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FORECLOSURE OF A REVERSE MORTGAGE CAN BE BASED UPON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS.

The Third Department determined summary judgment should not have been granted to defendant homeowner in a reverse-mortgage foreclosure action. Foreclosure proceedings were started because defendant did not make hazard insurance payments. Plaintiff bank made those payments on her behalf. The Third Department held that the relevant regulations allowed plaintiff bank to make the hazard insurance payments, but did not require it to do so. Foreclosure, therefore, can be based upon defendant’s failure to make the payments:

 

Defendant was obliged to “pay all property charges consisting of taxes, ground rents, flood and hazard insurance premiums, and special assessments” under the terms of the loan documents (24 CFR 206.205 [a]), and those documents contemplate that foreclosure is an available remedy for her failure to perform such an obligation (see 24 CFR 206.27 [b] [6]; [c] [2] [iii])[FN1]. Supreme Court nevertheless held that plaintiff was precluded from seeking foreclosure by 24 CFR 206.205 (c), which provides that “[i]f the mortgagor fails to pay the property charges in a timely manner, and has not elected to have the mortgagee make the payments, the mortgagee may make the payment for the mortgagor and charge the mortgagor’s account” (emphasis added). Language such as “may” should ordinarily be read as permissive, “and mandatory effect is given to [it] only when required by the context of the [regulation], the facts surrounding its [promulgation], or the purposes sought to be served thereby” (McKinney’s Cons Laws of NY, Book 1, Statutes § 177 [b]). The context of 24 CFR 206.205 gives no reason to believe that mandatory effect should be afforded to its discretionary language and, contrary to the conclusion of Supreme Court, neither does the purpose underlying the federal regulatory scheme. The scheme in question is intended to enable the Secretary to provide insurance for reverse mortgages that will facilitate the offering of such mortgages to elderly homeowners by lenders which, in turn, will allow the homeowners to monetize their accumulated home equity (see 12 USC § 1715z-20 [a]; 24 CFR 206.1). This actual goal runs against an interpretation of the regulation that would prevent a mortgagee from pursuing whatever permissible remedy it deems appropriate to recover unpaid carrying costs and, indeed, adopting that reading could well have a chilling effect on the willingness of lenders to offer reverse mortgages. We therefore read 24 CFR 206.205 (c) as allowing, but not requiring, plaintiff to pay carrying charges owed by defendant rather than resorting to foreclosure … . Onewest Bank, FSB v Smith, 2016 NY Slip Op 00092, 3rd Dept 1-7-16

 

FORECLOSURE (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/REVERSE MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)/REVERSE MORTGAGES (FORECLOSURE OF REVERSE MORTGAGE MAY BE BASED ON HOMEOWNER’S FAILURE TO MAKE HAZARD INSURANCE PAYMENTS)

DOCTRINE OF EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST FOR AN ORDER OF FILIATION, CRITERIA EXPLAINED.

The Third Department affirmed Family Court’s finding that the doctrine of equitable estoppel did not apply to petitioner’s application for an order of filiation. Equitable estoppel is triggered when the party seeking an order of filiation has acquiesced in the development of a parent-child relationship with another man. Here, although the child recognized some persons as “father figures” no parent-child relationship had developed with any single person:

 

“The doctrine of equitable estoppel is a defense in a paternity proceeding which, among other applications, precludes a man . . . from asserting his paternity when he acquiesced in the establishment of a strong parent-child bond between the child and another man” … . The party asserting application of the doctrine — here, the attorney for the children — “has the initial burden of establishing a prima facie case to support that claim” … . Assuming that burden is met, the burden then shifts to the nonmoving party — here, petitioner — to establish that it would be in the best interests of the children to order the genetic marker test … .

… [W]e agree with Family Court that application of the doctrine of equitable estoppel is not warranted here. Although the children’s therapist testified on direct (and respondent testified on rebuttal) that the girls do not recognize petitioner as their father, “[n]oticeably absent from the record is any indication that [another identified individual] played a significant role in raising, nuturing or caring for [respondent’s children]” … . To the contrary, both the therapist and respondent acknowledged that the children identified a number of individuals as “father figures” in their lives … . Hence, establishing petitioner’s paternity would not disrupt an existing parent-child relationship between the children and another individual … . Matter of Patrick A. v Rochelle B., 2016 NY Slip Op 00079, 3rd Dept 1-7-16

 

FAMILY LAW (EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST FOR AN ORDER OF FILIATION)/EQUITABLE ESTOPPEL (FAMILY LAW, EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST FOR AN ORDER OF FILIATION)/FILIATION, ORDER OF (EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST)/PATERNITY (EQUITABLE ESTOPPEL DID NOT APPLY TO PETITIONER’S REQUEST FOR AN ORDER OF FILIATION)

FINAL ORDERS OF PROTECTION ISSUED ON THE COURT’S OWN MOTION WITHOUT FOLLOWING THE PROCEDURE REQUIRED BY FAMILY COURT ACT 154-c VACATED.

The Third Department determined Family Court did not follow the statutory procedure for issuing final orders of protection. Although a court may issue a temporary order of protection on its own motion without following the procedure, it may not do so for final orders:

 

… Family Ct Act § 154-c (3) provides, in relevant part: “No order of protection may direct any party to observe conditions of behavior unless: (i) the party requesting the order of protection has served and filed a petition or counter-claim in accordance with article four, five, six or eight of this act and, (ii) the court has made a finding on the record that such party is entitled to issuance of the order of protection which may result from a judicial finding of fact, judicial acceptance of an admission by the party against whom the order was issued or judicial finding that the party against whom the order is issued has given knowing, intelligent and voluntary consent to its issuance” (emphasis added). Although a Family Court can issue a temporary order of protection on its own motion and, in so doing, it would “not [be] required to follow all of the ordinary procedural requirements” (… see Family Ct Act § 828 [1] [a]), where, as here, the court enters a final order of protection, it is required to observe the procedural steps set forth in Family Ct Act § 154-c (3) … . Indeed, Family Ct Act § 154-c (3) was amended in 1998 “to incorporate, explicitly, federal minimum due-process requirements regarding judicial findings as a prerequisite to issuing orders of protection, to ensure that such orders are given full faith and credit by courts of other jurisdictions” …

Here, although there was an exchange of proposed terms for mutual orders of protection, the mother clearly indicated that she did not consent to the orders containing the terms that Family Court ultimately adopted on its own motion or admit any pertinent allegations set forth in the father’s family offense petition … . Nor did Family Court conduct an examination of the factual basis of the parties’ family offense petitions or make a finding that the terms objected to by the mother were “reasonably necessary” to protect the parties or their children … . Matter of Daniel W. v Kimberly W., 2016 NY Slip Op 00070, 3rd Dept 1-7-16

 

FAMILY LAW (FINAL ORDERS OF PROTECTION ISSUED ON THE COURT’S OWN MOTION WITHOUT FOLLOWING STATUTORY PROCEDURE VACATED)/ORDERS OF PROTECTION (FAMILY COURT, FINAL ORDERS OF PROTECTION ISSUED ON THE COURT’S OWN MOTION WITHOUT FOLLOWING STATUTORY PROCEDURE VACATED)

GRANDMOTHER DID NOT DEMONSTRATE EXTRAORDINARY CIRCUMSTANCES JUSTIFYING AWARD OF CUSTODY OF GRANDCHILD TO HER, ANALYTICAL PRINCIPLES EXPLAINED.

The Third Department determined grandmother did not meet her burden of demonstrating extraordinary circumstances justifying the award of custody of the child to her. Family Court’s award of joint custody to mother and father was affirmed. Mother had relinquished custody to grandmother as an emergency measure (due to domestic abuse) but had continuously worked to regain custody. The court explained the relevant analytical principles:

 

It is well settled that, in the absence of extraordinary circumstances such as surrender, abandonment, persistent neglect, unfitness or an extended period of custody disruption, a parent has a claim of custody to his or her child superior to all others … . Here, since no finding of extraordinary circumstances had previously been made, the grandmother bore “the heavy burden of first establishing the existence of extraordinary circumstances to overcome the . . . parents’ superior right of custody” … . Only upon such a showing would Family Court proceed to address the issue of the child’s best interests … . Relevant here, “a prolonged separation of the . . . parent and the child for at least [24] continuous months during which the parent voluntarily relinquished care and control of the child and the child resided in the household of [a] grandparent” may constitute a disruption of custody sufficient to demonstrate extraordinary circumstances (Domestic Relations Law § 72 [2] [b]…). “An order placing a child in a nonparent’s custody upon a parent’s consent is neither a judicial finding nor an admission of extraordinary circumstances” … . Moreover, if the parent spends the period of separation trying to regain custody of his or her child, that period would not necessarily support a finding of extraordinary circumstances … . Matter of Elizabeth SS. v Gracealee SS., 2016 NY Slip Op 00068, 3rd Dept 1-7-16

 

FAMILY LAW (GRANDMOTHER DID NOT DEMONSTRATE EXTRAORDINARY CIRCUMSTANCES JUSTIFYING CUSTODY OF GRANDCHILD)/CUSTODY (GRANDMOTHER DID NOT DEMONSTRATE EXTRAORDINARY CIRCUMSTANCES JUSTIFYING CUSTODY OF GRANDCHILD)

DENIAL OF PAROLE WAS IRRATIONAL; PETITIONER’S PRISON RECORD WAS EXCEPTIONAL UNTIL HIS MEDICATION FOR TREATMENT OF SCHIZOPHRENIA WAS STOPPED.

The Third Department affirmed Supreme Court’s annulment of the Board of Parole’s denial of petitioner’s request for release on parole. Petitioner’s record in prison was exceptional except for a four-month period during which his medication to treat schizophrenia was stopped. Once medication resumed, petitioner once again functioned well:

 

The Board is charged with considering whether “there is a reasonable probability that, if [an] inmate is released, he [or she] will live and remain at liberty without violating the law, and that his [or her] release is not incompatible with the welfare of society and will not so deprecate the seriousness of his [or her] crime as to undermine respect for the law” (Executive Law § 259-i [2] [c] [A]). “The decision to grant parole release is discretionary, but the Board is required to consider certain guidelines in making its determination” … . These guidelines include such factors as the inmate’s institutional record, his or her release plans, the seriousness of the offense, and his or her prior criminal record (see Executive Law § 259-i [2] [c] [A] [i], [iii], [vii], [viii]; 9 NYCRR 8002.3 [a] [1], [3], [7], [8]). In 2011, the law was amended to further require that the Board’s “review must include an instrument that measures rehabilitation and the likelihood of success on parole” (… see Executive Law §§ 259-c [4]; 259-i [2] [c]). The Board utilizes the COMPAS assessment to satisfy this requirement … . * * *

Considering this factual background, we agree with Supreme Court that the Board’s determination was irrational … . Further, it was irrational to such a degree that it cannot withstand judicial scrutiny, despite the very limited scope of our review (see Executive Law § 259-i [5]…). As petitioner argues, a fair review of this record compels the conclusion that the determination to remove him from all medication for his mental illness led to a psychotic breakdown that rendered him unable to comply with prison regulations during the period when the disciplinary infractions occurred. To withhold petitioner’s necessary medications was apparently an error of medical judgment. However, for the Board to then rely upon petitioner’s conduct during the psychotic crisis that was thus precipitated as a primary ground for denying his release is so inherently unfair and unreasonable that it meets the high standard of “irrationality bordering on impropriety” warranting our intervention … . To hold otherwise would, in effect, result in punishing petitioner with continued incarceration for the failure of prison officials to provide him with proper treatment for his mental illness — a result that we cannot sanction. Accordingly, we agree with Supreme Court that petitioner must be afforded a de novo hearing before the Board. Matter of Hawthorne v Stanford, 2016 NY Slip Op 00083, 3rd Dept 1-7-16

 

 

CRIMINAL LAW (DENIAL OF PAROLE BASED ON BEHAVIOR WHEN PETITIONER WAS DENIED MEDICATION FOR SCHIZOPHRENIA WAS IRRATIONAL)/PAROLE (DENIAL OF PAROLE BASED ON BEHAVIOR WHEN PETITIONER WAS DENIED MEDICATION FOR SCHIZOPHRENIA WAS IRRATIONAL)/MENTAL ILLNESS (DENIAL OF PAROLE BASED ON BEHAVIOR WHEN PETITIONER WAS DENIED MEDICATION FOR SCHIZOPHRENIA WAS IRRATIONAL)

COUNTY COURT ABUSED ITS DISCRETION WHEN IT DENIED DEFENDANT’S APPLICATION FOR JUDICIAL DIVERSION TO A DRUG TREATMENT PROGRAM.

The Third Department, reversing County Court, determined defendant was eligible for judicial diversion to a drug treatment program. Defendant was stopped with four pounds of marijuana in his car. He demonstrated he was addicted to marijuana, that drug-dependence was a contributing factor re: his criminal behavior, and this was his first contact with the criminal justice system:

 

It is undisputed that defendant is an eligible defendant as defined in CPL 216.00 (1) and that his incarceration was not necessary to protect the public. Contrary to the determination of County Court, however, we also find that the uncontroverted evidence in the record amply supports the conclusions that defendant has a history of substance abuse and that such substance abuse and dependence were contributing factors to his criminal behavior. Specifically, among other things, defendant described that his progressively escalating marihuana use, which began socially at age 14, advanced to daily use over the ensuing years and culminated in defendant becoming a mule, transporting larger quantities of marihuana across state lines for other individuals in order to receive compensation in the form of marihuana. Defendant attested to resorting to this conduct when supporting his habit became too expensive, despite his gainful employment. We also note the expert testimony of a substance abuse counselor who opined that, based upon his history, defendant was an addict who was cannabis dependent.

Inasmuch as “[t]he statute does not require that a defendant’s . . . substance abuse or dependence be the exclusive or primary cause of the defendant’s criminal behavior” … , but instead only requires it be a contributing factor, we find no basis for County Court’s determination that the instant arrest — i.e., defendant’s only involvement with the criminal justice system — was not contributed to by defendant’s marihuana use. People v Cora, 2016 NY Slip Op 00066, 3rd Dept 1-7-15

 

 

 

 

 

 

CRIMINAL LAW (APPLICATION FOR JUDICIAL DIVERSION TO A DRUG TREATMENT PROGRAM SHOULD HAVE BEEN GRANTED)/JUDICIAL DIVERSION (APPLICATION FOR DIVERSION TO A DRUG TREATMENT PROGRAM SHOULD HAVE BEEN GRANTED)/DRUG TREATMENT PROGRAM (JUDICIAL DIVERSION APPLICATION SHOULD HAVE BEEN GRANTED)/MARIJUANA (APPLICATION FOR JUDICIAL DIVERSION TO A DRUG TREATMENT PROGRAM SHOULD HAVE BEEN GRANTED)

COCAINE-POSSESSION OFFENSES CHARGED IN THE SUPERIOR COURT INFORMATION (SCI) WERE NOT LESSER INCLUDED OFFENSES OF THE THE COCAINE-POSSESSION OFFENSE CHARGED IN THE FELONY COMLAINTS; SCI IS JURISDICTIONALLY DEFECTIVE.

The Third Department determined the superior court informations (SCI’s) to which defendant pled guilty were jurisdictionally defective because neither SCI charged a lesser included offense of the offense charged in the original felony complaints. If it is possible, under any set of facts, to commit the greater offense but not the lesser, the lesser is not a lesser included offense. The offenses at issue here involved the possession of cocaine:

“A crime is a lesser included offense of a charge of a higher degree only when in all circumstances, not only in those presented in the particular case, it is impossible to commit the greater crime without concomitantly, by the very same conduct, committing the lesser offense” … . To be guilty of the offense charged in the SCI, a defendant must attempt to “knowingly and unlawfully possess cocaine” that weighs “[500] milligrams or more” (Penal Law §§ 110.00, 220.06 [5]). The first felony complaint charged defendant with criminal possession of a controlled substance in the third degree, which requires proof of knowing, unlawful possession of substances containing narcotic drugs that have “an aggregate weight of one-half ounce or more” (Penal Law § 220.16 [12]). Considered in the abstract, it is possible to possess or attempt to possess one-half ounce of a mixture of cocaine and some other substance in which the proportion of cocaine is less than 500 milligrams. Thus, it is possible to commit criminal possession of a controlled substance in the third degree without also committing attempted criminal possession of a controlled substance in the fifth degree, and the offense charged in the SCI is not a lesser included offense of the crime charged in the first felony complaint.

The second felony complaint charged defendant with criminal possession of a controlled substance in the fifth degree, which is committed when a person “knowingly and unlawfully possesses a controlled substance with intent to sell it” (Penal Law § 220.06 [1]). It is possible to possess cocaine with the intent to sell it while not concurrently possessing cocaine weighing more than 500 milligrams, or attempting to do so, as required to commit the crime charged in the SCI (see Penal Law §§ 110.00, 220.06 [5]). Thus, the crime charged in the SCI is not a lesser included offense of the crime charged in the second felony complaint … . People v Seals, 2016 NY Slip Op 00065, 3rd Dept 1-7-16

CRIMINAL LAW (SUPERIOR COURT INFORMATION JURISDICTIONALLY DEFECTIVE, OFFENSES WERE NOT LESSER INCLUDEDS)/SUPERIOR COURT INFORMATIONS (JURISDICTIONALLY DEFECTIVE, OFFENSES NOT LESSER INCLUDEDS)/COCAINE OFFENSES (SUPERIOR COURT INFORMATION JURISDICTIONALLY DEFECTIVE, OFFENSES NOT LESSER INCLUDEDS)

PEOPLE SHOULD HAVE INSTRUCTED THE GRAND JURY ON THE AGENCY DEFENSE IN THIS CRIMINAL SALE OF MARIJUANA CASE, INDICTMENT PROPERLY DISMISSED.

The Third Department determined County Court properly reinspected the grand jury minutes pursuant to a second motion by defense counsel and properly dismissed the indictment because the People failed to instruct the grand jury on an applicable defense. Because the first motion to inspect argued the evidence before the grand jury was insufficient, the law of the case doctrine did not prohibit the second motion, which argued the proceedings were defective. The defendant was charged with criminal sale of marijuana.  However, the facts supported the theory the defendant was acting as an agent for the buyer:

 

… [W]hile there is no requirement that the grand jury “be charged with every potential defense suggested by the evidence” … , the People “must charge . . . those defenses that the evidence will reasonably support” … . As this Court recently reiterated, “[u]nder the agency doctrine, a person who acts solely as the agent of a buyer in procuring drugs for the buyer is not guilty of selling the drug to the buyer, or of possessing it with intent to sell it to the buyer. Whether the defendant was a seller, or merely a purchaser doing a favor for a friend, is generally a factual question [to be resolved] . . . based upon [considerations of] factors such as the relationship between the buyer and the defendant, who initiated the transaction, whether the defendant had previously engaged in drug transfers and whether he or she profited from the sale” … . * * *

 

…. [T]he evidence before the grand jury reasonably supported the defense of agency; hence, the People’s failure to instruct the grand jury in this regard rendered that proceeding defective — particularly in view of the fact that the People were on notice of this potential defense prior to the commencement thereof. There is no question that it was the buyer who initiated the sale and, given the relationship between defendant and the buyer’s stepbrother, the evidence reasonably suggested that defendant was doing a favor for the stepsister of one of his friends. Additionally, none of the testimony offered before the grand jury revealed that defendant had a prior history of drug sales, and the evidence that defendant profited from the subject transaction was tenuous at best. Under these circumstances, County Court properly granted defendant’s motion to dismiss the indictment under CPL 210.35 (5) … . People v Gallo, 2016 NY Slip Op 00064, 3rd Dept 1-7-16

 

 

 

 

 

 

CRIMINAL LAW (GRAND JURY SHOULD HAVE BEEN INSTRUCTED ON AGENCY DEFENSE)/GRAND JURIES (PEOPLE SHOULD HAVE INSTRUCTED JURY ON AGENCY DEFENSE)/AGENCY DEFENSE (GRAND JURY SHOULD HAVE BEEN INSTRUCTED ON AGENCY DEFENSE)/MARIJUANA, CRIMINAL SALE (GRAND JURY SHOULD HAVE BEEN INSTRUCTED ON AGENCY DEFENSE)

PHARMACEUTICALS COURIERS WERE EMPLOYEES.

The Third Department determined couriers for a pharmaceuticals warehouse (SDS) were employees entitled to unemployment insurance benefits:

Here, SDS advertised for couriers and screened interested parties. Couriers are assigned routes by SDS, set up geographically by SDS’s clients, worked an agreed upon set weekly schedule at a pay rate negotiated between the couriers and SDS and were required to either pick the pharmaceuticals up at an SDS warehouse or at the SDS client’s location. SDS would have an on-site coordinator present when pickups were made at the client’s location. Couriers were provided a daily manifest bearing SDS’s name that identifies the stops for their routes. Couriers were required to obtain proof of delivery signatures on the manifests and return a copy of them to SDS. Couriers also provided invoices to SDS in order to get paid and SDS would bill its clients, and couriers were paid whether or not SDS was paid by its clients … . Couriers were required to wear SDS uniforms and were provided badges identifying themselves as being contracted through SDS. SDS also provided scanners to couriers to be used in order to electronically track their pickups and deliveries. Matter of Gill (Strategic Delivery Solutions LLC–Commissioner of Labor), 2015 NY Slip Op 09576, 3rd Dept 12-24-15

UNEMPLOYMENT INSURANCE (PHARMACEUTICALS COURIERS WERE EMPLOYEES)

INTERPRETERS ARE EMPLOYEES.

The Third Department determined interpreters were employees of CP Language Institute, Inc (CPLI):

The record establishes that CPLI advertises for language service interpreters, like claimant, to provide translation services for its clients. An interpreter is required to submit a resume and, after being interviewed by CPLI and receiving a sufficient score on a written language proficiency test, CPLI adds the interpreter to its roster. CPLI maintains a file of each interpreter’s qualifications that includes a resume, reference letters, proficiency exam and availability. CPLI notifies an interpreter of assignments, which can be accepted or declined by the interpreter. Once an assignment is accepted, however, the interpreter is required to notify CPLI if he or she becomes unavailable and CPLI, not the interpreter, provides a substitute if needed.

Furthermore, claimant signed an agreement with CPLI that included guidelines regarding punctuality, attire, performance and conduct when providing services to CPLI clients. Although claimant could work for other agencies that provided translation services, she was subject to a 12-month noncompete clause following termination of her relationship with CPLI. In addition, claimant was provided with a picture identification badge with CPLI’s name. Claimant was paid by CPLI following the submission of time sheets, regardless of whether CPLI was paid by the client. Any complaints from a client were handled by CPLI. Matter of Karapetyan (Commissioner of Labor), 2015 NY Slip Op 09324, 3rd Dept 12-17-15

MONTHLY COMPILATION INDEX ENTRIES:

UNEMPLOYMENT INSURANCE (INTERPRETERS ARE EMPLLOYEES)/INTERPRETERS (UNEMPLOYMENT INSURANCE, EMPLOYEES NOT INDEPENDENT CONTRACTORS)

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