New York Law Review

Tag: 1987

  • Amodio v. Amodio, 70 N.Y.2d 5 (1987): Valuing Stock in Closely Held Corporations for Equitable Distribution

    Amodio v. Amodio, 70 N.Y.2d 5 (1987)

    When determining the equitable distribution of property in a divorce, the valuation of stock in a closely held corporation should consider various factors, including restrictions on transfer and any existing buy-sell agreements, but the price fixed in such agreements is not conclusive evidence of value.

    Summary

    In a divorce action, the primary issue was the valuation of the husband’s 15% stock interest in a closely held corporation for equitable distribution. The stock was acquired under a shareholder’s agreement with a right of first refusal for other shareholders at the original purchase price of $87,500. The lower courts valued the stock at $87,500, based on the agreement. The Court of Appeals affirmed, holding that while buy-sell agreements are a factor, they are not the sole determinant of value. Since the plaintiff’s expert failed to account for transfer restrictions, the agreement price was the only evidence of actual value presented.

    Facts

    The husband owned a 15% stock interest in Capitol Electrical Supply Co., Inc., acquired in 1980 for $87,500. A shareholder’s agreement stipulated that if the husband wished to sell the stock within 20 years, other shareholders had a right of first refusal at the original price. The agreement also provided that if the husband died within the 20-year term, the surviving shareholders could purchase his interest for $87,500. During the divorce proceedings, the valuation of this stock became a point of contention.

    Procedural History

    The trial court determined the stock was worth $87,500, aligning with the shareholder’s agreement price. The Appellate Division affirmed this valuation. The case then reached the New York Court of Appeals.

    Issue(s)

    Whether the price fixed in a shareholder’s agreement restricting the transfer of stock in a closely held corporation is the sole determinant of the stock’s value for equitable distribution purposes in a divorce proceeding.

    Holding

    No, because while a bona fide buy-sell agreement predating marital discord is a factor in determining the stock’s value, it is not conclusive, and the court must consider all circumstances reflecting on the present worth of the property to the titleholder.

    Court’s Reasoning

    The Court of Appeals acknowledged that there is no rigid formula for valuing stock in closely held corporations, stating, “One tailored to the particular case must be found, and that can be done only after a discriminating consideration of all information bearing upon an enlightened prediction of the future.” The court referenced the IRS guidelines (Revenue Ruling 59-60) as a recognized method, outlining factors such as the nature and history of the business, economic outlook, book value, earning capacity, and comparable stock prices.

    The court emphasized that restrictions on transfer due to limited markets or contractual provisions must be considered. While the existence of a buy-sell agreement is relevant, it’s not the only factor. The court cautioned against reading the lower court decisions as holding the agreement price as absolutely controlling simply because the stock wasn’t immediately transferable. The court noted that marital property can have value even without present marketability, citing *O’Brien v O’Brien* and *Majauskas v Majauskas*.

    In this case, the plaintiff’s expert used two appraisal methods, valuing the stock between $172,000 and $253,000, but failed to account for the transfer restrictions. Because of this omission, the court found the $87,500 price in the shareholder’s agreement to be the only reliable evidence of the stock’s actual value in the record. The court implicitly held that the expert’s valuation was flawed because it failed to take into account a key restriction on the stock. The court’s decision highlights the importance of considering all relevant factors when valuing assets for equitable distribution and the weight given to agreements entered into prior to marital discord, absent other reliable evidence.

  • People v. Owens, 69 N.Y.2d 585 (1987): Improper to Submit Only Portions of Jury Charge in Writing Over Objection

    People v. Owens, 69 N.Y.2d 585 (1987)

    It is reversible error for a trial court to provide the jury with only selected portions of its jury charge in writing over the defendant’s objection, as it creates a risk of undue emphasis and prejudice.

    Summary

    The New York Court of Appeals held that it is improper for a trial court, over defense counsel’s objection, to distribute only selected portions of the jury charge in writing to the jury during deliberations. The Court reasoned that this practice creates a risk that the jury will place undue emphasis on the written portions, potentially prejudicing the defendant, especially when critical defenses are omitted. The Court reversed the convictions in both cases, ordering new trials, emphasizing the importance of fairness and impartiality in jury instructions.

    Facts

    In People v. Owens, an undercover officer allegedly purchased cocaine from the defendant. Owens raised the defense of agency, claiming he acted solely as the officer’s agent. The trial court provided the jury with written instructions only on the elements of the crimes charged, omitting the agency defense. In People v. Boon, the defendant was charged with attempted robbery. The court provided written instructions on accessorial liability, attempt, and robbery, but excluded instructions on the presumption of innocence and reasonable doubt. In both cases, defense counsel objected to the selective written instructions.

    Procedural History

    In Owens, the jury found the defendant guilty on all counts, and the Appellate Division affirmed. In Boon, the jury found the defendant guilty of one count of attempted robbery, and the Appellate Division affirmed. The New York Court of Appeals consolidated the appeals and reversed both convictions.

    Issue(s)

    1. Whether it is permissible for a trial court, over defense counsel’s objection, to submit only certain portions of the jury charge in writing to the jury for use during deliberations.

    Holding

    1. No, because submitting only a portion of the charge creates a risk that the jury will perceive the writing as embodying the more important instructions, inviting greater attention to the principles repeated in writing than those simply recited orally, potentially prejudicing the defendant.

    Court’s Reasoning

    The Court emphasized the importance of fairness and impartiality in jury instructions, citing People v. Odell, 230 N.Y. 481, 487: “The court’s charge is of supreme importance to the accused. It should be the safeguard of fairness and impartiality and the guarantee of judicial indifference to individuals.” The Court noted the absence of statutory authorization for submitting written jury instructions and drew parallels to CPL 310.30, which requires the consent of both parties before providing jurors with copies of a statute. The court reasoned that selectively providing portions of the charge, especially without any jury request for clarification, risks undue emphasis on the written portions. This could lead jurors to believe that the written instructions are more important, subordinating the oral instructions, particularly those favorable to the defense. The court found this error to be prejudicial and not subject to harmless error analysis, thus requiring a new trial in both cases. The court reasoned that unlike the marshaling of evidence—which is statutorily authorized (CPL 300.10 [2]), and constitutes error only when an imbalance results in prejudice to defendant—the distribution of written instructions to the jury is not expressly authorized by law, and error in such submissions cannot be deemed harmless.

  • City of New York v. American School Publications, Inc., 69 N.Y.2d 576 (1987): Unfettered Discretion to Restrict Speech is Unconstitutional

    69 N.Y.2d 576 (1987)

    A municipality cannot, without duly enacted and content-neutral regulations, grant or deny access to public forums (like sidewalks) for the distribution of publications based on the subjective discretion of a government official.

    Summary

    The City of New York sought to prevent American School Publications from placing news bins for its Learning Annex Magazine on city sidewalks. The City argued the magazine was primarily commercial speech and thus could be restricted to maintain sidewalk aesthetics and safety. The court found that the City lacked any formal regulations governing sidewalk news bins, instead relying on an informal approval process managed by the Corporation Counsel. Because the city had not enacted any ordinances governing the placement of news boxes, the court ruled that the arbitrary discretion vested in a government authority is inconsistent with valid time, place and manner regulations because such discretion has the potential for suppressing a particular point of view.

    Facts

    American School Publications sought permission from New York City to install news bins on sidewalks to distribute its Learning Annex Magazine, which advertised courses offered by The Learning Annex, Inc.

    The City’s Corporation Counsel denied permission, deeming the magazine “mere advertisement” and unsuitable for sidewalk distribution.

    The Learning Annex modified the magazine to include articles and short stories, but the City still refused permission.

    Without City approval, the Learning Annex placed approximately 220 news bins on sidewalks.

    The City then sued, arguing that the bins were unsightly, unsanitary, and unsafe, seeking an injunction to remove them.

    Procedural History

    The Supreme Court initially viewed the modified magazine as a sham to convert commercial speech into non-commercial speech, but ruled the City lacked a narrowly drawn statute, rendering the City’s action unconstitutional.

    The Appellate Division affirmed, emphasizing the absence of any statute or regulation and stating that the City must allow all applicants equal access or none at all.

    The City appealed to the Court of Appeals.

    Issue(s)

    Whether, in the absence of local ordinances, the City of New York can invoke judicial enforcement to remove bins placed on sidewalks for the distribution of a free publication, based on the City’s determination that the publication is commercial speech.

    Holding

    No, because the City’s action was taken without the benefit of any regulation. The arbitrary discretion vested in some governmental authority is inconsistent with a valid time, place, and manner regulation because such discretion has the potential for suppressing a particular point of view.

    Court’s Reasoning

    The Court of Appeals held that while the City can regulate the installation of news bins, it must do so through properly drawn regulations that balance the City’s interest in health and safety with First Amendment freedoms of speech and press. The court emphasized that “[l]iberty of circulating is as essential to [First Amendment] freedom as liberty of publishing; indeed, without the circulation, the publication would be of little value’.

    The Court found that the City’s denial was made on the “private criteria of a subordinate attorney” without established guidelines. The court stated, “When a city allows an official to ban [a means of communication] in his uncontrolled discretion, it sanctions a device for suppression of free communication of ideas.”

    The court noted that proper legislative bodies, such as the City Council, should enact regulations and that the Board of Estimate holds the exclusive implementing authority with respect to the use of City property. The court cited Heffron v. International Society for Krishna Consciousness, noting that arbitrary discretion in a government authority creates the potential for suppressing a particular point of view.

    The Court stated that the City may distinguish between commercial and noncommercial speech in future regulations, which would not inherently offend the content neutrality requirement.

  • Seaview Association of Homeowners, Inc. v. Williams, 69 N.Y.2d 987 (1987): Implied Contract to Pay Homeowners’ Association Fees

    Seaview Association of Homeowners, Inc. v. Williams, 69 N.Y.2d 987 (1987)

    When a purchaser buys property in a community knowing that a homeowners’ association provides services and facilities, the purchase can create an implied-in-fact contract obligating the purchaser to pay a proportionate share of the association’s costs, regardless of actual usage.

    Summary

    The Seaview Association of Homeowners sued the Williams family to recover unpaid assessments for community services. The Williamses owned seven houses in Seaview, a private Fire Island community, but refused to pay assessments, arguing they were not association members and did not use the recreational facilities. The trial court found an implied contract existed based on the Williamses’ knowledge of community conditions when purchasing the properties. The Appellate Division affirmed. The New York Court of Appeals affirmed, holding that purchasing property with knowledge of the association’s services can manifest acceptance of the obligation to pay for those services, creating an implied-in-fact contract.

    Facts

    The Seaview Association of Homeowners maintained streets, walkways, beaches, and provided various community services in Seaview, Fire Island. The Association assessed property owners to cover these costs. The Williams family owned seven houses in Seaview and had lived in the adjoining community before purchasing their first house in Seaview in 1963. Two of the three family members were in the real estate business. They refused to pay the homeowners’ assessments, claiming they were not members of the association and did not use the recreational facilities. The Association then sued to recover assessments from 1976-1984.

    Procedural History

    The trial court ruled in favor of the Seaview Association of Homeowners, finding an implied contract existed. The Appellate Division affirmed the trial court’s decision based on the trial court’s reasoning, with one Justice dissenting. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

    Issue(s)

    Whether the purchase of property in a private community with knowledge that a homeowners’ association provides services and facilities for the benefit of residents constitutes an implied-in-fact contract to pay a proportionate share of the association’s costs.

    Holding

    Yes, because where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.

    Court’s Reasoning

    The Court of Appeals reasoned that an implied-in-fact contract arises when a purchaser buys property knowing that a homeowners’ association provides services and facilities. This knowledge manifests acceptance of the conditions of ownership, including the obligation to pay for those services. The obligation extends to a proportionate share of the full cost of maintaining the facilities and services, not just the reasonable value of those actually used by the resident. The court emphasized the factual nature of the issues regarding notice and knowledge. They deferred to the lower courts’ findings that the Williamses knew the nature of the Seaview community and impliedly accepted the conditions of ownership through their purchases, particularly their successive purchases. The court stated: “Where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.” Because the issues of notice and knowledge were factual and had been affirmed by the Appellate Division, the Court of Appeals found the issue beyond their review. The court cited Sea Gate Assn. v Fleischer as precedent.

  • Estate of Thomson v. Wade, 69 N.Y.2d 570 (1987): The Stranger-to-the-Deed Rule

    Estate of Thomson v. Wade, 69 N.Y.2d 570 (1987)

    Under the “stranger-to-the-deed” rule, a deed cannot create an easement or other real property interest in favor of someone who is not a party to the deed.

    Summary

    This case addresses whether a grantor can reserve an easement in a deed for the benefit of a third party who is not a party to the deed (a “stranger to the deed”). The New York Court of Appeals reaffirmed the long-standing rule that such a reservation is invalid. The court reasoned that allowing such reservations would create uncertainty in title and potentially lead to needless litigation, outweighing any potential frustration of the grantor’s intent. The court also held that a personal right-of-way (easement in gross) cannot be transferred if it’s not commercial in nature.

    Facts

    Plaintiff Thomson and Defendant Wade owned adjacent parcels of land. Thomson’s property (the annex parcel) fronted a river and had a motel, while Wade’s property was inland and bordered a public road. Both parcels were previously owned by Edward John Noble. Noble used Wade’s parcel to access the public road from the annex parcel. When Noble conveyed the annex parcel, he did not grant an express easement over Wade’s parcel. Later, when Noble conveyed Wade’s parcel, he included a clause that “excepted and reserved” a right-of-way for himself and Thomson’s predecessor. Thomson acquired a quitclaim deed to the right-of-way from the Noble Foundation (Noble’s successor-in-interest).

    Procedural History

    Thomson brought a declaratory judgment action, claiming an easement over Wade’s property. The Appellate Division concluded that no express easement was created. The Court of Appeals affirmed, upholding the “stranger-to-the-deed” rule.

    Issue(s)

    1. Whether a grantor can reserve an easement in a deed for the benefit of a third party who is not a party to the deed (a “stranger to the deed”).

    2. Whether a personal right-of-way (easement in gross) can be transferred to another party.

    Holding

    1. No, because New York adheres to the “stranger-to-the-deed” rule, which prohibits the creation of an interest in favor of a third party through a reservation or exception in a deed. This rule promotes certainty in title and avoids potential litigation.

    2. No, because the right-of-way reserved to Noble personally was not commercial in nature, and therefore could not be transferred to Thomson via the quitclaim deed.

    Court’s Reasoning

    The court reasoned that Noble could not create an easement benefitting land he no longer owned. Citing Tuscarora Club v. Brown, 215 NY 543, the court reaffirmed the “stranger-to-the-deed” rule, stating that a reservation in favor of a third party does not create a valid interest. While acknowledging that some jurisdictions have adopted a minority view that would recognize such an interest if the grantor’s intent is clear (citing Willard v. First Church of Christ, Scientist, 7 Cal 3d 473), the court declined to abandon the settled New York rule.

    The court emphasized the importance of certainty in real property titles, stating that “public policy favor[s] certainty in title to real property, both to protect bona fide purchasers and to avoid conflicts of ownership, which may engender needless litigation.” (Matter of Violi, 65 NY2d 392, 396). The court noted that any frustration of the grantor’s intent can be easily avoided by a direct conveyance of an easement to the third party.

    Regarding the personal right-of-way, the court cited Saratoga State Waters Corp. v. Pratt, 227 NY 429, 443, holding that because the right-of-way was not commercial, it could not be transferred to Thomson. Thus, neither the reservation of the easement in gross to Noble nor the reservation of a right-of-way to Thomson’s predecessor entitled Thomson to an express easement across Wade’s property.

    The court concluded, “where it can reasonably be assumed that settled rules are necessary and necessarily relied upon, stability and adherence to precedent are generally more important than a better or even a ‘correct’ rule of law” (Matter of Eckart, 39 NY2d 493, 500).

  • Seaview Assn. v. Williams, 69 N.Y.2d 987 (1987): Implied Contract to Pay Homeowners’ Association Fees

    69 N.Y.2d 987 (1987)

    When a purchaser knows that a homeowners’ association provides facilities and services for the benefit of community residents, buying property there can be seen as accepting the conditions of ownership, including paying for the services.

    Summary

    The Seaview Association, a homeowners’ association, sued the Williams family to recover unpaid assessments for community services. The Williams family owned multiple properties in the Seaview community but refused to pay assessments, arguing they were non-members and didn’t use the recreational facilities. The trial court found an implied contract existed based on the Williams’ knowledge of the community’s nature when they purchased the properties. The appellate court affirmed. The New York Court of Appeals affirmed, holding that purchasing property in a community with known homeowners’ association services implies acceptance of the obligation to pay for those services.

    Facts

    The Seaview Association of Fire Island owns and maintains streets, walkways, beaches, and various facilities in the Seaview community. They also provide services like a community manager and a rent-free home for a doctor. Property owners are assessed a share of the annual costs. The Williams family owned seven houses in Seaview and had lived in the adjoining community prior to purchasing their first house in 1963. They refused to pay assessments, claiming they were not members of the Association and did not use the recreational facilities. Two of the three defendants were in the real estate business and were among only five year-round residents.

    Procedural History

    The Seaview Association sued the Williams family to recover unpaid assessments from 1976-1984. The trial court ruled in favor of the Association, finding an implied contract existed. The Appellate Division affirmed the trial court’s decision. The New York Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

    Issue(s)

    Whether the purchase of property in a community with a known homeowners’ association providing services and facilities implies an acceptance of the conditions of ownership, including the obligation to pay assessments for those services.

    Holding

    Yes, because where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.

    Court’s Reasoning

    The court reasoned that the Williams family’s knowledge of the Seaview community and its homeowners’ association, combined with their purchase of multiple properties, implied an acceptance of the conditions of ownership, including paying assessments. The court stated, “Where there is knowledge that a private community homeowners’ association provides facilities and services for the benefit of community residents, the purchase of property there may manifest acceptance of conditions of ownership, among them payment for the facilities and services offered.” The court emphasized that the issue of notice and knowledge were largely factual and were the focus of the trial court. The Court found that the trial court had sufficient evidence to determine that the Williams family knew the nature of the community. The court also cited Sea Gate Assn. v Fleischer, stating the implied contract includes obligation to pay a proportionate share of the full cost of maintaining facilities, not merely the reasonable value of those actually used.

  • People v. Evans, 69 N.Y.2d 969 (1987): Discretionary Dismissal of Untimely Appeals

    People v. Evans, 69 N.Y.2d 969 (1987)

    A court retains discretion, rather than a mandatory obligation, to dismiss an appeal when the appellant fails to perfect it within the prescribed time frame.

    Summary

    Defendant Evans was charged with driving while intoxicated. The Liberty Town Justice Court suppressed breathalyzer evidence. The People filed a notice of appeal but failed to perfect it within the time prescribed by the Uniform Rules for Trial Courts. The County Court dismissed the appeal, believing it had no discretion. The Court of Appeals reversed, holding that CPL 460.70 (2)(c) grants the court discretion to dismiss or not dismiss appeals that are not timely perfected, and remitted the case to the County Court to exercise its discretion.

    Facts

    Ronald Evans was charged with driving while intoxicated on September 30, 1984.

    On November 19, 1985, the Liberty Town Justice Court ordered the suppression of breathalyzer test evidence due to a violation of Evans’ right to counsel.

    The People filed a timely notice of appeal with the Sullivan County Court on December 11, 1985.

    Before the appeal was perfected, Evans moved to strike the notice of appeal on December 19, 1985.

    The People opposed the motion to strike but failed to perfect their appeal within the time prescribed by the Uniform Rules for Trial Courts.

    Procedural History

    The Liberty Town Justice Court granted Evans’ motion to suppress evidence.

    The People appealed the suppression order to the Sullivan County Court.

    The Sullivan County Court granted Evans’ motion to dismiss the appeal as untimely, concluding it lacked discretion to hear an appeal not timely perfected.

    The People appealed the Sullivan County Court’s decision to the New York Court of Appeals.

    Issue(s)

    Whether County Court is mandated to dismiss an appeal when the appellant fails to perfect the appeal within the time prescribed, or whether the court has discretion to determine whether dismissal is warranted.

    Holding

    No, because CPL 460.70 (2)(c) provides that if an appellant fails to perfect the appeal within the prescribed time, “the court may, either upon motion of the respondent or upon its own motion, dismiss the appeal”. This language indicates discretionary rather than mandatory dismissal.

    Court’s Reasoning

    The Court of Appeals focused on the plain language of CPL 460.70 (2)(c), which states that the court “may” dismiss the appeal if it is not timely perfected. The use of “may,” the court reasoned, clearly indicates that the decision to dismiss is discretionary, not mandatory. The court also cited Uniform Rules for Trial Courts § 200.33 [c] [22 NYCRR], which reinforces this discretionary power. By concluding that it had no discretion to entertain the appeal, the County Court committed an error of law. The Court of Appeals found that the County Court should have considered the circumstances presented and then exercised its discretion to determine whether dismissal of the People’s appeal was warranted. The court’s decision emphasizes the importance of interpreting statutes and rules according to their plain language and giving effect to the legislature’s intent. The decision provides clarity to lower courts regarding their power to manage appeals that are not perfected in a timely manner. It prevents a rigid application of the rules that could lead to unjust outcomes. As the court stated, CPL 460.70(2)(c) clearly provides that if an appellant fails to perfect the appeal within the time prescribed, “the court may, either upon motion of the respondent or upon its own motion, dismiss the appeal”.

  • People v. Deegan, 69 N.Y.2d 976 (1987): Standard for Evidence Sufficiency to Support an Indictment

    People v. Deegan, 69 N.Y.2d 976 (1987)

    The standard for reviewing the sufficiency of evidence to support an indictment is whether the evidence is legally sufficient, meaning competent evidence that, if accepted as true, would establish every element of the offense charged; it requires a prima facie showing, not proof beyond a reasonable doubt.

    Summary

    Defendant, an elected official, was indicted for allegedly changing his vote on a waste removal rate increase in exchange for promised campaign contributions. The lower courts dismissed the indictment, finding the evidence insufficient by applying an incorrect standard requiring exclusion of every hypothesis but guilt to a moral certainty. The Court of Appeals reversed, holding that the proper standard for an indictment is legal sufficiency, meaning a prima facie case. The Court emphasized that it is the Grand Jury’s role to determine reasonable cause, and the ‘moral certainty’ standard applies only at trial.

    Facts

    The defendant, an elected official, allegedly changed his vote on a proposed rate increase for waste removal services. This change purportedly occurred after a promise of future campaign contributions from members of the waste removal industry. The Grand Jury subsequently indicted the defendant based on this evidence, including declarations of an alleged co-conspirator.

    Procedural History

    The trial court dismissed the indictment, deeming the evidence insufficient. The Appellate Division affirmed the dismissal. The Court of Appeals reversed the Appellate Division’s order, reinstated the indictment, and remitted the matter to the trial court for further proceedings.

    Issue(s)

    Whether the evidence presented to the Grand Jury was legally sufficient to support the indictment against the defendant for changing his vote in exchange for promised campaign contributions.

    Holding

    Yes, because the evidence before the Grand Jury was legally sufficient, meaning it constituted competent evidence that, if accepted as true, would establish every element of the offense charged, thereby meeting the prima facie standard for an indictment.

    Court’s Reasoning

    The Court of Appeals held that the lower courts erred by applying an incorrect standard of proof for evaluating the sufficiency of the evidence supporting the indictment. The lower courts had relied on a standard requiring the exclusion of every hypothesis but guilt to a moral certainty, which is not the standard for evaluating indictments. The Court explicitly stated, “As we held in People v Jennings (supra, at 114-116), the proper standard for reviewing the sufficiency of the evidence to support an indictment is ‘legal sufficiency,’ which is defined in CPL 70.10 (1) as ‘competent evidence which, if accepted as true, would establish every element of an offense charged’ (see, CPL 190.65 [1]).” The court further clarified that “legally sufficient means prima facie, not proof beyond a reasonable doubt” (quoting People v Mayo, 36 NY2d 1002, 1004). The Court emphasized that the Grand Jury is responsible for determining whether there is reasonable cause to believe a crime was committed and that the ‘moral certainty’ standard is applicable only to the trier of fact at trial. The court found that even excluding the alleged coconspirator’s declarations, the remaining evidence was sufficient to infer the defendant changed his vote for a promise of future campaign contributions. The Court declined to rule on the admissibility of other disputed evidence, deeming it premature. Because the inquiry on a motion to dismiss an indictment for insufficient evidence is purely legal, the court rejected remitting the appeal to the Appellate Division for further factual review, since the Grand Jury evidence met the legal sufficiency standard.

  • People v. Catten, 69 N.Y.2d 547 (1987): Double Jeopardy and Withdrawal of Mistrial Motions

    People v. Catten, 69 N.Y.2d 547 (1987)

    A defendant waives double jeopardy protections by moving for a mistrial, and the trial court has discretion whether to allow withdrawal of that motion after it has been granted, but before the jury is discharged.

    Summary

    These consolidated cases address whether a retrial after a mistrial, declared over defense objection, violates double jeopardy when the defendant initially requested the mistrial. In Catten, the defendant sought to withdraw his mistrial motion after it was granted. In Murphy, the defendant’s mistrial motion was initially denied, and the court later granted a mistrial based on the prosecution’s motion on the same grounds, purportedly “on consent.” The Court of Appeals held that in Catten, the trial court did not abuse its discretion in denying the withdrawal of the mistrial motion, while in Murphy, the retrial violated double jeopardy because the mistrial was declared without the defendant’s consent and without manifest necessity.

    Facts

    Catten: During a drug sale trial, an undercover officer testified about identifying the defendant in a lineup while wearing similar clothes to those worn during the sale. A backup officer later testified the defendant was allowed to change into street clothes before the lineup, and the outer clothing was removed at some point before identification. Defense counsel moved for a mistrial, which was granted. He then attempted to withdraw the motion, but the court denied the request.

    Murphy: During a manslaughter trial, a witness for the prosecution testified that Murphy offered her a jacket if she went to the back of his store with him. The defense motioned for a mistrial, which was denied. Later, the prosecutor requested a mistrial based on the same testimony, which the court granted. The defense attempted to withdraw the mistrial motion but was denied.

    Procedural History

    Catten: Following a retrial, Catten was convicted. The Appellate Division reversed the conviction, holding the trial court erred in declaring a mistrial over the defendant’s desire to continue the trial.

    Murphy: Murphy was convicted of manslaughter at the second trial. The Appellate Division affirmed the conviction.

    Issue(s)

    1. In Catten, whether the trial court erred in denying the defendant’s request to withdraw his mistrial motion after it was granted but before the jury was discharged.

    2. In Murphy, whether the retrial violated the defendant’s double jeopardy rights when the mistrial was declared after his initial motion was denied, and the court granted the mistrial based on the prosecution’s motion.

    Holding

    1. In Catten, No, because it is within the trial court’s discretion to deny withdrawal of a mistrial motion after it has been granted, and there was no abuse of discretion here.

    2. In Murphy, Yes, because the mistrial was declared without the defendant’s consent and without manifest necessity, thus violating his double jeopardy rights.

    Court’s Reasoning

    Catten: The Court reasoned that once a mistrial motion is granted, whether to allow its withdrawal is within the trial court’s discretion, citing Matter of Napoli v. Supreme Ct. The trial court found that defense counsel had adequate time to discuss the motion with his client, undermining the proffered reason for withdrawal. The Court also noted that a defendant need not agree with counsel’s mistrial motion for it to be binding. Thus, the denial of the withdrawal request was not an abuse of discretion.

    Murphy: The Court reasoned that the defendant’s initial mistrial motion was denied. When the prosecutor later moved for a mistrial (after the witness’s cross-examination testimony bolstered a justification defense) and the court granted it, the defendant possessed the right to have his trial completed by the current tribunal. Because the court had denied his original motion, there was nothing to withdraw, and the defendant registered an objection to the mistrial. The court abused its discretion by not considering a curative instruction, which has been held to preclude the mention of uncharged crimes from constituting reversible error (citing People v Santiago, 52 NY2d 865, 866). Since the mistrial was declared without consent or manifest necessity, retrial violated double jeopardy.

    The Court distinguished other cases, noting that in those cases, the defendant did not object to the court’s ruling or attempt to withdraw their prior application on any ground. As the court stated, “appellate review in such situations would be facilitated if, immediately after a motion for mistrial is made and all parties are heard, the court clearly and unconditionally states its decision on the record.”

  • Herzog Bros. Trucking, Inc. v. State Tax Commission, 69 N.Y.2d 536 (1987): State Taxation of Indian Traders Preempted

    Herzog Bros. Trucking, Inc. v. State Tax Commission, 69 N.Y.2d 536 (1987)

    Federal law preempts state tax laws that impose burdens on Indian traders engaged in trade with Indians on reservations, even if the legal incidence of the tax falls on non-Indian consumers.

    Summary

    Herzog Bros. Trucking, Inc., a Pennsylvania corporation, challenged New York State’s attempt to impose motor fuel and sales taxes on its wholesale distribution of motor fuel to Seneca Indian retailers on reservations. The New York Court of Appeals held that the state’s tax scheme was preempted by federal law, specifically the Indian trader statutes, which grant the federal government broad authority to regulate trade with Indians. Even though the tax was intended to be passed on to non-Indian consumers, the court found that imposing the tax collection burden on the wholesale trader was an impermissible intrusion into an area of trade comprehensively regulated by the federal government. The court reversed the Appellate Division’s denial of a preliminary injunction and remitted the case for further proceedings.

    Facts

    Herzog Bros. Trucking, Inc., a Pennsylvania corporation, engaged in the wholesale distribution of motor fuels.
    In June 1984, Herzog began selling motor fuel to authorized Seneca Nation of Indians retail establishments on reservations in New York.
    The Seneca retailers refused to pay state taxes on these transactions, believing they were exempt.
    In October 1984, the State Tax Commission began assessing motor fuel taxes against Herzog.
    In June 1985, New York amended its Tax Law to require sales tax on motor fuel to be collected upon importation or first sale by the distributor.

    Procedural History

    Hertzog brought a declaratory judgment action seeking a declaration that the state’s imposition of motor fuel and sales taxes was unconstitutional and unlawful.
    Herzog moved for a preliminary injunction to prevent the state from collecting the taxes.
    Special Term granted the preliminary injunction, finding that the plaintiffs were likely to succeed on the merits.
    The Appellate Division reversed, holding that Herzog had not shown a clear likelihood of success on the merits because the tax scheme imposed only a minimal burden of collecting taxes from non-Indian consumers.
    The New York Court of Appeals granted permission to appeal and certified the question of whether the Appellate Division erred in reversing the order of Special Term and denying the preliminary injunction.

    Issue(s)

    Whether federal law preempts New York State from imposing motor fuel and sales taxes on a non-Indian wholesale distributor’s sales of motor fuel to Indian retailers on Indian reservations, even if the legal incidence of the tax ultimately falls on non-Indian consumers.

    Holding

    Yes, because the Indian trader statutes grant the federal government broad authority to regulate trade with Indians, and state tax laws that impose burdens on Indian traders are preempted, regardless of whether the legal incidence of the tax falls on non-Indian consumers. Imposing tax collection obligations on the distributor impermissibly intrudes into an area of commerce comprehensively regulated by the federal government.

    Court’s Reasoning

    The court emphasized that Indian affairs occupy a unique place in Supremacy Clause jurisprudence, with the federal government possessing plenary and preemptive power over matters concerning Indians.
    The court distinguished between state tax schemes that merely require Indian retailers to collect taxes from non-Indian customers (which are generally permissible) and those that burden persons engaged in trade with Indians on reservations (which are generally preempted).
    The court relied on Warren Trading Post v. Arizona Tax Commission, 380 U.S. 685 (1965), and Central Machinery Co. v. Arizona State Tax Commission, 448 U.S. 160 (1980), which held that the Indian trader statutes preempt the field of transactions with reservation Indians, leaving no room for state laws that impose additional burdens on traders.
    The court found that New York’s motor fuel tax scheme, by imposing obligations on Herzog as a trader to the Seneca Nation, was preempted by the federal Indian trader laws. Even if the burden was minimal, the comprehensive federal regulatory scheme precluded state imposition. The court quoted Warren Trading Post, stating that the federal regulations were “apparently all-inclusive…[leaving] no room for state laws imposing additional burdens upon traders”.
    The court rejected the argument that the tax scheme was permissible because the legal incidence of the tax fell on non-Indian consumers, reasoning that the focus should be on whether the tax imposed any burden on the trader in its dealings with the tribe.