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The Absence of Plaintiff’s (Buyer’s) Attorney’s Explicit Unconditional Approval of the Purchase Contract Invalidated the Contract, Despite Plaintiff’s Desire to Go Through with the Purchase

The Fourth Department, reversing Supreme Court, determined that an explicit (not implied) unconditional attorney approval of a real estate contract is a necessary pre-requisite for a valid contract. Here plaintiff’s attorney had approved the contract on the condition that an environmental warranty be provided by the sellers, a condition which was never met or explicitly waived. Despite plaintiff’s desire to go through with the purchase, defendant-sellers’ attorney correctly determined there was no valid contract of sale because plaintiff’s attorney never explicitly unconditionally approved it:

As the Court of Appeals has stated, “[c]larity and predictability are particularly important” in the area of law dealing with attorney approval of real estate contracts … . Here, we conclude that, although plaintiff could have unilaterally waived the environmental conditions that [his attorney] placed on his approval of the contract inasmuch as those conditions benefitted only him …, neither [of plaintiff’s attorneys] clearly and unequivocally did so. Thus, the contract was never unconditionally approved by plaintiff’s attorneys. * * *

“[C]onsiderations of clarity, predictability, and professional responsibility weigh against reading an implied limitation into the attorney approval contingency” … . If [plaintiff’s attorney] intended to waive the conditions placed … on … approval of the contract, he should have done so expressly and not left anything for inference, or he should have stated that he, as plaintiff’s counsel, unconditionally approved the contract as proposed by defendants. Because he failed to do so, we conclude that there was not a valid contract between the parties and that the court erred in directing defendants to sell the property to plaintiffs. Pohlman v Madia, 2015 NY Slip Op 07379, 4th Dept 10-9-15

 

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Criteria for the “Fiduciary Exception” to the Attorney-Client Privilege in the Context of a Derivative Action Explained

The First Department, in a full-fledged opinion by Justice Acosta, in a matter of first impression, developed analytical criteria for determining whether documents sought by the plaintiff major investor (NAMA) in defendant limited liability company (Alliance) (formed for a major real estate development project) were protected by the attorney-client privilege. The documents at issue are communications between the managers of defendant Alliance and their attorneys, defendant Greenberg.  Supreme Court held that the 3000 communications were not protected by attorney-client privilege pursuant to the “fiduciary exception” to the privilege (re: derivative actions) because the interests of the plaintiff were not adverse to Alliance. However, that finding was not based upon a review of the communications. The First Department determined each individual communication must be reviewed to find whether it evinces an adversarial relationship. If so, such “adversity” would be only one factor to weigh in concluding whether “good cause” exists to invoke the “fiduciary exception” to the privilege. The First Department adopted the reasoning of a Fifth Circuit case, Garner v Wolfinbarger, 430 Fed 1093, which sets out a list of factors to be applied in finding good cause to apply the fiduciary exception to the privilege. “Adversity” is but one of those factors:

In the corporate context, where a shareholder (or, as here, an investor in a company) brings suit against corporate management for breach of fiduciary duty or similar wrongdoing, courts have carved out a “fiduciary exception” to the privilege that otherwise attaches to communications between management and corporate counsel. * * *

In 1970, the U.S. Court of Appeals for the Fifth Circuit extended the fiduciary exception to the corporate environment in Garner v Wolfinbarger (430 F2d 1093 [5th Cir 1970], cert denied 401 US 974 [1971]), for the first time allowing shareholders to use the exception to pierce the corporate attorney-client privilege. The Garner court was persuaded by two English cases that “treat[ed] the relationship between shareholder and company as analogous to that between beneficiaries and trustees” (id. at 1102). Relying on those cases and the traditional crime-fraud and joint-representation exceptions for the proposition that the corporate attorney-client privilege is not absolute, the court summarized its reasoning in the following way:

“[W]here the corporation is in suit against its stockholders on charges of acting inimically to stockholder interests, protection of those interests as well as those of the corporation and of the public require that the availability of the privilege be subject to the right of the stockholders to show cause why it should not be invoked in the particular instance” (id. at 1103-1104). * * *

While some factors in the Garner test are relevant to a determination of adversity, Garner did not create a categorical adversity limitation. Thus, adversity is not a threshold inquiry but a component of the broader good-cause inquiry. Moreover, of the Garner factors that pertain to adversity, some will indicate whether the parties are generally adverse, while others will require a review of the communications in dispute; the relevant factors may weigh against finding good cause to apply the fiduciary exception with respect to those communications that reveal adversity. Accordingly, a court may find that the party seeking disclosure has shown good cause to be given access to some communications but not others. NAMA Holdings, LLC v Greenberg Traurig LLP, 2015 NY Slip Op 07346, 1st Dept 10-8-15

 

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Defense Counsel’s Conduct Did Not Warrant Setting Aside the Verdict

The Second Department determined Supreme Court abused its discretion when it set aside the verdict in a personal injury trial based upon the conduct of the defense attorney:

The plaintiffs moved to set aside the verdict pursuant to CPLR 4404(a): (1) in the interest of justice, contending that defense counsel’s improper and inflammatory remarks during summation deprived them of a fair trial; and (2) contending that the verdict as to damages was contrary to the weight of the evidence. The Supreme Court granted the motion on the first ground, and the defendants appeal.

Under CPLR 4404(a), a trial court has the discretion to order a new trial “in the interest of justice” (CPLR 4404[a]…). In considering whether to exercise its discretionary power to order a new trial based on errors at trial, the court “must decide whether substantial justice has been done, whether it is likely that the verdict has been affected . . . and must look to [its] own common sense, experience and sense of fairness rather than to precedents in arriving at a decision’ … . On appeal, however, this Court is invested with the power to decide whether the trial court providently exercised its discretion … .

Here, we conclude that the Supreme Court improvidently exercised its discretion in ordering a new trial. The plaintiffs’ claims regarding defense counsel’s conduct center on remarks made by defense counsel during her summation, although they also challenge her cross-examination of certain witnesses. Some of the challenged conduct was certainly improper, and we do not condone it … . Nonetheless, viewing defense counsel’s conduct in the context of the entire trial, we conclude that it was not pervasive or prejudicial, or so inflammatory as to deprive the plaintiffs of a fair trial … . Lariviere v New York City Tr. Auth., 2015 NY Slip Op 06894, 2nd Dept 9-23-15

 

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The Unjustified Denial of Defense Counsel’s Request to Withdraw a Peremptory Challenge Was, Under the Facts, Subject to a Harmless Error Analysis

The Second Department determined the trial court erred when it denied defense counsel’s request to withdraw a peremptory challenge to a juror. However, the error was deemed harmless because of the nature of the evidence against the defendant. On appeal the Second Department primarily addressed whether the harmless error analysis applied to the withdrawal of a peremptory challenge:

The defendant contends that the Supreme Court’s improper denial of his request to withdraw his peremptory challenge is not subject to harmless error analysis, since the error deprived him of his constitutional right to a jury in whose selection he had a voice … . We disagree. While peremptory challenges “are a mainstay in a litigant’s strategic arsenal,” they are “not a trial tool of constitutional magnitude” … . The right to exercise peremptory challenges “is protected by the Criminal Procedure Law, which provides that each party must be allowed’ an equal number of peremptory challenges and that a court must exclude’ any juror challenged” … . Therefore, “the unjustified denial of a peremptory challenge violates CPL 270.25(2) and requires reversal without regard to harmless error” … . However, there is no statutory right to withdraw a peremptory challenge. Further, the instant case does not involve a situation in which the People attempted to peremptorily challenge a juror who had been accepted by the defense in violation of CPL 270.15(2), inasmuch as the People did not object to the defendant’s request to withdraw the peremptory challenge … . Moreover, the defendant was not prejudiced by the loss of the peremptory challenge since, at the conclusion of jury selection, defense counsel had exercised only 9 of his 15 peremptory challenges … . Accordingly, under the circumstances of this case, the error was harmless. People v Marshall, 2015 NY Slip Op 06830, 2nd Dept 9-16-15

 

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Apportionment of Damages Between the City and the Contractor Who Negligently Set Up Lane Closures for Its Highway Work Was Not Supported by the Weight of the Evidence—New Trial for Apportionment of Damages Ordered/Two-Justice Dissenting Opinion Argued that Plaintiffs’ Counsel’s Vouching for His Own Credibility and Attacking the Credibility of Defense Witnesses In Summation Warranted a New Trial

The First Department, in a full-fledged opinion by Justice Manzanet-Daniels, over a two-justice dissenting opinion, determined the weight of the evidence did not support a 65%/35% apportionment of damages to the city (65%) and the contractor (35%) who set up lane closures for highway repair work. Plaintiff was severely injured in an accident which the jury found was the result of the failure to adequately warn drivers of upcoming lane closures. Because the lane closures were the responsibility of the contractor, the majority determined the 65%/35% damages apportionment was not supported the weight of the evidence and sent the matter back for a new trial on the apportionment of liability. Much of the opinion, including the entirety of the dissenting opinion, focused on the propriety of remarks made by plaintiffs’ counsel during summation (vouching for his own credibility, attacking the credibility of defense witnesses, etc.):

It is well settled that trial counsel is afforded wide latitude in presenting arguments to a jury in summation … . During summation, an attorney “remains within the broad bounds of rhetorical comment in pointing out the insufficiency and contradictory nature of a plaintiff’s proofs without depriving the plaintiff of a fair trial” … . However, an attorney may not “bolster his case . . . by repeated accusations that the witnesses for the other side are liars” …. .

Although the City failed to object to the bulk of the challenged comments during summation, the City moved for an immediate mistrial based on comments impugning defense counsel, the reference to “Wang and his gang,” and plaintiffs’ counsel’s allegedly vouching for his own credibility. We find that although some of the comments were highly inflammatory, they did not ” create a climate of hostility that so obscured the issues as to have made the trial unfair'” … . The jury had ample reason to question the testimony of Officer Pagano, lessening the danger that they were improperly influenced by plaintiff’s counsel’s remarks. Gregware v City of New York, 2015 NY Slip Op 06408, 1st Dept 8-4-15

 

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Flaws in Causes of Action Stemming from the Alleged Breach of a Joint Venture Agreement Explained

In an action stemming from the alleged breach of a joint venture agreement, the Second Department, in the context of a motion to dismiss for failure to state a cause of action, went through each cause of action and, where dismissal was appropriate, noted the pleading failure. The joint venture cause of action did not allege a mutual promise to share the losses. The constructive trust cause of action did not allege a confidential or fiduciary relationship. The fraud allegations were not collateral to the terms of the alleged joint venture and no out-of-pocket losses were alleged. The tortious interference with contract cause of action did not allege the intentional procurement of a breach of the joint venture agreement. The accounting cause of action did not allege that a demand for an accounting was made. The Second Department noted that the motion to amend the complaint to cure some of the defects should have been granted. With respect to the criteria for determining a motion to dismiss for failure to state a cause of action where documentary evidence supporting the motion is submitted, the court explained:

“A motion pursuant to CPLR 3211(a)(1) to dismiss the complaint on the ground that the action is barred by documentary evidence may be granted only where the documentary evidence utterly refutes the plaintiff’s factual allegations, thereby conclusively establishing a defense as a matter of law” … .

In considering a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), “the court must accept the facts as alleged in the complaint as true, accord plaintiffs the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory” … . A court may consider evidentiary material submitted by a defendant in support of a motion to dismiss pursuant to CPLR 3211(a)(7) … . When evidentiary material is considered on a motion to dismiss a complaint pursuant to CPLR 3211(a)(7), and the motion has not been converted to one for summary judgment, “the criterion is whether the [plaintiff] has a cause of action, not whether he [or she] has stated one, and, unless it has been shown that a material fact as claimed by the [plaintiff] to be one is not a fact at all and unless it can be said that no significant dispute exists regarding it . . . dismissal should not eventuate”… . Mawere v Landau, 2015 NY Slip Op 06317, 2nd Dept 7-29-15

 

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Waiver of a Jury Trial in an Article 10 Sex-Offender Civil Commitment Proceeding Requires an On-the-Record Colloquy After Consultation with Counsel

The Second Department, in a full-fledged opinion by Justice Chambers, in a matter of first impression, determined that the state and federal constitutions mandated an on-the-record waiver of the right to a jury trail in an Article 10 sex-offender civil commitment proceeding. Here, the respondent sent a letter to the judge explaining his reasons for wanting a non-jury trial. The letter was deemed insufficient to establish a knowing waiver.

… [A]respondent’s statutory right to a jury trial in an article 10 proceeding is protected by Article I, § 2 of the New York State Constitution, which provides that “[t]rial by jury in all cases in which it has heretofore been guaranteed by constitution shall remain inviolate forever.” * * *

In view of the fact that article 10 proceedings are civil in nature, “the Due Process Clauses of the Fifth and Fourteenth Amendments … govern the scope of procedural due process” … . Accordingly, a respondent’s waiver of the right to a jury must comport with the procedural due process requirements under both the United States and New York Constitutions. * * *

With these general principles in mind, we hold that in order to accomplish a valid waiver of the right to a jury trial in an article 10 proceeding under Mental Hygiene Law § 10.07(b), and in accordance with due process, there must be an on-the-record colloquy, in order to ensure that the respondent understands the nature of the right, and that the respondent’s decision is knowing and voluntary after having had sufficient opportunity to consult with counsel … . * * *

We note, however, that a written waiver such as is mandated by CPL 320.10 in criminal proceedings is not required in order to satisfy the requirements of Mental Hygiene Law article 10 or due process … . Matter of State of New York v Ted B., 2015 NY Slip Op 06352, 2nd Dept 7-29-15

 

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Improper Evidence of Uncharged Offenses, a Police Officer’s Vouching for the Reliability and Credibility of the People’s Central Witness, and the Court’s Failure to Give Limiting Instructions to the Jurors after Sustaining Objections to Improper Testimony Deprived Defendant of a Fair Trial

The Third Department reversed defendant’s conviction based upon several errors including the improper presentation of evidence of uncharged crimes attributed to the defendant and a police officer’s vouching for the reliability and credibility of the confidential informant (CI), upon whose testimony the People’s case depended. The jury heard evidence of defendant’s participation in a drug offense identical to that for which he was on trial. Even though objection to the testimony was sustained and the testimony struck, no limiting instructions were given to the jury. Evidence of defendant’s sitting at a table on which were large amounts of heroin and crack cocaine was also improperly presented. Objection to that testimony was overruled. With respect to the police officer’s vouching for the credibility and reliability of the CI, the defense objection to that testimony was sustained, but no curative instructions were given to the jury:

At trial … the CI testified that defendant was not only present during [a] controlled purchase of crack cocaine, but that he had also participated in the transaction by providing the actual drugs. County Court denied defendant’s prompt motion for a mistrial, but otherwise sustained his objection and struck this portion of the CI’s testimony, without further limiting instructions to the jury. In our view, this revelation was highly prejudicial, as it related to a recent uncharged crime that was nearly identical to the sale for which defendant was on trial … . Shortly thereafter, the CI recounted that, upon entering the apartment on October 9, 2012, he had observed defendant sitting at a table “with large amounts of heroin and crack cocaine in front of him.” Although no reference to “heroin” was included in the People’s Molineux proffer, or otherwise previously disclosed, the court overruled defendant’s objection, permitting further testimony from the CI about the presence of heroin. Because defendant was not charged with possession or sale of heroin, it cannot be said that this evidence was directly related to or in any way necessary to explain his alleged possession and sale of crack cocaine such that it was inextricably interwoven into the CI’s narrative … . Significantly, the court did not attempt to cure the prejudice arising from the CI’s improper testimony by issuing an instruction either at the time of defendant’s objection or during the jury charge … . * * *

Further prejudice resulted from the People’s redirect examination of [officer] Gillis, who stated that the CI was “very reliable and very trustworthy.” After County Court overruled defendant’s objection, and characterized the testimony as “opinion,” Gillis elaborated that the CI had “never given [him a] reason to not believe anything that [the CI] is telling [him].” Allowing Gillis to vouch for the CI’s credibility was clearly improper … . The effect was compounded by the People’s summation, wherein the prosecutor surmised that law enforcement had used the CI for several years because of his reliability … . While we recognize that County Court sustained defendant’s objection, no curative instruction was issued, and we remain concerned that the prosecutor’s remark amplified the effect of Gillis’ improper vouching … . People v Nicholas, 2015 NY Slip Op 06269, 3rd Dept 7-23-15

 

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In Responding to Defendant’s Criticisms of Defense Counsel’s Actions, Defense Counsel Merely Explained His Actions and Did Not Take a Position Adverse to His Client’s—Therefore the Defendant Was Not Entitled to Withdraw His Plea on the Ground that He Was Denied Effective Assistance of Counsel

In affirming defendant’s conviction by guilty plea, the First Department determined that defense counsel, in responding to allegations about his performance made by the defendant, did not take a position adverse to his client’s. Rather, counsel merely explained the reasons for his actions and did not voice any opinion about the validity of defendant’s pro se motions. Therefore the defendant was not entitled to withdraw his plea on that ground:

“It is well settled that a defendant has a right to the effective assistance of counsel on his or her motion to withdraw a guilty plea” … . “When certain actions or inaction on the part of defense counsel is challenged on the motion, it may very well be necessary for defense counsel to address the matter when asked to by the court. When doing so, defense counsel should be afforded the opportunity to explain his performance with respect to the plea, but may not take a position on the motion that is adverse to the defendant. At that point, a conflict of interest arises, and the court must assign a new attorney to represent the defendant on the motion.” … . * * *

Counsel’s statement that defendant might not understand that he still retained certain residual rights to appeal despite the waiver, and that his concerns might be mitigated if the court explained that to him, was not adverse to defendant’s position. It merely conveyed that if defendant was informed that his waiver did not bar an appeal of all issues, including the voluntariness of the plea, it might affect his view of the waiver. Counsel’s factual statement that the waiver was a condition of the People’s plea offer, which reduced defendant’s sentence and made him eligible for parole at an earlier date, and that he did not believe that there was a basis for a CPL 30.30 motion because all but one of the adjournments since he had taken over the case had been on consent due to plea negotiations, did not go beyond a mere explanation of his performance … . Counsel did not deny that he advised defendant to agree to the waiver or that he refused to make a CPL 30.30 motion. Nor did he refute any specific factual allegation raised by defendant with respect thereto or affirmatively state his belief that defendant had no legal basis for withdrawing his plea. People v Maxwell, 2015 NY Slip Op 06199, 1st Dept 7-21-15

 

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Defense Counsel’s Failure to Investigate the Victim’s Medical Condition (Which Would Have Allowed More Effective Cross-Examination of the People’s Expert and the Victim), Failure to Object to Testimony Which May Have Been More Prejudicial than Probative (and which Clearly Required a Jury Instruction Limiting Its Use), and Failure to Object to Improper Comments Made by the Prosecutor, Deprived Defendant of Effective Assistance of Counsel

In a sexual abuse case based entirely on the victim’s testimony (alleging anal intercourse), the Third Department determined defense counsel’s failure to investigate the nature of the victim’s bleeding disorder (which could have called into question the prosecution’s expert’s opinion that victims of sexual abuse, like the victim here, often show no signs of injury), the failure to object to the testimony of the defendant’s spouse alleging his preference for anal intercourse (the prejudicial effect may well have outweighed the probative value—at the very least a limiting instruction should have been requested as to the jury’s limited use of such evidence), and the failure to object to improper comments made by the prosecutor in summation (appealing to jurors’ sympathy, exhorting the jurors to fight for the victim), required reversal and a new trial:

Had counsel sought to inform himself about the victim’s VWD [bleeding disorder] diagnosis, he likely would have become aware of medical experts such as Howard Snyder, a board-certified doctor of emergency medicine who submitted an affidavit in support of defendant’s postconviction motion. Snyder averred that “[t]he presence of VWD [in the victim] would have made the presence of bruising or bleeding during forceful, non-consensual anal intercourse more likely than in [a] patient without VWD.”Undoubtedly, expert testimony similar to Snyder’s would have done much to increase the significance of the SANE [sexual assault nurse examiner] report’s lack of physical findings and would have provided a powerful basis for cross-examination to counter the damaging effects of the SANE’s opinion testimony.

Counsel’s failings were magnified by the fact that the People’s only direct evidence of defendant’s guilt was the victim’s testimony, making counsel’s efforts to undermine her credibility of paramount importance. Indeed, there were no other witnesses to the alleged sexual assaults and no DNA evidence was recovered. In similar situations, the Second Circuit, applying New York law, has repeatedly held that “when a defendant is accused of sexually abusing a child and the evidence is such that the case will turn on accepting one party’s word over the other’s, the need for defense counsel to, at a minimum, consult with an expert to become educated about the vagaries of abuse indicia is critical. The importance of consultation and pre-trial investigation is heightened where, as here, the physical evidence is less than conclusive and open to interpretation” (Eze v Senkowski, 321 F3d 110, 129 [2d Cir 2003] …). Thus, the record establishes that, without any justification, counsel prejudiced defendant by “s[itting] on his hands, confident that his client would be acquitted” rather than “consult[ing with] and be[ing] prepared to call an expert” … , whose testimony then would have been “available [to] assist[] the jury in its determination” … .

Counsel’s conduct further fell below our standard of meaningful representation because he failed to object to, and request a limiting instruction to guide the jury in assessing, the testimony of defendant’s former spouse regarding defendant’s sexual preferences. Counsel sat mute while the witness testified that, upon reading the victim’s statement to police, it struck her that it contained details “only someone who had been intimate with [defendant] would know,” including what she then proceeded to describe as defendant’s preference for anal intercourse during their consensual sexual relationship [. We do not think that counsel’s failure to object to this testimony can be excused on the ground that such an objection had “little or no chance of success” … . “Not all relevant evidence is admissible as of right. . . . Even where technically relevant evidence is admissible, it may still be excluded by the trial court in the exercise of its discretion if its probative value is substantially outweighed by the danger that it will unfairly prejudice the other side” … .

In our view, a legitimate question exists as to whether the prejudicial effect of the former spouse’s testimony regarding defendant’s sexual preferences substantially outweighed its probative value, especially considering that she testified that she and defendant had not been sexually active for several years prior to the alleged assaults on the victim. Supreme Court should have had the opportunity to consider this question and make an appropriate ruling in the exercise of its discretion. The court would have done so, but for counsel’s inexplicable failure to object. In the event that the court had determined this testimony to be admissible, counsel could then have requested a limiting instruction, as the lack thereof would “permit[] the jurors to perhaps consider [the former spouse’s statements] as proof of defendant’s propensity” to engage in the sexual acts charged here … . * * *

Finally, we note with disapproval certain remarks made by the prosecutor during summation, to which counsel did not object. The prosecutor improperly attempted to appeal to the jury’s sympathy by asking the jurors to consider how they would have felt if they “were in [the victim’s] shoes” … . The prosecutor also exhorted the jurors to advocate for the victim during deliberations by using the phrase “you fight for her” … . While counsel’s failure to object to these remarks does not, in and of itself, amount to ineffective assistance of counsel, it further illustrates counsel’s representation, the cumulative effect of which deprived defendant of meaningful representation, especially “where, as here, the determination of guilt . . . hinged on sharp issues of credibility” … . People v Cassala, 2015 NY Slip Op 06176, 3rd Dept 7-16-15

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