Thursday, December 31, 2009


As I begin work on one appeal of an administrative law hearing (a process which can involve more time than working on the hearing itself), it is most important, before you prepare your argument for the appeal, to review the entire transcript of the hearing. Do not rely on your memory or notes, as the Appeal Board will rely on the transcript. I strongly urge anyone to copy the transcript rather than just inspect and make notes, especially when you have a right of reply. This is from the Appeal Board rules:

"Upon written request, arrangements may be made to inspect the minutes of the administrative law judge hearing or to borrow the minutes for the purpose of making a copy thereof at the party's expense. The request to make such arrangements must be made within seven days from the date of the notice of receipt of appeal. In such event, the time to submit written statements, documents or briefs shall be 20 days from the date when that party is sent notice that the transcript is available for inspection or copying."

Wednesday, December 30, 2009


I will be having this issue raised on an appeal to the Appeals Board but this is the rule according to the Appeal Board website:

"Federal and state laws prohibit the denial of benefits to any claimant because of pregnancy. Pregnant claimants are eligible for benefits according to the same rules that apply to all other claimants. If you are ready, willing and able to work, and are actively searching for work, the fact of your pregnancy has no bearing on your collecting benefits. There is no requirement that you disclose your pregnancy unless it affects your ability to perform work in your usual occupations. If your health prevents you from working in your normal occupation, you must inform the Telephone Claims Center.

The Telephone Claims Center may not ask you, on its own, if you are pregnant. If you are asked, you may refuse to answer. However, if your employer tells the Telephone Claims Center that you quit, took a leave of absence, or were fired, because of pregnancy, the Telephone Claims Center may verify that information with you. If you left your last job voluntarily, even though you were physically able to continue working, you may be ineligible for benefits.

A federal court decree prohibits the Unemployment Insurance Division from engaging in discrimination on the basis of pregnancy."

Tuesday, December 29, 2009


A recent consultation revealed the following. Claimant was terminated due to lay off and filed for unemployment benefits. Claimant received several weeks of benefits. Employer filed objection and during investigation, Claimant did not respond to investigation because Claimant found new employment. This was a mistake because the Department of Labor, having no evidence to the contrary, decided that Employer's objection would be granted and penalized Claimant. Even though the amount in dispute is small, Claimant must have a hearing to eliminate not only the overpayment but the additional penalties involved. This is from a handbook on representing yourself in an unemployment insurance hearing from MFY Legal Services which works in concert with community organizations to provide free civil legal assistance to those in greatest need:

"You are not obligated to refund overpayments if you accepted them in good faith (you believed you were entitled to the benefits), you did not make any false statements, AND you did not willfully conceal any pertinent fact in connection with your claim for benefits. New York Labor Law § 597.

You can be required to refund overpayments if you made a false statement of fact in connection with your claim for benefits, even if the false statement was inadvertent. For example, you could be required to refund benefits if you made an incorrect statement about the amount of your base period earnings and weeks of employment, even if it was an accident. A.B. 257,498; and A-750-2106.

If you made a statement that was an “error of law,” but was not a false statement of fact you cannot be required to refund the benefits. For example, if you reported a total lack of employment, but it is later determined that you were doing activities that actually constituted employment, your statement may not be a false statement of fact if an ordinary person would not have considered him/herself employed under those circumstances and you in fact did not realize that your activities were 'employment.' See Claim of Valvo, 57 N.Y.2d 116, 440 N.E.2d 780, 454 N.Y.S.2d 695 (1982).

If the false statement was made inadvertently (i.e., you did not know it was false), the DOL will collect the overpayment by collecting 50% of your future benefits. 12 NYCRR § 470.5"

Monday, December 28, 2009


Here is a recent appeal to the Appellate Division, 3rd Department on the issue of misconduct - what I note is how there is no mention of what happened at the Administrative Law Hearing and how the Court held that credibility issues are for the Board to resolve, raising the question of how did and if the Administrative Law Judge ruled on credibility:

IN RE SMITH v. ROCHESTER INST. OF TECH., 507350 [3d Dept 12-17-2009], 2009 NY Slip Op 09364, Decided and Entered: December 17, 2009.

Appeal from a decision of the Unemployment Insurance Appeal Board,
filed September 24, 2008, which ruled that claimant was disqualified
from receiving unemployment insurance benefits because his
employment was terminated due to misconduct.

Glenn D. Smith, Penfield, appellant pro se.

The Wolford Law Firm, L.L.P., Rochester
(Elizabeth A. Wolford of counsel), for Rochester Institute of
Technology, respondent.

Before: Cardona, P.J., Mercure, Spain, Kane and Stein, JJ.


Claimant, who was employed as a heating and air conditioning
technician at a university, was terminated from his employment after
he failed to follow his supervisor's request to meet with him on two
consecutive days. The Unemployment Insurance Appeal Board denied his
claim for benefits on the ground that he was terminated due to
misconduct, prompting this appeal.

We affirm. "An employee's failure to comply with an employer's
reasonable request may constitute insubordination rising to the
level of disqualifying misconduct" (Matter of Guagliardo
[Commissioner of Labor], 27 AD3d 866, 867 [2006] [citations
omitted]; accord Matter of Box [Commissioner of Labor],
50 AD3d 1431, 1432 [2008]). Here, the employer's representatives
testified that, despite having received prior written warnings
that continued acts of insubordination could result in his
termination, claimant failed to follow a directive from his
supervisor to meet with him to discuss his work assignments on two
consecutive days. To the extent that claimant denied that his
supervisor requested the meetings, this presented a credibility
issue for the Board to resolve (see
Page 2
Matter of Atson [Commissioner of Labor],
64 AD3d 1065, 1065-1066 [2009]). Inasmuch as the employer's request
was reasonable and claimant did not demonstrate a compelling reason
for refusing to comply, we discern no basis for disturbing the
Board's determination (see Matter of Miner [Commissioner of
Labor], 49 AD3d 1128, 1129 [2008]; Matter of Lambert
[Commissioner of Labor], 34 AD3d 948, 948 [2006]).

Cardona, P.J., Mercure, Spain, Kane and Stein, JJ., concur.

Sunday, December 27, 2009


NOTE - THERE IS A COMMENT MAKING A CORRECTION ON THIS POST COURTESY OF DAN BLUMENTHAL, ESQ. WHO WAS THE ATTORNEY FOR THE OCCUPANT IN THIS CASE. We all remember the November 2009 story in which a Suffolk judge awarded a Long Island family their East Patchogue house, wiping the slate clean on their mortgage debt and ruling that the bank holding their home loan had acted in a manner “so completely devoid of good faith that equity cannot be permitted to intervene on its behalf.” Well here is another case from the same court, diffrent judge, just about the same time:

COLLADO v. BOKLARI, HULT 387-09 (11-9-2009) 2009 NY Slip Op 29447, JUAN COLLADO, Petitioner v. AYAZ BOKLARI, MITCHELL GUTKOWSKI, JOHN DOE & JANE DOE, Respondents.

District Court of Suffolk County, Third District. Decided November 9, 2009.

Page 1

Collado, Collado & Fiore, PLLC, John J. Collado, Esq., Attorney
for Petitioner, Brentwood, New York.

Ezratty, Ezratty & Levine, LLP, Dan M. Blumenthal, Esq., Attorney
for the Respondent, Mineola, New York.


Mitchell Gutkowski, the above captioned respondent, moves this
Court pursuant to Order to Show Cause seeking to vacate a judgment
of possession and warrant of eviction entered July 23, 2009 upon
default. The grounds stated for the requested relief involve an
assertion that federal law requires prior receipt of a 90 day Notice
to Quit and assorted alleged defects in service of the referee's
deed, Notice to Quit and the instant petition. The above captioned
petitioner, Juan Collado, a foreclosure purchaser of the premises
located at 58 Manchester Road, Huntington, New York, opposes the
vacatur relief arguing the inapplicability of federal law,
compliance with New York's RPAPL eviction statutes and the failure
of the respondent to offer an excuse for his default. The Court
scheduled a hearing of the matter for October 8, 2009 at which time
the respondent requested that the matter be submitted upon papers,
and declined an opportunity to conduct a sworn hearing.

Undisputed Facts
Page 2

The undisputed relevant facts are that the petitioner is the owner
of the real property premises
located at 58 Manchester Road, Huntington, New York, by virtue of a
foreclosure referee's deed dated June 19, 2009, issued pursuant to
a June 5, 2009 assigned bid arising out of
a April 30, 2009 foreclosure sale. The petitioner served a Notice to
Quit and certified referee's deed upon the respondent's wife Lynn
Gutkowski at the premises on June 25, 2005. She also accepted a copy
of same as a person of suitable age and discretion, on behalf of her

Mitchell Gutkowski. Thereafter, the above captioned dispossess
petition was served personally upon the respondent and filed with
the Court on July 15, 2009, returnable July 23, 2009. The respondent
failed to appear and a default was entered resulting in the subject
judgment and warrant of eviction.
Effective May 20, 2009, Title 12 of the United States Code was
amended to add the "Protecting Tenants at Foreclosure Act". The
record presented no indication whether the subject foreclosure
involved a federally subsidized mortgage loan.

Issue Presented

Is the respondent entitled to vacate the petitioner's judgment of
possession? The test to be applied in determining whether the
respondent's default judgment should be vacated is whether the facts
presented demonstrate an excusable default in appearance and a
meritorious defense. See Benadon v. Antonio,
10 AD2d 40 (NYAD 1st Dept. 1960).


Meritorious Defense

The respondent's foremost meritorious defense argument requires
codifying a brand new federal statute involving a case of national
first impression. 12 U.S.C. Sec. 5220 (a) provides:

(a) In general — In the case of any foreclosure
on a federally related mortgage loan or on any
dwelling or residential real property after
the date of enactment of this
title [May 20, 2009], any immediate successor
interest in such property pursuant to the
foreclosure shall assume such interest subject
to (1) the provision by such successor in
interest of a notice subject to vacate to any
bona fide tenant at least 90 days before the
effective date of such notice; and (2) the rights
of any bona fide tenant, as of the date of such
notice of foreclosure. Emphasis added.

Titles 12 and 42 of the United States Code are the statutory
mechanisms wherein the federal government created and continues to
maintain the Department of Housing and Urban Development, the
Federal Housing Agency and other related agencies, which administer
its affordable housing programs through subsidized federal mortgages
and direct rent payments.
Page 3

On its face, Sec 5220 (a) Public Law 111-22 Div. A. Title VII of

2009 Emergency Economic Stabilization "Protecting Tenants at Foreclosure
Act" of 2009,123 State 1660, and its accompanying legislative summary in
the Federal Register, Vol. 74 No. 120, appears to support the respondent's
assertion of a meritorious defense, in that the use of the word "or"
in Sec. (a) spreads the 90 day Notice to Quit requirement
beyond HUD, FHA or other federally related properties to "any dwelling and
residential property".[fn1] It is undisputed in this case that only a
ten day notice was utilized per New York State law (RPAPL Sec. 713).The
utilization of the conjunctive expander word "or" in this
instance is intriguing as a review of the voluminous provisions of
Titles 12 and 42 reveals no other instance where Congress seeks to
regulate real property rights outside of its HUD/FHA subsidized
housing mission. The Court's threshold query is, whether this
expansion of federal authority to areas not involving federal
expenditure is constitutionally permissible?

Authority to Regulate

The fundamental premise/truism of the United States Constitution
is that the power and regulatory ability of the federal government
is limited to those areas surrendered by the states. See generally
U.S. v. Darby, 61 S. Ct. 451 (1941) citing to Story,
Commentaries on the Constitution, § 1907, 1908. Anals of
Congress 432, 761-768. Article 1, Section 8 of the
United States Constitution expressly details the 18 areas which the
federal government may lawfully regulate. All other areas not
expressly delegated to the United States "are reserved to the
states, or to the people". Amendment X United States Constitution.
(See also Amendment IX). Quoting James Madison, the
United States Supreme Court has held that "the powers delegated to
the federal government are few and defined . . . those which remain
in the states governments are numerous and infinite".
U.S. v. Lopez, 115 S. Ct. 1624 (1995).

The creation of rights and responsibilities concerning a private
landlord/tenant relationship is not listed as one of the 18 enacted
federal powers. As such, the justification for a federal presence
and the preemption of state law in this landlord/tenant area would
seem to fall to the general "catchall" power detailed in the
Constitution's Article I Section 8 (1) which provides:

Section 8. The Congress shall have power:

1. To lay and collect taxes, duties, imposts and excises, to pay
the debts and provide for the common defense and general welfare of
United States; but all duties, imposts and excises shall be uniform
throughout the United States.

Section 8 (1) is generally known as the "Taxation and Expenditure"
power under which Congress created and operates its assorted
affordable housing departments. The mission of these
Page 4
agencies is to expend federal funds to facilitate and subsidize
affordable housing in the United States. See 42 USCA 1437 (a) (1).
Conditioned upon the expenditure of the federal treasury; Congress
may regulate how HUD, the FHA and other related agencies are to
administer themselves and spend their funds. South Dakota v.
Dale, 107 S. Ct. 2793 (1987). See also "The Basis of the Spending
Power", 18 SEA. L.R. 215 (1995). However, absent a federal subsidy,
Congress has no authority to regulate the private relationship of a
landlord/tenant which is the province of state law. The law is
settled that the "general welfare" language does not extend
Sec. 8 (1) to issues of local non-interstate concern such a tenants'
rights unless linked to United States spending through its federal
housing agencies. See "Conforming the General Welfare Clause",
13 Harvard J.L. & Tech 87 (1999). The reason being that to hold
otherwise would extend federal control to arguably every area of
human endeavor and vitiate the constitutional framers' requirement
that "federalism" involves a limited universe of power and that the
states retained all but expressly ceded powers. U. S. V.
Butler, 56 S. Ct. 312 (1935).

Statutory Construction

In furtherance of its members oath of office to uphold the
Constitution, it is presumed that Congress intends to act
constitutionally. See generally, U. S. v. Lopez,
115 S. Ct. 1624 (1995) citing to the "Great Speeches and Orations of
Daniel Webster", 227-272 (E. Whipple ed. 1879). One of the
primary rules of federal statutory construction is that the Court
may make a non-literal interpretation so to reconcile and disregard
the language of the statute or to correct a manifest error or
absurdity. See, Holy Trinity Church v. U.S.,
12 S. Ct. 511 (1992). Peter Pan Fab. Inc. v. Martin Weiver
Corp., 274 F2d 487 (2d Cir. 1960);

The meaning of a word such as "or" may be construed in other than
its plain and ordinary sense so as to correct a mistake and to meet
constitutional muster. See U.S. v. Rumely,
73 S. Ct. 543 (1953). Blau v. Oppenheim,
250 F. Supp. 881 (S. D. NY, 1966). When considering whether Congress
intended to extend the regulatory jurisdiction of an existing
federal program, the Court is permitted to look beyond the words of
the statute to effectuate its underlying purpose. Salt Riv.
Project Agr. Imp. Dist. v. Fed. Power Dist.,
391 F 2d 470 (C.A.D.C. 1967). Statutes are instruments of
government, not exercises in composition and a departure from their
literary reading sometimes is necessary. See Malat v.
Riddell, 86 S. Ct. 1030 (1966).

The United States Supreme Court, citing Judge Learned Hand, has
held that "The art of statutory interpretation is the art of
proliferation of a purpose". U.S. vs. Shirev,
79 S. Ct. 746 (1959). Precedent exists that requires this Court to
ignore the plain meaning of the word "or", inserted into a hastily
enacted amendment, to make it consonant with the function sought to
be served, see Clark v. Uebersce Finanz-Korp.,
68 S. Ct. 174 (1947). See also, Markham v. Cable,
66 Sp. Ct. 193 (1945) which held that the use of the word "or" to
add an additional jurisdictional
Page 5
class which nullifies/sterilizes the limits of the original covered
class may be disregarded in the interest of statutory harmony. In
furtherance of same, the simplest way to restore constitutionality
to Sec. 5220 (a) is to simply deem the insertions of the word
"or" in par. (a) as a scrivener's error and to ignore same.
Simply removing it establishes the language as follows:

(a) In general — In the case of any foreclosure on a
federally related mortgage loan on any dwelling or residential
real property after the date of enactment of this
title [May 20, 2009], any immediate successor interest in such
property pursuant to the foreclosure shall assume such interest
to (1) the provision by such successor in interest of a notice to
vacate to any bona fide tenant at least 90 days before the effective
date of such notice; and (2) the rights of any bona fide tenant, as
of the date of such notice of foreclosure-Emphasis added.

Under this construction, the statute limits its reach to only
those tenancies arising from dwellings or residential real property
in which a federally related mortgage was foreclosed and comports
with the constitution as Congress is not expanding its regulation to
individuals who have not attached themselves to the federal purse
strings. This is consistent with the affordable housing "spending
power" jurisdictional grant embodied in the rest of the
United States Code. It also corrects the illogical coupling of a
subsequent universal jurisdictional grant which serves to nullify a
previously described limited jurisdictional grant. Without the word
"or" the limited grant (federally related loans) are now
further limited to federally related mortgages on residential
dwellings. As the petitioning tenant does not even allege a federal
loan nexus; he is not jurisdictionally covered by this federal
statute.[fn2] Moreover, Sec. 5220 (a) has already been judicially
construed not to contain a "private right of action".
Mangosing v. Wells Fargo Bank,
2009 WL 1456783 (Dist. Ct. Arizona 2009). To extend the 90 day
notice to non federally related loans would inherently created a
private right of action.[fn3]

New York Law Defenses
Page 6

As to the tenant's alternative arguments sounding under New York
State law; the Court notes the absence of any excuse for
respondent's failure to appear on July 23, 2009, a necessary
component of an application to vacate on the grounds of excusable
default. In fact, at no point does the petitioner seek to rebut the
petitioner's process server's affidavit that Mitchell Gutkowski
knew about the petition's return date and advised him he would not
appear. See Exhibit No. 4 Affidavit in Opposition.

The respondent claims that the petition should be dismissed as the
referee's deed was not exhibited to him. "In a summary proceeding
under RPAPL 713 (5), a purchaser real property at a mortgage
foreclosure sale must allege that either the deed delivered pursuant
to the foreclosure sale or a certified copy of such deed, has
been exhibited to the persons sought to be removed." 2 NY
Landlord & Tenant Summary Proc. § 35:8 (4th Edition).The Notice to
Quit served upon the respondent's wife contained a copy of the
referee's deed, which was accompanied by a certification
(which complied with CPLR 2105) of Juan Collado, an attorney
admitted to practice law in New York State. Respondent's conclusory
statement that the deed was not exhibited to him does not constitute
a defense to the proceeding.

The respondent seeks to jurisdictionally
dismiss the proceeding alleging that because the
Notice to Quit does not use the words "summary
proceeding" to describe the type of action
that would be commenced against him upon his
failure to surrender possession. This contention
is without merit. The Notice to Quit
substantially complies with the statute and
serves as an adequate basis for this proceeding.
Such notice need not be in the exact language of
the statute, rather it must be "to the effect"
prescribed in the statute.

(Folz v.Shalow, 16 N.Y.S. 942 (CP 1891); NY
Landlord & Tenant Incl. Summary Proc. § 30:47).The notice herein
adequately apprised respondent that in the event he failed to
surrender possession, "a legal proceeding shall be commenced against
(respondent) to remove (respondent) from the premises."

The respondent also alleges that the Notice to Quit
(dated June 23, 2009) is defective because it does not state an
exact date on which respondent must surrender possession. In order
to maintain this proceeding, petitioner was required to give
respondent the statutory ten day Notice to Quit prior to commencing
this proceeding. 2 NY Landlord & Tenant Incl. Summary
Proc. § 35:8 (4th Ed.). It is undisputed that the respondent's ten
day notice was served on him (by delivery to a suitable aged person
on June 25, 2009, and by mailing on June 26, 2009). The instant
proceeding was not commenced until July 17, 2009, when the petition
was filed. Olivero v. Duran, 70 Misc 2d 882,
(NY City Civ. Ct. 1972; 528 East 11th Street HDFC v. Durieaux,
164 Misc 2d 595 (NY City Civ. Ct. 1995). Respondent was provided
with sufficient notice prior to commencement of this
special proceeding. Respondent's claim that he was unable to
ascertain what date was ten days from his receipt of the Notice to
Quit is unavailing.

Any objections respondent may possess, such as that he allegedly
was not served in a prior foreclosure action appear to be related to
that action and are not in the subject matter jurisdiction of this
Court. Moreover, the Court notes that a "John Doe" was served
therein. The
Page 7
respondent has not shown he is more than a mere occupant at the

Lastly, the Court notes that the respondent did not avail himself
of the Court scheduled opportunity to conduct a hearing subject to
oath and cross examination in this matter. Such a hearing would have
been a more suitable forum to establish the validity of his
assertion that a lease exists and that he is a victim in this
instance. The failure to produce a lease and to state under oath
that he has been paying rent, together with his statement to the
process server, creates an inference that no such lease exists,
that no rent has been paid in excess of a year, and that the
respondent lacks the "clean hands" necessary to petition this Court
to vacate its prior judgment premised upon an acceptable excuse for
default and a meritorious defense.

Accordingly, the above captioned tenant respondents' application
is denied and the petitioner and the Sheriff may immediately proceed
to eviction without the need for any further 72 hour notice.

[fn1] The Court also notes that Sec. (a) (2) (A) of this statute
also utilizes the word "or" to further extend its reach to include
non bona fide tenants who lack a lease.


[fn3] Similarly, the Court notes that par. (a)(2)(A) also creates an
illogical statutory nullification situation wherein all Congress's
efforts to require that the tenant be a bona fide leasor in
Sec. (a)(2)(A) are vitiated by Sec.(a)(2)(B) which then provides that you
do not need a lease and do not need to be a BFP. Apparently the
tenant in this instance realized that production of his previously
alluded to lease would require him to be a rent paying BFP while
switching to having no lease lets him receive a 90 day notice, even
if he is not a BFP. The record presented does not contain even a
scintilla of evidence of a rental payment.

Saturday, December 26, 2009


More on the issue of who do you pay rent to when your Landlord is in foreclosure. The following is from a 2005 article from the New Jersey firm Fein, Such, Kahn & Shepard, P.C but it also speaks of New York law:

"Because of the normally slow process of a foreclosure action and the further delays recently caused by a slowdown of the processing of same in the New Jersey Court system resulting from changes in the personnel in the Foreclosure Unit, most foreclosures in New Jersey, even uncontested ones, are taking upwards of a year or more to complete. In addition, many of the sheriff’s offices in the State are back-logged which is causing delays in scheduling of sheriff sales. Coupled with both the debtor’s obligatory exercise of his right to two statutory adjournments and the reduced stigma of filing for bankruptcy in order to delay the foreclosure process, the secured lender in most cases is dealing with a non-performing asset which is quickly eroding in value.

In New York, the time-frame for completion of a foreclosure action is generally between nine months and one year, with delays resulting from failure of the Court to render decisions on motions within 60 days as required by the rules of Court and the all-to familiar order to show cause filed by the mortgagor in an attempt to forestall the foreclosure sale. However, foreclosures in the downstate counties may take slightly longer due to the current volume of cases pending before the Courts.

To combat these situations, a secured lender should consider taking some control over the real estate which serves as its collateral while continuing to shield itself from any liability that traditionally would accompany such control. Lenders, in many instances, can accomplish this by controlling the rental income stream on commercial properties. By far the best mechanism to control the rental income is through the use of a court-appointed rent receiver.

A rent receiver is a court appointed professional who takes complete control of a property away from a mortgagor, including control over collection and application of rental income from the property. A rent receiver is not an agent of the foreclosing mortgagee. He is independent of any party to the foreclosure and is answerable to the court. His responsibility is to maintain the status quo to preserve the property for a definitive period, usually the term of the foreclosure action. He is required to report to the court at certain intervals and is usually required to post a bond to protect against any mismanagement or wrongdoing by the receiver.

As set forth above, a good strategy for dealing with income producing property is the ability to control the rental income. In some instances this is accomplished through contractual language in the mortgage document or through a separate agreement executed simultaneously with the mortgage known as an “assignment of rents”. In many cases, under a standard assignment of rents, upon default by the mortgagee, the lender can take constructive possession of the mortgaged property by giving notice to the mortgagor’s tenants of such assignment and demanding the payment of rents directly. This in essence makes the lender a “mortgagee in possession”. While effective, this designation is not always the preferred mechanism in controlling the mortgagor’s rental stream. Many lenders do not realize that becoming a “mortgagee in possession” exposes themselves to a host of potential liabilities. As the party in active control of the property, the lender may be liable to:

Third parties injured while on the property;

Municipalities for zoning violations as well as violations of certain municipal ordinances;

The mortgagee and/or junior mortgagees for misapplication of rents to their detriment;

The mortgagee and/or junior mortgagees for deterioration of the property due to the action or inaction of the mortgagee which could lead to the elimination of surplus funds available to junior mortgagees or the mortgagor or the increase of a potential deficiency judgment against the mortgagor by the mortgagee in possession;

State and Federal agencies for potential environmental cleanup claims.

The preferable mechanism to control the rents is therefore the appointment of a rent receiver. The appointment of a receiver virtually eliminates the exposure to the above liabilities to the lender. As set forth above, the receiver is an officer of the court and not an agent of the mortgagee. He is normally bonded to protect against any of the above mentioned liabilities.

Although the exposure to liability is the biggest benefit to having a receiver appointed, there are many other benefits:

A receiver insures that, to the extent rental income is available, real estate taxes, insurance and necessary repairs are maintained on the property;

A lender has the peace of mind that the mortgagor is not siphoning the rents for his use for things other than the maintenance and upkeep of the property or the payment of mortgage payments;

It allows the lender to monitor the status of the tenancies during the foreclosure so that the lender knows how to deal with the tenants once title is taken to the property;

The receiver is responsible for evicting any non-paying tenants and marketing any vacancies, thereby eliminating waste and vandalism to the property and thus preserving the integrity of the property;

The appointment of a receiver may protect the rental income from collection efforts by other judgment creditors of the mortgagor;

A mortgagor faced with the possibility of losing his rental income will normally be compelled to discuss possible workout alternatives with the mortgagor.

The appointment of a rent receiver lies within the sound discretion of the court. Historically, Courts have looked to whether the appointment is necessary to protect the interest of the mortgagee. In making this decision, the courts have placed emphasis on whether the collateral is in a precarious or uncertain position.

There is no single factor relied upon by the Court in determining whether the lender’s security is in jeopardy. Instead the Court looks to several factors in determining whether to appoint a receiver:

Inadequacy of the property to satisfy the outstanding debt;

Inability of mortgagor to respond for deficiency;

Failure by mortgagor to pay real estate taxes and water rents;

Failure by mortgagor to keep property in good repair;

Failure by mortgagor to insure property;

Misappropriation of rents;

Decline in property value; and

The presence of stipulations in the mortgage document consenting to the appointment of a rent receiver or the assignment of rents to the mortgagee upon default.

It is the moving party’s burden to persuade the Court that the appointment of a rent
receiver is warranted. For this reason it is imperative to prove at least one or more of the above factors. In preparing for this, a lender should review the appraised value of the property, the amount to pay off the mortgage, whether mortgagor has maintained taxes and insurance, the physical condition of the property and the status of the leases and rental payments for each unit of the property.

In New York, although the appointment of a receiver is authorized by statute, the Courts still look to the factors above in determining if the appointment of a receiver is warranted.

Typically, a receiver in New Jersey is compensated a percentage of the funds collected, usually between 3%-6%. This figure is agreed to and placed in the order appointing the receiver. In some instances, however, the Court may feel this is a usurpation of the Court’s powers. In any case, the compensation of the receiver is within the sound discretion of the Court and the receiver is entitled to his reasonable expenses for the care and management of the property. Factors to be considered are the amount of money collected by the receiver, the extent and character of the services provided, and the degree of care used by the receiver. In the event the receiver does not collect sufficient funds to satisfy his expenses, the party moving for the appointment of the receiver is charged with paying the balance due. In New York, payment of compensation to the receiver may not exceed 5% of the funds collected, or $100, whichever is greater. As in New Jersey, in the event the receiver does not collect sufficient funds to satisfy his expenses, the party moving for the appointment of the receiver is charged with paying the balance due.

A rent receiver should be considered at the outset of the foreclosure action, although there is no prohibition for the appointment of a receiver at any point of the foreclosure action. Typically, receivers are appointed upon motion of a mortgagee filed on 16 days notice to all interested parties ( i.e. The mortgagor, subsequent mortgage holders, judgment holders, etc.).

The burden is on the moving party to demonstrate that all interested parties have been properly noticed. The application may also be brought by order to show cause filed during the pendency of the foreclosure action or at the initiation of the foreclosure action along with a verified complaint."

Thursday, December 24, 2009


The legal "'Twas the Night Before Christmas" Excerpted from the NEA Journal, December 1960:

Whereas, on an occasion immediately
preceding the Nativity festival,
throughout a certain dwelling unit,
quiet descended, in which could be heard
no disturbance, not even the sound
emitted by a diminutive rodent related
to, and in form resembling, a rat; and

Whereas, the offspring of the
occupants had affixed their tubular,
closely knit coverings for the nether
limbs to the flue of the fireplace in
expectation that a personage known as
St.Nicholas would arrive; and

Whereas, said offspring had become
somnolent, and were entertaining re:
saccharine-flavored fruit; and

Whereas, the adult male of the
family, et ux, attired in proper
headgear, had also become quiescent in
anticipation of nocturnal inertia; and

Whereas, a distraction on the snowy
acreage outside aroused the owner to
investigate; and

Whereas, he perceived in a most
unbelieving manner a vehicle propelled
by eight domesticated quadrapeds of a
species found in artic regions; and

Whereas, a most odd rotund gentleman
was entreating the aforesaid animals by
their appellations, as follows:

"Your immediate co-operation is
requested. Dasher, Dancer, Prancer, and
Vixen; and collective action by you will
be much appreciated, Comet, Cupid,
Donder, and Blitzen"; and

Whereas, subsequent to the above,
there occurred a swift descent to the
hearth by the aforementioned gentleman,
where he proceeded to deposit gratuities
in the aforementioned tubular coverings.

Now, therefore, be ye advised:
that upon completion of these acts,
and upon his return to his original
point of departure, he proclaimed
a felicitation of the type prevalent
and suitable to these occasions, ie:

Merry Christmas to All and to All a Good Night!

Wednesday, December 23, 2009


As a follow up to yesterday's blog, here is some more information I found. Standard mortgages generally do have a provision in them which allows the mortgagee (Bank) to collect rental payments which are owing to the mortgagor (Landlord) if the mortgagor defaults on his monthly mortgage payments. The sums collected are applied against the amounts that Landlord owes to the Bank - generally it would be applied first to penalties, then to interest, then if there's any left to principal. However, in New York at least, in order for the Bank to collect rent, the usual process is that they first go to court, begin a foreclosure proceeding against the Landlord, and obtain a court order allowing them to collect the rent. In most cases a "receiver" is appointed - that is, a neutral third party - who actually should collect the money and then disburse to the Bank. But as a condition of this arrangement the receiver also becomes responsible for essential repairs and maintenance - in other words, maintaining the habitability of the building. So for instance in cold weather the receiver would pay the building's oil bill (or gas bill or whatever) before he could pay the bank. That does NOT apply to nonessential services - for instance, the receiver would not be required to pay for a new paint job or something that doesn't go to habitability.

Tuesday, December 22, 2009


Here is an interesting dilemma I faced today: Landlord is in default of mortgage and a foreclosure proceeding is instituted against Landlord. What should Tenant do? Pay Landlord or Bank? Landlord, if the property is still in Landlord's name, may institute a non-payment summary proceeding against Ternant if Tenant withholds rent. But if the Bank or foreclosure court notifies Tenant to pay someone else, what does Tenant do? What are Tenant's rights? Well, here are some links (you may have to cut and paste into your browser) to articles that highlight this issue:

Monday, December 21, 2009


From The Nassau County Bar Association:

"On December 15, 2009, NYS Governor David Paterson signed a new law that requires any lender or settler seeking to foreclose on a mortgage and the mortgage holder to participate in a settlement conference before the Court. Anticipating an influx of additional activity, the Court has asked the Nassau County Bar Association to help provide pro bono legal representation to homeowners during these settlement conferences. The mandatory court settlement conferences are being held in Nassau Supreme Court five sessions a week, at 11 a.m. and 2 p.m. on Wednesdays and Thursdays, and 9:30 a.m. on Fridays. Volunteer attorneys represent the homeowners for that day only. Housing counselors from Nassau County are in attendance as well to assist in loan modifications. All participating NCBA members will be covered by limited malpractice insurance for that day through the Volunteer Lawyers Project. Volunteer attorneys will also receive the newest information and materials they need to provide representation. Previous experience in mortgage foreclosure, real estate or related areas is not required."

I will be a volunteer lawyer on January 6 and 13 at 11am.

Sunday, December 20, 2009


It is a fact that for many Claimants, UI benefits will not be enough. It is also a fact that for those Claimants who have been denied benefits, it will be some time before hearings, appeals, etc. may get you UI benefits. This is from a press release issued a few days ago and it is something that I advise all of my clients who are in the hearing process regarding their benefits:

"The State Office of Temporary and Disability Assistance (OTDA) and the State Department of Labor today discussed the unemployment situation in the Capital Region and programs and services available to help struggling New Yorkers provide for themselves and their families in these difficult times. At an event in Albany, State officials discussed the local unemployment situation and what is being done to help the unemployed. State officials also reminded people struggling to put food on the table that they can now apply for food stamp assistance online in much of the Capital Region. Under Governor David A. Paterson’s leadership, New York has created a website where anyone can quickly and easily find out what benefits and services they may be eligible for at The site also offers an electronic food stamp application, allowing residents in much of the Albany area to apply online. “During good economic times and especially during rough patches, State government is first and foremost accountable to New York's taxpayers,” said Governor Paterson. “There is no doubt that the past year has been a turbulent time. We need to let New Yorkers know about the expanded suite of State and federal programs aimed at helping working families to reassure them that State government is committed to bettering their lives.” “We recognize that many of those hard hit by the downturn have never sought help before, and we’re working to make it as easy as possible for those who are eligible to obtain benefits,” said Elizabeth Berlin, OTDA Executive Deputy Commissioner. “The myBenefits site allows people to apply for food stamps without having to take time off from work, or from looking for work, to visit the local department of social services to apply. As a result of the numerous steps we’ve taken over the past two years to make it easier for those eligible to access food stamp benefits, New York State has been well-positioned to respond to the increased demand.” “Although some say this brutal recession is ending, too many New Yorkers are still unemployed, struggling to provide food and shelter for themselves and their families,” State Labor Commissioner M. Patricia Smith said. “Unemployment benefits can only stretch so far, and we urge anyone in need to take advantage of benefits and services offered through the website.” The myBenefits site, launched in May 2008, allows New Yorkers to complete a simple online prescreening to determine whether they are likely to qualify for multiple benefits – including food stamps, home energy assistance, Earned Income Tax Credits, child and dependent care credits, Medicaid, Family Health Plus, Child Health Plus and school lunch programs, among others. Plans call for including additional program screenings through myBenefits over time, with the ultimate goal of allowing individuals and families to apply for an array of programs by answering one set of simple questions online. Residents of 27 counties – including Albany, Schenectady, Greene, Warren and Washington counties – can already submit a food stamp application through the website with the assistance of designated community organizations. Additionally, residents of 12 counties can use myBenefits to apply directly for food stamps from any computer with Internet access at any time convenient for them. Between September 2008 and September 2009, the number of individuals receiving food stamp benefits in the Capital Region has increased 27 percent, going from more than 75,000 people to just over 95,000. Statewide, enrollment grew 23 percent over the same period to more than 2.5 million recipients, an all-time high. Governor Paterson, OTDA and the Department of Labor have made the economic security of New Yorkers a priority. Those facing the loss of unemployment benefits, collecting unemployment, or just having a hard time getting by financially, should visit to see what assistance may be available to them.
To learn more about the programs New York State has to offer, visit and click on the link for “Resources for Working Families.”"


Saturday, December 19, 2009


Here is my concern regarding those decisions: According to Rule 463.1 (f) (2):

"The appeal board usually decides appeals without a new hearing. It relies on evidence taken at the administrative law judge hearing and the written arguments of the parties on appeal. The board will not consider any evidence not introduced at the administrative law judge hearing unless all parties consent or it is made part of the record at a further hearing. In its discretion the board may hold an additional hearing."

It appears to me that on issues of credibility of witnesses, the determination of the administrative law judge who actually heard, seen, etc. the witnesses should bear greater weight than a board who is just viewing the record and reading written arguments, unless they hold an additional hearing and/or unless it is clear that the administrative law judge was arbitrary and capricious.

Friday, December 18, 2009


Here is another case from the 3rd Department, Appellate Division similar to yesterday's post:

Matter of Stiefvater Real Estate, Inc. (Commissioner of Labor), 34 AD3d 1176, November 30, 2006, Appellate Division, Third Department (emphasis supplied):

"Initially, we find no merit in Stiefvater's contention that the Board erred in substituting its judgment for the credibility determinations of the Administrative Law Judge. Although considerable weight is accorded to such determinations, the Board is not bound by them and may make its own assessments (see Matter of Simpson [Commissioner of Labor], 301 AD2d 1005 [2003]; Matter of Cooney [Consolidated Edison Co. of N.Y.—Commissioner of Labor], 283 AD2d 820, 821 [2001])."

Thursday, December 17, 2009


There is a decision which I recently discovered which I find disturbing. The case is IN THE MATTER OF CLAIM OF DAOUST, 5 A.D.3d 828, 772 N.Y.S.2d 616 [3d Dept 2004] which stated (emphasis supplied):

"Although claimant maintains his innocence and argues that the Board failed to properly weigh other mitigating circumstances surrounding his plea, such conflicting evidence presented credibility issues falling within the exclusive province of the Board, which was not obligated to adopt the Administrative Law Judge's contrary credibility determinations (see Matter of Cooney [Consolidated Edison Co. of N.Y. — Commissioner of Labor], , [2001]; Matter of Thompson [New York City Off. of Bronx Borough President — Commissioner of Labor],, [2000])...."

It is not clear if the Employer's appeal of the ALJ hearing to the Appeal Board involved a new hearing or just a review of the ALJ hearing transcript.

Wednesday, December 16, 2009


So as a follow us to yesterday's blog, I point out the following section from Article 18 of the New York State Unemployment Insurance Law (emphasis supplied):

"Sec. 632. False statements or representations.1. Benefits and contributions. Any person shall be guilty of a misdemeanor who wilfully makes a false statement or representation

(a) with the effect of obtaining, either for himself or for any other person, any benefit or payment under the provision of this article or of any similar law of another state or the United States in regard to which this state acted as agent pursuant to an arrangement authorized by this article, or

(b) in order to reduce the amount of contributions to the fund."

Tuesday, December 15, 2009


Here is an interesting consultation. Claimant states Employer fired Claimant but Claimant was denied unemployment benefits because Employer argued to the DOL that Claimant was not fired but quit. Yet in an unrelated litigation, Claimant later discovered that Employer admitted in writing that Claimant was fired. Hearing is scheduled - it will be interesting to hear Employer's explanation of the conflicting statements it made.

Monday, December 14, 2009


This will also be on December 15. Nassau residents caught in the growing mortgage foreclosure crisis can have their questions answered by attorneys at a free clinic sponsored by the Nassau County Bar Association at the NCBA headquarters, 15th and West Streets, Mineola, NY. Attorneys have volunteered to provide one-on-one guidance, advice and direction to any Nassau County homeowner who is concerned about foreclosure matters or is already in the foreclosure process involving property in Nassau County. Attorneys have volunteered to review individual foreclosure issues with Nassau homeowners, help them sort things out, and give advice or refer them to agencies and programs, right in the same room, that may be able to help. This is not legal representation. The attorneys will help the homeowner find out if indeed, they need a credit counselor or a lawyer, and get them in touch with available resources. In addition to meeting one-on-one with a volunteer attorney, housing counselors from the Nassau County Homeownership Center and representatives from Nassau/Suffolk Law Services -- which provides free legal services for those who meet certain income guidelines -- will be on hand to provide assistance. Reservations are required by calling the Bar Association at 516-747-4070 between 9:30 a.m. - 4:30 p.m. The clinic is from 4-6 p.m.

Sunday, December 13, 2009


Senior Citizen Consultation Clinics - Each month, attorneys provide free 30-minute private consultations to Nassau County residents 65 years of age and over. The consultation does not provide free legal service. The Clinics are held from 9:30 a.m. to 10:30 a.m. at the Nassau County Bar Association, 15th and West Streets, Mineola, NY. This month's clinic is scheduled for Dec. 15. Advance telephone registration is required. Please call NCBA: (516) 747-4070.

Saturday, December 12, 2009


I had a recent consultation where I was advised that the Claimant, who resided in the NYC metro area, after requesting a hearing, was granted a hearing by telephone with the Troy office. I was advised at a CLE training course that for those claimants who request immediate hearings, have the option of requesting a telephone hearing but this is discouraged by attorneys for many reasons: i.e. it is harder to cross-examine by phone, introduce evidence, and the judge cannot view a person's credibility over the phone. Plus, we who represent claimants believe it is best for the hearing judge to see the claimant in person. I am now advised that one of the hearing offices is so overbooked with hearings, that it is assigning hearings by telephone. If this happens, make a request first in writing, and then at the telephone hearing, that you prefer an actual hearing. This may delay a determination but my experience has been this: I had one telephone hearing that wound up taking over 5 months and we are still awaiting a decision. I do not believe, and in this is my own opinion, that justice should be dispensed by telephone, email or text messaging.

Friday, December 11, 2009


Just a reminder again - contact an attorney once you get an adverse notice of determination or when you get a letter that your employer is requesting an appeal of your determination of benefits. If you request a hearing and/or wait until you get the hearing date before you contact a lawyer, you are not giving the lawyer (at least this lawyer)enough time to prepare - so either you talk your lawyer (but not me) into going to the hearing unprepared or you attend the hearing and request an adjournment to get a lawyer or give your lawyer time. What seems to be happening in the latter case now is that judges are issuing denial decisions with leave to reopen on good cause, viz., obtaining representation - this adds more work for the lawyer and, unless it is pro bono work, more legal fees and less time devoted to the merits of your case. What happens in the former case is that claimants are unhappy with the representation they received, stating that their lawyer did not fully understand the case and was not prepared.

Thursday, December 10, 2009


The NY State Department of Labor (DOL) has announced that claimants who are receiving NYS Unemployment Insurance (UI) Benefits can now voluntarily elect to have NY State Income Tax withheld from their UI benefit checks. Previously, only Federal Income Taxes could voluntarily be withheld.

Here are answers to FAQs from the NY State Department of Labor:

Are unemployment insurance benefits taxable?
Yes. Any unemployment compensation you receive is subject to Federal, New York State and Local income taxes provided you are required to file a tax return.

Is there tax relief available for UI claimants?
Yes. Under current legislation, the first $2400 of UI benefits paid in the year 2009 will be exempt from federal and state taxes.

Will any benefits be withheld for taxes? The withholding of benefits for Federal income tax or State income tax is voluntary. If you elect to have Federal tax withheld, an amount equal to 10% of your gross benefit payment will be withheld after mandatory deductions (such as child support payments), are made. If you elect to have State tax withheld, an amount equal to 2.5% of your gross benefit payment will be withheld. You can change this option any time by calling the Telephone Claims Center.

Can I change my tax withholding option?
You may start or stop the federal or state tax withholding at any time by contacting the Telephone Claims Center. If you are a new claimant, you can have opt for state income tax deductions at the time that you file online or by phone. If you have an open claim, then you would have to change your withholding options by calling the Telephone Claims Center.

Note: If you elect the Federal tax withholding option, you must have 10% withheld; you cannot have any less or any more than 10% withheld. If you elect the state tax withholding option, you must have 2.5% withheld; you cannot have any less or any more than 2.5% withheld.

Wednesday, December 9, 2009


A recent consultation revealed that Claimant did not file a request for hearing and several months have passed since Claimant received an adverse Notice of Determination. According to the Department of Labor website (the emphasis on 30 days is from me):

"You may request a hearing on any determination affecting your rights to benefits by writing a letter to NYS Department of Labor, P.O. Box 15131, Albany, NY 12212-5131. The request must be postmarked or otherwise proven to have been filed within 30 days after the mailing or personal delivery of the determination. Absent proof to the contrary, a determination shall be deemed to have been mailed on the date recited on it and received by a party to whom it is addressed no later than five business days after the date on which it is mailed. Make sure you include your Social Security number on your hearing request and the reasons you disagree with the determination. You will be notified of the date, time and place of the hearing by the Administrative Law Judge section after your request has been processed. To protect your rights, you must continue to claim weekly benefits for any week in which you are unemployed...."

The Appeal Board has long held that neither incapacity to work, nor unavailability to work constitute sufficient conditions for excusing an untimely protest of an initial determination. The language of the law is explicit that an extension of the 30 day limit can only be based on a "physical condition or mental incapacity" that prevents claimant from making a hearing request. However, LOCAL OFFICES ARE REQUIRED TO PROCESS ANY AND ALL HEARING REQUESTS. THE ADMINISTRATIVE LAW JUDGE WILL DECIDE WHETHER CLAIMANT IS ENTITLED TO A HEARING.

Tuesday, December 8, 2009


A recent consultation revealed that a several thousand dollar security deposit was never returned to the tenant, although the landlord advised the tenant that it would be returned as there was no damage to the premises when tenant timely vacated. Remedy? A small claims action and/or contact the Attorney General and file a complaint at 212-416-8000 or 212-416-8345. Usually, holding off on the last month's rent and have the landlord apply the security deposit has a potential disadvantage: you cannot safely use that landlord as a credit reference when trying to rent again. As to the limited remedies available to tenants, read this from

"The laws affecting security deposits in New York State are not protective enough. It is far too simple for landlords to abuse them without penalty. Many landlords, once they collect a security deposit, treat it as their own money, never to be returned to the tenant unless they are forced to do so. The "statutory trust" character of security deposits is thus flouted.

Reforms that would put some "teeth" into the law, such as triple damages for unwarranted withholding of deposits, are needed. Until reforms are enacted, the burden will continue to be on tenants to demand that there be strict compliance with the existing law."

Monday, December 7, 2009


Often asked, on social and other occasions, what litigation steps should I take, how do I stop him/her from doing this, my friend wants to litigate this, how can I sue, etc. etc. and it often reminds me of the following quotation, which was not taught in my law school:

"Discourage litigation. Persuade your neighbors to compromise whenever you can. As a peacemaker the lawyer has superior opportunity of being a good man. There will still be business enough."

Abraham Lincoln
16th president of US (1809 - 1865)

Sunday, December 6, 2009


Free Public Education Seminar - Current Issues in Animal Law - at the Nassau County Bar Association - Monday, January 11, 2010; 7:00 – 9:00 p.m. Learn about laws affecting: Pets and rental housing, co-ops, condos, defenses to eviction proceedings, Protecting individuals with service animals, Including the family pet in your estate plan, Your rights in a dangerous dog proceeding, Veterinary Malpractice and Negligence, The Pet Lemon Law, Animal Custody and Visitation in Divorce, Animal Cruelty and Abuse, Evacuation plans for your pets. Animal Cruelty and Abuse. Spay/Neuter Laws. Animal Custody and Visitation in Divorce Evacuations plans for your pets. For more information, click on the title above.

Saturday, December 5, 2009


On December 15, Nassau residents caught in the growing mortgage foreclosure crisis can have their questions answered by attorneys at a free clinic sponsored by the Nassau County Bar Association at the NCBA headquarters, 15th and West Streets, Mineola, NY. Attorneys have volunteered to provide one-on-one guidance, advice and direction to any Nassau County homeowner who is concerned about foreclosure matters or is already in the foreclosure process involving property in Nassau County. Attorneys have volunteered to review individual foreclosure issues with Nassau homeowners, help them sort things out, and give advice or refer them to agencies and programs, right in the same room, that may be able to help. This is not legal representation. The attorneys will help the homeowner find out if indeed, they need a credit counselor or a lawyer, and get them in touch with available resources. In addition to meeting one-on-one with a volunteer attorney, housing counselors from the Nassau County Homeownership Center and representatives from Nassau/Suffolk Law Services -- which provides free legal services for those who meet certain income guidelines -- will be on hand to provide assistance. Reservations are required by calling the Bar Association at 516-747-4070 between 9:30 a.m. - 4:30 p.m.

Friday, December 4, 2009


By clicking on the title above, you will view an article from the Law Society of Upper Canada but it deals with some of the issues attorneys faced when the other side is self-represented: however, I feel the advice given also applies to a lawyer dealing with another attorney and to the litigants themselves. In my experience, self represented clients often appear as Landlords in Landlord/Tenant court and in District Civil Court here in Nassau County, as well as small claims court. And of course, as mentioned last week on my Facebook page, you are aware of the self-represented parties in a Suffolk County mortgage foreclosure case who were able to get the action, and the mortgage, dismissed.

Thursday, December 3, 2009


Sometimes, a litigant is ill, or a lawyer has another matter, and a hearing or trial is scheduled. Lately, I have been under the weather and had to reschedule hearings and appointments....what is the rule on adjounments:

"In the Matter of Steven B., Respondent. Administration for Children's Services of the City of New York, Respondent; Makeba S., Appellant.

Decided May 11, 2006, 2006 NY Slip Op 03642 [6 NY3d 888] May 11, 2006 Court of Appeals


The order of the Appellate Division should be affirmed with costs.

The grant or denial of a motion for "an adjournment for any purpose is a matter resting within the sound discretion of the trial court" (Matter of Anthony M., 63 NY2d 270, 283 [1984] [citations omitted]). Contrary to appellant mother's claims, Family Court's refusal to grant her application for an adjournment fails to constitute an abuse of discretion. Mother's need for an adjournment to call additional witnesses resulted from her lack of due diligence in preparing for the hearing. Moreover, the witnesses she wished to call were not identified or would testify cumulatively. Under these circumstances, Family Court acted within its discretion in refusing to adjourn the hearing. Mother's remaining contentions lack merit.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo, Read and R.S. Smith concur.

On review of submissions pursuant to section 500.11 of the Rules of the Court of Appeals (22 NYCRR 500.11), order affirmed, with costs, in a memorandum."

Wednesday, December 2, 2009


A recent issue and it comes up often in matrimonial actions: an action for divorce is started and the parties seek temporary relief immediately, i.e., custody, visitation, maintenance, support, legal fees, health insurance, etc. What if one party is not happy with the temporary order? Here is a recent case from the Second Department (which covers Nassau):

"SINANIS v. SINANIS, 2008-10966 [2d Dept 11-10-2009]2009 NY Slip Op 08210, Appellate Division of the Supreme Court of New York, Second Department. Decided on November 10,2009.

In an action for a divorce and ancillary relief, the defendant
appeals (1), as limited by his notice of appeal and his brief, from
stated portions of an order of the Supreme Court, Westchester County
(Tolbert, J.), entered November 14, 2008, which, inter alia, granted
that branch of his motion which was for a downward modification of
pendente lite child support only to the extent of reducing his
support obligation from $1,200 per week to $700 per week retroactive
to September 1, 2008, and directed him to pay the
plaintiff's attorneys an interim counsel fee in the sum of
$10,000, and (2) from stated portions of an order of the same court
entered March 5, 2009, which, inter alia, upon reargument, adhered
to the prior determination granting that branch of his motion which
was for a downward modification of pendente lite child support only
to the extent of reducing his support obligation from $1,200 per
week to $700 per week, retroactive to September 1, 2008, and
directing him to pay the plaintiff's attorneys interim counsel fees
in the sums of $10,000 and $15,000, and directed him to deposit
marital funds in the sum of $139,000 in escrow.

ORDERED that the appeal from the order
entered November 14, 2008, is dismissed, as the portions of
that order appealed from were superseded by the order
entered March 5, 2009, made upon reargument; and it is further,

ORDERED that the order entered March 5, 2009, is affirmed insofar
as appealed from; and it is further,
Page 2

ORDERED that one bill of costs is awarded to the plaintiff.

Maniatis Dimopoulos & Lombardi, LLP, Scarsdale, N.Y.
(Constantine G. Dimopoulos of counsel), for appellant.

Fuchs & Eichen, Harrison, N.Y. (Charna L. Fuchs of counsel), for



The defendant seeks further modification of his pendente lite
child support obligation, which the Supreme Court reduced from the
sum of $1,200 per week to the sum of $700 per week. However,
"[m]odifications of pendente lite awards should rarely be made by an
appellate court and then only under exigent circumstances, such as
where a party is unable to meet his or her financial obligations or
justice otherwise requires" (Barone v Barone, 41 AD3d 623, 624;
see McGarrity v McGarrity, 49 AD3d 824, 825; Zheng v
Pan, 23 AD3d 378, 379). Here, the record indicates that in
addition to his salary of approximately $187,000 per year, the
defendant has sufficient resources available to pay child support in
the sum of $700 per week as well as the carrying charges for the
marital residence in accordance with the modified pendente lite
order, and he has not demonstrated that such payments will leave him
unable to meet his own financial obligations (see Ruane v
Ruane, 55 AD3d 586, 588; Krigsman v Krigsman,
288 AD2d 189, 191; see also Zheng v Pan, 23 AD3d at 379).
Accordingly, any perceived inequities in the pendente lite award can
be best remedied by a speedy trial, at which the parties' financial
circumstances can be fully explored (see Swickle v Swickle,
47 AD3d 704, 705; Stubbs v Stubbs, 41 AD3d at 833; Barone v
Barone, 41 AD3d at 624).

Contrary to the defendant's contention, the court properly made
the downward modification of his pendente lite child support
retroactive only to the approximate date upon which his application
for a downward modification was made
(see Rosenberg v Rosenberg, 215 AD2d 365, 366), rather than
from the date upon which the plaintiff's initial application for
pendente lite child support was made. "While a party in a
matrimonial action may request the downward modification of a
temporary child support award when that party can demonstrate
financial hardship, such a downward modification may operate only
prospectively" (Fruchter v Fruchter, 29 AD3d 942, 944; see
Shapiro v Shapiro, 35 AD3d 585, 587; Petek v Petek,
239 AD2d 327, 328).

In view of the disparity in the parties' financial circumstances,
the court properly directed the defendant to pay interim counsel
fees totaling $25,000 (see Lauria v Usak-Lauria,
65 AD3d 1017; Mueller v Mueller, 61 AD3d 652, 654; Mbanefo v
Mbanefo, 60 AD3d 648, 649; Stubbs v Stubbs, 41 AD3d at 833).
Furthermore, under the circumstances of this case, the court
properly directed that payment of interim counsel fees be made from
either the defendant's income or separate property.

Finally, the court providently exercised its discretion in
directing the defendant to deposit marital funds in the sum of
$139,000 in escrow to protect the plaintiff's right to equitable
distribution (see DiSanto v DiSanto, 279 AD2d 603).


It is clear to me that the motion for relief pendente lite is of extreme importance and a lot of work and time and detail should be put into it, with the unfortunate effect of extremely high legal fees. It also appears to me that when there is a huge fight over the pendente lite order, it is likely that the action will continue to be quite litigious and expensive.

Tuesday, December 1, 2009


This is an issue that came up in a recent consultation. Client wanted to change counsel but old counsel would not release files to Client because of unpaid legal fees. Here is the latest New York State Bar Association Ethics Opinion on this issue which is under the old Rules of Professional Responsibility:

"Opinion 766 — 9/10/03 (35-02)- New York State Bar Association Committee on Professional Ethics - September 10, 2003

Topic: Disposition of files of former client Overrules: N.Y. State 398


What is a lawyer's obligation to a former client who requests the files
that were generated in the course of the prior representation?

OPINION DR 9-102(C) provides:

A lawyer shall:

* * * (4) Promptly pay or deliver to the client . . . as requested by
the client . . . the funds, securities, or other properties in the
possession of the lawyer which the client . . . is entitled to

The question of which "funds, securities, or other properties in the
possession of the lawyer" the client (or successor counsel) is entitled to
receive is generally a question of law, not ethics. See N.Y. State 623
(1991) ("Which documents may be deemed to belong to the lawyer is not
always easy to ascertain; in certain instances, the lawyer's ownership of
such documents may be a complex issue of both law and fact."); Nassau Bar
Op. 94-19 (funds in IOLA account); Nassau Bar Op. 96-13 (funds in escrow
account). The duty to deliver "to the client all papers and property to
which the client is entitled" is also a requirement of withdrawal from
employment. See DR 2-110(A)(2).

Accordingly, the Bar's attention is directed to Sage Realty Corp. v.
Proskauer Rose Goetz & Mendelsohn, 91 N.Y.2d 30 (1997), in which the
Court of Appeals abandoned the distinction "between documents
representing the `end product' of an attorney's services, which belong to
the client, and the attorney's `work product' leading to the creation of
those end product documents, which remains the property of the attorney,"
opting instead for the "majority" view wherein, "upon termination of the
attorney-client relationship, where no claim for unpaid legal fees is
outstanding," the client is "presumptively accord[ed] . . . full access
to the attorney's file on a represented matter with narrow exceptions."
91 N.Y.2d at 34 (citations omitted). The Court cited the final draft of
the American Law Institute Restatement (Third) of the Law Governing
Lawyers § 58 (proposed final draft No. 1, 1996), as follows:

The draft Restatement provides that a former client is to be accorded
access to "inspect and copy any documents possessed by the lawyer
relating to the representation, unless substantial grounds exist to
refuse" (id., § 58[2])

[emphasis supplied].

Even without a request, an attorney is obligated to deliver to the
client, not later than promptly after representation ends, "such
originals and copies of other documents possessed by the lawyer relating
to the representation as the . . . [former] client reasonably needs"
(id., § 58[3], comment d). 91 N.Y.2d at 35. The Committee recognizes
that, consistent with the now rejected "minority view," N.Y. State 398
(1975) suggested that "the client is not entitled to require delivery of
the firm's work product" unless, in the context of the particular
circumstances, the "firm's duty" to the former client or the
"professional courtesy" to be accorded to successor counsel, "are
necessary" to guard the client's interest" (citations omitted).

To the extent that N.Y. State 398 thus reflects a presumption of
non-accessibility that a former client must overcome with respect to a
certain class of documents, that view has been plainly rejected by the
Court of Appeals in Sage Realty and is no longer valid. See also Gamiel
v. Sullivan & Liapakis, P.C., 289 A.D.2d 88 (2001); Getman v. Petro
& Ingalsbe, 266 A.D.2d 688 (1999).

With regard to who bears the cost of file assembly and delivery, we
also note the Court of Appeals statement in Sage Realty that "as a
general proposition, unless a law firm has already been paid for
assemblage and delivery of documents to the client, performing that
function is properly chargeable to the client under customary fee
schedules of the firm, or pursuant to the terms of any governing retainer
agreement." 91 N.Y.2d at 38. Of course, the fee for such services may not
be excessive. DR 2-106(A). See also Deane v. Skadden, Arps, Slate,
Meagher & Flom, N.Y.L.J., Aug. 17, 1998 (Sup.Ct. N.Y. County).


As a matter of ethics, upon request by a former client, a lawyer must
promptly turn over or provide access to the files which the former client
is entitled to possess. As a matter of New York law, a former client is
entitled to any document related to the representation unless substantial
grounds exist to refuse access. The lawyer may charge such former client
reasonable fees for assembling and delivering such files, as reflected by
customary fee schedules or any governing retainer agreement."