New York Law Review

Tag: bribery

  • S. T. Grand, Inc. v. City of New York, 32 N.Y.2d 300 (1973): Criminal Conviction as Collateral Estoppel in Subsequent Civil Action

    S. T. Grand, Inc. v. City of New York, 32 N.Y.2d 300 (1973)

    A criminal conviction is conclusive proof of the underlying facts in a subsequent civil action, provided there was an identity of issue and a full and fair opportunity to contest the prior decision.

    Summary

    S. T. Grand, Inc. sued New York City for the unpaid balance on a cleaning contract. The City counterclaimed, alleging the contract was illegal due to bribery, relying on S. T. Grand’s prior criminal conviction for bribing a city official to secure the contract. The New York Court of Appeals held that the criminal conviction conclusively established the bribery, barring S. T. Grand from recovering on the contract and requiring them to return payments already received. The court distinguished this case from *Gerzof v. Sweeney*, emphasizing the severity of the corruption at the contract’s inception and the difficulty in determining damages.

    Facts

    In 1966, S. T. Grand, Inc. contracted with New York City to clean the Jerome Park Reservoir, a contract awarded by Commissioner Marcus without competitive bidding under a “public emergency” exception. S. T. Grand completed the cleaning work. Subsequently, S. T. Grand and its president were convicted in federal court of conspiracy related to bribing Commissioner Marcus to obtain the cleaning contract. When S. T. Grand sued the city for the unpaid balance ($148,735), the city argued the contract was illegal due to the bribery and counterclaimed for the $689,500 already paid.

    Procedural History

    The City moved for summary judgment on S. T. Grand’s claim and its own counterclaim. Special Term denied the motion, citing *Gerzof v. Sweeney*. The Appellate Division modified, directing judgment for the City on both claims, finding no factual issues and distinguishing *Gerzof*. S. T. Grand appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether a criminal conviction is conclusive proof of its underlying facts in a subsequent civil action.
    2. Whether the equitable remedy fashioned in *Gerzof v. Sweeney* is available to S. T. Grand, Inc., thus allowing them to recover at least the value of the services rendered.

    Holding

    1. Yes, because the doctrine of collateral estoppel applies when there is an identity of issues necessarily decided in the prior action and a full and fair opportunity to contest the prior decision.
    2. No, because the circumstances of this case do not warrant the equitable exception created in *Gerzof v. Sweeney* due to the corruption at the inception of the contract and the difficulty in calculating damages.

    Court’s Reasoning

    The court overturned its prior precedent in *Schindler v. Royal Ins. Co.*, which held that a criminal conviction was only prima facie evidence in a subsequent civil suit. The court reasoned that the abolition of the mutuality requirement for collateral estoppel necessitates a change. The court applied the modern doctrine of collateral estoppel, as articulated in *Schwartz v. Public Administrator*, requiring identity of issue and a full and fair opportunity to litigate. The court found both requirements met, as the bribery conviction was based on the same facts at issue in the civil suit, and the criminal trial afforded S. T. Grand ample opportunity to contest the bribery allegations.

    Regarding the remedy, the court acknowledged the general rule that no recovery is permitted for work done under an illegal municipal contract, aiming to deter violations of bidding statutes. While *Gerzof v. Sweeney* created an exception, allowing partial recovery based on unique equitable considerations, the court found that the circumstances in *S. T. Grand* differed significantly. In *Gerzof*, there was a fair idea of damages suffered because the village had already determined its need for a generator and had conducted one round of legitimate bidding. Here, there was no untainted determination that the reservoir needed cleaning, nor any competitive bidding. Further, the illegality in *Gerzof* only affected the final stages of the contracting process, whereas in this case, the bribery permeated the entire process from the outset.

    Therefore, the Court held that the policy of deterring corruption outweighs any equitable concerns for S. T. Grand. As the court stated, “If we are to effectively deter the unscrupulous practice of fraudulent and collusive bidding on public contracts, we cannot look alone to existing penal sanctions. The nature of the wrong is such that it is not easily discovered but, when it is, we make it quite clear that courts of this State will decline to lend their aid to the fraudulent bidder who seeks recovery.”

  • People v. Sherman, 27 N.Y.2d 144 (1970): Scope of Conspiracy Conviction When Underlying Offense is Invalid

    People v. Sherman, 27 N.Y.2d 144 (1970)

    A conviction for conspiracy to commit multiple offenses can stand even if the conviction for one of the underlying offenses is overturned due to a technicality, provided there is sufficient proof of an agreement to commit at least one of the other offenses.

    Summary

    Defendants were convicted of conspiracy to commit bribery and larceny, as well as substantive counts of bribery and attempted grand larceny. The Court of Appeals modified the judgments, reversing the bribery convictions because the defendants were not public servants as defined by the bribery statute. However, the court upheld the conspiracy convictions, reasoning that the jury’s finding of conspiracy could rest on the agreement to commit larceny, which was supported by evidence and the attempted grand larceny convictions. The case was remitted for resentencing due to the vacated bribery sentences.

    Facts

    The defendants were indicted for conspiracy to commit bribery and larceny, along with substantive counts of bribery and attempted grand larceny. The specific facts underlying the charges are not detailed in this memorandum opinion, but the charges stemmed from a single course of conduct. The key fact is that the defendants’ status did not meet the definition of a public servant for the purposes of the bribery statute.

    Procedural History

    The defendants were convicted in County Court on all charges. They appealed to the Court of Appeals of New York. The Court of Appeals modified the judgment, reversing the bribery convictions but affirming the conspiracy and attempted grand larceny convictions. The case was then remitted to the County Court for reconsideration of sentencing.

    Issue(s)

    Whether a conviction for conspiracy to commit multiple offenses must be reversed if the conviction for one of the underlying offenses is overturned due to a technicality, even if there is sufficient evidence to support a finding of conspiracy to commit at least one of the other offenses.

    Holding

    No, because if an indictment charges conspiracy to commit a crime and refers to several separate offenses as purposes of the conspiracy, a conviction may rest on proof of an agreement to commit any one of the offenses without proof of an agreement to commit the others.

    Court’s Reasoning

    The Court of Appeals reasoned that the conspiracy conviction could stand because the jury found the defendants guilty of conspiring to commit both bribery and larceny. The court acknowledged that the bribery convictions were improper because the defendants did not qualify as “public servants” under the relevant statute. However, this was deemed a “technical classification of the offense and not because of any infirmity in the proof” regarding the agreement to commit bribery. The court emphasized that there was independent evidence and jury findings (in the form of the attempted grand larceny convictions) to support the conclusion that the defendants conspired to commit larceny. The court cited precedent, including People v. Trammell, stating that a conspiracy conviction can rest on proof of an agreement to commit any one of the offenses listed in the indictment, even if not all are proven. The court stated: “Since the jury concluded that the defendants had committed conspiracy to commit bribery and larceny, the fact that it is now determined that the defendants may not be prosecuted for bribery, only because of the technical classification of the offense and not because of any infirmity in the proof, does not upset the conclusion that defendants conspired to commit larceny.” This reasoning prevents defendants who genuinely conspired to commit crimes from escaping punishment based on technical defects in one of the underlying charges, so long as the conspiracy involved another valid offense. The court remitted for resentencing to allow the lower court to adjust the penalties in light of the vacated bribery charges.

  • People v. Morhouse, 21 N.Y.2d 66 (1967): Establishing Aider and Abettor Liability

    People v. Morhouse, 21 N.Y.2d 66 (1967)

    To be liable as an aider and abettor, a defendant must share the intent of the principal actor and take actions that encourage or induce the commission of the crime.

    Summary

    Morhouse, a political leader, was convicted of bribery and taking unlawful fees for his role in securing a liquor license for the New York Playboy Club by bribing Martin Epstein, Chairman of the State Liquor Authority. The prosecution argued Morhouse aided and abetted both the Playboy people in bribing Epstein and Epstein in taking unlawful fees. The Court of Appeals affirmed the conviction, holding that the evidence was sufficient to show Morhouse knew Epstein was to be bribed and that he encouraged the bribers, establishing a sufficient identity of interest between Morhouse and Epstein. The court remanded for a hearing on potential eavesdropping violations.

    Facts

    Playboy representatives initially agreed to bribe Epstein for a liquor license. This deal stalled. Epstein suggested involving Morhouse to resolve the issues. Morhouse agreed to help secure the license for $100,000, indicating knowledge of the prior corrupt arrangement with Epstein. After Morhouse’s involvement, Epstein told Berger, a Playboy representative, that he and Morhouse had discussed the deal and instructed Berger to pay Epstein his $50,000. Epstein eventually received half of his bribe.

    Procedural History

    Morhouse was convicted in the Supreme Court, New York County, of bribery and taking unlawful fees. The Appellate Division, First Department, affirmed the judgment. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the circumstantial evidence presented by the prosecution was sufficient to prove Morhouse’s guilt beyond a reasonable doubt.
    2. Whether the accomplice testimony was sufficiently corroborated.
    3. Whether the court orders authorizing eavesdropping were properly issued and executed and, if not, whether the evidence presented at trial was tainted by any improper eavesdropping.

    Holding

    1. Yes, because Morhouse knew of the corrupt agreement and encouraged the bribers to continue, satisfying the requirements for aider and abettor liability.
    2. Yes, because there was non-accomplice evidence fairly tending to connect Morhouse with the commission of the crime.
    3. Remanded for a hearing to determine whether the court orders authorizing eavesdropping were properly issued and executed under the law as it was understood at the time and to determine if the People’s evidence was tainted.

    Court’s Reasoning

    The court reasoned that Morhouse could be held liable as an aider and abettor because he knew Epstein was to be bribed and attached himself to the bribers’ cause, encouraging them to continue with the corrupt agreement. Morhouse’s representation that he could handle Epstein induced them to consummate the agreement. The court distinguished this case from others where the defendant had no personal interest in the crime’s commission. Here, Morhouse’s payment depended on the Playboy Club getting the license, requiring Epstein to fulfill his bargain. The court found sufficient corroboration of the accomplice testimony. Non-accomplice testimony showed Morhouse’s arrangement for payment by Playboy through its publishing affiliate and his efforts to shift the payment on the books after the Grand Jury investigation began. Regarding the eavesdropping, the court held that Morhouse had standing to object to bugs and wiretaps of his own business office and phone calls. The court remanded for a hearing to determine the propriety of these eavesdrops and whether they tainted the evidence. The court noted that the prosecution’s conduct in maintaining electronic surveillance of Morhouse’s office after he became a suspect and was known to confer with his attorney raised concerns about potential interference with his Sixth Amendment right to counsel.

  • People v. Mullens, 292 N.Y. 408 (1944): Admissibility of Evidence of Prior Bad Acts in Bribery Case

    People v. Mullens, 292 N.Y. 408 (1944)

    Evidence of prior bad acts is inadmissible in a criminal trial if its only probative value is to suggest that the defendant has a propensity to commit the charged crime, especially when the prior acts are not directly related to the current charges.

    Summary

    Defendants Mullens and Solomon were convicted on multiple counts of bribery related to state printing contracts. The prosecution alleged Mullens, a Deputy Comptroller, accepted bribes from Burland Printing Co. officers (the Walseys) through Solomon. The Court of Appeals reversed the convictions, finding that the admission of evidence of collateral transactions, specifically unrelated instances of alleged fraud and corruption, was prejudicial and violated the rule against using character evidence to prove guilt. The Court emphasized that evidence must be directly relevant to the charged offenses, and that admitting evidence of past misdeeds created unfair prejudice, influencing the jury’s verdict.

    Facts

    Mullens, as Deputy Comptroller, was accused of accepting bribes from the Burland Printing Co., facilitated by Solomon, in exchange for securing state printing contracts for Burland in 1935 and 1937. The prosecution presented evidence from Charles and Ira Walsey, officers of Burland, detailing the alleged bribery scheme, including payments made to Solomon. Evidence showed checks were made out to H. Bitterman at Solomon’s request. The prosecution also introduced evidence concerning printing contracts from 1932 to 1939.

    Procedural History

    Mullens and Solomon were convicted on six counts of bribery. The Appellate Division dismissed two counts for insufficient proof but affirmed the remaining convictions. The New York Court of Appeals granted leave to appeal to review the convictions on the remaining counts related to the 1935 and 1937 transactions.

    Issue(s)

    1. Whether the trial court erred in admitting evidence of prior bad acts and collateral transactions that were not directly related to the bribery charges against Mullens and Solomon.

    Holding

    Yes, because the evidence of prior bad acts lacked probative value regarding the bribery charges and was unduly prejudicial to the defendants, influencing the jury to convict based on perceived character rather than direct evidence of the crimes charged.

    Court’s Reasoning

    The Court reasoned that the evidence regarding Solomon’s alleged receipt of funds for removing a subway entrance in 1933, and evidence about the Burland Company’s collusive bidding practices, lacked direct relevance to the bribery charges against Mullens and Solomon. The court cited People v. Robinson, 273 N.Y. 438, 445, noting the jury was likely influenced by this evidence, which suggested the defendants were predisposed to commit such offenses. The court emphasized the fundamental rule that character is not an issue in a criminal prosecution unless the accused makes it one, citing People v. Zachowitz, 254 N.Y. 192. The Court stated: “None of these collateral transactions had any probative force save as thereby it was implied that the defendants were men whose experience had predisposed them to the commission of offenses of the sort for which they were on trial.” The introduction of these extraneous crimes allowed the jury to consider character evidence, which is impermissible. The Court concluded that the improper admission of evidence unduly contributed to the guilty verdict, warranting reversal and a new trial.