New York Law Review

Tag: Subornation of Perjury

  • People v. Nealer, 56 N.Y.2d 149 (1982): Right to Counsel Exception for New Crimes

    People v. Nealer, 56 N.Y.2d 149 (1982)

    A suspect whose right to counsel has attached for a prior crime is not immune from questioning, outside the presence of counsel, regarding a new crime, and evidence obtained during such questioning is admissible if not otherwise obtained in violation of the suspect’s rights.

    Summary

    Nealer was convicted of second-degree murder. While awaiting trial, he attempted to bribe a witness to change his testimony. The witness, acting as a police agent, met with Nealer and obtained incriminating statements. Nealer argued that his right to counsel was violated because the witness elicited these statements without his lawyer present after his right to counsel had attached on the murder charge. The New York Court of Appeals affirmed the conviction, holding that the right to counsel does not shield a defendant from investigation into new crimes, and the questioning was legitimately related to the new crime of attempting to suborn perjury.

    Facts

    Robert Davis was shot and killed at a bar. Witnesses identified the assailant as “Tommy,” a 6’3″ black male wearing a red-checked jacket, known to frequent the bar and reside at the Alexandria Hotel. Police identified “Tommy” as Nealer based on a prior arrest record. Police proceeded to Nealer’s hotel room without a warrant, arrested him, and seized a red-checked jacket and bullets matching those used in the crime. While incarcerated awaiting trial, Nealer’s wife approached a witness to the shooting, suggesting Nealer would “help him out” if he recanted his statement to the police. The witness informed the police, who instructed him to visit Nealer in prison and pretend to cooperate with the bribe offer. During the visit, Nealer offered the witness $300 to perjure himself.

    Procedural History

    Nealer was indicted for second-degree murder. Following a jury trial, he was convicted. The Appellate Division upheld the conviction. Nealer appealed to the New York Court of Appeals, arguing that his right to counsel was violated and that his warrantless arrest was unlawful.

    Issue(s)

    1. Whether Nealer’s right to counsel was violated when a police agent elicited incriminating statements from him regarding a new crime (attempted bribery) while he was awaiting trial for murder and his right to counsel had already attached for the murder charge.
    2. Whether Nealer’s warrantless arrest in his home violated the Fourth Amendment.
    3. Whether the loss of stenographic notes from summations and the jury charge denied Nealer due process of law.

    Holding

    1. No, because the right to counsel does not immunize a defendant against investigation into a new crime in progress.
    2. No, because exigent circumstances justified the warrantless arrest.
    3. No, because Nealer failed to demonstrate prejudice resulting from the missing notes since he did not claim any specific errors occurred during those portions of the trial.

    Court’s Reasoning

    The Court reasoned that while Nealer’s right to counsel had attached for the murder charge, this right does not extend to shield him from investigation into new crimes. The witness was acting as a police agent to investigate Nealer’s attempt to suborn perjury, a separate and distinct crime. The Court cited People v. Ferrara, noting that the right to counsel cannot be used as “a shield * * * to immunize one represented by an attorney against investigative techniques that capture a new crime in progress.” The police investigation into the bribery attempt was not a pretext to circumvent Nealer’s rights on the murder charge; the questioning was legitimately related to the new crime. Regarding the warrantless arrest, the Court relied on the trial court’s finding of exigent circumstances based on the gravity of the crime, Nealer’s possession of a gun, and the likelihood of escape. Finally, the Court found that the loss of stenographic notes did not prejudice Nealer, as he did not allege any specific errors during the summations or jury charge. The court noted that the right to appeal a criminal conviction is a “fundamental right”, and the state must provide a record of trial sufficient to enable a defendant to present reviewable issues on appeal (People v Rivera, 39 NY2d 519, 522).

  • New York Stock Exchange, Inc. v. Continental Insurance Company, 40 N.Y.2d 269 (1976): Fraudulent Scheme Exception to Perjury Rule

    New York Stock Exchange, Inc. v. Continental Insurance Company, 40 N.Y.2d 269 (1976)

    A cause of action for fraud and deceit will lie, even when perjury is involved, if the perjury is merely a means to accomplish a larger fraudulent scheme that extends beyond the issues determined in the prior proceeding.

    Summary

    The New York Stock Exchange (NYSE) and its subsidiary, Newin Corporation, sued Continental Insurance Company and its subsidiary, Fidelity & Casualty Company, alleging fraud and deceit during the bankruptcy proceedings of Ira Haupt & Co., a member firm of the NYSE. The NYSE claimed that the defendants suborned perjury to minimize the recovery on Haupt’s primary insurance bonds, thereby frustrating the NYSE’s ability to recover losses under its excess insurance coverage. The court held that a cause of action for fraud exists, even with perjury, when the perjury is part of a broader scheme to defraud that extends beyond the issues in the original case.

    Facts

    Ira Haupt & Co., an NYSE member, went bankrupt following the “salad oil swindle” of 1963. As required by NYSE rules, Haupt carried blanket bonds underwritten by Fidelity & Casualty Company. The NYSE also had excess insurance coverage, with Continental Insurance Company as one of the carriers. Haupt’s bankruptcy trustee sued on the primary bonds, alleging employee infidelity caused the firm’s collapse. The NYSE alleged that Continental and Fidelity corrupted a key witness, Jack E. Stevens, causing him to change his testimony, which led to a settlement for a fraction of the claim’s value. Subsequently, the insurers refused to pay under the excess coverage, claiming the primary coverage hadn’t been exhausted.

    Procedural History

    The NYSE and Newin Corporation filed suit against Continental and Fidelity, alleging fraud and other causes of action. Special Term rejected the defendants’ motion to dismiss. The Appellate Division affirmed but granted leave to appeal to the New York Court of Appeals on a certified question.

    Issue(s)

    Whether a civil action for damages can be maintained based on alleged subornation of perjury in a prior civil proceeding, where the perjury is part of a larger fraudulent scheme designed to defeat claims beyond those litigated in the initial proceeding.

    Holding

    Yes, because a cause of action for fraud and deceit will lie, even though perjury is present, where the perjury is merely a means to the accomplishment of a larger fraudulent scheme. The rule against civil actions for subornation of perjury does not apply when the perjury is part of a broader scheme extending beyond the issues of the original lawsuit.

    Court’s Reasoning

    The Court of Appeals acknowledged the general rule that civil actions for damages arising from subornation of perjury in a prior civil proceeding are barred, based on the policy of preventing endless litigation and re-trials of cases. However, the court recognized an exception to this rule: “A cause of action for fraud and deceit will lie, even though perjury is present, where the perjury is merely a means to the accomplishment of a larger fraudulent scheme.” The court cited Verplanck v. Van Buren, 76 N.Y. 247, in support of this exception. The court reasoned that the plaintiffs had alleged a fraud that extended beyond the scope of the trustee’s lawsuit involving only the Haupt bonds. The alleged fraud was intended to defeat recovery under the excess coverage as well. The court distinguished this case from those where recovery was precluded because the plaintiffs had no effective remedy in the prior action. According to the court, “Plaintiffs have alleged that the fraud committed in the bankruptcy proceedings is extrinsic and part of a larger scheme which goes beyond the scope of the trustee’s law suit, which involved only the Haupt bonds… Rather, they accept the fact of settlement but seek damages because Fidelity’s fraud was intended to extend beyond those bonds, so as to defeat or make more difficult any recovery under the excess coverage as well.” The court emphasized that the plaintiffs were not seeking to re-litigate the Haupt bonds issue but rather sought damages for the broader fraud impacting their excess coverage. The court further held that the plaintiffs could potentially sue as third-party beneficiaries of the Haupt bonds, despite not being named insureds, if the circumstances evidenced a clear intent to protect them, citing McClare v. Massachusetts Bonding & Ins. Co., 266 N.Y. 371. Therefore, the court found that the plaintiffs had pleaded legally sufficient causes of action.