claim is a ‘clear and unambiguous promise.’ ” The Court of Appeals concluded that it did not need to determine whether it should also recognize a promissory estoppel cause of action, because the petitioners did not establish that there was a clear and unambiguous promise.

First, the SPDs include no language that

could be construed as a clear and unambiguous promise of Medicare supplemental insurance coverage for life. To the contrary, we agree with the City that the language in the SPDs is descriptive and for informational purposes only. . . Indeed, annual SPDs are necessary only because benefits change from year to year, a fact petitioners do not contest. . . To the extent that one might infer a commitment of sorts from the SPDs’ language, it does not rise to the level of a clear and unambiguous promise that the City would pay for Medigap coverage, as opposed to some other form of health insurance coverage, for the rest of every retiree’s life.

Id. at *2.

In addition, (i) references in the SPDs and elsewhere to the fact that benefits were negotiated through collective bargaining implied that changes could be made to those benefits; (ii) cover letters issued by various Mayors that accompanied the SPDs “often explicitly state that rising costs and funding limitations may affect benefits”; and (iii) the affidavits submitted frequently referred to their reliance on the SPDs which, as set forth above, do not contain a clear and unambiguous promise. “Thus, the affidavits of the retirees no more establish a clear and unambiguous promise than do the SPDs.”

Second Department Holds that CPLR 205(a) Can Be Used in Successive Lawsuits

Parts Company With Contrary Second Circuit Ruling

And yet again we return to CPLR 205(a). That section provides that if an action is timely and properly commenced and is terminated in a manner other than those set forth in the statute, the plaintiff can bring a second (otherwise untimely) action based upon the same transaction or occurrence, or series of transactions or occurrences, within six months of the termination of the first action.

We previously reported on the Second Circuit decision in Ray v. Ray, 22 F.4th 69 (2d Cir. 2021), affirming the federal district court and holding “that CPLR section 205(a), New York’s ‘Saving Statute,’ does not permit a litigant to file an otherwise untimely ‘new action’ within six months of a ‘prior action,’ where that prior action was, itself, only made timely by a previous application of section 205(a).” Stated differently, multiple successive attempts to use CPLR 205(a) was rejected.

However, in Tumminia v. Staten Is. Univ. Hosp., 2025 N.Y. Slip Op. 03352 (2d Dep’t June 4, 2025), the New York State Appellate Division held to the contrary. There, it was alleged that the decedent suffered from bedsores contributing to her death while at the defendants’ nursing home and hospital. The decedent’s husband commenced an action against the defendants, as “Proposed Executor of ” the decedent’s estate. The plaintiff had previously submitted letters testamentary to the Richmond County Surrogate’s Court seeking his appointment as the executor of the decedent’s estate, but had not yet been appointed when he commenced the action. When the defendants moved to dismiss under CPLR 3211(a)(3) based on plaintiff’s lack of capacity, the plaintiff’s attorney requested that the motions be held in abeyance until the Surrogate proceeding concluded, and an administrator of the estate could be substituted for the plaintiff. Alternatively, the plaintiff’s attorney requested that if the trial court were to grant the motions, it should do so without prejudice. By order dated June 13, 2023, the trial court granted the motions, finding plaintiff to lack standing, and dismissed the action (“Action #1”).

Within six months and on December 11, 2023, the plaintiff commenced this action (“Action #2”), again as “Proposed Executor” of the decedent’s estate. The pleadings in this action were identical to those in Action #1. The defendants moved to dismiss on lack of capacity grounds. While plaintiff’s opposition was the same as it was in Action #1, plaintiff also provided a “Notification of Filing” dated February 20, 2024, which indicated that the plaintiff’s June 28, 2021 application for probate had been approved for electronic filing with the Richmond County Surrogate’s Court. By order dated March 5, 2024, the trial court dismissed Action #2 with prejudice.

Initially, the Second Department ruled that while the trial court properly dismissed Action #2 for lack of capacity because the plaintiff had not yet received letters of administration when Action #2 was commenced, it erred in doing so with prejudice. The plaintiff insisted that since the dismissal of Action #2 was for lack of capacity, plaintiff was entitled to bring yet a third action within six months under CPLR 205(a). The defendants countered with the Second Circuit decision in Ray v. Ray, supra, holding that only one CPLR 205(a) extension is permitted. Since the complaint’s causes of action were now time-barred, the defendants argued that the trial court properly dismissed Action #2 with prejudice.

The Second Department disagreed both with the defendants and the Second Circuit. While the court acknowledged that the statute of limitations had run for all of the causes of action in the complaint, it concluded that CPLR 205(a) could be applied here. The Court noted initially the Court of Appeals holding in Carrick v Central Gen. Hosp., 51 N.Y.2d 242 (1980) that “when a timely complaint is dismissed because the plaintiff, as ‘proposed administratrix’ of a decedent’s estate, lacks capacity to commence the action, such a plaintiff who subsequently obtains letters of administration may take advantage of CPLR 205(a) and commence a new action within six months of the dismissal of the prior action, even if the statute of limitations would have otherwise expired in the interim (citations omitted).” Tumminia at *3.

With respect to the holding in Ray v. Ray, the Second Department emphasized that the issue here appeared to be one of first impression in the New York State appellate courts. It stressed that it was not bound by the Second Circuit’s determination. The court stated that when looking at the language of CPLR 205(a), the key question was whether a third action commenced within six months of the termination of Action #2 (the instant action) “would have been timely commenced at the time of commencement of the prior action,” as CPLR 205(a) requires. Here, the Appellate Division concluded that it would be, because the instant action (#2) was timely.

[W]hen there are three successive actions filed, with the second and third being commenced within six months of the dismissal of the previous action, the third action “would have been timely commenced at the time of commencement of” the second action because, as a result of CPLR 205(a), the second action was timely. The fact that the second action was timely only as a result of the operation of CPLR 205(a) does not detract from the fact that it was, in fact, timely, meaning that the third action “would have been timely commenced at the time of commencement” of the second action.

Id.

Moreover, a companion statute to CPLR 205, CPLR 205- a, was added in connection with the 2022 enactment of the Foreclosure Abuse Prevention Act (FAPA). That statute mirrors much of CPLR 205, with some significant differences. One is its more expansive definition of a neglect to prosecute. Another is that it

specifically provides that “in no event shall the original plaintiff receive more than one six-month extension.” Although FAPA made a change to CPLR 205 by providing that CPLR 205 ‘shall not apply to any proceeding governed by’ CPLR 205-a (id. § 205[c]; see L 2022, ch 821, § 5), it did not add a similar provision to CPLR 205(a) stating that the original plaintiff shall not receive more than one six-month extension. The fact that the Legislature included this language in CPLR 205-a but not in CPLR 205(a) is further evidence that it did not intend for a plaintiff to be limited to one six-month extension under CPLR 205(a) (citation omitted).

Id. at *3–4.

Finally, the Tumminia court distinguished its facts from those in the Ray Second Circuit case, and emphasized the significance of that distinction. In Ray, the prior actions were dismissed for failure to state a cause of action.

Here, the prior action and this action were dismissed for lack of capacity because the plaintiff had applied for but not yet received letters of administration to act as the personal representative of the decedent. There may be situations where a plaintiff is unable to obtain letters of administration within six months through no fault of his or her own. In such a situation, it would be inequitable for an action to become barred by the statute of limitations. This could be a problem particularly for causes of action with very short statutes of limitations, such as causes of action against municipalities (see General Municipal Law § 50-i[1]). Indeed, here, it is unclear whether the plaintiff’s failure to obtain letters of administration within six months of the dismissal of the prior action was his own fault. The plaintiff had applied for letters of administration approximately two years prior to the dismissal of the prior action. If this Court were to apply the Ray analysis in such situations, it would preclude an estate from being able to recover damages for personal injury or wrongful death through no fault of its own.

Id. at *4.

Supreme Court Has Subject Matter Jurisdiction in Enforcement Proceeding Involving the State Insurance Fund, as Garnishee

Petition Here Is Seeking an Order, Not a Judgment

The question in Matter of Doran Constr. Corp. v. New York State Ins. Fund, 2025 N.Y. Slip Op. 03716 (2d Dep’t June 18, 2025), was whether the state supreme court has subject matter jurisdiction in a CPLR article 52 proceeding to enforce a money judgment against the New York State Insurance Fund (SIF), as garnishee.

In accordance with sovereign immunity principles the supreme court has no jurisdiction over money damages claims against the state. Normally, such claims must be brought in the Court of Claims. Since the SIF it is a state agency, the same rule applies. Nevertheless, CPLR 5207 governs enforcement involving the state and provides, in part, that:

None of the procedures for the enforcement of money judgments are applicable to a judgment against the state. All procedures for the enforcement of money judgments against other judgment debtors are applicable to the state, its officers, agencies and subdivisions, as a garnishee, except where otherwise prescribed by law, and except that an order in such a procedure shall only provide for the payment of moneys not claimed by the state, and no judgment shall be entered against the state, or any officer, department, board or commission thereof, in such a procedure (emphasis added).

Since the SIF is in this action as a garnishee, “[a]ll procedures for the enforcement of money judgments against other judgment debtors are applicable,” excluding the exceptions noted in the statute. The Second Department stated that the exceptions were inapplicable. First, far from being “otherwise prescribed by law,” “CPLR 5221(a)(4) provides that the Supreme Court or a County Court has authority to hear enforcement proceedings ‘authorized by this article,’ meaning the entirety of CPLR article 52, which, of course, includes CPLR 5207 garnishment proceedings against the State.” Id. at *3.

Moreover, “[p]ermitting CPLR article 52 procedures in a situation where the State claims the money ‘would amount to circumvention of the [S]tate’s waiver of sovereign immunity.’ Here, however, it has not been shown that the State Insurance Fund claims the funds at issue where Doran seeks to garnish the State Insurance Fund’s obligation to Bipex (citation omitted).” Id.

In addition, the petition here seeks the entry of an order, not a judgment against SIF, which would be prohibited by CPLR 5207. Thus, the Second Department held that the supreme court had subject matter jurisdiction over this proceeding to enforce a money judgment against the SIF, as garnishee. While acknowledging there was scant precedent on this issue, the court referenced Third Department and county court decisions supporting its conclusion. The court added that if the supreme court here issued a garnishee order and the state did not comply with that order, “the remedy would then lie at the Court of Claims for a CPLR article 78 proceeding in the nature of mandamus.”

Id. at *4.

Second Department Concludes That Wrongful Death Claim is Not Derivative of Negligence Cause of Action

Thus, Plaintiffs’ Wrongful Death Cause of Action Was Not Subject to Decedent’s Agreement to Arbitrate

In Marinos v. Brahaj, 2025 N.Y. Slip Op. 03561 (2d Dep’t June 11, 2025), the Second Department was asked to answer a question of first impression, that is, “whether a wrongful death cause of action asserted by a decedent’s administrator individually, and which arises from the same facts as a negligence cause of action, is subject to an arbitration clause the decedent entered into.” The answer to this question rested on whether wrongful death causes of actions are derivative or independent of negligence causes of action.

The decedent was operating an electric moped rented from Revel using an app, which requires Revel membership. When downloading the app, the user must acknowledge certain pages, including an agreement containing an arbitration provision. It was alleged that the decedent suffered injuries causing his death when he was ejected from the moped and into the street, thereby being hit by a vehicle operated and owned by the defendant Astrit Brahaj. The plaintiffs, decedent’s parents, brought this action to recover damages for personal injuries and wrongful death against the defendants.

For the purposes of the appeal, it was conceded that the estate’s negligence causes of action against the Revel defendants were subject to the arbitration provision. Moreover, it was undisputed that the plaintiffs, individually, did not enter into an arbitration agreement with Revel.

The Second Department noted the distinct differences between a negligence and wrongful death cause of action. For example,

1. They protect the rights of different classes of persons and the recoverable damages differ. “ ‘Wrongful death actions are brought not to compensate the decedent or his [or her] estate for the pain and suffering attendant to the injury, but rather to recover, on behalf of decedent’s distributees, the pecuniary value of the decedent’s life’ (citation omitted).”

Id. at *2.

2. They accrue at different times. “A negligence cause of action accrues at the time of the injury, while a wrongful death cause of action does not accrue until the decedent’s death, which can occur after the injury is sustained.”

Id. at *2.

While acknowledging that there was a split of authority throughout the country, the court concluded that the causes of action are separate and apart and the wrongful death action was independent of and not derivative of the negligence cause of action. As a result, the Second Department held that the wrongful death cause of action was not subject to arbitration and could be decided by the supreme court. “The plaintiffs, individually, never agreed to arbitrate any claims with Revel and now cannot be forced to do so.”

Conflict as to Whether Prejudgment Interest on Quantum Meruit Award Is Mandatory or Discretionary

Third Department Punts, Finding That the Prejudgment Interest Award Here Was Proper Regardless of Which Standard to Apply

As relevant here, CPLR 5001(a) provides that prejudgment interest “shall be recovered” in contract actions, but “in an action of an equitable nature, interest and the rate and date from which it shall be computed shall be in the court’s discretion.” Schott v. Lucatelli, 2025 N.Y. Slip Op. 03616 (3d Dep’t June 12, 2025) highlights a conflict with respect to quantum meruit claims.

The Third Department noted that where, as in this case, a contractor cannot establish an existing written contract under General Business Law § 771 and thus cannot recover under a breach of contract theory, it has an alternative remedy. It can resort to the equitable theory of quantum meruit for the reasonable value of the services rendered. Following a nonjury trial, the trial court had issued an award in favor of the plaintiff on a quantum meruit theory and prejudgment interest at the statutory rate.

The Third Department stated that “[w]hile the theory of quantum meruit is an equitable one, its nature remains quasi-contractual.” The court noted a conflict as to “whether quantum meruit awards stem from an action at law and are thus entitled to mandatory prejudgment interest, or whether they are instead equitable actions, thus leaving the determination of prejudgment interest to the sound discretion of the trial court.” Id. at *3. The First and Second Departments have ruled that prejudgment interest is mandatory. See Marin v. Constitutional Realty, LLC, 161 A.D.3d 538, 539 (1st Dep’t), lv. denied, 32 N.Y.3d 911 (2018); Tesser v. Allboro Equip. Co., 73 A.D.3d 1023, 1027 (2d Dep’t 2010). Apparently, the Fourth Department has sent conflicting signals.

In Schott, the Third Department declined to take a side on this issue because based on “the facts presented herein, we would uphold the prejudgment interest award regardless of which standard we apply. Thus, inasmuch as deciding this appeal does not turn on resolving said conflict — and the parties do not call on us to do so — we decline to address it.” Id.

Wishing each of you a peaceful and relaxing summer.

David

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