November 13, 2014
This column reports on several significant, representative decisions handed down recently in the U.S. District Court for the Eastern District of New York. Judge Raymond J. Dearie held that plaintiff's claims of "serious injury" under New York Insurance Law §5102(d) were sufficient to defeat summary judgment. Judge I. Leo Glasser found that certain recorded conversations between a cooperating witness and another person would be inadmissible hearsay at defendant's trial. Judge Joseph F. Bianco held that plaintiff's Section 1983 claims were barred by the Eleventh Amendment and the Rooker-Feldman doctrine. And Judge Denis R. Hurley dealt with sanctions for fees and costs, and apportionment of liability, among plaintiff and his two counsel, in connection with a frivolous appeal to the Second Circuit.
In Baytsayeva v. Shapiro, 09 CV 4874 (EDNY, Jan. 20, 2012), Judge Dearie denied defendants' motion for summary judgment, finding triable issues concerning whether plaintiff suffered "serious injury" within the meaning of New York Insurance Law §5102(d).
Plaintiff, a home health care worker, claimed that she suffered serious injury when struck by defendants' vehicle. Plaintiff was treated by three different physicians over three years for a variety of physical and mental conditions, including neck pain, headaches, loss of range of motion (ROM) in the lumbar and cervical spine, severe lower back pain, "positional vertigo," loss of sleep, a herniated disc and depression.
Under New York law, there is no right to recovery in tort for non-economic injury suffered in an automobile accident unless a covered person has sustained one or more of the nine types of "serious injury" set forth at §5102(d) of the Insurance Law. Plaintiff alleged three of these nine types: "permanent loss," "significant limitation," and a "90/180 claim" — in other words, that her injuries prevented her from "performing substantially all of the material acts which constitute such person's usual and customary daily activities for not less than  days during the  days immediately following the occurrence of the injury or impairment." Defendants moved for summary judgment on the ground that, in light of their experts' examinations, plaintiff's injuries could not be found to meet the "serious injury" threshold of §5102(d).
Judge Dearie found triable issues as to each species of injury. As to "permanent loss" and "significant limitation," defendants' expert examination showing no significant loss in ROM raised a prima facie case for summary judgment as to physical impairment. However, the defense examination was inconclusive as to depression and, in any event, the reports of plaintiff's treating physicians rebutted defendants' prima facie showing as to physical impairment and created triable issues as to ROM loss and soft tissue injuries. Slip op. 18-23.
Summary judgment was denied as to the 90/180 claim as well. First, defendants' experts did not examine plaintiff during the relevant 180-day post-incident period. Second, while plaintiff had been enrolled as a full-time student during 74 of the first 90 days immediately following the accident, she then withdrew her enrollment and neither worked nor attended school for more than 90 of the 180 days. That plaintiff both sought vocational training and attempted to return to the work force after the 180-day period did not support summary judgment where plaintiff's doctors confirmed that she was unable to do any type of work during the 180-day period. Slip op. 23-29.
Admissibility of Statements
In United States v. Romanello, 10 CR 929 (S-1) (EDNY, Jan. 3, 2012), Judge Glasser denied the government's in limine motion to admit into evidence at defendant Anthony Romanello's trial two recorded conversations in 2000 between a cooperating witness (CW) and one Thomas Cafaro. The relevant utterances, the court found, were inadmissible hearsay rather than admissions against penal interest, Fed. R. Evid. 804(b)(3), or statements by a co-conspirator in furtherance of the conspiracy, Fed. R. Evid. 801(d)(2)(E).
Defendant was charged with RICO conspiracy involving several alleged racketeering acts — extortion conspiracy, extortionate extension of credit conspiracy and illegal gambling. In Judge Glasser's formulation, the "essence" of the recorded conversations between CW and Mr. Cafaro "is fairly described as general chatter about various members, including defendant, of the Genovese Crime Family." Slip op. 1.
According to the government, Mr. Cafaro's statements were in furtherance of the "Genovese family conspiracy" because they apprised CW of the nature of that conspiracy and the structure of the family after CW had been proposed for membership. Contrary to the government's argument, the consensual recordings were not enlightening as to "the activities, purpose and means of the charged enterprise." Slip op. 11. Nor could they add anything to the first 12 paragraphs of the indictment describing the enterprise and the structure of the Genovese family.
The court saw no merit in the government's contention that Mr. Cafaro's statements regarding his knowledge of the Genovese family and illegal activities by certain family members were "against his penal interest." The government did not allege Mr. Cafaro to be a member of the Genovese family. In any event, mere knowledge about the family and mere membership in such an organization is not a crime. "There is thus no basis to posit a reasonable person's belief that statements such as those made by Cafaro would subject him to criminal liability." Slip op. 13.
Mr. Cafaro's comments to the CW were also not admissible against defendant Romanello under the co-conspirator exception to the hearsay rule because they were not made "by a co-conspirator or a party during the course of and in furtherance of the conspiracy . . . ." Fed. R. Evid. 801(d)(2)(E). Even if the conversations between Mr. Cafaro and the CW are "minutely parsed" and imaginatively construed to try to find a specific criminal conspiracy between Mr. Cafaro (the declarant) and defendant Romanello, there is nothing to show that such a conspiracy existed. The "general existence of the Mafia" is not a basis to admit Mr. Cafaro's statements. In short, Mr. Cafaro and defendant were not co-conspirators, and nothing in the proffered recordings was said to further any conspiracy. Slip op. 16-17.
In Temple v. N.Y.S. Department of Taxation & Finance, 11 CV 0759 (EDNY, Feb. 15, 2012), Judge Bianco granted defendants' motions to dismiss plaintiff's §1983 complaint, in which he alleged that defendants violated his right to due process by withdrawing money from his bank account to satisfy past due child support without notice to him and that the child support levy was invalid.
According to the complaint, plaintiff had been incarcerated in South Carolina for 13 years. In 2009 he earned $1,900 while in prison. He set aside $1,500 in a fixed account at State Farm Bank for the benefit of his children who resided in South Carolina. In May 2010, State Farm received a levy from the New York State Department of Taxation and Finance (DTF) and released the funds in plaintiff's account. Plaintiff alleged that (1) DTF never sent a warrant to plaintiff, (2) the warrants were unauthorized, (3) the levy was fraudulent, and (4) State Farm failed to give him proper notice that the account would be subject to levy. DTF and related defendants, and State Farm and its related defendants, filed separate motions to dismiss.
The Eleventh Amendment provides that the judicial power of the United States "shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." The Eleventh Amendment has been interpreted to bar suits in federal court by a citizen of a state against that state or its state officers in their official capacities, unless the state waived its sovereign immunity. Judge Bianco held that plaintiff's claims against DTF and Edward Brehm, a state officer acting in his official capacity, must therefore be dismissed, because New York State had not waived its sovereign immunity for suits under §1983.
Plaintiff's claims against the DTF defendants were also barred by the Rooker-Feldman doctrine, which provides that U.S. District Courts do not have jurisdiction to review final judgments of state courts, except for constitutional challenges and habeas corpus petitions. All four requirements for application of the Rooker-Feldman doctrinewere present here. First, plaintiff had lost in state court, where he was ordered to provide support for his child in New York and his request for a DNA test was denied. Second, the judgments against him were entered before the present action was commenced. Third, plaintiff was challenging injuries caused by state-court judgments. Finally, plaintiff sought review and rejection of the state-court judgment in this action.
Plaintiff argued that his claims were reviewable because they related to improper enforcement of the state-court judgment rather than the judgment itself, but Judge Bianco concluded that Rooker-Feldman bars enforcement claims as well because enforcement is "inextricably intertwined with the state court judgment." Slip op. 6.
Turning to State Farm's motion to dismiss, Judge Bianco noted that Rooker-Feldman also applied to claims against State Farm. In addition, plaintiff failed to state a claim against State Farm, because it did not act under color of state law. Generally, only state actors — not private citizens and entities — are subject to §1983 liability. State Farm is a private bank, and there was no nexus between the state and the actions of State Farm and its employee, both private parties. Moreover, the account documentation that plaintiff signed clearly authorized State Farm to comply with levies against his account.
Frivolous Appeal Costs
In Libaire v. Kaplan, 06 CV 1500 (EDNY, Jan. 30, 2012), Judge Hurley (a) adopted Magistrate Judge E. Thomas Boyle's Report and Recommendation as to the amount of fees and costs related to sanctions for the judgment debtors' frivolous appeal to the U.S. Court of Appeals for the Second Circuit, and (b) modified Judge Boyle's recommended allocation of liability.
Judge Hurley entered an original judgment in May 2009, arising from sanctions in the amount of reasonable attorney fees and costs incurred by defendants in defending the action against plaintiff and his primary lawyer ("judgment debtors") for filinga frivolous complaint. Judgment debtors unsuccessfully appealed to the Second Circuit, which granted defendant-appellees' motions for attorney fees and costs and also found the appeal itself to be frivolous. Another attorney handled the appeal as counsel to the original firm and plaintiff.
The Second Circuit remanded the matter to Judge Hurley to determine the amount of the sanctions award for the frivolous appeal and the allocation of sanctions between plaintiff and his counsel. Judge Hurley referred the matter to Judge Boyle, who recommended that defendants be awarded a total of $83,557.74 with liability apportioned 10 percent to plaintiff John Libaire and 45 percent each to his primary lawyer and appellate counsel. Both sides submitted objections.
A district judge, the court noted, reviews a magistrate judge's disposition de novo. The appellate debtors argued that no award or a nominal award should be made against Libaire and his primary attorney and no award at all should be made against appellate counsel. As Judge Hurley held, although Federal Rule of Appellate Procedure 38 "gives the Second Circuit discretion whether to impose sanctions for frivolous appeals, it does not give this Court that same option, nor does it in any way permit this Court to ignore direct remand orders from the Circuit." Slip op. 4. Indeed, the Second Circuit "unequivocally determined" that the appeal was frivolous and ordered the court on remand to calculate and apportion attorney fees and costs associated with the appeal. It was of no consequence that the circuit had not made a specific finding that the entire appeal was frivolous. Slip op. 4-5.
Judge Hurley held that appellate counsel was subject to equal liability for sanctions along with the primary attorney. The court declined to revisit the arguments made to the Second Circuit or to parse out which arguments might have been more frivolous than others.
Defendants objected to the apportionment of sanction liability, arguing that each of the appellate debtors should be held jointly and severally liable. But this argument was inconsistent with the Second Circuit's directive to allocate the sanction liability between plaintiff and his counsel. Judge Hurley accepted the allocation of 10 percent of sanction liability to Libaire on the ground that counsel was in a better position to evaluate the propriety of arguments on appeal. Because the participation of counsel was a "coordinated effort," Judge Hurley modified Judge Boyle's allocation of 45 percent of the liability against each attorney to hold them "jointly and severally liable for 90 percent of the appellate sanction liability." Slip op. 9. Finally, Judge Hurley adopted Judge Boyle's fee calculation.
Harvey M. Stone and Richard H. Dolan are partners at Schlam Stone & Dolan. Bennette D. Kramer, a partner of the firm, assisted in the preparation of the article.
[This article is reprinted with permission from the March 9, 2012, issue of the New York Law Journal. Copyright © 2012 ALM Properties, Inc. All rights reserved. Further duplication without permission is prohibited.]