Expose Corrupt Courts

Drunk-Driving-Fix Attorney/Prosecutor Fired

2012-02-03T15:49:00.000-05:00

Bronx ADA who allegedly had drunk-driving cases fixed axed from job
The New York Post by Douglas Montero - February 3, 2012

The Bronx prosecutor who allegedly had two drunken-driving cases fixed by cops has been terminated by the DA's office, officials said today. Assistant District Attorney Jennifer Troiano was fired Jan. 13, according to a spokesman for the DA's office. Troiano, 34, was charged with misdemeanor reckless driving and DUI in a three-car pileup on the Major Deegan Expressway in August 2010, although there was no allegation in the criminal complaint that she had caused the accident. Troiano allegedly slurred her way out of two DWI arrests in 2004 and 2006. In another case involving a Bronx ADA busted for drunk-driving, Rafael Urena, 26, also resigned last month, officials said. Urena allegedly blew a .081 blood-alcohol level on Jan. 7 and arrogantly told officers there was no need to explain how the Breathalyzer worked. “Yeah, I know what it is; I’m a Bronx assistant district attorney,” he said, according to sources.

CLICK HERE TO SEE RELATED STORY, "Pal Says Attorney/Prosecutor Skated From Two DWIs"

CLICK HERE TO SEE RELATED STORY, "Favored Treatment"

CLICK HERE TO SEE RELATED STORY, "Special 'Get-Out-Of-Jail' Rules for Lawyer/Prosecutors"

Schneiderman Goes After Banks' Frauds on Courts

2012-02-03T15:23:00.002-05:00

AG brings suit against banks’ mortgage practices
The Albany Times Union by Casey Seiler - Capitol Confidential - February 3, 2012

AG Eric Schneiderman has filed suit against several of the nation’s largest banks, charging that the creation and use of a private national Mortgage Electronic Registry System has resulted in “a wide range of deceptive and fraudulent foreclosure filings in New York state and federal courts, harming homeowners and undermining the integrity of the judicial foreclosure process.” In broad terms, the suit alleges that the banks used MERS as a front for millions of home loans that made it easy to securitize the living daylights out of those mortgages. The AG further alleges that MERS has fraudulently identified itself as the plaintiff in foreclosure actions although it lacks the documentation to claim ownership of the loans in question. MERS has been the target of numerous legal actions, including ongoing actions by Massachusetts and Delaware. Unlike many of those suits, this one alleges fraudulent practices as opposed to questioning MERS’ standard — or “standard” — business practices, or its very existence as structured. Suits questioning the company on that basis have encountered resistance from many state courts, most recently in Idaho. The lawsuit, filed in State Supreme Court in Brooklyn, seeks “a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties” — which could be a very big bill indeed for the plaintiffs. The suit was clearly in development long before Schneiderman was tapped by President Barack Obama to co-chair a special task force on just the sort of abuses that are being alleged.

Defendents include Bank of America, J.P. Morgan Chase, and Wells Fargo, which are identified as “MERS certifying officers” and are accused of having “repeatedly submitted court documents containing false and misleading information that made it appear that the foreclosing party had the authority to bring a case when in fact it may not have,” according to the AG’s release. The lawsuit names JPMorgan, Chase Bank, Bank of America and Wells Fargo as well as Virginia-based MERSCORP and its subsidiary, Mortgage Electronic Registration Systems. The lawsuit further asserts that the MERS System has effectively eliminated homeowners’ and the public’s ability to track property transfers through the traditional public records system. Instead, this information is now stored only in a private database – which is plagued with inaccuracies and errors – over which MERS and its financial institution members exercise sole control. Additional defendants include BAC Home Loans Servicing, LP, Chase Home Finance LLC, EMC Mortgage Corporation, and Wells Fargo Home Mortgage, Inc. “The banks created the MERS system as an end-run around the property recording system, to facilitate the rapid securitization and sale of mortgages. Once the mortgages went sour, these same banks brought foreclosure proceedings en masse based on deceptive and fraudulent court submissions, seeking to take homes away from people with little regard for basic legal requirements or the rule of law,” said Attorney General Schneiderman. “Our action demonstrates that there is one set of rules for all – no matter how big or powerful the institution may be – and that those rules will be enforced vigorously. Only through real accountability for the illegal and deceptive conduct in the foreclosure crisis will there be justice for New York’s homeowners.”

Here’s the response from MERS: MERSCORP, Inc., and its subsidiary, Mortgage Electronic Registration Systems, Inc. (MERS) comply with laws as well as county and state recording statutes and mortgage regulations. Federal and state courts around the country have repeatedly upheld the MERS business model, and the validity of MERS as legal mortgagee and nominee for lenders. We refute the attorney general’s claims and will defend the case vigorously in court.

More from the AG’s press release:

The financial industry created MERS in 1995 to allow financial institutions to evade local county recording fees, avoid the hassle and paperwork of publicly recording mortgage transfers, and facilitate the rapid sale and securitization of mortgages. MERS operates as a membership organization, and most large companies that participate in the mortgage industry – by originating loans, buying or investing in loans, or servicing loans – are members, including JPMorgan Chase, Bank of America, Wells Fargo, Fannie Mae, and Freddie Mac. Over 70 million loans nationally have been registered in MERS System, including about 30 million currently active loans. Through their membership in MERS, these companies avoided publicly recording the purchase and sale of mortgages by designating MERS Inc. – a shell company with no economic interest in any mortgage loan – as the “nominal” mortgagee of the loan in the public records. Instead, MERS members were supposed to log mortgage transfers in the MERS private electronic registry. The basic theory behind MERS is that, because MERS Inc. serves as a “nominee” (or agent) for most major lenders, it remains the “mortgagee” in the public records regardless of how often the loan is sold or transferred among MERS members. Thus, although MERSCORP has only about 70 employees, MERS Inc. serves as the mortgagee of record for tens of millions of loans registered in the MERS System. MERS has granted over 20,000 “certifying officers” the authority to act on its behalf, including the authority to assign mortgages, to execute paperwork necessary to foreclose, and to submit filings on behalf of MERS in bankruptcy proceedings. These certifying officers are not MERS employees, but instead are employed by MERS members, including JPMorgan Chase, Bank of America, and Wells Fargo. MERS’ conduct, as well as the servicers’ use of the MERS System, has resulted in the filing of improper New York foreclosure proceedings, undermined the integrity of the judicial process, created confusion and uncertainty concerning property ownership interests, and potentially clouded titles on properties throughout the State of New York. In fact, several New York judges have questioned the standing of the foreclosing party in cases involving MERS loans and the validity of mortgage assignments executed by MERS certifying officers.

The lawsuit specifically charges that the defendants have engaged in the following fraudulent and deceptive practices:

MERS has filed over 13,000 foreclosure actions against New York homeowners listing itself as the plaintiff, but in many instances, MERS lacked the legal authority to foreclose and did not own or hold the promissory note, despite saying otherwise in court submissions.
MERS certifying officers, including employees and agents of JPMorgan Chase, Bank of America, and Wells Fargo, have repeatedly executed and submitted in court legal documents purporting to assign the mortgage and/or note to the foreclosing party. These documents contain numerous defects, including affirmative misrepresentations of fact, which render them false, deceptive, and/or invalid. These assignments were often automatically generated and “robosigned” by individuals who did not review the underlying property ownership records, confirm the documents’ accuracy, or even read the documents. These false and defective assignments often masked gaps in the chain of title and the foreclosing party’s inability to establish its authority to foreclose, and as a result have misled homeowners and the courts.
MERS’ indiscriminate use of non-employee “certifying officers” to execute vital legal documents has confused, misled, and deceived homeowners and the courts and made it difficult to ascertain whether a party actually has the right to foreclose. MERS certifying officers have regularly executed and submitted in court mortgage assignments and other legal documents on behalf of MERS without disclosing that they are not MERS employees, but instead are employed by other entities, such as the mortgage servicer filing the case or its counsel. The signature line just indicates that the individual is an “Assistant Secretary,” “Vice President,” or other officer of MERS. Indeed, these documents often purport to assign the mortgage to the certifying officer’s own employer. Moreover, as a result of the defendants’ failure to track the designation of certifying officers and the scope of their authority to act, individuals have executed legal documents on behalf of MERS, such as mortgage assignments and loan modifications, when they were either not designated as a MERS certifying officer at the time or were not authorized to execute documents on behalf of MERS with respect to the subject loan.
MERS and its members have deceived and misled borrowers about the importance and ramifications of MERS’ role with respect to their loan by providing inadequate disclosures.
The MERS System is riddled with inaccuracies which make it difficult to verify the chain of title for a loan or the current note-holder, and creates confusion among stakeholders who rely on the information. In addition, as a result of these inaccuracies, MERS has filed mortgage satisfactions against the wrong property. The lawsuit seeks a declaration that the alleged practices violate the law, as well as injunctive relief, damages for harmed homeowners, and civil penalties. The lawsuit also seeks a court order requiring defendants to take all actions necessary to cure any title defects and clear any improper liens resulting from their fraudulent and deceptive acts and practices.

The matter is being handled by Deputy Bureau Chief of the Bureau of Consumer Frauds & Protection Jeffrey K. Powell, Assistant Attorney General Clare Norins, and Assistant Solicitor General Steven C. Wu, under the supervision of First Deputy Attorney General Harlan Levy.

NY "Officer-of-the-Court" Mystery Hits Cow Country

2012-01-27T11:07:00.001-05:00

NY lawyer’s decision to withdraw multimillion lottery claim doesn’t end mystery over ticket
The Associated Press - January 26, 2012

DES MOINES, Iowa — A New York attorney’s decision to withdraw his claim on a multimillion dollar Iowa Lottery prize doesn’t put to rest officials’ questions about how he obtained the ticket. Crawford Shaw, of Bedford, N.Y., withdrew his claim Thursday on a multimillion dollar Iowa Lottery prize just as mysteriously as he has made it, saying through a Des Moines law firm that he couldn’t satisfy lottery officials’ request for basic information about how he obtained the winning ticket. The lottery has asked the Iowa Division of Criminal Investigation and the Iowa attorney general to investigate. Officials say Shaw submitted the ticket for redemption on behalf of a trust on Dec. 29, less than two hours before it expired, and has identified the recipient only as a corporation in the country of Belize. The lottery wants to know how Shaw obtained the ticket to make sure it wasn’t stolen and that a valid player bought it. It has been 13 months since the winning ticket was purchased at a Des Moines gas station in December 2010. The payout for the prize would have been $7.5 million cash, or $10.3 million spread over 25 years after taxes. Iowa lottery officials had given Shaw until Friday to provide the identities and contact information of anyone who purchased or possessed the ticket. Instead of claiming the prize in person, as is normally done, Shaw signed the ticket on behalf of the trust and shipped it by FedEx to a Des Moines law firm he had retained. Shaw, 76, sent a fax to the law firm Thursday saying he doesn’t know the identity of the purchaser. The firm relayed the information to lottery officials. “In order that the claim be resolved without further controversy, Crawford Shaw, as Trustee for and on behalf of the Trust, does hereby withdraw the Claim and does hereby agree to take no further action to enforce the Claim,” the fax signed by Shaw reads. Shaw signed the ticket on behalf of Bedford, N.Y.-based Hexham Investments Trust, though lottery officials have said he misspelled the name of the trust by leaving off the second “h.” Shaw claimed not to be a beneficiary of the trust. Iowa Lottery CEO Terry Rich said Thursday that it’s the strangest situation officials can recall in the 26-year history of the lottery. He declined to speculate on the details of the claim, saying if he knew more than what’s been released, lottery officials would probably be writing a check to a winner. “I’m telling you, if I could take all of the suggestions, it would be a heck of a fun book,” Rich said. He previously had said the lottery had received several claims that the ticket was stolen. Iowa law also prohibits employees and contractors of the lottery, their relatives and anyone younger than 21 from playing. Shaw said Wednesday through the Des Moines-based Davis Brown Law Firm that if the jackpot were paid, the money would be donated to charity. He declined to comment further Thursday. Records show Shaw played at least a minor role in the collapse of Industrial Enterprises of America, a chemical company that was looted and bankrupted in 2009 by a stock manipulation scheme. Shaw helped found the company after taking control of a Houston-based shell corporation, serving as its CEO from 2004 to 2005. Shaw’s history also includes lawsuits alleging fraud in Delaware and Texas. The unclaimed money will go toward future prizes, Rich said.

'Occupy' Movement Protests 'Citizens United' at Supreme Court, Other U.S. Courthouses

2012-01-23T06:34:00.001-05:00

'Occupy' Movement Protests 'Citizens United' at Supreme Court, Other U.S. Courthouses
The National Law Journal by Tony Mauro and Andrew Ramonas - January 23, 2012

WASHINGTON, DC - The "occupy" movement took its campaign against corporate domination to the federal judiciary on Jan. 20, storming the U.S. Supreme Court building and demonstrating at other courthouses nationwide to protest the high court's 2010 Citizens United decision. "Corporations are not persons, and money is not political speech!" proclaimed "Occupy the Courts" leader David Cobb in front of several hundred people at a grassy area on U.S. Capitol grounds across the street from the Supreme Court. Protesters, some of them from the Occupy Wall Street encampments in Washington, later moved across the street to the Court, where they pushed through a police barricade and ran up the Court's steps almost to the columns that guard the bronze front doors. Court police allowed the demonstrators to advance, even though federal law prohibits demonstrations on Court grounds. Finally, an hour after the protesters entered onto Court property, police began making arrests and ordering remaining demonstrators down the steps. Late in the afternoon, a Court spokeswoman said a dozen people had been arrested. The protests marked the two-year anniversary on Jan. 21 of the Supreme Court's 5-4 decision in Citizens United v. Federal Election Commission, 130 S. Ct. 876 (2010), which struck down restrictions on independent expenditures by corporation and unions in election campaigns. Critics say the ruling has injected millions of dollars into campaigns, often in the form of attack advertising funded by independent "super-PACs" that cannot be directly traced or imputed to candidates. Several leaders of the protest said coverage of the Super-PACs and their impact on the Republican presidential primaries has helped galvanize opposition. "We are seeing how this disgusting decision is corrupting our system," said Medea Benjamin of Code Pink, a longtime activist who helped organize the Jan. 20 protests. "And we ain't seen nothing yet. Wait until the races get under way, and this will be influencing congressional races, everything." Asked why she was demonstrating at the Court, she said, "This is the scene of the crime." Some of the protesters are hoping to build on the protests and push for a constitutional amendment that would overturn Citizens United by stating that money is not speech and corporations are not persons under the law. Asked if a constitutional amendment is a realistic goal, Joan Stallard, a demonstrator from Washington, said, "The Constitution has been amended 27 times, and we can do it again." She said more and more of the public is beginning to understand "the power of corporations in our political system" and will be receptive to a constitutional change. The demonstration at the high court began with some light theater—black-robed "justices" dancing and singing. In Boston, protests included speeches and music by a fife-and-drum team dressed in Revolutionary War-era clothing. An "auctioneer" dressed in top hat and tails sold rights such as free speech and freedom of the press to the highest bidders, who were corporations represented by people dressed in boxes with the names of companies. About 150 people braved 29-degree weather to participate in the Boston protest behind the John J. Moakley U.S. Courthouse. In New York City, where the "Occupy" protests began, demonstrators moved the location of their anti-court protest to Foley Square, after a federal judge on Jan. 19 rejected their preferred location outside the Daniel Patrick Moynihan courthouse. Southern District Judge Lewis Kaplan said the General Services Administration had properly denied the group's application for a permit, because the location the demonstrators sought was not a designated public forum (NYLJ, Jan. 20). Late on the afternoon of Jan. 20, approximately 50 protesters were massing on Broadway, set to march about 12 blocks from Zuccotti Park north to Foley Square for a rally. Roughly 100 people chanted slogans outside the U.S. Court of Appeals for the Ninth Circuit in San Francisco. Demonstrators also gathered in Portland, Ore. and Detroit. In Chicago, 50 demonstrators came out in driving snow, with one holding a sign that said, "Citizens United against Citizens United." Tony Mauro covers the U.S. Supreme Court for ALM, the Law Journal's parent. He can be contacted at tmauro@alm.com. Andrew Ramonas, a reporter at The National Law Journal, an affiliate, can be contacted at aramonas@alm.com. Sheri Qualters, a reporter at The National Law Journal, contributed to this report.

Corrupt Judge-Picking Machine Upset With Law-Abiding Federal Judge

2012-01-23T06:30:00.001-05:00

City Seeks Removal of Garaufis From Firefighter Bias Lawsuit
The New York Law Journal by Mark Hamblett - January 23, 2012

New York City took its conflict with Eastern District Judge Nicholas Garaufis to a new level on Jan. 20, announcing that it had filed an appellate brief challenging the judge's remedial order in the long running battle over discriminatory hiring practices at the Fire Department and requesting that the judge be removed from the case. "It is an understatement to say that this judge has expressed firm views on the city's ostensible intent to discriminate, as well as the supposed need for close judicial oversight of systemic relief," the brief states. "To any reasonable observer, the vehemence of those beliefs would raise substantial doubt that he could fairly re-evaluate the evidence on either issue." Incensed over Judge Garaufis' decision to name a court monitor who could serve for at least a decade, Corporation Counsel Michael Cardozo and his legal team told the U.S. Court of Appeals for the Second Circuit that Judge Garaufis had demonstrated "bias throughout the proceeding." Judge Garaufis has voided three firefighter exams and made two liability determinations based on exams, finding the FDNY guilty of both intentional discrimination against black applicants, and practices that had a disparate impact on minorities, a finding that Mr. Cardozo said in his brief "intentionally disregarded a wealth of evidence relevant to the city's lack of discriminatory intent." In October, as he issued a remedial order in United States v. The City of New York, 11-5113-cv., that included the appointment of a monitor, Judge Garaufis observed, "Today—our years of litigation and two adverse liability decisions later—the city still doesn't get it." (NYLJ, Oct. 6, 2011) Mr. Cardozo vowed to appeal "as soon as the law allows." He did so in December and asked the Second Circuit to hear the appeal on an expedited basis (NYLJ, Dec. 9, 2011).

In its brief filed with the circuit on Jan. 17, the Law Department states that Judge Garaufis abused his discretion in entering an injunctive order that "far exceeds the scope of the statutory violation." "Despite the broad equitable powers conferred by Title VII, the District Court lacked authority to order the FDNY to change practices that have nothing to do with the exams that formed the sole basis for both liability determinations," the city argues. The injunction also violates "fundamental principles of federalism," the city says, because it limits the "political branches' ability to determine the appropriate allocation of scarce public resources," a concern that is heightened where, "as here, federal courts interfere with a locality's discretion in how best to protect public safety." "Further, the FDNY's quasi-military structure demands that a firefighter respond to authority with alacrity," the brief states. "The Fire Commissioner has the duty and necessary expertise to ensure, in the exercise of his sound discretion, that individuals holding such a position have the requisite character and integrity to command public trust. "Absent a proper adjudication that he has abused that power, a federal judge may not intervene without disrupting the delicate balance guaranteed by the Constitution." The city attacked the judge's findings of fact that followed a remedial bench trial he held in August, facts that Judge Garaufis said showed that hiring practices discriminated against blacks and Hispanics, leaving the department "a stubborn bastion of white male privilege." But the city's strongest language was reserved for the judge himself. It claimed Judge Garaufis showed partiality during the hearing—a "pervasive propensity to excuse shortcomings" in the proof offered by the Vulcan Society, an organization of black firefighters who intervened in the case brought by the U.S. government. "The picture that emerges is that of a court bound and determined to justify closely supervised 'top-to-bottom' injunctive relief," the city's brief states. "Where the city's proof showed that such relief was unnecessary, the court excluded, struck or ignored it. Where intervenors' evidence fell short, the court found a way to excuse or fix it." The city's lawyers say the judge tried to bolster the intervenors' evidence by calling three city officials as witnesses, thereby making "himself a witness in the case" in violation of the Federal Rules of Evidence "and destroying the appearance of impartiality." The city faults the judge for "confrontational" questions to city witnesses, the appointment of former Manhattan district attorney Robert Morgenthau as a special master to oversee test development, (Mr. Morgenthau would later step aside to be replaced by Mary Jo White, the former Southern District U.S. attorney who is now a Debevoise & Plimpton partner), and said the judge was "influenced by press accounts of extrajudicial statements attributed to city officials." The brief quotes the judge at one point as saying, "The court has been criticized in the media by the mayor and the Office of Corporation Counsel all along in this litigation." The brief was written by Alan G. Krams and Deborah A. Brenner, senior counsels in the Appellate Division of the city Law Department. Mr. Cardozo also signed the document because of the importance of the issue, a spokesperson said. Judge Garaufis declined to comment about the brief. Richard A. Levy of Levy Ratner represents the Vulcan Society. Mr. Levy said the city "is trying to avoid injunctive relief on the theory it was predicated on the intentional discrimination finding." He added, "I think they may be disappointed. Certainly, it's our view that all of the relief that was granted could have been granted based on [the judge's] finding of disparate impact—even though no intentionality has been found." Mark Hamblett can be contacted at mhamblett@alm.com.

Lawyer's Claim of Firing for Refusal to Back Forgery Is Left to Jury

2012-01-23T06:24:00.001-05:00

Lawyer's Claim of Firing for Refusal to Back Forgery Is Left to Jury
The New York Law Journal by Brendan Pierson - January 23, 2012

A lawsuit by a former Napoli Bern partner who claims he was fired for refusing to sign an affirmation that a forged signature was genuine may go forward, a state judge has ruled. In a Jan. 19 ruling in Connolly v. Napoli Kaiser Bern, 105224/05, Manhattan Supreme Court Justice Joan A. Madden denied a motion by the firm for summary judgment dismissing the suit, which was filed by Gerard A. Connolly. When Mr. Connolly worked at the firm, it was called Napoli Kaiser Bern. It is now called Napoli Bern Ripka Shkolnik. The suit centers on a personal injury case, Vasquez v. Barbieri, 13010/97, in Bronx Supreme Court. Mr. Connolly served as trial counsel for the plaintiff, Anthony Vasquez, in March and April 2001. According to Justice Madden's decision, Mr. Connolly began the case believing that Mr. Vasquez's wife, Rosa, had a derivative claim as a result of her husband's injury. However, he learned that the couple had separated before the injury and concluded that Ms. Vasquez had no claim. In mid-April 2001, the Vasquez case settled for $850,000, according to the decision. However, the defendant's insurer would not pay the settlement without signatures from both Mr. and Ms. Vasquez.

It is undisputed that Mr. Vasquez forged Ms. Vasquez's signature on the settlement documents. Mr. Vasquez testified in Mr. Connolly's suit that he did this at the suggestion of Gerald Kaiser, then a senior partner at the firm. Mr. Kaiser, now a director at Madison National Bancorp Inc. on Long Island, denies this and claims he did not learn the signature was forged until months later. In July 2001, the Napoli firm received a letter from an attorney representing Ms. Vasquez saying she had no knowledge of the settlement. In winter 2001, Ms. Vasquez moved to vacate the settlement. In order to oppose that motion, Mr. Kaiser asked Mr. Connolly to sign an affirmation that Ms. Vasquez had signed the settlement documents. Mr. Connolly refused on the grounds that he did not believe she had signed the documents and that, in any case, he had no personal knowledge about whether or not she had. On March 19, 2002, he signed a revised affirmation about the case, omitting that Ms. Vasquez had signed the documents. On April 11, 2002, the return date of Ms. Vasquez's motion, Ms. Vasquez reached a settlement with Mr. Vasquez and the Napoli firm in court, under which Mr. Vasquez agreed to pay her $12,000 and the firm agreed to pay her $50,000. On that same day, Napoli senior partner Marc J. Bern told Mr. Connolly that his employment was being terminated. Napoli senior partner Paul J. Napoli testified during Mr. Connolly's lawsuit that he fired Mr. Connolly because of his "sloppiness with court dates" and because he had lost five cases. He said that he had reached the decision to fire Mr. Connolly in September 2001, and that Mr. Connolly's handling of the Vasquez case was only the "culmination of his poor performance," precipitating his immediate termination. But Justice Madden held that Mr. Napoli's argument was one for a jury. "When viewing this evidence in the light most favorable to plaintiff…a reasonable fact finder could conclude that plaintiff was terminated for his refusal to sign this false affirmation in violation of [the Lawyer's Code of Professional Responsibility], rather than, as defendants allege, his poor performance as a trial attorney, and his alleged mishandling of the Vasquez action," she wrote. The judge noted that, in the two months before he was fired, Mr. Connolly had won two verdicts. In February 2002, he won a $75,000 award for an inmate who had been assaulted at Rikers Island. That March, he won a $203,000 award for a plaintiff who was injured after stepping into an open basement trap door. Mr. Connolly also obtained settlements for Napoli clients amounting to about $300,000 in winter 2001-02, according to the decision. Justice Madden also noted that Mr. Kaiser had testified that Mr. Connolly "did most aspects of his job well." "In addition, the timing of his termination suggests that plaintiff was fired not due to his alleged mishandling of the Vasquez action, but as a result of his refusal in March 2002, to falsely attest that Ms. Vasquez's signatures were genuine," she wrote. "If, in fact, NKB intended to fire plaintiff due to his mishandling of the case in connection with the signing of the release, it likely would have done soon after Ms. Vasquez's application was filed in February 2002," she said. "However, plaintiff was not terminated until the April 1, 2002 return date which was also after plaintiff refused to sign the false affirmation." "I think the court got it absolutely correct," said Andrew M. Moskowitz of Pashman Stein, counsel to Mr. Connolly. "There was ample evidence from which a reasonable jury could find that Mr. Connolly was terminated for his refusal to file a false affirmation." "We disagree with the decision and expect to take an appeal," said Christopher B. Hitchcock of Hitchcock & Cummings, counsel to Napoli Bern. Mr. Bern referred a request for comment to his outside counsel, who could not immediately be reached. Brendan Pierson can be contacted at bpierson@alm.com.

Bad Justice Getting Slower

2012-01-23T05:37:00.001-05:00

Getting a divorce? Better not be in a hurry
The Staten Island Advance by Frank Donnelly - www.SiLive.com - January 22, 2012

STATEN ISLAND, N.Y. -- Divorce cases are among the most gut-wrenching and contentious on Staten Island court dockets, and to the dismay of litigants and their lawyers, they're taking longer to resolve. Budget cuts and layoffs in the court system are prime culprits for the delays, although the sagging economy also plays a role, say lawyers. Veteran matrimonial attorney William J. Leininger said the wait to obtain a signed judgment finalizing a divorce is now nine months or more after both sides agree to terms. The finalization process used to take three or four months, he said. And that's on top of the time typically required -- anywhere from a few months to two years -- to reach the divorce settlement. The delays have pushed back clients' re-marriages and even cost some their wedding-hall deposits, said Leininger. The settlement stipulation, which establishes alimony, child support, custody and other issues, is unenforceable without the signed judgment, he said. And parties can't legally re-marry without the judgment. "It's a major problem. People want to move on with their lives," said Leininger, whose practice is based in Dongan Hills. "People have no legal rights when the judgment hasn't been signed. My clients have had their rights put into limbo for 10 months. It's very sad." According to the New York City Bar Association, the state judiciary, last year, was subjected to a $170 million budget cut. About 8 percent of its workforce, or 1,300 employees, left the courts due to early retirements and layoffs. As a result of those reductions, all courtrooms throughout the state must stop all activities at 4:30 p.m., including trials, settlement conferences and meetings with lawyers. On Staten Island, former administrative judge Philip G. Minardo said he had to shave off about $750,000, or around 5 percent, from the Supreme Court's $15.5 million budget for the current fiscal year and still keep the court running efficiently. Anne-Louise DePalo, a Dongan Hills-based matrimonial lawyer, said cutbacks had limited the matrimonial part to one clerk to review documents in contested divorce cases. Those records, which include financials, are typically voluminous. "It was a time-consuming process," she said. "It's not the court's fault. They have limitations in staffing. [But] if people don't settle their cases, it can take a long time" to resolve them. Justice Judith N. McMahon, who replaced Minardo on Jan. 1 as administrative judge, acknowledged that budget cuts and personnel losses have slowed divorce-case resolutions. She's vowed to expedite the process. "There have been resources transferred to the matrimonial part," she said last week. "I can tell you the entire staff in the matrimonial part is working very hard to decrease any type of delay, but, sometimes, it's innate in the matrimonial part. It's my belief that we should be up to date as of the end of March." Graniteville-based matrimonial lawyer Valerie J. Camacho believes the country's lingering financial crisis has played a main role in dragging out divorce cases here. "I think it's more a function of the economy," she said. "It's just harder to resolve cases. When you have enough money for both parties to divide assets, it's easy. But in this economy, it's almost impossible to divide up the assets so that both parties can survive." On the other hand, Paul Scano, a Castleton Corners-based matrimonial lawyer, said he hasn't noticed any significant slowdown in resolving cases. "Delays in signing judgments of divorce have gone on for a long time," he said. "It's nothing new." But both Scano and Leininger said New Jersey has streamlined the process to finalize divorces, and they'd like to see New York adopt it. In the Garden State, judges sign the final judgment of divorce in court when the two sides present it, along with the signed stipulation of settlement, setting forth the divorce terms, said Leininger. In New York, however, the plaintiff's attorney must prepare the final judgment notice after the settlement is discussed in court with the judge. He must then serve a copy of the judgment on the opposing lawyer and file the original with the matrimonial clerk's office where it can linger nine months or more before being signed, said Leininger. Leininger said 98 percent of divorces here are settled without a trial, so the New Jersey method would speed up the vast bulk of cases. He said it would require state court administrators' approval to implement. Judge McMahon said the re-jiggering of court personnel should move cases along. "The judgments are being done in a much more expeditious manner now," she said.

Report Finds Court Cuts Cause 'Substantial Harm'

2012-01-22T16:47:00.000-05:00

Report Finds Budget Cuts Result in 'Substantial Harm' to Courts
The New York Law Journal by Joel Stashenko - January 19, 2012

ALBANY, NY - Budget cuts imposed on New York's state's Judiciary in 2011 have been "substantially harmful and far-reaching" to the operations of the courts, the New York State Bar Association concluded in a report released Jan. 18. The report, based on observations by litigants, lawyers and others, found that courts have been "less efficient" and that "judicial decision-making is less expedient" than before passage of the 2011-12 state budget, when $170 million was excised from the Judiciary budget of about $2.3 billion for the year beginning April 1, 2011. "Recent reductions in state court funding have been quite costly," the report says. "Although state fiscal constraints are very real in this economy, additional and imminent investment in the state court system is necessary. It is necessary to restore a sense of confidence in the judicial system, which ultimately is priceless." The report was prepared by the executive committee of the state bar based on a questionnaire it sent to lawyers, judges, court staffers and members of the public in the state's 13 judicial districts. It was released in preparation for a presidential "summit" at the upcoming annual state bar meeting at 2 p.m. on Jan. 25 at the New York Hilton in Manhattan. Former Chief Judge Judith S. Kaye and Judge Richard Wesley of the U.S. Court of Appeals for the Second Circuit will moderate the discussion about cuts in funding to federal and state courts. The president of the American Bar Association, William T. Robinson III, also is set to speak at the session on funding shortages. Vincent E. Doyle III, the president of the state bar, said on Jan. 18 that he wanted one of the presentations to focus on what he thinks is a growing crisis in funding for state courts. (The other session, to begin at 3:30 p.m. on Jan. 25, will focus on the obligations of defense attorneys to warn immigrants about the collateral consequences of conviction.)

New York's Judiciary has submitted a budget for 2012-13 that is down slightly overall but includes $27.7 million necessary for judges to receive their first raises since January 1999. Governor Andrew M. Cuomo reacted positively to the courts' spending plans in his budget proposal (NYLJ, Jan. 18). "We certainly support it," Mr. Doyle said of the Judiciary's request for 2012-13. "But we would love to see it at a higher level of funding." Mr. Doyle said the state bar wants Mr. Cuomo and legislators to understand that several years of flat budget proposals have had a "very noticeable impact on the functioning of the court system." Among the impressions gathered by the state bar is that the cutbacks have "led to delays in the administration of justice, increased costs to litigants, and the crowding of court dockets." With cases taking longer to adjudicate, the state bar said the reputation of the courts has suffered. "It results in less accessibility, loss of respect and diminished power," the report declares. Among the functions taking longer are signing off on uncontested divorces, even where no children are involved, and disposing of commercial matters, the report states. "Reductions in staff have caused delays in courthouse operations," it says. "Something as simple as getting into the courthouse takes much longer due to fewer security personnel, and long lines form that can make a litigant miss a calendar call. The filing and processing of petitions, motions, and other court filings have been slowed." The evidence is anecdotal, and the report offers no statistics about the magnitude of the delays or how much they have increased in the last year. Lise Bang-Jensen, a spokeswoman for the state bar, said it was not practical for the group to perform a more scientific survey of court consumers. "It would be impossible to collect that data," she said. "How do you quantify how many people did not get into court because of the 4:30 p.m. closing time? How many people were unhappy because they did not get to be heard by 4:30 p.m. and could not come back the next day? There is no way to significantly measure this." Mr. Doyle, of Connors & Vilardo in Buffalo, said he expects his organization and other bar groups, such as the New York City Bar and the New York County Lawyers' Association, to be more aggressive this year in promoting the next state court budget than in the previous few years. Mr. Doyle said that will include joint news conferences like the one the state bar ran last year in conjunction with the city bar, NYCLA and other groups promoting passage of bills legalizing same-sex marriage and toughening ethics legislation for public officials in New York. Both of those bills ultimately passed last year in Albany. Mr. Cuomo's office had no immediate response yesterday to the state bar's survey. Legislative leaders also had no immediate comment. The state bar's conclusions mirror the findings of a shorter New York City Bar report that found the operations of the state courts have suffered from the 2011 cutbacks (NYLJ, Jan. 10). Joel Stashenko can be contacted at jstashenko@alm.com.

Toodles, Judge Poodle

2012-01-21T05:12:00.002-05:00

Toodles, Judge Poodle
The New York Post - EDITORIAL - January 21, 2012

Speaking of out-of-control judges, it’s au revoir for state Supreme Court Justice Emily Jane Goodman — the leftist lapdog we dubbed Judge Poodle for her slavish devotion to the city’s bleeding-heart brigade. Goodman is calling it quits after a nearly 30-year career on the bench. She calls it retirement. We would say she’s merely formalizing a partnership she’s long maintained with — speaking of dogs — the legal beagles of the loony left. It seems that Goodman is founding a law firm with former NYCLU chief Norman Siegel and two other leftist gadflies. Her chamber doors were always open to such activists: She literally held court in her living room for the Legal Aid Society one night in 1998 to block a set of rent-law reforms from taking effect — the very essence of a judge legislating from the bench.

Here’s some of her greatest hits:

Free Rides: In 1998, she tried to undo the city’s workfare reforms by allowing welfare recipients to essentially call in sick. In 2001, at the behest of the group Housing Works, she held the city in contempt and ordered it to pay fines for not finding shelter quickly enough for five homeless AIDS patients — never mind that the city had done so speedily for more than 8,000 patients already that year. More recently, in 2010, she tossed even the most modest reforms of rent regulations that have strangled the city’s real-estate market and kept prices artificially low.

Crime: The NYPD led a two-year investigation of the Sound Factory, a notorious West Side nightclub and drug den where 20 patrons overdosed and two died. Cops raided it in 2003, but Goodman laughed off their evidence and ordered the club re-opened. The party ended in 2004 only after the feds busted in on what they called a “stash house” for ecstasy and crystal meth. Most recently, Goodman was caught displaying an official NYPD placard in her car so she could park illegally at expired meters near her apartment. Respect for the law? Not Judge Poodle. Doggone good thing she’s leaving.

People Who Pick Political Puppet Judges Shouldn't Complain

2012-01-20T23:07:00.000-05:00

Bloomberg slams Garaufis over FDNY discrimination ruling
The New York Post by Mitchel Maddux - January 20, 2012

Mayor Bloomberg has launched a stinging broadside against a federal judge who last year mandated broader judicial oversight over New York City's fire department after that ruling minority firefighters were subjected to widespread discrimination. City attorneys have suggested that Brooklyn federal Judge Nicholas Garaufis "abandoned a neutral role" while presiding over the civil rights case brought against the FDNY by the US Justice Department and "injected" personal, "extrajudicial beliefs" into the bitterly fought court battle. "The whole episode speaks volumes about the Court’s lack of detachment," attorneys wrote in a brief filed with the Second Circuit Court of Appeals. It is not the first time that New York City's mayor has cross rhetorical swords with the powerful federal judge who recently ordered that a court-appointed monitor should supervise a wide range of functions at the fire department involving the hiring and promotion of minority firefighters. In his written decision issued last fall, Garaufis singled out Bloomberg personally for his failure to attack the issue of bias in the FDNY's ranks head-on. Last year, the judge wrote in another opinion that the fire department and city officials had tried to downplay problem, saying "the city’s culture of bureaucratic blame-shifting and accountability avoidance [shows]...that the city does not want to be held accountable for the results of its recruitment efforts. This is unacceptable." The city's appeal in the FDNY discrimination case has been long awaited and was promised within minutes of the judge's ruling that minorities trying to become city firefighters suffer disadvantages that go far beyond the applicant testing process. The ruling placing a court-appointed monitor over the fire department followed a special bench trial held last summer, which focused on how the FDNY can attract more minority applicants to an agency overwhelmingly staffed by white firefighters. The judge concluded after the trial that the low percentage of minorities in the FDNY is "a direct result and vestige of the city’s pattern and practice of discrimination against black firefighter candidates." Garaufis' ruling stems from a 2007 lawsuit filed against the fire department by the US Justice Department, with the aim of forcing the city to hire more minorities at an agency where white men make up 93 percent of the 11,000 firefighters in its ranks - in a city with a far more diverse population. The judge had ruled previously that the FDNY's entrance test unfairly discriminates against black and Hispanic applicants. Mary Jo White, the former Manhattan US attorney appointed by the court as a special master to create a new FDNY entrance exam, has been engaged in efforts to create a new test that is more fair to minority firefighters. Firefighter applicants are scheduled to take the new test in the spring.

Special Prosecutor Possible in Judicial Misconduct Case

2012-01-19T08:16:00.002-05:00

Special prosecutor possible in the Brunswick judge misconduct case
The Florida Times-Union by Teresa Stepzinski and Terry Dickson - December 21, 2011 (updated January 10, 2012)
Amanda Williams is resigning effective Jan. 2 amid 14 counts of misconduct.

BRUNSWICK, FL - A special prosecutor might be appointed to determine if Chief Superior Court Judge Amanda F. Williams committed a crime while being investigated for judicial misconduct. The state Attorney General’s Office wants to examine the Judicial Qualification Commission’s evidence that Williams lied to its investigators, and violated her oath of office, both of which are felony crimes. Lauren Kane, spokeswoman for Attorney General Sam Olens, said the office will decide whether to appoint a special prosecutor after talking to commission officials. If appointed, the special prosecutor would determine whether criminal charges would be filed. Facing 14 counts of unethical conduct on the bench, Williams submitted her resignation this week, effective Jan. 2. Had she not resigned, the commission would have conducted a hearing on the charges and could have asked the state Supreme Court to remove her from the bench. Among other things, Williams was accused of imposing indefinite jail terms on defendants, especially those in drug court, giving favorable treatment to the family of friends and those with high social standing, depriving defendants of access to their lawyers and ruling without giving parties a chance to be heard. With her resignation and an agreement to never again return to the bench, the commission dismissed all of the ethics charges against her. A conviction of a felony would mean Williams, 65, would lose her state pension, about $74,000 a year. As a judge, she was paid an annual state salary of $120,252. She will immediately lose the local supplements paid by the five counties in the Brunswick Judicial Circuit. Glynn County alone pays Superior Court judges $21,600 a year. Jackie Johnson, district attorney of the Brunswick Judicial Circuit, previously recused her office from any action in the case, Kane confirmed. Johnson said she did this because the commission might have called staff members as witnesses. However, one of the charges against Williams was that she held a reception for Johnson at her home in April 2009 at which she endorsed Johnson for the district attorney’s job. Johnson has said, to her knowledge, Williams made no such endorsement. terry.dickson@jacksonville.com, (912) 264-0405 - teresa.stepzinski@jacksonville.com, (904) 359-4075

Disciplinary Hearing Against Bronx Surrogate Concludes

2012-01-18T06:05:00.001-05:00

Disciplinary Hearing Against Bronx Surrogate Concludes
The New York Law Journal by Brendan Pierson - January 18, 2012

The disciplinary hearing against Bronx Surrogate Lee L. Holzman concluded on Jan. 17, more than one year after the Commission on Judicial Conduct first accused the surrogate of allowing Michael Lippman, former chief counsel to the Bronx public administrator, to collect more than $300,000 in excessive legal fees from estates. Former Manhattan Supreme Court Justice Felice K. Shea presided over the hearing, which concluded with commission attorney Brenda Correa cross-examining Surrogate Holzman for nearly two full days. Throughout the cross-examination, the surrogate repeatedly said that he had been inclined to trust affidavits of legal services submitted by Mr. Lippman, who had worked for the public administrator's office for over 30 years. He testified that, even after Mr. Lippman confessed in 2006 that he had taken excess fees from some estates, he did not believe the attorney had broken any laws and trusted that he would pay them back. He said his first inkling that Mr. Lippman may have been guilty of serious misconduct came in 2009, when state and federal authorities began investigating him. Although Surrogate Holzman removed Mr. Lippman from his position as chief counsel in 2006, he allowed him to continue working for the public administrator and to collect fees in order to refund the estates to which he owed money. The commission is charging the surrogate should have turned Mr. Lippman in to criminal authorities right away. The commission also alleges that the surrogate routinely approved legal fees for Mr. Lippman based on boilerplate language, and that he should have known about the excessive fees earlier. Both sides will now submit written closing briefs. Surrogate Holzman is represented by David Godosky of Godosky & Gentile. Ms. Shea will issue a report to the commission. The agency's administrator and Surrogate Holzman will then submit briefs to the commission, which will hear oral argument before rendering a final determination.

Governor Cuomo Reacts Positively to Judiciary's Spending Plan

2012-01-18T05:30:00.001-05:00

Governor Reacts Positively to Judiciary's Spending Plan
The New York Law Journal by John Caher and Joel Stashenko - January 18, 2012

The judiciary budget proposal—with funding for the first judicial pay raises in 13 years and $25 million to expand civil legal services—took a significant step forward with Governor Andrew Cuomo's apparent endorsement of the $2.7 billion spending plan. In his annual budget address on Jan. 17 in Albany, Mr. Cuomo publicly thanked Chief Judge Jonathan Lippman for presenting a no-growth budget, submitted a budget message to the Legislature that had nothing but praise for the Judiciary's plan and, in encountering the chief judge on the floor of the auditorium where the address was delivered, said to Judge Lippman, "You are a gentleman." Although Judge Lippman's budget still has to endure legislative and final executive scrutiny, the chief judge and Chief Administrative Judge A. Gail Prudenti were relieved and elated after listening to the governor's speech. "We are very, very pleased with the governor's commentary," Judge Lippman said. "It is a very good start."

"We are really happy with the comfort level that this governor has with our budget," Justice Prudenti said. New York governors are constitutionally required to submit the Judiciary's budget to the Legislature without revision, but can include commentary. In recent years, that commentary has been critical. In 2010, Governor David A. Paterson complained that the Judiciary was conducting "business as usual" when every other part of state government was cutting back. Last year, Mr. Cuomo accused the Judiciary of not doing its part to address a $10 billion state budget shortfall. Ultimately, the judiciary sustained deep cuts and hundreds of layoffs. This year, the Judiciary starts off on much firmer ground for next year's budget with what appears to be executive support. Even in years when the judiciary is not a budgetary target, the governor's written commentary is generally tepid to neutral. Mr. Cuomo's Jan. 17 commentary was unusually positive. "The budget submitted by the chief judge recognizes the ongoing budgetary pressures the state faces, addressing fiscal reality while supporting the courts' ability to uphold their constitutional duty," Mr. Cuomo wrote in a passage which Judge Lippman and Justice Prudenti saw for the first time at the budget presentation. "I commend the Judiciary for examining their operations and for continuing to seek to make the court system work better and smarter." The next step is to sell the budget to the Legislature, a task that falls primarily to Justice Prudenti, who took over as chief administrative judge less than two months ago. She will defend the budget at a legislative hearing on Jan. 30. Vincent E. Doyle III, president of the New York State Bar Association, said he is pleased by the governor's support. However, Mr. Doyle, of Connors & Vilardo in Buffalo, said the state bar will issue a report this week documenting the harm caused to the court system by the 2011-2012 budget cuts.

Similarly, the New York County Lawyers' Association expressed concern over the impact of those cutbacks. "The fact that the governor is supportive of the proposed judicial budget is welcome news, but the New York County Lawyers' Association remains deeply concerned about the impact that judicial budget cuts are having on the administration of justice, and intends to address the issue further in the coming days," said Stewart D. Aaron, NYCLA's president and a partner at Arnold & Porter. The judiciary's budget came in at $3.5 billion, or .15 percent, below this year's, even as the Third Branch would absorb $70 million in new expenses, much of it for judicial and contractual pay raises for non-judicial staff. It includes nearly $28 million for the first phase of a three-year boost in judicial pay. If the raise is approved by the Legislature and the governor, judges will get a 17 percent pay hike on April 1. Also in the budget is $21.3 million for contractually required pay increases for non-judicial employees and $25 million in increased aid for indigent defense. The $10,000 supplemental stipend for judges that was added to this year's budget is not included in the 2012-2013 budget. The $25 million in increased aid for indigent defense, one of the few instances of new discretionary spending in the judiciary budget, is the same amount recommended by the Task Force to Expand Access to Civil Legal Services in New York and requested in this year's budget. However, only half the money was allocated this year. "This is an important step forward and we are very appreciative of the chief judge's inclusion of funding for civil legal assistance at a time when we can only help one of nine New Yorkers who come to us for civil legal help," said Steven Banks, attorney-in-chief of the Legal Aid Society. Mr. Cuomo's $132.5 billion executive budget would increase operating expenses by about 1.9 percent without any increase in taxes or fees, according to the Division of the Budget. It stresses education reform, including a robust teacher evaluation program, state pension reform, economic development and streamlining of state government. Three of the four major public safety agencies—the Department of Corrections and Community Supervision, the Division of Criminal Justice Services and the State Police—would sustain budget cuts of up to about 2 percent. Only the Division of Homeland Security and Emergency Services would receive a boost, 13.1 percent.

The budget proposes:

• Establishing a new Foreclosure Relief Unit within the state Department of Financial Services to provide counseling and mediation services for New Yorkers facing eviction from their homes.
• Enacting an all-crime DNA bill that would require everyone convicted of a Penal Law crime to submit a genetic fingerprint (NYLJ, Jan. 5). It also addresses a lingering issue on who is responsible for collecting DNA from convicts. Legislation included with the budget would require DNA to be collected "by the public servant to whose custody the designated offender has been committed" or, if the individual is sentenced to probation, the local probation department.
• Creating a new "tenant protection unit" to "enforce landlord obligations and impose strict penalties for failure to comply with New York state's rent laws."
• Authorizing the State Police to recruit new officers for the first time in three years. Under the budget, the State Police would be allowed to hold two classes in the next year to bring up to 230 new recruits into the system. The new classes would bring to 4,458 the number of troopers when they are incorporated into the force, or a decline of just below 10 percent from the force's peak of 4,939 officers in 2009.
• Creating an Office of New Americans to provide legal assistance to immigrants seeking to establish themselves as U.S. citizens.
• Requiring that the trial date for traffic violations be a date subsequent to the initial appearance.

Joel Stashenko can be contacted at jstashenko@alm.com; John Caher can be reached at jcaher@alm.com.

What Is Law School For?

2012-01-17T19:36:00.000-05:00

What Is Law School for?
The New York Law Journal by Karen Sloan - January 17, 2012

The picture was meant to jolt the assembled crowd of legal educators. It showed the four members of Swedish supergroup ABBA, clad in their signature 1970s pop star regalia: tall platform boots, capes, sparkle galore. To put a finer point on it, Legal OnRamp Chief Executive Officer Paul Lippe played a snippet of ABBA's hit, "Waterloo." "We don't want to end up in our Waterloo," he warned as the photo loomed over the crowd on a projection screen; if law schools don't adapt to changes in the legal industry, they will look as outdated and ridiculous as ABBA now appears to young people. Lippe was hardly the only voice urging a rethinking of legal education during the annual meeting of the Association of American Law Schools in Washington earlier this month. Changes in the legal profession — and how law schools should respond — was the hot topic during the three-day conference, which drew nearly 3,000 educators. He was among the most emphatic, however, in warning that the divide between the legal academy and the profession is no longer tenable. It handicaps students by sending them into the job market without practical skills or an understanding of how lawyers operate and what clients expect, he said. For many legal educators, the comparison to ABBA seemed unfair, given that a growing number of them are retooling their curricula to meet the changing demands of legal employers. More than 500 law professors and administrators packed into a daylong session to discuss curriculum innovations, seek the correct balance between traditional and practice-based courses and debate which skills to teach in light of the broad range of careers their graduates pursue. The number of bodies in that room illustrated that legal academics understand that shifts in the profession require reform within the academy, said Susan Carle, an American University Washington College of Law professor who helped plan the session. More than 100 faculty members responded to a call for papers on teaching innovations. "I found it to be encouraging," she said. "There really is a lot of interesting work people are doing in law schools that relates to thinking about how legal scholarship should develop in response to this crisis." The state of the profession has not traditionally been a focus of law professors, said George Washington University Law School professor Thomas Morgan, author of the book The Vanishing American Lawyer. That remained true until about one year ago, when more people within the academy started taking note of the rumblings within the profession, he said. "We need to try and bridge what is a mutual set of problems," Morgan said.

'REARRANGING THE DECK CHAIRS'

Still, there remains a gap between the magnitude of change advocated by some within the profession and the modest innovations law schools are pursuing. Those innovations include a wider array of clinics, harnessing technology in simulations and student projects, and teaching transactional lawyering skills. "I think they are rearranging the deck chairs on the Titanic," said Susan Hackett, chief executive officer of consulting firm Legal Executive Leadership and former general counsel of the Association of Corporate Counsel. "The discussion seems to be, 'Let's add a Thursday evening extra-credit course on the legal profession that meets for a couple of hours.' That's just tweaking around the edges." Instead, Hackett suggested a re-engineering of law curricula to include an initial phase of core courses followed by a year of executive education-style classes covering topics including business skills, legal technology and behavioral management. The final phase would involve clinics or externships in law firms, legal departments, government agencies or nonprofit organizations. These could replace the traditional law firm summer associateships and would be more substantive, she said.

Missing in the conversation was any focus on what skills corporate clients actually want in their lawyers, Hackett said, such as the ability to solve problems and understand financial statements. "I truly think there are a significant number of people in legal education who think that what a client wants is irrelevant," she said. "They just want to teach the law." Others warned that framing the discussion solely in terms of what large law firms and corporate clients want ignores that the vast majority of law school graduates don't work in so-called Big Law, but rather in small firms, solo practice, government or nonprofits — or even as nonlawyers. Identifying exactly what skills and knowledge students should take away from law school is more complicated than critics suggest, said University of Richmond School of Law Dean Wendy Perdue and Northeastern University School of Law Dean Emily Spieler. Not only that, but eschewing traditional law and interdisciplinary courses in favor of trendy practical skills and legal-profession classes could undermine the larger mission, said Thomas Harvey, a 2009 graduate of Saint Louis University School of Law. Harvey and several classmates founded the nonprofit legal aid provider ArchCity Defenders shortly after graduating — in part, because they were inspired by a course in critical race theory. "Why is the failure of high-priced law firms to adequately train their associates the failure of law schools?" Harvey said. "I think law school works because it's a broad, rather than a narrow, experience. I fear for a day when that is eliminated from the curriculum in favor of an externship." Peter Kalis, chairman and global managing partner of K&L Gates, said he considers the criticism leveled against law schools misplaced. Law schools' failure lies not in their inability to teach practical skills, but rather in their diminishing ability to produce lawyers "able to speak the language of the law with confidence," he said. "My viewpoint is not all that representative of managing partners, I'll admit, but I believe law schools should concentrate on the education of law students from the perspective of acculturating them in the rule of law," Kalis said. "Law students should spend that time being immersed in and becoming familiar with common law subjects." The Association of American Law Schools attendees largely agreed that, in the future, most law schools will combine traditional bread-and-butter law curricula with courses, externships and clinics geared toward building real-world skills and knowledge about the legal profession. "It's OK that some traditional faculty members want to keep doing what they do, as long as other people are out there experimenting," Carle said.

FINDING A BALANCE

Finding that balance is something schools are only beginning to explore. "Certainly, this issue has gotten a lot of attention within the academy," said David Wilkins, director of the Program on the Legal Profession at Harvard Law School. "Whether law schools are willing to actually change is a much more difficult issue. There is a lot of dissatisfaction with law school, but not a lot of strong ideas about how they should change." Despite the talk, responding to changes within the profession does not rank as high with law faculties as their scholarly research, said Gillian Hadfield, a professor at the University of Southern California Gould School of Law. Morgan agreed: "Real, substantive change is still in the very early stages." Indeed, most law schools are taking baby steps with pilot programs and new courses that tend to serve relatively small numbers of students and require more resources than traditional lecture courses. Washington and Lee University School of Law is a notable exception. It did away with its traditional third-year curriculum in 2009 in favor of a year of hands-on instruction including clinics, externships and simulation courses. As ardently as law firm leaders and other practitioners say they want law schools to step up and better train lawyers, the legal hiring market has yet to signal that it recognizes the value of innovative teaching and curricula, said William Henderson, a professor at Indiana University Maurer School of Law – Bloomington who studies the profession. "There's no employer out there right now — not law firms, not the Department of Justice, not the ACLU — that are seeking out these graduates. These programs haven't affected hiring patterns," Henderson said. "It's still all sorted out with credentials. It's based on the brand of the law school." Wilkins concurred that achieving sweeping reform would be difficult until legal employers create incentives by hiring students from these innovative programs. "There's a lot of pious rhetoric coming out of law schools and the profession about what people want," he said. "They say they want this or that, but who do they ultimately hire? The kid on the law review." He urged practitioners to engage with administrators at their alma maters and actively support curriculum reform. Carle noted that most law schools have advisory committees that include practitioners; those panels should spearhead conversations about how to better connect the academy with the legal profession, he said. "The solution has to be two hands reaching across to touch each other," Henderson said. "The law schools have to do this, but there also has to be an open-minded employer on the other end." Karen Sloan can be contacted at ksloan@alm.com.

When It Comes to Manipulating Judicial Elections, Anything Goes

2012-01-16T05:11:00.002-05:00

Judge's Claims Against Election Law Attorney Are Dismissed
The New York Law Journal by Joel Stashenko - January 17, 2012

An election law attorney who was sued by a judge who is a former client alleging he committed legal malpractice by using privileged information he obtained from her to help a rival he later represented during a race for Brooklyn surrogate has won dismissal of the case in a Nassau County court. Supreme Court Justice Thomas P. Phelan granted summary judgment to Bernard M. Alter and his Brooklyn firm, Alter & Barbaro, dismissing the claim brought four years ago by Civil Court Judge Shawndya L. Simpson. Justice Phelan ruled in Simpson v. Alter, 11095/09, that Mr. Alter's representation of Diana Johnson in a 2007 race for Brooklyn surrogate did not breach any lawyer-client privilege between Judge Simpson and Mr. Alter that developed when she was running for Brooklyn Civil Court in 2003. Judge Simpson argued that she retained Mr. Alter in large part to help her meet residency requirements in Brooklyn for her successful 2003 campaign for Civil Court. Judge Simpson, who sits in Manhattan Civil Court, contended that Mr. Alter distributed confidential information he gleaned during her 2003 campaign to Ms. Johnson and reporters who used the information to challenge Judge Simpson during the 2007 surrogate's race about whether her legal residence was in Brooklyn or South Orange, N.J. Ms. Johnson won the Democratic primary against Judge Simpson in 2007 and was elected Brooklyn surrogate that fall. Mr. Alter, in an interview on Jan. 13, praised Justice Phelan for working "long, hard and laboriously" before reaching his decision.

"He saw that the plaintiff's case had no substance and he threw it out," Mr. Alter said. "I was getting tired of my reputation being thrown around. She [Judge Simpson] is nothing more than a sore loser trying to get back at everybody who opposed her election for surrogate judge." Neither Judge Simpson nor her attorney, Laura M. Dilimetin of Dilimetin & Dilimetin in Manhasset, returned calls seeking comment. The 2007 surrogate's race spawned a number of lawsuits. Before the primary, Judge Simpson attempted to have Mr. Alter disqualified as Ms. Johnson's attorney based on his prior representation of Judge Simpson. But Queens Supreme Court Justice Peter J. O'Donoghue dismissed those claims, and also rejected Mr. Alter's attempt to have Judge Simpson disqualified from the 2007 ballot because of residency rules (NYLJ, Aug. 21, 2007). Last year, Justice Phelan removed Surrogate Johnson as a defendant in Judge Simpson's 2009 suit, ruling that all oral and written communications between Mr. Alter and Surrogate Johnson in the 2007 campaign were shielded from disclosure by the attorney-client privilege. At the same time, the judge ruled that the case against Mr. Alter could go forward (NYLJ, June 27, 2011). But on Jan. 9, Justice Phelan rejected Judge Simpson's claims for legal malpractice, breach of fiduciary duty, breach of contract, aiding and abetting, unjust enrichment and other allegations against Mr. Alter. Among other things, Justice Phelan ruled that Judge Simpson failed to rebut Mr. Alter's contention that his work for her was completed in July 2003. She could make only "vague allegations" of her meetings with Mr. Alter beyond the Civil Court race, the judge said, thus placing her allegations related to the 2007 campaign outside the three-year window for filing legal malpractice, breach of contract and other claims. "Her failure to produce any direct or documentary evidence such as time sheets, notes, appointment book entries or phone bills, substantiating these meetings do not suffice, particularly where defendants have also demonstrated that plaintiff's first and third causes of action for breach of contract and legal malpractice are barred by applicable statute of limitations period," Justice Phelan wrote. He also held that Judge Simpson, who sought $15 million in damages, did not demonstrate triable issues of fact on those claims. "Plaintiff has simply failed to demonstrate that her damages, monetary or otherwise, including her loss of the surrogate's election in 2007, was a result of defendants failure to perform under their contract," he wrote. "Plaintiff has failed to establish that her damages resulted from the alleged attorney negligence or fiduciary misconduct." The ruling ends the long-standing litigation, the justice determined. "Incidentally, this holding is now law of the case and precludes any relitigation by plaintiff that defendants' representation of Johnson in any way breached plaintiff's right and/or privileges as a former client," Justice Phelan wrote. Mr. Alter represented himself. @Joel Stashenko can be contacted at jstashenko@alm.com.

Legal Malpractice Suit Over Bad Loan Advice Moves Forward

2012-01-16T05:02:00.001-05:00

Cadwalader Loses Bid to End Suit by Nomura Over Loan Advice
The New York Law Journal by Joel Stashenko - January 17, 2012

A legal malpractice claim may go forward against Cadwalader Wickersham & Taft for the firm's advice to a Japanese securities company about the safety of commercial loan investments in the 1990s, a state judge has determined. Acting Supreme Court Justice Melvin L. Schweitzer rejected Cadwalader's motion to dismiss the claim on summary judgment, ruling that triable issues of fact remain about the firm's handling of a bundle of commercial loans in 1997 worth about $1.8 billion. Primarily at issue in Nomura Asset Capital v. Cadwalader Wickersham & Taft, 116147/06, is a $50 million loan Nomura Asset Capital made to the Doctor's Hospital of Hyde Park in Chicago in 1997 and whether the firm properly attested to the fact that the loan was adequately securitized by the value of real property held by the hospital. Cadwalader issued an opinion letter to Nomura stating that the $50 million loan qualified for special tax treatment as a "real estate mortgage investment conduit," or REMIC, for federal income tax purposes, according to Justice Schweitzer. In order to qualify for that status, a loan must be securitized for the value of real property totaling at least 80 percent of the amount borrowed. Justice Schweitzer, who sits in the Manhattan Commercial Division, wrote in his Jan. 11 ruling that testimony on Cadwalader's behalf so far did not indicate that appraisals of the Chicago property were adequately made or that the law firm warned Nomura that the hospital loan "potentially ran afoul" of the 80 percent test under REMIC. Indications about the value of the property made to the firm showed it was worth just over $40 million, not $50 million, the judge said. "From a REMIC standpoint, Cadwalader had in its files a document that contained certain information about the DHL [the hospital], particularly the $40.6 million cost-based value which brought the loan perilously close to the 80 percent test, and which indeed could be viewed as a 'red flag' that this loan needed to be further scrutinized for REMIC-eligibility," Justice Schweitzer wrote. On the other hand, the judge added, a jury could conclude that the loan was prudent under the circumstances. But he said the question presents an issue for a jury to decide. The judge rejected the contention from Cadwalader that it was "universal practice," especially in 1997, for a lender to rely on its own securitization attorneys to set property appraisals as opposed to being advised by law firms hired to counsel clients about their investments. Justice Schweitzer said the testimony before him was contradictory both about the obligations of the firm on advising clients and about adherence to the 80 percent guideline for securitizing investments under REMIC. "When all of this evidence is viewed in the light most favorable to Nomura, there is no doubt that triable issues of fact have been raised requiring that a jury view all of this and come to its own conclusion," the justice wrote. In arguments before the judge last fall, lawyers clashed over whether Cadwalader's advise to Nomura violated the eligibility under REMIC and the associated tax advantages (NYLJ, Sept. 28). The loan went into default in 2000 and its servicer, LaSalle National Bank, sued Nomura alleging it had improperly claimed the loan was eligible for REMIC tax breaks. Nomural settled the debt for $68 million following an adverse ruling from the U.S. Court of Appeals for the Second Circuit in LaSalle Bank Natl. Assoc. v. Nomura Asset Capital Corp., 424 F.3d 195 (2005). Plaintiffs are the Nomura Asset Capital Corporation and its affiliate, the Asset Securitization Corporation. David R. Mariott of Cravath, Swaine & Moore, who represents Cadwalader, said he was "disappointed" by the ruling but declined further comment, including whether the firm would appeal. Amianna Stovall of Constantine Cannon, attorney for Nomura, declined to comment. Justice Schweitzer set a status hearing for Feb. 7. Joel Stashenko can be contacted at jstashenko@alm.com.

Attorney Takes the Fifth in Corrupt Judicial Hearing

2012-01-15T07:08:00.000-05:00

Attorney Takes the Fifth in Surrogate Hearing
The New York Law Journal by Brendan Pierson - January 13, 2012

Michael Lippman, a former counsel to the Bronx public administrator facing criminal charges for collecting excessive legal fees in estate cases, briefly took the stand on Jan. 12 in a disciplinary proceeding brought by the Commission on Judicial Conduct against Bronx Surrogate Lee L. Holzman for his alleged role in allowing the fees. As expected, Mr. Lippman declined to answer questions about the fees from Surrogate Holzman's attorney, David Godosky of Godosky & Gentile, citing his constitutional protection against self-incrimination. Surrogate Holzman tried repeatedly last year to stay the disciplinary proceeding against him until the criminal case against Mr. Lippman is resolved, arguing that he could not adequately defend himself without Mr. Lippman's testimony, but a First Department panel denied his request on Dec. 7. Surrogate Holzman began testifying on his own behalf on Jan. 10 under direct examination from Mr. Godosky. The surrogate said he did not know about Mr. Lippman's misconduct until 2006, when he was "shocked" to discover it. The commission on judicial conduct does not dispute that Surrogate Holzman fired Mr. Lippman from his position after learning about the excessive fees. However, it alleges he should have turned him in to criminal authorities right away. Instead, the surrogate allowed Mr. Lippman to keep working on public administration cases, turning all of his legal fees back to the estates from which he had collected fees, which the commission alleges was improper. Mr. Lippman's brief appearance interrupted the direct examination of Surrogate Holzman, which is expected to continue on Jan. 13.

-----RELATED STORY:

Bronx Surrogate Lee Holzman chafes under cross examination
Reuters - News & Insight by Joseph Ax - January 13, 2012

NEW YORK - The cross examination of Bronx Surrogate Lee Holzman was barely half an hour old, and the judge and his questioner, Brenda Correa, a lawyer for the state Commission on Judicial Conduct, were already at odds. Holzman's lengthy answers that ranged far afield -- on frequent display during three days of direct testimony -- prompted Correa's objection that he was not responding to her questions. At one point, retired state Supreme Court Judge Felice Shea, who is overseeing the hearing, turned to Holzman and tried to resolve the problem. "I know this is difficult, Judge Holzman, for someone who's been on the bench for as long as you have to be a witness, but you do have to answer the questions," she said. Holzman, who did not conceal his impatience with some of the questions he was asked, faces disciplinary charges from the commission that he failed to take proper action when he learned that a lawyer for the public administrator had been billing excessive estate fees in advance, in violation of protocol. The public administrator handles estates of people who die without anyone to manage their affairs. The lawyer, Michael Lippman, has been charged with stealing $300,000 in excess fees in the Bronx. But in testimony Friday, Holzman repeatedly said he had no idea that Lippman and the public administrator, Esther Rodriguez, had been paying out fees in advance. "Not having received any report from any source or agency, and considering Mr. Lippman had been an attorney for more than 30 years, if somebody had told me this was happening, I would think they were from Mars," he said. Lippman was called to the stand Thursday but asserted his Fifth Amendment rights and refused to answer questions about his conduct. Normally, judicial misconduct hearings take place behind closed doors, but Holzman waived confidentiality. The commission asserts that Holzman's lax oversight allowed Lippman to bill freely for work he had never done. In addition, the commission faults him for failing to report Lippman's conduct either to the departmental disciplinary committee or law enforcement authorities. Instead, the commission has alleged, Holzman kept Lippman on staff and required him to use the money he earned to repay the excessive fees he had billed in previous cases, a remedy that failed to make the earlier estates whole. Holzman has argued that he was the victim of unscrupulous employees whose conduct was unforeseeable. "I had never thought there was a chance that he had done anything of a criminal nature," Holzman said of Lippman. Follow us on Twitter: @ReutersLegal

Former SEC Lawyer to Pay $50,000 in Conflict of Interest Allegation

2012-01-14T23:50:00.000-05:00

Ex-Official at S.E.C. Settles Case for $50,000
The New York TImes by Edward Wyatt - January 13, 2012

WASHINGTON, DC — A former enforcement official for the Securities and Exchange Commission who was accused of blocking or closing at least three investigations into the activities of the Stanford Financial Group, which the authorities claim was a $7 billion Ponzi scheme, has settled civil charges brought by the Justice Department accusing him of violating conflict-of-interest rules by later representing Stanford before the commission. John M. Bales, the United States attorney for the Eastern District of Texas, announced Friday that the former official, Spencer C. Barasch, who from 1998 to 2005 served as the enforcement director for the S.E.C.’s Fort Worth regional office, had agreed to a civil settlement that would result in payment of a $50,000 fine. That is the maximum fine for a violation of federal conflict-of-interest rules, but it is much less than the punishment Mr. Barasch would have faced had the Justice Department pursued a criminal case. The civil settlement ends for now any further criminal investigation of Mr. Barasch. A separate civil case involving Mr. Barasch continues at the S.E.C. Paul Coggins, a lawyer representing Mr. Barasch, said the case was settled “to avoid the expense and uncertainty of protracted litigation.” Mr. Barasch’s actions after leaving the S.E.C. “were expressly permitted by the postemployment statute,” Mr. Coggins said. “At no time has he compromised his honor or ethics, and we vigorously dispute any suggestion to the contrary.” Government officials said at a Congressional hearing last May that Mr. Barasch was the subject of a criminal investigation into his work for Stanford, which was also the subject of much of a 150-page report by the commission’s inspector general issued in March 2010. That report found that Mr. Barasch frequently discouraged or halted further investigation into Stanford Financial by S.E.C. staff members, and that he subsequently represented the firm in talks with S.E.C. officials about other or continuing investigations. The S.E.C. is continuing its own attempts to reach a separate civil settlement with Mr. Barasch, people close to the commission said. Such a settlement could include an extended or permanent bar from work before the commission. H. David Kotz, the S.E.C. inspector general, said in a statement Friday that the Justice Department settlement “sends a strong message that former federal officials cannot abuse the public trust by attempting to profit personally from matters on which they worked as government servants before joining the private sector.” Mr. Bales said that the case demonstrated that the S.E.C.’s ethics program worked, because commission lawyers had told Mr. Barasch that he was barred from representing Stanford Financial on agency business. “Today’s settlement demonstrates that we will hold those that shirk their professional responsibilities accountable for their conduct,” he said. According to the Justice Department’s settlement, Mr. Barasch denied any wrongdoing. He said that he lacked the unilateral authority to close or hamper an investigation, and that he received “directives and pressure from his superiors in Washington” to devote his office’s resources to financial and accounting fraud rather to Ponzi schemes. Mr. Barasch also denied that he had been told he was permanently barred from representing Stanford Financial. In December 2006, he billed the firm about $6,500 for service and expenses. R. Allen Stanford, the founder of Stanford Financial, is scheduled to go on trial on Jan. 23 in Houston. He is charged with 21 federal criminal counts of defrauding investors, who were encouraged to buy certificates of deposit at a Stanford bank in Antigua. Instead of being invested, federal officials say, much of the money went to finance Mr. Stanford’s lavish way of living.

Want Legal Ethics Advice? There’s an App for That

2012-01-13T23:48:00.002-05:00

Want legal ethics advice? There’s an app for that
The Journal News - Completely Legal Blog by Steve Lieberman - January 13, 2012

The New York State Bar Association has introduced a mobile app that gives judges, lawyers, law students and the public at large instant answers to legal ethics questions on their smartphones. The app contains more than 900 searchable ethics opinions, dating back to 1964, on legal issues in categories from acceptance of employment to zoning board issues. Decisions can be searched by keyword, category or opinion number. “Ethics questions can arise in many different contexts. The NYSBA Mobile Ethics App will allow judges, lawyers and others to access the opinions of the Association’s Professional Ethics Committee on the spot from the convenience of their mobile devices,” Bar President Vincent E. Doyle III said in a statement. “The State Bar is pleased to provide this service to its members and the legal community.” This is the Bar’s latest foray into making the law accessible online. Last year, it launched the eLAP website, a secure portal for accessing lawyer assistance information and services. The Bar also improved its website’s search engine and offered its members discount subscriptions to Clio, a cloud-based practice management system designed for solo practitioners and small law firms. The Ethics app is available on Apple’s App Store, the Android Market, BlackBerry’s App World and on the state bar website at www.nysba.org/ethicsapp. The 77,000-member New York State Bar Association, founded in 1876, is the largest voluntary bar association in the nation.

Lawyer Arrested in Occupy Protest

2012-01-12T03:49:00.000-05:00

Lawyer arrested in Occupy protest at Port Hueneme
The Los Angeles Times - December 12, 2011

It didn't take long for Frank Chimienti to become the first and, so far, only person to be arrested at Monday's Occupy protest at the Port of Hueneme. Within an hour of joining protesters picketing outside the deep-water port, he decided to lie down in the middle of the road to block a long line of trucks trying to enter, said Chimienti, 41. When police asked him to get up, he refused. They asked again and when he refused a second time, they arrested him. The Camarillo man, a real estate lawyer, said he was aware of the potential consequences of his action. As a Buddhist, he said he believes that nonviolent civil disobedience is sometimes necessary to bring awareness of an injustice. Chimienti said he believes the Occupy movement is the embodiment of that philosophy. Greed and manipulation of the political system by the wealthy and corporate America have rendered the usual levers of democracy impotent, he said. "People in power won't relinquish control unless they are forced to,'' he said. Chimienti, who just a few years ago packaged mortgages for resale, may seem an odd ally in the younger-skewing Occupy movement. Before he chose law as a second career, he was a chemist and winemaker. But the death of his wife and the economic collapse caused him to look more deeply at life, he said. "I've almost become a completely different person than I was three years ago," he said. "I was making $180,000 as a third-year associate." Now he runs his own real estate practice. He has followed the Occupy movement from its start and camped with the protesters at Los Angeles City Hall for a few days before they were evicted. His arrest just before 11 a.m. resulted in a traffic infraction. He got along so well with the Port Hueneme police that one of them drove him to his car after he was released, he said. The whole episode lasted less than an hour, he said. "I actually made it to a 1:30 appearance in court,'' he laughed.

Judge Shines Light On Court System Vermin Infestation

2012-01-11T05:24:00.000-05:00

Bronx Surrogate Judge, Facing Discipline, Defends Himself
The New York Times by John Eligon - January 10, 2012

The complicated arrangement of letters and numbers in the myriad rules and protocols governing his court’s procedure rolled off Judge Lee L. Holzman’s tongue as easily as the alphabet as he testified on Tuesday. He referred casually to rules — like Section 1418 of the S.C.P.A., a reference to the Surrogate’s Court Procedure Act — that, he insisted in a Manhattan courtroom, he had long strongly enforced in his court. Judge Holzman explained the specific guidelines about what fees lawyers can collect when they administer an estate and when they can collect them. Veering from those procedures, he testified, would require a thorough explanation. And so it was with indignation, he said, that he met the news that rules were being broken right under his gavel. “I was shocked,” Judge Holzman said, referring to his reaction when he learned that Esther Rodriguez, the former Bronx public administrator, and her former counsel, Michael Lippman, had allegedly deviated from that protocol. Judge Holzman, the Bronx surrogate since 1988, is in the midst of a disciplinary hearing in which he is charged with allowing his staff to run amok and to take fees that were excessive and unearned from estates that it was handling. Judge Holzman could lose his job as a result of the hearing. The hearing provides a rare look at such a proceeding in New York State. Normally, they are closed, but Judge Holzman waived his right to confidentiality. This is just the 11th time in the state that a judge has waived confidentiality in more than 750 formal disciplinary proceedings spanning three and a half decades, said Robert H. Tembeckjian, the administrator of the State Commission on Judicial Conduct, which is prosecuting the case. The hearing is being held before Felice Shea, a retired State Supreme Court justice, who will advise to the commission whether the charges against Judge Holzman have been proven. If they have, the commission then makes the decision on Judge Holzman’s fate; its options range from admonition to removal.

Judge Holzman, who as surrogate oversees proceedings for wills and the settling of estates of people who die without wills, portrayed himself as the victim of dishonest employees. He said he first had an inkling of wrongdoing in 2004, when he noticed that a man whom Ms. Rodriguez had hired to clean out the properties of deceased people was receiving more money than usual. Judge Holzman later learned that the city was investigating the man, John Rivera, and told Ms. Rodriguez to stop using him, he said. As the public administrator, Ms. Rodriguez was to oversee the administration of estates of people who died without wills, including paying legal fees for that work. Judge Holzman said he later learned that Ms. Rodriguez was still using Mr. Rivera, who, unbeknown to the judge, was her boyfriend. “At that point, I had absolutely zero confidence in Esther Rodriguez,” Judge Holzman testified, adding that he gave her an ultimatum in January 2006. “I said, ‘You have two choices. You can resign or I’m going to fire you,’ and she gave me a letter of resignation.” It was only after Ms. Rodriguez — who, along with Mr. Rivera, faces criminal charges — resigned, Judge Holzman said, that he learned of what the commission has said were improper billing practices by Mr. Lippman. He was prematurely advancing fees from estates he oversaw and taking money he had not earned, according to the commission. Judge Holzman testified that Mr. Lippman worked for the public administrator, and it was her responsibility, not his, to make sure Mr. Lippman was getting proper fees. But the commission has argued that as the person authorized to hire and fire the Surrogate’s Court staff, Judge Holzman, by law, was responsible for making sure that the court’s employees followed proper procedure. The commission has also criticized Judge Holzman for his response after learning of Mr. Lippman’s reputed practices. Judge Holzman did not alert the authorities, and instead of firing Mr. Lippman, let him work on other estates to pay down the improper fees he had drawn on prior cases. “He had not, to my knowledge, violated any law,” Judge Holzman said. Mr. Lippman has been indicted in the Bronx on charges including scheming to defraud and grand larceny for his actions in the Surrogate’s Court.

-----Related Story:

Bx. judge testifies -- on his own behalf
The New York Post by Jose Martinez - January 10, 2012

A judge charged with misconduct took the rare step today of testifying publicly in his own defense. Bronx Surrogate Lee Holzman, who is accused of allowing a lawyer pal loot the estates of people who died with no wills, said he was "shocked" to learn in 2006 that there may have been misdeeds on his watch. The veteran judge, the Bronx surrogate since 1988, became only the 11th judge to testify in more than 700 disciplinary cases brought since 1978 by the New York State Commission on Judicial Conduct. Holzman said he was clueless that lawyer Michael Lippman - also his chief campaign fundraiser - had been repeatedly granted advance legal fees by Esther Rodriguez, a former public administrator in Bronx Surrogate's Court. Holzman probates will and oversees estates at the court. "I was shocked when I learned that apparently Mrs. Rodriguez, at the request of Mr. Lippman, had deviated from that protocol," Holzman said, saying the pair, who are both facing criminal charges, deviated from guidelines on payment standards. Bronx prosecutors in 2010 charged Lippman with billing more than $300,000 in excess legal fees. Holzman could be removed from the bench or censured by the commission, which is is having the case heard in Manhattan by a retired state judge. The former law school adjunct professor apologized for sounding "professorial" during his turn on the stand, and said he had limited contact with Lippman, who he's known since 1974. "I might have gone to a Yankee game or two with him, I'm not sure," Holzman said.

Second Circuit Chaos

2012-01-11T05:02:00.002-05:00

Circuit Upsets Fraud Conviction of Ex-Mayer Brown Partner
The New York Law Journal by Mark Hamblett - January 10, 2012

The conviction of former Mayer Brown partner Joseph P. Collins for helping Refco Inc. executives defraud investors of more than $2 billion was overturned on Jan. 9 by a federal appeals court. The failure of the trial judge, Southern District Judge Robert P. Patterson, to disclose to the parties the contents of a jury note suggesting that one juror was attempting to barter his vote, and the judge's subsequent ex parte conference with that juror, deprived Mr. Collins of the right to be present at his own trial, the U.S. Court of Appeals for the Second Circuit ruled. The note, crafted by the jury foreman, was delivered to Judge Patterson on the sixth day of deliberations in Mr. Collins' trial that ended in July 2009 with his conviction for conspiracy and two counts each of wire fraud and securities fraud (NYLJ, July 13, 2009). The jury failed to agree on a verdict on nine other counts after contentious deliberations during which Juror #4 claimed that Juror #9 twice threatened to cut off his finger. "There's been some concern amongst some of the juror's [sic] regarding odd behavior on the part of Juror #4," the foreman wrote. "During deliberations on 7/2, [Juror 4] changed his vote on a charge, bringing a unanimous decision. However, [Juror 4] then attempted to make his vote contingent upon the room agreeing blindly on a charge to be voted on later. He wanted to barter." The jury foreman's note was one of a stream sent to the judge but was the only one whose contents were not disclosed to counsel. Instead, over the objection of defense counsel William J. Schwartz of Cooley, Judge Patterson spoke privately with Juror #4, who denied he had engaged in bartering and said he had been "insulted and threatened" by others on the panel, including Juror #9, who vowed to have her "husband take care of me."

This ex parte discussion and the failure to disclose the contents of the note were enough for Second Circuit Judges Guido Calabresi, Denny Chin and Susan L. Carney to upset the conviction in United States v. Collins, 10-1048-cr, which also vacates the seven-year prison sentence Judge Patterson ordered Mr. Collins to serve in 2010. Mr. Collins, who resigned from Mayer Brown following his conviction, has remained free pending appeal. A spokesperson for U.S. Attorney Preet Bharara said the office was not commenting on plans to retry Mr. Collins. Mr. Schwartz issued a brief statement expressing gratitude for the decision "after this long fight." In a prosecution led by Assistant U.S. Attorney Christopher Garcia, the government charged that Mr. Collins drafted legal documents and gave legal advice to Refco principals to hide the financial service company's true financial condition and make themselves rich. The documents, Mr. Garcia contended, were used to confuse auditors and defraud Thomas H. Lee Partners when it purchased a majority stake in Refco in 2004 and mislead investors who purchased shares in an initial public offering of Refco in 2005 just before its fraud was discovered and the company collapsed. Mr. Collins testified in his own defense during the two-month trial, insisting that former Refco CEO Robert Bennett and other executives lied to him about loan transactions that masked huge debt at the company. Mr. Collins said he would have resigned from representing Refco had he known the truth. At sentencing, Judge Patterson agreed with Mr. Schwartz that Mr. Collins did not profit from the fraud and was not motivated by "greed or money because he would have been paid through his firm anyway." "I think this is a case of excessive loyalty to his client," the judge said. (NYLJ Jan. 15, 2010).

Unintended Consequences

On Jan. 9, Judge Chin wrote for the Second Circuit that, "In general, the trial court should not respond to a jury note in an ex parte manner." "Specifically, ex parte communication between the judge and a member of the jury may unintentionally 'drift' into a supplemental instruction," he said, citing the U.S. Supreme Court in United States v. United States Gypsum Co., 438 U.S. 422 (1978) and subsequent cases, as "a defendant has a well established right" to be present for supplemental instructions. And, he said, as the Court noted in Gypsum, "Unexpected questions or comments can generate unintended and misleading impressions of the judge's subjective personal views." The circuit went on to find that the initial failure to disclose the contents of the note and the ex parte conference deprived Mr. Collins of his right to be present at trial. "To be sure, hindsight is 20/20," Judge Chin said. "The difficulty of the circumstances the district court faced is not lost upon us," for the judge "was trying in good faith to ease serious tensions in the jury room and deal with accusations of misconduct." Nevertheless, he said, both decisions were in error and the error was not harmless. "We cannot say with 'fair assurance,' that the district court's errors in this case did not substantially affect the verdict," he said. "The court singled out a dissenting juror, and emphasized to him the importance of reaching a verdict." "We cannot ignore the possibility that Juror 4 walked out of the ex parte conference with the impression that he should not stand in the way of a prompt resolution of the case," he said. Had Judge Patterson shared the note from the outset and asked for counsel's input before responding, Judge Chin said, "any mistaken impressions might have been avoided." Mark Hamblett can be contacted at mhamblett@alm.com.

Corrupt Tembeckjian Thugs Continue Scam "Ethics" Hearings

2012-01-10T21:43:00.000-05:00

Holzman Takes Stand to Rebut Allegations in Excessive Fee Case
The New York Law Journal by Brendan Pierson - January 11, 2012

Bronx Surrogate Lee L. Holzman took the stand on Jan. 10 to defend himself against allegations by the Commission on Judicial Conduct that he allowed Michael Lippman, a former counsel to the Bronx public administrator, to collect $300,000 in excessive fees. Responding to direct examination by his attorney, David Godosky of Godosky & Gentile, Surrogate Holzman began by outlining the various kinds of cases handled by Surrogate's Court. He focused especially on cases involving the county's public administrator, who acts as executor of estates where there is no will or the executor named in the will is dead or unable to fulfill the role. The conduct commission's allegations against Surrogate Holzman hinge on his approval of attorney fees as part of the final accounting of estates. At the end of a case in Surrogate's Court, the parties submit an accounting of the estate for approval. In a publicly administered estate, that accounting includes legal fees for the public administrator's counsel, calculated according to guidelines promulgated in 2002 by an administrative board chaired by Surrogate Holzman. He testified that the public administrator's counsel is authorized to pay himself up to 75 percent of the projected final fee before submitting the accounting for final approval. Surrogate Holzman then turned to his personal history at the court. He said he began working for the court as an attorney in 1974, and took over after being elected as surrogate in 1988. The entire time, Mr. Lippman, who is facing criminal charges, was working as counsel to the public administrator, the judge said. Surrogate Holzman, 69, said he had little contact with Mr. Lippman outside of work. He went to "three or four" Yankees games with the attorney, who had season tickets, had several work-related lunches with him and invited Mr. Lippman, along with other Surrogate's Court employees, to his daughter's wedding, he said. But otherwise, Surrogate Holzman said he did not see Mr. Lippman socially. When he took over the court in 1988, he said, he made Mr. Lippman, who had been solely responsible for all the public administrator's cases, the supervisor of a team of attorneys. "I made a change to the system that I thought would be beneficial," the surrogate said. "At this point I'm not so sure." Surrogate Holzman testified that he had instructed the public administrators who worked under him on the protocol for approving attorney fees. He said he was "shocked" when he learned in 2006 that then-public administrator Esther Rodriguez had been approving excessive fee requests from Mr. Lippman without following the protocol. The commission does not dispute that Surrogate Holzman fired Mr. Lippman from his position after learning about the excessive fees. However, it alleges that he should have turned him in to criminal authorities right away. Instead, Surrogate Holzman allowed Mr. Lippman to keep working on public administrator cases, turning all of his legal fees back to the estates from which he had collected fees, which the commission alleges was improper. Later in the day, Surrogate Holzman testified that he approved the legal fees based largely on affidavits submitted by Mr. Lippman claiming the number of hours worked in each case. The surrogate said it was impossible for him to tell from the affidavit whether the legal work on a case should have required the number of attorney hours spent. "I would look at the account to see whether anything jumped out at me as being of some question," he said. "This is the first time I would look at an account from that point of view." Surrogate Holzman was expected to continue testifying Jan. 11. Former Manhattan Supreme Court Justice Felice K. Shea served as referee in the proceeding. Brendan Pierson can be contacted at bpierson@alm.com.

Lawyer Alleges Pryor Cashman Lawyer Aided Fraud by Fund

2012-01-09T01:02:00.001-05:00

Lawyer Alleges Pryor Cashman Lawyer Aided Fraud by Fund
The New York Law Journal by Brendan Pierson - January 9, 2012

A charitable foundation that fell victim to a Ponzi scheme run by former hedge fund manager Mark Bloom has filed a lawsuit accusing Donald S. Zakarin of Pryor Cashman of taking actions that furthered Mr. Bloom's fraud. The Alexander Dawson Foundation, which raises money for children's education, and two of its trustees filed their suit, Alexander Dawson Foundation v. Zakarin, 650026/12, on Jan. 4 in the Manhattan Commercial Division. They are represented by MoloLamken and Abrams Garfinkel Margolis Bergson. Pryor Cashman issued a statement calling the suit "baseless" and "an unwarranted and undeserved attack on attorneys whose professional conduct met the highest legal and ethical standards." According to the suit, the foundation lost $9.75 million by investing in North Hills LP, Mr. Bloom's hedge fund. In June 2009, Mr. Bloom admitted to running his fund as a Ponzi scheme and pleaded guilty to five felonies. He is now in prison. "The Ponzi scheme was not the product of Bloom's efforts alone," the lawsuit says. "He had help." Mr. Bloom, the lawsuit alleges, "revealed to Zakarin and Pryor Cashman in 2005 that he had been stealing money from North Hills—at that time, they could have shut Bloom's fraud down or withdrawn as his counsel. They did not. They chose instead to further the fraud by helping Bloom conceal his past and ongoing theft from the Plaintiffs and other victims of the Ponzi scheme until it finally came to light in late 2008." Between 2001 and 2009, according to the suit, Mr. Bloom stole at least $20 million of his investors' money for himself, buying a $5.2 million Upper East Side home, "at least $750,000 in art and $600,000 in jewelry, and hundreds of thousands of dollars for parties, travel, personal services and clothing," according to the complaint. The first sign of foul play came to light in the summer of 2005, when the Philadelphia Alternative Asset Fund, a commodities trading pool whose management company had been paying Mr. Bloom hefty commissions for leading his clients to invest there, was revealed to be a Ponzi scheme and put into receivership by the Commodity Futures Trading Commission.

The lawsuit alleges that, shortly after that fraud was discovered, Mr. Bloom confessed his own fraud to Mr. Zakarin, who had been representing him since 2004 in a dispute with his former employer, BDO Seidman. Allegedly, Mr. Bloom confessed not only that he had invested his clients' money with the fraudulent Philadelphia Alternative Asset Fund in order to receive kickbacks, but that he had stolen millions of dollars of his clients' money in various other ways and had falsified his accounting statements. Upon learning of the fraud, Mr. Zakarin advised Mr. Bloom to retain criminal counsel, the suit alleges. He then helped Mr. Bloom draft a $13 million loan agreement from North Hills to Mr. Bloom in order to cover up the theft, the suit claims. In one e-mail, he told Mr. Bloom that the loan document would "enhance [Bloom's] position" in a criminal case, according to the suit. "Zakarin knew from the outset that the proposed transaction would be improper even if the loan had been legitimate—indeed, Zakarin had sent Bloom an e-mail specifically informing him that it was not permissible for Bloom to borrow funds from North Hills for his personal use, even if the loan were documented in a note carrying a substantial interest rate," the suit alleges. "But of course, Zakarin also knew that the note would not document a legitimate loan because Bloom had already stolen the funds from North Hills that the note purportedly allowed him to borrow." "Zakarin thus had a choice," the suit said. "He at least could have refused to draft for Bloom the fraudulent note that was going to help hide Bloom's theft. He also could have advised Bloom to come clean to North Hills' investors about his theft. He simply could have withdrawn from representing Bloom so as to extricate himself from Bloom's ongoing fraud. But he did none of those things." In fact, the suit alleges, Mr. Zakarin opposed the suggestion of Victor Rosenzweig of Olshan Grundman Frome Rosenzweig & Wolosky, the independent director of North Hills Management, the hedge fund's general partner, that North Hills retain independent counsel for the purpose of the loan. Later, Mr. Zakarin opposed Mr. Rosenzweig's call for Mr. Bloom to confess his fraud to his investors, according to the suit. The plaintiffs are asserting claims for aiding and abetting fraud and aiding and abetting breach of fiduciary duty. "This case is baseless and what is worse, those behind it, having already had more than complete discovery, are fully aware it is baseless," said Pryor Cashman managing partner Ronald H. Shechtman in an e-mailed statement. "It is an unwarranted and undeserved attack on attorneys whose professional conduct met the highest legal and ethical standards of the bar. We will aggressively defend this claim and seek sanctions against the plaintiffs and their counsel." "The plaintiffs' last investment with Mr. Bloom and Bloom's diversion of funds occurred more than a year before we were retained," Mr. Shechtman added. "As plaintiffs are fully aware, while adhering to our strict duty of confidentiality, we consistently exhorted Bloom to liquidate all assets and repay investors as quickly as possible and plaintiffs actually recovered $5 million of their losses after our retention. This is a desperate attempt by the plaintiffs to shift their own responsibility for their losses, nothing more." The plaintiffs filed a separate lawsuit against Mr. Rosenzweig and his firm and against Mr. Bloom's accountant, Brian Zucker of Zucker & Associates in Manhattan Supreme Court last January (NYLJ, Jan. 14, 2011). That case, Alexander Dawson Foundation v. Zucker, 650053/11, is pending. They also sued Mr. Bloom and North Hills shortly after the fraud was revealed. That case is Alexander Dawson Foundation v. Bloom, 603590/08. Brendan Pierson can be contacted at bpierson@alm.com.

Doing What They Do Best, Court System Operates From the Shadows

2012-01-08T11:20:00.005-05:00

4-Year-Old Queens Custody Case Shifted to Brooklyn

The New York Law Journal by John Caher - January 9, 2012

The unexplained transfer of a long-running and highly volatile custody case from a judge in one borough to a judge in another—without a motion, hearing or formal request to move the case—has added another ember to an already fiery matrimonial dispute.

McAvoy v. Hannigan had been dragging on for more than four years before Supreme Court Justice Sidney F. Strauss in Queens when, just before Thanksgiving, the Office of Court Administration without explanation took the case away from him and sent it to Supreme Court Justice Jeffrey S. Sunshine in Brooklyn. The shift was mandated in an order issued in late November by Justice Fern A. Fisher, deputy chief administrative judge for the New York City courts. Apparently neither party asked for the case to be transferred, and the shift has given the estranged couple, who have been at loggerheads for a decade, one more thing to fight over. The mother, Annemarie McAvoy, an adjunct professor at Fordham University School of Law, former federal prosecutor, one-time candidate for city comptroller and legal commentator for Fox News, said she wants the case to remain with Justice Sunshine. The father, New Jersey real estate investor John Hannigan, wants it back before Justice Strauss in Queens and filed a writ of prohibition in the Appellate Division, Second Department, to get it there. "There was no motion, no hearing, no papers served and that is the part that is extraordinary," said Glenn S. Koopersmith, a matrimonial attorney in Garden City who represents Mr. Hannigan on an Article 78 writ of prohibition. Mr. Koopersmith is among at least eight matrimonial attorneys, many of them members of the prestigious American Academy of Matrimonial Lawyers, who have been involved in this case. "I'm doing this for 35 years and I have never seen anything like this," Mr. Koopersmith said. "Normally, you would have a motion and a chance to oppose. This was done summarily."

David Bookstaver, a spokesman for the OCA, said on Jan. 6 that the case was "assigned to Judge Sunshine because there were extremely serious concerns about the welfare of the child involved in this case." Mr. Bookstaver said that court administrators thought it best to have another judge take a look. His comments marked the first time the OCA had provided an explanation for the shift. "The feeling was that a fresh set of eyes that did not have four years of dealing with the case would be the best way to deal with this matter," Mr. Bookstaver said. "Once Judge Sunshine makes a determination regarding the child's welfare, the case will be sent back to Queens. The intent here was always keeping the child's welfare as the focus." It is unclear whether the case will go back to Justice Strauss. At the center of the tug of war is the couple's 10-year-old son, Chad. Ms. McAvoy and Mr. Hannigan divorced in 2005. Initially, the parents agreed to an arrangement whereby the mother had residential custody and the father shared legal custody, meaning they had joint decision-making authority. But their very different views of Chad's needs quickly led to a conflict. Ms. McAvoy believes the boy is autistic, or borderline autistic, and suffers from neuro-behavioral issues. In an interview, she said that she had Chad in therapy 40 hours a week when he was 18 months old. "He had issues," she said. "He still has neurological issues." Mr. Hannigan's attorney paints a different picture. "The mother basically saw the child through very dark glasses and was insistent to label this child autistic or being on the autistic spectrum," said Audrey M. Sager of Sager & Gellerman in Forest Hills, counsel for Mr. Hannigan in the divorce proceedings. "The father, however, did not see the child that way at all and the professionals that he dealt with did not corroborate the mother's viewpoint. The mother had not agreed with a single neutral professional opinion." Ms. Sager said the disagreement reached a tipping point when Chad entered kindergarten and the mother insisted on a restrictive placement that the father opposed. In early 2007, without a hearing, Justice Strauss shifted residential custody from Ms. McAvoy to Mr. Hannigan. A few months later, the Second Department affirmed Justice Strauss and held that the evidence before him was sufficient to "reach a sound conclusion that, under the circumstances of this case, it was in the child's best interest to award temporary residential custody to the father until such time as a hearing could be conducted on the issue of permanent custody." The Second Department in its terse decision (41 AD3d 791, 2007) did not say what that evidence was, although there was some suggestion, according to both sides of the dispute, that Chad was underweight while living with Ms. McAvoy and that his teeth were unhealthy. The panel sent the matter back to Justice Strauss for a trial on permanent custody. That trial has consumed about 30 trial days over the four-year duration of the litigation.

Multiple Counsel

Ms. Sager blames the slow progress on the fact that Ms. McAvoy has gone through six lawyers—Steven D. Kommor, Alexander Potruch, Stephen Gassman, Raoul Felder, Robert Hiltzik and Edward Hayes—before going pro se. Ms. Sager also said that, along the way, there were unfounded allegations of sexual abuse against the father and an unsuccessful motion by Ms. McAvoy under the Uniform Child Custody Jurisdiction and Enforcement Act to transfer the case to New Jersey. "Every time, we had another set of lawyers and they needed time to prepare," Ms. Sager said. Ms. McAvoy said in an interview that she is not to blame for the delay and wants the case to end. She said she accumulated more than $1 million in legal bills before running out of money and going pro se. "This is not an issue of switching lawyers," Ms. McAvoy said. "When I switched lawyers there was maybe a couple weeks' delay, if that. I made sure that there was no delay because my interest was in getting Chad back." Now, an imminent risk hearing is taking place before Justice Sunshine and is slated to continue on Jan. 9 and 10 in Brooklyn. Ms. McAvoy contends she brought her concerns about Chad before Justice Strauss more than a year ago. "I raised on the record with the judge that [Chad] was talking about killing himself, and the judge did nothing," Ms. McAvoy said. "In September, my son was hospitalized for hurting himself and having suicidal thoughts, as well as homicidal thoughts toward his father. The thought of killing himself always revolves around he would rather be dead than continue living with his father. He feels that if he has to do that, he doesn't want to live." Ms. Sager said neutral professionals dispute those claims and insists Chad is doing fine with his father—performing well in school, making friends, getting involved in extra-curricular activities.

Once Justice Sunshine concludes the imminent risk hearing in Brooklyn, the matter will go back to Queens, according to Mr. Bookstaver. Ms. Sager said the Nov. 23 order transferring the matter out of Queens caught her completely by surprise. "There was no motion, no application, nothing, and all of a sudden a case was being moved to a county with improper venue, from a sitting judge where there has been no mistrial and no recusal after 32 days of trial," Ms. Sager said. "I want a written decision and I want to know how it happened. My client wants this case adjudicated fairly and adjudicated quickly." Ms. McAvoy said she had made clear her displeasure with Justice Strauss, but said she did not seek transfer of the case. "I have been pretty vocal about my dissatisfaction with how this thing is moving, so it [the transfer] may have come through that," Ms. McAvoy said. "The judge on the record said we would be submitting post-trial briefs in 2014, so there was no end in sight. Temporary custody shouldn't be four and a half years. But I have not had any contact with any of the administrative judges." Ms. McAvoy also noted that Justice Strauss posted a question on the International Institute of Judaic Law website asking whether Jewish law supports or refutes the New York legal concept that custody determinations should be based on the best interests of the child. On the website (judaiclaw.org/Questions_Answers_010.html), a rabbi responded that under Talmudic law children under 6 should be placed with the mother and boys over 6 are to be placed with the father and that the welfare of the child is not the primary consideration. Chad was 6 when custody was shifted to the father, Ms. McAvoy said. Justice Strauss was unavailable for comment. John Caher can be contacted at jcaher@alm.com.

New York Lawyer Digs Through Horse Manure in Money Grab

2012-01-08T10:40:00.002-05:00

Foundation Sues Attorney Acting as Executor for Donor
The New York Law Journal by Joel Stashenko - January 9, 2012

A New York attorney who serves as an executor of the Paul Mellon Estate has been accused of defaming a nonprofit organization the estate endows to care for more than 1,000 retired thoroughbreds. What began as a "well-intentioned" effort by executor Frederick A. Terry Jr., who is of counsel to Sullivan & Cromwell, to become more involved in the operations of the Thoroughbred Retirement Foundation "descended into an unjustified attempt to wrest control of the TRF from its current board and officers that threatens to undermine the vitally important mission of the TRF," a suit filed on Jan. 5 by the foundation against Mr. Terry in Manhattan Supreme Court alleges. Paul Mellon, an heir to the Mellon Bank fortune, was a noted philanthropist and horseman. The year before his 1999 death, Forbes Magazine estimated his wealth at $1.4 billion. His estate has contributed $7 million to the foundation's endowment, with the stipulation that the group can use up to 5 percent of the funds annually for care of retired race horses. The complaint in Thoroughbred Retirement Foundation v. Terry, 150012/2012, contends that Mr. Terry falsely claimed in a Nov. 11, 2011, letter to the foundation's accounting firm that the foundation's financial report for 2010 was "incomplete and misleading." He objected specifically to a 2007 loan of $500,000 from the foundation from endowment funds. Mr. Terry also questioned the propriety of the foundation using Mellon funds to secure another $500,000 loan from a South Carolina bank, in part to pay off the 2007 loan. The foundation's complaint maintains that Mr. Terry also shared his concerns with the New York Attorney General's Office, which prompted an inquiry. In addition, the complaint argues that Mr. Terry and a co-executor of the Mellon Estate, Beverly Carter, who is not named as a defendant, hired veterinarian Stacey Huntington, who the foundation says misrepresented the condition of horses being cared for with Thoroughbred Retirement Foundation aid. Ms. Huntington reported that a large percentage of the horses she examined were malnourished or in ill health. She was eventually fired by the foundation's board, as the foundation and Mr. Terry and Ms. Carter bickered over what the foundation maintains was meddling by the two co-executors in its operations. According to the complaint, the veterinarian's report resulted in a series of negative articles about the Thoroughbred Retirement Foundation, including one in The New York Times on March 17, 2011, "Ex-Racehorses Starve as Charity Fails in Mission to Care for Them." In addition, the complaint alleges that Mr. Terry made uncomplimentary verbal statements about the foundation's financial status and its operations to people within the horse racing industry. The group's fundraising has fallen off as a result, the complaint alleges. "Defendant's oral statements were false and defamatory, impeached the honesty, integrity and business conduct of the TRF and exposed the TRF to public hatred, contempt, and/or disgrace," the complaint says. The foundation seeks at least $400,000, which it estimates it has lost due to Mr. Terry's actions, plus punitive damages and legal fees. Under the endowment agreement, the foundation is allowed to use up to 5 percent of the "annual fair-market value" of the endowment each year for its operating expenses. The lawsuit states that the endowment provides some 12 percent of the TRF's annual budget. According to the Times, the organization ran a deficit of $1.2 million in 2009. Foundation chairman John C. Moore said in an interview that Mr. Terry and Ms. Carter have not talked directly with the foundation in a year, choosing instead to communicate with the accountants and the state attorney general. "It's a heck of a shame that we have to sue these people," Mr. Moore said. "It is really simple for them to pick up the phone if they had a problem with us. Call us. Negotiate with us and if you can't do that, don't accuse us of doing something illegal. What they did was distinctly unhealthy to the horses because they damaged our ability to raise money." Mr. Moore called the article about the veterinarian's report "distorted." "No horses died of starvation last year or because of neglect," he said. "That is nonsense." Robert J. Giuffra Jr. of Sullivan & Cromwell said the executors have been "working diligently to improve the operations" of the TRF. "The executors have no interest other than the protection of the horses in the care of TRF," he said. "This lawsuit is regrettable and baseless." Mr. Terry, who was unavailable for comment, joined Sullivan & Cromwell in 1957, according to the firm's website. He also has served as a trustee of several foundations and is an executor of the estate of Frank Perdue, the former CEO of Perdue Chicken. Michael Ledley of Wollmuth Maher & Deutsch is representing the Thoroughbred Retirement Foundation, which is based in Lexington, Ky. , and has an office in Saratoga Springs, N.Y. Among the programs it funds in New York state is a farm for retired thoroughbreds maintained by inmates at the Wallkill Correctional Facility in Ulster County. Joel Stashenko can be contacted at jstashenko@alm.com.

Lawyer ‘axed’ for it

2012-01-07T17:43:00.000-05:00

Lawyer ‘axed’ for it
The New York Post by Dareh Gregorian - January 7, 2012
He almost pulled it off.

A state appeals court has thrown out a lawyer’s baffling $500,000 discrimination award against the law firm that canned him for trying to charge their clients for his hotels, booze, porn, limo rides and escort- service calls. The lawyer, James Hazen, claimed the firm, Hill, Betts and Nash, fired him because he has bipolar disorder, and they didn’t accommodate his disability by just allowing the $21,000 in improper charges to his corporate credit card. Hazen convinced an administrative law judge at the state Division of Human Rights that he was a victim of discrimination, and was awarded $50,000 for his “mental anguish,” court records say. That award was sent to the DHR commissioner for approval — and the commissioner found that wasn’t enough for his pain at being fired for the misconduct. The commissioner OK’d Hazen’s claim for lost wages and upped the award to a whopping $548,161. That wasn’t enough for the booze-loving porn and escorts fan. He filed a petition with Manhattan Supreme Court seeking to have a judge enforce the DHR order and to throw in another $126,000 in lost wages plus $200,000 for his mental anguish. The case was transferred to the state Appellate Division, which stopped the insanity. In a unanimous ruling, the five- judge panel found that Hazen was fired not because of his disability, but for trying to charge his firm’s clients for his many vices. Justice James Catterson, who wrote the decision, called the DHR ruling “incomprehensible,” especially since Hazen had never claimed to anyone at the firm that he was bipolar until after he was fired, so he couldn’t have been discriminated against. “There is no evidence at all, much less substantial evidence, that HBN knew, before they terminated [Hazen], that the petitioner was disabled by a bipolar disorder,” the judge wrote. Hazen now has his own firm in Red Bank, NJ. His lawyer, William Roth, declined comment on the case. dgregorian@nypost.com

******** The Decision:

Hazen v Hill Betts & Nash, LLP
2012 NY Slip Op 00047 - Decided on January 5, 2012 - Appellate Division, First Department - Catterson, J. - 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 January 5, 2012 - SUPREME COURT, APPELLATE DIVISION
First Judicial Department - Angela M. Mazzarelli, J.P., James M. Catterson, Leland G. DeGrasse, Sheila Abdus-Salaam,Nelson S. Román, JJ. - 104781/10 - [*1]James M. Hazen, Petitioner/Respondent, v Hill Betts & Nash, LLP, Respondent/Petitioner, New York State Division of Human Rights, Respondent.

Petitioner James Hazen challenges a determination of respondent State Division of Human Rights, dated October 27, 2010, which, in this employment discrimination proceeding (transferred to this Court, pursuant to Executive Law § 298 and 22 NYCRR 202.57(c)(2), by order of the Supreme Court, New York County [Lucy Billings, J.], entered March 11, 2011), after a hearing, found that respondent Hill Betts & Nash, LLP unlawfully discriminated against him, and awarded him damages. William H. Roth, New York, for petitioner/respondent. Jackson Lewis LLP, New York (Diane Windholz of counsel), for respondent/petitioner. CATTERSON, J. [*2]

In this employment discrimination action arising from the termination of the petitioner attorney by the respondent law firm, we reiterate that a petitioner's disability does not shield him from the consequences of workplace misconduct. Respondent Hill Betts & Nash (hereinafter referred to as "HBN") terminated the petitioner, James Hazen, on March 15, 2006, upon discovering that the petitioner charged hotel rooms, limousines, alcohol, adult movies and calls to escort services to his corporate American Express card and then attempted to have these charges billed to clients. On August 30, 2006, HBN reported the petitioner's misconduct to the Departmental Disciplinary Committee for the First Judicial Department (hereinafter referred to as the "DDC"). The petitioner filed a verified complaint with the New York State Division of Human Rights (hereinafter referred to as the "DHR") on November 7, 2006 charging HBN with unlawful discrimination and retaliation. The petitioner claims that his misconduct was caused by his bipolar disorder, that HBN failed to accommodate his mental illness, that his termination was discriminatory, and that HBN retaliated against him by reporting him to the DDC. Evidence and testimony before the Administrative Law Judge (hereinafter referred to as "ALJ") at a public hearing held during four days in December 2007 and January 2008 established the following: The petitioner was one of several partners at HBN who were issued a corporate American Express card for business expenses. HBN permitted Hazen to use the credit card for personal expenses, but required that he identify these charges and reimburse HBN. HBN's policy is to send each cardholder a sub-statement to mark up with notations indicating whether the charges are personal, chargeable to the firm or a client, or related to travel, entertainment or automobile expenses. It was not HBN's practice to return the statement to the cardholder for further review. The petitioner testified that until the period at issue in this case, he had adhered to this procedure and returned marked-up sub-statements with any receipts and payment for his personal charges. However, in December 2005, when the petitioner was provided with a sub-statement for the last quarter of 2005, he ignored requests from HBN's accounting department and did not submit his annotated sub-statement. The petitioner stopped coming to the office in mid-December, and advised HBN that he was told to "decompress." On January 11, 2006, a partner at HBN contacted the petitioner and asked him to submit his credit card sub-statement on the following day so that the accounting department could close out the 2005 books. The petitioner sent a fax in reply stating that he could not "waste two hours coming in [to] do the bills," but that he would mark up the sub-statement and fax it to accounting. When he did not send in the sub-statement on January 12, the accounting department e-mailed the sub-statement to the petitioner again and copied two partners at HBN. That evening, one of the partners reviewed the bills, and, seeing charges for more than 50 hotel stays between September 26 and December 27, 2005, initiated an internal investigation of the petitioner's credit card use.

The day after the petitioner received the e-mail from HBN's accounting department, he asked Phillip Russotti, his friend, also an attorney, to intervene on his behalf. Russotti testified that the petitioner advised him that he was having a problem at work with his credit card reports and that the firm was demanding that he complete them. Later that day, Russotti called a partner [*3]at HBN and advised him that he had met with the petitioner and found him in a "terrible state" and that the petitioner planned to begin seeing a psychiatrist. HBN presented evidence that until this point, it was unaware that the petitioner was having any mental health issues. Russotti also requested more time for the petitioner to prepare his expense reports. The evidence reflects that the petitioner saw a doctor on January 16. On January 17 and 25, Russotti advised HBN that the petitioner was suffering from a mental ailment, but did not specify the ailment. On January 23, the petitioner faxed the accounting department his annotated credit card sub-statement. The same day, HBN requested medical documentation supporting the petitioner's claim of mental illness and inability to return to work. However, on January 26, petitioner refused to discuss his purported illness with HBN citing "privacy" reasons. On January 27, Russotti mailed a copy of a one-page letter from the petitioner's doctor stating that the petitioner had experienced an unspecified "severe mood disorder." None of the correspondence contained any medical documentation of bipolar disorder or a description of the petitioner's workplace limitations as a result of his "disorder." The letter indicated only that the petitioner was responding well to treatment and was expected to be able to return to work within a few weeks. On January 31, Russotti sent a letter to HBN on the petitioner's behalf advising HBN that the credit card sub-statement that the petitioner submitted on January 23 falsely listed personal expenses in December 2005 and January 2006 as chargeable to clients. Russotti explained that these false expenses were attributable to "[the petitioner's] emotional illness." On February 3, HBN's counsel informed Russotti that HBN was terminating the petitioner effective March 6, 2006. During the hearing, the petitioner testified that although he engaged in the conduct for which he was terminated, it was caused by his bipolar disorder. The petitioner admitted that he repeatedly charged hotel rooms, limousines, and liquor to the HBN corporate card. Furthermore, during his hotel stays, petitioner charged pornographic movies and calls to escort services on the HBN card. Although HBN expected the petitioner to stay a few nights at a hotel in September to work on a case, the petitioner did not tell HBN about any of the other stays. The petitioner blamed his conduct on his bipolar disorder, and testified that he "only engaged in this inappropriate behavior and needed a companion when [he] was either in a manic or depressed state." However, he also admitted that in 2001, he had charged an escort to his corporate credit card and marked it as a client expense that was later discovered and corrected by HBN.

The petitioner testified that he also booked hotel rooms to avoid contact with people in the office on days when he was productive, but not manic. However, the petitioner explained that he booked the hotel rooms in advance on a travel web site. The petitioner conceded that despite using the hotels for inappropriate conduct, he believed that he could list the hotel fees as client expenses because he used the rooms for work. A partner at HBN testified that the investigation of the petitioner's expenses was concluded in March 2006 and determined that petitioner had charged $21,117.77 in personal expenses to the credit card since October 25, 2005, and attempted to list many of those expenses as billable to clients. HBN sent a letter to the petitioner on March 20 that included the [*4]investigation findings and stated the amount that the petitioner owed to the firm. Although the petitioner testified that he could have reimbursed HBN at any time, he did not remit the balance owed. On April 24, the petitioner sent a letter to HBN indicating that he believed he was wrongfully terminated. HBN submitted evidence that in June 2006, HBN retained a legal ethics expert to seek an opinion as to whether HBN was under a duty to report the petitioner's misconduct to the DDC. HBN's counsel advised HBN that it could not avoid reporting the petitioner's misconduct, and that the obligation to report was not affected by the petitioner's alleged disability. Following a meeting with the petitioner's counsel regarding the allegations of discrimination in July, HBN reported the petitioner's misconduct on August 30, 2006. Nine months after the hearing concluded, on September 25, 2008, the DHR ALJ issued a Recommended Findings of Fact, Opinion and Decision and Order finding that HBN had discriminated and retaliated against the petitioner. The ALJ awarded the petitioner $50,000 for mental anguish, but declined to award any compensation for lost salary or benefits on the ground that the petitioner failed to show that he made reasonable efforts to mitigate damages. Both parties objected to the ALJ Order and submitted supplemental briefs to the DHR Commissioner. The Commissioner issued a Final Order on October 27, 2010, amending the Recommended Order to award the petitioner compensation for lost wages through December 31, 2009, in the amount of $548,161, plus interest.

In his petition to Supreme Court, the petitioner sought to affirm the Final Order to the extent that it found HBN liable and calculated lost wages through December 31, 2009. However, the petitioner objected to the Final Order to the extent of claiming that he is entitled to additional compensation. The petitioner asserts that he should have also been awarded lost wages from December 31, 2009 through October 27, 2010, in the amount of $126,840, and an additional $200,000 for mental anguish. The petitioner also claims that he should have been awarded lost wages until his anticipated retirement date in the amount of $973,356. The Commissioner filed a cross petition to enforce the Final Order as issued, and HBN filed a cross petition to annul, reverse and vacate the Final Order and dismiss the petitioner's complaint. By order entered March 11, 2011, Supreme Court transferred the proceeding pursuant to Executive Law § 298 and 9 NYCRR 202.57 to this Court for review. For the reasons set forth below, we annul the Commissioner's Final Order, vacate the award, and dismiss the petitioner's complaint. Under the Human Rights Law, the scope of judicial review is "extremely narrow and is confined to the consideration of whether the Division's determination is supported by substantial evidence in the record." City of New York v. State Div. of Human Rights, 70 N.Y.2d 100, 106, 517 N.Y.S.2d 715, 717, 510 N.E.2d 799, 801 (1987); see also 300 Gramatan Ave. Assoc. v. State Div. of Human Rights, 45 N.Y.2d 176, 179-181, 408 N.Y.S.2d 54, 56-57, 379 N.E.2d 1183, 1185-1186 (1978). "Substantial evidence, which has been characterized as a minimal standard or as comprising a low threshold must consist of such relevant proof, within the whole record, as a reasonable mind may accept as adequate to support a conclusion or ultimate fact." Matter of Café La China Corp. v. New York State Liq. Auth., 43 AD3d 280, 280, 841 N.Y.S.2d 30, 31 (1st Dept. 2007) (internal quotation [*5]marks and citations omitted). Although judicial review of an agency determination appears to be limited, the Court of Appeals has made clear that a reviewing court exercises a genuine judicial function and that review is more than a "rubber stamp" of an agency's determination. See Matter of New York City Tr. Auth. v. State Div. of Human Rights, 78 N.Y.2d 207, 216, 573 N.Y.S.2d 49, 54, 577 N.E.2d 40, 45 (1991); Matter of Reape v. Adduci, 151 A.D.2d 290, 293, 542 N.Y.S.2d 562, 564 (1st Dept. 1989). In this case, the ALJ found that the respondent's reason for terminating the petitioner was a pretext and that the real reason for terminating him was his disability. We disagree. The record reflects that there is no evidence at all, much less substantial evidence, that HBN knew, before they terminated the petitioner, that the petitioner was disabled by a bipolar disorder or how that disorder limited his performance in the workplace. See e.g. Pimentel v. Citibank, N.A., 29 AD3d 141, 811 N.Y.S.2d 381 (1st Dept. 2006), lv. denied, 7 NY3d 707, 821 N.Y.S.2d 813, 854 N.E.2d 1277 (2006) (employer was not required to accommodate employee's depression where employee failed to adequately explain extent and limits of her restrictions).

The record reflects that until the petitioner began receiving requests from HBN in December 2005 to account for his credit card expenses, there was no indication that the petitioner was suffering from a mental illness. By his own account, the petitioner was able to produce "quality professional legal work" during the time he was allegedly disabled, and argued his portion of a complex summary judgment motion on December 9, 2005. Russotti testified that when he saw the petitioner in December, shortly before their January meeting, the petitioner's behavior did not seem unusual. The petitioner's doctor's records also indicate that neither the internist who had been treating him for more than a year for diabetes, nor the therapist who had been treating him for post-9/11 stress, diagnosed the petitioner with bipolar disorder or even mentioned the possibility that he was bipolar. Furthermore, once the petitioner began alluding to an "emotional illness," HBN specifically requested the details of the petitioner's condition in order to evaluate the medical benefits available to the petitioner, and the petitioner flatly refused to provide any information. The communications from Russotti, the petitioner, and the petitioner's doctor, contained only vague references to emotional illness or "mood disorder," and thus did not fall into the category of an "impairment [...] which [...] is demonstrable by medically accepted clinical [...] techniques." Executive Law § 292(21)(a). Thus, all that was before HBN when it terminated the petitioner on February 3 was that he had charged more than $21,000 in hotels and other personal expenses to the corporate credit card and tried to bill HBN's clients for personal expenses. Then, when confronted and asked for an explanation, he did not reimburse HBN and instead blamed his conduct on a "mood" illness, which he still did not identify. Despite this total lack of evidence as to the petitioner's termination due to his bipolar disorder, the ALJ incomprehensibly found that HBN's legitimate reason for terminating the plaintiff was a pretext. The ALJ relied on evidence that another HBN attorney had charged $25,000 to his corporate credit card and was not terminated. However, this demonstrates only that the ALJ misapprehended the nature of the professional misconduct. The other HBN attorney [*6]did not attempt to charge clients for his personal expenses and paid the money back over time; therefore, his conduct is clearly distinguishable from the petitioner's, which essentially amounted to attempted theft from HBN and its clients. The ALJ also noted that e-mails between two HBN partners raised an inference of discrimination. This too is not supported by record evidence. The e-mails have no direct statements of animus based on disability. Rather, they are the rational concerns of a law firm in the midst of litigating what the ALJ called "the largest case [HBN] had ever had in 10 to 15 years, with a potential for realizing damages in the hundreds of millions of dollars."

In rejecting HBN's nondiscriminatory reason, the ALJ further credited the petitioner's belated excuse that he behaved improperly because of his disability and accepted the petitioner's argument that HBN was obligated to accommodate him. The ALJ was persuaded by the petitioner's testimony and that of his doctor that the petitioner booked hotel rooms and escorts and falsified his credit card accounting as a result of his bipolar disorder. We note that the petitioner also testified that he had engaged in the same misconduct in 2001, four years before the onset of his purported bipolar disorder, when he billed an escort to his credit card and was discovered by HBN trying to list it as a client expense. Furthermore, although the petitioner testified that he only used the hotel rooms and escorts when he was either manic or depressed, he also testified that he booked the rooms on-line weeks in advance. Thus, the only way to credit the testimony that his disorder caused him to engage in such behavior, is to accept the preposterous notion that he was able to predict his mental state weeks in advance and plan accordingly. The record further refutes the ALJ's findings. Petitioner submitted the sub-statement on January 23. By that time, he had seen his doctor twice. On January 25, the doctor reported that the petitioner had responded promptly to drug treatment on January 16 and continued to have a "brisk, robust response to appropriate treatment." This testimony directly refutes the petitioner's claim that the sub-statement was the "diary of a madman." Even were we to accept that there was some evidence — sufficient to satisfy the substantial evidence standard — that the petitioner was disabled and that his misconduct was caused by his disability, HBN was not required to excuse that misconduct as an accommodation. Well-established precedent demonstrates that the New York State Human Rights Law "does not immunize disabled employees from discipline or discharge for incidents of misconduct in the workplace." Valentine v. Standard & Poor's, 50 F.Supp.2d 262, 289 (S.D.N.Y. 1999), aff'd, 205 F.3d 1327 (2d Cir. 2000); see e.g. McPhatter v. New York City, 378 Fed.Appx. 70, 72, available at 2010 WL 2025758 (2d Cir. May 24, 2010) (even assuming that employee had a history of a disability, the reasons for terminating the employee, including poor attendance, disciplinary record, and other insubordinate behavior, were not pretexts for disability-based discrimination).

There are few reported decisions examining workplace misconduct resulting from a bipolar condition. In each case, the court found that the employer was not required to endure misconduct simply because the employee is disabled. Husowitz v. Runyon, 942 F.Supp. 822 (E.D.N.Y. 1996); Davila v. Qwest Corp., 113 Fed.Appx. 849, available at 2004 WL 2005915 (10th Cir. 2004). Nor is the employer required to retroactively excuse the misconduct as an [*7]accommodation under the Americans with Disabilities Act of 1990 (42 U.S.C. § 12101 et seq.). Davila, 113 Fed.Appx. at 854, 2004 WL 2005915 at *4. In Davila, the petitioner was terminated for workplace violence and argued that his termination was based on his bipolar disorder, which the employer should have accommodated. In dismissing the petitioner's claim, the court found that "excusing workplace misconduct to provide a fresh start/second chance to an employee whose disability [was] offered as an after-the-fact excuse is not a required accommodation under the ADA." Id. In this case, the record is clear that it was not until after the petitioner accrued the expenses on his corporate credit card, and was asked to account for them, that he then consulted an attorney and sought a diagnosis from a psychiatrist. Thus, here, as in Davila, the petitioner has offered his disability as an "after-the-fact excuse." The Equal Employment Opportunity Commission similarly acknowledges that an employee's disability does not relieve him of the consequences of his misconduct. EEOC Guideline No. 30 specifically provides that "an employer [may] discipline an individual with a disability for violating a workplace conduct standard if the misconduct resulted from a disability," when "the workplace conduct standard is job-related for the position in question and is consistent with business necessity." Here, it is undisputed that charging personal expenses to clients constitutes serious job-related misconduct. The ALJ's finding of retaliation is also not supported by substantial evidence. We note at the outset that rule DR 1—103 of the Code of Professional Responsibility, which was in effect in August 2006, requires an attorney to report another attorney's violation of the rules. See 22 NYCRR 1200.0 (now Rules of Professional Conduct rule 8.3). The ALJ concluded that the proximity of notification by the petitioner's attorney of his discrimination claim in July to HBN's report to the DDC in August 2006 raised an inference of retaliation. It is undisputed that in June HBN consulted an attorney specializing in ethics and was advised that it had an obligation to report the petitioner's attempted theft to the DDC if it had a reasonable belief of wrongdoing, regardless of the petitioner's disability. Thus, HBN has provided a legitimate, nondiscriminatory reason demonstrating that the report was not retaliatory. Accordingly, the determination of respondent State Division of Human Rights, dated October 27, 2010, which, in this employment discrimination proceeding (transferred to this Court, pursuant to Executive Law § 298 and 22 NYCRR 202.57(c)(2), by order of the Supreme Court, New York County [Lucy Billings, J.], entered March 11, 2011), after a hearing, found that [*8]respondent Hill Betts & Nash, LLP unlawfully discriminated against petitioner James Hazen, and awarded petitioner damages, is annulled, on the law, without costs, the award vacated and the complaint dismissed. All concur. Determination of respondent State Division on Human Rights, dated October 27, 2010 (transferred to this Court, pursuant to Executive Law § 298 and 22 NYCRR 202.57(c)(2), by order of the Supreme Court, New York County [Lucy Billings, J.], entered March 11, 2011), annulled, on the law, without costs, the award vacated, and the complaint dismissed. Opinion by Catterson, J. All concur. Mazzarelli, J.P., Catterson, DeGrasse, Abdus-Salaam, Román, JJ. - THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. - ENTERED: JANUARY 5, 2012 - CLERK

More On Corrupt "Show/Give-Me-The-Money" Judge Scarpino

2012-01-06T23:57:00.001-05:00

Rod Covlin hires high-powered lawyer to defend against claims he killed wife Shele Attorney says Covlin's tired of 'being a punching bag'
The New York Daily News by Helen Kennedy - January 4, 2012

Last week, a judge blocked his access to the money after learning he was a suspect in Shele’s death. Rod Covlin says he’s sick of being tagged the killer of his beautiful blond banker wife. The Daily News has learned that after two years of silence, Covlin hired high-profile criminal lawyer Robert Gottlieb on Wednesday to defend him against suspicions in the mysterious death of his estranged wife, Shele Danishefsky Covlin. “He’s through with being a punching bag for others who clearly do not have the best interest of the children at heart,” Gottlieb told The News. Covlin had “chosen not to respond to scurrilous comments in order to shield his children — but enough is enough,” Gottlieb said. He batted back accusations that Covlin had not cooperated with cops after his 49-year-old wife — who had an order of protection against him — was found dead in her upper West Side bathtub on New Year’s Eve 2009. Covlin “cooperated fully with detectives from the beginning. He spoke with them at length on the day his wife’s body was found,” Gottlieb said. The death was initially ruled a slip-and-fall accident and Shele Covlin was buried without an autopsy. But she was exhumed three months later and officials found signs she had been strangled, reclassifying her death a homicide. Asked if police had interviewed Covlin since his wife’s death was ruled murder, Gottlieb said, “I can’t say if he’s had additional conversations after that.” Law enforcement sources have told The News that authorities still hope to indict Covlin for murder in the next few months. Gottlieb said he’s confident that won’t happen “because he did not commit any crime.” Gottlieb is an ally of Manhattan District Attorney Cy Vance and served on his transition team in 2009. “I will be in touch with the DA’s office to see what, if anything, they want,” he said. Covlin hired his high-powered lawyer on the same day that he was in a Westchester civil court refusing to surrender his claim to a $1.6 million Aetna life insurance payout on his slain wife. A Westchester judge continued to block Covlin’s access to the money and rejected his offer to step aside in exchange for having his parents put in charge of the fortune. “Nobody gives me conditions,” Westchester County Surrogate Court Judge Anthony Scarpino said. Scarpino was gulled into granting Covlin control of the money last June when Covlin said he was the best person to control the money on behalf of his two young kids, Anna, 11, and Myles, 5. Covlin’s paperwork failed to mention there was a custody battle over his kids or a war over his wife’s estate, which includes nearly $4 million in three life insurance payouts. The judge put a temporary hold on Covlin’s control of the Aetna policy last week after learning of the financial battles and that Covlin is the main suspect in his wife’s murder. On Wednesday, he extended that hold until a March 6 hearing and also ordered Covlin to provide a full accounting of where the money is and how much, if any, has been spent. Covlin and his parents were in the courtroom. Both sets of grandparents are seeking to administer the estate on behalf of the kids. Covlin appeared briefly agitated when a lawyer for his wife’s family said a federal judge proposed consolidating the payouts from all three of Shele Covlin’s policies under one impartial administrator. “No!” he exclaimed, and began urgently signaling his civil lawyer, Gina Alberta. She told the judge the issue was not settled, and he said he would look into it. hkennedy@nydailynews.com

Corrupt Judge Anthony Scarpino Starts Barking in Westchester

2012-01-05T23:45:00.000-05:00

Show me the money!
The New York Post by Laurel Babcock and Dan Mangan - January 5, 2012
Get out your calculator, creep!

An angry judge yesterday demanded that an Upper West Sider suspected of murdering his estranged wife account for the $1.6 million insurance payout to their kids over her death, and repeated his order that the man keep his hands off the loot. “You say everything is there and fine,” snapped Westchester County Surrogate’s Court Judge Anthony Scarpino to murder suspect Rod Covlin’s lawyers. “I need an accounting of that.” Hours later, Covlin’s new criminal-defense lawyer proclaimed the unemployed backgammon whiz innocent of the New Year’s Eve 2009 strangulation of his wife, Shele Danishefsky, in her West 68th Street apartment. The beautiful blond money manager was killed a day before she was due to meet with an attorney about cutting out Covlin from her will. “He was not involved in any way whatsoever with the tragic death of his wife,” said lawyer Robert Gottlieb. “He will defend himself and is confident that the DA will not charge him with any crimes for one simple reason — he did not commit any crimes.” The Manhattan DA’s Office is investigating Covlin in Danishefsky’s murder. She was originally buried without an autopsy because of her Orthodox Jewish faith, but after friends told the victim’s family members that Covlin had threatened to kill her, they agreed to an exhumation and autopsy that determined that she had been strangled. Last week, the New York County Public Administrator’s Office sued Covlin for allegedly causing Danishefsky’s wrongful death by strangling her. Then The Post revealed that last year, Covlin apparently conned his way into controlling the $1.6 million left to his and Shele’s two kids by failing to tell Scarpino in a Surrogate’s Court guardianship petition that Danishefsky had been murdered, and that he is the suspect. Scarpino then suspended Covlin’s control of the cash and ordered yesterday’s hearing. But the judge’s efforts to learn whether he’d been duped were stymied by the absence of Covlin lawyer Phillip Shapiro, who was being treated for a pinched nerve. Scarpino told the other lawyers to make sure Shapiro is in court on March 6 “to explain exactly what went on here.” Scarpino also barked, “Nobody gives me conditions” when lawyers said Covlin would agree to continued suspension of his guardianship only if his parents were appointed guardians. Gina Alberta, one of the lawyers, said, “There is no fraud perpetuated on this court.” She also said Covlin’s petition had been “truthful by statute,” and that the money was invested with “appropriate financial institutions” and had “not been spent.” dan.mangan@nypost.com

Top U.S. Judge Addresses Ethical Issues

2012-01-04T08:04:00.001-05:00

Chief Justice Defends His Colleague's Approach to Recusal
The National Law Journal by Tony Mauro - January 4, 2012

WASHINGTON, D.C. - Chief Justice John Roberts Jr., in his year-end report on the state of the federal judiciary, last week offered a vigorous defense of the U.S. Supreme Court's handling of ethical issues. He also said he has "complete confidence in the capability of my colleagues to determine when recusal is warranted." Though he said he was not specifically addressing "ongoing debates" about justices' ethics, Justice Roberts was clearly responding to recent calls for applying the judicial code of conduct for lower courts to U.S. Supreme Court justices. Those proposals have been triggered by criticism from both ends of the political spectrum of Justices Elena Kagan and Clarence Thomas for participating in the upcoming cases challenging the constitutionality of the Affordable Care Act. Critics have pointed out that justices have no rules governing their recusal actions, and no one reviews their decisions to stay in or bow out of a case. Justice Roberts' discussion of Supreme Court ethics was extraordinary, taking up all but the final two paragraphs of his 12-page report. He usually touches on several topics facing the federal judiciary in general, rather than focusing on the high court. His report on the workload of the federal courts this year is in an appendix. In an illuminating opening section, Justice Roberts drew a connection between the "Black Sox Scandal" that hit major league baseball in 1920 and the early formation of ethics rules for federal judges. Team owners, seeking to restore confidence in baseball, chose Chicago federal Judge Kenesaw Mountain Landis as baseball commissioner. Mr. Landis resigned his judgeship to take the job, but Justice Roberts said controversy over whether he should resign led the American Bar Association to create a commission on judicial ethics, headed by Chief Justice William Howard Taft. That eventually resulted in adoption of ethical canons and a code of conduct created by the Judicial Conference. But Justice Roberts stressed that under the structure of the U.S. Constitution, the Judicial Conference has no formal jurisdiction over the Supreme Court. In Article III, the Constitution created "one Supreme Court" explicitly, but said Congress could create inferior courts as it sees fit. Congress created the appeals and district courts, and it also established the Judicial Conference to set policy for those courts. As a result, Justice Roberts said, the Judicial Conference and its committees "have no mandate to prescribe rules or standards for any other body." Nonetheless, Justice Roberts said, Supreme Court justices consult the conference's code of conduct, as well as other sources including their colleagues and the Court's own legal office. Justice Roberts also said that Congress has directed justices and judges alike to file financial disclosure reports and imposed limits on gifts and outside income. "The Court has never addressed whether Congress may impose those requirements on the Supreme Court," Justice Roberts added. "The justices nevertheless comply with those provisions." He said the Court in 1991 adopted an "internal resolution" agreeing to follow Judicial Conference regulations.

As for recusals, Justice Roberts said justices follow the "same general principles" used by lower court judges, but are also influenced by the "unique circumstances" of the Supreme Court. He explained that when lower court judges recuse themselves, they are easily replaced by other judges, and their decisions can be reviewed by a higher court. But at the Supreme Court, when a justice is recused, no one else can replace him or her, and Justice Roberts said the Court "must sit without its full membership. A justice cannot withdraw from a case as a matter of convenience or simply to avoid controversy." In addition, Justice Roberts suggested it would be inappropriate for justices to pass on whether a colleague should or should not recuse. He wrote, "It would create an undesirable situation in which the Court could affect the outcome of a case by selecting who among its members may participate." In expressing his confidence in his colleagues to recuse when warranted, Justice Roberts said, "They are jurists of exceptional integrity and experience whose character and fitness have been examined through a rigorous appointment and confirmation process. …We are all committed to the common interest in preserving the Court's vital role as an impartial tribunal governed by the rule of law." He also wrote that "at the end of the day, no compilation of ethical rules can guarantee integrity. Justices must exercise both constant vigilance and good judgment to fulfill the obligations they have all taken since the beginning of the Republic." Justice Roberts ended his report by expressing gratitude to federal court judges and staff "for their selfless commitment to public service in the face of demanding dockets and tightened budgets." He also thanked Congress for its "careful consideration of the judiciary's financial needs." Tony Mauro, who covers the U.S. Supreme Court for The National Law Journal, an affiliate, can be contacted at tmauro@alm.com.

Second Department Disbars Two Long Island Attorneys

2012-01-04T08:00:00.001-05:00

Second Department Disbars Two Long Island Attorneys
The New York Law Journal by Brendan Pierson - January 4, 2012

Two Long Island attorneys were banned from practicing law by the Appellate Division, Second Department last week. Frederic A. Powell pleaded guilty to grand larceny, criminal possession of a forged instrument and attempted bribery on March 29, 2011, all felonies. Mr. Powell admitted to forging a name on a mortgage; trying to bribe a Hempstead, N.Y. town employee with $250 to expedite a Freedom of Information Act request for the location of a property; and stealing more than $50,000. He accomplished his theft by acting as a middle man for loans and keeping loan payments for himself instead of forwarding them to lenders, according to charges filed against him by Nassau County District Attorney Kathleen M. Rice. Mr. Powell's felony plea resulted in automatic disbarment by a Second Department panel consisting of Justices William F. Mastro, Reinaldo E. Rivera, Peter B. Skelos, Mark C. Dillon and Sheri S. Roman. The Second Department also disbarred Edward J. Martz, who was accused of failing to preserve client funds, using such funds for his own purposes, misleading a client into believing that he still had her funds in a bank account when he did not, failing to keep records and failing to cooperate with the grievance committee's investigation. Mr. Martz was suspended by the Second Department in January and served with the petition against him. He failed to respond. In light of that failure, a Second Department panel consisting of Justices Mastro, Rivera, Skelos, Dillon and Randall T. Eng disbarred him.

Matter of Powell
2011 NY Slip Op 09651 - Decided on December 27, 2011 - 2009-04002
Appellate Division, Second Department - 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 December 27, 2011
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT
WILLIAM F. MASTRO, A.P.J.
REINALDO E. RIVERA
PETER B. SKELOS
MARK C. DILLON
SHERI S. ROMAN, JJ.

[*1]In the Matter of Frederic A. Powell, an attorney and counselor-at-law. Grievance Committee for the Tenth Judicial District, petitioner; Frederic A. Powell, respondent. (Attorney Registration No. 1935741) Motion by the Grievance Committee for the Tenth Judicial District to strike the respondent's name from the roll of attorneys and counselors-at-law, pursuant to Judiciary Law § 90(4)(b), based upon his felony convictions. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the Second Judicial Department on July 11, 1984. Robert A. Green, Hauppauge, N.Y. (Daniel M. Mitola of counsel), for petitioner.

OPINION & ORDER - PER CURIAM. On March 29, 2011, in the Supreme Court, Nassau County (McCormack, J.), the respondent entered a plea of guilty to grand larceny in the second degree, a class C felony in violation of New York Penal Law § 155.40; criminal possession of a forged instrument in the second degree, a class D felony in violation of New York Penal Law § 170.25; and attempted bribery in the third degree, a class E felony in violation of New York Penal Law § 200.00. The respondent admitted that he stole property with a value exceeding $50,000; that, with intent to defraud and deceive, he placed a person's name on a mortgage without her knowledge or consent, thereby possessing a forged instrument; and that he attempted to confer a benefit upon a public servant to influence her actions, to wit, that he attempted to give $200 to an employee of the Town of Hempstead in exchange for her expediting a request under the Freedom of Information Law.The Grievance Committee for the Tenth Judicial District (hereinafter the Grievance Committee) moves to strike the respondent's name from the roll of attorneys and counselors-at-law pursuant to Judiciary Law § 90(4)(b) based upon his felony convictions. The respondent has neither opposed the Grievance Committee's motion nor submitted any papers in response. By virtue of his felony convictions, the respondent ceased to be an attorney and counselor-at-law pursuant to Judiciary Law § 90(4)(a), and was automatically disbarred on March 29, 2011. Accordingly, the Grievance Committee's motion to strike the respondent's name from the roll of attorneys and counselors-at-law is granted, effective March 29, 2011, and the respondent's name is stricken from the roll of attorneys and counselors-at-law based upon his disbarment. [*2] MASTRO, A.P.J., RIVERA, SKELOS, DILLON and ROMAN, JJ., concur.

ORDERED that pursuant to Judiciary Law § 90(4)(a), the respondent, Frederic A. Powell, is disbarred, effective March 29, 2011, and his name is stricken from the roll of attorneys and counselors-at-law, pursuant to Judiciary Law § 90(4)(b); and it is further,ORDERED that the respondent, Frederic A. Powell, shall comply with this Court's rules governing the conduct of disbarred, suspended, and resigned attorneys (see 22 NYCRR 691.10); and it is further, ORDERED that pursuant to Judiciary Law § 90, the respondent, Frederic A. Powell, is commanded to desist and refrain from (l) practicing law in any form, either as principal or as agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law or its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and its is further, ORDERED that if the respondent, Frederic A. Powell, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR 691.10(f). ENTER: Aprilanne Agostino, Clerk of the Court

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Matter of Martz
2011 NY Slip Op 09647 - Decided on December 27, 2011 - 2010-09953
Appellate Division, Second Department - 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 December 27, 2011
SUPREME COURT OF THE STATE OF NEW YORK
APPELLATE DIVISION : SECOND JUDICIAL DEPARTMENT
WILLIAM F. MASTRO, A.P.J.
REINALDO E. RIVERA
PETER B. SKELOS
MARK C. DILLON
RANDALL T. ENG, JJ.

[*1]In the Matter of Edward J. Martz, a suspended attorney. Grievance Committee for the Tenth Judicial District, petitioner; Edward J. Martz, respondent. (Attorney Registration No. 2051506) DISCIPLINARY proceeding instituted by the Grievance Committee for the Tenth Judicial District. The respondent was admitted to the Bar at a term of the Appellate Division of the Supreme Court in the First Judicial Department on March 31, 1986. Robert A. Green, Hauppauge, N.Y. (Robert H. Cabble of
counsel), for petitioner.

OPINION & ORDER - PER CURIAM. By decision and order on motion of this Court dated January 25, 2011, the respondent was immediately suspended from the practice of law upon a finding that he was guilty of professional misconduct immediately threatening the public interest based on his failure to cooperate with the lawful demands of the Grievance Committee for the Tenth Judicial District (hereinafter the Grievance Committee), substantial admissions made under oath, and other uncontroverted evidence of professional misconduct. That decision and order also authorized the Grievance Committee to institute and prosecute a disciplinary proceeding against the respondent based upon the allegations set forth in a petition dated August 16, 2010; ordered that the respondent serve an answer to the petition within 20 days; and referred the issues raised to the Honorable Arthur J. Cooperman, as Special Referee to hear and report. The petition contains 17 charges of professional misconduct against the respondent, including breaching his fiduciary duty by failing to preserve funds entrusted to him as a fiduciary incident to his practice of law (three counts); misappropriating and/or converting funds entrusted to him in his capacity as attorney, by using them for purposes other than those for which they intended (four counts); engaging in conduct involving dishonesty, fraud, deceit, or misrepresentation, by misleading a client that he still maintained her funds in his bank account, would be remitting them, and delaying remitting the funds; failing to maintain funds received on behalf of another, incident to his practice of law, in a special bank account; engaging in conduct prejudicial to the administration of justice by failing to timely or properly cooperate in the investigation by the Grievance Committee; permitting multiple checks or electronic transfers to be dishonored in his attorney trust account due to insufficient funds; failing to maintain required bookkeeping records; and engaging in conduct adversely reflecting on his fitness as a lawyer (five counts). [*2] On March 28, 2011, the respondent was personally served with a copy of the decision and order dated January 25, 2011, with notice of entry; notice of petition; and the petition dated August 16, 2010. More than 20 days have since elapsed without an answer to the petition, as directed, or a request for an adjournment. The Grievance Committee now moves to deem the charges against the respondent established, and to impose such discipline upon him as the Court deems appropriate, based upon his default. No opposition or other response to the Grievance Committee's motion has been received from the respondent to date. Accordingly, the Grievance Committee's motion is granted, the charges in the verified petition are deemed established and, effective immediately, the respondent is disbarred on default and his name is stricken from the roll of attorneys and counselors-at-law. MASTRO, A.P.J., RIVERA, SKELOS, DILLON and ENG, JJ., concur.

ORDERED that the Grievance Committee's motion is granted; and it is further, ORDERED that, pursuant to Judiciary Law § 90, effective immediately, the respondent, Edward J. Martz, is disbarred and his name is stricken from the roll of attorneys and counselors-at-law; and it is further, ORDERED that the respondent, Edward J. Martz, shall continue to comply with this Court's rules governing the conduct of disbarred, suspended, and resigned attorneys (see 22 NYCRR 691.10); and it is further, ORDERED that pursuant to Judiciary Law § 90, the respondent, Edward J. Martz, is commanded to continue to desist and refrain from (1) practicing law in any form, either as principal, agent, clerk, or employee of another, (2) appearing as an attorney or counselor-at-law before any court, Judge, Justice, board, commission, or other public authority, (3) giving to another an opinion as to the law or its application or any advice in relation thereto, and (4) holding himself out in any way as an attorney and counselor-at-law; and it is further, ORDERED that if the respondent, Edward J. Martz, has been issued a secure pass by the Office of Court Administration, it shall be returned forthwith to the issuing agency and the respondent shall certify to the same in his affidavit of compliance pursuant to 22 NYCRR 691.10(f). ENTER: Aprilanne Agostino, Clerk of the Court

Corrupt Court System Spews Twist on Judicial Departures

2012-01-04T07:49:00.001-05:00

OCA Sees Fewer Judges Leave Bench in 2011 Than Prior Year
The New York Law Journal by Joel Stashenko - January 4, 2012

Departures from the ranks of New York state judges in 2011 may have been quelled by the prospect of the first pay raise for the judiciary since 1999, Chief Judge Jonathan Lippman said. Last year, 54 judges left the bench through retirement, resignation or death, half the number of judges, 110, who left in 2010, according to the Unified Court System. There are about 1,200 state judges in New York. Legislation establishing a panel to recommend pay raises was passed in December 2010. The panel has proposed boosting all state judicial salaries by 27 percent over the next three years, beginning April 1, 2012. Judge Lippman said the probability that state judges will get a pay raise may have accounted for the fall-off in departures last year. "I think it did have a major impact on the mindset of our judges," Judge Lippman said yesterday in an interview. Among those leaving the bench in 2011 were 11 experienced judges who had exhausted the recertification process under which their terms were extended by a total of six years past reaching the mandatory retirement age of 70. They included Supreme Court Justice Alfred J. Weiner in Rockland County, who wrapped up a career in which he spent 39 years in various courts. Supreme Court Justice Frank A. Sedita in Erie County spent 35 years on the bench while Appellate Division, Fourth Department, Justice Samuel Green and Bronx Supreme Court Justice John P. Collins each had been on the bench for 33 years. Judge Lippman said one of the strengths of the Judiciary is the longevity of its judges.

"Look, you are losing people of invaluable experience" through mandatory retirement, he said. "I don't think you can replace 30 years or more on the bench be it on the criminal side, the civil side or the other subsets that we specialize in. It is a tremendous loss when we lose experienced judges and that's why we thought it was essential to resolve the salary issue so that we didn't lose more highly trained and experienced judges," many of whom are relatively young. Judge Lippman added, "I think it is fair to say that most judges aged out, but our experienced judges are our heart and soul of the system. I cannot tell you how helpful and significant it was that we now have this process where we can continue regular, permanent [pay] increases." Unless Governor Andrew M. Cuomo and the Legislature, which both had representatives on the pay commission, intervene, the salaries for Supreme Court justices, for example, will increase to $174,000 from $136,700 over the next three years.

One high-profile judge who quit the bench in 2011 citing the judicial pay situation was James M. McGuire of the Appellate Division, First Department. Mr. McGuire, 58, who has two young children, said he needed to earn more than the $144,000 a year salary of an appellate judge. Mr. McGuire, now a partner at Dechert, said the prospect of a pay raise, especially one to be phased in over three years, has not mollified all of his former colleagues. Some judges feel the hike is "too little, too late," he said. Court of Claims Judge Robert K. Holdman, who will turn 48 at the end of the month, also cited inadequate judicial pay when he resigned in September after six years. Three judges died in office in 2011: Presiding Justice Anthony V. Cardona of the Third Department; Housing Court Judge Oymin Chin in the Bronx, and Supreme Court Justice Robert A. Ross in Nassau County, who specialized in matrimonial matters.

Mandatory Departures

Still, the appeal of remaining on the bench, raise or no raise, was obvious among many of those who left on Dec. 31.

For example, Supreme Court Justice Anthony Falanga of Nassau County, 76, said he thought it would be fairer to have allowed him to serve out the rest of his current 14-year term, which ends at the end of 2012. Money was not an issue, said Mr. Falanga, who started yesterday with the Garden City firm of Jaspen Schlesinger Hoffman after 17 years on the bench. "I did not take the job for the money, nor did my colleagues," he said in an interview. "If I wasn't mandated to retire and I would have been allowed to serve the extra time, whether or not I was getting a pay raise, I would not have left." He added, "Retirement is not in my DNA. I am ready to get back into the fray and to do battle. The state Constitution says you are washed up at age 76, but I say 'boo-hoo to you.'"

Retiring judges have a range of plans, some tapping into their areas of expertise, some teaching, and others, well, retiring.

Onondaga County Court Judge William D. Walsh plans, for now, to go into conventional retirement mode. He said he was diagnosed with prostate cancer late in 2010 and that he promised his wife that if surgery went well, which it did, he would step down at the end of 2011. Judge Walsh said he plans to indulge two passions in retirement: racing motorcycles (NYLJ, Jan. 18, 2011) and waterskiing barefoot.

Mr. Sedita said he offered to work as an unpaid judicial hearing officer, but opted instead to join Counsel Financial in Buffalo beginning yesterday. Mr. Sedita said he will be one of the in-house counsels evaluating the loans lawyers seek from the firm to finance their litigation upon expectation of a favorable pay-off. He said he has no hard feelings about the mandatory retirement rules, but felt that he could have served capably for years to come. "My health is good, my mind is good," he said. "I think I could have still made a contribution." William Erlbaum, who stepped down as Queens Supreme Court justice in the fall after 33 years on the bench (NYLJ, Oct. 13, 2011) said he has spent weeks identifying significant legal papers from his judicial career and discarding others. He said he wants to keep his hand in practicing law by being a consultant to other lawyers, especially those involved in cases where the psychiatry or psychotherapy of the parties is at issue. He is also continuing as an instructor at Brooklyn Law School and at York College in the City University of New York system, he said. "I really don't have a great craving to go into courts," Mr. Erlbaum said. "There are a lot of lawyers who like to fire spitballs. I like to make good spitballs." Mr. Erlbaum, 75, stepped down 14 months earlier than he had to under state law. His last term of recertification would have ended at the close of 2012. He said, however, he wanted to leave the bench according to his own timetable. "They say at the state prison at Bedford Hills that the lights out is at 9 p.m., but that the women unscrewed the bulbs at 8:45 p.m.," he said. "I wanted to leave under my own steam." Joel Stashenko can be contacted at jstashenko@alm.com.

Lawyers' Duty of Truth Telling—Is Deceit Ever Permissible?

2012-01-03T11:20:00.000-05:00

Lawyers' Duty of Truth Telling—Is Deceit Ever Permissible?
The New York Law Journal by Anthony E. Davis - January 3, 2012

In his Professional Responsibility column, Anthony E. Davis of Hinshaw & Culbertson writes: This article addresses a profoundly troubling area of legal ethics, the meaning and scope of lawyers' duty of honesty. Why troubling? Because while the governing Rules of Professional Conduct are crystal clear - honesty is not only the best, but the only permissible policy - there are in fact circumstances where the law permits lawyers to engage in certain kinds of conduct that can only be described as dishonest. This article addresses a profoundly troubling area of legal ethics, the meaning and scope of lawyers' duty of honesty. Why troubling? Because while the governing Rules of Professional Conduct are crystal clear—honesty is not only the best, but the only permissible policy—there are in fact circumstances where the law, beyond the ethics rules, permits lawyers to engage in certain kinds of conduct, either directly or through the use of agents acting on their behalf, that can only be described as dishonest. Generally, when this subject is discussed in any depth, lawyers seem to fall into one of four groups.

Some lawyers take the position that the ethics rules' absolute prohibition of dishonesty on the part of lawyers should govern in all circumstances, without exception. Next to the purists are the lawyers who argue that the only permissible exception should be for government lawyers, particularly prosecutors, who, while prohibited themselves from engaging in deceit, should be permitted—as the law generally provides—to use and direct agents to engage in dishonesty to the extent necessary to apprehend and prosecute miscreants. Staking out the middle ground, and arguing for a "level playing field" for all members of the bar, and not just government lawyers, some assert that while the rule for lawyers themselves should be absolute, all lawyers—not just prosecutors—should be permitted to use and direct agents (and clients) to engage in limited forms of deceitful conduct to advance clients' legal rights. Finally, at the opposite end of the spectrum from the purists, some lawyers argue that the distinction between using agents and enabling lawyers themselves to engage in dishonest conduct is meaningless and pointless, and that if the objectives of the deceit are appropriate, lawyers themselves, as well as acting through agents, should be permitted to engage in such conduct.1 Let us begin our discussion with a review of the applicable Rules of Professional Conduct (RPC) in New York. RPC 4.1 provides: "Truthfulness In Statements To Others—In the course of representing a client, a lawyer shall not knowingly make a false statement of fact or law to a third person." And, more generally (i.e., in all circumstances, and not just in the course of representing clients), RPC 8.4 provides: "Misconduct—A lawyer or law firm shall not: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another; (b) engage in illegal conduct that adversely reflects on the lawyer's honesty, trustworthiness or fitness as a lawyer; (c) engage in conduct involving dishonesty, fraud, deceit or misrepresentation…" Thus, as it stands now, the New York rules unambiguously prohibit lawyers from engaging in the prohibited conduct themselves as well as from assisting or inducing others, or acting through others to do so.

Case Law and Ethics Opinions

The issue for New York lawyers has been further complicated over the years in two respects. First, there is case law holding that notwithstanding the ethics rules, evidence gained by the use of deceit, at least when engaged in by lawyers' agents, will be admitted. The leading case for this proposition is Gidatex, S.r.L., v. Campaniello Imports, Ltd.2 There, plaintiff's counsel hired two private investigators to pose as interior designers, visiting defendants' showrooms and warehouse, and to secretly tape-record conversations with defendants' salespeople. The defendants unsuccessfully sought to suppress their evidence based upon the fact that it was obtained in violation of New York's ethics rules. While the court in the Southern District of New York did not determine whether such conduct should be treated as unethical, and there are no reported instances of professional discipline being imposed in similar circumstances, the possibility nonetheless exists that lawyers may be disciplined in New York for such conduct—as RPC 8.4 in its current form plainly provides. Further complicating the situation is an ethics opinion from the New York County Lawyers' Association which purports to interpret the ethics rules as somehow permitting deceitful conduct, but only in civil rights or trademark infringement cases (see The Committee on Professional Ethics of the New York County Lawyers' Association Formal Opinion 737 ("NYCLA Opinion 737")). But the problem remains because ethics opinions do not trump the plain language of the RPCs, and what is therefore left for lawyers is a dilemma, not a solution.

Into this mix, the New York City Bar has recently issued a Report—"Proposed Amendment to Rule of Professional Conduct 8.4 Regulating Lawyers' Supervision of Undercover Investigations"—which the Professional Responsibility Committee prepared and which the other two committees in the "ethics cluster"—the Professional Ethics Committee and the Professional Discipline Committee—also adopted (the "City Bar 8.4 Report"). The City Bar 8.4 Report proposes that the RPCs be revised so as to bring them into line with the case law and, in effect, with the findings of NYCLA Opinion 737. (Before discussion of the report, it is appropriate to disclose that the author of this article was a member of the Professional Responsibility Committee and was one of the drafters of the report). The scope of the City Bar 8.4 Report is well summarized in its introduction: "This Report, and proposed amendment to the Rules of Professional Conduct, addresses a serious professional responsibility dilemma repeatedly faced by lawyers confronted with situations requiring the use of "undercover investigations": whether deceptive tactics may be employed by the lawyers themselves, by investigators, by so-called "testers," or by others acting under the lawyers' direction, and if so, under what circumstances?" The City Bar 8.4 Report begins by an extensive review of the current position in New York, summarized above. The Report also notes that "[n]otwithstanding the [existing] Rules…some New York lawyers…routinely employ officers, agents, inspectors, investigators and testers who engage in what can fairly be called "deceptive" conduct in order to: (i) protect or assert their clients' rights; (ii) pursue good faith claims that a violation of law has taken place; or (iii) establish a defense to claims that a violation of law has taken place. On the other hand, it appears that many lawyers shy away from the use of such methods for the fear that they may run afoul of the [existing RPCs]." The City Bar 8.4 Report then reviews the different ways other jurisdictions have addressed the same issue. Notably, all four of the different approaches to the issue discussed at the beginning of the article have been adopted by some states. Colorado, for example, has adopted the "purist" view, by imposing an outright prohibition on the use of deceptive tactics by lawyers. In People v. Pautler,3 the Colorado Supreme Court upheld disciplinary sanctions against a state prosecutor who posed as a public defender in order to induce the surrender of a suspect who had confessed to killing three women and raping another. The City Bar 8.4 Report notes that "[a]lthough the Pautler case concerned a lawyer who personally engaged in deceptive conduct (and also grossly interfered with the attorney-client relationship)…it construed the attorney-ethics rules in Colorado, to impose a blanket prohibition on both the direct and supervisory role of attorneys in the commission of deception under any circumstance." The City Bar 8.4 Report goes on to note that several other jurisdictions have addressed the issue by rewriting their legal ethics rules to permit lawyers to engage in conduct involving the use of undercover investigations in certain limited circumstances. For example, Rule 8.4(a)(3) of the Oregon Rules of Professional Conduct—the functional equivalent of New York Rule 8.4(c)—bans only deception "that reflects adversely on the lawyer's fitness to practice law."4 Oregon Rule 8.4(b) further clarifies that "it shall not be professional misconduct for a lawyer to advise clients or others about or to supervise lawful covert activity in the investigation of violations of civil or criminal law or constitutional rights, provided the lawyer's conduct is otherwise in compliance with these Rules…" The Oregon Rule also defines "covert activity" as "an effort to obtain information on unlawful activity through the use of misrepresentations or other subterfuge," and makes clear that such covert activity may only be commenced or supervised by the lawyer when he or she "in good faith believes there is a reasonable possibility that unlawful activity has taken place, is taking place or will take place in the foreseeable future."5

Continuing, the City Bar 8.4 Report notes that "[t]hus, Oregon permits the use of indirect deception in undercover investigations by all lawyers, regardless of the status of the lawyer or the substantive nature of the claim (i.e., by its terms, the Rule is not limited to criminal, civil rights or intellectual property cases).…Virginia and Florida likewise have adopted rules permitting some deceptive conduct. Although not a formal Rule change, Iowa has adopted the substance of Oregon Rule 8.4(b) in a comment to Rule 32:8.4(c) of the Iowa Rules of Professional Conduct, permitting both criminal and civil lawyers to supervise or participate in lawful covert activity in certain circumstances, regardless of the nature of the claim." The review of other states' approaches to the problem concludes by noting that "the positions taken in the District of Columbia, Utah, New Jersey, and Illinois are sub-optimal simply because, while they recognize the need for and the propriety of lawyer-supervised undercover investigations, they ignore the fact that the Rules in such jurisdictions do not expressly condone such attorney conduct. Thus, these jurisdictions in effect ignore the problem. Based on this survey, the City Bar 8.4 Report concludes that New York is currently aligned with the jurisdictions that have tacitly approved of lawyer-supervised undercover investigations but have not changed their ethics rules in accordance with that carve out. "Simply put, …there is no Rule in New York that expressly authorizes a lawyer's supervision of agents who engage in deceptive conduct, regardless of motive."

Proposed Rule Amendment

The City Bar 8.4 Report accordingly recommends that New York should adopt the Oregon approach, with a rule change that directly addresses the question of what conduct will, and will not, be permitted by way of exception to Rule 8.4(a)'s mandate that a lawyer shall not violate the Rules of Professional Conduct directly or "through the acts of another." The Report proposes to amend New York Rule 8.4(a) as set forth in italics below:

RULE 8.4: MISCONDUCT

A lawyer or law firm shall not: (a) violate or attempt to violate the Rules of Professional Conduct, knowingly assist or induce another to do so, or do so through the acts of another, provided, however, that this Rule does not prohibit a lawyer from advising or supervising another in conducting an otherwise lawful undercover investigation that does not violate Rule 4.2;

The Report adds the following important commentary to the Proposed Amendment:

Unlike Opinion 737, the language of the above Proposed Amendment does not refer to any one particular area of substantive law, such as civil rights or intellectual property law. Rather, its mandate is universally applicable to lawyer conduct in all substantive disciplines. As for a lawyer's personally engaging in the commission of deceptive conduct (as distinguished from the lawyer's supervision of, or giving advice regarding, the deceptive conduct of clients or agents), we are resigned to leave for another day the task of crafting a rule that identifies what conduct may and may not be permissible. Thus, the Proposed Amendment does not address in any fashion a lawyer's personally engaging in deceptive conduct. Finally, it should also be noted that the Proposed Amendment does not provide a safe harbor for conduct that would otherwise violate Rule 4.2: Communication with Person Represented by Counsel. Thus, the uses of undercover investigations that would be authorized by the Proposed Amendment would not extend to conduct that would otherwise violate Rule 4.2. Nor is the Proposed Amendment intended to restrict in any way undercover communications with represented parties otherwise permissible under Rule 4.2 as part of a law enforcement investigation. These considerations are set forth in a proposed Comment [6A], which would accompany the Proposed Amendment:

Comment - [6A] Notwithstanding the general restriction against engaging in deceit, a lawyer may advise or supervise another who engages in an otherwise lawful and ethical undercover investigation, in which the investigator does not disclose his or her true identity and motivation, regardless of the nature of the matter or substantive area of law involved. This Rule does not effect any change in the scope of a lawyer's obligations under Rule 4.2, and thus a lawyer must take reasonable measures so that the investigator does not communicate with a represented party in violation of Rule 4.2, does not seek to elicit privileged information, and otherwise acts in compliance with these Rules, court orders, and civil and criminal law.

As noted at the beginning of this article, the City Bar 8.4 Report adopts the position of those who believe that lawyers should not themselves be permitted to engage in deceit, but should be able to advise and assist others, acting as their agents, to engage in dishonesty to the extent encompassed by otherwise lawful acts of undercover investigations. Inevitably, this will not appeal to those who adhere strongly to one of the other three positions commonly held within the profession. In its favor, however, the city bar's proposed rule change would reconcile New York's RPCs with what is permissible under relevant case law and ethics opinions, would "level the playing field" as between lawyers in private practice and government lawyers, and would free lawyers to use otherwise lawful (but hitherto ethically impermissible) means to explore illegal conduct. Before concluding, the City Bar 8.4 Report notes the existence of an "argument that the Proposed Amendment would run counter to Section 487 of New York's Judiciary Law, which defines a misdemeanor and creates a private cause of action, with treble damages, against any attorney who, inter alia, '[i]s guilty of any deceit or collusion, or consents to any deceit or collusion, with intent to deceive the court or any party.' It may be that some conduct covered by the Proposed Amendment—much like the conduct already condoned in Gidatex and other case law—would violate Section 487 under certain circumstances. If so, a change to Judiciary Law Section 487 may be required." The conclusion of the City Bar 8.4 Report states, "…that the addition of Proposed Amendment is necessary in light of the lack of synchronicity between the plain language of the aforementioned NY Rules on the one hand, and well-established practices among prosecutors and civil lawyers in certain contexts, as well as judicial and other precedent, on the other. We further believe that the attorney conduct that would be authorized by the Proposed Amendment furthers the State's interest in identifying and curbing unlawful activity, whether criminal or civil, and regardless of the nature of the claim." It is to be hoped that the proposed change will be adopted, in order both to remove the disconnect that presently exists between what the RPCs actually state and the practices that are accepted and permitted by the courts and in NYCLA Opinion 737, and to level the playing field for undercover investigations as between lawyers in private practice and government lawyers. Anthony E. Davis is a partner at Hinshaw & Culbertson and a past president of the Association of Professional Responsibility Lawyers.

Endnotes:
1. For a powerful intellectual justification for permitting lawyers to lie, see William H. Simon, "Virtuous Lying: A Critique of Quasi-Categorical Moralism," Georgetown Journal of Legal Ethics, Vol. 12:433 1999.
2. 82 F.Supp.2d 119 (S.D.N.Y. 1999).
3. 35 P.3d 571 (Colo.O.P.D.J. 2001), aff'd 47 P.3d 1175 (Colo. 2002).
4. Oregon Rule 8.4(a)(3).
5. Oregon Rule 8.4(b).

The Supreme Court's Judgment Isn't Absolute

2012-01-02T23:26:00.001-05:00

The Supreme Court's Judgment Isn't Absolute
Townhall.com by Jeff Jacoby - January 2, 2012

Newt Gingrich's presidential ambitions may be heading for the exits -- opinion polls suggest that the former House speaker's hour has come and gone -- but his critique of judicial supremacy deserves to taken seriously no matter what happens in Iowa or New Hampshire. Contrary to popular belief, their judgments were never meant to be revered "almost as if God has spoken." In a 54-page position paper, Gingrich challenges the widely held belief that the Supreme Court is the final authority on the meaning of the Constitution. Though nothing in the Constitution says so, there is now an entrenched presumption that once the court has decided a constitutional question, no power on earth short of a constitutional amendment -- or a later reversal by the court itself -- can alter that decision. Thus, when House Minority Leader Nancy Pelosi was asked for her reaction to the Supreme Court's notorious eminent-domain ruling in Kelo v. New London, she replied as though a new tablet had been handed down from Sinai: "It is a decision of the Supreme Court. If Congress wants to change it, it will require legislation of a level of a constitutional amendment. So this is almost as if God has spoken." But judges are not divine and their opinions are not holy writ. As every American schoolchild learns, the judiciary is intended to be a co-equal branch of government, not a paramount one. If the Supreme Court wrongly decides a constitutional case, nothing obliges Congress or the president -- or the states or the people, for that matter -- to simply bow and accept it. Naturally this isn't something the courts have been eager to concede. Judges are no more immune to the lure of power than anybody else, and their assertion of judicial supremacy -- plus what Gingrich calls "the passive acquiescence of the executive and legislative branches" -- has won them an extraordinary degree of clout and authority. That aggrandizement, in turn, they have attempted to cast as historically unassailable. In Cooper v. Aaron, the 1958 Little Rock desegregation case, all nine justices famously declared "that the federal judiciary is supreme in the exposition of the law of the Constitution" -- a principle, they asserted, that has "been respected by this court and the country as a permanent and indispensable feature of our constitutional system." That wasn't really true. In the words of Larry Kramer, dean of Stanford's Law School (and a former clerk for Justice William Brennan, one of the court's liberal lions), "The justices in Cooper were not reporting a fact so much as trying to manufacture one." It worked. In recent decades, the claim of judicial supremacy has clearly prevailed. Look at the way it's taken for granted, for example, that whatever the Supreme Court decides next spring about the constitutionality of the ObamaCare insurance mandate will settle the issue once and for all. Gingrich argues that this is unhealthy, and that the elected branches have an obligation to check and balance the judiciary. "The courts have become grotesquely dictatorial, far too powerful and, I think, frankly arrogant," he said in Iowa last month. From the unhinged reaction his words provoked -- "this attempt to turn the courts into his personal lightning rod of crazy is simply Gingrich proving yet again that he needs to be boss of everything," railed Dahlia Lithwick in Slate -- you'd think he had declared war on the heart and soul of American democracy. But the heart and soul of American democracy is that power derives from the consent of the governed, and that no branch of government -- executive, legislative, or judicial -- rules by unchallenged fiat. Gingrich is far from the first to say so. "To consider the judges as the ultimate arbiters of all constitutional questions," wrote Thomas Jefferson in 1820, is "a very dangerous doctrine indeed, and one which would place us under the despotism of an oligarchy." Abraham Lincoln -- revolted by the Supreme Court's ruling in Dred Scott that blacks "had no rights a white man was bound to respect" -- rejected the claim that the justices' word was final. "If the policy of the government upon vital questions affecting the whole people is to be irrevocably fixed by decisions of the Supreme Court the instant they are made," he warned in his first inaugural address, "the people will have ceased to be their own rulers." Not all of Gingrich's proposals for reining in the courts, such as summoning judges before congressional committees to explain their rulings, may be wise or useful. But his larger point is legitimate and important. Judicial supremacy is eroding America's democratic values. For the sake of our system of self-government, the balance of federal power needs to be restored.

----- RELATED STORY:

Newt Gingrich says U.S. ‘courts have become grotesquely dictatorial’
The Wasington Post Election Blog by Nia-Malika Henderson - December 15, 2011

Newt Gingrich has advocated abolishing courts and subpoenaing judges for controversial decisions. And he defended his position in the Iowa debate Tuesday night, pushing back against critics who have said such a move would alter the checks and balances on the three branches of government. “The courts have become grotesquely dictatorial, far too powerful and I think frankly arrogant in their misreading of the American people,” the former House speaker said. “I would, just like [former presidents] Jefferson, Jackson, Lincoln and FDR, I would be prepared to take on the judiciary [branch of government] if it did not restrict itself in what it was doing.” Agreeing with Gingrich, Rep. Michele Bachmann (R-Minn.) said “if we give to the courts the right to make law than the people will have lost their representation.”

Top Federal Judge Chided For Wiping Her Feet on the U.S. Flay

2012-01-01T06:05:00.000-05:00

Staten Islanders quick to chide judge for wiping her feet on the flag

The Staten Island Advance by Tom Wrobleski - December 30, 2011

Associated PressFederal Judge Loretta Preska's considerable patriotism is misplaced, flag etiquette experts say.

STATEN ISLAND, N.Y. -- An esteemed jurist with a top Boy Scout official for a husband ought to know better when it comes to respecting Old Glory. Judge Loretta Preska, chief judge of the U.S. District Court for the Southern District, recently posed for an Associated Press photo in her Manhattan chambers for a story about judicial budget crunches. But it wasn't Ms. Preska that caught people's eye: It was the U.S. flag rug on her floor, literally under her feet. And under a table, too. "It is absolutely wrong," said Charles Greinsky, vice president of the Staten Island District Council, Boy Scouts of America, and a former assistant Scoutmaster. "Even my 11-year-old Tenderfoot Boy Scouts would know it's improper." The U.S. Code says that the flag should "never touch anything beneath it, such as the ground, the floor, water or merchandise." And those in Scouting begin learning as young as 7 years old never to let the flag touch the ground when it is being held or lowered. While the regulations make a distinction between actual U.S. flags and items such as rugs and apparel that are in the flag's image, Islanders said that on the floor underfoot isn't the place for any representation of Old Glory. "If I'd opened the newspaper and had seen that cold, I would have been on the phone with her immediately," said patriot artist Scott LoBaido, best known for the project where he painted American flags on buildings from coast to coast. Ms. Preska, a Fordham Law School grad appointed by President George H.W. Bush in 1992, might be expected to know a thing or two about flag etiquette, especially as practiced by the Boy Scouts. Her husband, attorney Thomas Kavaler, a partner at the high-powered Cahill, Gordon & Reindel law firm, is on the executive board of the Greater New York Councils, Boy Scouts of America, and served as vice president of endowments this year. But LoBaido and others were willing to cut the judge some slack. "She's obviously patriotic," said LoBaido, noting the other U.S.-themed objects visible in the picture. "But it looks like she doesn't realize she has her feet on the flag. I hope it's an oversight." LoBaido said he had no problem with the flag decoration draped over the back of the judge's couch, also visible in the photo. But putting your feet on the U.S. flag? No way? "Clearly, this is in poor taste and displays improper flag etiquette, but it seems the judge is quite patriotic if you observe her entire office," said City Councilman Vincent Ignizio (R-South Shore). "I would encourage her to hang that beautiful tapestry of Old Glory and dispose of this picture." A district court spokeswoman said that Ms. Preska was not reachable for comment. It's odd that a judge of Ms. Preska's pedigree would find herself criticized for disrespecting the flag. Known as a conservative jurist, she drew the ire of feminists by dismissing the discrimination lawsuit brought by women against Bloomberg LLC. She also sentenced a Somali pirate who attacked a U.S.-flagged ship to 33 years in prison. In 2007, it was reported that Ms. Preska was on President George W. Bush's short list of potential Supreme Court nominees. She was nominated to the U.S. Court of Appeals for the Second District by the younger Bush, but no action was taken on her nomination. The judge has also served on the advisory board of the Federalist Society for Law and Public Policy Studies, which on its website calls itself "a group of conservatives and libertarians" and says that law schools and the legal profession are "strongly dominated by a form of orthodox, liberal ideology." SILIve.com

Editorial: Justice System Must Correct Itself After Debacle

2012-01-01T06:04:00.000-05:00

Editorial: Justice system must correct itself after diversion debacle
The Knoxville News Sentinel - EDITORIAL - December 18, 2011

Outrage over the actions of disgraced former Knox County Criminal Court Judge Richard Baumgartner have provoked a genuine but misplaced legislative remedy for the situation. Two area legislators are proposing changes to a state anti-corruption law that prevents officeholders convicted of felonies from receiving retirement benefits. Defendants who qualify for diversion, as Baumgartner does, don't lose their pensions. The effort is misplaced. The real target of the outrage should be the agreement that allowed Baumgartner to plead guilty to a single count of official misconduct and qualify for diversion, which allows him to keep his $58,800 annual pension. Baumgartner, records show, became addicted to prescription drugs in 2007. Based on a Tennessee Bureau of Investigation probe, Special Judge Jon Kerry Blackwood determined Baumgartner, among other misdeeds, engaged in doctor shopping, bought pills from street dealers and had an affair with a woman who had been a defendant in his court. Baumgartner took so many pills that he was too compromised to sit on the bench, Blackwood ruled, and could not function as the "13th juror" in criminal trials as required by Tennessee law. In March, Blackwood accepted the plea deal that could result in Baumgarter emerging from probation without a criminal record. He also would get to keep his pension. State Sen. Randy McNally, R-Oak Ridge, and state Rep. Bill Dunn, R-Knoxville, want to close a loophole in state law so that felony defendants who are qualified to receive state pensions and who are allowed diversion must give up their retirement benefits. That's not the way to handle such situations. Diversion, by definition, scrubs a conviction from a person's record. The justice system cannot allow someone who is not technically guilty of a crime to be punished. And even if the Legislature changes the law, it can't be applied retroactively to Baumgartner. The problem lies in the liberal application of diversion, especially in cases of misconduct on the part of public officials. In the Baumgartner case, neither the judge, Blackwood nor Special Prosecutor Al Schmutzer seemed concerned about whether the punishment fit the crimes. Schmutzer, who negotiated the deal with Baumgartner's counsel, professed surprise that Blackwood sentenced Baumgartner to two years on probation with the promise of wiping clean the record if the ex-judge made it through without running afoul of the law again. Yet Schmutzer, who had read the TBI investigative file in its entirety, said he didn't agree with diversion but did not vigorously oppose it during sentencing. For his part, Blackwood did not review the TBI file, even though he had to know that it contained troubling information about Baumgartner's actions, before signing off on the agreement. Had he read the file, he would have had a hard time rationalizing diversion as justice being served. Diversion is a tool that can be used to give a second chance to first-time offenders. Baumgartner's pattern of behavior and the sheer volume of his misdeeds should have disqualified him as a candidate for diversion. As it stands, Baumgartner is getting away with a slap on the wrist. Schmutzer could have negotiated a tougher deal or at the very least insisted that Blackwood not consider diversion as a viable alternative. Blackwood could have delved more into Baumgartner's criminal acts before passing judgment. The problems Baumgartner wrought cannot be fixed in Nashville. The solution lies in the consciences of those whose duty it is to administer justice in Knox County.

Editorial: Criticism of Judiciary is Troubling

2012-01-01T06:03:00.000-05:00

Criticism of judiciary is troubling
The Omaha World-Herald - EDITORIAL - December 22, 2011

Newt Gingrich's campaign-trail attacks on the independence of the federal judiciary offer a troubling view of the Constitution and the distinct roles played by the three branches that share the power of our federal government. Federal judges should be accountable to the law, not to political winds that can blow from either direction, right or left. In bidding for the Republican presidential nomination, Gingrich has said he would consider sending U.S. marshals to haul judges, under subpoena, before Congress to explain controversial decisions. He argued that presidents have the right to ignore rulings of "elitist judges" when the decisions conflict with their powers as commander in chief. On a Sunday talk show, he suggested that some laws could be set by agreement of two of the three branches of government. He's not alone in criticizing judges. Texas Gov. Rick Perry said he would push to end lifetime appointments of federal judges. Former Sen. Rick Santorum said he would sign a bill to abolish the "rogue" California-based 9th Circuit Court of Appeals. The Constitution is specific on the roles of the three branches of government. Congress makes the laws. The executive branch executes the laws. The judicial branch interprets laws and tests their constitutionality. Yes, there is tension among the three branches, but that division of power is a fundamental protection in our democratic society. What are courts in authoritarian regimes but a tool to enforce the state's will? At the same time, the Constitution gives each branch checks and balances over the others. It is the president who nominates federal judges, while the Senate confirms them. The courts check both with judicial review, while Congress has the power to initiate a constitutional amendment. Some federal judges have overreached and tried to legislate from the bench. But they are granted life terms, barring impeachable conduct, to free them from the influences of the two other branches and popular opinion. There are those who believe the legislative and executive branches overreached in passing the new health care law. Where did they turn? The federal courts, of course, and that challenge is now before the Supreme Court. It's part of the constant balancing of power. Gingrich's statements bother many conservatives, including two of former President George W. Bush's attorneys general interviewed by Fox News. Michael Mukasey, a former federal judge, said some of Gingrich's ideas were "dangerous, ridiculous, totally irresponsible, outrageous, off-the-wall and would reduce the entire judicial system to a spectacle." Alberto Gonzales, a former state supreme court judge, worried about allowing Congress to police court decisions: "I believe that a strong and independent judiciary doesn't mean that the judiciary is above scrutiny, that it is above criticism for the work that it does, but I cannot support and would not support efforts that would appear to be intimidation or retaliation against judges." Bruce Fein, a conservative attorney and former Reagan administration official, called Gingrich's ideas "more pernicious to liberty than President Franklin Roosevelt's ill-conceived and rebuked court-packing plan." The winds of politics blow both ways. In a changeable climate, the stable rule of law — the ability to resolve conflicts peaceably — rests on an independent judiciary as much as it does on two other strong and independent branches of government.

Appeals Panel Takes Swipe at Judge Who Follows Law

2011-12-31T09:33:00.001-05:00

Panel Faults Judge Over Drastic Remedy for Tardiness
The New York Law Journal by Jeff Storey

A Brooklyn judge who has become known for his sharply worded opinions criticizing lenders seeking foreclosure and their attorneys (NYLJ, Dec. 28) has himself been faulted by an appeals court for adopting a drastic remedy to what the judge regarded as a tardy response to his demand for information. Supreme Court Justice Arthur M. Schack became concerned that a lender's counsel, Steven J. Baum, P.C., was representing both the plaintiff in the case, the assignee of the mortgage, and the defendant Mortgage Electronic Registration Systems (MERS), the assignor. In an order dated Feb. 2, 2009, he denied a motion for direct service but said the attorneys could move to renew within 60 days providing that the Baum firm submitted an affirmation that it had made full disclosure of any potential conflicts and that the plaintiff consented to the situation. The firm responded with an affirmation that it was not representing both parties in this case, but Justice Schack decided the assurances came too late. Since the affirmation was submitted 123 days after his 60-day deadline, he dismissed the foreclosure complaint "with prejudice" and canceled a notice of pendency. But the Appellate Division, Second Department, ruled last week in U.S. Bank, N.A. v. Kelvy Guichardo, 19086/08, that only "extraordinary circumstances" would justify such a drastic action, and "a single delay in submitting the affirmation" by the Baum firm did not qualify. "There was no pattern of willful noncompliance with court orders on part of the plaintiff and the Supreme Court gave no warning" that a failure to submit the affirmation within 60 days would result in the action Justice Schack took, the unanimous panel said in an unsigned opinion reversing his decision. Joining the decision were Justices William F. Mastro, Sandra L. Sgroi, Jeffrey A. Cohen and L. Priscilla Hall.

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2011-12-31T09:18:00.001-05:00

Alleged Bar Exam Cheater Got Due Process, Panel Says
The New York Law Journal by John Caher - January 3, 2012

A woman allegedly caught cheating on the New York state bar exam has failed to persuade an appellate panel that she was denied due process or that the nullification of her test results was not supported by substantial evidence. Dewitt v. Board of Law Examiners, 512523, stems from the July 2009 exam, when proctors said they saw Rose Dewitt copying or attempting to copy another candidate's responses to the multiple choice questions during both days of the exam. The Board of Law Examiners then retained an expert on test security and cheating, James A. Wollack, an associate professor at the University of Wisconsin-Madison, who had performed "copy analyses" for the board on 27 prior occasions. Mr. Wollack concluded that "statistical evidence" suggested that Ms. Dewitt had copied responses to the multiple choice questions. In addition to her lack-of-proof argument, Ms. Dewitt claimed she was denied due process because she was not provided with the other candidate's address or the underlying data on which Mr. Wollack concluded that she had copied answers. But that issue was not preserved for review because she failed to raise it at a hearing before the board. Records show that Ms. Dewitt is a 45-year-old immigrant who had practiced law for 14 years in her native Russia and now lives on Staten Island. Ms. Dewitt took an intensive course in English at Manhattan College, transferred to Baruch College to study English as a second language and worked as a paralegal in two law offices before enrolling in the Benjamin N. Cardozo School of Law in 2006, according to court records.

Corrupt Judge Anthony Scarpino in the News

2011-12-30T07:40:00.000-05:00

Man who 'killed' wife took control of life-insurance payout for kids
The New York Post by Dareh Gregorian, Dan Mangan and Douglas Montero - December 29, 2011

The man being sued for allegedly murdering his Upper West Side wife surreptitiously took control of the $1.6 million life-insurance-policy payout she’d left behind for their two kids, The Post has learned. Rod Covlin, 39, filed papers in Westchester County Surrogate’s Court in April seeking to be named guardian of the cashed-in Aetna policy that Shele Danishefsky Covlin, a money manager, had left for Anna and Myles. “I am Anna’s father,” an affidavit reads. “I have her best interests at heart, and I am in the best position to determine her current and future needs.” He filed a similar petition to control Myles’ half of the windfall. Covlin’s bid was successful. Surrogate Anthony Scarpino named him guardian in July, apparently unaware he’s the prime suspect in Shele’s Dec. 31, 2009, murder. The revelations came on the same day he was served with court papers by the New York County Public Administrator accusing him of having caused the wrongful death of the beautiful UBS Wealth Management VP. Shele's death was initially classified an accident but as The Post first reported it was reclassified a homicide after the body was exhumed three months later. The suit says Colvin, who's never been charged criminally, "did intentionally, deliberately, willfully, wantonly, maliciously, brutally and without provocation or just cause did strangle, choke, strike, injure, assault, abuse, beat and murder" the mother of his kids. A source familiar with the investigation said an arrest "could" come by this spring. Both kids were asleep in her apartment at the time of her death. Anna found her body in the bathtub. The children are supposed to get what remains of the cash at age 18. Covlin has power to invest the money, and he can withdraw the cash with the court’s permission. A source said Covlin had originally been listed as the beneficiary of the Aetna policy but Shele switched it to her kids about a month before she died as their marriage disintegrated and she told friends she feared he was going to kill her. The circumstances of his taking control of the funds appear shady. Covlin filed the petition to be named guardian in Westchester even though Shele’s estate case is being heard in Manhattan and the kids already have a law guardian acting on their behalf there. His petition doesn’t say that there’s an ongoing case or that the kids have a guardian. He also left blank the answer to a question about whether the kids’ custody had ever been the subject of a court order — and an order of protection had been filed against him before and after his wife’s murder, allowing him only supervised visits with the pair. He also wrote “n/a” under a question asking for the name and address of the kids’ maternal grandfather and grandmother, who have been fighting to keep him from getting their daughter’s money in the Manhattan case. He also touted his financial expertise, saying, “I have managed securities firms throughout my career, held many securities licenses, and traded [professionally],” although court papers show he’s been unemployed for years and spends his time gambling. He and the kids now live with his parents in Scarsdale. There’s no record of Covlin having notified the county public administrator, which is acting as executor of Shele’s estate, the judge handling the estate or Danishefsky’s family about his action. Covlin did not return a call for comment. Marilyn Chinitz of the law firm Blank Rome, which is representing Shele’s family, declined comment. dareh.gregorian@nypost.com

----- RELATED STORY:

Judge blocks Roderick Covlin from slain wife Shele Covlin’s $1.6 life insurance payout; orders hearing
The New York Daily News by Barbara Ross and Helen Kennedy - December 29, 2011
Westchester judge didn't know hubby Rod Covlin a suspect, faced court challenge in Manhattan

A Westchester judge yanked Roderick Covlin’s access to a $1.6 million life insurance payout on his slain wife Thursday after learning he is the prime suspect in her unsolved 2009 murder. That big Aetna life insurance policy is only one of several being fought over: nearly $4 million is at stake for Covlin in the battle to inherit his wife’s estate, the Daily News has learned. In Westchester, Surrogate Court Judge Scarpino suspended the financial rights he granted Covlin earlier this year when the unemployed backgammon player asked to manage the fortune his wife left their two kids. Shele Covlin, who was divorcing her husband when she was strangled in her Upper West Side bathtub, had removed him from her Aetna policy, and left it instead to Anna, 11, and Myles, 5. In his petition, Covlin told the judge that he has his kids’ “best interests at heart” and had experience managing investments and trading stocks professionally. He never mentioned that his right to oversee his wife's estate was being challenged by her family, who say he’s a gambler who can’t be trusted with the kids’ money, or that a Manhattan Surrogate Court had removed him as executor. He was readily granted guardianship of the money with no strings attached. David Bookstaver, spokesman for Office of Court Administration, said Scarpino was not aware of the claims against Covlin. Bookstaver contacted the judge on vacation after Covlin was sued for wrongful death Wednesday. He set a Jan. 4 hearing to revisit Covlin’s guardianship status. No one has been charged with the Dec. 31, 2009 murder of the 47-year-old UBS wealth manager but the Public Administrator in charge of her estate filed a civil suit alleging he killed her. The Daily News has learned Shele Covlin had additional $1 million policies on her life with the Hartford and US Life - and both companies have gone to court asking for guidance about who to pay. “The New York City Police Department has advised the company that Roderick B. Colvin is a suspect in their homicide investigation into the death of the Insured,” US Life said in a federal filing in March. It asked the court to take charge of the money, hoping to “avoid being vexed and harassed by conflicting” claims f Covlin is arrested. The issue is still being litigated. With Kerry Wills

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9th Judicial District Attorney Accused of Stealing From Client, Filing False Documents

2011-12-29T01:58:00.000-05:00

New City attorney accused of stealing from client
The Journal News by Steve Lieberman - December 28, 2011

NEW CITY, NY — An attorney for three Ramapo villages already suspended from practicing law on professional misconduct charges has been accused separately of stealing $70,000 from two clients in a medical malpractice case, the Rockland district attorney announced today. Joel A. Grossbarth denied the four felony charges through his lawyer. Grossbarth has been released on $25,000 bail by Clarkstown Justice Rolf Thorsen, pending a hearing on March 5 or potential grand jury action. The charges resulted from his private practice, not his employment with the villages of Airmont, New Hempstead and Sloatsburg. Grossbarth took a leave of absence from representing the municipalities after his suspension in November involving a different set of allegations by the state organization that oversees the conduct of attorneys. The criminal charges brought by the District Attorney’s Office are second-degree grand larceny, second-degree criminal possession of a forged instrument, and two counts of first-degree offering a false instrument. The top charges carry a maximum of 15 years in state prison. District Attorney Thomas Zugibe said in a news release that between July 16, 2010, and July 27, 2010, Grossbarth stole $70,000 from a couple in a malpractice case. The couple received a check in the mail for $70,000 and told Grossbarth that they did not wish to settle for less than $350,000, Zugibe said. Grossbarth is accused of telling the couple he would return the check to the opposing party, but instead deposited the money into his own account. Grossbarth also is accused of falsely filing a hold harmless agreement and general release with the Rockland County Clerk, settling the case without knowledge or authority of the victims. Zugibe said his investigators have received complaints from other clients of Grossbarth, whose arrest resulted from an investigation by the Rockland County Special Investigations Unit. Grossbarth’s lawyer, John Edwards, said the New City attorney would plead not guilty to the four charges. Grossbarth, 50, of 29 Linden Court, was suspended last month from practicing law by a state Supreme Court justice pending a hearing into professional misconduct charge brought by the Grievance Committee for the Ninth Judicial District. The committee acted on a complaint filed by Rudolph Gregus and his wife, who had hired Grossbarth in 2005. People who believe they have been similarly victimized can the Rockland District Attorney’s Office at 845-638-5001.

Judge Sanctions Bank, Law Firm in Foreclosure Case

2011-12-28T06:54:00.000-05:00

Judge Sanctions Bank, Law Firm in Foreclosure Case
The New York Law Journal by Andrew Keshner - December 28, 2011

A state judge has hit HSBC Bank and a Rochester law firm with sanctions in a case where he already dismissed with prejudice a foreclosure action and unsuccessfully demanded that a top HSBC executive appear at a sanctions hearing. Brooklyn Supreme Court Justice Arthur M. Schack issued a maximum $10,000 sanction against HSBC and a $5,000 sanction against the law firm of Shapiro, DiCaro & Barak, holding that both parties engaged in "frivolous conduct" during an attempted foreclosure against Bedford-Stuyvesant homeowner Ellen Taher. Justice Schack, who is known for taking hard looks at foreclosure actions, held last summer that the bank lacked standing and called assertions made in an attorney affirmation "patently false." He also ordered Irene Dorner, the CEO of HSBC North America Holdings, to personally appear at a sanction hearing, but she did not and instead appeared through counsel (NYLJ, July 14 and 18). In his Dec. 22 sanctions ruling, Justice Schack faulted HSBC's attorney at Mayer Brown for claiming that the bank only learned in July of the foreclosure from its servicer, Ocwen Loan Servicing. "HSBC sounds like a combination of Pontius Pilate and Sergeant Schultz in the classic 1960's television comedy, Hogan's Heroes. HSBC washes its hands of any responsibility and places any blame upon Ocwen, its servicer for the Taher mortgage," the judge wrote in HSBC Bank v. Taher, 9320-2009, later saying the bank could not "claim ignorance." Justice Schack also faulted Frank Cassara, an attorney for Shapiro DiCaro, for not explaining that an HSBC representative in his attorney affirmation was an Ocwen employee, saying "a reasonable attorney" would have do so. The "course of conduct" of Shapiro DiCaro and Mr. Cassara "was not reasonable," he wrote. An HSBC spokesman said that the bank "did not service this loan and neither prepared nor filed any of the underlying legal documents presented to the court. HSBC's role in this case is limited to that of Trustee." Goldberg Segalla represented Shapiro DiCaro. Patrick B. Naylon of Goldberg Segalla noted that the underlying foreclosure dismissal is being appealed. "Moreover, we intend to appeal this most recent decision as well," he wrote in an e-mail. "We do not believe an attorney or a client should be punished while proceeding in reliance on existing law. Mortgage foreclosures are not popular cases these days, but our system provides for zealous representation by attorneys for anyone appearing before the Judiciary. Protecting attorneys who appear for currently unpopular clients or causes from unwarranted sanctions is of the utmost importance to our system of Justice."

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Schumer's Brother-in-Law Stirs Controversy in Federal Judicial Nomination

2011-12-27T23:57:00.002-05:00

Short Hills resident's nomination stirs controversy
www.NorthJersey.com by Lindsey Kelleher - December 27, 2011

Short Hills resident Kevin McNulty was nominated by President Barack Obama to serve as U.S. District Court Judge for the District of New Jersey earlier this month. The nomination, announced by Sen. Frank Lautenberg (D-N.J.) and Sen. Robert Menendez (D-N.J.) Dec. 16, has recently stirred up controversy. The New York Post reported McNulty, 57, who is Sen. Charles Schumer's (D-N.Y.) brother-in-law, was nominated for this judge position at the last minute by Lautenberg so the two senators would stay politically close and connected. According to the Post article from Dec. 26, 87-year-old Lautenberg is concerned about losing his Senate seat during re-election time in 2014 because of his age. Schumer, who is influential in the Democratic Party, could stop Lautenberg from losing this position, the report continued. According to Lautenberg's spokesman Caley Gray, information in the New York Post article is untrue. "The New York Post story is complete fiction from a New York tabloid with a well-known partisan agenda. Sen. Lautenberg always maintains the highest standards in the judicial nominations process, and Kevin McNulty is one of the finest lawyers the senator has ever recommended for the bench," said Gray in a press release. Gray said in an interview with The Item of Millburn and Short Hills Dec. 27 that former federal judge John J. Gibbons - and not Schumer - recommended McNulty to Lautenberg for the judge position in 2009. According to Gray, in 2009 Lautenberg and members of his staff interviewed McNulty for this position, and he has been on Lautenberg's radar for this position since then. Gray said that McNulty is ranked as unanimously well-qualified by the American Bar Association, and that Lautenberg nominated McNulty as New Jersey's district court judge for his merits. In a press release from Sen. Lautenberg's office from October 2011, Lautenberg stated, "Mr. McNulty is an accomplished lawyer with decades of experience in public service and the private sector." Gibbons, a former Millburn resident who now lives in Maplewood, told The Item Dec. 27 that he recommended McNulty to Lautenberg. Gibbons and McNulty are partners at Gibbons P.C. Law Firm in Newark. According to Gibbons, McNulty has significant trial experiences, and has previously worked in the U.S. Attorney's Office as chief of the appellate section. "He is an excellent appellate lawyer and a fine writer," Gibbons said. "The public will benefit from his nomination." According to a biography about McNulty on the Gibbons law firm's website, he has litigated and counseled clients in a wide variety of pharmaceutical, intellectual property, commercial, criminal and appellate matters. McNulty has a B.A. from Yale University and graduated from New York University School of Law, (J.D., cum laude), in 1983. In an email to The Item, McNulty said he is unable to comment on his nomination. E-mail: kelleher@northjersey.com

The Nuts and Bolts of Legal Malpractice

2011-12-26T23:35:00.003-05:00

The Nuts and Bolts of Legal Malpractice
The New York Law Journal by Andrew Lavoott Bluestone - December 27, 2011

Every attorney has a story and an opinion about legal malpractice. They often rate the work of other attorneys on an attorney malpractice scale. These opinions are freely stated, and clients may be told that another attorney has committed legal malpractice. In general, what the attorneys are saying is that a specific act of another attorney fell below the standard believed to be "good and acceptable" by the opinion holder. However, that's just the start of the analysis. Importantly, this question of "departure" is but the first of four elements of legal malpractice, and generally, the easiest to discern. Human behavior is abundantly full of mistakes, hesitations, and wrong turns. Attorneys make mistakes, for both human and institutional reasons. Human reasons for mistakes are obvious. Lack of sufficient knowledge, miscalculation, inattention, family crises, personal character flaws, substance abuse problems, physical problems all create mistakes. Institutionally, attorneys over- book themselves in order to attempt to work to full capacity. Long delays between court dates, or between litigation events, requires that multiple cases be worked on at the same time. For attorneys who practice in contingent fee areas, there is no guarantee of cash flow, and a common practice is to file more cases than one might service at any given time. Large firms have to cultivate a pyramidal scheme of partners and associates, and those associates must be kept at work. So it goes. Departure is the first of the four elements of legal malpractice. This article will catalogue the four elements and sub-elements of legal malpractice as an attempted guide to the analysis of whether any particular legal outcome is legal malpractice and whether it can be prosecuted.

Departures

In order to recover damages for legal malpractice, a plaintiff must demonstrate that the attorney "failed to exercise the ordinary reasonable skill and knowledge commonly possessed by a member of the legal profession"1 and that the attorney's breach of this duty proximately caused plaintiff to sustain actual and ascertainable damages,2 beyond which a plaintiff must show that he or she would have prevailed in the underlying action or would not have incurred any damages but for the lawyer's negligence."3

Proximate Cause

As a second element, plaintiff must plead and prove that the departures "from good and accepted practice were the proximate reason for the loss sustained."4 Another way of saying this is that plaintiff must demonstrate "that he or she would have prevailed in the underlying action [or transaction] or would not have incurred any damages" except because of negligence of the attorney.5 Standing is one aspect of proximate cause. One must have a right to sue the attorney before the attorney's departure proximately cause damage. Privity of contract, no longer necessary in almost any other sphere of the law, still obtains here. In legal malpractice cases against criminal defense attorneys, the proximate cause of the damages is the guilty plea, or conviction, not representation. This determination is viewed as a policy decision by the courts.6 To state a cause of action for legal malpractice arising from negligent representation in a criminal proceeding, a plaintiff must allege his innocence or a colorable claim of innocence of his guilt. Id. One obvious example of lack of proximate cause occurs when the underlying claim was already barred by the statute of limitations before commencement even though the attorney's negligence was "clearly inexcusable."7 Another example would be one in which it is clear that plaintiff was responsible for her own problem, such as failing to cancel a contract of sale.8 Other examples arise in the settlement of the underlying case.9 In Rupert v. Gates & Adams PC, plaintiff claimed shortcomings in divorce representation, which then was resolved in a global settlement which itself resolved a bankruptcy proceeding. "In doing so, plaintiff precluded pursuit of the very means by which defendants' representation of plaintiff in the matrimonial action could have been vindicated," the Fourth Department held. Nevertheless, the rule generally remains that a legal malpractice action remains viable if it is alleged that the settlement of the action was effectively compelled by mistakes of counsel.10 Beyond the scope of this article is a contrary line of matrimonial cases in the First Department in which mere settlement (along with the rote allocution that the client was satisfied with the attorney's work) deprives them of a legal malpractice cause of action.11 Bankruptcy filings by a client are often associated with legal cases gone wrong, and factor into the analysis of standing to bring legal malpractice claims. Assets of the debtor are property of the estate, and not property of the debtor. A pre-petition legal malpractice lawsuit or cause of action becomes an asset of the estate. Failure to disclose a pre-petition legal malpractice cause of action in the schedules of a bankruptcy petition deprives the plaintiff of the legal capacity (standing) to sue for legal malpractice later. It is the trustee, and only the trustee in bankruptcy who has that standing.12 Attorney fee awards may similarly deprive plaintiff of standing to bring the action, or may be enunciated as "blocking" plaintiff from suing under res judicata.13 The reasoning goes that legal fees may not be awarded in the face of legal malpractice, and if legal fees are awarded, in arbitration, or as a charging lien,14 or as an application for fees in a bankruptcy matter,15 or in other circumstances, then there could have been no malpractice, whether the issue was raised or not. Hence, when plaintiff sues for legal malpractice after an attorney fee has been awarded, the case is dismissible under res judicata or collateral estoppel.

'But for' Issues

The third element of legal malpractice is "but for" which has become the shorthand for the "case within a case" or "lawsuit within a lawsuit." It is not completely clear where "proximate cause" ends and "but for" begins, but they are doctrinally different. Every negligence case requires "proximate cause," but only legal malpractice cases require "but for" causation. This requirement is a distinctive "feature of legal malpractice actions arising from an attorney's alleged negligence in preparing or conducting litigation." It is additional to the element of proximate cause, requiring the jury to find the hypothetical outcome of the underlying litigation before finding the attorney's liability in the litigation before it.16 Failure to allege "but for" causation is sufficient to dismiss the case.17 Success but for the negligence of counsel is the required proof. 18 Courts often determine that the allegations of a complaint are "speculative." As an example, in 180 E. 88th St. Apt. Corp. v. Law Off. of Robert Jay Gumenick,19 the First Department found "in any event" that causation was "speculative and otherwise unsubstantiated by the record." Another case,Stackpole v. Cohen, Ehrlich & Frankel, LLP,20 discusses whether a doctor would not have purchased an apartment but for the attorney's negligence. The First Department reviewed testimony that the doctor was aware of the "horrors" of amending the certificate of occupancy several years earlier in an unrelated transaction, and so she could not blame the attorneys for this particular outcome. One particularly unique issue is the attorney judgment rule.21 "Attorneys are free to select among reasonable courses of action in prosecuting clients' cases without thereby exposing themselves to liability for malpractice."22 Questions as broad as the selection of unsuitable experts,23 the selection of questions on cross-examination and what causes of action to bring are subsumed within the attorney judgment rule.

Ascertainable Damages

Fourth and last, damages in a legal malpractice case are designed "to make the injured client whole."24 Those damages are calculated depending upon the situation in which the legal malpractice case arises. The simplest case is that of a personal injury action never started, in which the statute of limitations has run. There, the finder of fact must determine the value of a hypothetical judgment25 that would have been obtained had the attorney commenced the action. Put another way, the measure of damages is generally "the value of the claim lost."26 Plaintiff must plead and prove actual ascertainable damages as a result of the attorney's negligence.27 The Second Department in Siciliano v. Forchelli & Forchelli noted, mere speculation about a loss from an attorney's "alleged omission is insufficient to sustain a prima facie case of legal malpractice."28 Collectibility is an issue in the determination of damages. After plaintiffs prove they would have obtained a specific dollar verdict, they then must prove (in the Second, Third or Fourth Department) how much of that verdict would be collectible. Damages recoverable are limited to the amount that "could or would have been collected" in the underlying action.29 As noted by the Second Department, collectibility of a "hypothetical judgment against the underlying tort-feasor is a factor to be considered by the trier of fact."30 In the First Department, the burden is on defendant to show non-collectibility.

Conclusion

Legal malpractice consists of four elements. Almost anyone can recognize the first, and in most cases, the departure is obvious, patent and prominent. Proximate cause and ascertainable damages are fairly easy to determine, after looking at privity and standing. The major battleground in legal malpractice is in the "case within a case" analysis. Plaintiffs lose underlying cases all the time. In trip and fall cases, there are defenses of notice, reasonable care and de minimus defects. In car cases, there are defenses of serious physical injury. In medical malpractice there are medical judgment defenses. In all cases, the underlying matter is subject to technical defenses of statute of limitations, standing, collateral estoppel and res judicata, as well as the more general defense that "plaintiff would have lost the case." It is here that the major battle on otherwise obvious legal malpractice cases takes place. Andrew Lavoott Bluestone is an attorney in Manhattan, specializing in legal malpractice litigation. He is board certified in legal malpractice by the American Board of Professional Liability Attorneys.

Endnotes:
1. Rudolf v. Shayne, Dachs, Stanisci, Corker & Sauer, 8 NY3d 438 (2007); Leder v, Spiegel, 9 NY3d 836 (2007).
2. McCoy v. Feinman, 99 NY2d 295 (2002).
3. Davis v. Klein, 88 NY2d 1008 (1996).
4. O'Callaghan v, Brunelle, 84 AD3d 581 (1st Dept. 2011).
5. Hamoudeh v. Mandel, 62 AD3d 948 (2d Dept. 2009); Markowitz v, Kurzman Eisenberg Corbin Lever & Goodman LLP, 82 AD3d 719 (2d Dept. 2011).
6. Carmel v. Lunney, 70 NY2d 169 (1987).
7. Dempster v. Liotti, 2011 NY Slip Op 4408 (2d Dept. 2011).
8. Bells v. Foster, 83 AD3d 876 (2d Dept. 2011).
9. Rupert v. Gates & Adams PC, 83 AD3d 1393 (4th Dept. 2011).
10. Garnett v. Fox, Horan & Camerini LLP, 82 AD3d 435 (1st Dept. 2011).
11. Harvey v. Greenberg, 82 AD3d 683 (1st Dept. 2011); Weissman v. Kessler, 78 AD3d 465 (1st Dept. 2010); Katebi v. Fink, 51 AD3d 424 (1st Dept. 2008).
12. Whelen v. Longo, 7 NY3d 821 (2006).
13. Mahler v. Campagna, 60 AD3d 1009 (2d Dept. 2009).
14. Siegel v. Werner & Zaroff, PC, 270 AD2d 119 (1st Dept. 2000).
15. Breslin Realty Dev. Corp v. Shaw, 72 AD3d 258 (2d Dept. 2010).
16. McKenna v. Forsyth & Forsyth, 280 AD2d 79 (4th Dept. 2001).
17. Waggoner v. Caruso, 14 NY3d 874 (2010).
18. Davis v. Klein, 88 NY2d 1008 (1996).
19. 180 E. 88th St. Apt. Corp. v. Law Off. of Robert Jay Gumenick, 84 AD3d 582 (1st Dept. 2011).
20. Stackpole v. Cohen, Ehrlich & Frankel, LLP, 82 AD3d 609 (1st Dept. 2011).
21. Iocovello v. Weingrad & Weingrad, 4 AD3d 208 (1st Dept. 2004); Rosner v, Paley. 65 NY2d 736 (1985).
22. Dweck Law Firm LLP v. Mann, 283 AD2D 292 (1st Dept. 2001).
23. Dimond v. Salvan, 78 AD3d 407 (1st Dept. 2010); Dimond v. Heinz Pet Prods. Co. 298 AD2d 426 (2d Dept. 2002).
24. Shayne, supra; Campagnola v. Mulholland, Minion & Roe, 76 NY2d 38 (1990).
25. McKenna v. Forsyth & Forsyth, supra.
26. Campagnola, supra.
27. Barnett v. Schwartz, 47 AD3d 197 (2d Dept. 2007).
28. Siciliano v. Forchelli & Forchelli, 17 AD3d 343 (2d Dept. 2005).
29. Schmitt v. McMillian, 175 AD 799 (1st Dept. 1916); Vooth v. McEachen, 181 NY 28 (1905).
30. Chiaffi v. Wexler, Bergerman & Crucet, 116 AD2d 614 (2d Dept. 1986).

Schumer Plays Santa in Federal Judgeship to Brother-In-Law

2011-12-25T23:49:00.011-05:00

Schumer bro-in-law judge nod stuns NJ
The New York Post - EXCLUSIVE - by Josh Margolin - December 26, 2011

Sen. Charles Schumer’s brother-in-law was quietly nominated this month to a federal judgeship in New Jersey — a move that has some in the Garden State crying political foul, The Post has learned. Kevin McNulty, who is married to Schumer’s sister, Fran, was named to the US District Court by the White House late on Friday, Dec. 16. According to a boilerplate quote, President Obama believes McNulty is a “distinguished individual” who “will serve the American people with integrity and a steadfast commitment to justice.” New Jersey’s two US senators, Frank Lautenberg and Robert Menendez, followed that up with their own news release heaping praise on the nominee. What no one mentioned is that McNulty, 57, was the last-minute choice of Lautenberg, who had been leaning toward other candidates until surprisingly submitting McNulty’s name to the White House. Lautenberg and his aides have given no public explanation for the decision to go with McNulty even though the latter had never been publicly touted as a contender for the job, which carries life tenure and a $174,000-a-year salary. “No one knows why he did it,” said one person involved in the nomination process. “Everyone thinks it’s all about 2014 and Frank making sure he has Chuck in his corner.” The White House declined to comment, as did McNulty. Lautenberg’s reps denied any political motives and stressed that McNulty, who lives in upscale Short Hills, won the nod on the merits. He is a senior partner at Gibbons PC in Newark. Aides also insisted that Lautenberg was clueless about McNulty’s relationship to Schumer when he first looked at him in 2009. “It is complete fiction to suggest that there was any deal or that Kevin McNulty was brought into the process at the last minute,” said Lautenberg spokesman Caley Gray. People involved in the judicial-nomination process in New Jersey told The Post they believe the surprise nomination was a naked political maneuver by the 87-year-old Lautenberg to stay in Schumer’s good graces. Lautenberg is worried that party elders will try to push him out of his beloved Senate seat because of his advanced age — something that Schumer, one of the party’s top opinion makers and fund-raisers, would be able to stop. “McNulty came out of left field,” said another source involved in the Jersey judicial politics. “McNulty’s not a dumb guy, but people were just, like, ‘How’d that happen?’” Schumer spokesman Mike Morey said Schumer played no part in his brother-in-law’s nod. He insisted Lautenberg could never lose Schumer’s backing. “Chuck Schumer has supported Frank Lautenberg through thick and thin, both in primaries and general elections,” Morey said. “It’s laughable to think he wouldn’t support him in the future.” jmargolin@nypost.com

Fraudster Lawyer, Accountant Removed From $400 Million Estate

2011-12-24T01:02:00.002-05:00

Lawyer, Accountant Removed From Heiress' Estate
The Assocaiated Press - December 24, 2011

Citing evidence of tax fraud, Manhattan Surrogate Court Judge Kristin Booth Glen has suspended the attorney and accountant for a late Montana copper mining heiress from administering her $400 million estate. Surrogate Glen on Friday said there was evidence that Huguette Clark's attorney, Wallace Bock, and accountant, Irving Kamsler, engaged in tax fraud that resulted in $90 million in unpaid federal gift taxes and penalties. Both deny any wrongdoing. Mr. Kamsler resigned Wednesday from administering the estate. Ms. Clark's family has accused the pair of plundering her fortune. The Manhattan District Attorney's Office has been looking into how Ms. Clark's affairs were managed in the past two decades, people familiar with the probe have said. The reclusive Ms. Clark, a U.S. senator's daughter, was 104 when she died in May.

More Political Chaos Keeps Federal Bench Unable to Deal with Justice

2011-12-23T07:42:00.000-05:00

U.S. Senate Blocks Green Nomination for Western District
The New York Law Journal by John Caher - December 23, 2011

A long vacant federal judgeship in the Western District will apparently remain vacant for the time being as Congressional Republicans have blocked the nomination of Monroe County District Attorney Michael C. Green. Mr. Green yesterday said he was advised by the White House that his nomination has been returned by the Senate and will not be resubmitted. The White House confirmed that the nomination is dead. "I appreciate the fact that the president nominated me," Mr. Green said. "Certainly, I was frustrated that after three years I couldn't even get the Senate to vote on it." Mr. Green, 50, a prosecutor in Rochester for the past 25 years and the district attorney for eight years, was recommended by Democratic Senator Charles Schumer for the vacancy created in March 2009 when Judge David Larimer took senior status. Mr. Green did not seek re-election this year as the Senate Judiciary Committee advanced his nomination on June 16. White House spokesman Brandon Lepow confirmed that Mr. Green's nomination was returned to President Barack Obama by the Senate and will not be resubmitted. Mr. Lepow would not comment on why the nomination was blocked, but Mr. Schumer said in a statement that "partisan politics stood in the way." A spokeswoman for Senator Charles Grassley, an Iowa Republican on the Judiciary Committee, yesterday said problems surfaced during a background investigation of Mr. Green. "Members had concerns with his background," said spokeswoman Beth Levine. "Mr. Green knows what the committee's concerns were. There were questions that arose during the background investigation. It turns out the White House isn't re-nominating so it sounds like they had concerns as well." Mr. Green disputed Ms. Levine's statement and said the background investigation was completed before he went to, and was approved 17-1 by the Judiciary Committee. "All of the background information was before the Judiciary Committee and I got thrown a 17-1 vote, with the only 'no' vote coming from [Republican] Senator [Mike] Lee of Utah, who publicly issued a statement saying he had concerns because I had never done federal civil work," Mr. Green said. "It is unbelievable [that Mr. Grassley's office] would say that." Mr. Green said he was not given details as to why his nomination was derailed, but suggested it had to do with local politics. He said Mr. Schumer's office told him that someone in the Rochester area was attempting to undermine the nomination and got the ear of Mr. Grassley. "The only questions Grassley raised were about a local political race, a local D.A.'s race," Mr. Green said. "Why he was getting involved in that, I have no idea."

Stephen Gillers, a professor at New York University School of Law and an ethics expert, said the U.S. Department of Justice contacted him after receiving an anonymous letter alleging that Mr. Green had violated ethical standards by endorsing his first assistant as his successor in the district attorney's office while the nomination was pending. Mr. Gillers said he had never heard of Mr. Green until receiving that request. "Green's nomination got derailed because someone wrote an anonymous letter after he was confirmed [by the committee] but before the Senate voted," Mr. Gillers said in an interview. "Justice asked me if it was a legitimate criticism." Mr. Gillers said it was unclear where the anonymous letter came from or the motivation behind it. He said he reviewed the letter and a subsequent letter Mr. Grassley sent to Mr. Green raising questions about his ethics. "There are a lot of factors that go into these things," Mr. Gillers said. "It may have been intended to embarrass the president. It may have been political pay-back. And it may have been an erroneous belief that he did violate ethics. My job was to speak to the ethical issues, and I did." In a Dec. 2 letter to Mr. Grassley and Judiciary Committee Chairman Patrick Leahy, D-Vermont, Mr. Gillers said Mr. Green did nothing wrong in endorsing his assistant, Sandra Doorley. "Mr. Green endorsed one candidate only, had the support of [a] State Bar opinion that doing so was appropriate, indeed of value, and had a non-partisan basis for his endorsement," Mr. Gillers said in the letter. "His decision was ethical and compliant with the New York Rules of Professional Conduct and the Code of Conduct for U.S. Judges." Mr. Gillers said in the letter that there is "no basis to conclude" that Mr. Green endorsed Ms. Doorley to further his chances of Senate confirmation. Additionally, an issue arose locally when Mr. Green kept on the payroll for the remainder of the year five prosecutors Ms. Doorley intended to fire. It is unclear why that would be an issue, but Mr. Green said it was raised by his opponents in Congress. Mr. Green, a former Republican who switched parties to run for district attorney when his own party would not support his nomination, is highly regarded and his nomination was strongly endorsed by local attorneys. In an interview last summer with the Law Journal, Monroe County Public Defender Timothy P. Donaher, whose office butted heads with Mr. Green's office, repeatedly praised the prosecutor. "Mike, before he became D.A., was known as one of the most prepared trial prosecutors that office had ever seen," Mr. Donaher said. "I don't think anyone works harder. From a defense perspective, he is a thorough, aggressive prosecutor, but a fair guy who is always willing to listen." A local community leader said Mr. Green was instrumental in establishing a program in which drug forfeiture monies are used to support an educational/athletic/mentoring program at the local Boys and Girls Club. "Mike is incredibly committed to this community," said I.C. Shah, former chairman of the Boys and Girls Club. "He is intelligent. He is passionate. He knows the law. It is very rare to find a combination of passion, commitment, knowledge and dedication, and he has all four." Mr. Green's first boss, Rochester attorney James Morris of Morris & Morris, where he began his legal career, said Mr. Green "is a good lawyer. But he has one characteristic above all. He is scrupulously honest and highly ethical." The only open opposition to Mr. Green's appointment, at least until the issues arose in the district attorney's race, came from a minority of the American Bar Association vetting committee, which expressed concern over his lack of experience in civil practice. Mr. Green said he has not decided what he will do when his tenure as district attorney ends next week and is considering his options. "It is time to look forward," Mr. Green said. "The fact that this opportunity closes just means others become open. I am excited about those opportunities." Mr. Obama has suffered a number of setbacks in his efforts to fill judicial vacancies. Currently, 16 nominees, all of whom were approved unanimously by the Judiciary Committee, are awaiting Senate action. Earlier this month, Senate Republicans blocked the nomination of Caitlin J. Halligan for the U.S. Court of Appeals for the District of Columbia Circuit. Ms. Halligan, a former New York solicitor general, is general counsel for the Manhattan District Attorney's Office. John Caher can be contacted at jcaher@alm.com.

Defense Attorney Helps Client Get Another 4.5 Years in Prison

2011-12-22T23:24:00.012-05:00

Cameron Douglas, serving 5 years for drug peddling, gets another 4.5 years for jailhouse possession
The New York Daily News by Tracy Connor - December 21, 2011

Celebrity deejay convinced a defense lawyer to smuggle anti-anxiety pills in her bra

A judge said Wednesday that Cameron Douglas is the most reckless criminal who’s ever been in his courtroom — and gave him an extra four years in prison to clean up his act. The drug-addict son of Hollywood powerhouse Michael Douglas is already serving five years in prison for peddling meth and heroin at a trendy Manhattan hotel. He got an extra 54 months tacked on for repeatedly violating jailhouse rules to get his hands on smack and prescription pills. “I don’t believe that I have had another case ever...of a defendant who has so recklessly, and flagrantly, and wantonly and criminally acted in as destructive and manipulative a fashion,” Judge Richard Berman said. Prosecutors had recommended an extra 12 to 18 months, but Berman said they needed to stop coddling Douglas and more than doubled that. Douglas, 33, had hoped to get off with treatment — blaming his addiction instead of himself for his predicament. “You see, your honor, I cannot seem to find comfort in my own skin,” he said tearfully. “I feel ashamed. I feel defeated.” The judge wasn’t in a sympathetic mood, noting that Douglas had lied to investigators about how he got a pill and some heroin while in lockup. Douglas, the grandson of “Spartacus” legend Kirk Douglas, also convinced a defense lawyer to smuggle anti-anxiety pills to him in her bra. When Douglas was initially sentenced on the 2009 arrest, the judge warned it was the druggie’s last chance. He gave Douglas a five-year sentence — half the mandatory minimum — because he agreed to help the feds prosecute his supplier. Douglas testified in that case earlier this year. Although the deejay has flunked out of rehab a half-dozen times, he insisted Wednesday he’s ready to kick his habit once and for all. Berman recommended Douglas be transferred to a facility that has drug-treatment and be allowed visits with his famous family.

Judge Recuses From Foreclosure Involving His Lender

2011-12-21T09:28:00.000-05:00

Judge Recuses From Foreclosure Involving His Lender
The New York Law Journal by Andrew Keshner - December 21, 2011

A judge whose widely publicized decision to cancel the mortgage of a Long Island homeowner was overturned has now recused himself from the case, with public records showing he holds a mortgage through the same lender. Acting Supreme Court Justice Jeffrey Arlen Spinner in Suffolk County recused himself from IndyMac Bank v. Yano-Horoski, 17926-2005, the day after the lender's attorney asked him to step aside. The lawyer referred to "a commercial relationship" between the judge and the lender, OneWest Bank, which had acquired the assets of IndyMac Bank from the FDIC, the receiver. IndyMac was the original plaintiff in the action. Justice Spinner wrote that he was taking the action "[u]pon the court's own initiative, for reasons which are dehors the record" but provided no other details. A review yesterday of the Suffolk County clerk's online database shows IndyMac Bank is listed as the mortgagee for a residence listing the justice as one of the mortgagors. The mortgage was filed on Jan. 31, 2004. Justice Spinner, through a court spokesman, declined to comment because the case is pending. Justice Spinner canceled Diana Yano-Horoski's $292,500 mortgage and judgment of foreclosure on her East Patchogue home in November 2009, faulting lender officials for their "harsh, repugnant, shocking and repulsive" treatment of Ms. Yano-Horoski during settlement conferences over which he presided (NYLJ, Nov. 23, 2009). The canceled mortgage was reinstated when the Appellate Division, Second Department, held the "severe sanction was not authorized by any statute or rule nor was the plaintiff given fair warning that such a sanction was even under consideration" (Nov. 22, 2010). With the mortgage reinstated, the homeowner's new pro bono attorney, Ivan E. Young of the Young Law Group in Bohemia, sought a vacatur of a default judgment obtained by the bank against his client. Mr. Young claimed improper service, extrinsic fraud and newly discovered evidence. OneWest countered with a dismissal motion and the case was scheduled for oral arguments on Dec. 7 before Justice Spinner.

In a faxed Dec. 6 letter, an attorney representing IndyMac Bank, Allan J. Arffa, a partner with Paul, Weiss, Rifkind, Wharton & Garrison, wrote, "Our client has informed us of certain developments, relating to a commercial relationship that exists between Your Honor and OneWest, that reasonably call into question Your Honor's impartiality in this matter, or at the very least clearly create an appearance of partiality, and that we respectfully require Your Honor's recusal in this matter. Although we are reluctant to raise this issue, after careful research and consultation, we have concluded that, as a matter of professional responsibility, we have no choice but to pursue the matter, initially by calling the issue to the attention of the parties and the Court. " Mr. Arffa was one of three Paul Weiss attorneys handling the Second Department appeal in 2009, along with McGlinchey Stafford in Albany. The Dec. 6 letter does not specify the judge's "commercial relationship" with the bank. Mr. Arffa referred questions to his client OneWest, which declined to comment. In any case, it is unclear whether Justice Spinner was required to recuse himself if his mortgage was the relationship to which Mr. Arffa was referring. Under Section 100.3(E)(1) of the Rules of the Chief Administrative Judge, judges must disqualify themselves "in a proceeding in which the judge's impartiality might reasonably be questioned." Under §100.3(E)(1)(c), one of those instances includes where "the judge knows that he or she, individually or as a fiduciary, or the judge's spouse or minor child residing in the judge's household has an economic interest in the subject matter in controversy or in a party to the proceeding or has any other interest that could be substantially affected by the proceeding." Here, there is no indication that the judge has an economic interest in the Yano-Horoski house or that his own mortgage could have been affected by his actions in the case. With foreclosure cases flooding the courts in recent years, several decisions by Justice Spinner—including the Yano-Horoski ruling—have gained media attention. Lenders have taken notice too, apparently deciding against sending junior associates to handle cases before the judge (NYLJ, July 15, 2010). Nevertheless, Mr. Young said Justice Spinner was "quite capable" of fairly handling each case. "There is no doubt in my mind that he could be fair and impartial. If you look at his record, he decided against banks and with banks," Mr. Young said. The case has been reassigned to Suffolk County Supreme Court Justice Jerry Garguilo (See Profile) and next court date is scheduled for Jan. 12. Meanwhile, Mr. Young has raised new claims in an effort to allow the Yano-Horoskis to stay in their home.

Firm Accused of Deception

In October court papers, Mr. Young contended the January 2009 default judgment of foreclosure against his clients had to be vacated due to the lack of personal service and the "extrinsic fraud" committed by the lender and Steven J. Baum P.C., its counsel before Paul Weiss entered the case. In one "instance of deception," Ms. Yano-Horoski's husband, Gregory, allegedly contacted Mr. Baum after the complaint was served. Mr. Baum, according to the defendant's filings, told the husband it was not necessary to file an answer because the foreclosure would be dismissed if a modification could be achieved or the outstanding balance was paid. Mr. Baum also allegedly told him the homeowners had time to make the mortgage current. In a second incident, Ms. Yano-Horoski claims she spoke with an unnamed woman lawyer at the Baum firm three days after her bankruptcy petition had been dismissed. The attorney allegedly told Ms. Yano-Horoski it was too late to file an answer. The homeowner's court papers, however, argue the bankruptcy triggered an automatic stay of the foreclosure and the Baum firm misrepresented that fact in filings to obtain the foreclosure. Mr. Young also argued the foreclosure action was fatally flawed owing to standing deficiencies; the plaintiff lender did not own the mortgage and note; and "true and obvious discrepancies" existed between the mortgage and note filed with the clerks' office, the court and given to the defense, the attorney said. Mr. Young's motion seeks the caption be amended to include Deutsche Bank, in its capacity as a trustee of a particular home equity mortgage loan asset-backed trust. In court papers, Mr. Arffa rejected Ms. Yano-Horoski's motion as "palpably deficient." He rejected claims of improper service and said extrinsic fraud allegations were insufficient and unsupportable. In affirmations, Mr. Baum and the two attorneys at the firm who handled the case said they never spoke with either Mr. Horoski or Ms. Yano-Horoski. Once the largest foreclosure law firm in New York, the Baum firm has been heavily criticized for its practices and recently announced that it was shutting down. Mr. Baum declined to comment on the litigation for this article. Mr. Arffa called the lack of standing claims "unfounded speculation as to the 'true' owner of the note and mortgage relating to the loan that fails to furnish competent evidence of any meritorious defense." Noting in court papers that during the course of the action OneWest has paid approximately $160,000 in principal and interest, plus $64,000 in insurance and taxes, Mr. Arffa said, "Having lived in her home for free for the past five years and more, it is more than time for defendants to cease trying to postpone the inevitable. If ever a borrower in a foreclosure proceeding had her day in court, Ms. Yano-Horoski is that borrower." Andrew Keshner can be contacted at akeshner@alm.com.

Corrupt Tembeckjian Goons To Hold Judicial "Ethics" Hearings

2011-12-12T11:24:00.001-05:00

Come to the Show at 61 Broadway (12th floor) on Wednesday, December 14, 2011. See How Even NYS Judges Get Denied Due Process in the Make-Believe "Ethics" World of The Empire State.

Disciplinary Proceedings to Resume Against Judge
The New York Law Journal by Brendan Pierson - December 9, 2011

Disciplinary proceedings against Bronx Surrogate Lee L. Holzman will resume next week [Wednesday, December 14, 2011] following an order by an Appellate Division, First Department, panel denying his request for a stay (NYLJ, Dec. 7). The proceedings, which will be open to the public at Surrogate Holzman's request, are set to take place Dec. 14 through 16, Dec. 19, Jan. 3 through 6 and Jan. 9 through 13. The Commission on Judicial Conduct alleges that Surrogate Holzman allowed Michael Lippman, a former counsel to the Bronx public administrator, to collect $300,000 in excessive fees. Surrogate Holzman became the chairman of the Administrative Board of the Offices of the Public Administrators, which is charged with approving fees for public administrators' counsel, in 2002. He eventually fired Mr. Lippman in 2006. Mr. Lippman was indicted last year for allegedly collecting excess fees in five cases and is facing criminal charges in the Bronx. Surrogate Holzman had asked the First Department to stay the disciplinary case against him until Mr. Lippman's criminal case was resolved.

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Lying Lawyer Slammed

2011-12-11T02:08:00.004-05:00

Lying lawyer slapped
The New York Post by Dareh Gregorian - December 10, 2011

A Queens lawyer has been suspended for six months for falsely accusing a New Jersey state trooper of using anti-Semitic slurs against him, according to a ruling released yesterday. Attorney Elliott Dear said he made up the outrageous allegations in hopes of getting out of a speeding ticket. Court papers say the unidentified trooper pulled over Dear, an orthodox Jew, for going 84 in a 55-mph zone while driving with his wife in 2007. Six days after getting the ticket, Dear sent a letter to the traffic court saying, “This ticket shall be dismissed immediately” since he wasn’t speeding and “the officer called me a ‘Jew kike’ — and this prejudice obviously was the cause for the ticket,” the papers say. The letter was forwarded to Internal Affairs, which contacted Dear, who repeated that he had been the victim of an ethnic slur. Unfortunately for Dear — and luckily for the trooper — the traffic stop had been videotaped on the officer’s car camera, and the trooper was wearing a recording device. Police reported Dear’s actions to the New York state lawyers’ disciplinary committee. In a ruling made public yesterday, a panel of state Appellate Division judges denied Dear’s request for only a private rebuke, and suspended him for six months.

-----RELATED STORY:
Lawyer Is Suspended for Making False Accusations Against N.J. Trooper
The New York Law Journal by Andrew Keshner - December 12, 2011

A Queens attorney who sought to get out of a speeding ticket by lying that a police officer had called him a "jew kike" has been suspended for six months. "[R]espondent cavalierly attributed anti-Semitic slurs to an innocent person in a manner which could have had devastating consequences to that person's career," the Appellate Division, First Department wrote in Matter of Eliott Dear, M-4742. "This act alone warrants a harsh sanction, not to mention that it was done to gain an advantage in an administrative proceeding." The penalty stems from a July 2007 traffic stop during which Eliott Dear, then 29, was given a summons from a New Jersey State Trooper for driving 84 mph in a 55 mph zone. Six days later, Mr. Dear, an orthodox Jew, wrote a letter to the traffic court on the letterhead of a law firm where he then worked as an associate insisting that the officer had made the anti-Semitic remark. Mr. Dear, who identified himself as "a licensed attorney in NY State," insisted that he had not been speeding and that the officer's "prejudice obviously was the cause for the ticket." Mr. Dear did not appear for his August 2007 traffic court hearing date and a contempt of court warrant was issued. The "bail" was set at $265, which was the fine for the speeding violation. Mr. Dear's allegation spurred an internal probe of the officer. After avoiding calls for two months, Mr. Dear finally spoke with an investigator from the state police. According to the First Department, he "equivocated" but after he was pressed to remember if a slur was used he explained that since he wrote the letter near the time of the incident, it was likely that the trooper said it. Mr. Dear told the investigator that the trooper had rejected his explanation for speeding that his pregnant wife needed a bathroom as "more baloney from 'you guys,' which [Mr. Dear] stated referred to orthodox Jews." Finally, Mr. Dear said that the trooper had shown a "demeaning" attitude toward him and his wife. But none of Mr. Dear's allegations was supported by the recordings from the microphone the officer was wearing during the traffic stop or the videotape from his car. The officer was exonerated in April 2008. The New Jersey State Police filed a complaint against Mr. Dear with the First Department Disciplinary Committee. Mr. Dear paid the $265 speeding fine in September 2008.

In a June 2009 deposition, Mr. Dear said it was an "impulsive and emotional" decision to write the letter. At the deposition, he said he did not mean to hurt the trooper and thought nothing would come of the allegation. By the time an investigator interviewed Mr. Dear, he explained he was sticking to his story because he was worried about being charged with perjury. When the disciplinary committee served Mr. Dear with a notice and statement of five charges, he admitted all five. Mr. Dear offered testimony to a referee from his psychiatrist that the attorney suffered from "borderline personality disorder, generalized anxiety disorder, attention deficit disorder, major depression, and narcissistic personality." The conditions made Mr. Dear more prone to "bad decisions," the psychiatrist explained, adding that at the time of the incident, Mr. Dear was working too much at a job he did not like and experiencing difficulties with his marriage and the eldest of his three children. The referee determined Mr. Dear's letter was an aberration that was worsened by his ensuing interview with an investigator. The referee also added that he believed Mr. Dear did not intend to harm the officer by his actions. The disciplinary committee initially called for a two-year suspension for Mr. Dear. But the committee later modified its stance and recommended six months. The hearing panel recommended confirmation of the referee's determinations and also supported a six-month suspension. Mr. Dear, a Fordham University School of Law graduate who was admitted to the bar in 2005, is now a solo practitioner in Forest Hills. Mr. Dear sought a private reprimand or censure from the appellate panel. But the panel confirmed the hearing panel's six-month sanction. "Notwithstanding the mitigating evidence and respondent's apparently sincere remorse, his behavior was reckless and reflects poorly on the bar. Under the circumstances, censure or admonition is simply too lenient a penalty," the panel wrote in its Dec. 8 decision. His suspension is effective Jan. 7, 2012. The panel consisted of Presiding Justice Luis A. Gonzalez and Justices Angela M. Mazzarelli, Richard T. Andrias, Rosalyn H. Richter and Sheila Abdus-Salaam. Scott Smith represented the departmental disciplinary committee. Mr. Dear was represented by Elana L. Yeger, a solo practitioner in Spring Valley. "Obviously, we are disappointed he was suspended at all," Ms. Yeger said in an interview. But she emphasized that it was a quarter of the two-year suspension that the disciplinary committee had initially requested. She stressed that Mr. Dear was sorry for his actions and accepted full responsibility. Andrew Keshner can be reached at akeshner@alm.com.

-----ATTORNEY ETHICS COMMITTEE DECISION:

Matter of Dear
2011 NY Slip Op 08840 - Decided on December 8, 2011
Appellate Division, First Department - 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 December 8, 2011
SUPREME COURT, APPELLATE DIVISION
First Judicial Department - Luis A. Gonzalez, Presiding Justice; Angela M. Mazzarelli, Richard T. Andrias, Rosalyn H. Richter, Sheila Abdus-Salaam - Justices

In the Matter of Eliott Dear, an attorney and counselor-at-law: Departmental Disciplinary Committee for the First Judicial Department, Petitioner, Eliott Dear, Respondent.

Disciplinary proceedings instituted by the Departmental Disciplinary Committee for the First Judicial Department. Respondent, Eliott Dear, was admitted to the Bar of the State of New York at a Term of the Appellate Division of the Supreme Court for the Third Judicial Department on June 28, 2005.

Jorge Dopico, Chief Counsel, Departmental -Disciplinary Committee, New York - (Scott D. Smith, of counsel), for petitioner. Elana L. Yeger, for respondent. M-4742 (October 22, 2010) IN THE MATTER OF ELIOTT DEAR, AN ATTORNEY - PER CURIAM

Respondent Eliott Dear was admitted to the practice of law in the State of New York by the Third Judicial Department on June 28, 2005. At all times relevant to this proceeding, respondent maintained an office for the practice of law within the First Judicial Department. He currently maintains a law office in Queens. The Departmental Disciplinary Committee now seeks an order pursuant to 22 NYCRR 605.15(e), confirming findings of misconduct by the Hearing Panel, and imposing a sanction of no less than six months. This disciplinary proceeding arises out of a traffic stop which occurred in New Jersey on July 5, 2007. Respondent, who is an orthodox Jew, was stopped for speeding by a New Jersey State Trooper and given a summons for going 84 mph in a 55 mph zone. Unbeknownst to respondent and his wife, who was in the passenger seat, the stop was videotaped from a camera in the trooper's car. Further, a microphone on the trooper's uniform recorded everything that the trooper said, although it did not capture respondent's statements. Six days after receiving the speeding ticket, respondent wrote the following letter to the traffic court on the letterhead of the law firm where he worked as an associate:

"Ladies and Gentlemen: This ticket shall be dismissed immediately since -
a. there was no speeding and the officer refused to show me evidence that there was: (i.e. - "not guilty")
b. even if there was speeding (which there wasn't) - I was in a 65-mph zone NOT a 55 mph zone; and
c. The officer called me a "jew kike" - and this prejudice obviously was the cause for the ticket. I am a licensed attorney in NY State and will be representing myself in this matter (contact details enclosed). Eliot Dear [signed] Eliot Dear Esq. [business card attached]"

The traffic court set the matter down for a hearing and the letter was forwarded to the New Jersey State Police, which in turn referred it to Sgt. Alexander Koopalethes of the Internal Affairs Investigation Bureau for an investigation. Sgt. Koopalethes attempted to reach respondent by telephone for two months and, only after a partner at respondent's law firm directed respondent to return his call, did Koopalethes hear from him, and have an opportunity to conduct a telephone interview. In the meantime, in August 2007, respondent defaulted on his traffic court hearing date and a contempt of court warrant was issued against him with "bail" set at $265 (the fine for the violation). During his telephone interview with Sgt. Koopalethes, which was recorded, respondent at first equivocated about whether the trooper directed an ethnic slur at him, but after he was pressed to remember if a slur was used, he explained that since he wrote the letter contemporaneously to the incident, it was likely that the trooper said it. The interview continued and respondent added that the trooper dismissed respondent's proffered explanation for speeding, namely, that his pregnant wife needed a bathroom, as more baloney from "you guys," which respondent stated referred to orthodox Jews. Respondent further recounted that the trooper displayed a demeaning attitude toward respondent and his wife. However, none of this information was supported by the video or audio recordings made during the traffic stop. In April 2008, 10 months after the traffic stop, the internal investigation was completed and the trooper was exonerated of all charges. In July 2008, the New Jersey State Police filed a complaint against respondent with the Disciplinary Committee wherein it was revealed that the traffic stop had been recorded. In August 2008, respondent was advised of the complaint and in September 2008, more than one year later, he paid the $265 fine for the speeding violation.

In a letter-answer to the complaint dated January 29, 2009, prepared by respondent's then attorney, and also signed by respondent, respondent admitted that the trooper did not use any ethnic slurs and that he "exacerbated his mistake by not fully refuting [this] allegation ... during his telephonic interview" with Sgt. Koopalethes. However, respondent continued to criticize the trooper's "demeanor" during the traffic stop and the trooper's apparent insensitivity to his wife's "bathroom demands." The letter concluded with respondent accepting responsibility for making the false statement against the trooper and acknowledging his wrongdoing. During his subsequent June 2009 deposition, respondent no longer attributed a demeaning attitude to the trooper. He explained that he wasn't trying to get back at the trooper, but that he just wanted the ticket dismissed. Respondent further stated that since he never filled out a formal complaint or form against the trooper, he never thought his writing that the trooper had used an ethnic slur would go anywhere except on a ticket processing pile, and that he had no logical reason for his decision to write the letter, just that it was "impulsive and emotional." Regarding the telephone interview with Sgt. Koopalethes, respondent testified that he knew he had lied and was in trouble, and he repeated the lie because he was concerned about possibly being charged with perjury.

The Departmental Disciplinary Committee served respondent with a notice and statement of five charges, and respondent admitted to all of thm. Accordingly, the Referee found that respondent engaged in conduct involving dishonesty, fraud, deceit or misrepresentation in violation of DR 1-102(A)(4) by falsely alleging in a letter to New Jersey authorities that the trooper referred to him with an ethnic slur (charge 1), and by falsely alleging during the telephonic interview with Sgt. Koopalethes that during the traffic stop, the trooper referred to him and his wife as "you guys", which was meant to be indicative of the trooper's prejudice against Jewish people (charge 2). Respondent engaged in conduct that was prejudicial to the administration of justice in violation of DR 1-102(A)(5) by consciously avoiding the initial phone calls and letters from Sgt. Koopalethes for approximately two months (charge 3), and by failing to appear in court regarding the summons resulting in a contempt of court warrant being issued against him on August 16, 2007 (charge 4). Lastly, by engaging in the above described misconduct, including not retracting false statements when questioned by the N.J. Internal Affairs investigator, respondent engaged in conduct that adversely reflects on his fitness as a lawyer in violation of DR 1-102(A)(7) (charge 5). In support of mitigation, respondent presented testimony from his treating psychiatrist, who diagnosed respondent as suffering from "borderline personality disorder, generalized anxiety disorder, attention deficit disorder, major depression, and narcissistic personality." He stated that at the time of the incident, respondent was experiencing a great amount of stress due to his working long hours at a job he did not like, marital tension, and substantial difficulties with respect to the oldest of his three children who, like respondent, suffered from ADHD. In the psychiatrist's opinion, the disorders that he diagnosed respondent having, combined with the aforementioned stress, "were the primary factors in making [respondent] vulnerable to impulsive acts." The psychiatrist changed respondent's medication and he, along with a psychologist specializing in dialectical behavioral therapy (DBT), recommended respondent undertake an intensive three-day-a-week outpatient DBT therapy regimen at the Columbia Day Program. Respondent completed a two-month program at Columbia while also seeing his psychiatrist twice a week. The psychiatrist explained that respondent's disorders do not cause a person to lie but they make such individuals "more vulnerable to making bad decisions," such as lying, even though they realize what they are doing is wrong. He stated that people like respondent would know the potential implications of actions if they stopped to think about them, but "the problem is that they often don't stop to think and just do." Respondent also called three character witnesses, all of whom testified favorably about respondent's character, honesty and integrity. The Referee found that while writing the letter was a single aberrational act, it was exacerbated by respondent's statements, required to be truthful, in his telephonic interview with Sgt. Koopalethes and by his perpetration of the theme of anti-Semitic behavior in his answer to the complaint. He further stated that he believed that respondent lacked the intent to harm the trooper, and credited respondent's psychiatrist's testimony that his accusation was an "impulsive" action even though six days had elapsed since he had received the ticket.

The Referee further stated that he believed that respondent was sincerely remorseful for the incident and that his apology to the trooper was genuine. The Referee accepted respondent's psychiatrist's opinion that respondent's personality disorders were legion and strong, and was persuaded that respondent's writing the charge that the trooper used an ethnic slur was impulsive. The Referee further asserted that, while perhaps not technically the "cause" of respondent's misconduct, his many personality disorders, exacerbated by the stress of his job, his marital problems and especially the problems of his oldest child, had a severe impact on his behavior. The Referee credited respondent for his devotion to therapy and continued attendance at therapy sessions, which appeared to be having a positive impact. The Referee observed that the trooper was not directly harmed by respondent's behavior, insofar as he was not disciplined, suspended, docked pay or benefits or even forced to hire a lawyer. On the other hand, he noted that the officer had nine months of emotional stress while the Internal Affairs investigation was ongoing and, though the disparate treatment claim against him was determined to be unfounded, the incident would be documented in his personnel file forever, which could affect or at least delay future consideration of a request for transfer or a promotion. Recognizing the financial hardship which a suspension would cause respondent, the Referee nevertheless recommended a six-month suspension. In unanimously recommending confirmation of the Referee's findings of fact, conclusions of law and recommended sanction of a six-month suspension, the Hearing Panel found —- "the Respondent's conduct to be nothing short of outrageous. To have made entirely fictitious charges of religious bias against a state police officer simply to get out of a speeding ticket, and to maintain the truth of those charges in a follow-up official investigation without regard to the potentially negative impact on the career, livelihood, and emotional state of the police officer, demonstrated Respondent's complete lack of a moral compass and sound judgment. In mitigation are the facts that Respondent has a short but unblemished record, was 29 years old at the time of the incident with severe financial and family stresses, is undergoing psychiatric treatment for his disorders with considerable success, cooperated with the Committee and appears genuinely remorseful for his conduct." Although the Committee had initially sought a two-year suspension before the Referee, it now seeks an order pursuant to 22 NYCRR 603.4(d) confirming the findings of fact and conclusions of law of the Hearing Panel and suspending respondent for no less than six months. Respondent asks this Court to disaffirm the determination of the Hearing Panel and issue a private reprimand or, at most a censure. We confirm the Hearing Panel's sanction. Respondent made false accusations, "which accusations were prejudicial to the administration of justice, engaged in conduct that adversely reflects on his fitness as an attorney, [and] asserted positions which served to harass and maliciously injure" (Matter of Aretakis, 57 AD3d 1160, 1161 [2008], appeal dismissed 11 NY3d 919 [2009] [one-year suspension where respondent, inter alia, falsely accused judge of criminal activity in making a recusal motion]). Indeed, even without the personal impugnation of a person's character as in this matter, this Court has suspended an attorney for resorting to falsehoods in an attempt to achieve a favorable outcome in an administrative proceeding [see Matter of Donofrio, 231 AD2d 365 [1997][one-year suspension where the respondent falsely informed the manager of the Parking Violations Bureau and an administrative law judge that his hearing needed to be expedited because his wife was in the hospital about to give birth and forged the ALJ's signature on a document stating that the respondent's summonses had been dismissed]). Here, respondent cavalierly attributed anti-Semitic slurs to an innocent person in a manner which could have had devastating consequences to that person's career. This act alone warrants a harsh sanction, not to mention that it was done to gain an advantage in an administrative proceeding. Notwithstanding the mitigating evidence and respondent's apparently sincere remorse, his behavior was reckless and reflects poorly on the bar. Under the circumstances, censure or admonition is simply too lenient a penalty. Accordingly, the Committee's petition should be granted to the extent of confirming the Hearing Panel's determination as confirmed the Referee's findings of fact and conclusions of law, and, effective 30 days from the date hereof, respondent is suspended from the practice of law for a period of six months, and until further order of this Court.
All concur. Order filed. (December 8, 2011) Gonzalez, P.J., Mazzarelli, Andrias, Richter, and Abdus-Salaam, JJ.

Meet The Mayor's Judge Pickers

2011-12-11T01:12:00.000-05:00

Mayor's Advisory Committee Plays Key Role in Screening Candidates
The New York Law Journal - December 12, 2011

An advisory committee of 19 attorneys plays a leading role in what Zachary Carter calls the "very, very arduous" task of recruiting highly qualified candidates for city judgeships and determining who will make the cut for presentation to Mayor Michael R. Bloomberg. Mr. Bloomberg appoints nine members of the mayor's advisory committee on the judiciary, the state's chief judge appoints four, the presiding justices of the First and Second departments appoint two each and law school deans appoint two on a rotating basis. It is a "working committee" with members divvying up the major chores for investigating individual candidates. After a preliminary screening by staff, members examine candidates' court decisions and other writings, scrutinize background checks and disciplinary decisions and interview as many as 20 to 40 practitioners who are familiar with the work and temperament of the potential judges. Committee members are not paid for their work. Members serve two-year terms, but the committee's chair and co-chair have served since 2002, when Mr. Bloomberg took office. Following is a list of the current members.

Mayor's Appointees

Zachary W. Carter, the chair, is a partner at Dorsey & Whitney, where he is co-chair of the white-collar crime and civil fraud practice group. He is a former Eastern District U.S. attorney, a federal magistrate judge and a city Criminal Court judge.
Robert G.M. Keating is vice president of strategic initiatives at Pace University. He serves as dean of the New York State Judicial Institute and director of the Center for Judicial Studies. He has served as a state administrative judge and the city's criminal justice coordinator.
Barry A. Cozier is a member of Epstein Becker & Green in its national litigation group. He has served as an associate justice of the Appellate Division, Second Department, a justice on the Commercial Division and a Family Court judge. He also is a former deputy chief administrative judge for New York City courts.
James A. Dollard is a partner at Marrazzo & Dollard, a general law partnership concentrating in real estate, estates and family law. He is a past president of the Richmond County Bar Association.
Beth Kaufman is a litigation partner at Schoeman, Updike & Kaufman. A member of the council of the ABA Section on litigation, she has served on the executive committee of the New York City Bar and has chaired that association's Committee on the Judiciary.
Chanwoo Lee is a criminal defense attorney who was formerly an attorney with the Legal Aid Society, criminal division. She is a former president of the Queens County Bar Association.
Marvin Ray Raskin is in private practice with a concentration in criminal law and disciplinary matters since 1977 after working as a prosecutor with the Bronx District Attorney's Office. He is a past president of the Bronx County Bar Association.
Crystal L. Screen is a solo practitioner focusing on family law matters. She was previously with the Legal Aid Society's juvenile rights division. Ms. Screen is the president of the Assigned Counsel Association of Queens Family Court and serves on various court committees.
Mara T. Thorpe is a partner at Cohen Lans specializing in family law. She is a former Family Court judge and former partner at Morrison Cohen Singer & Weinstein.

Chief Judge's Appointees

Dolly Caraballo is a member of Caraballo & Mandell, a general practice firm specializing in real estate and commercial litigation and transactions. She is the past president of the Puerto Rican Bar Association.
Michael Corriero is executive director and founder of the New York Center for Juvenile Justice. After working as a prosecutor and defense attorney, he was a Criminal Court and Court of Claims/acting Supreme Court justice. He also is the former director of Big Brothers/Big Sisters of New York City.
Felice K. Shea is a retired Supreme Court justice. Before election to the bench, she was a staff attorney at the Harlem Branch of the Legal Aid Society. After retirement, she returned to Legal Aid as a volunteer in the juvenile rights division. Ms. Shea was a member of the New York State Commission on Judicial Conduct and serves as a referee for the commission.
Peter J.W. Sherwin is a partner in Proskauer Rose's litigation and dispute resolution department. He is active in numerous bar associations and previously served as chair of the Committee on Lesbian and Gay Rights of the New York City Bar.

First Department

Austin V. Campriello is a partner at Bryan Cave. He has held numerous government appointments in his career and served as chief of the Rackets Bureau at the Manhattan District Attorney's Office.
William J. Snipes is a litigation partner at Sullivan & Cromwell. He is also a member of the city bar's Committee on Minorities in the Courts and the former co-chair of the Second Circuit Task Force on Gender, Racial and Ethnic Fairness in the Courts.

Second Department

Milton Mollen is counsel to Herrick, Feinstein, a former deputy mayor for public safety and presiding justice of the Appellate Division, Second Department. Mr. Mollen also chaired a special commission in the 1990s to investigate corruption in the NYPD.
Michael Young is a litigation partner with Willkie Farr & Gallagher specializing in securities and financial reporting. He is a frequent author on the subjects of financial reporting, audit committee effectiveness and the role and responsibilities of the independent auditor.

Law School Deans

Jennifer Baum is an assistant professor of clinical legal education and the director of the child advocacy clinic at St. John's University School of Law. After beginning her career in private practice, she joined the Legal Aid Society, where she litigated law reform cases.
Nitza M. Escalera is assistant dean of student affairs at Fordham University School of Law. She also teaches a seminar titled Negotiation and Mediation: A Cross-Cultural Perspective and a course on Race and Ethnicity at John Jay College.

Click Here To See More About The Mayor's Advisory Committee on The Judiciary

Mayor Builds Legacy With Appointments of 'Highly Qualified' Civil, Family Court Judges

2011-12-10T08:15:00.000-05:00

Bloomberg Builds Legacy With Appointments of 'Highly Qualified' Civil, Family Court Judges
The New York Law Journal by Daniel Wise - December 12, 2011

On the day before Thanksgiving, Mayor Michael R. Bloomberg carved two hours out of his schedule to interview eight candidates for Criminal and Family Court. "We are a nation of laws, and the independence of the judiciary is a bedrock of our society," Mr. Bloomberg said in an e-mail to the Law Journal. "It is a principle on which this nation was founded and essential to the success of our country. So appointing the highest quality individuals to the bench is a responsibility I take very seriously." The candidates Mr. Bloomberg selects in the next several weeks to fill vacancies on the Criminal and Family courts and for interim Civil Court positions will join 58 new judges the mayor has appointed since taking office in January 2002. With more than two years left in his third and final term, he is likely to match or surpass the 67 named by his immediate predecessor, Rudolph Giuliani, during his two terms. By now, Mr. Bloomberg has put his stamp of approval on many of the Giuliani appointments as well. In addition to his own choices, the mayor has reappointed 119 judges selected by his predecessors in the continuation of a "merit" selection process instituted by Mayor Edward I. Koch in 1978. In fact, Mr. Bloomberg has appointed or reappointed virtually all of the city's authorized Family and Criminal Court judges. His own choices represent 55 percent of the judges sitting in Criminal Court and 34 percent of those in Family Court. When reappointments are added, he has had a hand in the careers of 62 percent of the judges sitting in Criminal Court and 76 percent of those in Family Court. (Elected Civil Court judges also are assigned to sit in those courts.) Moreover, Mr. Bloomberg's influence extends beyond the courts where the state Constitution grants him appointment authority. Eighteen Bloomberg appointees have been named as acting justices in Supreme Court, where they preside over felony cases and large commercial disputes. Finally, state court administrators have named eight to supervisory positions, including Edwina Richardson-Mendelson, the current administrative judge of the city Family Court, and Barry Kamins, who oversees all criminal courts in Brooklyn. "It's a huge legacy, and he's proud of it," said Robert G.M. Keating, the vice president for strategic planning at Pace University, the vice chair of the mayor's Advisory Committee on the Judiciary. An interview with Mr. Bloomberg is the culmination of an appointment process that can take up to eight months to complete. The mayor has "followed the process to a T," said Corporation Counsel Michael A. Cardozo. In an executive order the mayor issued in March 2002, he committed himself, as did former mayors, to naming new judges only from a list of three "highly qualified" candidates nominated for each position by the 19-member advisory committee. Mr. Bloomberg's final choices are subject to a public hearing and to further screening by the New York City Bar. Elizabeth Donoghue, chair of the city bar's Judiciary Committee, said that the mayor's committee and the city bar have developed a "highly professional, very smooth relationship. They have done an excellent job advancing high-quality candidates." The advisory committee also screens candidates for reappointment, sending a single name to the mayor if it is satisfied that he or she meets its and the mayor's stringent criteria for serving on the bench.

Consumer of Legal Services

At the final interviews, Mr. Bloomberg shows an "uncanny ability" to elicit information, often plucking details from "left-field" on a resume, to help him determine whether candidates have the "intelligence and people skills" to make a good judge, said Mr. Cardozo. Mr. Cardozo said that Mr. Bloomberg often quizzes prospective judges about ideas for reforming the courts. The mayor is "very interested in 'change agents,'" said Mr. Keating. Mr. Cardozo is one of four top mayoral aides who talk to judicial candidates before Mr. Bloomberg sits down with them. The others are John Feinblatt, the mayor's criminal justice coordinator, Deputy Mayor Carol Robles-Roman and Norma Abbene, Ms. Robles-Roman's chief of staff. Mr. Bloomberg said that he relies on the advice of his aides, "particularly their views on the candidates' experiences and judgments as lawyers. But the final decision is mine, and the interview I conduct is an absolutely essential part of the decision-making process." Mr. Bloomberg's own background as a businessman represents what may be the most significant change in the way judges are appointed. Unlike his three predecessors—Mr. Giuliani, a former U.S. attorney, David N. Dinkins and Mr. Koch—Mr. Bloomberg was not trained in the law. Mr. Bloomberg approaches his appointment responsibilities as a "consumer of legal services" rather than as a lawyer, said Zachary Carter, a partner at Dorsey & Whitney who has chaired the judicial advisory committee since 2002. "In selecting judges my goal has been to appoint exceptional people of the highest quality. They must represent a wide spectrum of the legal community and of our city," Mr. Bloomberg told the city bar in 2003. They must possess uncommon wisdom, knowledge and experience. They must understand how to better serve New Yorkers, by administering justice in innovative and creative ways. They must be tough and compassionate. They must have common sense and impeccable honesty."

Mr. Bloomberg in his e-mail said, "I am not looking for someone who will agree with me on every issue presented, but rather someone who will look at the facts and the law, and then drawing on his or her experiences and knowledge, reach an independent, practical, well-reasoned judgment." The mayor's approach has translated into a more diverse crop of appointees according to some measures. For one thing, he has greatly increased the number of defense attorneys named to the bench. He also has named more women and minorities in a quest for diversity that has involved extensive outreach by advisory committee members, said Ms. Robles-Roman and others. Mayor Michael Bloomberg swears in Criminal Court judges he has reappointed during a January 2009 ceremony at the Emigrant Industrial Savings Bank Building. Carol Robles-Roman, deputy mayor for legal affairs, stands behind the mayor. Of his appointments, 34 have been for Criminal Court and 20 for Family Court. Another four are serving as interim Civil Court judges, temporary positions that often function as way stations and training grounds on the road to appointment to the other courts. All told, 30 of Mr. Bloomberg's 58 new judges have been women, 17 minorities and three openly gay. Twenty-one have been prosecutors and 20 Legal Aid attorneys. Twenty-nine have worked in the state and federal court system in some capacity. Six have served in the city Law Department and 11 in other city agencies. Twenty-six have put in time in private practice, five at the time of their appointments. They have lived in all five boroughs.

Ms. Robles-Roman said that the mayor fosters diversity of "every manner possible," whether it is racial and ethnic background, professional experience or neighborhood ties. In fact, said Mr. Carter, the advisory committee sees "lots of different combinations of skills." Ms. Robles-Roman added that the committee and mayor's aides who review its work do not pigeonhole candidates for particular courts. "We try not to say that they have to be this kind of a judge or that kind of a judge," she said. Thus, Acting Supreme Court Justice Juan M. Merchan initially received an appointment as an interim Civil Court judge stationed in Bronx Family Court and then as a full-fledged Family Court judge even though he had never practiced in that court. Justice Merchan, a former prosecutor, had what Ms. Robles-Roman calls "a rich portfolio." Senator Charles Schumer has recommended Judge Merchan for a spot on the federal district court. However, some criminal defense lawyers complain that Mr. Bloomberg's appointees are not always familiar with the way things are done in Criminal Court. "They don't know how to assess the risk posed by a defendant and fail to understand which cases are going to end up on the junk heap," said one defense attorney. The defense attorneys complain that inexperienced judges sometimes lack the ability to set appropriate bail. This has resulted in cases where bail was too high for defendants charged with minor offenses or low enough to allow dangerous suspects to be released too soon, they contend. Moreover, one member of the advisory committee suggested that recent court personnel cuts may put a premium on candidates who already know how the courts work, Family Court attorney referees, for example. Mr. Carter said that feedback from practitioners about the quality of Mr. Bloomberg's appointments has been "very, very positive," a fact that was generally confirmed by attorneys interviewed by the Law Journal. Nevertheless, some lawyers faulted the temperament of individual judges. Thus, one lawyer said of a Bloomberg appointee in Criminal Court, "it's very, very difficult to practice law in front of him; it's as if no one ever practiced law except him. He gives the prosecution and defense a hard time." Another acknowledged that the judge "is smart" but added that he is "nasty and curt when there is no reason for it."

Some of the negative comments may come from attorneys who have not obtained good results from particular judges. However, Mr. Cardozo acknowledged that "not everybody is perfect." Screeners add that they do not have a "crystal ball" with which to predict how a rookie judge will react to the challenges he or she faces when on the bench. But judges often are initially named for short terms, and must face the committee and the mayor as often as three times in three years, a frequency that provides a check on rookie mistakes and unjudicial conduct. More than half of Mr. Bloomberg's picks—33—have had to convince him that their performance merits reappointment. Mr. Cardozo said that some judges do not seek reappointment because they have reached the mandatory retirement age or are simply tired of the job. Others may see the "writing on the wall" and not bother to put in their names. Only "a few" actually have sought reappointment and been turned aside by the committee, he said. Mr. Bloomberg has made all his choices from the lists of three highly qualified candidates forwarded to him, said Desirée Kim, the committee's executive director. Nor has he denied reappointment to any candidates sent to him, though five have been given less than full terms. All five ultimately received full terms. Ms. Robles-Roman said that the mayor has had "absolutely outstanding" candidates to choose from among the 423 attorneys who have applied for judicial posts—some more than once—while he has been in office. The aspirants have had "a real commitment to and desire for public service," she said, "a personal mandate to make people's lives better." Applicants have been "superb, just superb," said Mr. Keating. However, although they say that there has been a steady stream of highly qualified candidates, officials have been troubled by the fact that many "senior public servants"—experienced lawyers holding top positions in government agencies—are not applying because they would have had to endure a huge pay cut if selected. "Judicial salaries pose a significant hurdle in our efforts to attract a broad cross-section of the legal community from which to select potential candidates," Mr. Cardozo testified at a hearing called by a commission on judicial compensation last summer. "There are many qualified practitioners whom we simply never have an opportunity to consider, individuals who wish to serve the public as judges but for whom the economic sacrifice we ask of them is simply too great." The disparity between the salaries of judges and top-level prosecutors, Legal Aid attorneys and assistant corporation counsels has widened since 1999, when judges had their last raise. Mr. Cardozo notes, for example, that the head of his office's appeals division would have to take a 20 percent pay cut to accept a judgeship. Ironically, however, there is some evidence that mayoral appointments have gotten older and, presumably, more experienced. The average age of Mr. Bloomberg's appointees has been 48, compared to 44 for Mr. Giuliani. In any case, officials hope that more candidates will come forward now that a commission has recommended that judges receive a raise. Under its proposal, the salaries of Criminal and Civil Court judges would go to $143,000 from $125,600 on April 1, 2012, and to $159,900 by 2014 unless the governor and the Legislature block the pay hikes. Family Court judges, now paid $136,700, would receive $160,000 next year, ultimately rising to $174,000.

Family Court Challenges

The 20 new judges that Mr. Bloomberg has named to Family Court "have strengthened" the bench and "made it a much better bench than it was," said Martin Guggenheim, a nationally recognized expert on the court who served on the mayor's committee. That is important, he explained, because the court is a "very difficult place to work," an overcrowded arena where judges must quickly make emotionally wrenching decisions that disproportionately affect the lives of poor minority group members. Mr. Guggenheim said that the mayor must choose judges "willing to push the city's Administration for Children's Services to move cases where children have been removed from their homes because delay is destructive of family bonds." Likewise, he said, the bench should be diversified so its judges will be more sensitive to the needs and problems of the people that come before it. Minority group members represent 35 percent of Mr. Bloomberg's appointments, twice the 18 percent of Mr. Giuliani. Moreover, while Mr. Giuliani's appointments were primarily drawn from prosecutors, Mr. Bloomberg's choices have been spread more broadly across lawyers who represented different categories of litigants. Only one of Mr. Bloomberg's 20 Family Court appointees had spent the bulk of his career as a prosecutor. Three of Mr. Bloomberg's Family Court appointees spent all, or nearly all, of their careers at the Legal Aid Society. By contrast, more than half of Mr. Giuliani's Family Court choices (13 of 22) were lawyers with extensive experience prosecuting juveniles or adults. Four of the new judges could be described as insiders, having spent most of their careers working for the court, while four others had significant experience dealing with Family Court matters. However, four of Mr. Bloomberg's choices had little previous experience in the court. Attorneys interviewed by the Law Journal gave rave reviews to several of Mr. Bloomberg's appointments to the challenging court. One lawyer gave an "A+" to Ronald H. Richter, who was appointed to Queens Family Court in January 2009 and left in September to take over the ACS. The lawyer said Mr. Richter was "very personable on the bench and highly sensitive of the rights of parents as well as the need to protect children in danger." Another called him "brilliant and progressive." A third said "he never spoke down or demonized a parent no matter how serious the abuse charges."

Judge Richardson-Mendelson was appointed to a one-year term in Queens in 2003 and to a full 10-year term a year later. She has a good understanding of "the needs of families and a lot of positive belief in the families that come before her to demonstrate the better part of themselves," said one lawyer who practices before her. Another lawyer called her implementation as administrative judge of the entire court—a job she was given by the state in 2009—of "time-certain" court dates "hugely beneficial, you no longer have to waste a day to conduct a half-hour hearing," Several lawyers also described Judge Ann-Marie Jolly, who was Judge Richardson-Mendelson's chief of staff before her appointment in 2010, as an excellent addition to the bench. One lawyer called her "amazingly respectful of lawyers and litigants and willing to go against ACS." Another said "she knows the law and is good at pushing for settlements." Judge Maria Arias, who headed a legal clinic for battered women at City University of New York School of Law also received high marks. One lawyer said she "bends over backwards to afford litigants as much opportunity as possible to make their cases." Another portrayed her "as very knowledgeable about the law and sensitive to issues of gender, race and sexual orientation." The application filled out by candidates for judgeships notes that "A judge may be required to handle emergency applications, cope with media scrutiny, issue quick decision, deal with fractious litigants, recall significant amounts of information, and otherwise respond to extremely stressful situations." It asks if they are "able to perform these tasks on your own or with reasonable accommodation." According to a few lawyers, several of the mayor's judges have been less than successful in handling "stressful situations" in Family Court, an environment well calculated to bring out a judge's impatience and short temper. For example, one lawyer described a Bloomberg appointment as "really rude to both litigants and case workers." Another said that "people are afraid of her with reason." That being said, however, the lawyer said the judge is "fair across the board." Another judge is viewed as possessing "a demeanor of impatience, cynicism and general negativity." Nevertheless, while the judge was reluctant to hold hearings, another lawyer said the judge was willing to take an individualized approach to cases.

Defense Backgrounds

In more than a dozen interviews, defense lawyers gave Mr. Bloomberg's 34 picks for the Criminal Court generally high marks. Jeffrey Lichtman, who is best known for his representation of organized crime defendants, said that most of the mayor's picks have been good, adding that the mayor's approach to picking judges is no different than his approach to running the city. "He is looking for judges with real world experience," Mr. Lichtman said, and is "more interested in the system working right than finding judges of an ideological bent." Particularly welcome has been the selection of Acting Supreme Court Justice Barry Kamins, a Brooklyn-based defense lawyer and former president of the New York City Bar. Judge Kamins is the author of the treatise "New York Search and Seizure," which one lawyer described as "a bible" that is kept close at hand by prosecutors and defense lawyers alike. Shortly after his appointment, he was designated by state administrators to manage criminal cases in Brooklyn, a position in which he drew good reviews from several attorneys. Ten of Mr. Bloomberg's appointees, or 29 percent, spent at least 60 percent of their careers doing defense work compared to 4 percent of Mr. Giuliani's selections. Conversely, 38 percent of Mr. Bloomberg's choices had spent at least 60 percent of their careers prior to appointment as prosecutors; 60 percent of Mr. Guiliani's choices had similar backgrounds. Mr. Bloomberg also has appointed more women to Criminal Court than his predecessors—44 percent of his selections. Michael Coleman, the executive director of New York County Defender Services, called Mr. Bloomberg's shift toward appointing more former defense lawyers "an extremely positive thing for the bench." "Historically," he said, "most judges have come from a law enforcement background and having a broader spectrum can only be a benefit and make for a fairer and more balanced system." But defense attorneys interviewed also praised the approach of some former prosecutors named by Mr. Bloomberg. Judge Mario Mattei, who was chief of the investigations bureau in the Staten Island District Attorney's Office for 18 years, "is a gentleman who listens and gives you time to make your argument," one lawyer said. Judge Melissa Jackson, a former veteran Brooklyn prosecutor, is the supervising judge of the Manhattan Criminal Court. A lawyer who has observed her said that she is "a brilliant judge with a sense of street smarts. You respect her decisions even when they don't go your way." However, some Criminal Court appointees have drawn the ire of attorneys who appear before them. One lawyer criticized a former longtime prosecutor for "not being actively engaged in settling cases" and "fairly bound to prosecution offers, resulting in clients languishing in jail." Another, expressing what he said was a common view, described a Bloomberg judge as "punitive to counsel and their clients." The lawyer added, "even though he dismisses cases he feels should not have been brought, he is disdainful to the prosecution and defense alike."

Depoliticizing the Process

Participants in the appointment process insist that neither political influence nor ideology have any effect on Mr. Bloomberg's picks. "You don't need a rabbi," Mr. Cardozo said. "With this mayor, it doesn't matter who you know or don't know." Mr. Giuliani was sometimes criticized for not following the advice of his committee and driving judges from the bench because their decisions did not accord with his political views. In contrast, Victor Kovner, a partner at Davis Wright Tremaine, a former corporation counsel who designed the model for the mayor's screening system, said that Mr. Bloomberg's appointments have "on the whole been totally excellent choices made on a totally non-political basis." Roger Stavis, a defense lawyer at Gallet Dreyer & Berkey who sat in on the city bar's review of the mayor's judicial candidates, said that Mr. Bloomberg's process is "insulated against political influence, and judges who had done their job conscientiously had nothing to fear about going before the mayor's committee for reappointment even if they had issued controversial decisions." Aides say that Mr. Bloomberg, a Republican-turned-independent, never asks about a candidate's party affiliation. Mr. Carter said that the advisory committee "saw a lot of people who never would have been considered" under a more political process. As a result of the mayor's attitude, Mr. Guggenheim, the former committee member, said members "were willing to say no'' when contacted by the supporters of particular candidates. Jennifer Baum, a clinical professor at St. John's University School of Law who has held a law school seat on the committee for about 20 months, said that she hears from a lot of people who are convinced that a candidates' success depends on "who you know," but she tells them "they are flat out wrong." Ms. Baum said that Mr. Bloomberg trusts the committee to sift through the qualifications of the exceptionally qualified candidates he receives. "I often forget that the mayor's office is involved at all," she said. Most of the state's judges are elected. While Mr. Bloomberg has said that there are many excellent elected judges, he has been critical of the process by which they are put on the ballot. For example, he wrote in a 2005 New York Daily News column referencing scandals in Brooklyn that a "patronage-driven" process should be replaced by one in which candidates are barred from running unless independent commissions establish that they are qualified. "We must change the farce of 'electing' judges, which bears more of a resemblance to voting in the Soviet Union than in the United States of America," he wrote. The mayor's ideas have made little headway, but he is satisfied with his choices made through the appointment process. "I think the process has worked well and has resulted in some very able and committed candidates being appointed to the bench," he said in his e-mail last week. "I think people understand that to be appointed a judge by me you don't have to have political connections, or belong to any particular party, or have a key person to support you. You don't have to be someone who is 'liberal' or 'conservative.' What you need is to be smart, practical and independent." Additional reporting by Jeff Storey. Research assistance by Laura Haring. Jeff Storey can be reached at jstorey@alm.com.

Click Here to Read Biographies of Mr. Bloomberg's Judicial Appointees.

IRS Attacks Brooke Astor Estate in Corrupt Westchester County

2011-12-09T12:19:00.000-05:00

Brooke Astor Estate Now Faces $62 Million Attack By IRS
Forbes by William P. Barrett - December 7, 2011

It’s been four years since Brooke Astor, the oft- and well-married grande dame of New York City society, died at age 105 amid sensational allegations her only son, Anthony Marshall, neglected her care and stole part of her considerable wealth. At age 87, he’s appealing his 14-count conviction and 1-to-3-year prison sentence. But now the storied Astor fortune–the last of her three husbands was a direct descendant of America’s first multi-millionaire–faces another big threat: the Internal Revenue Service.

The Astor estate recently filed seven lawsuits in U.S. Tax Court to challenge IRS demands that executors cough up another $62 million. The litigation promises to flick some more scab off a wound that has both titilated and even embarrassed New York’s chattering classes. As it so often the case in tax litigation involving dead people, the size of Astor’s estate is looming as a key issue. That’s made all the more complicated by allegations that Marshall and his similarly convicted and sentenced lawyer buddy, Francis X. Morrissey Jr., who is also appealing, used undue influence and even forgery in getting Astor to amend her will and reduced planned gifts to various charitable entities. According to court filings, the feds say her taxable estate is $223 million, with a total federal tax bill of $97 million. Astor’s representative say her stash is just $93 million, with a tax bill of $35 million. The two valuations fall on both sides of a $131 million estimate made public a few months before her death during a successful court battle by relatives to remove Marshall from control over his mother’s care. Why the big gap in valuations now? Some $96 million of that pertains to charitable bequests the estate claims as deductions but which the feds say are uncertain and therefore not eligible to be used to reduce taxes.

Then there is $20 million in what the feds call gifts that Astor gave away during her lifetime and should have been included in the estate. It appears much of this involved transfers to her son, some of which appear to be at the heart of the criminal case against him and are issues in the ongoing probate case in Westchester County, N.Y., where she lived. However, the estate acknowledges that federal gift-tax returns were not filed. So the IRS demand for $62 million on more includes $2 million in penalties for failure to file and failure to pay. Six of the seven lawsuits filed by the estate deal with gift tax issues in the years returns weren’t filed. For advice on how to make sure this doesn’t happen to you, click here. For other estate-planning lessons from the Astor mess, click here. Meanwhile, Astor’s estate continues the process of liquidating her assets. Her lavish apartment on Park Avenue in New York City was just sold for $21 million (down from an original asking price of $46 million). Sotheby’s announced last week it will hold an auction of her jewelry and art in April expected to bring in upwards of $5 million. At her death, Astor was hailed for her wide-ranging philanthropy, especially to underprivileged classes; her lack of pretension and her status as perhaps the last link to the “Gilded Age.” That was the time around 1900 when, it was said, New York society consisted of a number of well-heeled families led by her last husband’s grandmother, the wife of William Backhouse Astor. Indeed, it was that exact number–400–that decades later inspired the Forbes list of the 400 richest Americans. Born in 1902 to a future U.S. Marine commandant, she was married for the first time at age 17 to a financier’s son who became a New Jersey politician (and the father of Anthony Marshall). After their divorce she remarried in 1932, to a partner of a Wall Street investment firm. Eleven months after his death, in 1953 she married Vincent Astor. Then chairman of the company owning Newsweek magazine, he was the scion of a family line dating back to John Jacob Astor, who amassed a fur- and lumber-fortune in the years after the Revolutionary War. At his death in 1848, John Jacob Astor left behind an estate estimated at $20 million–easily tens of billions in today’s dollars. Vincent’s own father, John Jacob Astor IV, died in the 1912 sinking of the Titanic, leaving him an inheritance of $72 million–$1.7 billion in today’s dollars. Vincent Astor died of a heart attack in 1959 at age 67. Despite just six years of marriage, he bequeathed his entire fortune to Brooke Astor.

Malpractice Suit Proceeds Against Pryor Cashman

2011-12-08T23:29:00.000-05:00

Malpractice Suit Proceeds Against Pryor Cashman
The New York Law Journal by Brendan Pierson - November 21, 2011

A legal malpractice lawsuit filed by the trustees to a union's benefit funds against Pryor Cashman for failing to provide advice that would have prevented the funds' third-party administrator from embezzling $42 million may go forward, a unanimous Appellate Division, First Department, panel ruled Thursday. The trustees for the three Construction Workers Local 147 filed the lawsuit, Fitzsimmons v. Pryor Cashman, 651360/10, last year (NYLJ, Aug. 30, 2010). It followed the December 2009 arrest of Melissa G. King on federal charges of embezzling millions from the funds as the principal behind administrator King Care LLC. Pryor Cashman had advised the trustees and benefit funds for more than a decade. The trustees claim the law firm should have realized administrative expenses for the funds were "unusually high" and encouraged the trustees to ask why, the complaint said. Pryor Cashman also should have recommended hiring an independent auditor, the complaint said. Pryor Cashman moved to dismiss, arguing that the trustees had not brought specific allegations of the firm failing to fulfill its duties. Manhattan Supreme Court Justice Barbara R. Kapnick denied the motion in March, and the First Department affirmed. "Plaintiff put forth sufficient detail to establish the negligence of the attorneys, that the negligence was the proximate cause of the losses sustained by the benefits funds, and actual damages to those funds," the panel said. "Plaintiffs were not required to allege the specific scope of defendants' duties, given the absence of a governing retainer agreement." Justices Luis A. Gonzalez, Peter Tom, James M. Catterson, Rosalyn H. Richter and Nelson S. Roman sat on the panel.

-----RELATED STORY:

Funds Sue Pryor Cashman Over Embezzlement Scandal
New York Law Journal by Nate Raymond - August 31, 2010

Trustees to a union's benefit funds have sued Pryor Cashman for failing to provide legal advice that would have prevented the funds' third-party administrator from embezzling $42 million. The trustees for the three funds filed the suit last week in Manhattan Supreme Court against the firm and partner Christopher J. Sues. The malpractice suit followed the December arrest of Melissa G. King, who was charged federally with misappropriating millions from the funds as the principal

-----COURT DECISION:

Fitzsimmons v Pryor Cashman LLP
NY Slip Op 08280 Decided on November 17, 2011 - Appellate Division, First 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 November 17, 2011 - Gonzalez, P.J., Tom, Catterson, Richter, Román, JJ. - 6072 - 651360/10

Richard T. Fitzsimmons, et al., Plaintiffs-Respondents,
v
Pryor Cashman LLP, et al., Defendants-Appellants.
Pryor Cashman LLP, New York (Gideon Cashman of counsel), for appellants.
Schulte Roth & Zabel LLP, New York (Ronald E. Richmanand Max Garfield of counsel), for respondents.

Order, Supreme Court, New York County (Barbara R. Kapnick, J.), entered March 10, 2011, which, in a legal malpractice action alleging, among other things, that defendants failed to notify plaintiffs of information indicating that money may have been misappropriated from the benefit funds of which plaintiffs were trustees, denied defendants' motion to dismiss the complaint based on documentary evidence and for failure to state a cause of action, unanimously affirmed, without costs. The court applied the correct standard and properly held that the complaint states a cause of action for legal malpractice. Plaintiff put forth sufficient detail to establish the negligence of the attorneys, that the negligence was the proximate cause of the losses sustained by the benefits funds, and actual damages to those funds (see Leder v Spiegel, 9 NY3d 836, 837 [2007], cert denied 552 US 1257 [2008]; O'Callaghan v Brunelle, 84 AD3d 581, 582 [2011]). Plaintiffs were not required to allege the specific scope of defendants' duties, given the absence of a governing retainer agreement (see Greenwich v Markhoff, 234 AD2d 112, 114 [1996]). Moreover, the documentary evidence including Form 5500s, minutes of a 1997 Board meeting, and Department of Labor letters" does not conclusively disprove plaintiffs' allegations (see Guggenheimer v Ginzburg, 43 NY2d 268, 275 [1977]). Plaintiffs' expert affidavit was properly considered to remedy any defects in the complaint (see Leon v Martinez, 84 NY2d 83, 88 [1994]). We have considered defendants' remaining contentions and find them unavailing.

THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT. ENTERED: NOVEMBER 17, 2011 [*2]
CLERK

-----RELATED STORY:

$42 mln malpractice suit against firm may proceed: appeals court
REUTERS by Leigh Jones - November 17, 2011

NEW YORK - A $42 million legal malpractice action against Pryor Cashman involving pilfered union benefits can move ahead following an appeals court decision Thursday. Affirming a lower court ruling, the Appellate Division, First Department, refused to dismiss a lawsuit filed against the law firm in 2010 by trustees for the benefits fund of a construction workers' union. The Local 147 Construction Workers Retirement Fund alleged that Pryor Cashman failed to give legal advice that would have prevented the funds' third-party administrator, Melissa King, from embezzling $42 million. King pleaded guilty last month to the embezzlement. The trustees' lawsuit alleged that as fund counsel, Pryor Cashman lawyers failed to recommend an independent auditor to examine the funds' books and failed to advise the trustees on how to ensure that books were maintained properly. Thursday's decision affirmed a ruling that found the complaint sufficiently pled the trustees' claims. Pryor Cashman did not immediately respond to requests for comment. The case is Fitzsimmons v. Pryor Cashman, No. 651360/2010, Appellate Division, New York County Supreme Court. For the plaintiffs: Ronald Richman, Schulte Roth & Zabel, New York. For the defendants: Gideon Cashman, Pryor Cashman, New York.

Disciplinary Probe May Proceed Against Surrogate

2011-12-07T09:43:00.000-05:00

Disciplinary Probe May Proceed Against Surrogate
The New York Law Journal by Brendan Pierson - December 7, 2011

Bronx Surrogate Lee L. Holzman yesterday lost a motion to stay a disciplinary proceeding against him brought by the Commission on Judicial Conduct for allegedly allowing Michael Lippman, a former counsel to the Bronx public administrator, to collect $300,000 in excessive fees. Surrogate Holzman filed an Article 78 petition earlier this year seeking dismissal of the commission's action without prejudice to refile after the resolution of a criminal case against Mr. Lippman pending in the Bronx. Acting Supreme Court Justice Barbara Jaffe, who is presiding over the Article 78 case, dismissed Mr. Holzman's petition on Sept. 8, and the disciplinary proceeding began on Sept. 12. But Surrogate Holzman filed a renewed motion to stay with Justice Jaffe, who granted a temporary stay before eventually denying the renewed motion in early October. Justice Holzman then appealed to the Appellate Division, First Department. Justice Sheila Abdus-Salaam immediately issued a temporary stay until a full panel could consider the motion. The panel that ultimately denied the motion yesterday consisted of Justices Abdus-Salaam, James M. Catterson, Karla Moskowitz, Leland G. DeGrasse and Rosalyn H. Richter. All concurred except Justice Catterson, who said the panel should have stayed the case pending the resolution of Mr. Lippman's criminal case so that he could testify if he is acquitted. Mr. Lippman is refusing to testify in Surrogate Holzman's disciplinary case, invoking his Fifth Amendment right. The disciplinary case will now resume. The conduct commission has alleged that Surrogate Holzman allowed Mr. Lippman to collect fees without sufficient documentation, awarded fees beyond those authorized by an oversight commission, which the surrogate oversaw (NYLJ, Sept. 13), and failed to report to authorities that Mr. Lippman had taken advance or excessive fees in some cases. Surrogate Holzman became the chairman of the Administrative Board of the Offices of the Public Administrators in 2002, the year the body formulated guidelines for the payment of counsel to public administrators. Mr. Lippman was indicted last year for allegedly collecting excess fees in five cases. The surrogate eventually fired Mr. Lippman in 2006.

Real Judge Reverses Fake Judge's Fixed Ruling

2011-12-06T23:08:00.000-05:00

Justice Finds Law Judge Coached Police, Cancels Suspension of License for Refusal to Take Test
The New York Law Journal by Brendan Pierson - December 6, 2011

A Manhattan judge has reinstated the driver's license of a woman who was arrested for drunken driving but later acquitted, finding that an administrative law judge had asked leading questions of a police officer and wrongly ruled that the woman had knowingly refused a sobriety test. Supreme Court Justice Lucy Billings handed down a sharply worded ruling in Prince v. Department of Motor Vehicles, 403039/10, in which she said that an administrative law judge with the Department of Motor Vehicles had "coached" a police witness in order to reach the conclusion that the woman, Natacha Prince, had refused a sobriety test knowing that it would cause her to lose her license. According to the decision, Ms. Prince was stopped by police while driving erratically. She volunteered to take a test to determine her blood alcohol level, but soon began suffering from an asthma attack. When police asked again if she would take a test, she refused, saying, "No I'm not giving nothin'," according to the opinion. However, after she received medical treatment, she again volunteered to take a test, but was not given one. Ms. Prince was charged with driving while intoxicated but acquitted. However, in August 2010 the Department of Motor Vehicles suspended her license for one year for refusing to take a blood-alcohol test, and a DMV administrative law judge denied her petition challenging the suspension. Though the suspension has now ended, Ms. Prince must pay $750 to renew her license. She cannot afford the fee, partly because losing her license caused her to lose her job, according to Justice Billings' opinion. In appealing to the Supreme Court, Ms. Prince said she had not known, while she was having her asthma attack, the kind of test she was refusing. She also said that the police did not tell her that refusing the test would cause her license to be suspended, and that she would have taken it if she had known. She further said that the administrative law judge coached the officer who stopped her to say that he had warned her, and that the officer never would have offered such testimony if he had not been coached. In reversing the administrative law judge's determination, Justice Billings pointed to several problems with the result. First, she said, Ms. Prince had not persistently refused the test, and had in fact volunteered to take it when she was first stopped. "While a driver initially may consent to a chemical test and then definitively refuse when actually administered the test, petitioner affirmatively volunteered to submit to a test, but only later, at her most heightened point of distress and agitation, was she asked to submit to a test," the judge said. "Moreover, even if a single refusal by itself were enough, petitioner's single refusal was flanked by prior and subsequent consents, which the police ignored," the judge wrote. Justice Billings said that the evidence suggested Ms. Prince did not understand what was being asked of her, since her response, "No I'm not giving nothin'," "indicates no understanding of either the type or the purpose of any requested test." Justice Billings then said that the administrative law judge had assumed, before hearing any evidence, that Ms. Prince had been warned of the consequences of refusing a test and had coached the DMV's witness accordingly. "Of course the ALJ at the hearing did not know the eventual verdict of innocence, but given that distinct possibility, he was obligated to accept the concomitant possibility that she was never warned of her refusal's adverse consequences equally with the possibility that she was so warned," Justice Billings wrote. "His conduct of the hearing demonstrates his ready assumption that she was warned and closedmindedness to any other set of facts. His affirmative assistance and advocacy on the police's behalf and lack of evenhandedness toward petitioner's presentation taints what evidence of a warning the record contains." The administrative law judge's conduct effectively shifted the burden of proof from the DMV onto Ms. Prince, Justice Billings said. "Respondent agency offered no evidence that petitioner's refusal was predicated on a warning of the consequences until the ALJ offered it and developed it through his pointed questioning of respondent's witness," Justice Billings wrote. "Although the burden to produce that evidence rested on respondent, the ALJ's conduct effectively shifted that burden to petitioner, unschooled in the issues to be explored in the hearing, to produce evidence and prove that she was not warned." Justice Billings reversed the law judge's decision rather than remanding it, because "a remand would not undo the coaching of respondent's witness." The New York Attorney General's Office, which represented the DMV and the administrative law judge, Robert J. Krengel, declined to comment. Ms. Prince appeared pro se. Brendan Pierson can be contacted at bpierson@alm.com.