author: Stein, J.

text:
    [35 NE3d 481, 14 NYS3d 313]
    Commonwealth of Pennsylvania Public School Employees’ Retirement System, Together and on Behalf of All Others Similarly Situated, et al., Plaintiffs, and Commerzbank AG, Together and on Behalf of All Others Similarly Situated, Appellant, v Morgan Stanley & Co., Incorporated, et al., Respondents, et al., Defendants.
    Argued June 1, 2015;
    decided June 30, 2015

      POINTS OF COUNSEL

      Robbins Geller Rudman & Dowd LLP, San Diego, California 0Joseph D. Daley, of the California bar, admitted pro hac vice, Daniel S. Drosman and Luke O. Brooks of counsel), for appellant.
    I. Commerzbank AG has standing to sue on the Allianz Dresdner Daily Asset Fund notes. (International Design Concepts, LLC v Saks Inc., 486 F Supp 2d 229; Griffey v New York Cent. Ins. Co., 100 NY 417; Leon v Martinez, 84 NY2d 83; Aini v Sun Taiyang Co., Ltd., 964 F Supp 762; Matter of Boissevain, 40 Misc 2d 237; Banque Arabe et Internationale D’Investissement v Maryland Natl. Bank, 57 F3d 146; Premium Mtge. Corp. v Equifax, Inc., 583 F3d 103; Allstate Ins. Co. v Countrywide Fin. Corp., 824 F Supp 2d 1164; MBIA Ins. Corp. v Countrywide Home Loans, Inc., 87 AD3d 287.) II. A reasonable trier of fact could find Morgan Stanley & Co., Incorporated and Morgan Stanley & Co. International Limited liable for fraud based on the evidence adduced. (Premium Mtge. Corp. v Equifax, Inc., 583 F3d 103; Allstate Ins. Co. v Countrywide Fin. Corp., 824 F Supp 2d 1164; MBIA Ins. Corp. v Countrywide Home Loans, Inc., 87 AD3d 287; Ellington Credit Fund, Ltd. v Select Portfolio Servicing, Inc., 837 F Supp 2d 162; CPC Intl. v McKesson Corp., 70 NY2d 268; Dillon v Morano, 497 F3d 247.)

      Davis Polk & Wardwell, LLP, New York City (James P. Rouhandeh, Antonio J. Perez-Marques and Jessica L. Turner of counsel), Cahill Gordon & Reindel LLP, New York City {Floyd Abrams, Jason M. Hall and Roxana Labatt of counsel), Satterlee Stephens Burke & Burke LLP, New York City {Joshua M. Rubins, James J. Coster and James I. Doty of counsel), Gibson, Dunn & Crutcher LLP, Washington, D.C. {Mark A Perry of counsel), for respondents.
    I. No reasonable trier of fact could find that Allianz Dresdner Daily Asset Fund validly assigned its rights to sue for common-law fraud to Dresdner Bank AG in connection with its sale of the Cheyne notes. (Fox v Hirschfeld, 157 App Div 364; State of Cal. Pub. Employees’ Retirement Sys. v Shearman & Sterling, 95 NY2d 427; Tycon Tower I Inv. Ltd. Partnership v Burgee Architects, 234 AD2d 748; Argyle Capital Mgt. Corp. v Lowenthal, Landau, Fischer & Bring, 261 AD2d 282; Abel v Paterno, 245 App Div 285; Dexia SA/NV v Morgan Stanley, 41 Misc 3d 1214[A], 2013 NY Slip Op 51696[U]; State Farm Mut. Ins. Co. v Anikeyeva, 35 Misc 3d 1203[A], 2012 NY Slip Op 50542[U]; Banque Arabe et Internationale D'Investissement v Maryland Natl. Bank, 57 F3d 146; International Design Concepts, LLC v Saks Inc., 486 F Supp 2d 229; Brandoff v Empire Blue Cross & Blue Shield, 183 Misc 2d 936.) II. No reasonable jury could find Morgan Stanley & Co., Incorporated and Morgan Stanley & Co. International Limited liable for primary fraud under New York law. (Mateo v Senterfitt, 82 AD3d 515; Eurycleia Partners, LP v Seward & Kissel, LLP, 46 AD3d 400; Crigger v Fahnestock & Co., Inc., 443 F3d 230; Gaidon v Guardian Life Ins. Co. of Am., 94 NY2d 330; Merrill Lynch & Co. Inc. v Allegheny Energy, Inc., 500 F3d 171; Abrahami v UPC Constr. Co., 224 AD2d 231; CPC Intl. v McKesson Corp., 70 NY2d 268; Oster v Kirschner, 77 AD3d 51; JP Morgan Chase Bank v Winnick, 406 F Supp 2d 247; Ambassador Factors v Kandel & Co., 215 AD2d 305.)
   OPINION OF THE COURT

Stein, J.

In this case certified to us by the United States Court of Appeals for the Second Circuit, we must determine whether a reasonable factfinder could conclude that plaintiff Commerzbank AG was assigned the right to bring a common-law fraud claim, and therefore had standing to sue various defendants involved in the issuance of rated notes by the Cheyne structured investment vehicle (SIV). The notes in question were originally purchased by Allianz Dresdner Daily Asset Fund (DAF), subsequently sold to a branch of Dresdner Bank AG in 2007, and ultimately acquired by Commerzbank through its merger with Dresdner in 2009. Because Commerzbank has failed to present any evidence of a communicated intent by DAF and Dresdner to assign to Dresdner the right to sue for fraud in connection with the transaction through which DAF purchased the notes, we hold that Commerzbank has failed to raise a question of fact regarding standing.

L

The facts and procedural history of this action are explained in more detail in the underlying decisions of the District Court (888 F Supp 2d 478 [SD NY 2012]; 910 F Supp 2d 543 [SD NY 2012]; 888 F Supp 2d 431 [SD NY 2012]; 269 FRD 252 [SD NY 2010]) and the Second Circuit (772 F3d 111 [2d Cir 2014] [as amended Nov. 12, 2014]). As particularly relevant here, defendants Morgan Stanley & Co., Incorporated and Morgan Stanley & Co. International Limited (collectively, Morgan Stanley) arranged and placed notes for the Cheyne SIV, which was launched in 2005. To attract investors, defendants Standard & Poor’s Ratings Services and The McGraw-Hill Companies, Inc. (collectively, S & P) and Moody’s Investors Service, Inc. and Moody’s Investors Service Ltd. (collectively, Moody’s) — nationally recognized statistical rating organizations — were engaged to rate the notes. Between 2005 and 2007, the Cheyne SIV issued several classes of notes on a rolling basis. These notes received top credit ratings from Moody’s and S & P, which ratings were included in documents distributed to potential investors by Morgan Stanley. Investors who purchased the notes purportedly relied on these ratings.

The notes issued by the Cheyne SIV — which included a significant number of subprime residential mortgage-backed securities — were downgraded by S & P and placed on review for downgrade by Moody’s after the SIV breached its “Major Capital Loss Test” in 2007. That breach triggered “an irreversible operating state requiring that a receiver be appointed to manage the SIV in order to sell its assets and repay maturing liabilities.” Allegedly, most, if not all, of the value of the Cheyne SIV notes was eradicated.

In 2008, this action was commenced against Morgan Stanley and the rating agencies in the federal District Court for the Southern District of New York by Abu Dhabi Commercial Bank and other institutional investors that had purchased or acquired Cheyne SIV notes and allegedly suffered damages as a result of the Cheyne SIV’s collapse. Commerzbank — which held Cheyne SIV notes that it had purchased directly, in addition to the notes that had originally been purchased by DAF and subsequently acquired by Commerzbank — eventually joined the action as a named plaintiff. Plaintiffs, including Commerzbank, asserted causes of action sounding in fraud, aiding and abetting fraud, and negligent misrepresentation against Morgan Stanley and the rating agencies. More specifically, plaintiffs asserted that defendant rating agencies, at the behest of Morgan Stanley, knowingly issued fraudulently high ratings that did not reflect the true risks of the Cheyne SIV notes. As alleged in the complaint, these ratings were unreliable, devoid of any meaningful factual or statistical basis, and based on outdated models and inaccurate information. According to plaintiffs, when Morgan Stanley distributed materials containing the ratings to potential investors, it knew that the ratings were false and misleading, and Morgan Stanley therefore made materially misleading statements and omissions that led plaintiffs to purchase Cheyne SIV notes, believing they were a safe investment.

Following discovery, Morgan Stanley and the rating agencies moved for summary judgment dismissing plaintiffs’ fraud claims and questioned, among other things, whether Commerzbank had standing to sue for fraud on the Cheyne SIV notes originally purchased by DAF and whether Morgan Stanley had made any actionable misstatements. Defendants also argued that plaintiffs could not establish justifiable reliance on the ratings. With respect to the reliance element, the District Court limited plaintiffs to a single three-page declaration to demonstrate whether and how they had relied on the ratings when investing in Cheyne SIV notes. In the declaration submitted by plaintiffs, Commerzbank asserted that Dresdner purchased Cheyne SIV notes “at par” from its affiliate, DAF, in October 2007, and that Dresdner was acquired by Commerzbank in January 2009 which, under German law, meant that all of Dresdner’s “assets, liabilities, rights and obligations passed automatically by operation of law to Commerzbank and Dresdner ceased to exist as a legal entity.”

As pertinent here, the District Court granted defendants’ motion for summary judgment in part, dismissing Commerzbank’s claims insofar as they were based on the notes purchased by DAF, and dismissing plaintiffs’ fraud claim against Morgan Stanley (888 F Supp 2d at 447-448, 478). With respect to standing, the court held that, although Commerzbank may have acquired all causes of action possessed by Dresdner, it had provided no evidence that DAF, in the first instance, had assigned to Dresdner any tort causes of action connected to the notes (see id. at 447-448). As for the dismissal of the fraud claim against Morgan Stanley, the court determined that the ratings were attributable solely to the rating agencies (see id. at 448-453). In the absence of a fraudulent statement made by Morgan Stanley, the court held that Morgan Stanley could be liable, at most, for aiding and abetting fraud (see id.). The court also found that questions of fact precluded summary judgment on Commerzbank’s fraud claims against the rating agencies and its aiding and abetting cause of action against Morgan Stanley based on the notes purchased directly by Commerzbank (see id. at 458-468, 477-478).

Commerzbank moved for reconsideration of the standing issue and proffered, as pertinent here, two additional declarations to support its contention that DAF had assigned its fraud claims to Dresdner. More specifically, Commerzbank provided a declaration from Christopher Williams, former Secretary of and Senior Counsel to Dresdner Advisors (DAF’s investment advisor) and former Senior Counsel to the branch of Dresdner that purchased the notes from DAF. Williams explained that DAF did not typically enter into written agreements when purchasing or selling securities. He further explained that, when the Cheyne SIV notes were downgraded in 2007, DAF was prohibited from continuing to hold them by federal rules promulgated under the Investment Company Act of 1940. “ [I]n order to ensure DAF’s compliance” with such rules, Dresdner therefore purchased the notes from DAF for cash “at par” for $121,078,069. DAF ceased operations 10 months later and was terminated in January 2009. Williams asserted that, to the best of his knowledge, DAF and Dresdner believed that any causes of actions or claims related to the notes would automatically transfer with them.

Commerzbank also submitted a declaration by Brian Shlissel, Managing Director of Allianz Global Investors Fund Management LLC, which administered DAF as a series of a Massachusetts business trust known as Allianz Global Investors Managed Accounts Trust, of which Shlissel was the President and Chief Executive Officer. Shlissel similarly attested to the foregoing facts regarding DAF’s sale of the notes to Dresdner, and he asserted that the parties to the sale believed that any causes of action related to the notes would automatically transfer to Dresdner with the notes themselves.

The District Court denied Commerzbank’s motion for reconsideration, declining to consider its additional submissions (888 F Supp 2d at 490-491). Commerzbank appealed.

The Second Circuit held that the District Court abused its discretion by refusing to consider Commerzbank’s supplemental papers, but determined that resolution of the standing issue would require it to pass on an open question of New York law; namely, whether proof of a subjective, uncommunicated intent to transfer a whole interest in a note — in the absence of limiting language — suffices to transfer an assignor’s tort claims related to such note under New York law (772 F3d at 121). Accordingly, the Second Circuit certified to us the question whether, “[b]ased on the declarations and documentary evidence presented by Commerzbank, ... a reasonable trier of fact [could] find that DAF validly assigned its right to sue for common law fraud to Dresdner in connection with its sale of Cheyne SIV notes” (id. at 125). Further, if we answer the first question in the affirmative, the Second Circuit asked us to determine whether, “based on the record established in the summary judgment proceedings in the district court, ... a reasonable trier of fact [could] find Morgan Stanley liable for fraud under New York law” (id.).

We accepted certification (24 NY3d 1028 [2014]), and now answer the first question in the negative. We, therefore, have no occasion to pass on the second.

IL

Commerzbank contends that its proffered evidence precludes the granting of summary judgment in defendants’ favor on the issue of whether Commerzbank has standing to pursue a fraud claim arising out of DAF’s purchase of the Cheyne SIV notes that Commerzbank subsequently acquired. According to Commerzbank, any fraud claims possessed by DAF were assigned to Dresdner in light of the “unqualified” nature of DAF’s sale of its “whole interest” in the notes to Dresdner. Commerzbank also argues that the Williams and Shlissel declarations are sufficient to demonstrate the intent of DAF and Dresdner to assign to Dresdner all causes of action associated with the notes. Finally, relying on Banque Arabe et Internationale D'Investissement v Maryland Natl. Bank (57 F3d 146 [2d Cir 1995]) and International Design Concepts, LLC v Saks Inc. (486 F Supp 2d 229 [SD NY 2007]), Commerzbank asserts that the circumstances surrounding the 2007 sale of the Cheyne SIV notes provide a sufficient basis upon which a factfinder could conclude that, when the notes were transferred, the parties to the sale intended to assign any potential fraud claims related thereto. We find these arguments unpersuasive.

To be sure, fraud claims are freely assignable in New York (see Banque Arabe, 57 F3d at 151-153; Glen Banks, New York Contract Law § 15:4 [28 West’s NY Prac Series]; see also General Obligations Law § 13-101). It has long been held, however, that the right to assert a fraud claim related to a contract or note does not automatically transfer with the respective contract or note (see Argyle Capital Mgt. Corp. v Lowenthal, Landau, Fischer & Bring, 261 AD2d 282, 283 [1st Dept 1999], lv denied 93 NY2d 817 [1999]; Tycon Tower I Inv. Ltd. Partnership v Burgee Architects, 234 AD2d 748, 749 [3d Dept 1996], lv denied 90 NY2d 804 [1997]; Ettar Realty Co. v Cohen, 163 App Div 409, 411 [1st Dept 1914]; Fox v Hirschfeld, 157 App Div 364, 365-368 [1st Dept 1913]; Weylin Hotel Corp. v Ritter, 114 NYS2d 158, 159 [Sup Ct, NY County 1952], affd 280 App Div 785 [1st Dept 1952]; see also State of Cal. Pub. Employees’ Retirement Sys. v Shearman & Sterling, 95 NY2d 427, 436 [2000]; Banque Arabe, 57 F3d at 151). Thus, where an assignment of fraud or other tort claims is intended in conjunction with the conveyance of a contract or note, there must be some language — although no specific words are required — that evinces that intent and effectuates the transfer of such rights (see State of Cal. Pub. Employees’ Retirement Sys., 95 NY2d at 432; Tycon Tower I Inv. Ltd. Partnership, 234 AD2d at 749; see also Banque Arabe, 57 F3d at 151-152; see generally Leon v Martinez, 84 NY2d 83, 88 [1994]). Without a valid assignment, “only the . . . assignor may rescind or sue for damages for fraud and deceit” because “the representations were made to it and it alone had the right to rely upon them” (Nearpark Realty Corp. v City Inv. Co., 112 NYS2d 816, 817 [Sup Ct, NY County 1952]; see Fox, 157 App Div at 365-368; see also Banque Arabe, 57 F3d at 151; Fraternity Fund Ltd. v Beacon Hill Asset Mgt., LLC, 479 F Supp 2d 349, 373 [SD NY 2007]).

Our review of the record fails to reveal any proof of an assignment of fraud or, more generally, tort causes of action. Crucial to our analysis, Commerzbank concedes that there was no “explicit” assignment of DAF’s common-law fraud claims to Dresdner in connection with DAF’s sale of the notes. Rather, Commerzbank contends that the transfer of the notes was “unqualified” and, therefore, implicitly included claims related thereto. At its core then, Commerzbank’s argument amounts to little more than an assertion that, in the absence of language to the contrary, DAF’s tort claims necessarily transferred to Dresdner with the notes. However, this is contrary to the law in New York, which requires either some expressed intent or reference to tort causes of action, or some explicit language evidencing the parties’ intent to transfer broad and unlimited rights and claims, in order to effectuate such an assignment (compare Banque Arabe, 57 F3d at 152 [assignment of interest and rights in “transaction,” rather than contract, broad enough to encompass tort claims], and International Design, 486 F Supp 2d at 237 [assignment language expressly stated “without limitation”], with State of Cal. Pub. Employees’ Retirement Sys., 95 NY2d at 435-436 [assignment of rights and interests arising out of loan documents and promissory note did not assign cause of action for malpractice against drafter of loan documents]).

The declarations of Williams and Shlissel are insufficient, as a matter of law, to demonstrate that the parties expressed an intent to and did, in fact, undertake an assignment of fraud claims in connection with the conveyance of the notes at the time of the sale. Williams and Shlissel averred only that DAF and Dresdner assumed that DAF’s rights and causes of action would transfer automatically with the note; neither declarant claimed that the assignment of tort claims was actually discussed or negotiated by the parties prior to or at the time of the transfer, or that the sale of the notes in any way referenced the simultaneous assignment of such claims. This deficiency is fatal to Commerzbank’s argument that it has standing (see generally Wells v Shearson Lehman/American Express, 72 NY2d 11, 24 [1988] [“(u)ncommunicated subjective intent alone cannot create an issue of fact where otherwise there is none”]; Property Asset Mgt., Inc. v Chicago Tit. Ins. Co., Inc., 173 F3d 84, 87 [2d Cir 1999]).

As Commerzbank points out, in Banque Arabe (57 F3d 146) and International Design (486 F Supp 2d 229) the Second Circuit and District Court, respectively, took note of the circumstances surrounding the transfers in question when considering whether the parties assigned tort causes of action. However, these cases do not stand for the proposition that Commerzbank espouses — namely, that the surrounding circumstances can be sufficient, in the absence of any supporting language, to raise a question of fact regarding whether an assignment of tort claims was effected. In both Banque Arabe and International Design, the courts first concluded that the language of the assignment encompassed tort claims before reinforcing their conclusions by reference to the circumstances of the transaction (see Banque Arabe, 57 F3d at 152 [concluding that the “language in the Assignment alone is sufficient to demonstrate (the assignor’s) intent to transfer all of (its) rescission and fraud claims”]; International Design, 486 F Supp 2d at 236-237 [noting that “(t)he words of the assignment are of paramount importance” and that the assignment there expressly provided that it was “without limitation”]). By contrast, the only language used to convey the notes here is contained in the confirmation letter sent by Dresdner, which merely referred to the purchase of “each of the Cheyne Holdings,” and the declarations of Williams and Shlissel, which similarly fail to contain any assertion that the parties to the sale referenced or assigned tort causes of action.

In any event, the circumstances here would be insufficient to raise a question of fact as to whether DAF intended to assign to Dresdner potential fraud causes of action based on the ratings. Although Dresdner bought the Cheyne SIV notes after they were devalued, Commerzbank presented no evidence that the sale was in contemplation of DAF’s dissolution, as it was in Banque Arabe (compare 57 F3d at 152), and DAF was not terminated until a year after the sale (compare International Design, 486 F Supp 2d at 237 [assignor was a defunct entity at the time of the sale]). Nor would Dresdner’s purchase of the notes after they were devalued compel the conclusion that Dresdner must have intended to assume any potential fraud claims, particularly in light of Williams’ assertion that Dresdner purchased the notes “in order to ensure DAF’s compliance” with federal rules. Indeed, there is no indication that Dresdner and DAF were even aware, at the time of the sale, that any potential fraud claims existed (see Fox, 157 App Div at 369). Likewise, on this record, Dresdner’s purchase of the notes “at par” lends no support to Commerzbank’s position since the sale price was mandated by federal rules (see 17 CFR 270.17a-9 [a]). Thus, the circumstances surrounding this transaction are plainly distinguishable from those in Banque Arabe and International Design, and Commerzbank’s reliance on those cases is unavailing.

Because DAF’s sale of the notes, in the conceded absence of any expression of a contemporaneous intent to transfer related tort claims to Dresdner, did not, under New York law, effectuate an assignment of the fraud claim Commerzbank now seeks to pursue, Commerzbank has failed to raise a question of fact concerning standing. Accordingly, the first certified question should be answered in the negative and the second certified question not answered as academic.

Chief Judge Lippmajn and Judges Read, Pigott, Rivera, Abdus-Salaam and Fahey concur.

Following certification of questions by the United States Court of Appeals for the Second Circuit and acceptance of the questions by this Court pursuant to section 500.27 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.27), and after hearing argument by counsel for the parties and consideration of the briefs and the record submitted, first certified question answered in the negative and second certified question not answered as academic.

      . The Second Circuit did not reach the merits of Commerzbank’s motion to ratify its claim by a successor entity to DAF under Federal Rules of Civil Procedure rule 17 (a) (3), but commented that the motion, which must be made within a “reasonable time” of the standing objection, was not made until over one year after defendants’ answers raised the standing issue (772 F3d 111, 122 n 5 [2d Cir 2014] [as amended Nov. 12, 2014]).

      . Commerzbank’s standing to sue with respect to the notes that it purchased directly is not at issue.


source: Caselaw Access Project

author: Read, J.

license: Public Domain

text:
    [35 NE3d 827, 14 NYS3d 757]
    Adam L. Walton, Appellant, v Strong Memorial Hospital et al., Respondents.
    Argued March 26, 2015;
    decided June 10, 2015

      POINTS OF COUNSEL

      Magavern, Magavern & Grimm LLP, Buffalo (Edward J. Markarian of counsel), and Brown Chiari LLP, Lancaster 0James M. Mucklewee of counsel), for appellant.
    I. Under the plain language of CPLR 214-a and the medical definition of “fixation device,” the polyvinyl catheter was a foreign object and not a fixation device because it did not fix or fixate anything, and the terms “intent” and “continuing treatment purpose,” which do not appear in CPLR 214-a, should not be read into the statute. (Flanagan v Mount Eden Gen. Hosp., 24 NY2d 427; Rodriguez v Manhattan Med. Group, 77 NY2d 217; Rockefeller v Moront, 81 NY2d 560; Cooper v Edinbergh, 75 AD2d 757; Lombardi v DeLuca, 130 AD2d 632, 71 NY2d 838; People v Suber, 19 NY3d 247; LaBarbera v New York Eye & Ear Infirmary, 91 NY2d 207; Sanders v Winship, 57 NY2d 391; Matter of Chemical Specialties Mfrs. Assn. v Jorling, 85 NY2d 382, 85 NY2d 1033; Carmona v Lutheran Med. Ctr., 238 AD2d 535.) II. Defining “foreign object” and “fixation device” based on “intent” and “continuing treatment purpose” violates rules of statutory construction and defeats the policy goal of the statute. (Rothstein v Tennessee Gas Pipeline Co., 87 NY2d 90; Stet-tine v County of Suffolk, 66 NY2d 354; Rodriguez v Manhattan Med. Group, 77 NY2d 217; Rockefeller v Moront, 81 NY2d 560; LaBarbera v New York Eye & Ear Infirmary, 91 NY2d 207; People v Hobson, 39 NY2d 479; People v Suber, 19 NY3d 247; People v Rudolph, 21 NY3d 497; Flanagan v Mount Eden Gen. Hosp., 24 NY2d 427.) III. Defendants’ attempt to distinguish Norred v Teaver (320 Ga App 508, 740 SE2d 251 [2013]) is without merit. (Rockefeller v Moront, 81 NY2d 560; LaBarbera v New York Eye & Ear Infirmary, 91 NY2d 207.) IV. Reading “intent” and “continuing treatment purpose” into the statute has produced unsatisfactory results. (Carmona v Lutheran Med. Ctr., 238 AD2d 535; Jacobs v University of Rochester, 103 AD3d 1205; Dunning v Minkowitz, 18 Misc 3d 1125[A], 2008 NY Slip Op 50202[U]; Newman v Keuhnelian, 248 AD2d 258, 92 NY2d 804; Perl v Meher, 18 NY3d 208; Balaskonis v HRH Constr. Corp., 1 AD3d 120.)

      Martin Clearwater & Bell, LLP, New York City {Barbara D. Goldberg, William P. Brady and Geri Beth Horenstein of counsel), for respondents.
    I. The Court should adhere to its prior precedent and hold that the polyvinyl monitoring catheter was not a “foreign object,” but instead was a “fixation device,” because it was intentionally left in plaintiff’s body to serve a continuing medical function. (Rockefeller v Moront, 81 NY2d 560; LaBarbera v New York Eye & Ear Infirmary, 230 AD2d 303, 91 NY2d 207; Flanagan v Mount Eden Gen. Hosp., 24 NY2d 427; Rodriguez v Manhattan Med. Group, 77 NY2d 217; Matter of Beary v City of Rye, 44 NY2d 398; Lombardi v DeLuca, 71 NY2d 838; Cooper v Edinbergh, 75 AD2d 757; Newman v Keuhnelian, 248 AD2d 258, 92 NY2d 804; Jacobs v University of Rochester, 103 AD3d 1205.) II. Plaintiffs reliance on Norred v Teaver (320 Ga App 508, 740 SE2d 251 [2013]) is unavailing. (Rockefeller v Moront, 81 NY2d 560; LaBarbera v New York Eye & Ear Infirmary, 230 AD2d 303, 91 NY2d 207; Rodriguez v Manhattan Med. Group, 77 NY2d 217.) III. Plaintiffs reliance on the medical and dictionary definition of “fixation device” and the tenets of statutory construction does not require this Court to overturn its prior precedent. (Sanders v Winship, 57 NY2d 391.) IV. Defining “foreign object” and “fixation device” based on “intent” and “continuing treatment purpose” does not defeat the policy objectives of the statute. (Newman v Keuhnelian, 248 AD2d 258.) V. Reading “intent” and continuing treatment purpose into the statute has not produced unsatisfactory results. (Torres v Hyun Taik Cho, 2011 NY Slip Op 31183[U]; Carmona v Lutheran Med. Ctr., 238 AD2d 535.)

      Wilson Elser Moskowitz Edelman & Dicker LLP, Albany {James A. Shannon of counsel), for Healthcare Association of New York State, Inc., amicus curiae.
    I. Plaintiffs plain language test will dramatically expand the foreign object exception. (Flanagan v Mount Eden Gen. Hosp., 24 NY2d 427;
      Goldsmith v Howmedica, Inc., 67 NY2d 120; Thornton v Roosevelt Hosp., 47 NY2d 780; Matter of Beary v City of Rye, 44 NY2d 398; Weber v Scheer, 58 AD2d 520; LaBarbera v New York Eye & Ear Infirmary, 91 NY2d 207; Rockefeller v Moront, 81 NY2d 560; Schwartz v Heyden Newport Chem. Corp., 12 NY2d 212; Cross v City of Syracuse, 200 NY 393; Murphy v St. Charles Hosp., 35 AD2d 64.) II. Plaintiffs plain language test will dramatically alter the classification of commonly used medical objects. (Rockefeller v Moront, 81 NY2d 560; Ericson v Palleschi, 23 AD3d 608; Jacobs v University of Rochester, 103 AD3d 1205; Rodriguez v Manhattan Med. Group, 77 NY2d 217.)
   OPINION OF THE COURT

Read, J.

We are “presented with] yet another variation among a myriad of medical protocols, devices and procedures” (LaBarbera v New York Eye & Ear Infirmary, 91 NY2d 207, 212 [1998]), and asked whether a fragment from a catheter that was placed in plaintiff Adam Walton’s heart during surgery in 1986 is a foreign object for purposes of the discovery rule of CPLR 214-a. Considering the specific facts and circumstances alleged in this case in light of our precedents, we conclude that the fragment qualifies as a foreign object.

L

Facts

On May 27, 1986, when plaintiff wás three years old, he underwent surgery to correct a congenital heart malformation. The operation was performed at Strong Memorial Hospital in Rochester, New York. The operative note states that at the beginning of the surgery, after the incision was made, a “[p]olyvinyl catheter was placed within [plaintiff’s] left atrium for recording atrial pressure.” The note further relates that, before plaintiff was released from the operating room to the surgical intensive care unit,

“[p]olyvinyl catheters were placed within [plaintiff’s] left atrium and right atrium for recording atrial pressure. Myocardial pacing wires were placed upon the right atrium and right ventricle for pacing as indicated. Two pericardial drainage tubes were left[,] one anteriorly and one posteriorly. Hemostasis [i.e., stoppage of bleeding] was secured!, and] [t]he incision was closed . . . .”

On May 30, 1986, the third day after surgery, while plaintiff was still in the surgical intensive care unit, the catheters, pacing wires and drainage tubes were taken out of his body; the nursing progress notes state as follows: “OF NOTE: LA [i.e., left atrial] line possibly broke off with a portion remaining in pt. [patient], as it was being removed.” Plaintiff was discharged from the hospital on June 7, 1986.

Fifteen years later, in April 2001, a pacemaker was inserted into plaintiffs heart; then, a year after that, in May 2002, he underwent surgery to replace a damaged heart valve with a porcine (pig) valve. The following year, on March 2, 2003, plaintiff suffered an embolic stroke; an echocardiogram performed the next day detected “small mobile filamentous masses” in plaintiffs heart, which were identified as possibly suture material, although clots could not be ruled out. Five and a half years later, on December 2, 2008, plaintiff, by then 25 years old, suffered a transient ischemic attack, his second that year. Accordingly, a decision was made to replace his pacemaker’s battery, which was accomplished two days later.

The echocardiogram performed in conjunction with this last operation revealed “a regular-appearing left atrial foreign body.” As a result, on December 18, 2008, plaintiff underwent exploratory surgery, and plastic tubing was discovered in his heart. The surgical pathology report states that the tissue submitted for analysis was labeled “left atrial line,” and consisted of “a 10.2 cm in length x 0.1 cm in diameter brown catheter.[] Also received is a 2.0 x 0.1 cm tan catheter.[] At one of the catheter [s] is tan-white soft tissue adhered to the catheter.” The pathologist’s diagnosis was “foreign body, heart, excision: catheter; benign associated fibrous tissue with focal calcification.”

By summons and complaint dated November 24, 2009, plaintiff commenced this action against defendants Strong Memorial Hospital, University of Rochester Medical Center, Children’s Hospital at Strong and five named physicians (collectively, defendants). He alleged that, while treating him from May 26 to June 7, 1986, defendants negligently left a foreign body in his heart, which caused him to “suffer [ ] serious and permanent injuries,” and that he “could not have reasonably discovered the presence of [this] foreign body prior to December 4, 2008.” In particular, plaintiff claimed that defendants negligently left a portion of an atrial catheter in the left and/or right atrium of his heart, which caused him to suffer a stroke and transient ischemic attacks, among other serious maladies.

By answers dated February 2, 2010, defendants asserted the statute of limitations as an affirmative defense, and by notice of motion dated March 14, 2012, they moved pursuant to CPLR 3211 (a) (5) to dismiss the complaint as time-barred. Defendants contended that this action should have been commenced by May 30, 1996, or 10 years after they had allegedly failed to remove the entire catheter, citing CPLR 208 (imposing a 10-year cap on the commencement of an infant’s medical malpractice action). Further, defendants contended, the foreign object exception for medical malpractice actions did not apply. This exception, codified in CPLR 214-a, provides that although a medical malpractice lawsuit must normally be brought within two years and six months of

“the act, omission or failure complained off,] . . . where the action is based upon the discovery of a foreign object in the body of the patient, [it] may be commenced within one year of the date of such discovery or of the date of discovery of facts which would reasonably lead to such discovery, whichever is earlier. . . . For the purpose of this section the term ‘foreign object’ shall not include a chemical compound, fixation device or prosthetic aid or device.”

Although plaintiff sued within one year of discovery of the tubing, defendants took the position that the catheter was necessarily a fixation device, not a foreign object, because “[it] was intentionally placed inside the plaintiff during the operation and served a continuing medical purpose beyond the procedure itself.”

In opposition to the motion, plaintiff submitted the affidavit of a physician specializing in internal medicine and cardiovascular disease, who opined that the catheters were “placed to permit monitoring of arterial and venous pressures for management of fluid replacement, blood pressure, and prevention and/or treatment of congestive heart failure”; and “[had] no treatment function, but rather, simply serve [d] as a conduit for information from the cardiovascular system to a machine situated outside the body that is capable of analyzing that information and displaying the results on a monitor.” Accordingly, plaintiff’s expert concluded, the catheters were not “ ‘fixative device [s],’ as that term is used in medicine,” because they did not “secure body tissues one to another, or at least provide support to some structure within the body on either a permanent or temporary basis.”

Supreme Court granted defendants’ motion, and dismissed plaintiff’s claims with prejudice (37 Misc 3d 539 [Sup Ct, Erie County 2012]). The judge rejected defendants’ “fundamental argument” that “an object, irrespective of its nature or purpose, is always a ‘fixation device’ so long as it was intended to serve some continuing treatment purpose after the procedure in which it was placed in the body has concluded” (id. at 547-548). Supreme Court explained that

“ [t]he catheter here does not fit the concept of a ‘fixation device’ under any commonly understood meaning or technical sense. It served no fixative or fixation purpose. Its nature is not one which closes or fixates anything within a patient’s body. The affidavit from plaintiff’s expert further confirms the futility of attempting to characterize this catheter as a ‘fixation device’ ” {id. at 548).

The judge then considered whether the catheter, although not excluded as a fixation device, was a foreign object. Based on our decision in LaBarbera, he felt “compelled to conclude that the catheter . . . [was] not a ‘foreign object’ because, in the first instance, it was left in the plaintiff’s body deliberately with a continuing medical purpose” {id. at 549).

The Appellate Division agreed the complaint was untimely and so unanimously affirmed, but employed slightly different reasoning (114 AD3d 1289, 1290 [4th Dept 2014]). The Court concluded that, in light of our decisions in Rockefeller v Moront (81 NY2d 560 [1993]) and LaBarbera, the catheter, which was deliberately inserted into plaintiff’s heart to monitor atrial pressure, was a fixation device within the meaning of the statute. We granted plaintiff leave to appeal (23 NY3d 903 [2014]), and now reverse.

IL

Background

Flanagan

In Flanagan v Mount Eden Gen. Hosp. (24 NY2d 427 [1969]), the doctor inserted surgical clamps in the body of plaintiff Josephine Flanagan (Flanagan) during the course of gall bladder surgery in 1958. Eight years later, in 1966, after experiencing severe abdominal pain, Flanagan consulted another physician, who discovered by X-ray analysis that the clamps remained in her body. They were surgically removed, and shortly thereafter, Flanagan brought a medical malpractice action against the hospital and the estate of the doctor who had operated on her.

The defendants moved to dismiss the complaint as untimely, Supreme Court granted the motion and the Appellate Division affirmed (29 AD2d 920 [1st Dept 1968]). Deviating from our reluctance to create common-law exceptions to a statute of limitations (see Schwartz v Heyden Newport Chem. Corp., 12 NY2d 212 [1963] [the plaintiff’s cause of action accrued when the harmful chemical was injected into his body, not when its deleterious effects were discovered 15 years later], cert denied 374 US 808 [1963]; Conklin v Draper, 229 App Div 227 [1st Dept 1930] [the statute of limitations began to run when arterial forceps were left in the plaintiff’s abdomen during surgery, not when the malpractice was discovered more than two years afterwards], affd 254 NY 620 [1930]), we reversed. We held that “where a foreign object has negligently been left in the patient’s body, the Statute of Limitations will not begin to run until the patient could have reasonably discovered the malpractice” (Flanagan, 24 NY2d at 431).

We commented that at the time Conklin was decided, “no other jurisdiction had a contrary rule” (id. at 430), and reasoned that cases like Schwartz, which involved negligent medical treatment and medication, were fundamentally different from those where a foreign object is left in a patient’s body; specifically, “[i]n the latter [,] no claim can be made that the patient’s action may be feigned or frivolous . . . [and] there is. no possible causal break between the negligence of the doctor or hospital and the patient’s injury” (id.). Further, this species of alleged malpractice “does not raise questions as to credibility . . . [or] rest on professional diagnostic judgment or discretion”; and a foreign object like a clamp “retains its identity so that a defendant’s ability to defend a ‘stale’ claim is not unduly impaired” (id. at 431).

Lower Court Decisions after Flanagan

Subsequent to our decision in Flanagan, plaintiffs quite naturally pushed for expansion of this new precedent, and a number of courts obliged. For example, in Dobbins v Clifford (39 AD2d 1 [4th Dept 1972]), the Appellate Division applied a discovery rule in an action involving an operation performed in 1966 to remove the plaintiffs spleen, which resulted in damage to his pancreas not apparent until 1970. Although this fact pattern did not involve a foreign object by any stretch of the imagination, the court determined that “the rationale in Flanagan” {id. at 3 [emphasis added]) called for the statute of limitations to run from the plaintiffs discovery of the cause of his injuries rather than the date of the alleged malpractice because

“the same fundamental factors are present . . . [; namely,] an act of malpractice committed internally so that discovery is difficult; real evidence of the malpractice in the form of the hospital record . . . available at the time of suit; professional diagnostic judgment is not involved [;] and there is no danger of false claims” {id. at 3-4; see William Samore & Robert J. Tymann, 1972 Survey of New York Law, Torts, 24 Syracuse L Rev 551, 560 [1973] [noting that “(t)he importance of (Dobbins) lies in its expansive extension of prior case law. It is obvious that the ‘foreign object’ category was not originally intended to include damaged organs”]).

Similarly, in an earlier case, Murphy v St. Charles Hosp. (35 AD2d 64 [2d Dept 1970]), the Appellate Division applied Flanagan to save an otherwise time-barred action involving a prosthesis surgically inserted into the plaintiff’s hip and femur in 1963. The prosthesis broke in 1967, forcing the plaintiff to undergo surgery for removal of the fragmented and displaced appliance. The Court concluded that the foreign object in Flanagan was “akin to the prosthesis [in Murphy] . . . since both involve the surgical insertion of a medical device . . . [and] there is the same minimization of prejudice to a defendant in the preparation of his case because of the availability and identifiability of the real evidence involved” (id. at 67; but see Schiffman v Hospital for Joint Diseases, 36 AD2d 31 [2d Dept 1971] [declining to extend Flanagan or apply Murphy to a case where the plaintiff alleged the misreading of biopsy slides], lv denied 29 NY2d 483 [1971]). Additionally, Flanagan was extended by a court to a case where the plaintiff sought damages allegedly caused by exposure to a defective isotope (see Le Vine v Isoserve, Inc., 70 Misc 2d 747 [Sup Ct, Albany County 1972] ; but see Fonda v Paulsen, 79 Misc 2d 936, 939, 940 [Sup Ct, Albany County 1974] [declining to adopt the “plaintiffs’ interesting and novel theory that negligently undetected cancer (was) a ‘foreign body’ within the purview of Flanagan” because “(t)he Court of Appeals specifically . . . failed to adopt a broad discovery test . . . for all malpractice cases regardless of whether a foreign object (was) involved”], revd on other grounds 46 AD2d 540 [3d Dept 1975]).

The Adoption of CPLR 214-a

In 1975, Governor Hugh L. Carey proposed and the legislature enacted CPLR 214-a, one of a number of reforms aimed at making medical malpractice insurance more affordable in New York State (see generally L 1975, ch 109). CPLR 214-a, in combination with an amendment to CPLR 214 (6), reduced the statute of limitations for medical malpractice actions from three years to two years and six months, and also continued, but sought to curtail, Flanagan’s discovery rule for foreign objects. In his Program Bill Memorandum, the Governor explained that although

“the Court of Appeals sought to make it emphatically clear that its decision [in Flanagan] should be limited to foreign objects and should not become a ‘discovery’ rule . . . , intermediate appellate courts rapidly sought to broaden it into a ‘discovery rule.’ For example, they applied [Flanagan] to instances where fixation devices were inserted in a patient’s body for the purpose of treatment and to chemicals introduced in the body for the purpose of treatment. The most damaging expansion was to a situation where nothing was introduced into the patient’s body but malpractice occurred in that while treating one organ the doctor caused damage to another.[] It is obvious that this latter extension has a potential of bringing virtually all medical malpractice cases under the discovery rule. This measure would correct these abuses by limiting the discovery statute to ‘foreign objects’ and specifically excluding therefrom chemical compounds, fixation devices and prosthetic devices” (Governor’s Program Bill Mem at 4, Bill Jacket, L 1975, ch 109).

CPLR 214-a took effect on July 1, 1975. We first discussed the new statute in Matter of Beary v City of Rye (44 NY2d 398 [1978]), which consolidated for appeal five separate tort claims. There, we reversed Matter of Smalls v New York City Health & Hosps. Corp. (55 AD2d 537 [1st Dept 1976] [lesion caused by a cervical myelogram allegedly negligently performed in 1973]) and Merced v New York City Health & Hosps. Corp. (56 AD2d 553 [1st Dept 1977] [allegedly negligent failure to suture a fallopian tube during a sterilization operation in 1971]). In both cases, the Appellate Division had determined that the plaintiffs’ notices of claim were timely filed by extrapolating from Flanagan’s rationale to justify a discovery rule. With reference to the plaintiff in Merced, we observed that although she

“advance [d] the argument . . . that considerations similar to those which motivated the [C]ourt in Flanagan should be applied with like effect to the far different circumstances in her case ...[,] the enactment of CPLR 214-a . . . clearly interdicted the extension of the ‘foreign object’ exception .... By expressly prohibiting the inclusion of chemical compounds, fixation devices and prosthetic aids from the embrace of the term ‘foreign object’ and by limiting the time within which an action based on the presence of such an object in the body of a patient may be commenced to one year from the date of its discovery, the Legislature left us no room but to conclude that it intended that Flanagan not be broadened beyond its existing confines” (44 NY2d at 414-415 [emphases added]; see also Thornton v Roosevelt Hosp., 47 NY2d 780 [1979] [refusing to extend Flanagan to a strict products liability claim]; Goldsmith v Howmedica, Inc., 67 NY2d 120, 123 [1986] [holding that the general time-of-commission accrual rule applies in a medical malpractice action brought against a physician who implanted a prosthetic device that malfunctioned eight years after surgery]).

The IUD Cases in the Lower Courts and Rodriguez

After CPLR 214-a’s enactment, a number of cases arose addressing whether intrauterine devices (IUDs) were foreign bodies. IUDs are plastic or metal objects that are inserted into a woman’s uterus to prevent pregnancy, and the placement of an IUD is a nonsurgical intervention. In the most common fact pattern resulting in litigation, a doctor inserted an IUD into a plaintiff’s womb without detecting and removing a previously placed IUD. In the earliest of the reported cases, Supreme Court agreed with the defendant that an IUD was a fixation device because it was “fixed within the woman’s body,” but held that “when the second IUD was placed in the plaintiff’s body the first IUD became, or took on the character of, a ‘foreign object’ because it then had no function to perform, no longer belonged in the body, and should have been removed as expected by the patient” (Darragh v County of Nassau, 91 Misc 2d 53, 54-55 [Sup Ct, Nassau County 1977], affd 63 AD2d 1010 [2d Dept 1978]; see also Ooft v City of New York, 80 AD2d 888 [2d Dept 1981] [same]; Sternberg v Gardstein, 120 AD2d 93 [2d Dept 1986] [an IUD became a foreign object when not removed, as intended and agreed upon, during an operation involving an abortion and tubal ligation sterilization]; cf. Szakalski v Aubry, 148 AD2d 972 [4th Dept 1989] [holding that an IUD contained within a surgically removed pelvic mass was a fixation device, and not reaching the plaintiff’s argument that the IUD was “transformed” from a fixation device into a foreign object when she was erroneously advised that the IUD had probably been expelled]).

The issue finally reached us in Rodriguez v Manhattan Med. Group (77 NY2d 217 [1990]). Plaintiff Evelyn Rodriguez (Rodriguez) had an IUD inserted in her uterus in 1980; two years later, when she and her husband decided to start a family, she visited a doctor to have the IUD removed. The doctor examined Rodriguez and could not locate the IUD; he then ordered X rays of Rodriguez’s lower abdomen, which did not show the IUD. He therefore advised Rodriguez that she could attempt to conceive without any medical intervention. By the spring of 1986, Rodriguez, who had not become pregnant in the meantime, was experiencing heavy vaginal bleeding, leading her to consult another doctor. This physician ordered a sonogram, which revealed that the IUD inserted in 1980 was embedded in the uterine wall. The IUD had to be removed surgically.

Rodriguez and her husband then sued the doctor who examined her in 1982 and his employer, claiming that the doctor had acted negligently in failing to locate the IUD. The defendants interposed the statute of limitations as an affirmative defense, and the plaintiffs responded that the limitations period did not begin to run until the IUD’s discovery in Rodriguez’s body in 1986. Holding that the IUD was a fixation device and therefore not a foreign object within the meaning of section 214-a, Supreme Court dismissed the complaint, and the Appellate Division, with two Justices dissenting, affirmed (155 AD2d 114 [1st Dept 1990]).

The plaintiffs took the position that although the IUD was a fixation device when originally implanted in Rodriguez’s body, the IUD became a foreign object once the doctor left it in place after Rodriguez specifically directed him to remove it.

We disagreed with the “notion of a transformation in a ‘fixation device’s’ character resulting from a physician’s postinsertion negligence [, which was] evidently derived from a legal theory pertaining to undetected and unremoved I.U.D.s” popular in some lower courts (77 NY2d at 222 [citing Sternberg, Ooft and Darragh, among other cases and commentary]).

Summing up, we observed that the plaintiffs’ theory was “flawed” because it disregarded Flanagan’s “context”; specifically, in Flanagan,

“the patient was suing the practitioners who had actually left the surgical clamps in her body and the focus of her claim was that very act. Here, . . . there is no claim against the physician who actually inserted the I.U.D.; instead, [the] plaintiffs are seeking recovery from a different treating physician on the theory that his treatment of [Rodriguez] in connection with the previously inserted I.U.D. was negligent. . . . Indeed, the gist of [the] plaintiffs’ claim, i.e., a negligent failure to detect the continued presence of a previously inserted device, is most logically classified as one involving misdiagnosis — a category for which the benefits of the ‘foreign object’ discovery rule have routinely been denied” (id. at 222-223 [citations omitted]).

Finally, we noted that the “special analytical factors . . . deemed significant in Flanagan” cut against a discovery rule and that, in any event, the legislature’s adoption of CPLR 214-a “preclude [d] our adoption of a more flexible discovery rule for these [IUD] cases even if considerations similar to those which motivated the [C]ourt in Flanagan [c]ould be applied with like effect” (id. at 223-224 [internal quotation marks omitted]).

Rockefeller

We next grappled with the foreign object exception in Rockefeller, where a suture was affixed to an organ (the vas defer-ens) not properly involved in the hernia repair surgery that plaintiff Mark Rockefeller (Rockefeller) underwent in 1971 as a four-year-old child. The error was discovered in 1989, when Rockefeller and his wife sought to ascertain if there was a medical reason why she was unable to become pregnant. After an attempt to repair the damage to the vas deferens proved unsuccessful, Rockefeller and his wife brought an action for medical malpractice against the doctor responsible for the suture and the hospital where he performed the hernia operation. Supreme Court rejected the defendants’ motions to dismiss on statute-of-limitations grounds, holding that the suture was a foreign object; the Appellate Division, with two Justices dissenting, agreed (182 AD2d 160 [3d Dept 1992]). The defendants appealed.

Because the alleged malpractice occurred before CPLR 214-a took effect, the timeliness of Rockefeller’s lawsuit was governed by the three-year limitations period in former CPLR 214 (6) and decisions interpreting the foreign object exception as articulated in Flanagan. Additionally, since Rockefeller was an infant when the alleged malpractice occurred, he was entitled to the benefit of the infancy toll in CPLR 208 as it existed prior to July 1, 1975. Ultimately, though, the timeliness of his action turned entirely on whether the suture was a foreign object (see Rockefeller, 81 NY2d at 564 n 2).

We observed that when deciding whether an item of medical paraphernalia is a foreign object,

“the courts should consider the nature of the materials implanted in a patient, as well as their intended function. Objects such as surgical clamps, scalpels, and sponges are introduced into the patient’s body to serve a temporary medical function for the duration of the surgery, but are normally intended to be removed after the procedure’s completion. ... By contrast, items which are placed in the patient with the intention that they will remain to serve some continuing treatment purpose constitute ‘fixation devices’ ” (id. at 564).

In support of the proposition that the courts considered fixation devices in general and sutures in particular to have been “exempt from coverage under the judicially created ‘foreign object’ rule prior to enactment of CPLR 214-a” (id.), we cited Lombardi v DeLuca (71 NY2d 838 [1988], affg 130 AD2d 632, 632 [2d Dept 1987] [“A fixation device, in this case, suture material, intentionally placed in the body and not left there in the course of some later procedure in which it should have been removed, does not constitute a ‘foreign object’ ”]). Lombardi addressed sutures placed in plaintiff Mildred Lombardi’s abdomen during an operation performed in 1966, remnants of which were discovered during exploratory surgery in October 1975.

Analogizing to Rodriguez, we concluded that

“a claim based on a medical professional’s deliberate implantation of a ‘fixation device’ [here, sutures] in the wrong place does not transform it into a foreign object. Such a claim is more readily characterized as one predicated on negligent medical treatment, which, like misdiagnosis, is a category of malpractice not covered by the ‘foreign object’ rule” (81 NY2d at 565).

Stated slightly differently, Rockefeller’s claim was “more accurately characterized as a challenge to [the doctor’s] medical judgment and treatment — i.e., his placement of the suture— and not as one predicated on [his] failure to remove medical material that should have been extracted at the close of the operation” {id. at 566). Obviously (if obliquely) referring to the legislative purpose animating CPLR 214-a, we reiterated the importance of restricting the foreign object exception to “the narrow confines announced in Flanagan,” and pointed out that “only in circumstances where a foreign object is negligently ‘left’ in the patient’s body without any intended continuing treatment purpose will the discovery rule be available to delay the running of the Statute of Limitations” {id.).

LaBarbera

In May 1986, plaintiff Peter LaBarbera (LaBarbera) underwent a procedure described in the operative record as “total nasal reconstruction with placement of silastic stents.” During the surgery, the doctor placed a two centimeter by six centimeter silastic stent, described as a device made of biologically inert, implantable material, in LaBarbera’s left nasal cavity and sutured the stent in place; he then packed the area with gauze. Within two weeks following surgery, the doctor removed the gauze, but left the stent. In the ensuing months, LaBarbera suffered from dizziness and voiced persistent nasal and respiratory complaints. He claimed that the doctor who performed the nasal reconstruction had misdiagnosed the cause of these ailments and erroneously treated him for allergies. In October 1992, LaBarbera alleged, the stent was discovered and determined to be the cause of his symptoms; it was surgically removed the next month.

LaBarbera brought suit against the doctor who had implanted the stent and the hospital where the operation had been performed. His expert opined that the stent should have been removed about 10 days after surgery, when it “no longer function[ed] to maintain a bodily structure.” Both parties’ experts agreed that the stent was a fixation device because it had been intentionally placed in LaBarbera’s nose “to provide support for the internal structures of the nose that were the subject of the operation and to prevent scarring” (the defendant doctor’s expert); and/or as “a part of the medical procedure . . . used to maintain a bodily structure” (LaBarbera’s expert).

Supreme Court dismissed the action as untimely, concluding that the nasal stent was a fixation device; the Appellate Division, with one Justice dissenting, agreed (230 AD2d 303 [1st Dept 1997]). The dissenting Justice considered the stent to be a foreign object “based on a physician’s failure to make certain that all temporary holding devices — clamps, temporary stents, and others — have been removed from the body at the close of a single — albeit several-stage — medical proceeding” {id. at 311 [Murphy, P.J., dissenting]).

We characterized the issue presented by LaBarbera’s appeal as “whether a plastic stent, placed in [LaBarbera’s] nose for postsurgery healing purposes, constitutes a ‘foreign object’ that would avoid the bar of the statute of repose” (91 NY2d at 208). We concluded that the stent was not a foreign object based on “the same dispositional criterion used in Rockefeller— intentional insertion of a therapeutic item for postsurgery continuing treatment purposes,” whereas a foreign object is “ ‘negligently “left” in the patient’s body without any intended continuing treatment purpose’ ” (id. at 212, quoting Rockefeller, 81 NY2d at 566, citing McLaughlin, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR C214-a:3 at 603 [1990 ed] [“(i)t has become relatively clear that a foreign object is one that the doctor does not intend to leave inside the body”]). Here, we concluded, the stent was not “ ‘left’ ” in LaBarbera’s nose; “[r]ather, it was put there only to be removed after it had served its postsurgery healing purposes. . . . [T]he key feature is the uncontroverted protocol of insertion as part of a continuing treatment modality” (id. at 212-213 [emphasis added]). Accordingly, we disagreed with both LaBarbera’s theory that “the relatively short and ordinarily definite nature of the stent’s time in the nose should allow it to be treated as a ‘foreign object,’ ” and the “ ‘multistage procedure’ exception (i.e., that the surgical procedure continued until the packing was removed)” advanced by the dissenting Justice of the Appellate Division (id. at 213).

III.

Analysis

Several general principles may be distilled from our cases considering the foreign object exception: (1) tangible items (clamps, scalpels, sponges, etc.) introduced into a patient’s body solely to carry out or facilitate a surgical procedure are foreign objects if left behind (Flanagan and dicta in Rockefeller and LaBarbera)-, (2) the alleged failure to timely remove a fixation device does not transform it into a foreign object (Rodriguez and LaBarbera)', (3) nor does a fixation device become a foreign object if inserted in the wrong place in the body (Rockefeller)', (4) failure to timely remove a fixation device is generally akin to misdiagnosis (Rodriguez), and improper placement of a fixation device is most readily characterized as negligent medical treatment (Rockefeller)', and (5) the legislature, in enacting CPLR 214-a, directed the courts not to exploit the rationale supporting Flanagan to expand the discovery exception for foreign objects beyond the rare Flanagan fact pattern, and explicitly commanded that chemical compounds, fixation devices and prosthetic aids or devices are never to be classified as foreign objects (Beary [Merced], Rodriguez, Rockefeller, LaBarbera and the legislative history of CPLR 214-a).

As discussed, most of our post -Flanagan cases have dealt with ultimately unsuccessful attempts by plaintiffs to circumvent the exclusion of conceded or obvious fixation devices from the foreign object exception/tolling provision of CPLR 214-a. Not surprisingly, then, defendants in this case advocate a very expansive definition of a fixation device, intended to sweep in the catheter placed in the left atrium of plaintiff’s heart during surgery and allegedly incompletely removed three days later while he was being cared for in the surgical intensive care unit. Specifically, defendants interpret Rockefeller and LaBarbera to hold that

“any device that is intentionally left in a patient’s body for purposes of continuing treatment is a ‘fixation device,’ and not a ‘foreign object,’ [because] . . . [t]he appropriate focus should not be on the specific function that a device was intended to perform, but whether the device was intentionally inserted as part of a continuing treatment modality.”

We specifically stated in Rockefeller, though, that “ [i] n determining whether an object which remains in the patient constitutes a ‘foreign object,’ the courts should consider the nature of the materials implanted in a patient, as well as their intended function” (81 NY2d at 564 [emphasis added]). The suture in Rockefeller and the nasal stent in LaBarbera were undeniably fixation devices — the suture performed a securing function and the stent, a supporting function. Because the suture and the stent were fixation devices, they were intentionally placed for a continuing treatment purpose. In short, every fixation device is intentionally placed for a continuing (even if temporary) treatment purpose, but it does not follow that everything that is intentionally placed for a continuing treatment purpose is a fixation device. Otherwise, there would have been no reason for the legislature to separately identify and exclude prosthetic aids or devices from the ambit of the foreign object exception, because prosthetic aids or devices are also intentionally placed to serve a continuing medical purpose. Defendants’ overly-broad proposed definition of a fixation device divorces statements in Rockefeller and LaBarbera from their context.

Here, the catheter inserted in the left atrium of plaintiff’s heart performed no securing or supporting role during or after surgery. As explained by plaintiff’s expert, and uncontroverted by defendants, the catheters functioned like a sentinel, allowing medical personnel to monitor atrial pressure so that they might take corrective measures as required; the catheters were, in the words of plaintiff’s expert, “a conduit for information from [plaintiff’s] cardiovascular system.” Because the catheters under the facts of this case are therefore not fixation devices (or chemical compounds or prosthetic aids or devices), they are not categorically excluded from the foreign object exception in CPLR 214-a.

The question then becomes whether the catheters are analogous to tangible items like the clamps in Flanagan or other surgical paraphernalia (e.g., scalpels, sponges, drains) likewise introduced into a patient’s body solely to carry out or facilitate a surgical procedure. We conclude that they are, although we recognize that factual differences exist between this case and Flanagan.

First, the clamps in Flanagan were inadvertently left behind at the conclusion of the surgery, before the plaintiff left the operating room. Here, a catheter fragment was allegedly allowed to remain in plaintiff’s heart when medical personnel removed the catheters, drainage tubes and pacing wires, which were placed in plaintiff’s body during surgery. This occurred three days following surgery while plaintiff was being cared for in the hospital’s surgical intensive care unit. Second, the doctor in Flanagan apparently forgot to retrieve the clamps before closing the patient’s incision. In this case, by contrast, the catheter was not forgotten; instead, its removal was allegedly botched. Thus, medical personnel did not intend in the first instance to leave any tubing in plaintiff’s heart, although it is presumably possible (there is no way to tell from the nursing progress notes) that a judgment was made that any catheter fragment left behind was too inconsequential to present a significant risk, or that plaintiff’s condition was too fragile to tolerate exploratory or retrieval efforts, at least at that juncture.

These particular variations on the Flanagan fact pattern do not, in our view, make this case meaningfully different or expand the foreign object exception beyond its legislatively-limited scope. Like the clamps in Flanagan, the catheter was introduced into plaintiff’s body during an operation for an instrumental purpose. Unlike the clamps, the catheter remained in plaintiff’s body for a few days after surgery, but not for “postsurgery healing purposes” as was the case with the nasal stent in LaBarbera (91 NY2d at 212). Instead, the catheter served a monitoring function. Leaving the catheter in plaintiff’s body post-surgery did not convert a surgical aid into a fixation device any more than leaving the IUD in Evelyn Rodriguez’s body converted a fixation device into a foreign body. The “nature of the materials” and their “intended function” remained constant in both cases (Rockefeller, 81 NY2d at 564). And the fragment, of course, served no purpose whatsoever; it certainly was not a fixation device, however defined. Fundamentally, if the facts are as alleged, plaintiff — like Josephine Flanagan — left the hospital after an operation with therapeutically useless and potentially dangerous surgical paraphernalia lodged in his body.

Accordingly, the order of the Appellate Division should be reversed, with costs, and defendants’ motion to dismiss the complaint as time-barred denied.

Chief Judge Lippman and Judges Pigott, Rivera, AbdusSalaam, Stein and Fahey concur.

Order reversed, with costs, and respondents’ motion to dismiss the complaint as time-barred denied.

      . Ten centimeters is slightly less than four inches.

      . Two centimeters is slightly more than three quarters of an inch.

      . CPLR 214-a also continued the “continuous treatment” doctrine that we embraced in Borgia v City of New York (12 NY2d 151 [1962]), but sought to prevent manipulation of the date when the statute of limitations began to run; specifically, section 214-a provides that “[f]or the purpose of this section the term ‘continuous treatment’ shall not include examinations undertaken at the request of the patient for the sole purpose of ascertaining the state of the patient’s condition.”

      . The Governor’s Program Bill Memorandum is obviously referring to Dobbins here, and CPLR 214-a’s exclusion of “prosthetic aid[s] or device[s]”is presumably intended to abrogate Murphy. Appellate cases that were decided before 1975 and extended Flanagan to create a discovery rule for fixation devices and chemical compounds are not so easy to identify.

        . The Governor’s proposed bill also included a six-year outside limit to an exception from the basic statute of limitations for medical malpractice lawsuits. The legislature did not endorse this approach.

      . Because of the way the plaintiffs argued Rodriguez, we had no occasion to discuss whether or why an IUD is a fixation device within the meaning of CPLR 214-a.

      . In a related context, we have held that the maximum 10-year extension of the statute of limitations which CPLR 208, as amended in 1975, imposes on infants in medical malpractice actions runs from the initial negligent act, not from the end of any period of subsequent continuous treatment (see Matter of Daniel J. v New York City Health & Hosps. Corp., 77 NY2d 630 [1991]; see also McDermott v Torre, 56 NY2d 399 [1982]; Infancy Toll’s 10-Year Cut-Off Not Extended by “Continuous Treatment” Doctrine, David D. Siegel, NY St L Dig No. 378 at 2 [June 1991]). Here, defendants asserted that, by virtue of CPLR 208, the statute of limitations lapsed 10 years after the catheter fragment was allegedly left in plaintiff’s heart; however, they apparently never contended (and surely did not argue on appeal to us) that plaintiff’s claim was untimely even if the catheter was a foreign object because the discovery exception, instead of postponing accrual, merely tolled the statute of limitations. Accordingly, we have no occasion to consider and express no opinion about the interplay of CPLR 208 and CPLR 214-a in a case involving a foreign object left in an infant after surgery and discovered more than 10 years later.

      . In his answer to the complaint, the defendant doctor denied LaBarbera’s allegation that the “the foreign body [i.e., the implanted silastic stent] should have been removed within several days after the procedure.” Moreover, the defendant doctor’s expert said nothing about whether or under what circumstances the sutured-in stent should have been taken out of LaBarbera’s nose. He stated simply that “[i]t is intended that the stent remain in the patient’s nose after surgery is completed to serve a continuing treatment purpose.”


author: Pigott, J.

text:
    [35 NE3d 845, 14 NYS3d 775]
    The People of the State of New York, Respondent, v Dean Pacquette, Appellant.
    Argued June 4, 2015;
    decided June 30, 2015

      POINTS OF COUNSEL

      Robert S. Dean, Center for Appellate Litigation, New York City (Carl S. Kaplan of counsel), for appellant.
    The prosecution’s failure in this buy-and-bust case to provide CPL 710.30 notice of the pretrial police-arranged identification of appellant by a “foot apprehension officer,” i.e., a field team officer other than the undercover purchasing officer, requires the preclusion of his identification testimony because the Wharton confirmatory identification exception to the notice requirement does not apply where, as here, the officer initially viewed the perpetrator fleetingly and at a distance across the street, at night, and lost sight of him for 10 to 15 minutes before the subsequent showup identification. (People v Boyer, 6 NY3d 427; People v Newball, 76 NY2d 587; People v Bernier, 73 NY2d 1006; People v Vasquez, 20 NY3d 461; People v O’Doherty, 70 NY2d 479; Gilbert v California, 388 US 263; United States v Wade, 388 US 218; Stovall v Denno, 388 US 293; People v Gissendanner, 48 NY2d 543; People v Rodriguez, 79 NY2d 445.)

      Cyrus R. Vance, Jr., District Attorney, New York City (Brian R. Pouliot and Martin J. Foncello of counsel), for respondent.
    Detective Vanacore’s confirmatory identification of defendant was properly admitted at trial. (United States v Wade, 388 US 218; People v Wharton, 74 NY2d 921; People v Roberts, 79 NY2d 964; People v Gordon, 76 NY2d 595; People v Newball, 76 NY2d 587; People v Mato, 83 NY2d 406; People v Carter, 66 AD3d 529; People v Polanco, 179 AD2d 531; People v Hatcher, 209 AD2d 639; People v Allen, 162 AD2d 538.)
   OPINION OF THE COURT

Pigott, J.

This appeal requires us to decide whether the People may be excused from their statutory requirement to notify a defendant, within 15 days of his arraignment, of their intention to offer at trial the testimony of a police officer who had previously identified him during a pretrial procedure (see CPL 710.30). We hold that the People were required to abide by the statutory notice requirement and therefore the court erred in allowing the officer to testify at trial relative to his identification of defendant. However, we find such error harmless.

L

On May 17, 2007, at 12:45 a.m., police officers from the Manhattan South Narcotics Division were conducting a coordinated drug enforcement effort in the vicinity of Washington Square Park. Pursuant to this assignment, an undercover officer equipped with $200 in prerecorded buy money purchased crack cocaine from a man present at the corner of West 4th Street and Sixth Avenue. An additional officer, Detective Vanacore, who was surveying the transaction from his vantage point across the street (approximately 40 feet away), communicated his observations to a backup unit.

Upon completion of the sale, Detective Vanacore communicated with the backup unit, indicating that the drug transaction was complete and identifying the seller as a “male black who was tall, wore a light-colored hooded sweatshirt and a dark baseball hat.” Within minutes, the backup unit approached the site of the transaction and the subject fled. Detective Vanacore left the scene in order to assist in the apprehension of an additional suspect. Defendant was subsequently arrested by the backup unit. Upon return to his original post, Detective Vanacore observed defendant in the custody of the backup unit and communicated to the arresting officer that defendant was the person he had observed with the undercover officer. Upon searching defendant, officers recovered $20 in prerecorded buy money.

Prior to trial, defendant was served with a CPL 710.30 notice pertaining to the undercover officer’s pretrial identification. Defendant moved to suppress that identification testimony on the ground that showup identifications are inherently suggestive. Following a pretrial hearing, the motion court denied defendant’s motion, holding that the undercover officer’s out-of-court identification was confirmatory and therefore admissible.

At trial, during the People’s opening statement, the prosecutor informed the jury that it would hear testimony from not only the undercover officer, but also Detective Vanacore, who, along with the undercover officer, viewed defendant shortly after the transaction and confirmed that the backup unit arrested the correct person. Defendant moved to preclude Detective Vanacore’s prospective testimony, arguing that the People had not provided him with notice concerning Detective Vanacore’s identification testimony. Following a mid-trial hearing, the court determined that Detective Vanacore’s identification was confirmatory in nature and therefore admissible without the need for notice. Defendant was convicted of criminal sale of a controlled substance in the third degree.

On appeal, the Appellate Division affirmed the conviction, holding that Detective Vanacore’s identification of defendant “was confirmatory and thus did not require CPL 710.30 (1) (b) notice” (112 AD3d 405, 405 [1st Dept 2013]). A Judge of this Court granted defendant leave to appeal (23 NY3d 1023 [2014]). We now affirm, albeit on a different ground.

IL

“CPL 710.30 could not be clearer” (People v Boyer, 6 NY3d 427, 431 [2006]). When the People intend to offer at trial “testimony regarding an observation of the defendant either at the time or place of the commission of the offense or upon some other occasion relevant to the case, to be given by a witness who has previously identified him as such,” the statute requires the People to notify the defense of such intention within 15 days after arraignment and before trial (CPL 710.30 [1] [b]). Not only is “[t]he statutory mandate . . . plain” but the procedure is “simple” (Boyer, 6 NY3d at 431). The People serve their notice upon defendant, the defendant has an opportunity to move to suppress and the court may hold a Wade hearing {see id.). If the People fail to provide notice, the prosecution may be precluded from introducing such evidence at trial.

The notice statute was “a legislative response to the problem of suggestive and misleading pretrial identification procedures” (People v Gissendanner, 48 NY2d 543, 552 [1979]). In enacting the notice requirement, the legislature “attempt [ed] to deal effectively with the reality that not all police-arranged identifications are free from unconstitutional taint” (People v Newball, 76 NY2d 587, 590 [1990]).

The purpose of the notice requirement is twofold: it provides the defense with “an opportunity, prior to trial, to investigate the circumstances of the [evidence procured by the state] and prepare the defense accordingly” and “permits an orderly hearing and determination of the issue of the fact . . . thereby preventing the interruption of trial to challenge initially the admission into evidence of the [identification]” (People v Briggs, 38 NY2d 319, 323 [1975]). Thus, the statute contemplates “pretrial resolution of the admissibility of identification testimony where it is alleged that an improper procedure occurred” (People v Rodriguez, 79 NY2d 445, 452 [1992]). “If no notice is given before trial, the purposes of the statute may be defeated” (Briggs, 38 NY2d at 323).

The People, relying on our decision in People v Wharton (74 NY2d 921 [1989]), argue that the trial court properly determined that Detective Vanacore’s identification of defendant was merely confirmatory, thereby obviating the need for CPL 710.30 notice. We disagree. In Wharton, defendant was provided with notice and made a pretrial suppression motion on the identification. His challenge on the appeal to this Court was whether he was entitled to a Wade hearing. We held that the defendant was not entitled to the hearing because the “officer’s observation of [the] defendant . . . was not of a kind ordinarily burdened or compromised by forbidden suggestiveness” {id. at 922). There, the “identification was made by a trained undercover officer who observed [the] defendant during the face-to-face drug transaction knowing [the] defendant would shortly be arrested” (id.).

In this case, unlike Wharton, Detective Vanacore’s surveillance of defendant does not constitute an “observation of . . . defendant... so clear that the identification could not be mistaken” thereby obviating the risk of undue suggestiveness (Boyer, 6 NY3d at 432). Therefore, the People were required to serve their notice concerning Detective Vanacore’s observations. “To conclude otherwise directly contravenes the simple procedure that has been mandated by the Legislature and would permit the People to avoid their statutory obligation” (id. at 433). Indeed, the People indicated that they typically do provide notice in these circumstances and inadvertently failed to do so in this case.

III.

Although the People’s failure to provide a CPL 710.30 notice with regard to Detective Vanacore may not be excused, we nonetheless hold that the error was harmless. Even in the absence of Detective Vanacore’s identification testimony, the evidence at trial overwhelmingly established that defendant was the seller. The primary undercover officer, an experienced narcotics detective who engaged in a face-to-face transaction with defendant, unequivocally identified defendant as the seller.

Moreover, defendant was arrested jfist minutes after the transaction, and the prerecorded buy money that had been used to purchase the drugs was found on defendant’s person (see People v Rodriguez, 100 NY2d 30, 32-33 [2003]). Finally, defendant’s flight from police officers evinced a consciousness of guilt (see People v Chico, 90 NY2d 585, 591 [1997]). Under these circumstances, we conclude that Detective Vanacore’s testimony was merely cumulative and that its admission could not have contributed to defendant’s conviction.

Accordingly, the Appellate Division order should be affirmed.

Chief Judge Lippman and Judges Read, Rivera, Abdus-Saeaam, Stein and Fahey concur.

Order affirmed.