Death of The Duopoly

Democrats and Republicans are at risk of becoming irrelevant, says Reason.com's Nick Gillespie, as more voters identify as Independents or with other groups like the Tea Party. He talks with WSJDN's Kelsey Hubbard about the shortcomings of the longstanding duopoly in American politics

THE SATURDAY ESSAY
Wall Street JUNE 18, 2011
LINK

Death of the Duopoly

Being binary is bad for business, so when will politics cure its bipolar disorder? Nick Gillespie and Matt Welch on the lessons Washington should learn from the real world.

By NICK GILLESPIE and MATT WELCH
 
Nothing in American life today seems as archaic, ubiquitous and immovable as the Republican and Democratic parties.


The two 19th-century political groupings divide up the spoils of a combined $6.4 trillion that is extracted each year from taxpayers at the federal, state, county and municipal levels. Though rhetorically and theoretically at odds with one another, the two parties have managed to create a mostly unbroken set of policies and governance structures that benefit well-connected groups at the expense of the individual.

Americans have watched, with a growing sense of alarm and alienation, as first a Republican administration and then its Democratic successor have flouted public opinion by bailing out banks, nationalizing the auto industry, expanding war in Central Asia, throwing yet more good money after bad to keep housing prices artificially high, and prosecuting a drug war that no one outside the federal government pretends is comprehensible, let alone winnable. It is easy to look upon this well-worn rut of political affairs and despair.

Journal Community

And Americans are, in increasing numbers. Perhaps the most important long-term trend in U.S. politics is the four-decade leak in market share by the country's two dominant parties. In 1970, the Harris Poll asked Americans, "Regardless of how you may vote, what do you usually consider yourself—a Republican, a Democrat, an independent or some other party?"

Fully 49% of respondents chose Democrat, and 31% called themselves Republicans. Those figures are now 35% for Democrats and 28% for Republicans. While the numbers have fluctuated over the years, the only real growth market in politics is voters who decline affiliation, with independents increasing from 20% of respondents to 28%.

These findings are consistent with other surveys. In January, Gallup reported that the Democrats were near their lowest point in 22 years (31%), while the GOP remained stuck below the one-third mark at 29%. The affiliation with the highest marks? Independent, at 38% and growing. In a survey released in May, the Pew Research Center found that the percentage of independents rose from 29% in 2000 to 37% in 2011.

POLITICS2

It is generally taken for granted that the Democrats and Republicans will always be around. But that may just be the influence of what cognitive scientists call "existence bias"—the pervasive idea that the status quo is stable and ongoing. What if the same factors that have given our incumbent parties an advantage also threaten to hasten their demise?

Economists have a particular fondness for studying what Democrats and Republicans have become: the longest-lived duopoly in American history. The Nobel Prize-winning economist John Forbes Nash (the subject of the book and movie "A Beautiful Mind") was all about duopolies. He showed that two powerful competitors frequently end up locked in a stable, mutually beneficial dance of tit-for-tat—they collude, in short, to carve up a captive market.

Economists have paid less attention to the chief vulnerability of duopolies: How collusion against the interests of customers produces an inevitable revolt, sweeping one or both dominant players into the dustbin of history.

In a widely circulated 2009 paper surveying the economic literature on the topic, the late Larry F. Darby presented a list of classic duopolies, including such familiar pairings as MCI and AT&T, and Macy's and Gimbels. Tellingly, several of the players no longer existed: MCI (then known as WorldCom) became history's largest bankruptcy in 2003; Gimbels was the country's dominant department store chain in the 1930s but went out of business in 1987.

There is nothing inherently stable about two organizations dominating a particular market in the hurly-burly of modern American life. In fact, there are many reasons to suspect that such arrangements are unstable—particularly when technology allows captive consumers to flee.

It is worth taking a closer look at one case on Mr. Darby's list: Kodak and Fujifilm. For much of the 20th century, Kodak was synonymous with color photography. Memories captured on film were "Kodak moments," and the Dow Jones Industrial Average listed the company for more than seven decades. At one point it enjoyed an amazing 96% share of the U.S. market for film. Such was its dominance that the federal government sued Kodak for antitrust violations not once but twice, producing out-of-court settlements in 1921 and 1954.

Fujifilm began competing with Kodak globally in the 1970s and seriously in the U.S. after the 1984 Olympics. Though always the junior partner on Kodak's home turf, the conglomerate held its own enough that the duopoly soon attracted academic studies. Their underlying assumption was that the duopoly would be stable for the foreseeable future.

But the studies were wrong. The share price of Eastman Kodak tumbled from $60 in 2000 to below the $4 mark by 2011.

What happened? Like many duopolies, Kodak and Fujifilm treated their customers like captives, forcing them to pay for pictures they didn't want and steering them toward ever-pricier analog products. This worked as long as consumers had nowhere else to turn. But digital technology, as we know, changed all that, giving customers not just a Kodak/Fuji-free workaround, but the power to make, delete, alter and otherwise control their own creative product.

Or consider the American craft-beer revolution, which people who went to college in the 1980s or before can testify is almost impossible to believe. As in politics, a duopoly—Anheuser-Busch InBev and MillerCoors—soaks up the vast majority (around 80%) of market share. But now the legacy giants are steadily leaking market share and buzz, while upstart craft-beer makers are cashing in on the only sector of the industry showing consistent growth.

Netscape or Internet Explorer, Crest or Colgate, stuffing or potatoes: When given real choice, especially the choice to go elsewhere, consumers will drop even the most beloved of brands for options that enhance their experience and increase their autonomy. We have all witnessed and participated in this revolutionary transfer of loyalty away from those who tell us what we should buy or think and toward those who give us tools to think and act for ourselves. No corner of the economy, of cultural life, or even of our personal lives hasn't felt the gale-force winds of this change.

Except government.

Think of any customer experience that has made you wince or kick the cat. What jumps to mind? Waiting in multiple lines at the Department of Motor Vehicles. Observing the bureaucratic sloth and lowest-common-denominator performance of public schools, especially in big cities. Getting ritually humiliated going through airport security. Trying desperately to understand your doctor bills. Navigating the permit process at city hall.

Whatever examples you come up with, chances are good that the culprit is either a direct government monopoly (as in the providers of K–12 education) or a heavily regulated industry or utility where the government is the largest player (as in health care).

Unlike government, Kodak doesn't have a guaranteed revenue stream. If consumers abandon its products, sales will be zero, and the company will disappear. The history of private-sector market dominance is filled with such seemingly sudden disappearing acts: Big-box music retailers and bookstores were supposed to bestride the land like colossi at the turn of our new century, but Virgin megastores have all but disappeared, and Borders has just gone bankrupt.

A more efficient system is on the doorstep of our most stubborn, foot-dragging sector: government.

There is a positive correlation between an organization's former dominance and its present-day inability to cope with change. As the technology business consultant Nilofer Merchant has aptly put it, "The Web turns old industries on their head. Industries that have had monopolies or highly profitable duopolies are the ones most likely to be completely gutted when a more powerful, more efficient system comes along."

Fortunately, a more efficient system is finally on the doorstep of America's most stubborn, foot-dragging, reactionary sector—government at the local, state and especially federal levels—and its officially authorized, customer-hating agents, the Democrats and Republicans.

As the number of independents rises, voters who are free from party affiliations are more inclined to view political claims with due skepticism. By refusing to confer legitimacy on the two accepted forms of political organization and discourse, they hint strongly that another form is gathering to take their place.

Something potentially revolutionary is afoot in our politics. The Bush-Obama era of bailout economics and perennially deferred pain has produced a political backlash. When blue-state California was allowed in May 2009 to pass judgment on a multipart budget-fix referendum that had received nearly unanimous support from the state's politicians and interest groups, the measures lost by an average of 30 percentage points, despite opponents having been vastly outspent.

Eight months later, unknown Republican Scott Brown won Teddy Kennedy's old Senate seat in overwhelmingly Democratic Massachusetts. Congressmen mostly canceled their traditional August town hall meetings in 2010 after getting too many earfuls in 2009.

For the first time in recent memory, participants in the political process, many of them newly engaged, are openly imagining and pushing for a world other than the one they currently live in. Voters are seizing control over the means of production, meeting up with strange new subgroups, and having a blast in the process. The future—even the present—belongs not to the central re-election committee but to the decentralized single-issue swarm. Wherever both parties have colluded in erecting a roadblock to the desires of American voters, there are citizen groups creating angry and effective coalitions to confront the status quo.

The decentralized and effectively leaderless Tea Party is the most potent example of this permanent non-governing minority. The movement has focused like a laser beam on what all but a few Washington politicians won't dare to touch: actually cutting spending and debt. Whether the group will be able to maintain its emphasis on stanching the nation's flow of red ink while avoiding divisive social issues is an open question. But there's no denying that the Tea Party's biggest impact has come by backing challengers to entrenched Republican candidates.

A similar phenomenon is visible in rising opposition to the drug war. Last fall, people from the far right, the far left and everywhere in between banded together in California to push an outright marijuana-legalization law. The initiative, derided as crazy by California's political class, pulled an impressive 46.5% of the vote.

And in the school-choice movement, politicians such as New Jersey's Republican Gov. Chris Christie and Newark's Democratic Mayor Corey Booker may agree on nothing else but ending the public school monopoly on K-12 education.

Such new configurations do not mean that the Democrats and Republicans will disappear anytime soon. Unlike Kodak and Fujifilm, they have a guaranteed revenue stream, and they get to write their own rules for survival. But the demonstrated ability of disgruntled voters to create whole new ways of doing things has made our political duopolists less secure and complacent.

At a time when governments at every level have run out of money, the smart politicians will figure out how to unbundle policy options and speed up the sort of innovation that has made most areas of our lives better than they were 40 years ago.

And the dumb politicians? They'll go the way of Kodak.

—Adapted from "The Declaration of Independents: How Libertarian Politics Can Fix What's Wrong with America" by Nick Gillespie and Matt Welch, to be published by PublicAffairs on June 28. Copyright © by Nick Gillespie and Matt Welch.

In Selzer v New York City Tr. Auth., NYS Supreme Court Sets The Verdict Aside

Selzer v New York City Tr. Auth.

2011 NY Slip Op 51015(U)
Decided on May 18, 2011
Supreme Court, New York County
Kenney, J.

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on May 18, 2011
Supreme Court, New York County

Wilder Selzer, Plaintiff,
against
New York City Transit Authority, Defendant.
112370/07

Plaintiff's Counsel:
Langsam Law
7 Dey Street, Suite 500
New York, NY 10007
212) 742-2700

Defendant's Counsel:
Smith & Laquercia, P.C.
291 Broadway
New York, NY 10007
(212) 227-3333

Joan M. Kenney, J.

Papers considered in review of this motion to set aside a verdict:

Notice of Motion, Affirmation, and Exhibits1-7
Opposition Papers, Affirmation with Exhibits8-13

Plaintiff's application seeks an Order pursuant to CPLR 4404(a), setting aside a jury verdict, and finding in favor of plaintiff as to liability and granting plaintiff a new trial on the issue of damages. Defendant opposes the motion.

Background

In this personal injury action that was tried before a jury from December 3, 2010 through December 8, 2010, the jury rendered a verdict in favor of defendant, the New York City Transit Authority (TA). This Court presided over the jury trial. The case involved a claim by plaintiff, a passenger on an TA subway, that he was injured due to an unidentified conductor's closing of the [*2]subway doors while he was exiting the subway car. Plaintiff's right leg was allegedly trapped in the closing doors. Plaintiff testified that the lower part of his leg was trapped in the closed subway doors, causing him to fall and sustain multiple fractures to his leg. Plaintiff underwent an open reduction with internal fixation to treat the spiral fractures of his tibia and fibula.

Plaintiff argues seeks a new trial pursuant to CPLR 4404(a) on the grounds that the verdict was against the weight of the evidence and not in the interest of justice, due to the misconduct of counsel for the TA.

Defendant's counsel argues that his conduct did not rise to a level necessitating a new trial.

Discussion

The discretion of a trial court to set aside the jury verdict pursuant to CPLR Section 4404(a) is a broad one intended to ensure that justice is done. CPLR §4404(a) states in pertinent part that:

"[a]fter a trial of a cause of action or issue triable of right by a jury, upon the motion of any party or on its own initiative, the court may set aside a verdict or any judgment entered thereon and direct that judgment be entered in favor of a party entitled to judgment as a matter of law or it may order a new trial of a cause of action or separable issue where the verdict is contrary to the weight of the evidence, in the interest of justice or where the jury cannot agree after being kept together for as long as is deemed reasonable by the court.

The power to set aside a jury verdict and order a new trial is an inherent one (McCarthy v Port of NY Auth., 21 AD2d 125, 127, [1st Dept 1964]), which is codified in New York in CPLR 4404(a). The power is a broad one intended to ensure that justice is done (see, Siegel, New York Prac. §406), but the proper standard for setting aside a jury verdict is elusive and has long defied precise definition (see, Mann v Hunt, 283 AD 140 [3d Dept 1953]). Nevertheless, a close examination of the precedents reveals several principles that tend to outline the parameters of this Court's function on such a motion.

Whether a jury verdict is against the weight of the evidence is essentially a discretionary and factual determination which is to be distinguished from the question of whether a jury verdict, as a matter of law, is supported by sufficient evidence (Cohen v Hallmark Cards, 45 NY2d 493, 498-499 [1978]; Yalkut v City of New York, 162 AD2d 185 [1st Dept 1990]). The criteria for setting aside a jury verdict as against the weight of the evidence are less stringent, for such a determination results only in a new trial and does not deprive the parties of their right to ultimately have all disputed issues of fact resolved by a jury (Cohen, supra, at 498).The fact that determination of a motion to set aside a verdict involves judicial discretion does not imply, however, that this Court can freely interfere with any verdict that is unsatisfactory or with which it disagrees. A preeminent principle of jurisprudence in this area is that the discretionary power to set aside a jury verdict and order a new trial must be exercised with considerable caution, for in the absence of indications that substantial justice has not been done, a successful litigant is entitled to the benefits of a favorable jury verdict. "Fact-finding is the province of the jury, not the trial court, and a court must act cautiously or it could engage in an overzealous enforcement of its duty to oversee the proper administration of justice. A court cannot overstep its bounds and unnecessarily interfere with the fact-finding function of the jury to a degree that amounts to an usurpation of the jury's duty" (citations omitted). Nicastro v Park, 113 AD2d 129 [2d Dept 1985]).

Analysis of the cases reveals that particular deference has traditionally been accorded to jury [*3]verdicts in favor of defendants in tort cases because the disputed factual contentions are often sharper and simpler, and the jury need not find that a defendant has prevailed by a preponderance of the evidence, but rather may simply conclude that the plaintiff has failed to meet the burden of proof, establishing the defendant's culpability (citations omitted). Nicastro v Park, supra at 189.

As a general matter, "[i]ndeed, the court must cautiously balance the great deference to be accorded to the jury's conclusion ... against the court's own obligation to assure that the verdict is fair (citations omitted)." Bennett v Wolf, 40 AD3d 274 [1st Dept 2007]; McDermott v. Coffee Beanery, Ltd., 9 AD3d 195, 206 [1st Dept 2004]; Sepulveda v Aviles, 308 AD2d 1 [1st Dept 2003]; see, Mitchell v Yueh S. Wu, 38 AD3d 507 [2nd Dept 2007]).

Plaintiff argues inter alia, that a critical fact ignored by the jury, is that the expert's testimony regarding plaintiff's physical examination of plaintiff and the attendant medical records, went unrebutted. The TA did not call a medical expert to refute the testimony of plaintiff's expert. Plaintiff's expert, an orthopedic surgeon, testified that spiral fractures often occur when a foot and/or ankle are held in a fixed position, while the rest of the body twists. Plaintiff contends that the expert testimony corroborates plaintiff's version of how the accident occurred.

It is well settled that expert opinion evidence "must be based on facts in the record or personally known to the witness. [The expert] cannot reach his conclusion by assuming material facts not supported by evidence." (Cassano v. Hagstrom, 5 NY2d 643, 646 [1959]; Roques v Noble, 73 AD3d 204 [1st Dept 2010]). Here, the only statements indicating that the accident did not occur in the manner claimed by plaintiff, were the hypothetical statements made by defendant's counsel during his cross-examinations and summation. The TA conductor's testimony was based on speculation, because he testified that he did not know whether he was operating the doors in question at the time of the accident.

Given the plausible, uncontradicted evidence from plaintiff that the accident occurred in the manner he claimed, and not in the manner which defense counsel asserted, substantial justice would not be done if the verdict were permitted to stand. Moreover, plaintiff introduced competent testimony from an orthopedic surgeon, that plaintiff's injuries were the result of a trapping of the lower part of his foot or ankle.[FN1]

The weighing of the evidence is left entirely to this court's discretion, and this discretion may be exercised to set aside a verdict even where the evidence may be technically sufficient to sustain it (see, Siegel-NYPRAC §406; Cohen, supra, at 498-499). The court finds that the verdict is against the weight of the evidence. When there is something about the case that arouses a court's suspicions and makes it uncomfortable, although it cannot say clearly that the result can go in only one direction. It may be some misconduct on the part of counsel that the judge thinks may have influenced the verdict (see, Siegel-NYPRAC § 406, citing, Robinson v Klein, 21 AD2d 778 [1st Dept 1964]).

To obtain a new trial in the interest of justice, "[t]he Trial Judge must decide whether substantial justice has been done, whether it is likely that the verdict has been affected ... and must look to [her] own common sense, experience and sense of fairness rather than to precedents in [*4]arriving at a decision.' ... This power conferred upon a court to order a new trial is discretionary in nature." Micallef v Miehle Co., 39 NY2d 376, 381, (1976).

Plaintiff contends that the TA's attorney's misconduct tainted the course of the trial so that any chance for fair outcome was effectively destroyed, warranting new trial. Plaintiff argues that the TA's attorney interjected his own view of facts as to how he would personally enter and exit a subway train based upon his own experience and, that plaintiff was "rushing" home; and plaintiff never tried to exit the subway before the doors began to close. See, Valenzuela v City of New York, 59 AD3d 40, 869 (1st Dept 2008).Although a new trial may be granted in the rare circumstance that counsel's remarks rise to a watershed of prejudice so profound that it deprives the other party of a right to a fair trial, see e.g., Smith v City of New York, 217 AD2d 423, 424 (1st Dep't 1995), the watershed marker is very high, since the law allows for a wide latitude in the types of remarks allowed during trial and summation including comment, denunciation or appeal in advocating his/her cause. The TA attorney's conduct did not consist merely of a few, isolated, errant remarks. Rather, the remarks were repeated and calculated to influence the jurors by considerations not legitimately before them.

During his closing, the TA attorney also made the following statements:

TA'S Counsel:"After all, if you imagine a person standing in a doorway just standing there when the doors closed — - - and all of you [have] seen this happe[n] and I know this, during jury selection, you've all seen doors close on people and passengers, okay. You know what happens. It's the upper part of the person's body that's contacted."

Plaintiff's Counsel: Objection

Court:Sustained

TA's Counsel:". . . [B]ecause as I said in my opening, the plaintiff's body was outside of the train at the time of the occurrence. Why was it that way? I have no idea but it wasn't because his leg just happened to be at a particular point that it could be grabbed and held . . ."

"Think about it, how it happened. If he were going through, the upper part of his body would have been hit and would have been the contact point, his arm, shoulder, or something like that . . ."

Plaintiff's Counsel: "Objection"

Court:"Sustained"

TA's Counsel:"But not his leg."

Court:"Sustained"

TA's Counsel:"There is no other way I see it."

(Exhibit "A" annexed to moving papers).

A lawyer shall not assert personal knowledge of the facts in issue, except when testifying as a witness, and shall not assert a personal opinion as to the credibility of a witness (Code of Professional Responsibility, DR 7-106 [C](3)(4) [22 NYCRR § 1200.37(c)(3),(4)]; see also People v Paperno, 54 NY2d 294, 300-01 [1981]). This conduct amounts to a subtle form of testimony, as to which the opposing party cannot cross-examine (id., citing Paperno, at 301). In ruling on a motion for a new trial based on attorney misconduct, the trial court must determine, in its discretion, whether counsel's conduct created "undue prejudice or passion which played upon the sympathy of the jury" (Valenzuela, supra).

This Court cannot condone defendant's counsel's violation of these basic ethical and [*5]disciplinary rules. Further, this Court's observation was that defendant's counsel so tainted the course of the trial that he effectively destroyed any chance for a fair outcome by interjecting his own view of the facts to the jury."A new trial should be granted in the interests of justice only if there is evidence that substantial justice has not been done ... as would occur, for example, there has been misconduct on the part of the attorneys or jurors." (Gomez v Park Donuts, 249 AD2d 266 [2nd Dept 1998]; see also Schafrann v N. V Famka, Inc., 14 AD3d 363, 364, [1st Dept 2005]).

A verdict should be set aside only when the misconduct of the jury was likely to cause prejudice to one of the parties. Rather than employ a "per se" rule as to what constitutes prejudicial misconduct, courts make the determination on a "case-by-case basis, and the facts in each case must be examined to determine the nature of the material placed before the jury and the likelihood that prejudice would be engendered" (Taylor v Port Authority of New York and New Jersey, 202 AD2d 414 [2nd Dept 1994] [citations and internal quotations omitted]). As this standard suggests, the party claiming misconduct need not prove prejudice to an absolute certainty, but rather, that such prejudicial effect was "likely" (Edbauer v Board of Ed. of North Tonawanda City Sch. Dist., 286 AD2d 999 [4th Dept 2001]).

The TA's counsel created an atmosphere that deprived the plaintiff of a fair trial, not by an isolated remark during summation, but by continual and deliberate efforts to divert attention from the issues (see Vassura v. Taylor, 117 AD2d 798, 799 [2nd Dept 1986]; Mercurio v Dunlop, Ltd., 77 AD2d 647 [2nd Dept 1986]). For example, the TA's counsel repeatedly denigrated the ethics and veracity of the plaintiff and his counsel (see Clarke v New York City Tr. Auth., 174 AD2d 268, 276 [1st Dept 1992]; Weinberger v. City of New York, 97 AD2d 819, 820 [2nd Dept 1983]). The inflammatory and prejudicial comments made by defendant's counsel so contaminated the proceedings as to deny plaintiff his right to a fair trial (see Vassura v Taylor, supra).

According to a dissenting juror, defense counsel's speculative remarks regarding his personal theory regarding the cause of plaintiff's injuries, as well as, similar improper remarks made during summation and cross examination , e.g., plaintiff "jetting out of the train," were relied upon by the remaining jurors, rather than the uncontested witnesses' evidentiary testimony. The dissenting juror was so concerned that the remainder of the jurors were ignoring the evidence, that she asked for a read back of the charge relating to the inadmissability of counsel's remarks made during opening and closing statements.

As a rule of law, the discretionary power afforded to this Court to set aside a jury verdict and to order a new trial can only be exercised with considerable caution. There are strong indications that substantial justice has not been done in this case, therefore plaintiff is entitled to a new trial. Ohdan v City of New York, 268 AD2d 86 (1st Dept 2000); Berry v. Metropolitan Transportation Authority, 256 AD2d 271 (1st Dept 1998).

Accordingly, it is
ORDERED that plaintiff's motion is granted in part and denied in part; and it is further
ORDERED that plaintiff is granted a new trial on all issues; and it is further
ORDERED that plaintiff's counsel is to serve a copy of this Order upon the appropriate clerk's office so as to cause this case to be placed upon the Part 40 calendar.

Dated: May 18, 2011
E N T E R: [*6]
Hon. Joan M. Kenney
J.S.C.

Attorney Ravi Batra Wins Right To Depose Defendant Parties From the TV Show Law & Order

Ravi Batra, Plaintiff

against

Dick Wolf, LYDIA MAYBERRY, ERIC OVERMYER, NOAH BAYLIN, MARY GAMBARDELLA, JENNIFER VON MAYRHAUSER, RUTH PONTIOUS, SANDY DEBLASIO, ANNE NEWTON-HARDING, MICHAEL STRUK, PARK DIETZ, WOLF FILMS, RICHARD SWEREN, PETER JANKOWSKI, JEFFREY HAYES, MATTHEW PENN, MICHAEL S. CHERNUCHIN, DAVID POST, LORENZO CARCATERRA, AARON ZELMAN, MARC GUGGENHEIM, GARY KARR, WILLIAM N. FORDES, ROZ WEINMAN, ARTHUR W. FORNEY, WENDY BATTLES, KATI JOHNSTON, RICHARD DOBBS, LYNN KRESSEL CASTING, NBC TELEVISION, UNIVERSAL NETWORK TELEVISION LLC, NBC UNIVERSAL NY, AND UNIVERSAL STUDIOS, Defendants.

116059/2004
Plaintiff
Ravi Batra Esq.
142 Lexington Avenue, New York, NY 10016

For Defendants
Elizabeth McNamara Esq.
Davis Wright Tremaine, LLP
1633 Broadway, New York, NY 10019

Lucy Billings, J.

I.INTRODUCTION

Plaintiff, a New York attorney, sues defendants, all associated in various capacities with the television series Law & Order, for defamation arising from the depiction of a lead character in the "Floater" episode of Law & Order. He claims the episode was based on the scandal involving crimes by attorney Paul Siminovsky and Justice Gerald Garson, but cast an Indian American of plaintiff's age with his first name in the Siminovsky role.

Plaintiff moves to compel disclosure. C.P.L.R. § 3124. This decision and order address plaintiff's notices demanding depositions of defendants Dick Wolf, Peter Jankowski, Jeffrey Hayes, and Kati Johnston, to which defendants have objected. C.P.L.R. § 3107. Upon oral [*2]argument June 17 and July 8, 2010, for the reasons explained below, the court grants plaintiff's motion to the extent of compelling these defendants' depositions, on the conditions specified.

"Any party may take the testimony of any person by deposition," without an initial showing of materiality. C.P.L.R. § 3106. See Seltzer v. Bayer, 272 AD2d 263, 266 (1st Dep't 2000); Fasciglione v. D.C.D. Advert., Ltd., 256 AD2d 215 (1st Dep't 1998). Although C.P.L.R. § 3103(a) confers "broad discretion" on the court to issue protective orders denying or limiting disclosure, including depositions, "to prevent unreasonable annoyance, expense, embarrassment, disadvantage, or other prejudice to any person," see Lipin v. Bender, 84 NY2d 562, 570 (1994); Jones v. Maples, 257 AD2d 53, 56 (1st Dep't 1999), the rule disfavors limitations. Emile v. Big Brothers/Big Sisters of New York City, Inc., 292 AD2d 297, 298 (1st Dep't 2002).

II.PRECLUDING DEFENDANTS' DEPOSITIONS

As named defendants, Wolf, Jankowski, Hayes, and Johnston must anticipate expending time and effort defending themselves and thus disclosing information relevant to their defenses. See C.P.L.R. § 3101(a)(1) and (2). Only the most extreme circumstances would shield defendants from their depositions, such as systematic harassment by plaintiff, including breaking into and entering defendants' apartments and distributing forged obscene images of defendants to their family, friends, and associates, or defendants' severe psychiatric disorders such that a deposition would endanger their mental health. Jones v. Maples, 257 AD2d at 56-57; Button v. Guererri, 298 AD2d 947 (4th Dep't 2002). Defendants have not indicated any remotely comparable circumstances.

The standard allowing disclosure of "all matter material and necessary," C.P.L.R. § 3101, is by those terms broad and to be "interpreted liberally to require disclosure, upon request, of any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity." Allen v. Crowell-Collier Publ. Co., 21 NY2d 403, 406 (1968); Osowski v. Amec Const. Mgmt., Inc., 69 AD3d 99, 106 (1st Dep't 2009). Defendant Wolf Films, a business entity of unspecified form, was responsible for production of Law & Order. Defendant Wolf, the Chairman of Wolf Films, had ultimate authority over production of the Law & Order episode, received the reports clearing names for use on the show, and is in a position to know the contracts and relationships among the business entities associated with Law & Order or involved in the "Floater" episode's production. Defendant Matthew Penn, a producer of the episode, testified at his deposition that Wolf had authority to alter the show's scripts, authority Penn likely would not mention unless Wolf had exercised it.

Defendant Jankowski, the President of Wolf Films and in charge of that entity's budget and personnel, is likely in a position to clarify the precise responsibilities of the Law & Order staff. Even if the depositions of Wolf and Jankowski ultimately establish their lack of responsibility for any defamation, which they obviously have not accomplished yet, they still may have observed, heard, or otherwise learned information that would point plaintiff to admissible evidence. Even if they insist they remember nothing regarding the "Floater" episode, plaintiff is entitled to test their lack of memory and attempt to refresh it, whether about the script, developing it into a film, or any other information leading to admissible evidence.

As an Executive Producer of Law & Order, defendant Hayes oversaw the production of the "Floater" episode, was involved in readings of its script and auditions for the episode, and likely participated in or at least witnessed discussions or decisions regarding the alleged defamatory character. Again, even if not responsible for any defamation, he still may be witness to it, and, in any event, defendants have not as yet established their nonliability.

As a Line Producer for Law & Order, defendant Johnston was similarly in a position to have participated in or witnessed discussions or decisions regarding the character. Although Johnston in her affidavit denies working on the "Floater" episode, plaintiff is entitled to attempt to refresh her recollection given the contradictory deposition testimony by defendant Eric Overmyer, the writer of the "Floater" script. He testified that he did interact with Johnston in recording the episode, and she was present for readings of its script before the script was in final [*3]form.

Plaintiff suggests, and no evidence refutes, that this phase of script development may have been when a story based on the Siminovsky-Garson scandal evolved to cast an Indian American as the attorney involved. If, as plaintiff further alleges, contemporaneous publicity about him inspired the use of an Indian American attorney, any decision to carry out that inspiration involved business judgment, weighing the risks versus the episode's success, by executives like Jankowski and Wolf. Producers like Hayes and Johnston may well be in a position to identify who provided creative direction for Law & Order episodes' content. If Johnston did not work on the "Floater" episode, she may be in a position also to identify which line producer did.

III.LIMITING THESE DEFENDANTS' DEPOSITIONS

These defendants' status as employees at high levels that may remove them from direct knowledge of material information does not insulate them from depositions. Plaintiff seeks to depose all four witnesses in their capacity as named defendants, not merely in their capacity as employees of defendant. C.P.L.R. § 3101(a)(1) and (2). See Broadband Communications v. Home Box Off., 157 AD2d 479, 480 (1st Dep't 1990); Saieh v. Demetro, 201 AD2d 477 (2d Dep't 1994).

Insofar as these defendants' high level positions limit their knowledge, however, their removed positions may limit their depositions. If defendants continue to display a sincere lack of memory, plaintiff may not test and attempt to refresh it endlessly. Had defendants requested or the record indicated that the information to be gleaned from these defendants was equally available through a less burdensome disclosure device, the court might preclude depositions until after plaintiff used that device and then showed it to be insufficient. Button v. Guererri, 298 AD2d 947. Likewise, time limits may prevent "unreasonable annoyance" or harassment. C.P.L.R. § 3103(a). See Bielat v. Montrose, 249 AD2d 103 (1st Dep't 1998).

IV.CONCLUSION

For the foregoing reasons, the court grants plaintiff's motion to compel the depositions of defendants Dick Wolf, Peter Jankowski, Jeffrey Hayes, and Kati Johnston, subject to the following conditions, unless the parties stipulate otherwise. Plaintiff shall re-serve notice of the times and places for these defendants' depositions, consistent with C.P.L.R. §§ 3107 and 3110. Plaintiff shall be limited to three hours per deposition for his questions and each defendant's answers, exclusive of objections or colloquy by defendants' attorneys, as well as interruptions or breaks off the record.

DATED: August 23, 2010
LUCY BILLINGS, J.S.C.

Alexander Kaplan, Esq., Sentenced To 46 months In Prison For Mortgage Fraud Scheme

Real Estate Lawyer Sentenced in Manhattan Federal Court to 46 Months in Prison for His Role in a Multimillion-Dollar Mortgage Fraud Scheme

U.S. Attorney’s Office June 21, 2011
* Southern District of New York (212) 637-2600

Press Release

PREET BHARARA, the United States Attorney for the Southern District of New York (pictured above), announced that ALEXANDER KAPLAN, formerly a Brooklyn-based real estate lawyer and the owner of a title insurance company, was sentenced on Friday, June 17, 2011, in Manhattan federal court to 46 months in prison by United States District Judge RICHARD J. HOLWELL for his role in a multimillion dollar mortgage fraud scheme. KAPLAN was convicted, on February 6, 2009, of eighteen counts of mortgage fraud after a two-week jury trial.

According to the evidence presented at trial and statements made in court:

From late 2004 through January 2007, KAPLAN and his coconspirators obtained hundreds of mortgage and home equity loans by submitting loan applications and supporting documents to various lenders that contained false information about, among other things, the prospective borrower’s employment, income, and intent to reside in the property in question, as well as the fair market value of the property.

The fraud also involved paying individuals who fit a certain financial profile to act as phony purchasers, or “straw buyers,” of the target properties. KAPLAN’s co-conspirators then prepared and submitted false and misleading information concerning the straw buyers’ current residences, employment, income, assets, and existing debt. False documentation, such as bank statements and proof of income, were also created and submitted to the lenders.
In addition, KAPLAN and his co-conspirators sought mortgages and home equity loans at values that were in excess of properties’ actual sale prices and, therefore, the properties’ true market values. To support applications for loans in excess of the properties’ market values, they procured artificially inflated appraisals of the market value of the target properties. Using these false appraisals, KAPLAN’s co-conspirators received mortgages and other loans in excess of the actual sale price of the properties securing the loans. The difference between the appraised value of the property and the property’s actual sale price represented, in part, the profits from the scheme.

KAPLAN’s role in the scheme largely centered on the purchase of a block of ten rent-regulated condominium apartments at 243 West 98 Street, on the Upper West Side of Manhattan th (“the Apartments“). Over the course of two separate days in January 2006, KAPLAN served as the attorney for the buyers and the banks in the closings of the Apartments. He conspired with others to obtain mortgages, based on false statements and material omissions, to finance 100 percent of the purchase price of the Apartments.

In his capacity as the buyers’ attorney and bank attorney, KAPLAN presided over the closings, and obtained signed and completed false documents, including, among other things, loan application documents, on which each of the buyers indicated that the Apartment was to be a “primary residence,” and false affidavits stating that the buyers intended to occupy the Apartments. He submitted these fraudulent documents to the lenders.

Almost all of the Apartments were then resold, or “flipped,” to straw-buyers within a matter of months after their initial purchases. The purported sales prices for each of the flips was almost twice the initial purchase price, and KAPLAN’s co-conspirators obtained almost $13 million in additional loans on the Apartments by submitting false information and documents to various lenders. KAPLAN served as both the buyer’s and seller’s attorney for each of these flips, drafting sham contracts of sale and other necessary documentation. He also served as the attorney for the banks at the closings of certain loans obtained in connection with the flips of the Apartments.

In addition to the prison term, Judge HOLWELL sentenced KAPLAN, 36, of Brooklyn, New York, to three years of supervised release.

Mr. BHARARA praised the efforts of the Federal Bureau of Investigation, the New York City Police Department, and the United States Bureau of Immigration and Customs Enforcement. He also thanked the New York State Attorney General’s Office for its outstanding work in the investigation.

This case is being prosecuted by the Office’s Organized Crime Unit. Assistant United States Attorneys AVI WEITZMAN and KATHERINE R. GOLDSTEIN are in charge of the prosecution.

Mortgage Fraud: 02-09-09 Alexander Kaplan, Guilty

Posted on February 9, 2009
by alaskakid
LINK

LEV L. DASSIN, the Acting United States Attorney for the Southern District of New York, announced that attorney ALEXANDER KAPLAN was found guilty today of participating in a multimillion-dollar mortgage fraud scheme. KAPLAN was found guilty, after a two-week jury trial in Manhattan federal court, on all eighteen counts in the Indictment against him. According to the evidence at trial, statements made in open court, and the Indictment:

From late 2004 through January 2007, KAPLAN and his coconspirators, using phony purchasers, or “straw buyers,” obtained hundreds of mortgage and home equity loans by submitting to various lenders loan applications and supporting documents that contained false information about, among other things, the prospective borrower’s employment, income and assets, and intent to reside in the property in question, as well as the fair market value of the property.

In addition, KAPLAN and his co-conspirators, using artificially inflated appraisals, sought and obtained mortgages and home equity loans at values that were in excess of properties’ actual sale prices and, thus, the properties’ true market values. The difference between the appraised value and actual sale price of the property represented, in the part, the profits from the scheme.

KAPLAN participated in the scheme by acting as a lawyer for the straw buyers and providing misleading and false information to the lenders. As shown at trial, concerning a block of ten rent-regulated condominium apartments at 243 West 98 th Street, on the Upper West Side of Manhattan (“the Apartments”), KAPLAN served as the attorney for the buyers and the banks in the closings of sales of the Apartments, supported by 100% financing. None of the documents submitted to the lenders in these transactions disclosed that: (1) certain buyers were seeking loans to purchase more than one Apartment as a “primary residence;” (2) each of the Apartments was already occupied by a tenant, and therefore not suitable for a primary residence; or (3) the Apartments were subject to rent regulation laws that precluded the buyer from charging the reported rents.

KAPLAN presided over the closings, and obtained for submission to the lender signed and completed false documents, including, among other things, loan application documents, on which each of the buyers indicated that the Apartment was to be a “primary residence,” and false affidavits stating that the buyers intended to occupy the Apartments.

Almost all of the Apartments were then resold, or “flipped,” to straw buyers within a matter of months. The purported sales prices for each of the flips was almost twice the initial purchase price, and KAPLAN’s co-conspirators obtained almost $13 million in additional loans on the Apartments by submitting false information and documents to the lenders.

KAPLAN served as both the buyer’s and seller’s attorney in connection with the flip transactions, drafting sham contracts of sale and other documentation. KAPLAN also served as the attorney for the banks in connection with certain of the flip transactions, and distributed a portion of the loan proceeds to his co-conspirators.

KAPLAN, of Brooklyn, New York, was found guilty of one count of conspiracy to commit bank, wire, and mail fraud; six counts of bank fraud; eight counts of wire fraud; and three counts of mail fraud. The conspiracy count carries a maximum prison sentence of 30 years and a fine of $1 million or twice the gross gain or loss resulting from the offense. Each of the substantive bank, wire, and mail fraud counts carries a maximum prison sentence of 30 years and a fine of $1 million or twice the gross gain or loss resulting from the offense.

KAPLAN is scheduled to be sentenced by United States District Judge RICHARD J. HOLWELL on May 1, 2009.

Of the 26 other defendants originally charged with KAPLAN in United States v. Aleksander Lipkin, et al., 25 have pleaded guilty. The case against JOHN CIAFALO remains pending.

Mr. DASSIN praised the investigative work of the Federal Bureau of Investigation, New York City Police Department, and Department of Homeland Security’s U.S. Immigration and Customs Enforcement.

Assistant United States Attorneys JONATHAN B. NEW, KATHERINE R. GOLDSTEIN, and AVI WEITZMAN are in charge of the prosecution.

The charges and allegations contained in the Indictment against CIAFALO are merely accusations, and the defendant is presumed innocent unless and until proven guilty.

N.Y. Attorney Convicted of Mortgage Fraud
Mark Hamblett All Articles
New York Law Journal
February 09, 2009

The bogus world of a Brooklyn, N.Y., attorney who built a profitable business on title insurance while earning high fees on real estate closings came crashing down on Friday as a federal jury convicted him in a subprime mortgage scam.

Alexander M. Kaplan, 34, of Lerner & Kaplan, sat stoically at the defense table while a jury of 10 women and two men pronounced him guilty on all 18 counts in an indictment charging him with conspiracy and bank, mail and wire fraud.

Kaplan, who testified in his own defense, is scheduled to be sentenced May 1 by Southern District Judge Richard Holwell.

The verdict was a victory for Assistant U.S. Attorneys Avi Weitzman and Jonathan New, who persuaded the jury that Kaplan played a pivotal role in a wide-ranging conspiracy that ripped off lenders of millions of dollars.

Kaplan's role, they proved, was to keep lenders in the dark by representing the bank, the buyer and the seller in transactions where mortgage brokers, particularly lead actor Alexander Lipkin, would use the identities of innocent straw buyers to obtain huge loans on properties. Sometimes, they would flip the properties within weeks using even more phony documents.

Weitzman told the jury during summations in the two-week trial that Kaplan was "a liar and fraudster," who "engaged in a massive fraud that was perpetrated by all these people.

"He did so by telling lies to banks over and over again. He lied about who the real purchasers were and he lied about the amount of money he disbursed from the loan proceeds," Weitzman said. "His lies were all intended to protect his criminal partners and to make sure the real estate transactions looked legitimate."

Kaplan was one of 27 people indicted in the conspiracy. All of the other defendants except one have pleaded guilty, including Lipkin who admitted to guilt in two schemes in June 2008. He has yet to be sentenced.

The first was part of a foreclosure "rescue scheme" whereby Lipkin induced distressed homeowners to transfer the deeds in their homes to straw buyers who would supposedly "save" their homes and promise to return the deed to the homeowners.

In the end, Lipkin and his cohorts, using the straw buyers, would take out millions of dollars in loans on the property. They would then default on those loans, leaving both the banks and the straw buyers damaged.

The second scheme concerned subprime mortgages. Lipkin and others submitted applications for millions of dollars to lenders using fraudulent documents, a scheme that cost the lenders more than $4.5 million.

Kaplan, the prosecutors said, was one of several dirty lawyers who helped facilitate these plots, including the signature scam in the indictment: the purchase of a block of apartments at 243 West 98th Street in Manhattan where Lipkin and several others, including Kaplan, never disclosed to the bank that the units were occupied and under rent control. Some tenants were paying as little as $393 a month.

Kaplan made between $850 to $1,100 in fees per closing and much more in title fees, Weitzman said, and he made "tens of thousands" in fees on the West 98th Street deal.

AN UPHILL BATTLE

Defense lawyer Diarmuid White of White & White in Manhattan, was faced with an uphill battle. It did not help when his client took the witness stand and was unable to remember key details, claimed paralegals handled a good deal of the work, and conceded he did not file income taxes in 2006 and then blamed his accountant.

White's strategy was to portray Kaplan as an ambitious young attorney who was trying to build a "mill" and who let things get away from him through sloppy business practices and mismanagement.

"No question he did not act as diligently as he should have," White told the jury during opening statements, asking why Kaplan "would risk everything -- his law career, his business, everything, to willingly participate in such a conspiracy?"

Kaplan, admitted to the bar in 1999 after graduating from New York Law School, started with a small firm practicing immigration, matrimonial and real estate law. After working for another real estate firm in Brooklyn, he and partner Garry Lerner, who is his cousin, started their own practice focusing on real estate.

Kaplan got his foot in the door by becoming the closing agent for one bank. He soon became the agent for another six banks and, at the peak of his practice, did closings for as many as 60 banks.

By 2004, he was doing as many as 10 closings a day, employing teams of paralegals to handle most of the transactions.

In the  same building as Lerner & Kaplan on E. 12th Street in Brooklyn, Kaplan built a thriving 10-employee title company, Executive Settlement Services.

"Why send this out? Why not have a title company that I control and all the fees that it generates?" White said to the jury during opening arguments. "Now that's good business, but it's not so good for a lawyer because there is a potential conflict of interest."

There were ethical lapses, he said, and Kaplan "spread himself too thin" because "he couldn't possibly oversee every transaction."

In his summation, White did not mince words, saying Lerner & Kaplan was "run poorly, not well supervised, not managed properly."

"There was too much emphasis on growing the business," he said. "The practice was a mess."

White said that Lipkin, "the ringleader," lied to everyone along the way, the banks, the straw buyers, the other defendants and Kaplan, whom he played for a dummy.

"He was a fool, a total fool," White said. "He was ripe for Lipkin to manipulate and that's what happened. He was duped."

But Weitzman and New convinced the jury that it was impossible for Kaplan to sign off on one document after another on the closings, particularly the West 98th Street property, without knowing, or at least consciously avoiding, the truth.

Weitzman compared Kaplan to the three monkeys who hear no evil, see no evil and speak no evil.

"Essentially, Kaplan's defense is 'I didn't see nothing. I didn't hear nothing,'" he said.

Kaplan faces a potential sentence of upwards of 30 years and a fine of $1 million, but is expected to receive much less under the U.S. Sentencing Guidelines.

Damages For Mental Anguish Arising From Foreseeable Result, A Non-Pecuniary Damage, Should Not Be Barred

Dombrowski v Bulson

2010 NY Slip Op 09625 [79 AD3d 1587]
December 30, 2010
Appellate Division, Fourth Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, February 16, 2011

Thomas E. Dombrowski, Appellant, v Raymond W. Bulson, Respondent.
—[*1] Cantor, Lukasik, Dolce & Panepinto, P.C., Buffalo (Jeremy C. Toth of counsel), for plaintiff-appellant.

Damon Morey LLP, Buffalo (Vincent G. Saccomando of counsel), for defendant-respondent.

Appeal from an order of the Supreme Court, Allegany County (John A. Michalek, J.), entered July 17, 2009 in a legal malpractice action. The order granted the motion of defendant for summary judgment, dismissed the complaint and denied plaintiff's cross motion for summary judgment.

It is hereby ordered that the order so appealed from is unanimously modified on the law by denying the motion in part and reinstating the complaint only insofar as it seeks damages for nonpecuniary loss and as modified the order is affirmed without costs.

Memorandum: In this legal malpractice action, plaintiff alleges that defendant negligently represented him in a criminal action and that, as a result of defendant's negligence, plaintiff was convicted following a jury trial of two felonies and one misdemeanor and was sentenced to a determinate term of incarceration of four years plus a period of postrelease supervision. County Court denied plaintiff's subsequent motion to vacate the judgment of conviction pursuant to CPL 440.10 on the ground of ineffective assistance of counsel, and we denied plaintiff's motion for leave to appeal from the order denying that motion. Plaintiff thereafter commenced a proceeding in Federal District Court seeking a writ of habeas corpus, again contending that he was denied effective assistance of counsel. In granting the petition in that proceeding almost three years later, the Magistrate determined that defense counsel failed to conduct an adequate investigation and failed to conduct a sufficient cross-examination of the complainant, who is plaintiff's daughter, regarding prior inconsistent statements. When the Magistrate issued his ruling, however, plaintiff had been incarcerated for more than five years, and the prosecution declined to retry him. The indictment was thus dismissed. Plaintiff then commenced this legal malpractice action, seeking money damages for his loss of liberty arising from his alleged wrongful incarceration and for lost wages.

Supreme Court granted defendant's motion for summary judgment dismissing the complaint on the ground that plaintiff has no right to recover any money damages. With respect to loss of liberty, the court determined that damages for such nonpecuniary loss are not recoverable in a legal malpractice action and, with respect to lost wages, the court determined that plaintiff was estopped from seeking such damages because he had been deemed disabled by [*2]the Social Security Administration prior to his incarceration and had received disability payments while incarcerated. We conclude that the court erred in determining that plaintiff is not entitled to seek damages for nonpecuniary loss arising from his loss of liberty, and we therefore modify the order accordingly. We further conclude, however, that the court properly granted that part of defendant's motion with respect to damages for lost wages, in view of plaintiff's receipt of disability payments while incarcerated.

"To establish a cause of action to recover damages for legal malpractice, a plaintiff must prove that the defendant attorney failed to exercise 'the ordinary reasonable skill and knowledge commonly possessed by a member of the legal community, and that the attorney's breach of [that] duty proximately caused plaintiff to sustain actual and ascertainable damages' " (Velie v Ellis Law, P.C., 48 AD3d 674, 675 [2008], quoting Rudolf v Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438, 442 [2007]). It is well settled that nonpecuniary damages are not recoverable in a legal malpractice action involving the negligence of an attorney in a civil matter (see e.g. Wolkstein v Morgenstern, 275 AD2d 635, 637 [2000]; Dirito v Stanley, 203 AD2d 903 [1994]). Here, however, the issue before us is whether that rule should also apply to legal malpractice actions where the underlying matter is criminal rather than civil in nature. The only New York appellate court decision on point is that of the First Department in Wilson v City of New York (294 AD2d 290 [2002]), which held that recovery of nonpecuniary damages is not permitted. In our view, the reasoning of the First Department in Wilson is not persuasive, and we therefore decline to follow the holding in Wilson.

"It is fundamental to our common-law system that one may seek redress for every substantial wrong. 'The best statement of the rule is that a wrong-doer is responsible for the natural and proximate consequences of his [or her] misconduct' " (Battalla v State of New York, 10 NY2d 237, 240 [1961]; see Derby v Prewitt, 12 NY2d 100, 105-106 [1962]). Where emotional or other nonpecuniary loss is a direct result of a defendant's breach of duty, a plaintiff may recover damages for such loss (see generally Martinez v Long Is. Jewish Hillside Med. Ctr., 70 NY2d 697, 699 [1987]; Kennedy v McKesson Co., 58 NY2d 500, 504-506 [1983]). The risk of imprisonment is a direct result of attorney malpractice in a criminal case and, indeed, it is the primary risk involved in most criminal cases. In our view, a cause of action for criminal legal malpractice is analogous to causes of action for false arrest and malicious prosecution, both of which allow recovery for the plaintiff's loss of liberty resulting from the plaintiff's wrongful incarceration (see Strader v Ashley, 61 AD3d 1244 [2009], lv dismissed 13 NY3d 756 [2009]; Lynch v County of Nassau, 278 AD2d 205 [2000]; see generally Britt v Legal Aid Socy., 95 NY2d 443, 448 [2000]). We thus conclude that a plaintiff who establishes that he or she was wrongfully convicted due to the malpractice of his or her attorney in a criminal case may recover compensatory damages for the actual injury sustained, i.e., loss of liberty, and any consequent emotional injuries or other losses directly attributable to his or her imprisonment.

We note in addition that the recent trend in other states with respect to this issue is in favor of allowing recovery for loss of liberty in criminal legal malpractice cases, even in those states that, in conformity with the general rule, do not otherwise allow recovery of nonpecuniary damages in malpractice actions (see e.g. Wagenmann v Adams, 829 F2d 196, 221-222 [1st Cir 1987]; Snyder v Baumecker, 708 F Supp 1451, 1464 [NJ Dist 1989]; Rowell v Holt, 850 So 2d 474 [Fla 2003]; Holliday v Jones, 215 Cal App 3d 102, 118-119, 264 Cal Rptr 448, 458 [1989]). As has been noted, "[w]hen an attorney's negligence causes a client's loss of liberty, courts have been willing to step away from the general rule barring damages for emotional distress. Generally, these cases hold that when an attorney represents a criminal defendant, incarceration is the foreseeable result of negligence. Accordingly, damages for the mental anguish arising from that foreseeable result, a non-pecuniary damage, should not be barred" (Rhoades and Morgan, Recovery for Emotional Distress Damages in Attorney Malpractice Actions, 45 SC L Rev 837, 845 [1994]; see also Barry, Legal Malpractice in Massachusetts: Recent Developments, 78 Mass L Rev 74, 82 [1993] [*3]["Courts in other jurisdictions have frequently held that emotional distress damages are recoverable where the attorney's malpractice results in the client's wrongful deprivation of liberty," noting cases in Massachusetts, New Jersey and California]).

Finally, with respect to plaintiff's remaining contentions, we conclude that the mere fact that the Federal Magistrate in granting his petition for a writ of habeas corpus determined that he was denied effective assistance of counsel does not establish plaintiff's innocence as a matter of law, nor does it have collateral estoppel effect on the issue of causation. Present—Smith, J.P., Peradotto, Lindley, Sconiers and Pine, JJ.

New York State Supreme Court Judge Carol Huff Plays Ball With The NYC Police Pension Fund

Empire Center files appeal in police FOIL case

Kevin Holloran

March 24, 2011
LINK

The New York City Police Pension Fund had no legal basis for refusing last year to release the names of retired police officers in response to a Freedom of Information Law (FOIL) request from the Empire Center, according to an appellate brief filed by the Center this week.

The Empire Center is appealing a December decision by Supreme Court Justice Carol E. Huff of Manhattan, who sided with the Pension Fund in its refusal to comply with the FOIL request. Names and pension benefits of more than 300,000 other retired public employees in New York -- including all retired police from agencies outside New York City -- already have been posted at SeeThroughNY.net, the Empire Center government transparency site.

In a brief filed with the Appellate Division of state Supreme Court, the Empire Center argues:

The singular refusal of the Fund to make public the names of the individual retirees currently receiving pensions makes it impossible for the Empire Center to provide comprehensive comparative data to the public, and frustrates the public's ability to exercise oversight on the use of taxpayer funds. The Fund's refusal violates its statutory duty under FOIL, and defeats FOIL's core purposes of informing the public about the actions of government agencies and the expenditure of taxpayer funds.

The brief says Justice Huff’s decision was “based on a misreading of a law protecting the privacy of the beneficiaries of pensioners - a law that has no bearing on the names of pensioners themselves.”

Download a copy of the Empire Center's appellate brief and record on appeal.

Legal Battle For Public Access Heats Up

January 31, 2011
LINK
CONTACT: Tim Hoefer
(518) 434-3100

The Empire Center for New York State Policy today announced that it is appealing a recent court ruling that would block public release of the names of more than 44,000 retired police officers collecting benefits from the New York City Police Pension Fund.

“The names of public employees and retirees have always been regarded as public information under New York’s FOI law,” noted Tim Hoefer, director of the Albany-based Empire Center. “Because taxpayers foot the bill for the salaries of government workers and retirees, they have a right to know who they are and how much they are paid, just like any private company’s board of directors know who their employees are and how much they are paid. Access to this data also provides a means for scrutinizing spending on a case by case basis, adding a level of accountability previously unknown in government spending.”

Hoefer first requested a list of the names and annual retirement allowances paid to retired police officers in a letter sent to the fund last January. Similar information for members of other New York pension funds -- including the names of thousands of retired state and local police officers from other departments -- already has been posted at SeeThroughNY.net, the Empire Center's government transparency website. SeeThroughNY.net also includes searchable databases of government employee salaries, pork barrel spending and teacher and superintendent contracts.

The Police Pension Fund denied Hoefer’s request, saying it was required to release only a list of individual pension amounts, but not the names of pension recipients. The Empire Center then filed a legal challenge to the Fund’s decision, which was argued in written briefs submitted last fall to state Supreme Court Justice Carol E. Huff of Manhattan.

In an opinion dated December 6 but not filed until December 30, Justice Huff sided with the Police Pension Fund, saying it could provide pension amounts while withholding the names of pension recipients. The Empire Center, represented by attorney David A. Schulz of Manhattan, has appealed the decision to the Appellate Division of the state Supreme Court.

The Empire Center’s initial notice of appeal says Justice Huff “committed errors of fact and law” and that the Pension Fund had “failed to meet its burden of establishing any basis in fact or the law to withhold from the public the names and other requested information about those receiving retirement benefits.”

Pending a decision on the appeal, the Empire Center today posted a complete database of retirement allowances for 44,370 retired New York City police officers, minus the names withheld by the pension fund.

The data show the average pension of New York City police officers who retired in 2009 was $58,563, up 19 percent from the $49,066 average pension of officers retired in 2000. The amounts do not include an additional $12,000 “variable supplement” payment collected by retirees with regular service (non-disability) benefits. Mayor Michael Bloomberg has proposed the elimination of this supplement, also known as the “Christmas bonus” because it is paid in December.

The Empire Center is a project of the Manhattan Institute for Policy Research, one of the nation’s leading non-profit think tanks.

Copies of court papers are available here and here.

The Shady Deals of U.S. Supreme Court Justice Clarence Thomas and His Wife

America must demand Thomas' resignation.

The 'Judicial Insider Trading' of Justice Clarence Thomas and His Wife 'Ginni'
The Brad Blog
LINK

Brad interviews watchdog attorney Kevin Zeese on KPFK...

He had inappropriate sexual entanglements with a number of women and lied about it repeatedly to the American people. Yet nobody --- save for one Colorado law school prof --- seems to be calling for Justice Clarence Thomas' resignation for some reason.

That, even though Thomas, unlike Rep. Anthony Weiner, appears to have actually, and flagrantly, and repeatedly, broken the law.

As we reported in January, Thomas appears to have "knowingly and willfully" filed falsified Financial Disclosure Forms which withheld disclosure of nearly $700,000 his wife received from the rightwing Heritage Foundation for the better part of the last 20 years. Only once it was pointed out publicly this year did Thomas bother to file "self-initiated amendments" to the forms he had signed just above the legal warning in bold and all caps which reads: "NOTE: ANY INDIVIDUAL WHO KNOWINGLY AND WILLFULLY FALSIFIES OR FAILS TO FILE THIS REPORT MAY BE SUBJECT TO CIVIL AND CRIMINAL SANCTIONS (5 U.S.C. app. § 104)"

While there has been little indication that law enforcement is actually investigating the crimes of the U.S. Supreme Court Justice (which, as we pointed out in January, are punishable by up to $50,000 and/or 1 year in jail for each instance of falsification), last Friday when Thomas' Financial Disclosure Form for 2010 [PDF] was released, the matter appears to have gotten shadier still, leading at least one government watchdog organization to describe what Thomas and his wife Virginia "Ginni" Thomas may be been doing as "Judicial Insider Trading."

Connecting the dots, it would seem the couple made huge profits from Thomas' participation and insider knowledge of last year's Citizens United ruling at the U.S. Supreme Court, as we'll show you below.

While Barack Obama's DoJ seems to be looking the other way, there was one person in Congress trying to bring attention to this issue last week with his ConflictedClarence.com website: Rep. Anthony Weiner...

For some reason or another, Weiner has been distracted of late, so I was happy to pick up the ball today and cover the new Thomas disclosures on our radio show on L.A.'s Pacifica Radio affiliate, KPFK today. The audio from the show is below. But here are a few quick details, as promised.

Before posting the timeline, one very important point that hasn't received nearly enough attention: during Thomas' contentious confirmation hearings in 1991, he received a huge boost when an outside organization ran $100,000 worth of television commercials attacking those Senators who were threatening to vote against Thomas' confirmation. That organization? A newly formed group called Citizens United.

Twenty years later, and without either Thomas disclosing it, or anyone in the media connecting the dots, Thomas decided in favor of the group in the now-infamous Citizens United v. FEC case, which has allowed a tsunami of corporate money into our political and electoral system.

It was that decision that allowed corporations to pour virtually unlimited money into 501(c)(4) non-profits that could, in turn, use the money to affect elections with millions of dollars in campaign ads, etc.

Ginni Thomas created one of those 501(c)(4) organizations just after oral arguments were argued before her husband in the Citizens United case, and somehow managed to raise some $550,000 in about two months' time before the end of 2009.

Here, courtesy of Velvet Revolution's ProtectOurElections.org campaign:

Sept 9, 2009: Citizens United argued.
Nov 6, 2009: Virginia Thomas launches her new Liberty Central 501(c)(4) organization, which raises 550K in 2009.
Jan 21, 2010: Citizens United decided.
March 15, 2010: Virginia Thomas announces that Liberty Central would "accept donations from various sources — including corporations — as allowed under campaign finance rules recently loosened by the Supreme Court."
November 14, 2010: Liberty Central announces that Virginia Thomas would be leaving the organization.
November 16, 2010: Liberty Consulting incorporated in the state of Virginia.
February 4, 2011: Politico reports that Virginia Thomas had launched Liberty Consulting.
February 8, 2011: ProtectOurElections.org releases its expose of Liberty Consulting
February 12, 2011: Liberty Consulting website is deleted http://libertyinc.co/
February 23, 2011: ProtectOurElections.org files a formal bar complaint against Clarence Thomas requesting that he be disbarred on various grounds.

Note the date on which Ginni launched her 501(c)(4), Liberty Central, Inc., and note how quickly she was able to raise half a million dollars from it. And that was even before she told the LA Times that the group would "accept donations from various sources — including corporations — as allowed under campaign finance rules recently loosened by the Supreme Court."

Unlike for the past 20 years, Justice Thomas was able to understand the (incredibly simple) Financial Disclosure Form this time around, for 2010, well enough that he was able to list his "Spouse's Non-Investment Income" including "salary and benefits" from both Liberty Central, Inc., and Liberty Consulting, Inc.

Unfortunately, the form doesn't require him to specify how much she received from each, and Liberty Central has extended its deadline for filing its own disclosure forms until August. So, until then, we're just left to speculate as to how much the Thomases made from those ventures, although the Disclosure Form does reveal that the Thomases invested some of their own money to start up Liberty Consulting, Inc. The form indicates that less than $15,000 was invested.

Setting aside the fact that common sense suggests Thomas should have recused himself from the Citizens United decision (which was decided by a 5 to 4 vote), given the $100,000 in ads from that group that benefited him when he was confirmed by the U.S. Senate, Ginni's ability to profit from the decision is raising a lot of questions that should be answered.

Today, VR's ProtectOurElections.org sent another letter [PDF] to the DoJ, including the newly released Financial Disclosure Form, asking the department to investigate a number of additional questions that have been raised by the new disclosures, including:

Was Mrs. Thomas tipped off to the Citizens United decision before it was rendered?

Did Mrs. Thomas launch Liberty Central to take advantage of Citizens United and did she receive any income as a result of Citizens United?

What happened to the $550,000 raised by Mrs. Thomas for Liberty Central (which is listed on its 2009 IRS 990 form)?

Did Mrs. Thomas raise funds for Liberty Central after the Citizens United decision and if so how much and what was it used for?

Is Liberty Consulting engaged in consulting Supreme Court litigants or potential litigants?

Is Liberty Consulting engaged in lobbying and if so is Mrs. Thomas lobbying for litigants before the Supreme Court?

Is Liberty Consulting a legitimate company or a conduit to raise funds for the Thomas family?

[And by way of my own disclosure, since, unlike Thomas, I happen to believe it's the right thing to do, VR is an organization co-founded by The BRAD BLOG.]

All of the above was the topic of discussion with VR/ProtectionOurElection.org's attorney and spokesperson Kevin Zeese this afternoon on my KPFK show, after a few minutes discussing some of the other stories that America hasn't heard about thanks to the ridiculous Anthony Weiner "scandal."

Download MP3, or listen online below [appx. 28 mins]...

And here's a bonus for ya. VR/POE's short video expose of Ginni Thomas' Liberty Consulting --- in which a visit is made to the organization's address at "Suite 302" in Burke, Virginia. The organization's website was removed from the Internet just days after this video was released earlier this year...

Attorney Michael K. Loucks, Prosecutor of Health Care Fraud, Switches Sides

Prosecutor of Health Care Fraud Becomes a Defender of "The Dark Side"

NY Times' Duff Wilson: "Michael K. Loucks was arguably the nation’s most influential prosecutor of health care fraud....But a year and a half ago, Mr. Loucks, a Republican, left the United States attorney’s office in Boston after he was passed over for the top post and President Obama appointed a Democrat. Instead, Mr. Loucks joined Skadden, Arps last July, and has startled former allies by emerging in recent months as zealous a corporate defender as he was a prosecutor, complete with proposals seeking more lenient treatment for the medical companies he once vilified."

From Betsy Combier: Could it be that Mr. Loucks joined up with former Chief Judge of New York State, Judith Kaye, after President Obama didnt appoint him to the top post at the United States attorney’s office in Boston? Maybe our President had something in mind when he 'overlooked' Mr. Loucks so that he could stop attacking health care frauds? Just asking.

Judith Kaye

June 4, 2011
Drug Makers’ Feared Enemy Switches Sides, as Their Lawyer
By DUFF WILSON, NY Times

Michael K. Loucks was arguably the nation’s most influential prosecutor of health care fraud.

He racked up numerous convictions and mega-settlements in nearly a quarter-century, using whistle-blowers and secret grand juries to pressure major pharmaceutical and health companies into ending illegal practices like kickbacks to doctors and misuse of blockbuster drugs.

Once described as a cross between a firebrand preacher and a charismatic litigator, Mr. Loucks burnished a reputation aptly captured in a Fortune magazine headline: “Why Do Drug Companies Fear This Man? Maybe because he’s declared all-out war on cheats in the drug industry.”

But a year and a half ago, Mr. Loucks, a Republican, left the United States attorney’s office in Boston after he was passed over for the top post and President Obama appointed a Democrat. Instead, Mr. Loucks joined Skadden, Arps last July, and has startled former allies by emerging in recent months as zealous a corporate defender as he was a prosecutor, complete with proposals seeking more lenient treatment for the medical companies he once vilified.

In a six-page memo last month to clients in his portfolio, which may include some of the very same corporations he prosecuted repeatedly, Mr. Loucks bemoaned strategies he had embraced.

“The government and the whistle-blower have an advantage,” he wrote, complaining that federal investigators were now using the law unfairly. “While prosecutors often assert the company has engaged in ‘serious’ misconduct, they keep the company in the dark, often for years, as to the specific allegations.”

Those who have known him are quick to recall that his crowning achievement was a $2.3 billion settlement against Pfizer that capped a four-year secret investigation.

“We’re all disappointed that he’s gone over to the dark side because it seemed that he was a good prosecutor,” said Shelley R. Slade, a whistle-blowers’ lawyer in Washington and a former senior counsel for health care fraud at the Justice Department.

“I looked upon it with sadness,” Patrick Burns, spokesman for the whistle-blower advocacy group Taxpayers Against Fraud, said of Mr. Loucks’ change. “He’s a good and honorable person. He did great work in the Boston office. He’s a good lawyer. It’s just too bad.”

Federal ethics rules prohibited Mr. Loucks from any dealings with the United States attorney’s office in Boston for a year after his resignation, and he can never be involved in cases he investigated directly. But he is not barred from representing clients he once prosecuted on other matters, and his law firm’s roster includes some of the biggest companies he once investigated, including Pfizer, Merck, Schering-Plough, Bristol-Myers Squibb and Medtronic.

He defends his newfound friendship with former foes, and notes that he’s still wearing cowboy boots native to his Oklahoma childhood even though he’s now working in the white-collar division of a prestigious law firm.

“While everyone calls it ‘the other side,’ I’m doing the same thing I’ve always done, which is zealously representing my clients,” he said.

And while he used to call some of those people’s actions “evil,” today he argues that drug and medical device companies are making strides in complying with federal billing, fraud and kickback laws. “They make products that have huge benefits to a number of people,” he said. Skadden, a 2,000-lawyer firm, has made several hires in recent years to amplify its health care practice.

In interviews and a lengthy e-mail exchange, Mr. Loucks said his views on the whistle-blower law had evolved.

The False Claims Act, with its triple damages, has been the government’s most powerful weapon against health care fraud since Congress in 1986 increased the rewards for whistle-blowers. Since then, taxpayers have recovered an estimated $28 billion from medical companies.

As a federal prosecutor in Boston, Mr. Loucks created a health care fraud unit and used the law, as well as the tools of secrecy and surprise, to reap major awards. The unit’s victories are renowned, starting with an $875 million payment in 2001 by TAP Pharmaceuticals. Whistle-blowers shared $95 million in that case, alerting companies and informants to the stakes involved.

For years, Mr. Loucks has argued that whistle-blowers are paid far much in health care fraud cases — bounties up to 30 percent, totaling $650 million in just the last two years, he said. These people would blow the whistle for less, he argued both inside the prosecutor’s office and more recently in a paper titled “the Great American Giveaway.” While that hostility toward what he considers the greed of some whistle-blowers is old news, Mr. Loucks’ views on unsealing their complaints are new.

In his May 12 memo to clients, Mr. Loucks urged some companies to press judges to unseal complaints more quickly. That way, he says, they can learn the scope of complaints sooner, identify witnesses and fight back harder.

“If Mike was still with the Justice Department, he could give you 10 reasons why this is a bad idea,” said Suzanne E. Durrell, a whistle-blowers’ lawyer in Boston who worked with Mr. Loucks when she was chief of the civil division for the United States attorney in Massachusetts.

Mr. Loucks says more openness would let companies clean up their own acts, even if it meant adverse publicity.

He points to new statistics that he says support his argument. The Justice Department reported to Congress that 885 False Claims Act cases involving health care fraud were pending under seal at the beginning of this year, with only about 200 prosecutors to juggle them. On average, a case was sealed for more than a year, and some much longer.

“That the government doesn’t have adequate resources to handle the cases is not a good cause to keep them under seal,” Mr. Loucks said in an interview, comparing it to a sports game where only one team is allowed to try to score. In these cases, that would now be his former team.

“I knew what I was doing on behalf of the government,” he said. “I don’t know if lawyers on the other side felt they were not able to adequately represent their clients while the case was under seal.”

Nicholas C. Theodorou, chairman of Foley Hoag’s business crimes defense group in Boston, said Mr. Loucks’ argument made sense from a corporate defense standpoint, and possibly would sit well with some federal judges who have questioned why cases remain under seal so long.

For his part, Mr. Loucks uses a baseball reference. Johnny Damon left his beloved Boston Red Sox in late 2005 to sign with “the evil empire, the New York Yankees,” Mr. Loucks said. Both teams won World Series with help from Mr. Damon.

Asked whether the “evil empire” analogy fit the Justice Department or Skadden, Mr. Loucks said, “One man’s evil empire is another’s home team.”

Disbarred: James J. Armenakis

Matter of Armenakis

2011 NY Slip Op 04593
Decided on June 2, 2011
Appellate Division, First Department
LINK
Per Curiam

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.
Decided on June 2, 2011

SUPREME COURT, APPELLATE DIVISION

First Judicial Department

Peter Tom,Justice Presiding,
David B. Saxe
Karla Moskowitz
Diane T. Renwick
Leland G. DeGrasse,Justices.

[*1]In the Matter of James J. Armenakis (admitted as James John Armenakis), an attorney and counselor-at-law: Departmental Disciplinary Committee for the First Judicial Department, Petitioner, James J. Armenakis, Respondent.

Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, James J. Armenakis, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the First Judicial Department on January 15, 1973.

Jorge Dopico, Chief Counsel, Departmental
Disciplinary Committee, New York
(Raymond Vallejo, of counsel), for petitioner.
Michael A. Gentile, for respondent.
M-889 - April 4, 2011

IN THE MATTER OF JAMES J. ARMENAKIS, A
SUSPENDED ATTORNEY [*2]

PER CURIAM

Respondent James J. Armenakis was admitted to the practice of law in the State of New York by the First Judicial Department on January 15, 1973, under the name James John Armenakis. At all times relevant to this proceeding, respondent has maintained an office for the practice of law within the First Judicial Department.

By order entered December 4, 2008, this Court suspended respondent from the practice of law pursuant to 22 NYCRR 603.4(e)(1)(ii), based upon his admissions under oath and supporting documentation that he had committed professional misconduct that immediately threatened the public interest (Matter of Armenakis, 58 AD3d 222 [2008]). Specifically, respondent admitted that he converted to his own use $735,000 he
was holding in escrow; mismanaged the escrow account which included repeated overdrafts; failed to maintain proper records; deposited personal funds into the escrow account; and failed to supervise a non-attorney in connection with the escrow account.

On October 22, 2010, respondent pleaded guilty in Supreme Court, New York County, to grand larceny in the second degree (Penal Law § 155.40[1]), a class C felony; grand larceny in the third degree (Penal Law § 155.35), a class D felony; offering a false instrument for filing in the first degree (Penal Law § 175.35), a class E felony; and criminal possession of stolen property in the third degree (Penal Law § 165.50), a class D felony. The plea was in full satisfaction of an indictment and superior court information.

During his plea allocution, respondent admitted that he committed grand larceny in the second degree and offered a false instrument for filing in the first degree when, from 1996 through 2008, he failed to pay withholding taxes in relation to his law firm employees which amounted to approximately $90,000 (with penalties and interest it amounted to $200,000) and, he knowingly and falsely understated his tax liability on his 2006 New York State personal income tax return. Respondent further admitted that, as counsel for the seller in a real estate transaction, he deposited into his escrow account a down payment check in the amount of $735,000 and, thereafter, used those funds for personal obligations so that on or about May 2, 2008, the day of the closing, said funds were not turned over. Thus, respondent conceded that by stealing the $735,000, he committed grand larceny in the third degree and knowingly possessed stolen property in the third degree. On November 17, 2010, respondent executed an affidavit of confession of judgment in the amount of $735,000, and was scheduled to enter into an order of restitution. While respondent was scheduled to be sentenced on these convictions on April 20, 2011, we have not been informed as to whether sentence has in fact been imposed.

The Departmental Disciplinary Committee now seeks an order, pursuant to Judiciary Law § 90(4)(b), striking respondent's name from the roll of attorneys on the ground that he was automatically disbarred as a result of his felony convictions, as defined by Judiciary Law § 90(4)(e). Respondent has written this Court stating that he will not be submitting a response to the Committee's motion to strike.

Respondent's conviction of New York felonies constitutes grounds for automatic disbarment under Judiciary Law § 90(4) and his name should be stricken from the rolls (see Matter of Bernstein, 78 AD3d 94 [2010] [automatic disbarment based upon conviction of, inter alia, grand larceny in the second and third degree, and offering a false instrument for filing in the [*3]first degree]; Matter of Cherry, 51 AD3d 119 [2008] [automatic disbarment based upon conviction of grand larceny in the second and third degree]; Matter of Koeppel, 218 AD2d 46 [1995] [automatic disbarment based upon conviction of criminal possession of stolen property in the third degree]). The fact that respondent has not yet been sentenced does not impede the Committee's petition since, for purposes of automatic disbarment, conviction occurs at the time of plea (see Matter of Chilewich, 20 AD3d 109 [2005]; Matter of Sheinbaum, 47 AD3d 49 [2007]).

Accordingly, the Committee's petition should be granted and respondent's name stricken from the roll of attorneys pursuant to Judiciary Law § 90(4)(a) and (b), effective nunc pro tunc to October 22, 2010.

All concur.

Order filed.
(Entered June 2, 2011)

Tom, J.P., Saxe, Moskowitz, Renwick, and DeGrasse, JJ.

Respondent disbarred and his name stricken from the roll of attorneys and counselors-at-law in the State of New York, nunc pro tunc to October 22, 2010. Opinion Per Curiam. All concur.

Disbarred: Marc A. Bernstein

Matter of Bernstein

2010 NY Slip Op 07244 [78 AD3d 94]
October 12, 2010
Per Curiam
Appellate Division, First Department
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
As corrected through Wednesday, December 29, 2010

[*1]

In the Matter of Marc A. Bernstein (Admitted as Marc Alan Bernstein), an Attorney, Respondent. Departmental Disciplinary Committee for the First Judicial Department, Petitioner.

First Department, October 12, 2010
APPEARANCES OF COUNSEL

Alan W. Friedberg, Chief Counsel, Departmental Disciplinary Committee, New York City (Eileen J. Shields of counsel), for petitioner.

Arthur L. Aidala, for respondent.
{**78 AD3d at 95} OPINION OF THE COURT

Per Curiam.

Respondent Marc A. Bernstein was admitted to the practice of law in the State of New York by the First Judicial Department on February 8, 1982 under the name Marc Alan Bernstein. At all times relevant herein, respondent has maintained an office for the practice of law within the First Judicial Department.

By order entered April 23, 2009, this Court immediately suspended respondent from the practice of law pursuant to 22 NYCRR 603.4 (e) (1) (i), (ii) and (iii), based upon his failure to cooperate with the lawful demands of the Departmental Disciplinary Committee and his substantial admission under oath that he converted clients' settlement funds to his personal use, and other uncontested evidence of professional misconduct (Matter of Bernstein, 63 AD3d 87 [2009]).

In May and July 2009, respondent was charged in two separate indictments filed in Supreme Court, New York County, with nine counts of grand larceny in the second degree (Penal Law § 155.40 [1]), a class C felony, seven counts of grand larceny in the third degree (Penal Law § 155.35), a class D felony, one count of scheme to defraud in the first degree (Penal Law § 190.65 [1] [a]), and two counts of scheme to defraud in the first degree (Penal Law § 190.65 [1] [b]), both class E felonies, for stealing funds from escrow accounts. In March 2010, respondent was charged in an indictment filed in Supreme Court, New York County, with criminal tax fraud in the second degree (Tax Law § 1805), a class C felony, offering a false instrument for filing in the first degree (Penal Law § 175.35), a class E felony,{**78 AD3d at 96} and three counts of repeated failure to file income and earnings taxes (Tax Law § 1802 [a]), a class E felony.

On April 5, 2010, respondent pleaded guilty to the felony charges in the first two indictments, as adjusted.[FN*] As to the March 2010 indictment, he pleaded guilty to offering a false instrument for filing in the first degree, and two counts of repeatedly failing to file State income tax returns for the years 2003 through 2007.

Specifically, respondent admitted that between 2006 and 2009, he stole settlement and escrow funds from 16 medical malpractice and personal injury clients and a $900,000 deposit he was holding in escrow for a real estate purchaser. He also schemed to defraud approximately 13 additional clients in which he obtained property with a value in excess of $1,000. The total amount of his theft is believed to be approximately $2.2 million. Respondent also admitted that his filed New York State income tax return for 2008 contained material false information and statements by which he understated and underpaid the taxes due on the money he stole by more than $50,000, and that he repeatedly failed to file State personal income tax returns from 2003 through 2007. Respondent was ordered to pay a minimum of $200,000 in restitution by June 3, 2010, his scheduled sentencing date, at which time a restitution hearing was to be held to determine the total amount of restitution to be ordered.

By petition dated May 12, 2010, the Disciplinary Committee seeks an order striking respondent's name from the roll of attorneys pursuant to Judiciary Law § 90 (4) (a) and (b), upon the ground that he was automatically disbarred upon his conviction of a felony as defined by [*2]Judiciary Law § 90 (4) (e) (see Matter of Caro, 46 AD3d 136 [2007]; Matter of Szegda, 42 AD3d 193 [2007]). Respondent's counsel was served with this motion but no response has been submitted.

Respondent's conviction of New York felonies constitutes grounds for automatic disbarment under Judiciary Law § 90 (4) (see Matter of Cherry, 51 AD3d 119 [2008] [automatic disbarment based upon conviction of grand larceny in the second and third degree]; Matter of DeGrasse, 44 AD3d 107 [2007] [automatic disbarment based upon conviction of grand larceny in the second degree]). For the purposes of automatic disbarment, conviction occurs at the time of plea or verdict (Matter of Sheinbaum,{**78 AD3d at 97} 47 AD3d 49 [2007]; Matter of Ramirez, 7 AD3d 52 [2004]). Accordingly, the Committee's motion to strike respondent's name from the roll of attorneys and counselors-at-law, pursuant to Judiciary Law § 90 (4) (b), should be granted, and respondent's name stricken from the roll of attorneys and counselors-at-law, nunc pro tunc to April 5, 2010, the date of his plea.

By separate motion dated May 13, 2010, the Committee requests an order pursuant to 22 NYCRR 603.13 (g) appointing an attorney to inventory respondent's files and to take such action as seems indicated to protect the interests of his clients on the ground that respondent has "stonewalled" every effort to return client files to those from whom he stole settlement funds. The clients need documents from their files to prove how much they are entitled to receive in restitution and to support their claims with the Lawyers' Fund for Client Protection.

The Committee advises that beginning in early 2009, after it sought respondent's interim suspension, and continuing through the fall of 2009, it has received a "steady stream of complaints" from respondent's clients alleging that, not only did he fail to disburse their settlement funds to them but that he completely stopped communicating with them. In March/April 2009, the Committee was contacted by Jordan Hecht, Esq., from whom respondent had subleased an office in the Hecht law firm's suite, reporting that respondent's clients were coming to the office to get their files but he could not release them because the files did not belong to him. By June 2009, Mr. Hecht informed the Committee that respondent had removed his files from the office but left no instructions for contacting him.

During this same time period (March 2009), the District Attorney's Office endeavored to assist the complainants in obtaining their files so they could prove respondent's thefts, and aided them in filing claims with the Lawyers' Fund for Client Protection. According to an affidavit of Assistant District Attorney (ADA) Keith, in September 2009, Judge Carruthers ordered respondent to produce all client files to the District Attorney's Office for return to his former clients, but respondent produced only 15 files. On March 19, 2010, Judge Carruthers ordered respondent to produce an inventory of his files by March 30, 2010, but he has not yet complied. ADA Keith further states that Archive Systems, Inc., has a storage facility in New Jersey at which respondent has placed dozens of boxes of files, yet respondent has not paid for the storage space and Archive's collection department is seeking payment. Based upon her conversation{**78 AD3d at 98} with the representative at Archive, ADA Keith states that "it seems clear that it will take a court appointed receiver or some other mechanism of the courts to get access to the client files locked in the New Jersey storage facility." In addition, respondent's attorney in the criminal proceeding informed ADA Keith that respondent handed over to a successor law firm the few cases and client files he considered viable, ongoing matters and it is unclear if the affected clients were given notice of such transfer. Ms. Keith hopes that a receiver may be able to obtain the proper return of the complainants' [*3]property (their files) which they need for a restitution hearing.

The Committee adds that respondent's files in the storage facility are in danger of being destroyed and respondent's conduct has, in effect, obstructed the remaining clients from accessing their own files. Staff counsel notes that it is in respondent's own interest not to return said files so that his clients cannot prove their losses, thereby reducing the amount of restitution ordered by the court as well as the reimbursement he will owe to the Lawyers' Fund.

Accordingly, the Committee's petition to appoint an attorney pursuant 22 NYCRR 603.13 (g) to inventory the client files of respondent, Marc A. Bernstein, Esq., and to take such action as seems indicated to protect the interests of his clients should be granted.

Gonzalez, P.J., Tom, Andrias, Nardelli and Román, JJ., concur.

Respondent disbarred, and his name stricken from the roll of attorneys and counselors-at-law in the State of New York, nunc pro tunc to April 5, 2010. Receiver appointed, as indicated.

Footnotes

Footnote *: Count six of the July 2009 indictment (3553/09), alleging scheme to defraud in the first degree, was dismissed.

Attorney Arnold E. DiJoseph III of Podlofsky & Orange Simply Didn't File His Client's Papers, No Excuse Given

I'm going to try to expose as many lawyers as I hear about who do not do their jobs, in a new section. Send me cases!!

Thanks,

Betsy Combier

Casali v Cyran

2011 NY Slip Op 03791
Decided on May 3, 2011
Appellate Division, Second Department

Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.

This opinion is uncorrected and subject to revision before publication in the Official Reports.

Decided on May 3, 2011
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT

REINALDO E. RIVERA, J.P.
THOMAS A. DICKERSON
L. PRISCILLA HALL
JEFFREY A. COHEN, JJ.

2009-11669
(Index No. 20640/05)

[*1]Frank Casali, appellant,
v
Daniel J. Cyran, etc., respondent, et al., defendant.

Podlofsky & Orange, LLP (Arnold E. DiJoseph, P.C., New York,
N.Y. [Arnold E. DiJoseph III], of counsel), for appellant.
Vardaro & Helwig, LLP, White Plains, N.Y. (Edward J.
Guardaro, Jr., and Terence S. Reynolds of counsel), for respondent.

DECISION & ORDER

In an action to recover damages for medical malpractice, the plaintiff appeals from an order of the Supreme Court, Nassau County (Feinman, J.), entered October 16, 2009, which denied his motion to vacate an order of the same court entered August 28, 2009, upon his default, granting the motion of the defendant Daniel J. Cyran for summary judgment dismissing the complaint insofar as asserted against that defendant.

ORDERED that the order entered October 16, 2009, is affirmed, with costs.

To vacate his default, the plaintiff was required to demonstrate a reasonable excuse for the default and potentially meritorious opposition to the motion (see CPLR 5015[a]; Legaretta v Ekhstor, 74 AD3d 899; Rivera v Komor, 69 AD3d 833; Nowell v NYU Med. Ctr., 55 AD3d 573). The plaintiff's excuse for failing to oppose the motion of the defendant Daniel J. Cyran for summary judgment dismissing the compaint insofar as asserted against Cyran can only be classified as law office failure. Although the Supreme Court has the discretion to excuse a default resulting from law office failure (see CPLR 2005), here, the plaintiff's attorney, in his affirmation, admitted that there was "no excuse, reasonable or otherwise." Additionally, the plaintiff failed to establish that he had potentially meritorious opposition to the motion (see Bollino v Hitzig, 34 AD3d 711). Accordingly, the Supreme Court properly denied the plaintiff's motion to vacate the prior order granting Cyran's motion for summary judgment dismissing the complaint insofar as asserted against Cyran.

RIVERA, J.P., DICKERSON, HALL and COHEN, JJ., concur.

ENTER:
Matthew G. Kiernan
Clerk of the Court