In Farkas v Farkas, — NY3d —, 10/24/2008 N.Y.L.J. 27, (col. 3) the Court of Appeals held that Rule 202.48 cannot deprive a party of a judgment where it has been improperly or unnecessarily invoked in the first place. The 'settle' or 'submit' trigger for the 60-day limitation of Rule 202.48(a) does not purport to govern the flow of the entry process, which is a ministerial recording function that is separate and distinct from the procedure of obtaining the court's signature on a proposed judgment. The trial court’s 1996 decision found that the e husband seriously dissipated marital assets; and that, although the wife was entitled to $100,000 per year in lifetime spousal maintenance, the husband would likely never pay, condemning her to 'the role of sleuth and detective, always in court.' Supreme Court granted the wife the parties' $3.2 million cooperative apartment in Manhattan; all furniture, furnishings, antiques and works of art; all jewelry, collectibles and personal property she owned or had in her possession including stocks, bonds, equities, cash accounts and funds of any description; 50 percent of any interest or shares the husband might own in Alexander's Department Store, the family business; and 100 percent of any remaining IRA, KEOGH or other retirement plan or annuity of which the husband was the owner or beneficiary. The 1996 decision also addressed a debt the parties owed to Chemical Bank. Supreme Court required the husband either to pay all sums due to Chemical Bank and deliver to the wife a satisfaction of the debt and stipulation of discontinuance with prejudice of the foreclosure action; or, alternatively, to pay one-half of the sums due to Chemical Bank and deliver to the wife a stipulation of discontinuance with prejudice of a replevin action that the husband's mother had commenced against the wife. 'In the event that [the husband] fails to comply with one of these alternatives within 45 days,' the Court opined, '[the wife] may enter a money judgment against [the husband] for the total amount due and owing to Chemical Bank'. The Court ended its 1996 decision with the instruction to '[s]ettle judgment.' Supreme Court's subsequent judgment (the 1996 judgment) indicated that the husband had not complied with either alternative for discharging his obligation with respect to the Chemical Bank debt, and included the following decretal paragraph:
'ORDERED, ADJUDGED, and DECREED, [the husband] is directed to pay in full all sums due to Chemical Bank, including interest, penalties, legal fees and other costs and to deliver to [the wife] or her attorneys...evidence of satisfaction of the debt and a stipulation of discontinuance with prejudice of the action brought by Chemical Bank. In lieu thereof, at his option [the husband] may pay one-half of all sums due to Chemical Bank and deliver a discontinuance with prejudice of the action for replevin brought by [the husband's mother] against [the wife]. In the event that [the husband] fails to comply with either option within 30 days from the date hereof, [the wife] shall be entitled to enter a money judgment against [the husband] for the total amount due and owing to Chemical Bank without further order '.
The husband appealed and the Appellate Division affirmed (Farkas v. Farkas, 251 AD2d 4 [1st Dept 1998]).
An amended judgment of divorce entered on April 14, 1999 (the 1999 amended judgment), repeated the 1996 judgment's provision regarding the debt to Chemical Bank. In June 2000, the wife sought an 'Order...[p]ursuant to the Order [sic] of this Court dated July 17, 1996, entering a Final Judgment against [the husband] for the sum of $984,401.17, representing the principal sum due Chemical Bank, with interest and penalties. In a 2000 decision and order, Supreme Court granted the wife's application 'for a money judgment in her favor against [the husband] in the sum of $984,401.17 in respect of the Chemical Bank foreclosure action and restated, in its entirety, the relevant decretal paragraph from the 1999 amended judgment, italicizing the final sentence, presumably for emphasis. At the end of the 2000 decision and order the fifth paragraph provided as follows:
'ORDERED that [the wife's] application...for a money judgment in her favor against [the husband] in the sum of $984,401.17 in respect of the Chemical Bank foreclosure action, in addition to the bank's attorneys' fees, is granted and [the wife] may settle the judgment thereon. Upon [the wife's] suggestion, such judgment shall contain language staying execution thereon pending determination or other disposition of the Chemical Bank foreclosure action' .
In May 2005, 5 ½ years later, the wife served the husband with a notice of settlement and proposed judgment regarding the monies owed Chemical Bank. The proposed judgment stated that the wife and Chemical Bank had settled the foreclosure action for $750,000 in August 2003; the proposed judgment against the husband was in the principal amount of $750,000.
The husband opposed entry, citing 22 NYCRR 202.48 (Rule 202.48). Subdivision (a) states that 'Proposed orders or judgments, with proof of service on all parties where the order is directed to be settled or submitted on notice, must be submitted for signature, unless otherwise directed by the court, within 60 days after the signing and filing of the decision directing that the order be settled or submitted.' Subdivision (b) specifies that failure to submit the order or judgment as directed within the 60-day time frame constitutes an abandonment of the motion or action except upon 'good cause shown'.
Supreme Court thereafter signed a paper captioned 'Order/Judgment,' entered on June 20, 2005 which stated: 'IT IS HEREBY ORDERED, that [the wife's] application...is granted in that a Money Judgment is hereby granted in favor of [the wife]...against [the husband]...in the amount of $750,000.00 with interest from August 6, 2003, and that [the wife] shall have execution therefore.'
The Appellate Division, with two Justices dissenting, reversed the judgment on the law, vacated it, and dismissed the underlying claim as abandoned pursuant to Rule 202.48. It cited Brill v. City of New York (2 NY3d 648 [2004]) and Miceli v. State Farm Mut. Auto. Ins. Co. (3 NY3d 725,726 [2004]). The majority considered itself 'constrained to reverse and vacate' because the wife failed to provide any explanation for her untimely submission of the proposed judgment other than 'law office failure' (Farkas v. Farkas, 40 AD3d 207, 207, 211 [2007]). The majority acknowledged 'that there was arguably good cause for delaying settlement of the judgment until after the Chemical Bank foreclosure action was settled in August 2003,' but concluded that 'the record revealed no justification for the wife's failure to submit a judgment for an additional year and nine months thereafter' .
The Court of Appeals, in an opinion by Judge Read, reversed the Appellate Division's May 2007 order, and upheld its June 1998 order. The Court held that the 1996 judgment and the 1999 amended judgment were not subject to Rule 202.48's 60-day requirement. These judgments carried out the 1996 decision, which directed the parties to ‘settle judgment.' The decretal paragraph specifically addressing the Chemical Bank monies provided that the wife was 'entitled to enter a money judgment against the husband for the total amount due and owing to Chemical Bank without further order'. The Court held that this paragraph set out a 'simple judgment for a sum of money which speaks for itself,' and therefore fell outside the ambit of Rule 202.48 (citing Funk v. Barry, 89 NY2d 364, 367 [1996]). Judge Read pointed out that the Court emphasized in Funk, that the 'settle' or 'submit' trigger for the 60-day limitation of Rule 202.48(a) 'does not purport to govern the flow of the entry process, which is a ministerial recording function that is separate and distinct from the procedure of obtaining the court's signature on a proposed judgment'.
Judge Read noted that Supreme Court added the phrase 'without further order' to the typewritten text of the proposed counter-judgment submitted in 1996 in order to further drive home the point that no further court action was contemplated or required with respect to the monies owed Chemical Bank. Even though the wife was entitled to enter a judgment against the husband for the Chemical Bank monies, without a limitations period, under the plain terms of the 1999 amended judgment and Funk (which held that the Legislature has chosen not to place a time restriction on the completion of entry' ). the wife's attorney moved for an order to show cause allowing the wife to enter a judgment against the husband for the Chemical Bank monies. This unnecessary motion led to the discussion in the 2000 decision and order in which Supreme Court stated, for the third time, that the wife was entitled to the monies owed Chemical Bank without further order, and then unaccountably ordered the wife to 'settle...judgment' for this very relief. Rule 202.48 cannot deprive a party of a judgment where it has been improperly or unnecessarily invoked in the first place.
Chủ Nhật, 26 tháng 10, 2008
Thứ Bảy, 25 tháng 10, 2008
What Must Be Shown For A Defendant To Be Entitled To Specific Performance Of A Plea Agreement?
In People v Jenkins (2008 NY Slip Op 07992 [10/23/08]) the Court of Appeals considered who has to prove what in order for a defendant to be entitled to specific compliance of a plea agreement. Specifically who has has the burden of proof of compliance or non-compliance and what does that burden entail? Under what circumstances can a court add additional terms to a plea agreement? By a 6-1 vote, the Court upheld the addition of a term to the plea agreement in a case in which dissenting Judge Pigott writes that
Mr. Jenkins pleaded guilty to a drug charge pursuant to a plea agreement permitting him to avoid incarceration upon (1) completing an 18- to 24-month residential drug treatment program at Veritas Therapeutic Community, a Drug Treatment Alternative to Prison (DTAP) program, and completing its aftercare or live-out treatment; (2) completing vocational training including obtaining a General Equivalency Diploma (GED); (3) securing full-time employment and (4) finding "suitable" housing. The plea agreement additionally required defendant to make every court appearance and not be rearrested. The agremtn was that the prosecutor would join in an application for dismissal of the charge upon Jenkins' complettion of these conditions.
Veritas provided regular updates to the court, culminating in letter, two years after the plea, in which Veritas wrote to the court that defendant has completed the two drug treatments programs, has obtained employment. But Vertias also wrote that Jenkins has "unresolved family issues" that would create further problems, if not addressed.
Jenkins moved for dismissal of the charges, alleging compliance with the conditions. The People did not join in, saying that they had not received documentary proof regarding the educational and employment conditions and requested an adjournment to provide the defendant time to submit documentation. The dissent points out that
The majority of the Court holds that having withdrawn the motion
By contrast, Judge Pigott, in dissent writes that
the People did not contest defendant's claim that he was entitled to have the charges dismissed, let alone establish that he was not, nor did the court make such a finding. Indeed, the People never even argued in Supreme Court, the Appellate Division or to this Court that, as of October 2001, defendant had not complied with the terms and conditions of the plea agreement. Rather, the People have consistently argued that Supreme Court properly exercised its discretion in requiring defendant to participate in further services.
Mr. Jenkins pleaded guilty to a drug charge pursuant to a plea agreement permitting him to avoid incarceration upon (1) completing an 18- to 24-month residential drug treatment program at Veritas Therapeutic Community, a Drug Treatment Alternative to Prison (DTAP) program, and completing its aftercare or live-out treatment; (2) completing vocational training including obtaining a General Equivalency Diploma (GED); (3) securing full-time employment and (4) finding "suitable" housing. The plea agreement additionally required defendant to make every court appearance and not be rearrested. The agremtn was that the prosecutor would join in an application for dismissal of the charge upon Jenkins' complettion of these conditions.
Veritas provided regular updates to the court, culminating in letter, two years after the plea, in which Veritas wrote to the court that defendant has completed the two drug treatments programs, has obtained employment. But Vertias also wrote that Jenkins has "unresolved family issues" that would create further problems, if not addressed.
Jenkins moved for dismissal of the charges, alleging compliance with the conditions. The People did not join in, saying that they had not received documentary proof regarding the educational and employment conditions and requested an adjournment to provide the defendant time to submit documentation. The dissent points out that
the court conducted no inquiry and, presumably, made no determination as to whether defendant had, in fact, met all of the conditions of the plea agreement. Significantly, the People made no claim that defendant had not successfully completed the program. Rather, the People requested two to three weeks to respond and sought defendant's cooperation in providing certain documents. The court held an off-the-record discussion at the bench. What exactly was said during this discussion is unknown, but it caused defense counsel to withdraw the motion. What is known is that the parties talked about the "unresolved family issues" identified in the October 11th Veritas letter and that the court adjourned the matter to look into getting defendant "some other support services." Defendant voiced his objection stating, among other things, that he "completed everything there is to complete in this program.
The majority of the Court holds that having withdrawn the motion
Under these circumstances, where defendant had failed to provide satisfactory proof that he completed all of the conditions of his agreement, the People were entitled to an adjournment and not required to join in the motion to dismiss. Neither was Supreme Court compelled to "turn a blind eye" and dismiss this case in the furtherance of justice. To be sure, Supreme Court could not pass favorably on defendant's Clayton motion without evidentiary support demonstrating that he had complied with the terms of the agreement as CPL 210.40 requires the court to articulate on which factors it relies in dismissing an indictment. Affording the trial court this discretion does not, as the dissent maintains, improperly shift the burden of proof from the People to defendant.
By contrast, Judge Pigott, in dissent writes that
Clearly, it was Supreme Court's duty to make sufficient inquiry, at the time of the motion, as to whether defendant had complied with the terms of the plea agreement. I disagree with the majority that defendant's failure to provide documentation regarding the successful completion of the program excused such inquiry by the court; to so hold improperly shifts the burden of proof from the People to the defendant to prove his compliance with the plea agreement- something we have never done. But even assuming the burden was on the defendant, the facts found in this record seem to support his claim. The Court had in its possession monthly progress reports from Veritas, as well as the October 11th letter, indicating that defendant had successfully completed the program: a determination that Veritas was to make under the plea agreement. What remained for the court to determine was whether OSN had approved of his housing and whether defendant had committed any new crimes. The October 11th Veritas letter confirmed that defendant had been residing with his family. OSN never objected to defendant's housing nor his compliance with any of the other terms of the plea agreement during his ]treatment. Indeed, OSN only objected to his housing on October 23, 2001, two weeks after the return date, and the objection was conditional, i.e. defendant had to find another residence if his girlfriend did not attend treatment meetings.
Further, in my view, while well intentioned, Supreme Court erred in adjourning the matter to determine whether family counseling was needed for defendant, and also erred in imposing family counseling as a condition.
Thứ Năm, 23 tháng 10, 2008
First Department Holds That Value of Husbands Subchapter C Corporation Should Be Reduced For Embedded Taxes
First Department Holds in Case Where Marital Estate is $77,680,333.95 That Value of Husbands Subchapter C Corporation Should Be Reduced By $21,778,708 to Reflect the Federal and State Taxes Embedded in Securities it Owned.
In Wechsler v Wechsler, --- N.Y.S.2d ----, 2008 WL 4635832 (N.Y.A.D. 1 Dept.) the issue of first impression was the extent to which the value of a holding company, Wechsler & Co., Inc. (WCI), a Subchapter C corporation, all the shares of which were owned by the husband, should be reduced to reflect the federal and state taxes embedded in the securities it owned. These securities constituted virtually all of its assets, due to the unrealized appreciation of those securities. As of the date the divorce action was commenced, the valuation date, WCI had ceased trading securities for the accounts of customers and bought and sold securities solely for its own account. The Appellate Division, in an opinion by Justice James M. McGuire, modified the judgment appealed from by the husband. It noted that Supreme Court adopted a "baseline" value of $70,848,107 on the date the action was commenced. That baseline value was determined by the neutral expert before any deduction for embedded taxes and then made adjustments to it that differed in various ways from the adjustments made by the neutral expert. The most significant adjustment was on the issue of the extent of the reduction for embedded taxes. Supreme Court rejected the approach of the Fifth Circuit in Matter of Dunn v Commissioner of Internal Revenue (301 F3d 339 [5th Cir2002] ), the approach embraced by the neutral expert. Pursuant to that approach, consistent with the assumption inherent in the net asset valuation methodology, an actual sale of the corporation's assets is assumed to occur on the valuation date. The value of the corporation is reduced on a dollar-for-dollar basis by the full amount of the tax liability that would arise from the sale of the assets by the hypothetical buyer on the valuation date. Both the neutral expert and the husband's expert testified, and the wife's expert did not dispute, that if the securities were sold as of the date of commencement, the effective tax rate would be 41.74% of the baseline value of $70,848,107. Under the valuation methodology adopted in Dunn, the date-of-commencement value of WCI would be reduced by $29,572,000 (41.74% of $70,848,107). Instead, Supreme Court accepted the approach of the wife's expert and reduced the baseline value of WCI by 11% of $70,848,107 ($7,793,292). That percentage approximated what Supreme Court and the wife's expert denominated the "historical" rate of the annual taxes paid by WCI, a rate determined by comparing the average annual taxes paid by WCI to its average annual gross revenue, i.e., its revenue before all applicable deducttions for its various costs of doing business (including the salaries of its employees). The Court indicated that Supreme Court relied in significant part on the decision of the Tax Court in Matter of Jelke v. Commissioner of Internal Revenue (TC Memo 2005-131 [2005] ), a decision that was reversed by a divided panel of the Eleventh Circuit after the appeal was argued (507 F3d 1317 [2007] ). In Jelke, the Eleventh Circuit adopted the approach of the Fifth Circuit in Dunn and concluded that, on the assumption that a sale of the corporation's assets occurs on the valuation date, the value of the corporation's assets should be reduced by the full amount of the embedded taxes that would be payable as a result of the sale. At trial, Supreme Court was asked to choose between the approach of the Fifth Circuit and an approach different from the one advanced by the Commissioner in Jelke. The latter approach, the one Supreme Court adopted, did not attempt to ascertain the period of time over which the assets of a corporation would be sold by a reasonable buyer and discount the taxes that would be due over that period to present value as of the date of commencement. Rather, it adopts a baseline value of the assets as of the commencement date and reduces that value by an "historical" tax rate of the corporation. Both the neutral expert and the husband's expert vehemently disagreed with the"historical" approach espoused by the wife's expert. The Appellate Division pointed out that the wife offered nothing by way of precedent to support her expert's position. The Appellate Division rejected the approach of the wife's expert because it did not accord with common sense, conflicted with the reasoned testimony of both the neutral expert and the husband's expert and was without precedential support. The approach of the wife's expert assumed that the assets will not be sold as of thevaluation date and that WCI would operate in the future as it had in thepast so that each year it both would sell assets to the same extent it annuallyhad sold assets in the past and would be able to offset income generated by thesale of assets with the same deductions for salaries and other expenses that ithad been able to take in prior years. The assumption that WCI would continue to beable to take the same deductions for salaries was at least brought into questionby proceedings in Tax Court that were pending as of the trial. Furthermore, the assumption that WCI would sell assets in the future to the sameextent that it had sold assets in the past was even more questionable. Moreover, by also assuming that the securities owned by WCI will not depreciatein value over time, the approach of the wife's expert required the husband to bearall the risk of a decline in their value. The Appellate Division held that as between the competing methodologies advanced by the parties at trial Supreme Court should have adopted the one accepted by the Fifth Circuit in Dunn. It concluded that Supreme Court overvalued WCI by $21,778,708 (the difference between the $7,793,292 reduction in value based on the "historical" tax rate methodology and the $29,572,000 reduction that would result under the methodology adopted in Dunn ). This amount differed from the "baseline" value of $70,848,107 because of other valuation adjustments made by Supreme Court. The husband did not dispute all of these adjustments and the discrepancy between the two "baseline" values was of no moment.] That amount should be subtracted from the total value of WCI at the time of the commencement of the action found by Supreme Court ($74,387,630), leaving a total value of $52,608,922.
The Court pointed out that shortly after oral argument, the wife moved to dismiss the appeal on the ground that the husband was a fugitive from this jurisdiction and barred from maintaining the appeal under the fugitive disentitlement doctrine. By an order dated November 27, 2007, it granted the wife's motion and dismissed the appeal with leave to the husband to move to reinstate the appeal on the condition that, within a certain time frame, he post an undertaking of approximately $10 million (45 AD3d 470 [2007] ). The husband posted the undertaking and moved to reinstate the appeal.
The Appellate Division affirmed that part of the judgment of Supreme Court which declined to award permanent maintenance in part because the wife would be "vastly wealthy in her own right." The wife did not perfect her cross appeal, so there was no occasion to decide whether a permanent maintenance award would be appropriate in light of the reduction of the distributive award. The Court noted that Supreme Court awarded the wife over $27 million in assets, reflecting approximately 88% of the other marital assets.
On appeal, the husband argued that, consistent with the approach adopted in Dunn, pursuant to which the hypothetical buyer is assumed to liquidate the assets of the corporation upon acquiring it, an additional reduction in value is warranted to account for the non-tax costs of liquidating the corporation that the buyer would incur. The husband's expert computed those costs by assuming that WCI's assets would be liquidated over a six-month period after the valuation date (the date the action was commenced), an assumption that results in higher non-tax liquidation costs than would be incurred if the assets were liquidated on the date of commencement. Although the parties did not discuss the issue, the assumption by the husband's expert of a six-month liquidation period is not consistent with the assumption, for purposes ofdetermining the extent of the reduction for embedded taxes, that the corporation'sassets are liquidated on the valuation date. Supreme Court held that no such reduction in the value of WCI was appropriate. Supreme Court did not make any specific findings on what the non-tax liquidation costs of WCI would be. Determining whether and the extent to which a reduction in value for non-tax liquidation costs is warranted was complicated further by the parties' contentions about those costs. The Court pointed out that there were other complications that the parties did not discuss. The Court concluded that the value of WCI should not be reduced by any non-tax liquidation costs. It had no rational basis in the record for determining what the amount of the non-tax liquidation costs are, assuming it were to hold that the value of WCI should be reduced by some such costs. It also beleived that the amount of any of the costs it might recognize was small relative to the overall value of the marital property and might not exceed the costs of additional briefing and the possible fact-finding proceeding. It added that its resolution of this issue sets no precedent on the question of whether or the extent to which a reduction in value for non-tax liquidation costs is appropriate in other circumstances. The Appellate Division held that Supreme Court erred in concludingthat the husband’s right pursuant to a subscription agreement to purchase additional shares of the common stock of WCI's predecessor entity at a price of $4,900 per share, a right that when exercised entitled him to 12 additional shares of preferred stockfor each share of common stock, was not his separate property. The subscriptionagreement was entered into prior to the marriage and, as amended prior to themarriage, entitled the husband to purchase 10 additional shares of common stockand thereby acquire 120 shares of preferred. Prior to the marriage, the husbandpurchased pursuant to the subscription agreement 2.65 shares of the common stock,thereby also acquiring 31.8 shares of preferred. Supreme Court concluded, and thewife did not contend otherwise, that these shares and fractional sharesconstitute separate property of the husband. The remaining 7.35 shares of commonstock, and the attendant 88.2 shares of preferred, were paid for and acquiredduring the marriage. Because marital property is defined to include "all propertyacquired by either or both spouses during the marriage" (Domestic Relations Law s236[B][1][c] ), Supreme Court concluded that these shares were marital property.The flaw in Supreme Court's reasoning was that it did not recognize that,especially given the broad meaning of the term property in the Domestic RelationsLaw the husband's right to acquire the 7.35 shares of common stock and 88.2 shares of preferred was itself property that he acquired before the marriage. The husband's right to acquire the shares was tantamount to an "in-the-money option" as the purchase price of the shares was far below their fair market value. Thus, he was entitled to acredit in the amount of the value as of the date of the marriage of his right toacquire the additional shares of stock pursuant to the subscription agreement.The value of the 7.35 shares of common stock and the 88.2 shares of preferred, assuming the right was exercised as of the date of marriage, was approximately $232,800. Consistent with the approach of the neutral expert and the husband's expert in valuing the husband's right as of the date of the marriage to acquire the shares pursuant to the subscription agreement, the value of that right was approximately $196,800 ($232,800 minus the approximately $36,000 purchase price of the 7.35 shares of common stock).
The Appellate Division noted that, in part, because of its conclusion that the wife would be "vastly wealthy in her own right" as a result of the equal distribution of themarital assets, Supreme Court denied the wife's request for permanent maintenance.However, Supreme Court awarded conditional, durational maintenance to the wife,with the husband being obligated both to make monthly payments of $46,666 to thewife, a portion of which was deductible by the husband, and to pay variousexpenses, including the mortgage payments and taxes relating to the home awardedto the wife. Pursuant to the terms of the judgment, this maintenance awardcontinues until the wife receives both the specific assets awarded to her and thefirst payment on account of the distributive award. Relying on it decisions in Gad v. Gad (283 A.D.2d 200 [2001] ) and Pickard v. Pickard (33 AD3d 2002 [2006], appeal dismissed 7 NY3d 897 [2006] ), the husband argued that because Supreme Court did not make a permanent maintenance award he was entitled to a credit against the distributive award in the amount of all the temporary maintenance payments he made. The husband contended that he paid a total of $3,000,987 in temporary maintenance.
The Appellate Division held that the husband's reliance on Gad and Pickering was misplaced and that he was not entitled to any credit for the temporary maintenancepayments he made, regardless of the amount of those payments. The meredetermination by Supreme Court not to award permanent maintenance cannot beequated with a finding that the pendente lite maintenance award was excessive.Supreme Court did not make such a finding either expressly or implicitly. The determination not to award permanent maintenance was based in part on the ground that permanent maintenance was unnecessary given the wife's vastly different economic circumstances as a result of the equal distribution of the marital property. Inaddition, Supreme Court also based this determination on the consequences of thedistribution of the overwhelming preponderance of the liquid marital assets to thewife. As a result, a permanent maintenance award would have required the husbandto tap into the income generated by WCI or liquidate securities it owned eventhough he was awarded this asset. Accordingly, Supreme Court cogently observedthat an award of permanent maintenance would entail an element of "double dipping"by the wife into the principal asset awarded to the husband.
The Appellate Division found that the date-of-commencement value of the marital interest in WCI was $47,131,777.95--$52,608,922 minus the sum of the adjusted, after-tax value of the proceeds of the securities sold prior to the commencement date ($155,691.18), the value of the husband's property interest in WCI as of the date of the marriage ($646,271), the value of the husband's subscription right ($196,800), the value of the common and preferred stock he inherited from hisfather ($3,523,904.80) and the amount of the increase in value of the husband'sequity interest at the time of the inheritance stemming from the controllinginterest in the corporation acquired as a result of the inheritance ($954,477.07).
Supreme Court valued at $30,548,556. the other marital assets, including securities (virtually all of which were in the husband's name), cash accounts, a home and an apartment. After considering the statutory factors Supreme Court determined that the parties should share equally in all of the marital assets. Given itsconclusion that the husband should retain his ownership of WCI, Supreme Court wasconstrained to award to the wife approximately 88% of the other marital assets,collectively valued at $27,135,154. The husband was awarded his Colorado residence(valued at $1.95 million) and, to provide him with "some liquid cash assets,"certain securities Supreme Court had valued at $1,463,422. The result of these discrete awards was a deficiency in the wife's share of the assets of $22,770,623 ($49,905,776, one half of the total value of $99,811,533 that Supreme Court assigned to the marital assets, minus $27,135,154, the value of the specific marital assets awarded to the wife). Accordingly, Supreme Court granted a distributive award to the wife in the amount of the deficiency, and directed that the husband pay the award over a period of 15 years, with annual payments of $1,518,042 payable in quarterly installments of $379,510.50. Supreme Court did not grant pre-judgment or post-judgment interest on the distributive award to the wife, but ruled that interest would accrue in the event and to the extent of a default in any of the required payments.
The Appellate Division held that husband's argument that the securities of WCI (and thus WCI itself) and the other securities he owned or controlled should have been valued as of the date of trial was without merit. While some "courts have concluded that 'active' assets should be valued only as of the date of the commencement of the action,while the valuation date for 'passive' assets may be determined more flexibly,"these "formulations" are but "helpful guideposts" and not "immutable rules of law"(McSparron v. McSparron, 87 N.Y.2d 275, 287-288 [1995] ). Thus, althoughsecurities commonly are "passive assets" that are valued at the date of trial asthey may "change in value suddenly based on market fluctuations" (Grunfeld v.Grunfeld, 94 N.Y.2d 696, 707 [2000] ), they may be active assets when, as here,they are actively managed by the titled spouse. The securities owned by WCI andby the husband required his "specialized knowledge in order to be appropriatelyinvested," Supreme Court stressed that: "The parties, by their actions throughout prior proceedings herein, charted a course of litigation that accepted a [date of commencement] valuation of WCI ... When this trial began defendant agreed, by words and deeds, that the court should utilize a [date-of-commencement] valuation. Thus, when, during discovery, [the wife] demanded up to date financial information about WCI, defendant refused to produce such information arguing that it was irrelevant to a [date-of-commencement] valuation." The Appellate Division declined to disturb Supreme Court's allocation of themarital assets other than the marital component of WCI. Accordingly, it held that adistributive award of $11,705,013 ($38,840,167 minus $27,135,154) was necessary toeffectuate the equal division of the marital property. In accordance with thepayment terms fixed by Supreme Court, the $11,705,013 distributive award waspayable over a period of 15 years, with quarterly payments of $195,083.55.
The Appellate Division noted that a problem arose because the written decision and order direct that the husband transfer to the wife all of the securities owned or controlled by the husband (other than those owned by WCI) and listed in the decision and order along with their date-of-commencement market value. The decision expressly noted that by crediting against the distributive award the full value of the securities as of the date of commencement, "the risks of gains and/or losses since the valuation date [were passed] over to [the wife]." Even assuming that there was some ambiguity in the relevant terms of the judgment on this score, the decision controls (Madison III Assoc. Ltd. Partnership v. Brock, 258 A.D.2d 355 [1999] ). With respect to any of the securities the husband sold while he was free to do soafter the wife's motion for an injunction was denied, the husband argued that hewas required to provide the wife with "the proceeds of re-investment less the costsof the sale, taxes and reinvestment." The wife argued that the husband was required to transfer to her the assets acquired with the sale proceeds. The dispute reduces towhether the husband is entitled to a credit against the distributive award in theamount of the costs he incurred, including taxes he paid, in selling and reinvesting the securities sold. The Appellate Division held that it would be inequitable not to grant the husband such a credit given that he was free to sell the securities during the pendency of the action. Accordingly, it directed a hearing to determine which securities the husband sold, what he did with the proceeds, what costs he incurred and the amount of the resulting credit to which he may be entitled. The judgment of Supreme Court was modified by(1) reducing the base line value of WCI by $29,572,000 pursuant to the approach of the neutral expert and the husband's expert, (2) determining that the husband's right pursuant to asubscription agreement to purchase additional shares of stock in WCI's predecessorwas his separate property and reducing the base line value of WCI by the value ofthat right, $196,800, (3) reducing by $211,403.71 the after-tax value of the proceeds of the securities sold prior to the commencement date of the action but not settled until after that date, (4) determining that the marital interest in WCI was $47,131,777.95, (5) determining that the value of the marital estate was $77,680,333.95, (6) directing the husband to pay the wife a distributive award of $11,705,013, payable in quarterly installments of $195,083.55, and (7) determining that the wife's share of the tax liability of WCI was 44.8%, and otherwise affirmed.
In Wechsler v Wechsler, --- N.Y.S.2d ----, 2008 WL 4635832 (N.Y.A.D. 1 Dept.) the issue of first impression was the extent to which the value of a holding company, Wechsler & Co., Inc. (WCI), a Subchapter C corporation, all the shares of which were owned by the husband, should be reduced to reflect the federal and state taxes embedded in the securities it owned. These securities constituted virtually all of its assets, due to the unrealized appreciation of those securities. As of the date the divorce action was commenced, the valuation date, WCI had ceased trading securities for the accounts of customers and bought and sold securities solely for its own account. The Appellate Division, in an opinion by Justice James M. McGuire, modified the judgment appealed from by the husband. It noted that Supreme Court adopted a "baseline" value of $70,848,107 on the date the action was commenced. That baseline value was determined by the neutral expert before any deduction for embedded taxes and then made adjustments to it that differed in various ways from the adjustments made by the neutral expert. The most significant adjustment was on the issue of the extent of the reduction for embedded taxes. Supreme Court rejected the approach of the Fifth Circuit in Matter of Dunn v Commissioner of Internal Revenue (301 F3d 339 [5th Cir2002] ), the approach embraced by the neutral expert. Pursuant to that approach, consistent with the assumption inherent in the net asset valuation methodology, an actual sale of the corporation's assets is assumed to occur on the valuation date. The value of the corporation is reduced on a dollar-for-dollar basis by the full amount of the tax liability that would arise from the sale of the assets by the hypothetical buyer on the valuation date. Both the neutral expert and the husband's expert testified, and the wife's expert did not dispute, that if the securities were sold as of the date of commencement, the effective tax rate would be 41.74% of the baseline value of $70,848,107. Under the valuation methodology adopted in Dunn, the date-of-commencement value of WCI would be reduced by $29,572,000 (41.74% of $70,848,107). Instead, Supreme Court accepted the approach of the wife's expert and reduced the baseline value of WCI by 11% of $70,848,107 ($7,793,292). That percentage approximated what Supreme Court and the wife's expert denominated the "historical" rate of the annual taxes paid by WCI, a rate determined by comparing the average annual taxes paid by WCI to its average annual gross revenue, i.e., its revenue before all applicable deducttions for its various costs of doing business (including the salaries of its employees). The Court indicated that Supreme Court relied in significant part on the decision of the Tax Court in Matter of Jelke v. Commissioner of Internal Revenue (TC Memo 2005-131 [2005] ), a decision that was reversed by a divided panel of the Eleventh Circuit after the appeal was argued (507 F3d 1317 [2007] ). In Jelke, the Eleventh Circuit adopted the approach of the Fifth Circuit in Dunn and concluded that, on the assumption that a sale of the corporation's assets occurs on the valuation date, the value of the corporation's assets should be reduced by the full amount of the embedded taxes that would be payable as a result of the sale. At trial, Supreme Court was asked to choose between the approach of the Fifth Circuit and an approach different from the one advanced by the Commissioner in Jelke. The latter approach, the one Supreme Court adopted, did not attempt to ascertain the period of time over which the assets of a corporation would be sold by a reasonable buyer and discount the taxes that would be due over that period to present value as of the date of commencement. Rather, it adopts a baseline value of the assets as of the commencement date and reduces that value by an "historical" tax rate of the corporation. Both the neutral expert and the husband's expert vehemently disagreed with the"historical" approach espoused by the wife's expert. The Appellate Division pointed out that the wife offered nothing by way of precedent to support her expert's position. The Appellate Division rejected the approach of the wife's expert because it did not accord with common sense, conflicted with the reasoned testimony of both the neutral expert and the husband's expert and was without precedential support. The approach of the wife's expert assumed that the assets will not be sold as of thevaluation date and that WCI would operate in the future as it had in thepast so that each year it both would sell assets to the same extent it annuallyhad sold assets in the past and would be able to offset income generated by thesale of assets with the same deductions for salaries and other expenses that ithad been able to take in prior years. The assumption that WCI would continue to beable to take the same deductions for salaries was at least brought into questionby proceedings in Tax Court that were pending as of the trial. Furthermore, the assumption that WCI would sell assets in the future to the sameextent that it had sold assets in the past was even more questionable. Moreover, by also assuming that the securities owned by WCI will not depreciatein value over time, the approach of the wife's expert required the husband to bearall the risk of a decline in their value. The Appellate Division held that as between the competing methodologies advanced by the parties at trial Supreme Court should have adopted the one accepted by the Fifth Circuit in Dunn. It concluded that Supreme Court overvalued WCI by $21,778,708 (the difference between the $7,793,292 reduction in value based on the "historical" tax rate methodology and the $29,572,000 reduction that would result under the methodology adopted in Dunn ). This amount differed from the "baseline" value of $70,848,107 because of other valuation adjustments made by Supreme Court. The husband did not dispute all of these adjustments and the discrepancy between the two "baseline" values was of no moment.] That amount should be subtracted from the total value of WCI at the time of the commencement of the action found by Supreme Court ($74,387,630), leaving a total value of $52,608,922.
The Court pointed out that shortly after oral argument, the wife moved to dismiss the appeal on the ground that the husband was a fugitive from this jurisdiction and barred from maintaining the appeal under the fugitive disentitlement doctrine. By an order dated November 27, 2007, it granted the wife's motion and dismissed the appeal with leave to the husband to move to reinstate the appeal on the condition that, within a certain time frame, he post an undertaking of approximately $10 million (45 AD3d 470 [2007] ). The husband posted the undertaking and moved to reinstate the appeal.
The Appellate Division affirmed that part of the judgment of Supreme Court which declined to award permanent maintenance in part because the wife would be "vastly wealthy in her own right." The wife did not perfect her cross appeal, so there was no occasion to decide whether a permanent maintenance award would be appropriate in light of the reduction of the distributive award. The Court noted that Supreme Court awarded the wife over $27 million in assets, reflecting approximately 88% of the other marital assets.
On appeal, the husband argued that, consistent with the approach adopted in Dunn, pursuant to which the hypothetical buyer is assumed to liquidate the assets of the corporation upon acquiring it, an additional reduction in value is warranted to account for the non-tax costs of liquidating the corporation that the buyer would incur. The husband's expert computed those costs by assuming that WCI's assets would be liquidated over a six-month period after the valuation date (the date the action was commenced), an assumption that results in higher non-tax liquidation costs than would be incurred if the assets were liquidated on the date of commencement. Although the parties did not discuss the issue, the assumption by the husband's expert of a six-month liquidation period is not consistent with the assumption, for purposes ofdetermining the extent of the reduction for embedded taxes, that the corporation'sassets are liquidated on the valuation date. Supreme Court held that no such reduction in the value of WCI was appropriate. Supreme Court did not make any specific findings on what the non-tax liquidation costs of WCI would be. Determining whether and the extent to which a reduction in value for non-tax liquidation costs is warranted was complicated further by the parties' contentions about those costs. The Court pointed out that there were other complications that the parties did not discuss. The Court concluded that the value of WCI should not be reduced by any non-tax liquidation costs. It had no rational basis in the record for determining what the amount of the non-tax liquidation costs are, assuming it were to hold that the value of WCI should be reduced by some such costs. It also beleived that the amount of any of the costs it might recognize was small relative to the overall value of the marital property and might not exceed the costs of additional briefing and the possible fact-finding proceeding. It added that its resolution of this issue sets no precedent on the question of whether or the extent to which a reduction in value for non-tax liquidation costs is appropriate in other circumstances. The Appellate Division held that Supreme Court erred in concludingthat the husband’s right pursuant to a subscription agreement to purchase additional shares of the common stock of WCI's predecessor entity at a price of $4,900 per share, a right that when exercised entitled him to 12 additional shares of preferred stockfor each share of common stock, was not his separate property. The subscriptionagreement was entered into prior to the marriage and, as amended prior to themarriage, entitled the husband to purchase 10 additional shares of common stockand thereby acquire 120 shares of preferred. Prior to the marriage, the husbandpurchased pursuant to the subscription agreement 2.65 shares of the common stock,thereby also acquiring 31.8 shares of preferred. Supreme Court concluded, and thewife did not contend otherwise, that these shares and fractional sharesconstitute separate property of the husband. The remaining 7.35 shares of commonstock, and the attendant 88.2 shares of preferred, were paid for and acquiredduring the marriage. Because marital property is defined to include "all propertyacquired by either or both spouses during the marriage" (Domestic Relations Law s236[B][1][c] ), Supreme Court concluded that these shares were marital property.The flaw in Supreme Court's reasoning was that it did not recognize that,especially given the broad meaning of the term property in the Domestic RelationsLaw the husband's right to acquire the 7.35 shares of common stock and 88.2 shares of preferred was itself property that he acquired before the marriage. The husband's right to acquire the shares was tantamount to an "in-the-money option" as the purchase price of the shares was far below their fair market value. Thus, he was entitled to acredit in the amount of the value as of the date of the marriage of his right toacquire the additional shares of stock pursuant to the subscription agreement.The value of the 7.35 shares of common stock and the 88.2 shares of preferred, assuming the right was exercised as of the date of marriage, was approximately $232,800. Consistent with the approach of the neutral expert and the husband's expert in valuing the husband's right as of the date of the marriage to acquire the shares pursuant to the subscription agreement, the value of that right was approximately $196,800 ($232,800 minus the approximately $36,000 purchase price of the 7.35 shares of common stock).
The Appellate Division noted that, in part, because of its conclusion that the wife would be "vastly wealthy in her own right" as a result of the equal distribution of themarital assets, Supreme Court denied the wife's request for permanent maintenance.However, Supreme Court awarded conditional, durational maintenance to the wife,with the husband being obligated both to make monthly payments of $46,666 to thewife, a portion of which was deductible by the husband, and to pay variousexpenses, including the mortgage payments and taxes relating to the home awardedto the wife. Pursuant to the terms of the judgment, this maintenance awardcontinues until the wife receives both the specific assets awarded to her and thefirst payment on account of the distributive award. Relying on it decisions in Gad v. Gad (283 A.D.2d 200 [2001] ) and Pickard v. Pickard (33 AD3d 2002 [2006], appeal dismissed 7 NY3d 897 [2006] ), the husband argued that because Supreme Court did not make a permanent maintenance award he was entitled to a credit against the distributive award in the amount of all the temporary maintenance payments he made. The husband contended that he paid a total of $3,000,987 in temporary maintenance.
The Appellate Division held that the husband's reliance on Gad and Pickering was misplaced and that he was not entitled to any credit for the temporary maintenancepayments he made, regardless of the amount of those payments. The meredetermination by Supreme Court not to award permanent maintenance cannot beequated with a finding that the pendente lite maintenance award was excessive.Supreme Court did not make such a finding either expressly or implicitly. The determination not to award permanent maintenance was based in part on the ground that permanent maintenance was unnecessary given the wife's vastly different economic circumstances as a result of the equal distribution of the marital property. Inaddition, Supreme Court also based this determination on the consequences of thedistribution of the overwhelming preponderance of the liquid marital assets to thewife. As a result, a permanent maintenance award would have required the husbandto tap into the income generated by WCI or liquidate securities it owned eventhough he was awarded this asset. Accordingly, Supreme Court cogently observedthat an award of permanent maintenance would entail an element of "double dipping"by the wife into the principal asset awarded to the husband.
The Appellate Division found that the date-of-commencement value of the marital interest in WCI was $47,131,777.95--$52,608,922 minus the sum of the adjusted, after-tax value of the proceeds of the securities sold prior to the commencement date ($155,691.18), the value of the husband's property interest in WCI as of the date of the marriage ($646,271), the value of the husband's subscription right ($196,800), the value of the common and preferred stock he inherited from hisfather ($3,523,904.80) and the amount of the increase in value of the husband'sequity interest at the time of the inheritance stemming from the controllinginterest in the corporation acquired as a result of the inheritance ($954,477.07).
Supreme Court valued at $30,548,556. the other marital assets, including securities (virtually all of which were in the husband's name), cash accounts, a home and an apartment. After considering the statutory factors Supreme Court determined that the parties should share equally in all of the marital assets. Given itsconclusion that the husband should retain his ownership of WCI, Supreme Court wasconstrained to award to the wife approximately 88% of the other marital assets,collectively valued at $27,135,154. The husband was awarded his Colorado residence(valued at $1.95 million) and, to provide him with "some liquid cash assets,"certain securities Supreme Court had valued at $1,463,422. The result of these discrete awards was a deficiency in the wife's share of the assets of $22,770,623 ($49,905,776, one half of the total value of $99,811,533 that Supreme Court assigned to the marital assets, minus $27,135,154, the value of the specific marital assets awarded to the wife). Accordingly, Supreme Court granted a distributive award to the wife in the amount of the deficiency, and directed that the husband pay the award over a period of 15 years, with annual payments of $1,518,042 payable in quarterly installments of $379,510.50. Supreme Court did not grant pre-judgment or post-judgment interest on the distributive award to the wife, but ruled that interest would accrue in the event and to the extent of a default in any of the required payments.
The Appellate Division held that husband's argument that the securities of WCI (and thus WCI itself) and the other securities he owned or controlled should have been valued as of the date of trial was without merit. While some "courts have concluded that 'active' assets should be valued only as of the date of the commencement of the action,while the valuation date for 'passive' assets may be determined more flexibly,"these "formulations" are but "helpful guideposts" and not "immutable rules of law"(McSparron v. McSparron, 87 N.Y.2d 275, 287-288 [1995] ). Thus, althoughsecurities commonly are "passive assets" that are valued at the date of trial asthey may "change in value suddenly based on market fluctuations" (Grunfeld v.Grunfeld, 94 N.Y.2d 696, 707 [2000] ), they may be active assets when, as here,they are actively managed by the titled spouse. The securities owned by WCI andby the husband required his "specialized knowledge in order to be appropriatelyinvested," Supreme Court stressed that: "The parties, by their actions throughout prior proceedings herein, charted a course of litigation that accepted a [date of commencement] valuation of WCI ... When this trial began defendant agreed, by words and deeds, that the court should utilize a [date-of-commencement] valuation. Thus, when, during discovery, [the wife] demanded up to date financial information about WCI, defendant refused to produce such information arguing that it was irrelevant to a [date-of-commencement] valuation." The Appellate Division declined to disturb Supreme Court's allocation of themarital assets other than the marital component of WCI. Accordingly, it held that adistributive award of $11,705,013 ($38,840,167 minus $27,135,154) was necessary toeffectuate the equal division of the marital property. In accordance with thepayment terms fixed by Supreme Court, the $11,705,013 distributive award waspayable over a period of 15 years, with quarterly payments of $195,083.55.
The Appellate Division noted that a problem arose because the written decision and order direct that the husband transfer to the wife all of the securities owned or controlled by the husband (other than those owned by WCI) and listed in the decision and order along with their date-of-commencement market value. The decision expressly noted that by crediting against the distributive award the full value of the securities as of the date of commencement, "the risks of gains and/or losses since the valuation date [were passed] over to [the wife]." Even assuming that there was some ambiguity in the relevant terms of the judgment on this score, the decision controls (Madison III Assoc. Ltd. Partnership v. Brock, 258 A.D.2d 355 [1999] ). With respect to any of the securities the husband sold while he was free to do soafter the wife's motion for an injunction was denied, the husband argued that hewas required to provide the wife with "the proceeds of re-investment less the costsof the sale, taxes and reinvestment." The wife argued that the husband was required to transfer to her the assets acquired with the sale proceeds. The dispute reduces towhether the husband is entitled to a credit against the distributive award in theamount of the costs he incurred, including taxes he paid, in selling and reinvesting the securities sold. The Appellate Division held that it would be inequitable not to grant the husband such a credit given that he was free to sell the securities during the pendency of the action. Accordingly, it directed a hearing to determine which securities the husband sold, what he did with the proceeds, what costs he incurred and the amount of the resulting credit to which he may be entitled. The judgment of Supreme Court was modified by(1) reducing the base line value of WCI by $29,572,000 pursuant to the approach of the neutral expert and the husband's expert, (2) determining that the husband's right pursuant to asubscription agreement to purchase additional shares of stock in WCI's predecessorwas his separate property and reducing the base line value of WCI by the value ofthat right, $196,800, (3) reducing by $211,403.71 the after-tax value of the proceeds of the securities sold prior to the commencement date of the action but not settled until after that date, (4) determining that the marital interest in WCI was $47,131,777.95, (5) determining that the value of the marital estate was $77,680,333.95, (6) directing the husband to pay the wife a distributive award of $11,705,013, payable in quarterly installments of $195,083.55, and (7) determining that the wife's share of the tax liability of WCI was 44.8%, and otherwise affirmed.
Thứ Tư, 22 tháng 10, 2008
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New York Court of Appeals Rejects Interpretation of the term “Cohabitation” which contemplates “changed economic circumstances"
In Graev v Graev, —NY3d—, --- N.E.2d ----, 2008 WL 4620698 (N.Y.) the parties settlement agreement that was incorporated, but not merged, into a judgment of divorce required Mr. Graev to pay Mrs. Graev spousal support payments of $10,000 per month, subject to adjustment, until the earlier of August 10, 2009 or the occurrence of any of four "termination events"; namely, the wife's remarriage or death, the husband's death, or "[t]he cohabitation of the Wife with an unrelated adult for a period of sixty (60) substantially consecutive days." The agreement did not define "cohabitation."
On September 7, 2004, Mr. Graev advised Mrs. Graev that her cohabitation with MP, an unrelated adult male, had been documented and photographed by professionals retained by his counsel." Invoking the separation agreement's provision for termination in the event of cohabitation, Mr. Graev ceased making spousal support payments as of September 2004. Mrs. Graev moved in Supreme Court to enforce the settlement agreement's maintenance provisions; Mr. Graev cross-moved for summary judgment on the ground that a termination event had occurred. He took the position that Mrs. Graev and MP were cohabiting within the meaning of the settlement agreement because MP had stayed overnight in Mrs. Graev's vacation home in Connecticut for at least 60 substantially consecutive days during the summer of 2004, as borne out by surveillance. He also contended, there was an "obvious serious relationship" between Mrs. Graev and MP, and MP was Mrs. Graev's "lover and life partner," as illustrated by the number of family occasions--weddings, birthdays and the like--they attended as a couple. Mrs. Graev argued that she did not "cohabit" with MP during the summer of 2004 because their relationship had long been platonic, as proven by evidence of MP's sexual incapacity and her diminished sexual desire caused by prescribed medication. In Mrs. Graev's view, use of the word 'cohabitation'--rather than 'living together' or 'residing' ... plainly meant having sexual relations. In response, Mr. Graev insisted that "cohabitation could not possibly require 'sexual relations' " under the law and the plain meaning of the settlement agreement, which was intended to be less stringent than section 248 of the Domestic Relations Law. Supreme Court granted both parties' motions to the extent of ordering a hearing to determine whether Mrs. Graev's relationship with MP constituted "cohabitation" within the meaning of the separation agreement. After the hearing , Supreme Court, credited Mrs. Graev's and MP's testimony that their relationship ceased to be sexual long before the summer of 2004. It concluded that New York cases "find that an essential element of cohabitation is a shared residence with shared household expenses" and that "the couple functioned as an economic unit," features lacking in the bond between Mrs. Graev and MP, which she likened to "an adult dating relationship." On appeal, Mr. Graev repeated his plea that the word "cohabitation" was ambiguous under New York law. Mrs. Graev rejoined that New York courts have construed "cohabitation" as synonymous with "living together," which, in turn, the courts have long held to mean sharing a residence, sharing expenses, and functioning asan economic unit. The Appellate Division affirmed, with two Justices dissenting. According to the majority, New York judicial decisions had consistently interpreted "cohabitation" to mean "more than a romantic relationship or series of nights spent together" and to require "the sharing of finances" or "an economic relationship akin to a shared possessory interest in one home," which could be "proven with evidence that two people keep their personal belongings and receive their mail at the same address". The majority found that Mrs. Graev and MP spent more than 60 substantially consecutive nights together during the summer of 2004, and that "their relationship became romantic in January 2003". These facts were not "decisive" under New York case law, however, because MP owned his own home and there was "absolutely no evidence that the couple shared household expenses or functioned as a single economic unit" . As a result, the majority concluded that Mrs. Graev's relationship with MP did not amount to "cohabitation." The Court of Appeals reversed in a 4-3 opinion by Judge Read. She did not agree that "the term cohabitation has a plain meaning which contemplates changed economic circumstances, and is not ambiguous" absent an explicit provision to the contrary in a separation agreement or stipulation, or, put slightly differently, is necessarily determined by whether a "couple share[s] household expenses or function[s] as a single economic unit". The Court held that the word "cohabitation" is ambiguous as used in this separation agreement: neither the dictionary nor New York case law supplies an authoritative or "plain" meaning. She noted that courts in other states have not ascribed a uniform meaning to the word "cohabitation" as used in separation agreements. Black's Law Dictionary defines "cohabitation" to mean "living together, esp[ecially] as partners in life, usu[ally] with the suggestion of sexual relations" (Black's Law Dictionary 277 [8th ed 2004]. In addition to the definition in Black's Law Dictionary "cohabit" is variously defined as "[t]o live together as husband and wife: often said distinctively of persons not legally married" (Oxford English Dictionary [2d ed 1989] ); "to live together and have a sexual relationship without being married" (The New Oxford American Dictionary [2d ed 2005] ); "to live together as or as if as husband and wife" (Webster's Third New International Dictionary [2002] ); "to live together as husband and wife, usually without legal or religious sanction," or "to live together in an intimate relationship" (Random House Webster's Unabridged Dictionary [2d ed 2001] ); and "to live together as or as if a married couple" (Merriam Webster's Collegiate Dictionary [10th ed 1997] ). The common element in all these definitions is "to live together," particularly in a relationship or manner resembling or suggestive of marriage, and New York courts have used the word "cohabitation" interchangeably with the phrase "living together". Ultimately, however, "living together" as if husband and wife is no less opaque than "cohabitation": both bring to mind a variety of physical, emotional and material factors, and therefore might mean any number of things in a separation agreement, where otherwise unexplained in the text, depending on the parties' intent. For example, the parties here might reasonably have meant "cohabitation" to encompass whether Mrs. Graev engaged in sexual relations with an unrelated adult; whether she and the unrelated adult commingled their finances or--just the opposite--whether she supported the unrelated adult financially; whether she and the unrelated adult shared the same bed; or some combination of these or other factors associated with living together as if husband and wife. The Court found that New York case law does not establish a distinct meaning--"changed economic circumstances"--for "cohabitation.". While more recent Appellate Division decisions may be read to imply, as the Appellate Division held in this case, that there can be no "cohabitation" without changed economic circumstances, the Court of Appeals stated that it had never taken this position and declined to do so now. The Court found that the ambiguity of the word "cohabitation" in this separation agreement was illustrated by the shifting "plain" meanings and positions advanced by the parties over the course of the litigation. The Court of Appeals found that the word "cohabitation" did not have a "plain" meaning in this separation agreement. Without extrinsic evidence as to the parties' intent, there was no way to assess the particular factors inherent in the dictionary meanings or case law discussions of "cohabitation" the parties may have meant to embrace or emphasize. In a footnote the Court responded to the complaint of the dissent that its resolution of this appeal created uncertainty, making it difficult for parties to understand their obligations and responsibilities"; and that "[t]he wiser choice is to articulate a clear rule of law" (dissenting op at 10-11). The Court responded that articulating a "clear rule of law" was hardly fair to those who may have used the word "cohabitation" in an extant separation agreement, intending the meaning ascribed to it by those Appellate Division cases requiring financial interdependence. The wisest rule is for parties in the future to make their intention clear by more careful drafting.
On September 7, 2004, Mr. Graev advised Mrs. Graev that her cohabitation with MP, an unrelated adult male, had been documented and photographed by professionals retained by his counsel." Invoking the separation agreement's provision for termination in the event of cohabitation, Mr. Graev ceased making spousal support payments as of September 2004. Mrs. Graev moved in Supreme Court to enforce the settlement agreement's maintenance provisions; Mr. Graev cross-moved for summary judgment on the ground that a termination event had occurred. He took the position that Mrs. Graev and MP were cohabiting within the meaning of the settlement agreement because MP had stayed overnight in Mrs. Graev's vacation home in Connecticut for at least 60 substantially consecutive days during the summer of 2004, as borne out by surveillance. He also contended, there was an "obvious serious relationship" between Mrs. Graev and MP, and MP was Mrs. Graev's "lover and life partner," as illustrated by the number of family occasions--weddings, birthdays and the like--they attended as a couple. Mrs. Graev argued that she did not "cohabit" with MP during the summer of 2004 because their relationship had long been platonic, as proven by evidence of MP's sexual incapacity and her diminished sexual desire caused by prescribed medication. In Mrs. Graev's view, use of the word 'cohabitation'--rather than 'living together' or 'residing' ... plainly meant having sexual relations. In response, Mr. Graev insisted that "cohabitation could not possibly require 'sexual relations' " under the law and the plain meaning of the settlement agreement, which was intended to be less stringent than section 248 of the Domestic Relations Law. Supreme Court granted both parties' motions to the extent of ordering a hearing to determine whether Mrs. Graev's relationship with MP constituted "cohabitation" within the meaning of the separation agreement. After the hearing , Supreme Court, credited Mrs. Graev's and MP's testimony that their relationship ceased to be sexual long before the summer of 2004. It concluded that New York cases "find that an essential element of cohabitation is a shared residence with shared household expenses" and that "the couple functioned as an economic unit," features lacking in the bond between Mrs. Graev and MP, which she likened to "an adult dating relationship." On appeal, Mr. Graev repeated his plea that the word "cohabitation" was ambiguous under New York law. Mrs. Graev rejoined that New York courts have construed "cohabitation" as synonymous with "living together," which, in turn, the courts have long held to mean sharing a residence, sharing expenses, and functioning asan economic unit. The Appellate Division affirmed, with two Justices dissenting. According to the majority, New York judicial decisions had consistently interpreted "cohabitation" to mean "more than a romantic relationship or series of nights spent together" and to require "the sharing of finances" or "an economic relationship akin to a shared possessory interest in one home," which could be "proven with evidence that two people keep their personal belongings and receive their mail at the same address". The majority found that Mrs. Graev and MP spent more than 60 substantially consecutive nights together during the summer of 2004, and that "their relationship became romantic in January 2003". These facts were not "decisive" under New York case law, however, because MP owned his own home and there was "absolutely no evidence that the couple shared household expenses or functioned as a single economic unit" . As a result, the majority concluded that Mrs. Graev's relationship with MP did not amount to "cohabitation." The Court of Appeals reversed in a 4-3 opinion by Judge Read. She did not agree that "the term cohabitation has a plain meaning which contemplates changed economic circumstances, and is not ambiguous" absent an explicit provision to the contrary in a separation agreement or stipulation, or, put slightly differently, is necessarily determined by whether a "couple share[s] household expenses or function[s] as a single economic unit". The Court held that the word "cohabitation" is ambiguous as used in this separation agreement: neither the dictionary nor New York case law supplies an authoritative or "plain" meaning. She noted that courts in other states have not ascribed a uniform meaning to the word "cohabitation" as used in separation agreements. Black's Law Dictionary defines "cohabitation" to mean "living together, esp[ecially] as partners in life, usu[ally] with the suggestion of sexual relations" (Black's Law Dictionary 277 [8th ed 2004]. In addition to the definition in Black's Law Dictionary "cohabit" is variously defined as "[t]o live together as husband and wife: often said distinctively of persons not legally married" (Oxford English Dictionary [2d ed 1989] ); "to live together and have a sexual relationship without being married" (The New Oxford American Dictionary [2d ed 2005] ); "to live together as or as if as husband and wife" (Webster's Third New International Dictionary [2002] ); "to live together as husband and wife, usually without legal or religious sanction," or "to live together in an intimate relationship" (Random House Webster's Unabridged Dictionary [2d ed 2001] ); and "to live together as or as if a married couple" (Merriam Webster's Collegiate Dictionary [10th ed 1997] ). The common element in all these definitions is "to live together," particularly in a relationship or manner resembling or suggestive of marriage, and New York courts have used the word "cohabitation" interchangeably with the phrase "living together". Ultimately, however, "living together" as if husband and wife is no less opaque than "cohabitation": both bring to mind a variety of physical, emotional and material factors, and therefore might mean any number of things in a separation agreement, where otherwise unexplained in the text, depending on the parties' intent. For example, the parties here might reasonably have meant "cohabitation" to encompass whether Mrs. Graev engaged in sexual relations with an unrelated adult; whether she and the unrelated adult commingled their finances or--just the opposite--whether she supported the unrelated adult financially; whether she and the unrelated adult shared the same bed; or some combination of these or other factors associated with living together as if husband and wife. The Court found that New York case law does not establish a distinct meaning--"changed economic circumstances"--for "cohabitation.". While more recent Appellate Division decisions may be read to imply, as the Appellate Division held in this case, that there can be no "cohabitation" without changed economic circumstances, the Court of Appeals stated that it had never taken this position and declined to do so now. The Court found that the ambiguity of the word "cohabitation" in this separation agreement was illustrated by the shifting "plain" meanings and positions advanced by the parties over the course of the litigation. The Court of Appeals found that the word "cohabitation" did not have a "plain" meaning in this separation agreement. Without extrinsic evidence as to the parties' intent, there was no way to assess the particular factors inherent in the dictionary meanings or case law discussions of "cohabitation" the parties may have meant to embrace or emphasize. In a footnote the Court responded to the complaint of the dissent that its resolution of this appeal created uncertainty, making it difficult for parties to understand their obligations and responsibilities"; and that "[t]he wiser choice is to articulate a clear rule of law" (dissenting op at 10-11). The Court responded that articulating a "clear rule of law" was hardly fair to those who may have used the word "cohabitation" in an extant separation agreement, intending the meaning ascribed to it by those Appellate Division cases requiring financial interdependence. The wisest rule is for parties in the future to make their intention clear by more careful drafting.
Challenge to Facial Sufficiency of Accusatory Instrument Not Forfeited By Guilty Plea
In People v Lucas (2008 NY Slip Op 07948 [10/21/08]) the Court of Appeals rejected a broad reading of its holding in People v Cahill (2 NY3d 14 [2003], in which the Court had held that it was impermissible double counting to use the intent to kill to transform the criminal trespass into a burglary in the first degree and to then use the burglary in the first degree to elevate a murder in the second degree to a murder in the first degree. In Lucas the defendant argued that under Cahill the same killing during an abduction could not be the basis of a kidnapping in the first degree charge and a murder in the first charge based on a murder in furtherance of in the course of a kidnapping in the first degree. The Court rejected this argument, holding that
Perhaps of more general interest, and certainly of greater help to defendants, is that the Court reaffirmed that an attack of the facial sufficiency of an accusatory instrument survives a guilty plea. Here, Mr. Lucas argued that the facts stated in the indictment do not constitute the crime of first degree murder. The Court held that
The problem in Cahill was the double counting of one criminal intent. We said that Cahill's "conviction cannot stand because the burglary carried no intent other than to commit the murder" (id. at 62 [emphasis added]). We explained that, in defining first degree murder — a crime which could make a defendant eligible for the death penalty — the Legislature required murder and "[a]n additional aggravating factor — murder 'plus'" (id. at 64). But where "the very same mens rea — the intent to kill" was used to define both the murder and the aggravating factor, the legislative goal of "narrowing rather than expanding the class of defendants eligible for the death penalty" had not been achieved (id. at 64-65). The gist of Cahill is that where only one criminal intent, the intent to kill, is shown, defendant's crime has not been "aggravated" to first degree murder.
That is not true here. Here, the murder defendant committed and the predicate crime that serves as an aggravation arise from two distinct intents — the intent to kill the victim and the intent to abduct him. The intent to abduct aggravated the crime of murder, and defendant is thus a member of that class of murderers whose crime is significantly worse than ordinary murder — "murder plus." It is of no moment that a factual circumstance other than defendant's intent — in this case, the victim's death — is an element of both the murder and the predicate felony. Cahill is satisfied by the showing of a second criminal intent.
Perhaps of more general interest, and certainly of greater help to defendants, is that the Court reaffirmed that an attack of the facial sufficiency of an accusatory instrument survives a guilty plea. Here, Mr. Lucas argued that the facts stated in the indictment do not constitute the crime of first degree murder. The Court held that
This argument attacks the facial sufficiency of the accusatory instrument, and so is not forfeited by defendant's guilty plea (People v Taylor, 65 NY2d 1, 5 [1985])...
Thứ Hai, 20 tháng 10, 2008
Fourth Department Holds Credit For College Expenses Not Mandatory
In Pistilli v Pistilli, --- N.Y.S.2d ----, 2008 WL 2713989 (N.Y.A.D. 4 Dept.) following the entry of a judgment that, inter alia, granted plaintiff a divorce, plaintiff moved to modify the judgment by "[d]istributing the actual and anticipated college education costs associated with the parties' children," specifically the parties' daughter, between the parties. Defendant cross-moved for an order directing that he pay 60% of the college education expenses of the parties' daughter and reducing his child support obligation accordingly. Defendant appealed from an order requiring him to pay 80% of the daughter's college expenses based on Supreme Court's determination that defendant "shall contribute to college costs 'in accordance with his percentage' " of the parties' combined parental income and denying his cross motion seeking a reduction in his child support obligation. Pursuant to an oral stipulation of the parties that was incorporated but not merged into the judgment of divorce, the parties "agreed to contribute to [their children's college expenses] as they are then financially able." The Appellate Division held that the court erred in failing to consider defendant's maintenance obligation in calculating the percentage of defendant's contribution to the daughter's college expenses. After subtracting from defendant's income the amount of taxable maintenance paid to plaintiff as indicated on the parties' respective 2005 tax returns, which were used by the court in determining the parties' respective incomes, it concluded that defendant's percentage of the combined parental income was 64% rather than 80%, and thus defendant's pro rata share of the daughter's college expenses was reduced from 80% to 64%. It rejected defendant’s contention that the court erred in determining that he was entitled to a credit against his child support obligation only in the amount of his pro rata share of the daughter's college meal plan. It held that a credit against child support for college expenses is not mandatory but depends upon the facts and circumstances in the particular case, taking into account the needs of the custodial parent to maintain a household and provide certain necessaries. Because plaintiff had to maintain a household for the daughter during the daughter's school breaks and weekend visits, it could not be said that defendant was entitled to a credit for the daughter's rooming expenses. Nevertheless, inasmuch as we it reduced defendant's pro rata share of the daughter's college expenses from 80% to 64%, defendant's child support credit based on the college meal plan had to reflect that reduction and it modified the order accordingly.
District Court Establishes Rules For Default Judgment in Hague Case
In Aguirre v Calle, 2008 WL 4461931 (E. D. N. Y.) Petitioner alleged that her seven-year-old daughter, who resided in Colombia with her from the time she was four months old, was illegally retained in the United States by the child's biological father, Mr. Calle , following an authorized, 30-day custodial visit to his home in Elmhurst, New York. She further alleged that, as the parent with sole custody of her daughter under Colombia law, she made both formal and informal attempts to have her daughter returned to her habitual residence in Colombia. Respondent never responded to the Verified Complaint and failed to appear before the Court in connection with the case. On August 26, 2008, Petitioner filed a Motion for Entry of Default and Notation of Default, in response to which a Clerk's Entry of Default was entered on that same day. The following day, the matter was referred to Magistrate Judge Gold for an inquest as to damages and a report and recommendation under the Notation of Default.
The Magistrate judge found that Carolina was born in the United States on November 11, 2000. Aguirre and Calle had never been married to each other and they ended their relationship prior to Carolina's birth. Aguirre informed Calle of her intention to return to Colombia with Carolina and, according to the complaint in this action, Calle did not object. On March 19, 2001, Aguirre and Carolina moved to Colombia where they lived since Carolina was 4 months old. There was no custody agreement between Carolina's parents and there was no judicial or administrative determination of their rights either in Colombia or the United States. In the summer of 2005, Aguirre authorized a visit for Carolina with Calle in the United States for 20 days. Calle returned Carolina to Colombia without incident. In 2007, Aguirre again authorized Carolina to visit with Calle in the United States, for one month from June 27, 2007 through July 27, 2007. On July 4, 2007, Calle told Aguirre that he would not be returning Carolina because he wanted to keep her in New York. Calle failed to return Carolina to Colombia as scheduled. Aguirre had not seen Carolina since June 27, 2007. Aguirre had some telephonic contact with Carolina over the past year, although Calle recently terminated his cell phone service. Aguirre has asked Calle to return Carolina. Aguirre made formal requests for the return of Carolina, filed with the United States Department of State and the National Center for Missing and Exploited Children. The Magistrate judge held that that once found to be in default, a defendant is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. Citing Greyhound Exhibitgroup, Inc., v. E.L .U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049 (1993); Montcalm Pub. Corp. v. Ryan, 807 F.Supp. 975, 977 (S.D.N.Y.1992). A court, however, retains the discretion to determine whether a final default judgment is appropriate. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir.1993). Even after a defendant has defaulted, "[a] plaintiff must ... establish that on the law it is entitled to the relief it seeks, given the facts as established by the default." U.S. v. Ponte, 246 F.Supp.2d 74, 76 (D. Me.2003). For petitioner to prevail she had to establish with the facts alleged in her petition--that (1) the child was habitually resident in one country; (2) petitioner had custody rights under the law of the place of habitual residence, and was exercising those rights at the time of the removal or retention; and (3) the removal or retention was in breach of petitioner's custody rights. Villegas Duran v. Arribada Beaumont, 534 F.3d 142, 147 (2d Cir.2008). Aguirre sufficiently alleged these three elements in her petition. The Magistrate judge found that the parents' last shared intent was for Carolina to reside in Colombia. Aguirre took Carolina to Colombia at 4 months old without objection by Calle. For the past six years, Carolina lived in Colombia and attended school there. The only times that Carolina stayed in the United States with her mother's consent were for the first 4 months of her life, during one 20-day visit with Calle in 2005, and for the first 30 days of her visit with Calle in 2007. Although Carolina had now been in the United States for over a year, there was no evidence that Carolina had acclimatized to the United States. The Magistrate judge found that the well-pleaded allegations of the complaint sufficiently established that, prior to the retention, Carolina was a habitual resident of Colombia. Title XII of the Colombian Civil Code sets forth the rights and duties between parents and children. Article 253 provides, "Both parents ... shall exercise the parental care in the upbringing and education of their legitimate children." Title XIV of the Colombian Civil Code sets forth the rights of "Patria Potestas." Article 288 provides that "Paternal authority is the set of rights that the law acknowledges to the parents over their non-emancipated children ...." It further provides that, "The exercise of the parental authority over their legitimate children shall be exercised jointly by both parents. In the absence of one of the parents, the other parent shall exercise the paternal authority." Article 338 of the Colombian Minors' Code provides that, "When a minor is going to go out of the country with one of the parents or with a person different from their legal representatives, they should previously obtain the permission of the parent or legal representative who is not traveling, authenticated before a notary or consular authority." Article 310 of Title XIV of the Colombian Civil Code provides that an individual's parental authority ceases after his "prolonged absence." Accordingly, the Magistrate Judge found that under Colombian law, petitioner and respondent shared joint custodial rights. Because petitioner shared with respondent a joint right and responsibility of "parental care in the upbringing and education" of Carolina, Colombian Civil Code, Art. 253, Aguirre had a right of custody under the Hague Convention. The court noted that the Second Circuit has defined "custody of a child" as "the primary duty and ability to choose and give sustenance, shelter, clothing, moral and spiritual guidance, medical attention, education, etc...." Croll v. Croll, 229 F.3d 133, 138 (2d Cir.2000). Since Carolina's birth, Aguirre had sole custody of Carolina and taken responsibility for raising her. As the sole parent responsible for Carolina's care, Aguirre determined that Carolina would speak Spanish and attend school in Colombia, and that Carolina would be a Colombian National. Clearly, Aguirre had rights of custody under Colombian law that can be enforced by the Hague Convention. The Magistrate found that Aguirre was exercising her custody rights up until the time when Carolina was retained in the United States by Calle. Petitioner authorized Carolina's visit to the United States only for the period from June 27, 2007 through July 27, 2007. On July 4, 2007, Calle informed Aguirre that he would not return Carolina to Colombia at the end of July, and in fact he did not return her on the scheduled date. Over the past year, petitioner made formal and informal requests for Carolina's return to Colombia to no avail. Petitioner had thus sufficiently pled that Calle breached Aguirre's custody rights by his unilateral decision to retain Carolina in the United States after July 27, 2007.
On September 9, 2008, the Magistrate Judge issued a Report and Recommendation, recommending that the Court enter a judgment in favor of Petitioner "and that an order be entered directing the prompt return of Carolina Gutierrez Aguirre to her habitual residence" in Colombia. The Magistrate Judge recommended that Respondent be held liable for Petitioner's attorney's fees and costs, pursuant to Article 26 of the Hague Convention and 42 U.S.C. 11607. No objections to the Report were filed with the Court. The Court found no basis upon which to disturb the findings made by the Magistrate Judge. Therefore, the Court adopted and affirmed the Report in its entirety. Respondent was ordered immediately to return his daughter, Carolina Gutierrez Aguirre, to her habitual residence in Colombia and into the custody of her mother. The matter was referred back to the Magistrate Judge for an inquest with respect to the amount of attorney's fees and costs.
The Magistrate judge found that Carolina was born in the United States on November 11, 2000. Aguirre and Calle had never been married to each other and they ended their relationship prior to Carolina's birth. Aguirre informed Calle of her intention to return to Colombia with Carolina and, according to the complaint in this action, Calle did not object. On March 19, 2001, Aguirre and Carolina moved to Colombia where they lived since Carolina was 4 months old. There was no custody agreement between Carolina's parents and there was no judicial or administrative determination of their rights either in Colombia or the United States. In the summer of 2005, Aguirre authorized a visit for Carolina with Calle in the United States for 20 days. Calle returned Carolina to Colombia without incident. In 2007, Aguirre again authorized Carolina to visit with Calle in the United States, for one month from June 27, 2007 through July 27, 2007. On July 4, 2007, Calle told Aguirre that he would not be returning Carolina because he wanted to keep her in New York. Calle failed to return Carolina to Colombia as scheduled. Aguirre had not seen Carolina since June 27, 2007. Aguirre had some telephonic contact with Carolina over the past year, although Calle recently terminated his cell phone service. Aguirre has asked Calle to return Carolina. Aguirre made formal requests for the return of Carolina, filed with the United States Department of State and the National Center for Missing and Exploited Children. The Magistrate judge held that that once found to be in default, a defendant is deemed to have admitted all of the well-pleaded allegations in the complaint pertaining to liability. Citing Greyhound Exhibitgroup, Inc., v. E.L .U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir.1992), cert. denied, 506 U.S. 1080, 113 S.Ct. 1049 (1993); Montcalm Pub. Corp. v. Ryan, 807 F.Supp. 975, 977 (S.D.N.Y.1992). A court, however, retains the discretion to determine whether a final default judgment is appropriate. Enron Oil Corp. v. Diakuhara, 10 F.3d 90, 95 (2d Cir.1993). Even after a defendant has defaulted, "[a] plaintiff must ... establish that on the law it is entitled to the relief it seeks, given the facts as established by the default." U.S. v. Ponte, 246 F.Supp.2d 74, 76 (D. Me.2003). For petitioner to prevail she had to establish with the facts alleged in her petition--that (1) the child was habitually resident in one country; (2) petitioner had custody rights under the law of the place of habitual residence, and was exercising those rights at the time of the removal or retention; and (3) the removal or retention was in breach of petitioner's custody rights. Villegas Duran v. Arribada Beaumont, 534 F.3d 142, 147 (2d Cir.2008). Aguirre sufficiently alleged these three elements in her petition. The Magistrate judge found that the parents' last shared intent was for Carolina to reside in Colombia. Aguirre took Carolina to Colombia at 4 months old without objection by Calle. For the past six years, Carolina lived in Colombia and attended school there. The only times that Carolina stayed in the United States with her mother's consent were for the first 4 months of her life, during one 20-day visit with Calle in 2005, and for the first 30 days of her visit with Calle in 2007. Although Carolina had now been in the United States for over a year, there was no evidence that Carolina had acclimatized to the United States. The Magistrate judge found that the well-pleaded allegations of the complaint sufficiently established that, prior to the retention, Carolina was a habitual resident of Colombia. Title XII of the Colombian Civil Code sets forth the rights and duties between parents and children. Article 253 provides, "Both parents ... shall exercise the parental care in the upbringing and education of their legitimate children." Title XIV of the Colombian Civil Code sets forth the rights of "Patria Potestas." Article 288 provides that "Paternal authority is the set of rights that the law acknowledges to the parents over their non-emancipated children ...." It further provides that, "The exercise of the parental authority over their legitimate children shall be exercised jointly by both parents. In the absence of one of the parents, the other parent shall exercise the paternal authority." Article 338 of the Colombian Minors' Code provides that, "When a minor is going to go out of the country with one of the parents or with a person different from their legal representatives, they should previously obtain the permission of the parent or legal representative who is not traveling, authenticated before a notary or consular authority." Article 310 of Title XIV of the Colombian Civil Code provides that an individual's parental authority ceases after his "prolonged absence." Accordingly, the Magistrate Judge found that under Colombian law, petitioner and respondent shared joint custodial rights. Because petitioner shared with respondent a joint right and responsibility of "parental care in the upbringing and education" of Carolina, Colombian Civil Code, Art. 253, Aguirre had a right of custody under the Hague Convention. The court noted that the Second Circuit has defined "custody of a child" as "the primary duty and ability to choose and give sustenance, shelter, clothing, moral and spiritual guidance, medical attention, education, etc...." Croll v. Croll, 229 F.3d 133, 138 (2d Cir.2000). Since Carolina's birth, Aguirre had sole custody of Carolina and taken responsibility for raising her. As the sole parent responsible for Carolina's care, Aguirre determined that Carolina would speak Spanish and attend school in Colombia, and that Carolina would be a Colombian National. Clearly, Aguirre had rights of custody under Colombian law that can be enforced by the Hague Convention. The Magistrate found that Aguirre was exercising her custody rights up until the time when Carolina was retained in the United States by Calle. Petitioner authorized Carolina's visit to the United States only for the period from June 27, 2007 through July 27, 2007. On July 4, 2007, Calle informed Aguirre that he would not return Carolina to Colombia at the end of July, and in fact he did not return her on the scheduled date. Over the past year, petitioner made formal and informal requests for Carolina's return to Colombia to no avail. Petitioner had thus sufficiently pled that Calle breached Aguirre's custody rights by his unilateral decision to retain Carolina in the United States after July 27, 2007.
On September 9, 2008, the Magistrate Judge issued a Report and Recommendation, recommending that the Court enter a judgment in favor of Petitioner "and that an order be entered directing the prompt return of Carolina Gutierrez Aguirre to her habitual residence" in Colombia. The Magistrate Judge recommended that Respondent be held liable for Petitioner's attorney's fees and costs, pursuant to Article 26 of the Hague Convention and 42 U.S.C. 11607. No objections to the Report were filed with the Court. The Court found no basis upon which to disturb the findings made by the Magistrate Judge. Therefore, the Court adopted and affirmed the Report in its entirety. Respondent was ordered immediately to return his daughter, Carolina Gutierrez Aguirre, to her habitual residence in Colombia and into the custody of her mother. The matter was referred back to the Magistrate Judge for an inquest with respect to the amount of attorney's fees and costs.
Recent Law Grads - $12 an hour!
"Paralegals / Recent Law School Graduates
Reply to: job-886105721@craigslist.org [?]
Date: 2008-10-20, 10:21AM EDT
We have several temporary positions for recent law school graduates interested in gaining experience with a prestigious government agency.
Please email resumes for immediate consideration.
* Compensation: $12/Hour
* Principals only. Recruiters, please don't contact this job poster.
* Please, no phone calls about this job!
* Please do not contact job poster about other services, products or commercial interests."
Good luck trying to swing those $1500 a month non-dischargeable student loan payments on that!
Reply to: job-886105721@craigslist.org [?]
Date: 2008-10-20, 10:21AM EDT
We have several temporary positions for recent law school graduates interested in gaining experience with a prestigious government agency.
Please email resumes for immediate consideration.
* Compensation: $12/Hour
* Principals only. Recruiters, please don't contact this job poster.
* Please, no phone calls about this job!
* Please do not contact job poster about other services, products or commercial interests."
Good luck trying to swing those $1500 a month non-dischargeable student loan payments on that!
Thứ Sáu, 17 tháng 10, 2008
Important Decision Regarding Subpoenas and Privilege in Criminal Cases
In a lengthy opinion, the Court of Appeals in People v Kozlowski, 2008 NY Slip Op 07759 [10/16/08], upheld the larceny (and related) convictions of the former CEO Kozlowski and CFO Swartz of Tyco and the fines of $35 and $70 million imposed on Swartz and Kozlowski, respectively. Although this decision rejected the defendants' arguments for a reversal and/or vacateur of the fines, it is likely to be cited more frequently by defendants than by prosecutors.
First, the decision contains a very helpful analysis of the standard for enforcing a third-party subpoena duces tecum which was set forth nearly 30 years ago in People v Gissendanner (48 NY2d 543, 550 [1979]). Under Gissendanner, defendants must proffer a good-faith factual predicate sufficient for a court to draw an inference that specifically identified materials are reasonably likely to contain information that has the potential to be both relevant and exculpatory.
What constitutes a sufficient showing under Gissendanner is often in dispute. In this case, the Court made clear that the standard is not to be set too high. In Kozlowski the the People's case centered on the charge that defendants' bonuses were not approved by Tyco's Compensation Committee or the Board of Directors. Defendants maintained that the bonuses were properly approved through the efforts of either of two directors. Among other things, their subpoena seeks specifically identified statements made by the director-witnesses regarding key issues in this case, including, most notably, "Compensation Events."
The Court held that "Although defendants have certainly not made a robust showing under Gissendanner, we disagree with the People's contention that defendants were simply fishing for "general credibility" evidence." The Court's anaylsis, set forth here, is worth keeping in hand, when a prosecutor claims that the defendant has failed to prove what a requested document actually states:
So how did the defendants lose if they met their burden under Gissendanner? The Court held that there was another hurdle which was not met -- the documents were privileged as trial preparation materials (which may be disclosed "only upon a showing that the party seeking discovery has a substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means") (CPLR 3101 [c], [d] [2]). The Court held that
The Court also rejected the argument that the privilege of specific requested documents covering trial preparation materials had been waived by the disclosure of other historical privileged documents created earlier.
The Court did not address whether and when the constitutional right to a fair trial limits a trial court’s discretion to apply a statutory privilege so as to preclude a defendant from receiving otherwise subpoenable materials (see, e.g. Davis v Alaska, 415 US 308 [1974]; People v Davis, 86 AD2d 856 [1982]).
Although this decision hurt Swartz and Kozlowski, it is likely to be helpful to more defendants than prosecutors, since it is more common for defense attorneys to attempt to assert the privilege, than prosecutors.
First, the decision contains a very helpful analysis of the standard for enforcing a third-party subpoena duces tecum which was set forth nearly 30 years ago in People v Gissendanner (48 NY2d 543, 550 [1979]). Under Gissendanner, defendants must proffer a good-faith factual predicate sufficient for a court to draw an inference that specifically identified materials are reasonably likely to contain information that has the potential to be both relevant and exculpatory.
What constitutes a sufficient showing under Gissendanner is often in dispute. In this case, the Court made clear that the standard is not to be set too high. In Kozlowski the the People's case centered on the charge that defendants' bonuses were not approved by Tyco's Compensation Committee or the Board of Directors. Defendants maintained that the bonuses were properly approved through the efforts of either of two directors. Among other things, their subpoena seeks specifically identified statements made by the director-witnesses regarding key issues in this case, including, most notably, "Compensation Events."
The Court held that "Although defendants have certainly not made a robust showing under Gissendanner, we disagree with the People's contention that defendants were simply fishing for "general credibility" evidence." The Court's anaylsis, set forth here, is worth keeping in hand, when a prosecutor claims that the defendant has failed to prove what a requested document actually states:
In meeting the burden for production, defendants need not — and indeed could not — show that director-witness statements are "actually" relevant and exculpatory (see Gissendanner, 48 NY2d at 550. Gissendanner does mandate, however, that they point to specific facts demonstrating a reasonable likelihood that such material may be disclosed and that they are not engaged in a fishing expedition. In applying this standard, we must give due regard to the accused's right to a fair trial (Ritchie, 480 US at 56; Nixon, 418 US at 711).
Here, defendants were not engaged in "general discovery," regarding the director-witness statements. Instead, they identified the specific director-interview notes and memorandum that they sought by referring Supreme Court to Tyco's privilege log. Defendants pointed to undisputed facts, arguing that after the directors were made aware of at least some of defendants' questionable activities through the Boies Schiller investigation, they continued to permit Swartz to exercise substantial authority as the CFO of Tyco until September 11, 2002 — the day before he was indicted — and voted to pay him $50 million in severance just one day after the last of the relevant director interviews. On the basis of these facts, defendants asserted that the "director witnesses . . . did not believe Swartz had engaged in any wrongful conduct and only 'changed their tune' after the District Attorney obtained an indictment."
So how did the defendants lose if they met their burden under Gissendanner? The Court held that there was another hurdle which was not met -- the documents were privileged as trial preparation materials (which may be disclosed "only upon a showing that the party seeking discovery has a substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means") (CPLR 3101 [c], [d] [2]). The Court held that
Although we agree with defendants that the director-witness statements are trial preparation materials and not absolutely privileged, enforcement of their subpoena was directed to the trial court's discretion (citations omitted). In making its discretionary determination that defendants did not establish an inability to "obtain the substantial equivalent" of the facts contained in the director witness interview notes without "undue hardship" (see CPLR 3101 [d] [2], Weinstein-Korn-Miller, NY Civ Prac § 3101.55), Supreme Court relied upon defendants' failure to "explain[] why the defense could not have sought to conduct its own interviews of these witnesses at an earlier time." We cannot say that this conclusion represents an abuse of the trial court's discretion. Defendants made no effort to show any "undue hardship" that would have prevented them from securing their own "substantial[ly] equivalent" interviews with the director-witnesses (see CPLR 3101 [d] [2]). As Tyco pointed out in its reply submission on its motion to quash, defendants "have access to the same witnesses as Tyco does."...(see Hickman v Taylor, 329 US 495, 513 [1947] [production of attorney's account of witness statements is justified only in "rare" cases and is not appropriate when potential for "direct interviews with witnesses themselves" is possible]
The Court also rejected the argument that the privilege of specific requested documents covering trial preparation materials had been waived by the disclosure of other historical privileged documents created earlier.
The Court did not address whether and when the constitutional right to a fair trial limits a trial court’s discretion to apply a statutory privilege so as to preclude a defendant from receiving otherwise subpoenable materials (see, e.g. Davis v Alaska, 415 US 308 [1974]; People v Davis, 86 AD2d 856 [1982]).
Although this decision hurt Swartz and Kozlowski, it is likely to be helpful to more defendants than prosecutors, since it is more common for defense attorneys to attempt to assert the privilege, than prosecutors.
Thứ Ba, 14 tháng 10, 2008
India
We have a source in India who is witnessing firsthand the development of the Indian LPO document review industry. In the coming weeks, stay tuned for possible Tom the Temp reports from the Indian subcontinent.
Also, someone sent me an interesting article today from the Chicago Tribune regarding the student loan mess and the increasing uselessness of a college degree:
http://www.chicagotribune.com/business/content/education/chi-college-costs-14-oct14,0,1864072.story
Thứ Sáu, 10 tháng 10, 2008
Rochester Curfew Ordinance Invalid
By a 3-2 vote , the Fourth Department in Anonymous v City of Rochester (2008 NY Slip Op 07724 [10/1008]) held that the Rochester Ordinance which imposed a curfew on persons under seventeen and subjected them to arrest for violation of the curfew conflicted with both New York statutes and the constitution and is, thus, invalid. (Great job by Michael Burger and David Ahl working pro bono).
Attorneys representing person who were stopped pursuant to the curfew ordinance and then charged with other crimes, have a basis to challenge the arrests and the acquisition of evidence regarding the other crimes.
Attorneys representing person who were stopped pursuant to the curfew ordinance and then charged with other crimes, have a basis to challenge the arrests and the acquisition of evidence regarding the other crimes.
Child Sexual Abuse Accomodation Syndrome Testimony Admissible Without Frye Hearing
In People v Bassett (2008 NY Slip Op 07729 [10/3/08]) the Fourth Department held that there was no error in allowing the People to present the testimony of a witness concerning child sexual abuse accommodation syndrome (CSAAS) without first conducting a Frye hearing.
Perhaps a reader can inform us how CSAAS became so clearly established that admissibility of testimony about is beyond question. Where are the peer reviewed studies?
The Court also rejected defendant's contention that defense counsel was ineffective in failing to conduct an adequate cross-examination of the People's expert witness and to challenge his qualifications or familiarity with CSAAS.
With respect to the merits of defendant's contention that a Frye hearing was required, it is well settled that expert testimony concerning CSAAS is admissible to assist the jury in understanding the unusual conduct of victims of child sexual abuse provided that, as here, the testimony is general in nature and does "not attempt to impermissibly prove that the charged crimes occurred" (People v Carroll, 95 NY2d 375, 387; see People v Gillard, 7 AD3d 540, lv denied 3 NY3d 659; People v Doherty, 305 AD2d 867, 868, lv denied 100 NY2d 580; People v Miles, 294 AD2d 930, lv denied 98 NY2d 678), and a "Frye hearing was unnecessary [in this case] because the expert's testimony did not involve novel scientific evidence" (People v Middlebrooks, 300 AD2d 1142, 1143, lv denied 99 NY2d 630).
Perhaps a reader can inform us how CSAAS became so clearly established that admissibility of testimony about is beyond question. Where are the peer reviewed studies?
The Court also rejected defendant's contention that defense counsel was ineffective in failing to conduct an adequate cross-examination of the People's expert witness and to challenge his qualifications or familiarity with CSAAS.
What Constitutes an Unequivocal Assertion of the Right to Counsel?
In New York the unequivocal assertion of the right to counsel acts to preclude any further questioning unless there is a waiver of the right to silence in the presence of counsel. But what constitutes such an unequivocal assertion? That was the issue in People v Edwards (2008 NY Slip Op 07474 [10/3/08]. When two detectives sought to speak to Mr. Edwards he informed them that his union representative and a friend who is a Sheriff's Deputy advised him not to speak to the police. When the police responded that those people were not attorneys, Mr. Edwards replied that he did not have an attorney and could not afford one. Was that his way of saying that he wanted an attorney and was relying on his friends who most knew the law solely because he could not afford one? The trial court said no, and the Fourth Department held that the record supports the court's determination (the Court wrote that on this issue one should see generally People v Glover, 87 NY2d 838; People v Fridman, 71 NY2d 845; People v Hicks, 69 NY2d 969, rearg denied 70 NY2d 796; People v Dehmler, 188 AD2d 1056, lv denied 81 NY2d 1013).
The Court did not cite People v Porter (9 NY3d 966 [2007]), in which the Court of Appeals, last year, overturned the Appellate Division, Fourth Department's decision, on whether the circumstances established an unequivocal invocation of the defendant's right to counsel. The Court in Porter emphasized that in deciding on whether request is unequivocal, the court should look at the clear meaning of the statement and held that the defendant's words "I think I need an attorney", coupled with an interviewing officer's notation that defendant was "asking for an attorney" demonstrated an unequivocal invocation of defendant's right to counsel.
The Edwards decision does not explain why the statments of Mr. Edwards fell short of the standard applied in Porter.
The Court did not cite People v Porter (9 NY3d 966 [2007]), in which the Court of Appeals, last year, overturned the Appellate Division, Fourth Department's decision, on whether the circumstances established an unequivocal invocation of the defendant's right to counsel. The Court in Porter emphasized that in deciding on whether request is unequivocal, the court should look at the clear meaning of the statement and held that the defendant's words "I think I need an attorney", coupled with an interviewing officer's notation that defendant was "asking for an attorney" demonstrated an unequivocal invocation of defendant's right to counsel.
The Edwards decision does not explain why the statments of Mr. Edwards fell short of the standard applied in Porter.
Check the Certificate of Conviction -- It is Often Wrong
Since Corrections officials must follow the terms of a certificate of conviction, it is critical that appeals attorneys review the certificate of conviction and determine if it accurately reflects the appellant's convictions and sentences. In October, 2008 the Fourth Department noted errors in the certificates of conviction in seven different cases.
In People v Wynn (2008 NY Slip Op 07432 [10/3/08]) the certificate had the wrong predicate status.
In People v Switzer (2008 NY Slip Op 07452 [10/3/08]) the certificate of conviction provided
In People v Sweney (2008 NY Slip Op 07393 [4th Dept]) the certificate named the wrong judge.
In People v Mosley (2008 NY Slip Op 07423 [10/3/08]) the certificate incorrectly listed the consecutive sentences imposed.
In both People v Martin (2008 NY Slip Op 07281 [10/3/08]) and People v Dickerson(2008 NY Slip Op 07310 [10/3/08]) the certificate inaccurately reflected the length of the sentence imposed.
Finally, in People v Bassett (2008 NY Slip Op 07729 [10/3/08]) the certificate listed a higher level offense than that for which the defendant had been convicted.
It is clear that the Court pays attention to certificates of conviction. Counsel should do no less.
In People v Wynn (2008 NY Slip Op 07432 [10/3/08]) the certificate had the wrong predicate status.
In People v Switzer (2008 NY Slip Op 07452 [10/3/08]) the certificate of conviction provided
that a term of imprisonment of 1½ to 4½ years was imposed on that count, which is a legal sentence, but the sentencing minutes establish that the court imposed a term of imprisonment of 1½ to 4 years, which is an illegal sentence.The certificate also incorrectly stated that the conviction followed a jury trial. The case was remanded for re-sentencing.
In People v Sweney (2008 NY Slip Op 07393 [4th Dept]) the certificate named the wrong judge.
In People v Mosley (2008 NY Slip Op 07423 [10/3/08]) the certificate incorrectly listed the consecutive sentences imposed.
In both People v Martin (2008 NY Slip Op 07281 [10/3/08]) and People v Dickerson(2008 NY Slip Op 07310 [10/3/08]) the certificate inaccurately reflected the length of the sentence imposed.
Finally, in People v Bassett (2008 NY Slip Op 07729 [10/3/08]) the certificate listed a higher level offense than that for which the defendant had been convicted.
It is clear that the Court pays attention to certificates of conviction. Counsel should do no less.
An Issue Likely to Result in Appellate Relief, Even When Unpreserved
One issue that the Fourth Department has repeatedly reversed on, even when unreserved is the erroneous setting of the expiration date of an order of protection. For example, in February 2008, we noted that the Court in People v Smith (2008 NY Slip Op 00904 [4th Dept 2008)held that
[W]e agree with defendant that the court erred in calculating the expiration date of the order of protection without taking into account the jail time credit to which she is entitled (see People v Clinkscales, 35 AD3d 1266, 1267; People v Hare, 27 AD3d 1171, 1172, lv denied 6 NY3d 892, 894, 898). Although defendant failed to preserve that contention for our review, we exercise our power to review that contention as a matter of discretion in the interest of justice (see People v Fomby, 42 AD3d 894, 895; People v Valdez, 41 AD3d 1255, lv denied 9 NY3d 882).
Last week, in People v Cambridge (2008 NY Slip Op 07435 [10/3/08]) the Court went a step further and corrected such an unpreserved error, in the interest of justice, depsite there being a valid waiver of appeal.
[W]e agree with defendant that the court erred in calculating the expiration date of the order of protection without taking into account the jail time credit to which she is entitled (see People v Clinkscales, 35 AD3d 1266, 1267; People v Hare, 27 AD3d 1171, 1172, lv denied 6 NY3d 892, 894, 898). Although defendant failed to preserve that contention for our review, we exercise our power to review that contention as a matter of discretion in the interest of justice (see People v Fomby, 42 AD3d 894, 895; People v Valdez, 41 AD3d 1255, lv denied 9 NY3d 882).
Last week, in People v Cambridge (2008 NY Slip Op 07435 [10/3/08]) the Court went a step further and corrected such an unpreserved error, in the interest of justice, depsite there being a valid waiver of appeal.
Thứ Năm, 9 tháng 10, 2008
The American Bar Association
"Tom the Temp,
We’re updating the ABA Journal’s Blawg Directory. Currently we have you listed as an anonymous blogger. I’m double checking that that’s what you prefer. I’d also like to know if there’s more detail that we should add in our description in our directory.
Best,
Molly
abajournal.com"
With all due respect, I would prefer to remain anonymous. Frankly, I feel like an anonymous nothing in the eyes of the ABA anyway. The ABA is merely designed to protect the interests of biglaw partners and their buddies in academia and banking at the expense of everyone else. More jobs for professors who want cushy positions with little work, more profit for universities (for whom law schools are VERY profitable since they're so cheap to run), no oversight of law school fraudulent advertising, more indentured-for-life loan slaves for the financial people and agencies, and plenty of top 5 percenters to burn out in biglaw billing 3,000 hours per year.
During this recent credit crisis, the actions of the ABA have truly been disgraceful. The ruling this spring to allow for document review outsourcing is literally sucking thousands of jobs out of the country as we speak. In the same vein, "End of Esq." is now reporting that the ABA is setting it up in such a way that small town attorneys could now potentially be liable to clients for uninsured deposits in attorney escrow accounts. http://endofesq.com/?p=309
The American legal profession is now on its last legs. As a desperate attorney in Michigan recently wrote on a popular legal message board,
"My problem is that I have two more kids to go to college and the ID Law firm I was working at cut me and 4 others. They lost two ins company clients. I thought I was making partner. I'm now upside down on my home (75% drop in value and owe 80K on what was a $260K home) we’re living off savings and I'm making maybe 20 K this year. I'm 49 but will be 50 next week and setting up a competitive practice in Detroit would cost over 100 K. Two days ago I had lunch with a with a friend who is a partner of a firm and he couldn't have been sorrier but his firm is cutting 14 attorneys. Same with all my friends and contacts, there just isn't a position for me right now. Going to deer camp this weekend with seven attorneys (one of which posts here). Three of us are unemployed. First time that has happened. We've been camping together for 18 years. Found out last night that another friend, who has been a senior estate planning partner in a 50 + attorney firm has had his department closed. That’s another 5 attorneys out. I asked him if he was going to set-up his department as a firm and he said that the major clients have taken such a hit that he doesn't think the firm would make any money."
Thứ Hai, 6 tháng 10, 2008
Permissible To HaveTestimony That Jailhouse Informant's Cooperation Agreement Required Truthful Testimony
In People v Santana (2008 NY Slip Op 07377 [4th Dept 10/308]), the Court held that there was no error in permitting the attorney for a jailhouse informant to testify that pursuant to to the his cooperation agreement, the informant was required "to provide truthful cooperation" at defendant's trial in order to receive a downward departure of his federal sentence. The Court explained that since the informant had not yet testified, his attorney could not and, indeed, did not offer any opinion whether the informant had provided such truthful cooperation. Thus,
Further, the Court held that since defendant raised the issue of the informant's motive for testifying and his credibility, "the People were properly permitted to elicit the bolstering aspect of the cooperation agreement, i.e., the promise by the [informant] to testify truthfully" (Hayes, 226 AD2d at 1055; see People v Poppo, 292 AD2d 859, 860, lv denied 98 NY2d 679).
the attorney did not implicitly testify concerning the informant's credibility in violation of the Confrontation Clause or the advocate-witness rule (cf. United States v Roberts, 618 F2d 530), nor did her testimony usurp the jury's function to assess the informant's credibility (see People v Hayes, 226 AD2d 1055, 1056 lv denied 88 NY2d 936).
Further, the Court held that since defendant raised the issue of the informant's motive for testifying and his credibility, "the People were properly permitted to elicit the bolstering aspect of the cooperation agreement, i.e., the promise by the [informant] to testify truthfully" (Hayes, 226 AD2d at 1055; see People v Poppo, 292 AD2d 859, 860, lv denied 98 NY2d 679).
When it Comes to Instructions on the Right Not To Testify, Timing Is Everything
In People v Mcknight (2008 NY Slip Op 07355 [4th Dept 10/3/08]) the Court rejected the contention that reversal was warranted because the court failed to instruct the jury at the outset of the trial that defendant had a constitutional right not to testify.
Although defense counsel requested that instruction (see CPL 300.10 [2]), he did so after the People's opening statement and thus the request was untimely (see CPL 270.40). In denying the request, the court stated that it would give the instruction at the conclusion of the case, if requested to do so, and we conclude that "the court's decision to wait until after summations to deliver the instruction was not erroneous" (People v Rescigno, 152 AD2d 853, 854, lv denied 74 NY2d 851; see also People v La Mountain, 155 AD2d 717, 720, lv denied 75 NY2d 814; cf. People v Jeffries, 129 AD2d 962).
When Waiver of Appeal Does Not Encompass Sentencing Issue
Generally, the valid waiver by defendant of the right to appeal encompasses his challenges to the severity of the sentence (see People v Hidalgo, 91 NY2d 733, 737). There is an exception to this general rule. In People v Tolliver (2008 NY Slip Op 07341 [4th Dept 10/3/08]), the Court reaffirmed that even a valid waiver of the right to appeal does not encompass defendant's challenge to the severity of the sentence where the defendant waived his right to appeal before Supreme Court advised him of the maximum sentence that could be imposed (see People v Mingo, 38 AD3d 1270, 1271; see generally People v Lococo, 92 NY2d 825, 827).
Hearing Ordered on Claim of Ineffective Assistance of Counsel
In People v Wosu (2008 NY Slip Op 07292 [4th Dept 10/3/08],by a 3-2 vote, the Fourth Department held that it was error for a court to deny a 440.10 motion based on a claim of ineffective assistance of counsel (IAC). Since counsel framed the claim exclusively in therms of the United States Constitution that Copurt applied the federal test for IAC set forth in Strickland v Washington (466 US 668); see People v McDonald, 1 NY3d 109, 114-115).
On appeal Ms. Wosu relied on the decision of the Second Circuit with respect to a codefendant's application for a writ of habeas corpus based on ineffective assistance of counsel (Eze v Senkowski, 321 F3d 110). According to defendant, she and her two codefendants presented a unified defense at trial, and thus the same deficiencies in the representation of the attorney for the codefendant who sought a writ of habeas corpus were also present in the representation of defendant's trial attorney.
The dissent rejected the relevance of the holding in the co-defendant's case because Ms. Wosu's attorney presented an alibi defense. Thus, the dissenting justices reason, the deficiencies int he co-defendant's attack on the credibility of the complainant was less relevant.
On appeal Ms. Wosu relied on the decision of the Second Circuit with respect to a codefendant's application for a writ of habeas corpus based on ineffective assistance of counsel (Eze v Senkowski, 321 F3d 110). According to defendant, she and her two codefendants presented a unified defense at trial, and thus the same deficiencies in the representation of the attorney for the codefendant who sought a writ of habeas corpus were also present in the representation of defendant's trial attorney.
The dissent rejected the relevance of the holding in the co-defendant's case because Ms. Wosu's attorney presented an alibi defense. Thus, the dissenting justices reason, the deficiencies int he co-defendant's attack on the credibility of the complainant was less relevant.
Crawford Motions: Damned If You and Damned If You Don't
Assigned appellate counsel, who upon a review of the record conclude that there are no non-frivolous issues, may move to be relieved of the assignment (People v Crawford, 71 AD2d 38). In federal court this is known as an Anders brief (Anders v California, 386 US 738). However counsel must be very careful to file such a motion only if there are, in fact no frivolous issues. And even if there are such issues there are difficult issues that can arise in the decsion to file or not file such a motion.
First, the filing of such a motion, if warranted, may not only result in the attorney being relieved of the assignment, but also in the client's conviction being affirmed (see, e.g., People v Hill, 2008 NY Slip Op 07546 [4th Dept 10/3/08]). Thus, such a motion, in which defense counsel details why there are no issues to be raised on appeal from the conviction or sentence is the functional equivalent of a prosecutor's appellant's brief.
If that doesn't dissuade a defense attorney form filing such a motion, there is always the potential embarrassment of the court granting the motion, but then reassigning the appeal to another attorney because the first attorney failed to recognize that there non-frivolous issues that could be raised in the case. That happened in three cases in the most recent packet of Fourth Department decisions (People v Shampine (2008 NY Slip Op 07551 [4th Dept 10/3/08]; People v Spencer, 2008 NY Slip Op 07552 [4th Dept 10/3/08]; People v Spencer, 2008 NY Slip Op 07553 [4th Dept 10/3/08]).
Thus, for example, in People v Shampine (2008 NY Slip Op 07551 [4th Dept 10/3/08], the Court wrote
It is clear that these motions are filed at your peril and your client's peril.
But what do you do when the only non-frivolous issue is one that could hurt your client? For example, what if the sentence imposed was unlawfully short? Does an attorney have to file a brief challenging the sentence as unlawful? (See, People v Ammons (41 AD3d 1325)).
What if the client entered a plea to a lesser offense and already served the entire sentence and you see a possible issue regarding the plea? If you raise the issue regarding the plea and win your client faces the potential of a more serious conviction and more time. What if you are unable to get a response from your client as to what to do?
The Second Circuit provides one answer. In United States v. Ibrahim (62 F.3d 72 [2d Cir. 1995]) the Court held that where the defendant has not requested that appellate counsel challenge the validity of a plea and has not made such a challenge in a pro se brief, cousnel can file an Anders brief which should either state that counsel believes that defendant would run unacceptable risk of adverse consequences in challenging the validity of the plea or discuss why there are no non-frivolous issues regarding the validity of the plea.
The Fourth Department has no clear holding guiding counsel. But the Spencer decisions cited above suggest that in the Fourth Department counsel canot file an Anders or Crawford motion is such a circumstance. In both of those cases the defendant has pled to a lesser offense and served his sentence of imprisonment. So counsel filed a Crawford motion rather than risking the client getting convicted of a more serious offense and receiving more time. In both cases the Court held that
Thus, unlike the Second Circuit, it appears that the Fourth Department wants assigned counsel to raise such an issue.
First, the filing of such a motion, if warranted, may not only result in the attorney being relieved of the assignment, but also in the client's conviction being affirmed (see, e.g., People v Hill, 2008 NY Slip Op 07546 [4th Dept 10/3/08]). Thus, such a motion, in which defense counsel details why there are no issues to be raised on appeal from the conviction or sentence is the functional equivalent of a prosecutor's appellant's brief.
If that doesn't dissuade a defense attorney form filing such a motion, there is always the potential embarrassment of the court granting the motion, but then reassigning the appeal to another attorney because the first attorney failed to recognize that there non-frivolous issues that could be raised in the case. That happened in three cases in the most recent packet of Fourth Department decisions (People v Shampine (2008 NY Slip Op 07551 [4th Dept 10/3/08]; People v Spencer, 2008 NY Slip Op 07552 [4th Dept 10/3/08]; People v Spencer, 2008 NY Slip Op 07553 [4th Dept 10/3/08]).
Thus, for example, in People v Shampine (2008 NY Slip Op 07551 [4th Dept 10/3/08], the Court wrote
Upon a review of the record, we conclude that a nonfrivolous issue exists as to whether County Court erred in denying defendant's request for a downward departure from his presumptive risk level. Therefore, we relieve counsel of her assignment and assign new counsel to brief this issue, as well as any other issues that counsel's review of the record may disclose.
It is clear that these motions are filed at your peril and your client's peril.
But what do you do when the only non-frivolous issue is one that could hurt your client? For example, what if the sentence imposed was unlawfully short? Does an attorney have to file a brief challenging the sentence as unlawful? (See, People v Ammons (41 AD3d 1325)).
What if the client entered a plea to a lesser offense and already served the entire sentence and you see a possible issue regarding the plea? If you raise the issue regarding the plea and win your client faces the potential of a more serious conviction and more time. What if you are unable to get a response from your client as to what to do?
The Second Circuit provides one answer. In United States v. Ibrahim (62 F.3d 72 [2d Cir. 1995]) the Court held that where the defendant has not requested that appellate counsel challenge the validity of a plea and has not made such a challenge in a pro se brief, cousnel can file an Anders brief which should either state that counsel believes that defendant would run unacceptable risk of adverse consequences in challenging the validity of the plea or discuss why there are no non-frivolous issues regarding the validity of the plea.
The Fourth Department has no clear holding guiding counsel. But the Spencer decisions cited above suggest that in the Fourth Department counsel canot file an Anders or Crawford motion is such a circumstance. In both of those cases the defendant has pled to a lesser offense and served his sentence of imprisonment. So counsel filed a Crawford motion rather than risking the client getting convicted of a more serious offense and receiving more time. In both cases the Court held that
The record establishes that defendant moved prior to sentencing to withdraw his plea. The facts raise the issue of whether the court abused its discretion in denying defendant's motion. Therefore, we relieve counsel of his assignment and assign new counsel to brief this issue
Thus, unlike the Second Circuit, it appears that the Fourth Department wants assigned counsel to raise such an issue.
Thứ Năm, 2 tháng 10, 2008
Crooked Law School Deans
Whatever happened to the Attorney General's student loan conflict of interest investigation? The WSJ law blog is reporting today that Dean Richard Matasar of the overpriced New York Law School diploma mill is also chairman of the board of directors at the subprime student loan lender Access Group. Should the dean of an institution that puts out distorted post-graduate career stats designed to entice young people to commit financial suicide really be on the board of directors of an out of control subprime higher education loan lender? Aren't these corrupt conflict of interests exactly the sort of thing that caused this financial crisis?
http://blogs.wsj.com/law/2008/10/02/the-credit-crisis-and-law-school-loans-take-one/
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