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LOAN FUNDED BY THE PROCEEDS OF ILLEGAL GAMBLING IS ENFORCEABLE (CT APP).

The Court of Appeals determined that the loan agreement between plaintiff and defendant was enforceable despite the fact that the loan was funded by illegal gambling:

Neither the terms of the agreement nor plaintiff’s performance — i.e., loaning money to a friend — was intrinsically corrupt or illegal. Although the loan was funded by the parties’ illegal gambling operation (for which both were criminally prosecuted), the record does not support a characterization of their conduct as “malum in se, or evil in itself” … and the source of funds used for a loan is not typically a factor in determining its validity. Defendant argues the agreement should be deemed unenforceable because the courts should not assist a party in profiting from ill-gotten gains. But, here, where both parties were involved in the underlying illegality, neither enforcement nor invalidation of the contract would avoid that result. Indeed, if the loan is not enforced, defendant receives a windfall despite his participation in the criminal acquisition of the funds. We have been reluctant to reward “a defaulting party [who] seeks to raise illegality as a sword for personal gain rather than a shield for the public good'” … . Although we do not condone plaintiff’s illegal bookmaking business, for which he was prosecuted and fined, the circumstances presented here do not warrant a departure from this tenet. Centi v McGillin, 2019 NY Slip Op 09058, CtApp 12-19-19

 

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DEFENDANT, A NONCITIZEN, WAS TOLD DURING HIS PLEA COLLOQUY THAT HE DID NOT HAVE THE RIGHT TO A JURY TRIAL ON THE DEPORTATION-ELIGIBLE B MISDEMEANOR; WHILE THE LEAVE APPLICATION WAS PENDING THE LAW WAS CHANGED TO AFFORD A PERSON IN DEFENDANT’S POSITION THE RIGHT TO A JURY TRIAL; THE MAJORITY UPHELD THE GUILTY PLEA; THE DISSENT ARGUED THE PLEA SHOULD NOT STAND (CT APP).

The Court of Appeals, in a brief memorandum, over an extensive dissenting opinion, determined the accusatory instrument accusing defendant of criminal contempt was sufficient and defendant’s guilty plea was voluntary. During the plea colloquy defendant, an noncitizen, was told he did not have the right to a jury trial on the deportation-eligible B misdemeanor. While defendant’s leave application to the Court of Appeals was pending, the court decided People v Suazo, 32 NY3d 491, affording persons in defendant’s position the right to a jury trial. The dissent argued the guilty plea should be vacated:

From the dissent:

In accordance with the law at the time of defendant Sixtus Udeke’s plea allocution, the trial court told defendant, a noncitizen, that he had no right to a trial by jury for a deportation-eligible Class B misdemeanor. While defendant’s leave application to this Court was pending, we issued a new rule in People v Suazo (32 NY3d 491 [2018]), recognizing precisely the right defendant was told he did not have during the plea colloquy: that noncitizens like defendant have the right to a trial by jury for crimes carrying the potential penalty of deportation. That rule applies retroactively to defendant’s appeal, and it leads to the conclusion that his guilty plea is invalid because he could not have knowingly and intelligently waived a right the court said he did not have. Therefore, I dissent from the majority decision that the guilty plea should stand. People v Udeke, 2019 NY Slip Op 09057, CtApp 12-19-19

 

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AN APPLICATION FOR A WRIT OF HABEAS CORPUS IS NOT A VEHICLE FOR ISSUES WHICH COULD HAVE BEEN RAISED IN A DIRECT APPEAL OR A MOTION TO VACATE THE JUDGMENT OF CONVICTION PURSUANT TO CPL 44O (THIRD DEPT).

The Third Department determined petitioner’s application for a writ of habeas corpus was properly denied because the issues could have been raised in a direct appeal or in a CPL 440 motion to vacate the conviction:

With regard to petitioner’s claim that, pursuant to Penal Law § 70.35, his one-year jail sentences merged with and should have been ordered to run concurrently with his indeterminate sentence, “[h]abeas corpus is not the appropriate remedy for raising claims that could have been raised on direct appeal or in the context of a CPL article 440 motion, even if they are jurisdictional in nature” … . Petitioner’s contentions regarding his sentences, including their legality and whether they merged under Penal Law § 70.35, could have been raised on direct appeal or in a motion pursuant to CPL 440.20 … . As we perceive no basis to depart from traditional orderly procedure, we conclude that Supreme Court properly denied petitioner’s application. People ex rel. McCray v Favro, 2019 NY Slip Op 09065, Third Dept 12-19-19

 

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INSPECTORS HIRED TO ASSESS DAMAGE TO PROPERTY CAUSED BY HURRICANE SANDY WERE EMPLOYEES ENTITLED TO UNEMPLOYMENT INSURANCE BENEFITS (THIRD DEPT).

The Third Department determined inspectors hired by Partnership for Response and Recovery (PaRR) to inspect damage to property caused by Hurricane Sandy were employees entitled to Unemployment Insurance benefits:

Before the inspectors were deployed to a particular disaster area, PaRR set up a field operation near the site where it distributed FEMA-issued computers and cameras to the inspectors. In addition, for the inspectors’ convenience, it provided them with invoice forms containing the information required by FEMA to be used to receive payment. PaRR also supplied them with an identification badge bearing its logo and offered them training on how to utilize the FEMA computer system and comply with FEMA’s requirements. PaRR set the rate of pay at $62.50 per inspection, paid inspectors even if it had not yet received payment from FEMA, reimbursed them for travel to the site of the assignment and provided compensation for prepositioning to the site. Moreover, it conducted a quality review of 3% of the inspection reports and encouraged inspectors to complete their reports within three days as requested by FEMA. PaRR also provided field support to the inspectors to assist them with completing their inspection reports and using the FEMA computer system.

Although claimant and the other inspectors worked independently and without any supervision from PaRR in conducting the actual inspections, the evidence demonstrates that PaRR retained overall control over many important aspects of their work. Although some of this control emanated from the regulatory requirements imposed by FEMA, this was not to such an extent as to negate the existence of an employment relationship … . Matter of Jensen (Partnership for Response & Recovery, LLP–Commissioner of Labor), 2019 NY Slip Op 09073, Third Dept 12-19-19

 

 

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MORTGAGE COMPANY’S PROOF OF STANDING AND MAILING OF RPAPL 1304 NOTICE INSUFFICIENT IN THIS FORECLOSURE ACTION (SECOND DEPT).

The Second Department, reversing Supreme Court, determined plaintiff bank did not provide sufficient evidence of standing and mailing of the RPAPL 1304 notice in this foreclosure proceeding:

… [T]he plaintiff failed to meet its prima facie burden of establishing that it had standing to commence this action. In support of its motion, the plaintiff relied on the affidavit of its Document Execution Specialist, Jerrell Menyweather, who attested that the plaintiff received physical delivery of the original note on July 6, 2007, and was in possession and the holder of the note, prior to commencement of the action … . While Menyweather attested that his knowledge was based on business records maintained by the plaintiff, he failed to annex the business records that he referred to in his affidavit. Thus, his affidavit constituted inadmissible hearsay and lacked probative value on this issue of the plaintiff’s standing … .

… [T]he plaintiff failed to establish, prima facie, that it complied with RPAPL 1304. Although Menyweather stated in the affidavit that the RPAPL 1304 notices were sent to certain of the defendants via certified and first-class mail, the plaintiff failed to provide any documents to prove that the mailing actually took place. Moreover, “[w]hile mailing may be proved by documents meeting the requirements of the business records exception to the rule against hearsay,” Menyweather “did not make the requisite showing that he was familiar with the plaintiff’s mailing practices and procedures, and therefore did not establish proof of a standard office practice and procedure designed to ensure that items are properly addressed and mailed” … . Nationstar Mtge., LLC v Jean-Baptiste, 2019 NY Slip Op 09011, Second Dept 12-18-19

 

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EVIDENCE PETITIONER HAD MADE A THREAT TO A PRISON EMPLOYEE WAS INSUFFICIENT, DETERMINATION ANNULLED (SECOND DEPT). ​

The Second Department, annulling the determination, held that the evidence petitioner had made a threat was insufficient:

… [W]e agree with the petitioner that the determination that he was guilty of violating prison disciplinary rule 102.10 was not supported by substantial evidence. In reviewing a prison disciplinary determination, a court’s review of the factual findings is limited to ascertaining whether the determination is supported by substantial evidence (see CPLR 7803[4] …). Substantial evidence is “such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact” … .

Prison disciplinary rule 102.10 provides that “[a]n inmate shall not, under any circumstances, make any threat, spoken, in writing, or by gesture” (7 NYCRR 270.2[B][3][i]). Here, the misbehavior report and the hearing testimony merely demonstrated that the petitioner “became loud and argumentative” when he was denied permission to hold a certain event in his capacity as the president of a certain prison inmate organization. The evidence merely showed that the petitioner was upset, and the statement by the prison’s Deputy Superintendent of Programs that she felt “intimidated,” and that the petitioner “stared at [her] and in a threatening manner left the area,” without more, was insufficient to establish that the petitioner actually made a threat against her. Matter of Mays v Early, 2019 NY Slip Op 09004, Second Dept 12-18-19

 

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ALTHOUGH THE JUDGMENTS WERE DOCKETED, THE DEBTOR’S NAME WAS MISSPELLED RENDERING THE LIEN INVALID; ALTHOUGH THE ISSUE WAS NOT RAISED BELOW, THE APPELLATE COURT CAN CONSIDER AN ISSUE OF LAW WHICH COULD NOT BE AVOIDED IF IT HAD BEEN RAISED (SECOND DEPT).

The Second Department, reversing Supreme Court, determined the judgment creditor, Fischer, was not entitled to priority over the respondent wife, Mayrav, who had been awarded real property owned with her husband, Julius, in divorce proceedings. Although Fisher’s judgments were docketed, Julius’s surname was spelled incorrectly, rendering the lien invalid. Although this issue had not been raised below, the appellate court can address it because it is a question of law which could not have been avoided if it had been raised:

“CPLR 5203(a) gives priority to a judgment creditor over subsequent transferees with regard to the debtor’s real property in a county where the judgment has been docketed with the clerk of that county” ( … see CPLR 5203[a]). Pursuant to CPLR 5018(c), a judgment is docketed when the clerk makes an entry “under the surname of the judgment debtor . . . consist[ing] of . . . the name and last known address of [the] judgment debtor” … . “A judgment is not docketed against any particular property, but solely against a name” … . ” Once docketed, a judgment becomes a lien on the real property of the debtor in that county'” … .

… [I]t is undisputed that when the judgments were docketed, Julius’s surname was spelled incorrectly. Because the judgments were not docketed under the correct surname, no valid lien against Julius’s interest in the subject property was created … . Therefore, Fischer was not entitled to a determination that his interest in the subject property was superior to that of Mayrav, whose interest “vest[ed] upon the judgment of divorce” … . Although Mayrav failed to argue in the Supreme Court that Fischer did not have a valid lien on the subject property in light of the undisputed fact that Julius’s surname was misspelled, that issue can be raised for the first time on appeal because it is one of law which appears on the face of the record and could not have been avoided if it had been raised at the proper juncture … . Accordingly, that branch of the petition which sought a determination that Fischer’s interest in the subject property was superior to that of Mayrav should have been denied. Matter of Fischer v Chabbott, 2019 NY Slip Op 09002, Second Dept 12-18-19

 

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MOTHER ALLEGED SHE MADE PAYMENTS TO THIRD PARTIES IN THIS SUPPORT ENFORCEMENT PROCEEDING; FATHER SHOULD NOT HAVE BEEN ORDERED TO REIMBURSE MOTHER WITHOUT PROOF THE PAYMENTS WERE IN FACT MADE BY MOTHER (SECOND DEPT).

The Second Department, reversing Family Court, determined, in this support proceeding, father’s objections should have been granted. Although mother alleged she made payments to third parties, she presented no proof of the payments. Therefore mother did not prove father owed those amounts to her:

At a support violation hearing, the petitioner has the initial burden of presenting prima facie evidence of nonpayment of child support … . Here, the father’s concession of failure to pay child support constituted prima facie evidence of a violation … . However, a party seeking reimbursement must show that he or she actually paid the sums for which reimbursement is sought  … . Since the amount of child support arrears awarded included amounts that the mother claimed to have paid to third parties, and the father did not concede those amounts, the mother was not entitled to a money judgment in the absence of proof that she paid the subject sums, which would demonstrate that the father was indebted to her for those expenses … . Matter of Barletta v Faden, 2019 NY Slip Op 08998, Second Dept 12-18-19

 

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PLAINTIFF WAS ENTITLED TO A SECOND EXTENSION OF TIME TO SERVE THE SUMMONS AND COMPLAINT IN THE INTEREST OF JUSTICE; DEFENDANT WAS ESTOPPED FROM CLAIMING HE RESIDED AT AN ADDRESS DIFFERENT FROM THE ADDRESS ON FILE WITH THE DEPARTMENT OF MOTOR VEHICLES (SECOND DEPT).

The Second Department determined plaintiff was properly granted a second extension of time, in the interest of justice, to serve the summons and complaint. The court noted that defendant Ewing was estopped from contending his address was different from the address indicated in the Department of Motor Vehicles; (DMV’s) records:

Ewing maintains that he should have been served at an address which differed from the Strauss Street address listed on the police report, as well as the Atlantic Avenue address and the Georgia address. However, a search of the DMV records conducted on June 23, 2017, more than six weeks after the traverse hearing, reflected that the Atlantic Avenue address, where the plaintiff had attempted to effectuate service, was the current documented address for Ewing. Since the record demonstrates that Ewing failed to notify the DMV of his change of residence, as required by Vehicle and Traffic Law § 505(5), he was estopped from raising a claim of defective service … .

Furthermore, we note that “the more flexible interest of justice’ standard accommodates late service that might be due to mistake, confusion, or oversight, so long as there is no prejudice to the defendant” …  Here, the plaintiff demonstrated that there was no demonstrable prejudice to Ewing, particularly in light of evidence that he had actual notice of the action … . Indeed, the record indicates that Ewing served an answer to the complaint in April 2015, shortly after the expiration of the 120-day period for service … . Mighty v Deshommes, 2019 NY Slip Op 08996, Second Dept 12-18-19

 

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THE DEMAND FOR THE RETURN OF THE DEPOSIT UNDER A REAL ESTATE PURCHASE CONTRACT WAS AN ANTICIPATORY BREACH OF THE CONTRACT AND PLAINTIFF WAS ENTITLED TO KEEP THE DEPOSIT AS LIQUIDATED DAMAGES (SECOND DEPT). ​

The Second Department determined defendant’s demand for the return of its deposit in a real estate transaction was an anticipatory breach of the purchase agreement entitling plaintiff to retain the deposit as liquidated damages. Plaintiff, Lamarche Food, had represented that it was a New York corporation authorized to do business in New York. The corporation had been dissolved in 1992. For that reason defendant claimed plaintiff had breached the contract and demanded the return of the deposit. However, pursuant to Business Corporation Law 1006, a dissolved corporation may continue to function for the purpose of winding up affairs. Apparently defendant acknowledged the “winding up affairs” issue and argued only that its demand for a return of the deposit was not an anticipatory breach:

By letter dated June 23, 2017, a new attorney for the defendant informed the plaintiffs’ attorney that Lamarche Food had defaulted on its obligations under the contract of sale inasmuch as it had represented therein that it was a New York corporation authorized to carry on its business in New York, with all the power and authority to enter into and perform the contract, and yet Lamarche Food was dissolved on June 24, 1992, and, therefore, was not a registered corporation in New York capable of engaging in new business. The defendant’s attorney further stated that in light of the breach, the defendant demanded a refund of its deposit within 10 days. * * *

On appeal, the defendant does not dispute that Lamarche Food could continue to function for the purpose of selling the subject property as part of its winding up of the corporation’s affairs. Rather, the defendant contends that its June 23, 2017, letter to the plaintiffs’ attorney did not constitute an anticipatory breach of the contract of sale. “An anticipatory breach of contract by a promisor is a repudiation of [a] contractual duty before the time fixed in the contract for . . . performance has arrived” … . “For an anticipatory repudiation to be deemed to have occurred, the expression of intent not to perform by the repudiator must be positive and unequivocal'” … . We agree with the Supreme Court’s determination that the June 23, 2017, letter reflected a positive and unequivocal repudiation of the contract by the defendant … , thereby, under the terms of the contract, entitling the plaintiffs to retain the deposit as liquidated damages for the defendant’s anticipatory breach. Lamarche Food Prods. Corp. v 438 Union, LLC, 2019 NY Slip Op 08995, Second Dept 12-18-19

 

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