New York Law Review

Tag: New York Court of Appeals

  • Cortland Street Recovery Corp. v. Bonderman, 31 N.Y.3d 30 (2018): Interpreting ‘Fundamental Change’ Clauses in Preferred Stock Agreements

    Cortland Street Recovery Corp. v. Bonderman, 31 N.Y.3d 30 (2018)

    When interpreting a contract, particularly one involving complex financial transactions, a motion to dismiss should be denied if the contract language is ambiguous and susceptible to multiple reasonable interpretations, requiring further factual development to ascertain the parties’ intent.

    Summary

    Cortland Street Recovery Corp., representing preferred shareholders of Superior Well Services, sued to compel Superior to repurchase their shares after a merger with Nabors Industries. The preferred stock agreement stipulated repurchase upon a “fundamental change,” defined as an entity acquiring over 50% of Superior’s common stock, unless the acquisition resulted from a merger where Superior was the “surviving entity.” Nabors acquired Superior through a subsidiary, Diamond Acquisition Corp., which merged into Superior. The plaintiffs argued that either the initial tender offer triggered the fundamental change provision or that Nabors’ continued existence meant Superior wasn’t the sole surviving entity. The Court of Appeals held that the contract was ambiguous, precluding dismissal and requiring further examination of the parties’ intent.

    Facts

    Plaintiffs owned preferred stock in Superior Well Services, Inc., which contained a provision requiring Superior to repurchase the stock at $1,000 per share upon a “fundamental change.”
    The agreement defined “fundamental change” as (1) an entity acquiring over 50% of Superior’s voting stock, unless resulting from a merger where Superior is the surviving entity, or (2) Superior merging with another entity, unless Superior is the surviving entity.
    In 2010, Superior agreed to be acquired by Nabors Industries through a tender offer via Nabors’ subsidiary, Diamond Acquisition Corp.
    Diamond acquired over 92% of Superior’s common stock and then merged into Superior, with Superior surviving the merger and Nabors becoming the sole owner of Superior.
    Plaintiffs demanded repurchase of their preferred stock, arguing a fundamental change occurred, but Superior refused.

    Procedural History

    Plaintiffs sued in Supreme Court, seeking a declaration that Superior must repurchase their shares.
    Supreme Court denied Superior’s motion to dismiss, finding the fundamental change provision open to interpretation.
    The Appellate Division reversed, dismissing the complaint, viewing the acquisition and merger as a single transaction with Superior as the surviving entity.
    The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the acquisition of over 50% of Superior’s common stock by Diamond Acquisition Corp. constituted a “fundamental change” under the preferred stock agreement, requiring Superior to repurchase the preferred shares.
    Whether, even if the entire series of transactions is considered a single event, Superior was “the surviving entity” of the merger, triggering the exception to the fundamental change provision.

    Holding

    No, because the agreement was ambiguous as to whether the initial tender offer by Diamond triggered the “fundamental change” provision independently of the subsequent merger, and also ambiguous as to whether Superior was “the surviving entity” given Nabors’ continued existence.

    Court’s Reasoning

    The Court of Appeals emphasized that on a motion to dismiss, the court must accept the plaintiff’s allegations as true and draw all reasonable inferences in their favor. Dismissal is only appropriate if documentary evidence utterly refutes the plaintiff’s factual allegations and conclusively establishes a defense as a matter of law.
    The Court found the preferred stock agreement ambiguous. The term “transaction” within the agreement was not defined, making it unclear whether it referred only to the tender offer, or to the entire series of steps culminating in Nabors’ ownership.
    If the “transaction” was only the tender offer, then the acquisition of over 50% of Superior’s stock would constitute a fundamental change under subdivision (i), irrespective of the merger exception in subdivision (iii).
    Even if the entire series of steps were considered a single transaction, the court found ambiguity in the phrase “the surviving entity.” The use of “the” suggested that only one entity could survive, yet Nabors also survived. Superior failed to establish as a matter of law that only the tender offer and the merger of Diamond into Superior constituted the relevant “transaction.”
    Because there was a reasonable basis to believe the fundamental change clause was activated, dismissal was inappropriate. The Court quoted Sokoloff v. Harriman Estates Dev. Corp., 96 NY2d 409, 414 (2001), stating that a court must “accept as true the facts as alleged in the complaint and submissions in opposition to the motion, accord plaintiffs the benefit of every possible favorable inference and determine only whether the facts as alleged fit within any cognizable legal theory.” The Court also cited Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 (2002), noting that a motion may be granted if “documentary evidence utterly refutes [the] plaintiffs factual allegations,” thereby “conclusively establishing a defense as a matter of law.”
    The Court reversed the Appellate Division’s order and reinstated the complaint, allowing the case to proceed to further factual development to determine the parties’ intent regarding the ambiguous contract language.

  • Town of Wallkill v. Civil Service Employees Ass’n, 19 N.Y.3d 1068 (2012): Local Laws Govern Police Discipline Despite Collective Bargaining Agreements

    19 N.Y.3d 1068 (2012)

    When a general, special, or local law predates and expressly commits disciplinary authority over a police department to local officials, that law supersedes the provisions of a collective bargaining agreement (CBA) regarding police discipline.

    Summary

    This case addresses the conflict between the Taylor Law, which supports collective bargaining, and the policy favoring strong disciplinary authority over police forces. The Town of Wallkill enacted a local law governing police discipline that conflicted with an existing CBA. The Court of Appeals held that because the local law predated the Civil Service Law provisions regarding discipline and expressly granted the Town authority over police discipline, the local law controlled, and arbitration under the CBA was not required. This reaffirmed the principle that local control over police discipline can supersede collective bargaining agreements.

    Facts

    Since 1995, the Town of Wallkill had a CBA with the Town of Wallkill Police Officers’ Benevolent Association, Inc. (Wallkill PBA), granting police officers the right to arbitration in disciplinary matters. In 2007, the Town adopted Local Law No. 2, which established a different disciplinary procedure without arbitration, instead vesting authority in the Town Board. Shortly after, the Town initiated disciplinary action against two police officers under the new local law. Wallkill PBA requested arbitration on behalf of the officers.

    Procedural History

    The Town commenced a CPLR article 75 proceeding to stay arbitration and declare Local Law No. 2 valid. Wallkill PBA cross-petitioned to compel arbitration and declare Local Law No. 2 invalid. Supreme Court denied the Town’s petitions and granted the PBA’s cross-petitions, declaring the local law invalid and directing arbitration. The Appellate Division reversed, citing Matter of Patrolmen’s Benevolent Assn. of City of N.Y., Inc. v New York State Pub. Empl. Relations Bd., which addressed similar tensions between collective bargaining and local disciplinary authority.

    Issue(s)

    Whether the Town of Wallkill properly exercised its authority to adopt Local Law No. 2 pursuant to Town Law § 155, thereby superseding the disciplinary provisions of the collective bargaining agreement between the Town and Wallkill PBA.

    Holding

    Yes, because Town Law § 155, a general law enacted prior to Civil Service Law §§ 75 and 76, commits to the Town the power and authority to adopt and make rules and regulations for the examination, hearing, investigation and determination of charges made against members of the police department.

    Court’s Reasoning

    The Court of Appeals relied on its prior decision in Matter of Patrolmen’s Benevolent Assn., which addressed the tension between collective bargaining under the Taylor Law and the policy favoring strong disciplinary authority for police forces. The Court emphasized that “police discipline may not be a subject of collective bargaining under the Taylor Law when the Legislature has expressly committed disciplinary authority over a police department to local officials.” In this case, Civil Service Law §§ 75 and 76 generally govern disciplinary procedures for public employees, including police officers, allowing for collective bargaining on the subject. However, Civil Service Law § 76 (4) states that nothing in sections 75 or 76 should repeal or modify any general, special, or local preexisting laws. The Court found that Town Law § 155, which predates Civil Service Law §§ 75 and 76, grants the Town the authority to regulate police discipline. Therefore, the Town properly exercised its authority to enact Local Law No. 2, and the subject of police discipline resides with the Town Board, making it a prohibited subject of collective bargaining. The court reasoned that the legislature had committed disciplinary authority to local officials, thus trumping the CBA. As such, the Appellate Division’s order was affirmed.

  • Dean v. Tower Insurance Co., 19 N.Y.3d 704 (2012): Interpreting ‘Residence Premises’ in Homeowners Insurance Policies

    Dean v. Tower Insurance Co. of N.Y., 19 N.Y.3d 704 (2012)

    When the term “residence premises” in a homeowners insurance policy is undefined and ambiguous, particularly in situations where the insured has purchased the policy but has not yet fully moved into the property due to necessary repairs, the policy should be interpreted in favor of the insured’s reasonable expectations.

    Summary

    Douglas and Joanna Dean purchased a homeowners’ insurance policy from Tower Insurance for a house they bought in Irvington. Due to extensive termite damage discovered after the closing, they couldn’t immediately move in and began renovations. A fire destroyed the house after renovations were substantially complete. Tower denied coverage, claiming the house was unoccupied and thus not a “residence premises” as defined by the policy. The New York Court of Appeals held that the term “residence premises” was ambiguous under the circumstances, precluding summary judgment for the insurer, and that it was an issue of fact as to whether the insured’s actions were sufficient to satisfy the requirements of the insurance policy.

    Facts

    The Deans contracted to buy a house in February 2005, with a closing initially set for March 31, 2005. They obtained a homeowners’ insurance policy from Tower Insurance effective that date. The closing was delayed until May 20, 2005. After closing, extensive termite damage was discovered, prompting significant renovations. The policy was renewed in March 2006. A fire completely destroyed the house on May 15, 2006, after renovations were substantially completed. Douglas Dean spent a considerable amount of time at the property doing repairs, eating meals, and occasionally sleeping there.

    Procedural History

    The Deans sued Tower for breach of contract after Tower denied coverage. The Supreme Court granted Tower’s summary judgment motion, dismissing the complaint. The Appellate Division modified the order, finding that Tower failed to meet its initial burden for summary judgment. The Appellate Division certified a question to the Court of Appeals, which affirmed the Appellate Division’s order.

    Issue(s)

    Whether the term “residence premises” in the insurance contract is ambiguous when the insured purchased a homeowners’ policy in advance of a closing but was unable to move in immediately due to the need for major repairs?

    Holding

    Yes, because the term “reside” is not defined in the contract, making “residence premises” ambiguous, and because there were issues of fact as to whether the insured’s actions were sufficient to satisfy the policy requirements.

    Court’s Reasoning

    The court reasoned that insurance contracts must be interpreted according to common speech and the reasonable expectations of an average insured. Any ambiguities in an insurance policy are construed against the insurer. The court noted that the standard for determining residency requires more than temporary presence, including some degree of permanence and intent to remain. The court emphasized that Douglas Dean’s daily presence at the house for repairs, coupled with his intent to move in with his family, created a question of fact. Because the term “reside” was undefined, the average insured could reasonably expect that occupancy, as demonstrated by Dean’s repair work and presence, would satisfy the policy’s requirements. Referencing Insurance Law § 3404, the court noted the standard fire policy speaks in terms of occupancy, further suggesting that occupancy could be a reasonable expectation for coverage. The court also quoted Page v Nationwide Mut. Fire Ins. Co., stating that a householder need not have conventional furniture to occupy a house; presence for sleeping, eating, and working can constitute occupancy. This reasoning emphasizes that the factual circumstances surrounding the insured’s use of the property created ambiguity, thus preventing summary judgment for the insurer.

  • People v. Rivera, 19 N.Y.3d 71 (2012): Foreign Convictions and Retroactive Youthful Offender Status in Enhanced Sentencing

    People v. Rivera, 19 N.Y.3d 71 (2012)

    A defendant is not entitled to retroactive application of youthful offender status to a foreign felony conviction for the purpose of avoiding enhanced sentencing as a second violent felony offender.

    Summary

    Rivera was convicted of attempted robbery and adjudicated a second violent felony offender based on a prior Pennsylvania burglary conviction. He argued that because he could have received youthful offender status had the burglary occurred in New York, the Pennsylvania conviction should not serve as a predicate felony. He also challenged the constitutionality of the tolling provision in Penal Law § 70.04 (1) (b) (v). The New York Court of Appeals affirmed the lower court’s decision, holding that Rivera was not entitled to retroactive youthful offender status and that the tolling provision did not violate equal protection.

    Facts

    In 1999, Rivera, then 18 years old, was convicted of first-degree burglary in Pennsylvania. He was not granted youthful offender status under Pennsylvania law.

    In March 2010, Rivera pleaded guilty to attempted robbery in the first degree in New York.

    Prior to sentencing for the attempted robbery, Rivera objected to the use of his Pennsylvania burglary conviction as a predicate violent felony, arguing that he would have been eligible for youthful offender status had the crime occurred in New York.

    Rivera also challenged Penal Law § 70.04 (1) (b) (v), which tolls the 10-year look-back period for prior felonies during periods of incarceration.

    Procedural History

    The County Court rejected Rivera’s arguments and adjudicated him a second violent felony offender.

    The Appellate Division affirmed the County Court’s decision.

    The New York Court of Appeals granted Rivera leave to appeal.

    Issue(s)

    1. Whether a defendant is entitled to retroactive application of youthful offender status to a foreign felony conviction for the purpose of avoiding enhanced sentencing as a second violent felony offender?

    2. Whether Penal Law § 70.04 (1) (b) (v)’s tolling provision violates the Equal Protection Clause of the New York State Constitution?

    Holding

    1. No, because a defendant is not entitled to retroactive application of youthful offender status to a foreign felony conviction when the foreign jurisdiction did not grant such status.

    2. No, because the tolling provision is rationally related to the legitimate state purpose of punishing recidivism.

    Court’s Reasoning

    The Court of Appeals relied on established precedent that foreign convictions have the same force and effect in New York as they would in the jurisdiction where they were entered. While a prior adjudication as a youthful offender, whether foreign or domestic, cannot serve as a predicate for multiple offender sentencing if consistent with New York’s youthful offender treatment, New York courts have declined to retroactively assign such status to underlying convictions from other jurisdictions.

    The court quoted People v. Treadwell: “mere speculation that defendant might have been accorded youthful offender treatment had the offense been committed in New York, where such treatment was not and could not have been accorded by the jurisdiction in which the crime was actually committed, cannot preclude the use of such a conviction as a predicate felony.”

    Regarding the equal protection challenge, the Court applied rational basis review, noting that the Equal Protection Clause does not mandate absolute equality but only requires that a legislative classification be rationally related to a legitimate state purpose.

    The Court explained that enhanced sentencing statutes punish repeat offenders more severely because recidivism demonstrates a lack of rehabilitation and a greater danger to society. Penal Law § 70.04 furthers this interest. Omission of periods of incarceration from the 10-year look-back period is rational because society has an interest in treating individuals who demonstrate good behavior while released differently from those who remain incarcerated.

    The court stated, “New York has a legitimate interest in upholding the State’s Penal Law, and in furtherance of this interest it was not irrational for the Legislature to punish those who repeatedly violate New York’s criminal laws more harshly than those who have violated our laws but once.”

  • Bronx Committee for Toxic Free Schools v. New York City School Constr. Auth., 20 N.Y.3d 146 (2012): Supplemental EIS for Post-Remediation Monitoring

    Bronx Committee for Toxic Free Schools v. New York City School Constr. Auth., 20 N.Y.3d 146 (2012)

    An agency must supplement its Environmental Impact Statement (EIS) to describe remedial measures essential to understanding a project’s environmental impact when that showing is unrebutted.

    Summary

    The New York City School Construction Authority (Authority) sought to build a school campus on a contaminated former railroad yard. After participating in the Brownfield Cleanup Program and preparing an EIS, the Authority was challenged for failing to include long-term maintenance and monitoring plans for its environmental controls in the EIS. The Court of Appeals held that the Authority had to supplement its EIS. Because the Authority did not dispute the petitioners’ claim that these measures were essential to protecting the site’s occupants, the court found that a supplemental EIS was required to address the maintenance and monitoring protocols, despite the Authority’s participation in the Brownfield Program and submission of a site management plan to the Department of Environmental Conservation (DEC).

    Facts

    The Authority planned to construct a school campus on a site that was formerly a railroad yard in the Bronx. The site was significantly contaminated, requiring cleanup. The Authority participated in the Brownfield Cleanup Program administered by the DEC. As part of this program, the Authority submitted a Remedial Action Work Plan (RAWP) that included engineering controls like vapor and hydraulic barriers. The DEC conditionally approved the RAWP, requiring the Authority to develop a site management plan for DEC approval, which would detail the operation and maintenance of the implemented remedies. The Authority then prepared a draft and final EIS but did not include a description of long-term maintenance and monitoring procedures in either version.

    Procedural History

    Petitioners initiated a CPLR article 78 proceeding challenging the Authority’s SEQRA compliance, focusing on the absence of a long-term maintenance and monitoring protocol in the EIS. Supreme Court ordered the Authority to prepare a supplemental EIS. The Authority moved for reargument and renewal, arguing that the site management plan obviated the need for a supplemental EIS. Supreme Court granted reargument but adhered to its previous ruling. The Appellate Division affirmed. The Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

    Issue(s)

    Whether the Authority violated the State Environmental Quality Review Act (SEQRA) by failing to describe in an EIS the methods it adopted for long-term maintenance and monitoring of the controls it used to prevent or mitigate environmental harm, when the Authority did not dispute that such information was essential to understanding the project’s environmental impact.

    Holding

    Yes, because the Authority did not dispute the petitioners’ showing that the long-term maintenance and monitoring measures were essential to protecting the site’s occupants from dangerous contaminants, and therefore, the EIS was incomplete without this information.

    Court’s Reasoning

    The Court of Appeals emphasized that an EIS must include a description of the proposed action, its environmental impact, and mitigation measures (ECL 8-0109[2]). The court’s role is to assess whether the agency identified relevant environmental concerns, took a “hard look” at them, and provided a “reasoned elaboration” for its determination, citing Matter of Jackson v New York State Urban Dev. Corp., 67 NY2d 400, 417 (1986). The court stated that the Authority did not argue that the maintenance and monitoring measures were minor details but failed to dispute petitioners’ claims that the measures were “essential” to protecting occupants. The court rejected the Authority’s arguments that it reasonably postponed detailing these measures until after the EIS filing and that the DEC’s approval of the site management plan within the Brownfield Program satisfied the requirement. The court reasoned that DEC regulations allow for supplemental EIS filings when subjects are “not addressed or inadequately addressed in the EIS,” including when changes are proposed for the project, newly discovered information arises, or circumstances change (6 NYCRR 617.9 [a][7]). The court affirmed that SEQRA and the Brownfield Program serve distinct purposes, with SEQRA designed to ensure that primary environmental concerns and mitigation efforts are described in a publicly available EIS subject to public review and comment. The court concluded that despite other outreach efforts, the Authority needed to take the additional step of filing a supplemental EIS. As the Court explained, “SEQRA is designed to assure that the main environmental concerns, and the measures taken to mitigate them, are described in a publicly filed document identified as an EIS, as to which the public has a statutorily-required period for review and comment.”

  • Siegmund Strauss, Inc. v. East 149th Realty Corp., 18 N.Y.3d 33 (2011): Scope of Review on Appeal from Final Judgment

    18 N.Y.3d 33 (2011)

    An appeal from a final judgment brings up for review a prior non-final order dismissing a cause of action or counterclaim if the dismissal necessarily removed that legal issue from the case.

    Summary

    This case addresses the “necessarily affects” requirement under CPLR 5501(a)(1), determining whether an appeal from a final judgment allows review of a prior non-final order dismissing counterclaims. Strauss sued Windsor, Twinkle, and others, seeking a declaration as the lawful tenant of a property. The Rodriguezes (Windsor/Twinkle) counterclaimed, alleging fraud, conversion, and tortious interference, but not breach of contract. The Supreme Court dismissed these counterclaims. After a trial on possession, the court declared Strauss the lawful tenant. The Appellate Division held that the appeal from the judgment did not bring up for review the prior order dismissing the counterclaims. The Court of Appeals reversed, holding that the dismissal of the counterclaims necessarily affected the final judgment and should be reviewed.

    Facts

    Strauss and Windsor/Twinkle negotiated a merger, with Strauss to occupy Windsor’s leased premises. The parties began performing without a fully executed contract. A dispute arose, and Strauss removed the Rodriguezes from payroll and changed the locks. Strauss sued for a declaration as the lawful tenant.

    Procedural History

    Strauss sued in Supreme Court. The Rodriguezes counterclaimed. The Supreme Court dismissed the counterclaims. The Rodriguezes moved to amend their answer to assert breach of contract, but the motion was denied. After a bench trial, the Supreme Court declared Strauss the lawful tenant. The Rodriguezes appealed to the Appellate Division, seeking review of the order dismissing the counterclaims, but the Appellate Division affirmed, holding the order did not necessarily affect the final judgment. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether an appeal from a final judgment brings up for review a prior non-final order dismissing the defendant’s counterclaims.

    Holding

    Yes, because the dismissal of the counterclaims by the Supreme Court necessarily removed the legal issues raised in those counterclaims from the case, thus the order dismissing the counterclaims necessarily affected the final judgment.

    Court’s Reasoning

    The Court of Appeals addressed the scope of CPLR 5501(a)(1), which permits review of non-final orders that “necessarily affect” the final judgment. The Court cited Karger’s definition: a non-final order “necessarily affects” a final judgment if reversing the order would require reversing or modifying the judgment, and there was no further opportunity to raise the decided questions. The Court rejected the Appellate Division’s reliance on Siegel’s test (whether reversal of the non-final order would overturn the judgment), finding it too narrow. The Court emphasized that its prior jurisprudence (citing Draper, Lasidi, Karlin, Scarangella, and Bartoo) did not require the reinstatement of a counterclaim to completely overturn the judgment. The Court reasoned that the Supreme Court’s dismissal under CPLR 3211(a)(7) removed the legal issue from the case. “Put another way, because Supreme Court’s dismissal of the counterclaims and third-party claim necessarily removed that legal issue from the case (i.e., there was no further opportunity during the litigation to raise the question decided by the prior non-final order), that order necessarily affected the final judgment.” Consequently, the Court remitted the case to the Appellate Division for review of the Supreme Court’s order dismissing the counterclaims, along with the final judgment.

  • People v. Colville, 17 N.Y.3d 20 (2011): Allocating Decision-Making Authority on Lesser Included Offenses

    17 N.Y.3d 20 (2011)

    The decision of whether to request a jury charge on lesser-included offenses is a matter of strategy and tactics that ultimately rests with defense counsel, not the defendant.

    Summary

    Delroy Colville was convicted of second-degree murder. At trial, his attorney requested that the judge submit lesser-included offenses of first- and second-degree manslaughter to the jury, believing it was a sound trial strategy. However, Colville objected, and the judge deferred to Colville’s wishes and did not include the lesser-included offenses. The New York Court of Appeals reversed, holding that the decision to request a jury charge on lesser-included offenses is a strategic one that falls within the purview of defense counsel, not the defendant. This decision emphasizes the attorney’s role as the guiding hand in trial strategy, ensuring defendants receive the benefit of counsel’s expertise.

    Facts

    On October 28, 2004, Colville stabbed and killed Gregory Gardner, and injured Carl Jones in a shared residence. Colville claimed self-defense, alleging Gardner attacked him first. Witnesses presented conflicting accounts, some suggesting Colville was the aggressor. After the incident, Colville hid the knife and was later arrested.

    Procedural History

    Colville was indicted for second-degree murder and second-degree assault. At trial, the defense requested a justification charge and submission of lesser-included offenses of manslaughter. The trial judge initially hesitated but agreed, then ultimately deferred to Colville’s objection to including the lesser offenses. The jury convicted Colville of murder and acquitted him of assault. The Appellate Division affirmed the conviction. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the decision to request a jury charge on lesser-included offenses is a strategic decision entrusted to the attorney, or a fundamental decision reserved to the accused?

    Holding

    1. Yes, because the decision is one of trial strategy, best left to the expertise of counsel.

    Court’s Reasoning

    The Court of Appeals reviewed conflicting authorities and commentary on the allocation of decision-making authority between attorney and client. It noted that while the American Bar Association (ABA) initially suggested the defendant should decide on lesser-included offenses, it later revised its stance. The court observed that most jurisdictions now consider this a strategic decision for the attorney. The court emphasized that CPL 300.50 allows either party to request a lesser-included offense instruction when a reasonable view of the evidence supports it. The court reasoned that this decision is unlike pleading guilty or asserting an extreme emotional distress defense, which are exclusively the defendant’s prerogative. The Court stated, “[I]t makes little sense to hold that the defendant personally has the last say about an issue when the defense as a whole does not.” The court found the trial judge erred by deferring solely to Colville’s wishes, denying him the benefit of his counsel’s judgment. “By deferring to defendant, the judge denied him the expert judgment of counsel to which the Sixth Amendment entitles him.” The court concluded that this error was not harmless, as the jury might have convicted Colville of manslaughter instead of murder had the lesser-included offenses been submitted. The conviction was reversed and a new trial was ordered.

  • In the Matter of 747 Third Ave. Corp. v. Tax Appeals Tribunal of the State of N.Y., 26 N.Y.3d 1057 (2015): Burden of Proof for Tax Exemption Claims

    In the Matter of 747 Third Ave. Corp. v. Tax Appeals Tribunal of the State of N.Y., 26 N.Y.3d 1057 (2015)

    A taxpayer bears the burden of proving entitlement to a tax exemption, and any ambiguity in the statute must be resolved against the exemption.

    Summary

    The New York Court of Appeals held that an adult “juice bar” operator failed to prove that its admission charges and private dance performance fees qualified for a tax exemption under the “dramatic or musical arts performances” exception. The court emphasized that tax exemptions are a matter of legislative grace, and the taxpayer bears the burden of demonstrating clear entitlement to the exemption. Because the operator failed to provide sufficient evidence, particularly regarding the nature of the private room performances, the Tax Appeals Tribunal’s decision denying the exemption was upheld. The court reasoned it was not irrational to deny the exemption, lest it swallow the general tax on amusements.

    Facts

    747 Third Ave. Corp. operated an adult “juice bar” in Latham, New York. The business collected admission charges and fees for private dance performances. The corporation sought a tax exemption for these charges, claiming they qualified as “dramatic or musical arts performances” under New York Tax Law § 1105 (f) (1). The Tax Appeals Tribunal denied the exemption, and the corporation appealed.

    Procedural History

    The Tax Appeals Tribunal denied the tax exemption claimed by 747 Third Ave. Corp. The corporation appealed to the Appellate Division, which affirmed the Tribunal’s decision. The corporation then appealed to the New York Court of Appeals.

    Issue(s)

    Whether the admission charges and private dance performance fees collected by the adult “juice bar” operator qualify for the tax exemption for “dramatic or musical arts performances” under New York Tax Law § 1105 (f) (1).

    Holding

    No, because the taxpayer failed to meet its burden of proving that the fees constituted admission charges for performances that were dance routines qualifying as choreographed performances, particularly concerning the private room performances.

    Court’s Reasoning

    The court emphasized that New York imposes sales tax on a wide array of entertainment venues and activities under Tax Law § 1105 (f) (1), encompassing any place where facilities for entertainment, amusement, or sports are provided. The exemption for “dramatic or musical arts performances” was intended to promote cultural and artistic performances. The court stated, “It is well established that a taxpayer bears the burden of proving any exemption from taxation.” Citing Matter of Grace v New York State Tax Commn., 37 NY2d 193, 195 (1975), the court noted that any ambiguity must be resolved against the exemption. The court found that the corporation failed to provide sufficient evidence, especially regarding the private room performances, as their expert’s opinion was not based on any personal knowledge or observation of the private dances. The court also deferred to the Tribunal’s discrediting of the expert’s opinion, stating it was a determination well within its province. The court reasoned that extending the tax exemption to every act declaring itself a “dance performance” would allow the exemption to swallow the general tax on amusements. As the court stated, “If ice shows presenting pairs ice dancing performances, with intricately choreographed dance moves precisely arranged to musical compositions, were not viewed by the legislature as “dance” entitled a tax exemption, surely it was not irrational for the Tax Tribunal to conclude that a club presenting performances by women gyrating on a pole to music, however artistic or athletic their practiced moves are, was also not a qualifying performance entitled to exempt status.”

  • People v. Hudy, 19 N.Y.3d 1042 (2012): Scope of Cross-Examination and Rape Shield Law

    People v. Hudy, 19 N.Y.3d 1042 (2012)

    A trial court has discretion to limit cross-examination of a witness regarding evidence of sexual conduct or other matters where the probative value is outweighed by the risk of unfair prejudice or confusion, and the Rape Shield Law generally prohibits evidence of a victim’s sexual conduct in sex offense prosecutions.

    Summary

    The New York Court of Appeals affirmed the defendant’s conviction for sex offenses, holding that the trial court did not abuse its discretion by limiting the cross-examination of the defendant’s daughter regarding her relationship with a teenage boy and her MySpace account content. The Court found the excluded evidence either fell under the Rape Shield Law or was of limited probative value compared to the risk of prejudice. The Court emphasized the defendant was given sufficient latitude to establish his defense that his daughter fabricated the charges.

    Facts

    The defendant was accused of sexually abusing his two daughters after his divorce. The older daughter disclosed the abuse following a heated phone conversation with the defendant after she was found at a 16-year-old boy’s house. The younger daughter later made similar allegations. The defendant and his older daughter had a strained relationship marked by disagreements about her behavior, attire, and relationships with boys. He threatened to send her to a “brat camp.”

    Procedural History

    The defendant was convicted of sexual abuse, rape, criminal sexual act, and endangering the welfare of a child. The Appellate Division affirmed the conviction. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the trial court deprived the defendant of a fair trial by precluding: (1) cross-examination of the older daughter regarding the nature of her relationship with a 16-year-old boy; (2) cross-examination about her MySpace account postings and photos; and (3) evidence of her clothing choices?

    Holding

    No, because (1) the evidence regarding the daughter’s relationship with the boy fell within the Rape Shield Law; (2) the trial court has discretion to limit cross-examination where the probative value is outweighed by the risk of prejudice or confusion; and (3) the defendant was given sufficient latitude to develop his defense that his daughter had reasons to fabricate the charges.

    Court’s Reasoning

    The Court of Appeals held that the trial court acted within its discretion. First, the Court stated that the evidence regarding the daughter’s relationship with the 16-year-old boy fell squarely within the ambit of the Rape Shield Law, which generally prohibits “[e]vidence of a victim’s sexual conduct” (CPL 60.42). The purpose of the Rape Shield Law is that such evidence “rarely elicits testimony relevant to the issues of the victim’s consent on credibility, but serves only to harass the alleged victim and confuse the jurors” (quoting People v. Scott, 16 NY3d 589, 594 [2011]). The Court noted that the defendant focused solely on alleged sexual behavior and did not attempt to elicit the general nature of the relationship. However, the trial court did permit evidence that the daughter failed to return home, was found at the boy’s house, and was angry at the defendant for involving the police.

    Second, the Court held the trial court did not abuse its discretion regarding the MySpace evidence, because trial judges have “discretion to determine the scope of the cross-examination of a witness” (quoting People v. Corby, 6 NY3d 231, 234 [2005]). The trial court gave the defendant some leeway in portraying the nature of the material on the daughter’s MySpace account and the conflict that arose between them over the postings. The Court reasoned that it was obvious that the MySpace postings caused considerable friction between the defendant and his daughter, and that she resented his parental intrusion.

    Third, the Court determined there was no abuse of discretion in the exclusion of evidence regarding the daughter’s clothing. The court permitted testimony regarding the controversy over the daughter’s attire and the defendant’s negative reaction to her clothing choices. The Court stated that the precise types of clothing were unnecessary to further the motive defense.

    The Court concluded the trial judge gave the defendant sufficient latitude to develop his theory that his older daughter had substantial reasons to fabricate either to put an end to the defendant’s parental interference or to avoid being sent to an institution for troubled youths. The Court concluded: “Defendant was therefore able to present evidence reflecting his parental concern over his daughter’s inappropriate and risky behavior, which he claimed provoked his daughter’s motivation to lie about his conduct. As such, there was no abuse of discretion in the trial court’s exclusion of the challenged evidence.”

  • People v. Cajigas, 19 N.Y.3d 697 (2012): Intent to Violate Order of Protection as Predicate for Burglary

    People v. Cajigas, 19 N.Y.3d 697 (2012)

    The intent to commit a crime element of burglary can be satisfied by the intent to engage in conduct that would be legal but for the existence of a valid order of protection, excluding violations of the stay-away provision itself.

    Summary

    Norman Cajigas was convicted of attempted burglary based on violating an order of protection. The New York Court of Appeals addressed whether the intent element of burglary could be satisfied by intending to commit an act that is only illegal because of the order of protection. The Court held that it could, provided the intended act goes beyond simply violating the stay-away provision. The Court reasoned that any crime, including those defined by protective orders, can satisfy the intent element of burglary. The Court also noted the role of prosecutorial discretion in ensuring appropriate charges are filed, especially in cases where the violation might seem minor.

    Facts

    Maria obtained an order of protection against Cajigas after he became abusive. The order required him to stay away from her residence and refrain from contacting her. Cajigas violated the order multiple times, including going to her home. Maria and her daughter moved, but Cajigas continued to stalk her. One day, Maria’s daughter was home alone when she heard someone trying to open the door. She saw Cajigas through the peephole. Cajigas fled after the daughter spoke to him.

    Procedural History

    Cajigas was indicted for attempted burglary and criminal contempt. At trial, the defense argued that the intent element of burglary could not be satisfied by the intent to commit an act that would not be illegal but for the order of protection. The trial court rejected this argument and instructed the jury that the intent element is established if Cajigas intended to violate a provision in the order other than the stay-away restriction. Cajigas was convicted. The Appellate Division affirmed. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    Whether the intent to commit a crime element of burglary may be satisfied by an intent to commit an act that would not be illegal in the absence of an order of protection.

    Holding

    Yes, because any crime, including those defined by an order of protection (excluding the stay-away provision itself), can satisfy the intent element of burglary.

    Court’s Reasoning

    The Court of Appeals reasoned that the burglary statute requires a trespass coupled with the intent to commit a crime. While People v. Lewis established that the unlawful entry element of burglary cannot be based solely on violating the stay-away provision of an order of protection, it did not preclude the use of other violations of the order to establish the “intent to commit a crime therein” element. The Court emphasized that the People are not required to prove the particular crime the defendant intended to commit inside the structure. The court stated, “aside from a violation of a stay-away provision, conduct that is “prohibited by an order of protection . . . can serve as predicate crimes for the ‘intent to commit a crime therein’ element of burglary”.

    The Court acknowledged that burglary charges based on violations of orders of protection could lead to serious felony convictions and prison sentences, potentially disproportionate to the underlying conduct. However, it emphasized that prosecutorial discretion allows the District Attorney to file appropriate charges based on the specific facts of the case. The Court noted that in this case, Cajigas’s persistent and blatant disregard of the orders of protection warranted the attempted burglary conviction.