New York Law Review

Tag: Provisional Remedies

  • Kuriansky v. Bed-Stuy Health Care Corp., 73 N.Y.2d 875 (1989): Provisional Remedies and Preservation of Constitutional Claims

    Kuriansky v. Bed-Stuy Health Care Corp., 73 N.Y.2d 875 (1989)

    A party must properly raise and preserve a constitutional challenge at the trial level to allow for appellate review; broad assertions of constitutional violations are insufficient.

    Summary

    This case concerns the propriety of provisional remedies (attachment and preliminary injunction) obtained by the plaintiff in a civil forfeiture action. The New York Court of Appeals affirmed the lower court’s decision, holding that the plaintiff made a sufficient showing to justify the provisional remedies. Furthermore, the Court held that the defendants’ claim that conditioning relief from the provisional restraints upon disclosure of potentially incriminating financial information violated their Fifth and Sixth Amendment rights was not preserved for appellate review, as the argument was not specifically raised and ruled upon in the lower courts. A general assertion of Fifth Amendment rights was deemed insufficient. Therefore, the order of the Appellate Division was affirmed.

    Facts

    The specific facts underlying the forfeiture action against Bed-Stuy Health Care Corp. are not detailed in this memorandum opinion. However, the plaintiffs sought and obtained provisional remedies, including attachments and preliminary injunctions, to restrain the defendants’ assets during the pendency of the forfeiture proceedings. The defendants sought relief from these restraints, arguing that doing so would violate their Fifth and Sixth Amendment rights.

    Procedural History

    The Supreme Court granted the plaintiffs’ motions for provisional relief. The defendants appealed, arguing that conditioning relief from the provisional restraints upon the disclosure of potentially incriminating financial information was precluded by the Fifth and Sixth Amendments. The Appellate Division affirmed the Supreme Court’s order. The defendants then appealed to the New York Court of Appeals. The Court of Appeals affirmed the Appellate Division’s order.

    Issue(s)

    Whether the defendants adequately preserved their claim that conditioning relief from provisional restraints upon the disclosure of potentially incriminating financial information violated their Fifth and Sixth Amendment rights, thus entitling them to appellate review of that claim.

    Holding

    No, because the defendants did not specifically invoke their Fifth Amendment privilege or raise the argument they now advance on appeal in the lower courts. The Court of Appeals held that a broad assertion of Fifth Amendment violations was insufficient to preserve the specific argument for appellate review.

    Court’s Reasoning

    The Court of Appeals based its decision on the principle of preservation of issues for appellate review. The Court stated that “the record does not demonstrate either that defendants ever actually attempted to invoke their Fifth Amendment privilege or that they made the argument they now advance on appeal.” The Court emphasized that the defendants only broadly argued that “CPLR Article 13-A violates defendants’ Fifth Amendment rights,” which was insufficient to preserve the specific argument regarding the disclosure of financial information as a condition for relief from the provisional restraints. Because the issue was not properly raised and ruled upon in the lower courts, the Court of Appeals declined to address the merits of the constitutional claim. This holding reinforces the importance of raising specific legal arguments and creating a clear record in the lower courts to preserve those arguments for appellate review. This is a fundamental principle of appellate procedure and ensures that the trial court has the initial opportunity to address and rule upon the legal issues presented.

  • Morgenthau v. Citisource, Inc., 68 N.Y.2d 211 (1986): Provisional Remedies and Pre-Conviction Asset Seizure

    68 N.Y.2d 211 (1986)

    New York’s CPLR Article 13-A permits the pre-conviction attachment of a criminal defendant’s assets, not limited to proceeds of the crime, to ensure funds are available for potential forfeiture judgments, provided due process safeguards are met.

    Summary

    The District Attorney sought to attach assets of defendants indicted for “post-conviction forfeiture crimes” under CPLR Article 13-A. The lower courts disagreed on whether assets beyond the direct proceeds of the alleged crimes could be seized pre-conviction. The Court of Appeals held that the statute allows such seizure to ensure funds are available for potential forfeiture judgments, but emphasizes that due process rights must be carefully protected. The court found that the statute contained sufficient safeguards to satisfy due process requirements, including notice requirements, burden of proof, and opportunities to challenge the attachment.

    Facts

    Robert Morgenthau, the District Attorney, initiated a civil forfeiture action against Citisource, Inc., Marvin Kaplan, Stanley Friedman, and others, seeking $4.49 million. Kaplan, Friedman, and others were indicted on various felony charges, including violations of the Donnelly Act, the Martin Act, grand larceny, bribery, bribe receiving, and conspiracy. Morgenthau obtained ex parte orders to attach certain assets belonging to Kaplan and Friedman and to restrain the alienation of funds in Kaplan’s retirement trust account. The claiming authority asserted that these provisional remedies were necessary to prevent the dissipation of assets that would be subject to a judgment if the defendants were convicted.

    Procedural History

    The Supreme Court denied the defendant’s motion to vacate the attachment and injunction, confirming the attachment on the funds already levied. The Appellate Division modified and vacated the Supreme Court’s order, limiting attachment only to assets directly traceable to the alleged crimes. The Court of Appeals reversed the Appellate Division’s order. The case was remitted to the Appellate Division to consider the factual issues and arguments not previously addressed.

    Issue(s)

    1. Whether CPLR Article 13-A authorizes the pre-conviction attachment of a putative “criminal defendant’s” assets that are not directly traceable to the alleged crime?

    2. Whether CPLR Article 13-A, as interpreted to allow pre-conviction attachment of untainted assets, violates the defendant’s federal constitutional rights to due process and right to counsel?

    Holding

    1. Yes, because the statute explicitly allows for provisional remedies, including attachment, in actions relating to post-conviction forfeiture crimes prior to conviction to prevent the dissipation of assets that would be subject to judgment.

    2. No, because the statute provides sufficient procedural safeguards to protect the defendants’ interests and minimizes the risk of erroneous deprivation of property.

    Court’s Reasoning

    The Court reasoned that the legislative intent behind CPLR Article 13-A was to “take the profit out of crime.” The statute allows forfeiture actions against “criminal defendants” resulting in a judgment recovering proceeds of the crime or a money judgment equivalent in value to those proceeds (CPLR 1311[1]). The availability of provisional remedies such as attachment is crucial to prevent defendants from dissipating assets before a judgment can be obtained. The court emphasized that a contrary interpretation would contravene the legislative purpose.

    Addressing the due process challenge, the Court applied the balancing test from Mathews v. Eldridge, considering the private interest affected, the risk of erroneous deprivation, and the government’s interest. The Court acknowledged the defendant’s interest in possessing their assets, but weighed this against the government’s strong interest in deterring crime and preserving assets for victims. The Court determined that CPLR Article 13-A provides sufficient safeguards, including the requirements for the claiming authority to demonstrate a substantial probability of success on the issue of forfeiture, that failure to enter the order may result in proceeds being unavailable, and that the need to preserve the property outweighs any hardship on the defendants (CPLR 1312[3]). These safeguards ensure compliance with due process requirements.

    Regarding the right to counsel, the Court stated that while pre-conviction asset attachment could potentially infringe on the ability to hire counsel, CPLR 1312(3) requires the claiming authority to prove the need for the provisional remedy outweighs the hardship on any party. The court can also consider the impact of forfeiture on the defendant (CPLR 1311[4][d][i]).

    The Court specifically noted, “[Provisional remedies * * * shall be available in all actions to recover property or for a money judgment” (CPLR 1312 [1]).”