I hope I can shed some light on legal aspects of Former Guy’s trial in New York, now in its fourth day. We’ll do this Q and A style, and I welcome any additional questions.
Q If the loans got paid in full, why are we here?
A New York has a statute – known as 63-12 – which gives its Attorney General authority to seek an order enjoining the continuation of business activities, etc. whenever someone engages in “repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business.” The statute vests significant power in the AG and the court to which she applies for the order. A violation, standing along, provide a basis for the requested relief.
Q If Former Guy thinks his apartment is worth more than anyone else thinks it’s worth, who’s to say?
A Appraised values generally reflect what a reasonable buyer and seller, with knowledge and not under duress, will pay and accept. Appraisal is an art, not a science. However, these facts do not allow someone to avoid fraud charges, no matter what. The last five homes in the hood sold for $200 per square foot and you think yours is worth $250 psf, G-d Bless. You think yours is worth $500 psf? And that it’s 3x its actual size. Fine, but don’t provide that estimate on a financial statement you give to a lender!
Q How come a Democrat judge is deciding this case? Where’s the jury?
A New York elects its judges, unfortunately. Merit selection – where, typically, the governor selects judges from a slate that an independent commission provides – reduces partisanship. Here, Judge Arthur Ergeron drew the case. It. All.
About the jury? Apparently, Former Guy did not request a jury. The U.S. Constitution provides for a right to a jury trial in civil cases. But, in all courts, parties must request a jury by a date certain, set forth in the civil rules for that jurisdiction. Jury trials take more time and burden the system. So, while the right exists, it’s waived by inaction.
Q How come the judge shut down Former Guy about the judge’s clerk?
A I will be practicing law for 42 years two weeks from today. I know judges protect their staffs. Breaks occur during trials because judges want to accommodate their people. Treat an assistant or a bailiff badly? Expect Pain, soon! Want to please a judge? File on time, Have documents properly marked. Be respectful and pleasant. Etc.
Q What’s up with this summary judgment thing? Did the judge decide the case without hearing any witnesses? Why, and how come we still have a trial?
A That is one fine question. In many cases, the parties do not have disputes about material facts. Instead, they are fighting about the outcome, given the facts. In a suit about a contract, for example, the parties might be disagreeing about the meaning of a word or a sentence … or even the import of the placement of a comma. (Many cases do involve factual disputes, e.g., was the light red or green.)
Summary judgment involves filing papers with the court, telling the court no material factual disputes exist and the law directs a decision in A’s favor. B gets to respond and can tell the court there are (1) material factual disputes (supported by admissible evidence); or (2) no material factual disputes, but the law directs a decision in B’s favor.
Sometimes – and the current case offers a good example – involve partial summary judgment. Judge Ergeron decided, based on the filed papers, that no material factual disputes exist concerning the violations of N.Y. Executive Law § 63-12. The trial involves appropriate sanctions, and on that issue material disputes abound.
Good lawyers focus, when they can, on summary judgment or defending against a summary judgment motion. Summary judgment saves time and money, it provides an opportunity to win without worrying about a witness’s testimony or a juror’s misunderstanding, and even when a judge denies a summary judgment motion, the judge knows more about the case than they did beforehand, and for a party seeking summary judgment, that tends to be helpful.
I hope I have shed some light on the trial du jour.