New York Law Review

Tag: due diligence

  • CBS, Inc. v. Ziff-Davis Publishing Co., 75 N.Y.2d 496 (1990): Reliance on Express Warranties as Part of the Bargain

    CBS, Inc. v. Ziff-Davis Publishing Co., 75 N.Y.2d 496 (1990)

    In a breach of express warranty claim, the buyer’s reliance is established if the express warranties were bargained-for terms of the contract, even if the buyer doubted the truth of the warranted facts before closing.

    Summary

    CBS sued Ziff-Davis for breach of express warranties concerning the profitability of magazines CBS purchased from Ziff-Davis. CBS, after signing the purchase agreement but before closing, discovered information suggesting the warranted financial statements were inaccurate. Despite these concerns, CBS closed the deal, reserving its rights. The New York Court of Appeals held that CBS could pursue its breach of warranty claim because the warranties were bargained-for terms of the contract. The court distinguished reliance in contract law from reliance in tort-based fraud claims, emphasizing that CBS relied on the warranty itself as part of the agreement, not necessarily on the truth of the underlying information.

    Facts

    1. Ziff-Davis, through Goldman Sachs, solicited bids for its consumer magazines, providing financial information.
    2. CBS submitted a bid based on Ziff-Davis’s representations.
    3. CBS and Ziff-Davis entered into a purchase agreement containing express warranties regarding the accuracy of the financial statements.
    4. CBS performed due diligence and discovered potential inaccuracies in Ziff-Davis’s financial reports.
    5. CBS notified Ziff-Davis of its concerns, but Ziff-Davis insisted on closing, threatening legal action if CBS failed to proceed.
    6. The parties closed the deal with a mutual understanding that the closing did not waive any rights or defenses.
    7. CBS then sued for breach of warranties.

    Procedural History

    1. The Supreme Court dismissed CBS’s breach of warranty claim, holding that CBS’s admission that it did not believe the representations were true was fatal to the claim.
    2. The Appellate Division affirmed for the reasons stated by the Supreme Court.
    3. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether a buyer must believe in the truth of warranted information to maintain a breach of express warranty claim, or whether it is sufficient that the warranty was a bargained-for term of the contract.

    Holding

    1. No, because the critical question is not whether the buyer believed in the truth of the warranted information, but whether it believed it was purchasing the seller’s promise as to its truth.

    Court’s Reasoning

    1. The court distinguished between reliance in tort (fraud) and reliance in contract (breach of warranty). In a contract for express warranty, reliance means that the warranty was a bargained-for term.
    2. The court cited Ainger v. Michigan General Corp., stating the crucial question is whether the buyer believed it was purchasing the seller’s promise.
    3. The court noted, “[Warranty] is intended precisely to relieve the promisee of any duty to ascertain the fact for himself; it amounts to a promise to indemnify the promisee for any loss if the fact warranted proves untrue.”
    4. The court emphasized that express warranties are integral to the contract, and the right to indemnification depends on proving the warranty was breached, not on proving the buyer believed in the truth of the warranted facts after the contract was formed.
    5. The court rejected Ziff-Davis’s argument that CBS’s disbelief in the truth of the warranted information relieved Ziff-Davis of its obligations, stating that such a holding would deprive the express warranties of their value.
    6. The court noted that the Uniform Commercial Code is instructive: Acceptance of goods doesn’t impair other remedies for nonconformity, including damages for breach of an express warranty.
    7. The court viewed the warranty as a continuing promise to indemnify CBS if the warranted facts proved untrue, regardless of CBS’s doubts before closing.

  • People v. Qualls, 61 N.Y.2d 863 (1984): Duty to Disclose Promises Made to Witnesses

    People v. Qualls, 61 N.Y.2d 863 (1984)

    A prosecutor has a duty to disclose any promises made to a witness in exchange for their testimony, and failure to do so may warrant vacating a conviction, especially where the defendant could not have discovered the undisclosed agreement with due diligence.

    Summary

    Qualls was convicted of murder and weapon possession. He later moved to vacate the judgment, alleging the prosecutor knowingly used perjured testimony and failed to disclose an agreement with a witness (Rambert) to recommend a minimum sentence on Rambert’s pending charge for favorable testimony. The trial court denied the motion without a hearing, stating the defendant should have raised these facts on direct appeal. The Appellate Division affirmed. The Court of Appeals reversed, holding the trial court abused its discretion by denying the motion without a hearing because the defense could not have reasonably discovered the full extent of the agreement before sentencing, and the undisclosed promise raised serious questions about the witness’s credibility.

    Facts

    The key witness against Qualls, Eugene Rambert, had prior convictions and was awaiting sentencing on another charge. During Qualls’s trial, the prosecutor represented that the only promise to Rambert was that the People would inform the court of his cooperation at sentencing. Later, in Raymond Tinsley’s trial (another case where Rambert testified), it emerged that Rambert testified he’d been promised the District Attorney would seek to reduce his sentence in exchange for his testimony in both Tinsley’s and Qualls’s cases. The prosecutor in Rambert’s case affirmed there was a verbal agreement that cooperation would benefit Rambert, but denied any specific promise regarding the final sentence. Prior to Qualls’s trial, the assistant DA in Rambert’s case arranged for Rambert’s parole pending sentencing and later recommended a specific reduced sentence that Rambert testified was promised.

    Procedural History

    Qualls was convicted in Supreme Court, Bronx County; his conviction was affirmed by the Appellate Division. He then filed a motion pursuant to CPL 440.10 to vacate the judgment based on prosecutorial misconduct. The Supreme Court denied the motion without a hearing, and the Appellate Division affirmed. The New York Court of Appeals reversed the order and remitted the matter to the trial court for a hearing.

    Issue(s)

    Whether the trial court abused its discretion in denying the defendant’s motion to vacate his conviction without a hearing, where the motion alleged prosecutorial misconduct based on the failure to disclose a promise made to a key witness, and whether the defendant could have discovered the facts supporting the motion with due diligence before sentencing.

    Holding

    Yes, because the defendant’s failure to discover the full extent of the agreement between the prosecution and the witness Rambert before sentencing was not due to a lack of diligence, and the undisclosed promise raised factual issues regarding the witness’s credibility and the completeness of the representations made at trial.

    Court’s Reasoning

    The Court of Appeals found that defense counsel was entitled to rely on the prosecutor’s representation that no specific promises were made to Rambert. The court highlighted that the defense only discovered the potential specific promise when reviewing transcripts from another trial (Tinsley’s), long after Qualls’s sentencing. The court noted, “Defense counsel was entitled to rely on the representation of the prosecutor — an officer of the court — that there were no other or specific promises made.” The court also pointed to the affirmation from the trial assistant in Rambert’s case, which acknowledged a verbal agreement that cooperation would benefit Rambert. The court stated, “Thus, on these submissions it appears that defendant’s failure to bring to light the underlying facts of the alleged prosecutorial misconduct before his sentencing was not through lack of due diligence, and that issues of fact were raised as to whether there was indeed a specific promise made to Rambert to secure a further reduction of his sentence…” The Court emphasized that such a failure to disclose could impact the fairness of the trial and the reliability of the verdict. The Court relied on precedent, including People v. Mangi and People v. Savvides, underscoring the importance of disclosing any agreements with witnesses. A hearing was necessary to determine the precise nature of the agreement and its impact on the trial’s fairness. The lack of due diligence bar to the CPL 440 motion did not apply here because the information was not available during the trial or sentencing. This case is significant because it reinforces the prosecutor’s ethical obligation of transparency to the court and defense during trial.

  • People v. Arroyo, 54 N.Y.2d 567 (1982): Admissibility of Prior Testimony When a Witness is Unavailable

    People v. Arroyo, 54 N.Y.2d 567 (1982)

    Prior testimony of an unavailable witness is admissible at trial if the prosecution demonstrates due diligence in attempting to locate the witness and the prior testimony bears sufficient indicia of reliability, including an opportunity for cross-examination.

    Summary

    Arroyo was convicted of assault based on the prior preliminary hearing testimony of the victim, his estranged common-law wife, who disappeared before trial. The New York Court of Appeals affirmed the conviction, holding that the prosecution had demonstrated due diligence in attempting to locate the witness and that the prior testimony was reliable because Arroyo was present at the preliminary hearing, represented by counsel, and had the opportunity to cross-examine the witness. The court emphasized that the right to confrontation is not absolute and that prior testimony can be admissible if it bears sufficient indicia of reliability.

    Facts

    Arroyo was charged with assault for allegedly stabbing his estranged common-law wife. The victim testified at a preliminary hearing. Prior to trial, the victim disappeared. The prosecution asserted diligent efforts were made to locate her. The prosecution’s case rested largely on the victim’s preliminary hearing testimony, along with police officer and hospital personnel testimony regarding the assault’s circumstances.

    Procedural History

    The trial court ruled the victim’s preliminary hearing testimony admissible, with redactions. Arroyo was convicted of second-degree assault. The Appellate Division affirmed the conviction. Arroyo appealed to the New York Court of Appeals, arguing that the admission of the prior testimony violated his right to confrontation.

    Issue(s)

    1. Whether the prosecution exercised “due diligence” in attempting to locate the missing witness, as required by CPL 670.10, to justify the admission of her preliminary hearing testimony.
    2. Whether the preliminary hearing provided a sufficient opportunity for cross-examination to satisfy confrontation clause requirements, thereby allowing the introduction of the witness’s testimony at trial.

    Holding

    1. Yes, because the prosecution made reasonable efforts to locate the witness, including contacting her, visiting her apartment, and checking with various agencies and individuals, leading the trial court to conclude she was intentionally hiding.
    2. Yes, because Arroyo was present at the preliminary hearing, represented by counsel, and had the opportunity to cross-examine the witness; the court found no meaningful frustration of that right.

    Court’s Reasoning

    The Court of Appeals emphasized the importance of a defendant’s right to confront adverse witnesses, including the opportunity for cross-examination. However, this right is not absolute. Prior testimony can be admissible if the witness is unavailable and the testimony bears sufficient indicia of reliability. The court stated that the prosecution must demonstrate “due diligence” in attempting to locate the witness, showing that their failure to produce her was not due to indifference or strategic preference. The court reviewed the trial court’s factual finding that the prosecution exercised due diligence, noting the various steps taken to locate the witness, including phone calls, visits to her apartment, and inquiries with neighbors and agencies. The court found this determination was supported by the evidence. Regarding reliability, the court noted the solemnity of the preliminary hearing, the witness’s testimony under oath, and Arroyo’s opportunity for cross-examination. The court rejected Arroyo’s argument that the preliminary hearing was too limited for effective cross-examination, stating that a “fair opportunity” to cross-examine is sufficient. The court also rejected Arroyo’s claim that he should have been allowed to withdraw his counsel’s cross-examination, stating that the testimony, once given, becomes an integral part of the record. The court stated, “the constitutional provision was not intended to secure to the accused person the right to be confronted with the witnesses against him upon his final trial; but to protect him against ex parte affidavits and depositions taken in his absence.” The court concluded that the victim’s prior testimony was sufficiently reliable to support Arroyo’s conviction, despite the fact that the People’s case depended on the prior statement, cautioning that “there may be instances in which, though the circumstances surrounding prior testimony have rendered it admissible, in the context of the entire case as it develops, the prior testimony, by itself, will be found insufficient to support a guilty verdict beyond a reasonable doubt.”

  • Wilensky v. Bergner, 43 N.Y.2d 663 (1977): Requirements for Valid Substitute Service Under CPLR 308(4)

    Wilensky v. Bergner, 43 N.Y.2d 663 (1977)

    For substitute service under CPLR 308(4) to be valid, the summons must be affixed to the door of the defendant’s actual dwelling place or usual place of abode, and mailing the summons to the defendant’s last known residence is insufficient if the affixing is done at the last known residence instead of the current dwelling.

    Summary

    This case clarifies the requirements for “nail and mail” service under New York’s CPLR 308(4). The plaintiffs attempted to serve the defendant by affixing a summons to his parents’ address, his last known residence, after he had moved. The Court of Appeals held that service was invalid because the statute requires the summons to be affixed to the defendant’s actual dwelling place or usual place of abode, not merely the last known residence, even though the defendant ultimately received actual notice. The decision emphasizes the importance of strict compliance with the statute to ensure proper notice.

    Facts

    Pauline and Martin Wilensky were injured in an automobile accident caused by Bergner on April 2, 1972. At the time of the accident, Bergner lived with his parents at 76 Aster Court. Approximately 30 months later, the Wilenskys attempted to sue Bergner by affixing the summons and complaint to the door of 76 Aster Court on August 27, 1974, and mailing copies to that address on August 29, 1974. Bergner had moved from his parents’ home in February 1973 and established a new residence at 2729 West 33rd Street.

    Procedural History

    The defendant moved to dismiss the action, arguing ineffective service. Special Term initially denied the motion, finding due diligence and estopping the defendant due to his father mailing the summons. The Appellate Division reversed, finding the substitute service defective and no basis for estoppel without fraud by the defendant. The plaintiffs appealed to the New York Court of Appeals.

    Issue(s)

    Whether the “nail and mail” service under CPLR 308(4) was valid when the summons was affixed to the defendant’s last known residence but not his actual dwelling place or usual place of abode.

    Holding

    No, because CPLR 308(4) requires the summons to be affixed to the defendant’s actual dwelling place or usual place of abode, and merely mailing it to the last known residence, without proper affixing, is insufficient.

    Court’s Reasoning

    The court emphasized the statutory language of CPLR 308(4), which requires affixing the summons to the door of the defendant’s “actual place of business, dwelling place or usual place of abode” and mailing it to the “last known residence.” The court rejected the argument that “dwelling place” and “last known residence” could be equated. The court reasoned that the Legislature intentionally retained these distinct requirements to ensure actual notice to defendants, balancing the need for effective service with the prevention of “sewer service.” The court stated that blurring the distinction between “dwelling place” and “last known residence” would diminish the likelihood that potential defendants receive actual notice. The court noted, “While a rule which permits both the ‘nailing’ and ‘mailing’ steps to be completed at a defendant’s last known residence would make it infinitely easier to serve the ‘hard-to-find’ defendant, such a rule would not ensure that a readily accessible defendant is given adequate notice.” Furthermore, the court held that receiving actual notice through means other than those authorized by statute does not cure the defect in service. Finally, the court declined to apply the estoppel doctrine because the defendant had no affirmative duty to keep potential plaintiffs informed of his whereabouts, citing Dobkin v. Chapman, 21 N.Y.2d 490, 504. The court found no conduct by the defendant calculated to prevent the plaintiffs from learning his new address.

  • People v. McLaurin, 38 N.Y.2d 587 (1976): Duty to Secure Defendant for Speedy Trial After Notice of Incarceration

    People v. McLaurin, 38 N.Y.2d 587 (1976)

    When the state knows of a defendant’s incarceration in another jurisdiction and fails to take diligent action to secure the defendant’s presence for trial, the defendant’s right to a speedy trial is violated.

    Summary

    McLaurin was indicted in New York in 1968 but was subsequently incarcerated in New Jersey. New York authorities were notified of his incarceration in 1969 and were asked whether they would extradite him. No action was taken until 1972 when he was returned to New York. The Court of Appeals held that McLaurin’s right to a speedy trial was violated because the New York authorities knew of his whereabouts and availability for over three years but failed to act diligently to secure his presence for trial. The Court reversed the Appellate Division order and dismissed the indictment.

    Facts

    McLaurin was indicted in New York on September 30, 1968, and pleaded not guilty. He was released on bail but was subsequently arrested and convicted in New Jersey. On June 20, 1969, New York authorities were informed that McLaurin was being held in a New Jersey State prison. New Jersey specifically requested, via three communications dated June 18, 1969, that New York advise whether it would extradite McLaurin. McLaurin remained incarcerated in New Jersey until June 25, 1972, when he was returned to New York.

    Procedural History

    McLaurin appealed to the Appellate Division, arguing that he was denied a speedy trial. The Appellate Division rejected his claim. The Court of Appeals initially withheld determination of the appeal and remitted the case to the Supreme Court, Bronx County, for evidence regarding New York authorities’ knowledge of McLaurin’s New Jersey incarceration and their efforts to secure his presence in New York. After a hearing, the Court of Appeals reversed the Appellate Division’s order and dismissed the indictment.

    Issue(s)

    Whether McLaurin’s right to a speedy trial was violated when New York authorities knew of his incarceration in New Jersey for over three years but failed to take diligent action to secure his presence for trial.

    Holding

    Yes, because New York knew of McLaurin’s whereabouts and availability for over three years, the failure to act violated his right to a speedy trial.

    Court’s Reasoning

    The Court of Appeals relied on its prior decisions in People v. Briggs, People v. McLaurin, and People v. Winfrey, which established that the state has a duty to make diligent efforts to bring a defendant to trial, especially when the defendant is incarcerated in another jurisdiction and the state is aware of it. The Court emphasized that New York authorities were not only aware of McLaurin’s incarceration but were also specifically asked by New Jersey whether they intended to extradite him.

    “In these circumstances where New York knew of defendant’s whereabouts and availability for over three years, we are required to hold that defendant’s right to a speedy trial was violated”. The Court found the delay unreasonable and prejudicial, thus warranting dismissal of the indictment. The decision underscores the importance of prosecutorial diligence in pursuing cases, even when defendants are incarcerated elsewhere.

  • People v. McLaurin, 38 N.Y.2d 123 (1975): Prosecutorial Duty to Secure Defendant’s Presence from Another State for Speedy Trial

    38 N.Y.2d 123 (1975)

    When a defendant is incarcerated in another state, the prosecution must make diligent efforts to secure the defendant’s presence for trial in New York; failure to do so may violate the defendant’s right to a speedy trial.

    Summary

    McLaurin pleaded guilty to attempted robbery. He appealed, arguing a violation of his speedy trial rights due to a delay caused by his incarceration in New Jersey. The New York Court of Appeals found the record insufficient to determine if the delay was justified, specifically whether the prosecution knew of McLaurin’s out-of-state incarceration and made diligent efforts to secure his return for trial. The court emphasized the prosecution’s duty to demonstrate “good cause” for the delay and remanded for a hearing to establish these facts. The case highlights the importance of prosecutorial diligence when a defendant is incarcerated in another jurisdiction.

    Facts

    McLaurin was indicted in Bronx County, New York, on September 30, 1968, for robbery, grand larceny, and weapon possession. He was released on bail but arrested in New Jersey on December 13, 1968, on charges of kidnapping, rape, and narcotics offenses. He was convicted in New Jersey and sentenced to five to seven years. New York authorities filed a detainer. McLaurin remained in New Jersey custody until June 25, 1972, when he was returned to New York.

    Procedural History

    On October 17, 1972, McLaurin moved to dismiss the New York indictment, alleging denial of a speedy trial. The Supreme Court, Bronx County, conditionally granted the motion, ordering dismissal if trial did not commence by January 15, 1973. McLaurin then pleaded guilty to attempted robbery. The Appellate Division affirmed the judgment. McLaurin appealed to the New York Court of Appeals.

    Issue(s)

    Whether the delay in bringing McLaurin to trial in New York, due to his incarceration in New Jersey, violated his right to a speedy trial.

    Holding

    No, the Court could not determine if McLaurin’s speedy trial rights were violated because the record was incomplete as to whether the prosecution knew of McLaurin’s incarceration in New Jersey and whether they made diligent efforts to obtain his presence for trial; therefore, the case was remitted to the lower court for further proceedings.

    Court’s Reasoning

    The Court of Appeals stated the established principle that delay due to incarceration in another jurisdiction is not automatically justified if the prosecution knows of the detention but fails to diligently seek the defendant’s presence for trial. The prosecution must demonstrate “good cause” for the delay. The Court emphasized that knowledge of the defendant’s whereabouts by law enforcement is crucial and is imputed to the District Attorney’s office. The Court found the record insufficient because there was no hearing on the original motion to dismiss, McLaurin pleaded guilty, and the prosecutor was prevented from introducing evidence about when they learned of McLaurin’s New Jersey incarceration. The court noted, “A defendant ought not be penalized because of any inadequacy of internal communication within the law enforcement establishment.” The case was remanded to determine whether the prosecutor was unaware of McLaurin’s incarceration and could not, with due diligence, have discovered his whereabouts. The Court noted that documentary evidence relating to the issue of the prosecutor’s knowledge of defendant’s imprisonment in New Jersey should be presented. The court cited CPL 30.30 (subd 4, pars [c], [e]), regarding the tolling of time periods due to the absence or unavailability of the defendant or detention in another jurisdiction, although it acknowledged this statute was not directly controlling as the indictment predated the law’s enactment.