Restivo et al v. Nassau County et al

Motion to Dismiss for Failure to State a Claim

E.D.N.Y.March 23, 2017

6411908v.1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ----------------------------------------------------------------------- X JOHN RESTIVO and DENNIS HALSTEAD, Plaintiffs, v. NASSAU COUNTY, a municipality; NASSAU COUNTY ATTORNEY’S OFFICE; CARNELL FOSKEY, in his official capacity; LISA LOCURTO; ESTHER MILLER; ROBERT F. VAN DER WAAG; SONDRA M. MENDELSON; LIORA BEN-SOREK; and MICHAEL FERGUSON, Defendants. : : : : : : : Case No. 16 CV 2492 (JS) (SIL) DEFENDANTS’ NOTICE OF MOTION TO DISMISS ----------------------------------------------------------------------- X TO: NEUFELD SCHECK & BRUSTIN, LLP Nick Brustin Anna Benvenutti Hoffman Alexandra Lampert Richard W. Sawyer Attorneys for Plaintiffs 99 Hudson Street, 8 th Floor New York, New York 10013 (202) 965-9081 PLEASE TAKE NOTICE that upon the annexed declaration of Eliza M. Scheibel, Esq., dated March 22, 2017; the exhibits annexed to the Scheibel Declaration; the accompanying memorandum of law, dated March 23, 2017; and upon all the prior proceedings herein, defendants Nassau County, Nassau County Attorney’s Office, Carnell Foskey (sued in his official capacity only), Lisa LoCurto, Esther Miller, Robert F. Van Der Waag, Sondra M. Mendelson, Liora Ben-Sorek, and Michael Ferguson, by their undersigned attorneys, will move this Court, before the Hon. Joanna Seybert on June 5, 2017, or on such other date as the Court may determine, for an order, pursuant to Rules 12(b)(6) and 9(b) of the Federal Rules of Civil Case 2:16-cv-02492-JS-SIL Document 27 Filed 03/23/17 Page 1 of 2 PageID #: 164 6411908v.1 Procedure, granting the defendants’ motion to dismiss the complaint with prejudice, and for such other, different and further relief as the Court in its discretion may deem just and proper. PLEASE TAKE FURTHER NOTICE that pursuant to the briefing schedule set forth by the Court, opposition to the motion must be filed on or before May 8, 2017 and reply papers must be filed on June 5, 2017. Dated: White Plains, New York March 23, 2017 Respectfully submitted, WILSON, ELSER, MOSKOWITZ, EDELMAN & DICKER LLP Attorneys for Defendants /s/ Eliza M. Scheibel Peter A. Meisels, Esq. Eliza M. Scheibel, Esq. 1133 Westchester Avenue White Plains, New York 10604 (914) 323-7000 Case 2:16-cv-02492-JS-SIL Document 27 Filed 03/23/17 Page 2 of 2 PageID #: 165 6411902v.1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK ----------------------------------------------------------------------- X JOHN RESTIVO and DENNIS HALSTEAD, Plaintiffs, v. NASSAU COUNTY, a municipality; NASSAU COUNTY ATTORNEY’S OFFICE; CARNELL FOSKEY, in his official capacity; LISA LOCURTO; ESTHER MILLER; ROBERT F. VAN DER WAAG; SONDRA M. MENDELSON; LIORA BEN-SOREK; and MICHAEL FERGUSON, Defendants. : : : : : : : Case No. 16 CV 2492 (JS) (SIL) DECLARATION OF ELIZA M. SCHEIBEL ----------------------------------------------------------------------- X ELIZA M. SCHEIBEL, an attorney duly licensed to practice law in the state of New York and before the United States District Court for the Eastern District of New York, hereby declares, pursuant to 28 U.S.C. § 1746, and subject to the penalties of perjury, as follows: 1. I am an associate in the firm of Wilson, Elser, Moskowitz, Edelman & Dicker LLP, counsel for Defendants in the above-captioned action. 2. I submit this declaration in support of the Defendants’ motion to dismiss the complaint. 3. Annexed hereto as Exhibit 1 is a true and accurate copy of the Plaintiffs’ complaint filed in this matter. 4. Annexed hereto as Exhibit 2 is a true and accurate copy of the January 11, 2007 letter from Esther Miller referenced at paragraph 31 of the Complaint. 5. Annexed hereto as Exhibit 3 is a true and accurate copy of the March 3, 2015 Declaration of Lisa LoCurto filed in Restivo et al v. Nassau County et al, Docket No. 06-cv- 06720 (E.D.N.Y.) (hereinafter, the “Civil Rights Action”), which is referenced in paragraph 85 Case 2:16-cv-02492-JS-SIL Document 27-1 Filed 03/23/17 Page 1 of 2 PageID #: 166 6411902v.1 of the Complaint. 6. Annexed hereto as Exhibit 4 is a true and accurate copy of the transcript of the March 17, 2015 hearing held in the Civil Rights Action, which is referenced in paragraphs 86 and 87 of the Complaint. I declare under penalty of jury that the foregoing is true and correct. Executed this March 22, 2017. /s/ Eliza M. Scheibel Eliza M. Scheibel Case 2:16-cv-02492-JS-SIL Document 27-1 Filed 03/23/17 Page 2 of 2 PageID #: 167 EXHIBIT 1 Case 2:16-cv-02492-JS-SIL Document 27-2 Filed 03/23/17 Page 1 of 32 PageID #: 168 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK __________________________________________ ) JOHN RESTIVO and DENNIS HALSTEAD, ) ) Plaintiffs, ) ) v. ) COMPLAINT AND ) JURY DEMAND NASSAU COUNTY, a municipality; NASSAU ) COUNTY ATTORNEY’S OFFICE; CARNELL ) 16-cv-2492 FOSKEY, in his official capacity; LISA ) LOCURTO; ESTHER MILLER; ROBERT F. ) VAN DER WAAG; SONDRA M. MENDELSON ) LIORA BEN-SOREK; and MICHAEL ) FERGUSON, ) ) Defendants. ) _________________________________________ ) Plaintiffs John Restivo and Dennis Halstead, by and through their attorneys, the law firm of Neufeld Scheck & Brustin, LLP, state as follows: INTRODUCTION 1. In 2014, a federal jury found former Nassau County Police Department Detective Joseph Volpe liable for maliciously prosecuting John Restivo and Dennis Halstead and depriving them of a fair trial for a rape and murder they did not commit. The jury awarded Mr. Restivo and Mr. Halstead $18 million each in damages for the eighteen years they spent wrongly imprisoned (the “Civil Rights Lawsuit”). Judgment was entered against the Estate of Joseph Volpe, who died during the litigation. 2. Over nearly 8 years of litigation, Nassau County directed the defense of the Civil Rights Lawsuit and represented that it would indemnify all individual defendants, including Mr. Volpe. Nassau County had represented Mr. Volpe and ultimately represented his Estate. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 1 of 31 PageID #: 1Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 2 f 2 I : 69 2 3. Reasonably relying on Defendants’ representations, John Restivo and Dennis Halstead expended considerable resources litigating the Civil Rights Lawsuit. Plaintiffs also made a number of strategic decisions-including voluntarily dismissing their claim directly against Nassau County and claims against other individual defendants-in reliance on Nassau County’s indemnification representation. 4. Defendants’ representations induced Plaintiffs to believe that they would be able to collect on a judgment in the Civil Rights Lawsuit, even if that judgment was against an individual defendant like the Estate of Volpe and not against Nassau County itself. 5. However, after the $36 million judgment was entered against the Estate of Joseph Volpe, Nassau County, the Nassau County Attorney’s Office, and the Individual Defendants in this suit (Defendants LoCurto, Miller, Van der Waag, Mendelson, Ben-Sorek, and Ferguson) conspired to escape Nassau County’s indemnification obligation. 6. In furtherance of this scheme, individual Defendants acting at the behest of and as agents of Nassau County fraudulently misrepresented key facts, took unsupportable legal positions, and concealed evidence from John Restivo, Dennis Halstead, and the court. 7. When evidence of this fraudulent scheme first came to light, Defendants conspired to conceal their misconduct by representing that Nassau County had not, in fact, represented that it would indemnify (or had an obligation to indemnify) the Estate of Joseph Volpe. These statements were false. 8. Though Nassau County has now entered into a binding stipulation that it will fully indemnify the Estate of Joseph Volpe in connection with the Civil Rights Lawsuit, upon information and belief, Nassau County may not intend to comply with that stipulation. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 2 of 31 PageID #: 2Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 3 f 2 I : 170 3 9. Specifically, Nassau County recently rejected an agreement proposed by Plaintiffs (the “Tolling Agreement”), under which Plaintiffs would agree not to bring certain claims against Nassau County and its agents so long as Nassau County complied with its indemnification obligation in the Civil Rights Lawsuit. As Nassau County’s only obligation under the Tolling Agreement would have been to comply with its preexisting indemnification obligation, the only reason for Nassau County to reject the Tolling Agreement is if it did not actually intend to indemnify the Estate of Volpe or intended to otherwise not comply with its court-ordered obligations, for example by delaying payment to Plaintiffs. Thus, Nassau County’s rejection of the Tolling Agreement is evidence that the fraud and misrepresentations may well continue into the future-and of Nassau County’s intent not to comply with its obligation under the law, its contract with Volpe, or the court’s orders. 10. Defendants’ misconduct has injured Mr. Restivo and Mr. Halstead by causing them to expend extra resources to ensure Nassau County complies with its indemnification obligations, tricking them into giving up a cause of action against Nassau County and causes of action against other individual defendants, and causing them extreme and continuing emotional distress and anxiety. If Nassau County attempts to delay payment to Plaintiffs or does not actually comply with its indemnification obligation, the fraud will have damaged Plaintiffs in the total amount of the judgment, costs, and fees owed to them in the Civil Rights Lawsuit-up to approximately $43 million. 11. Under Judiciary Law § 487, Plaintiffs are entitled to treble damages, and would seek full damages in the amount of $129 million to hold Nassau County and the individual defendants responsible for their egregious pattern of dishonesty, misrepresentation, and fraud. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 3 of 31 PageID #: 3Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 4 f 2 I : 171 4 JURISDICTION AND VENUE 12. This Court has diversity jurisdiction, pursuant to 28 U.S.C. § 1332, as the amount in controversy in this matter exceeds $75,000 exclusive of interest and costs, and as the matter is between parties who are citizens of different States. Plaintiffs John Restivo and Dennis Halstead are domiciled in and citizens of Florida, and each of the Defendants resides in and is a citizen of New York. 13. Plaintiffs have complied with the requirements of New York General Municipal Law Section 50-i by making and serving a notice of claim on the County of Nassau on March 19, 2015, within the time required by New York General Municipal Law Section 50-e. More than thirty days have elapsed since the service of that notice, and no offer of settlement has been made. 14. Defendants did not request that Plaintiffs John Restivo and Dennis Halstead submit to a hearing pursuant to New York General Municipal Law Section 50-h. 15. Pursuant to 28 U.S.C. § 1391(b), venue is proper in the Eastern District of New York, the judicial district in which the claims arose. JURY DEMAND 16. Pursuant to the Seventh Amendment of the United States Constitution, Plaintiffs request a jury trial on all issues and claims set forth in this Complaint. PARTIES 17. Plaintiff John Restivo is and was at all times relevant to this Complaint a citizen and resident of the State of Florida. He currently lives in Vero Beach, Florida. 18. Plaintiff Dennis Halstead is and was at all times relevant to this Complaint a citizen and resident of the State of Florida. He currently lives in Tallahassee, Florida. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 4 of 31 PageID #: 4Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 5 f 2 I : 172 5 19. Defendant Lisa LoCurto was at all times relevant to this Complaint a Chief Deputy County Attorney employed by Nassau County and the Nassau County Attorney’s Office, acting in her individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of the Nassau County and the Nassau County Attorney’s Office. Upon information and belief, she is entitled to indemnification under Nassau County Administrative Code § 22-2.8. 20. Defendant Esther Miller was at all times relevant to this Complaint a Deputy County Attorney/Litigation Bureau Chief employed by Nassau County and the Nassau County Attorney’s Office, acting in her individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of Nassau County and the Nassau County Attorney’s Office. Upon information and belief, she is entitled to indemnification under Nassau County Administrative Code § 22-2.8. 21. Defendant Robert F. Van der Waag was at all times relevant to this Complaint a Deputy County Attorney/Appeals Bureau Chief employed by Nassau County and the Nassau County Attorney’s Office, acting in his individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of Nassau County and the Nassau County Attorney’s Office. Upon information and belief, he is entitled to indemnification under Nassau County Administrative Code § 22-2.8. 22. Defendant Sondra M. Mendelson was at all times relevant to this Complaint a Deputy County Attorney employed by Nassau County and the Nassau County Attorney’s Office, acting in her individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of Nassau County and the Nassau County Attorney’s Office. Upon information and belief, she is entitled to Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 5 of 31 PageID #: 5Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 6 f 2 I : 173 6 indemnification under Nassau County Administrative Code § 22-2.8. 23. Defendant Liora Ben-Sorek was at all times relevant to this Complaint a Deputy County Attorney employed by Nassau County and the Nassau County Attorney’s Office acting in her individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of Nassau County and the Nassau County Attorney’s Office. Upon information and belief, she is entitled to indemnification under Nassau County Administrative Code § 22-2.8. 24. Defendant Michael Ferguson was at all times relevant to this Complaint a Deputy County Attorney employed by Nassau County and the Nassau County Attorney’s Office, acting in his individual capacity as a County employee and within the scope of employment pursuant to the statutes, ordinances, regulations, policies, customs, and usage of Nassau County and the Nassau County Attorney’s Office. Upon information and belief, he is entitled to indemnification under Nassau County Administrative Code § 22-2.8. 25. Defendant Nassau County is a municipality that is a political subdivision of the State of New York, was the employer of the individual defendants, and is and was at all times relevant to this Complaint responsible for the policies, practices, and customs of the Nassau County Attorney’s Office. 26. Defendant Carnell Foskey, sued in his official capacity, is the Nassau County Attorney and supervises the Nassau County Attorney’s Office, which is a department of Nassau County. With Defendant Nassau County, Foskey and/or the Nassau County Attorney’s Office was the employer of the individual defendants, and is and was at all times relevant to this Complaint responsible for the policies, practices, and customs of the Nassau County Attorney’s Office. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 6 of 31 PageID #: 6Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 7 f 2 I : 174 7 FACTS The Civil Rights Lawsuit and Nassau County’s Agreement to Indemnify Joseph Volpe and His Estate 27. Filed in December 2006, Mr. Restivo and Mr. Halstead’s suit had been litigated by the Nassau County Attorney’s Office and outside counsel retained by Nassau County for over seven years by the time of the 2014 verdict. 28. Mr. Volpe died in January 2011; Carolann Hesseman as Executrix of the Estate of Joseph Volpe was substituted as a party in March 2011, and was represented by the Nassau County Attorney’s Office and outside counsel retained by Nassau County throughout the litigation. 29. Nassau County has an obligation to indemnify Volpe and his Estate for all damages, costs, and fees stemming from the Civil Rights Lawsuit. 30. Throughout the litigation, Nassau County acted through its agents, including the Nassau County Attorney’s Office, the individual Defendants in this suit, and outside counsel to represent to the Court, to the plaintiffs John Restivo and Dennis Halstead, and to Carolann Hesseman as the Executrix of the Estate of Joseph Volpe, that Nassau County would fully indemnify Joseph Volpe and/or the Estate of Joseph Volpe for any damages stemming from the Civil Rights Lawsuit. 31. Specifically, on or about January 11, 2007-at the inception of Mr. Restivo and Mr. Halstead’s 42 U.S.C. § 1983 suit against Nassau County and Volpe-Esther Miller, Litigation Bureau Chief for the Nassau County Attorney’s Office, sent Joseph Volpe a letter through counsel for the Commissioner of the Nassau County Police Department, Deputy County Attorney Tatum J. Fox. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 7 of 31 PageID #: 7Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 8 f 2 I : 175 8 32. In that letter, which is based on a form letter used by Nassau County and the Nassau County Attorney’s Office in all suits against Nassau County employees, Miller explained to Volpe the County’s statutory obligations to provide him legal representation and indemnify him under New York Gen. Mun. L. § 50-l and the Nassau County Admin. Code § 22-2.8. 33. The letter offered to provide Volpe representation, free of charge, conditioned on Volpe’s agreement to let the Nassau County Attorney’s Office have full control over the litigation. 34. The letter also informed Volpe that, should the Police Officer Indemnification Board determine that Volpe acted within the scope of his employment or duties, “the County will indemnify you for any award of damages against you.” 35. Volpe signed the letter under the words “agreed and accepted,” and returned it to Nassau County. 36. From that point on, Nassau County controlled all litigation on Volpe’s behalf. 37. In January 2007, Deputy County Attorneys Sondra M. Mendelson and Liora Ben- Sorek presented the Police Officer Indemnification Board with the County’s position regarding the facts and law involved in Mr. Restivo and Mr. Halstead’s case. 38. On February 9, 2007, the Police Officer Indemnification Board determined that “the acts alleged were committed while in the proper discharge of said officer(s)’ duties and within the scope of his/her employment.” 39. After Joseph Volpe passed away during the litigation, Plaintiffs sought information from Nassau County regarding the identity of the executor or administrator of the Estate, so that Plaintiffs could substitute the proper representative of the Estate in the litigation. Nassau County suggested that no representative need be named, and that “Joseph Volpe” could Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 8 of 31 PageID #: 8Case 2:16-cv 02492-JS-SIL Document 27-2 il 3/23/ 7 9 f 2 I : 176 9 simply be renamed “the Estate of Volpe,” as Nassau County itself was the true party in interest due to its indemnification obligation. However, Plaintiffs insisted on substitution of the actual representative of the Estate, and moved to substitute the executrix of the Estate of Joseph Volpe as a defendant in the case. 40. As a result of Plaintiffs’ requests for information about the representative of the Estate, Probate attorney Mark Brosnan, who represented Carolann Hesseman during the probate of Mr. Volpe’s will, was contacted by Defendant Michael Ferguson in approximately March 2011. Mr. Ferguson advised Mr. Brosnan that Plaintiffs wanted to substitute Ms. Hesseman, as the successor in interest to Mr. Volpe, in the Civil Rights Lawsuit. 41. Mr. Ferguson told Mr. Brosnan that all of the defendants were fully indemnified by the County, including Mr. Volpe and his Estate. In processing the estate, Mr. Brosnan acted based on this representation from the County that there was no risk to the Estate’s assets. Nassau County Consistently Represents to Plaintiffs that It Will Indemnify Volpe and His Estate 42. None of the documents related to the indemnification agreement or the Police Officer Indemnification Board’s determination that Mr. Volpe was acting within the scope of his employment were provided to Plaintiffs in discovery. Lawyers acting on behalf of Nassau County asserted privilege over any documents related to indemnification. 43. However, in response to Plaintiffs Restivo and Halstead’s initial discovery requests, in July 2007, Deputy Nassau County Attorney Liora Ben-Sorek answered, on behalf of all defendants, “please be informed that the defendants have been indemnified,” and produced a copy of § 22-2.8 of the Nassau County Administrative Code. 44. For the next eight years, from entry of the Nassau County Attorney’s Office’s notices of appearance through discovery and two trials, Nassau County consistently and Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 9 of 31 PageID #: 9Case 2:16-cv-0249 -JS SIL Document 27-2 il 3/23/ 7 10 of 32 PageID #: 177 10 unambiguously maintained that it had fully indemnified all the individual defendants, including Volpe and his Estate. 45. The County made these representations of indemnification to Volpe and later his Estate in order to represent him and direct the litigation. 46. The County also made these indemnification representations to Plaintiffs Mr. Restivo and Mr. Halstead, and the United States District Court for the Eastern District of New York, in discovery responses, oral communications, and appearances before the Court on behalf of the County and Volpe and his Estate. 47. Reasonably and foreseeably relying on Defendants representations that Nassau County would indemnify all of the individual defendants in the Civil Rights Lawsuit, and thus that Plaintiffs would be able to actually recover the amount of a judgment, Plaintiffs voluntarily dismissed their claim pursuant to Monell v. Dep’t of Social Servs. Of the City of New York, 436 U.S. 658 (1978), after it had been affirmed on summary judgment, via which Plaintiffs could have held Nassau County directly liable for the civil rights violations. 48. Plaintiffs also made numerous other strategic litigation decisions in reliance on Nassau County’s indemnification representations, including dismissing claims against other individual defendants. Nassau County Knowingly Lies to Escape Its Indemnification Obligation and Deceive the Court and Plaintiffs 49. After a federal jury found Defendant Volpe liable and judgment entered against the Estate for $36 million, the County, through its policymakers, sought means to escape its indemnification obligation and agreement. 50. In so doing, a number of County policymakers, employees, and sub-contractors knowingly made material misrepresentations to Plaintiffs, the Estate, and the Court in an attempt Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 10 of 31 PageID #: 10Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 11 of 32 PageID #: 178 11 to avoid the County’s obligation. Still others colluded to effectuate the deception, or consented in the deception and/or attempted deception of the parties and the Court, which was used on behalf of the County and to further its interests. 51. Because of Defendants’ misrepresentations and other efforts to conceal Nassau County’s decision, apparently made after the judgment was entered in favor of Plaintiffs in the Civil Rights Lawsuit, not to comply with its indemnification obligations, Plaintiffs did not discover evidence of Defendants’ fraud or other misconduct until February 17, 2015. 52. Nassau County made multiple misrepresentations to Plaintiffs, after the judgment became due, indicating that it would comply with its indemnification obligation-although it did not actually intend to comply with its obligation at that time. 53. Specifically and by way of example, after indicating that it would appeal the judgment in the Civil Rights Lawsuit and seek a stay of the district court proceedings, Nassau County represented to Plaintiffs that it would post a supersedeas bond in the amount of the judgment. After significant delay, Plaintiffs repeatedly inquired about the bond, but Nassau County and its agents assured Plaintiffs that Nassau County intended to post the bond pursuant to its indemnification obligation. However, at this time of these misrepresentations, upon information and belief Nassau County did not actually intend to post a supersedeas bond because it did not intend to comply with its indemnification obligation. 54. Because Plaintiffs accepted as true Nassau County’s representations that it was working on posting the supersedeas bond-and that any delay was simply due to the complexity of the process-Plaintiffs agreed to put off instituting proceedings to collect on their judgment. 55. However, on February 17, 2015, Defendant filed a Motion to Stay Judgment Pending Appeal which suggested that Nassau County may have no obligation to indemnify the Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 11 of 31 PageID #: 11Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 2 of 32 PageID #: 79 12 Estate of Joseph Volpe. This was the first evidence that Plaintiffs discovered suggesting that Defendants may be engaging in dishonest and fraudulent behavior by planning to not comply with Nassau County’s obligations to fully indemnify Volpe in connection with the Civil Rights Lawsuit. 56. At this time, Plaintiffs had an enforceable judgment in the amount of $36 million plus interest, costs, and attorney’s fees, against the Estate of Joseph Volpe. Pursuant to its indemnification obligation, Nassau County was obligated to satisfy this judgment. 57. Plaintiffs, through the exercise of reasonable diligence, could not have discovered the fraudulent scheme before February 17, 2015 because of Defendants’ efforts to conceal it. 58. After February 17, 2015, when Plaintiffs brought the issue to the attention of the court and began to make efforts to protect their interests and ensure indemnification, Nassau County and its agents continued to make false statements that misrepresented and concealed the true nature of their indemnification obligation. 59. In a letter from Lou Freeman, outside counsel retained by Nassau County, to Plaintiffs’ counsel dated February 27, 2015, Mr. Freeman strenuously denied that Nassau County had any contractual obligations to Volpe or his Estate. Upon information and belief, this representation was made based on Mr. Freeman’s communication with Nassau County and certain individual Defendants. 60. In response to Plaintiffs’ demand that Nassau County produce a copy of its Indemnity Agreement with Volpe, the letter asserted “the County has never entered into an indemnity agreement with Detective Volpe or the Volpe Estate.” (emphasis added). It also referred to the Volpe Indemnity Agreement as “nonexistent.” Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 12 of 31 PageID #: 12Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 13 of 32 PageID #: 180 13 61. However, these statements were untrue. Nassau County, through its agent Mr. Freeman, knowingly made this misrepresentation in order to conceal from Plaintiffs the true nature of its indemnification obligation. 62. After Plaintiffs located what appeared to be a form indemnification contract from the Nassau County Attorney’s Office to another police officer in public filings for a different case, Plaintiffs wrote to Mr. Freeman and requested he, as the attorney for Nassau County, produce any such document from this case. Plaintiffs then directed Mr. Freeman to an entry in the County’s privilege log created by Freeman, Nooter & Ginsberg that appeared to cover these indemnification agreements. 63. Later that night, another outside counsel for Nassau County, associate Nadjia Limani, produced the contract-the letter signed by Defendant Esther Miller and Mr. Volpe, dated January 11, 2007-that Mr. Freeman on behalf of the County had claimed did not exist. Nassau County and the individual Defendants knew that this contract existed, and that these false statements were based on communications with the Defendants. 64. Mr. Freeman and his associate knew this contract existed-they were responsible for the privilege log withholding the contract and other indemnification documents. Ms. Miller, who signed it, knew the contract existed. 65. And upon information and belief any Nassau County Attorney with whom Mr. Freeman and his associate consulted knew that there would be such a contract; upon information and belief it is a form letter sent out in each case and, without such a contract, the Nassau County Attorney’s Office would have no basis to represent a defendant. 66. John Restivo and Dennis Halstead, as Plaintiffs with a judgment against the Estate of Joseph Volpe, are the intended third-party beneficiaries of the Indemnity Agreement between Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 13 of 31 PageID #: 13Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 14 of 32 PageID #: 181 14 Nassau County and Joseph Volpe, which was executed for the specific purpose of indemnifying Volpe in connection with Mr. Restivo and Mr. Halstead’s claims against him. Nassau County Induced the Estate of Joseph Volpe to Rely on its Representations that it Would Indemnify the Estate, then Breached the Indemnity Agreement by Informing the Estate that It Would Not Honor Its Indemnification Obligations 67. In repeated letters and briefings, including in a filing with the District Court on March 9, 2015, Mr. Freeman on behalf of the County insisted that the County had never considered the question of indemnification of a police officer’s estate and never made a promise to indemnify Mr. Volpe’s Estate. Mr. Freeman, his associate, and Deputy County Attorney Michael Ferguson, as well as upon information and belief other members of the Nassau County Attorney’s Office, knew this representation to be false. 68. At a hearing before the District Court on March 17, 2015, probate attorney Mark Brosnan, who represented Carolann Hesseman during the probate of Mr. Volpe’s will, informed the Court of a conversation he had with Michael Ferguson in 2011 and a second conversation he had with Mr. Freeman and his associate in 2015. 69. Mr. Brosnan told the Court that, in approximately March 2011, he was contacted by a lawyer from the Nassau County Attorney’s Office, Michael Ferguson. Before that call, Mr. Brosnan had no information about any civil rights lawsuit involving Mr. Volpe. 70. Mr. Ferguson informed Mr. Brosnan that Mr. Volpe had been a named defendant in a civil rights lawsuit, and that the plaintiffs wanted to substitute the fiduciary of his estate, Ms. Hesseman, as the successor in interest to Mr. Volpe. 71. During this phone call, Mr. Ferguson told Mr. Brosnan that all of the defendants were fully indemnified by the County, including Mr. Volpe and his Estate. Ferguson stated, in Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 14 of 31 PageID #: 14Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 15 of 32 PageID #: 182 15 substance, that the Estate did not have to worry about any risk to its assets because the County was indemnifying it. 72. Mr. Brosnan reported he had made notes of this conversation at the time, and that he had subsequently acted based on this representation from the County that there was no risk to the Estate’s assets. 73. In approximately late January or early February 2015, Mr. Brosnan was contacted by lawyer for Nassau County Louis Freeman and his associate. Mr. Freeman and his associate informed him, in substance, that there was a $36 million judgment against the Estate and that the County was going to question its indemnification obligations. During this conversation, Mr. Brosnan informed Mr. Freeman and his associate that he had been promised, by Nassau County Deputy County Attorney Michael Ferguson, in 2011, that the Estate would be fully indemnified and that there was no risk to the Estate’s assets. 74. Despite their actual knowledge of the existence of a direct promise to indemnify the Estate, the County and its attorneys represented to Plaintiffs and to the Court that the County had never considered whether it could indemnify a deceased police officer’s estate before the verdict was entered against Mr. Volpe’s Estate. 75. In addition to making false statements to the Court and Plaintiffs, Nassau County’s pattern of misconduct included making filings with the Court nominally on behalf of Carolann Hesseman as Executrix of Joseph Volpe’s Estate that were actually made to advance the interests of Nassau County, and indeed were directly adverse to the interests of the Estate. 76. Upon information and belief, these filings, including but not limited to Defendants’ motions for a stay of enforcement of judgment, which disclaimed Nassau County’s indemnification obligation and directed Plaintiffs to seek satisfaction of their judgment from the Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 15 of 31 PageID #: 15Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 16 of 32 PageID #: 183 16 Estate directly, were made without ever consulting with Ms. Hesseman, let alone receiving her consent. 77. Even though Plaintiffs alerted the County’s lawyers that this filing appeared to create an unwaivable conflict of interest, the County’s lawyers denied there was any such conflict in their papers and continued to file papers nominally on behalf of the Estate. Nassau County Also Knowingly Misrepresents the Law in an Attempt to Escape its Indemnification Obligations 78. In their Motion for a Stay of Enforcement of the Judgment, the County and its attorney Mr. Freeman and his associate, nominally on behalf of the Estate but in fact as agents of Nassau County, falsely represented that there was a question as to whether the County was legally able to indemnify a police officer’s estate. 79. They represented to Plaintiffs and submitted to the Court, in Court filings, that Gen. Municipal Law § 50-l was silent as to the treatment of estates, and that while Nassau County Administrative Code § 22-2.8, which covers all County employees, defines employee to include estates, § 22-2.8 did not apply to police officers. 80. But the Nassau County Attorney’s Office and the County’s attorney Mr. Freeman and his associate knew this “legal” argument was both false and disingenuous. In the very letter Nassau County sends to police officers at the outset of litigation against them to inform of their rights, the Nassau County Attorney’s Office form letter reads, for example: “As a County employee, you are entitled, pursuant to the Nassau County Administrative Code § 22-2.8, to legal representation provided by the County . . . .” 81. On information and belief, Mr. Freeman, his associate, and other lawyers representing Nassau County have made similar misrepresentations to lawyers acting on behalf of Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 16 of 31 PageID #: 16Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 17 of 32 PageID #: 184 17 the Estate, including Mr. Brosnan, in an attempt to prevent the Estate from acting on its rights to enforce the indemnification agreement. Nassau County Directed and is Responsible for this Fraudulent Scheme 82. Upon information and belief, all of this deceptive conduct occurred with the knowledge and consent of the attorneys at the highest levels of the Nassau County Attorney’s Office. 83. Mr. Freeman has represented that he consulted with members of the Nassau County Attorney’s Office, who directed this strategy. All acts taken by the firm Freeman, Nooter & Ginsberg in connection with the Civil Rights Lawsuit were directed by Nassau County and based on communications with Nassau County and the individual Defendants. 84. Ms. Ben-Sorek, who entered an appearance on behalf of all defendants in this case in February 2007, is automatically served with every filing made in the district court in the Civil Rights Lawsuit, as is the general Nassau County Attorney’s Office email address. 85. Ms. LoCurto, the Chief Deputy County Attorney, provided a declaration in support of the supplemental motion to stay judgment, one of the motions filed in the name of Ms. Hesseman but which made arguments contrary to her interests. 86. In advance of the March 17, 2015 hearing before the district court in the Civil Rights Lawsuit on the conflict of interest created by Nassau County’s change of position, the Court ordered that “[a] representative of the County Attorney’s Office who has decision-making authority” appear at the conference. Mr. Van Der Waag appeared at the conference and represented to the Court that he had authority to bind the County. 87. Mr. Van Der Waag did not correct any of the many misstatements and misrepresentations above. Instead, Mr. Van Der Waag, on behalf of Nassau County, made new Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 17 of 31 PageID #: 17Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 18 of 32 PageID #: 185 18 misrepresentations in support of the County’s effort to evade its responsibility to pay the judgment. These included that any indemnification obligation was limited to the assets in the Estate, and that the County could reconvene the Police Officer Indemnification Board to vote again on whether Mr. Volpe’s acts were within the scope of employment, once the Second Circuit affirmed the jury verdict. 88. Each of these representations is contrary to the settled understanding of the Nassau County Attorney’s Office and the settled practice of Nassau County in how it has handled indemnification for the past 30 years. Discovery of Defendants’ Fraud Necessitates Additional Litigation to Ensure Indemnification 89. After Plaintiffs became aware that Nassau County might attempt to evade its indemnification obligations, Plaintiffs diligently made every effort to protect their interests and their entitlement to the judgment awarded by the jury in the Civil Rights Lawsuit. 90. On February 26, 2015, Plaintiffs served a formal demand notice for prompt payment of that judgment on the Estate of Joseph Volpe, and on Nassau County as indemnitor. 91. On March 9, 2015, Plaintiffs filed a petition, pursuant to Fed. R. Civ. P. 69(a) and N.Y. CPLR § 5227, asking the Court to compel Nassau County, as the Volpe Estate’s indemnitor, to pay Plaintiffs the debt-in the full amount of the judgment, including costs, interest, and attorney’s fees-which Nassau County owed to the judgment debtor the Estate. 92. The Court held a hearing in the Civil Rights Lawsuit on March 17, 2015, at which Defendants again changed its position on indemnification and misrepresented key facts to the Court and the parties. These additional false statements caused Plaintiff to file an additional legal briefing-a Supplement to the N.Y. CPLR § 5227 Petition, filed on March 30, 2015. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 18 of 31 PageID #: 18Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 19 of 32 PageID #: 186 19 93. Defendants repeatedly opposed Plaintiffs’ attempts definitively to establish that Nassau County was obligated to pay the judgment. This baseless opposition caused Plaintiffs to file additional legal briefings to protect their interests. 94. In total, Plaintiffs’ attorneys spent hundreds of hours litigating the indemnification issue in an attempt to ensure that Plaintiffs could actually collect on their judgment. 95. Additionally, Defendants’ misconduct made it necessary for Plaintiffs’ attorneys to consult with additional attorneys, including David Graff and Rachael Ann Kierych of Anderson Kill P.C., in order to protect their interests, causing Plaintiffs to incur thousands of dollars in additional legal fees. 96. Meanwhile, the defendants in the Civil Rights lawsuit appealed Plaintiffs’ judgment to the Second Circuit Court of Appeals. The parties await a decision from that court. The judgment has become due, but Plaintiffs agreed, pursuant to a Stipulation and Consent Decree, not to demand payment until the appeal is resolved. Defendants’ Misconduct Causes Mr. Restivo and Mr. Halstead Extreme Emotional Distress 97. The Civil Rights Lawsuit was lengthy, emotionally draining, and costly. Plaintiffs filed their Complaint in 2006 and did not receive a judgment in their favor until 2014. The case is still not resolved, as the defendants have appealed that judgment. 98. Dennis Halstead and John Restivo suffer from extreme emotional damage from their wrongful conviction and 18-year incarceration for the rape and murder of a teenage girl- damage that a jury found was caused by a Nassau County detective. The protracted Civil Rights Lawsuit forced Mr. Halstead and Mr. Restivo to relive these traumatic experiences, causing extreme emotional distress, anxiety, and fear. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 19 of 31 PageID #: 19Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 20 of 32 PageID #: 187 20 99. Actions taken by Defendants and/or their agents during the Civil Rights Lawsuit-including but not limited to repeatedly accusing Mr. Restivo and Mr. Halstead of a crime they did not commit and (even as recently as this year) falsely calling Mr. Restivo and Mr. Halstead pedophiles and child molesters-also caused Plaintiffs significant emotional distress. 100. Mr. Restivo and Mr. Halstead bore these indignities, suffered the emotional damage they caused, and undertook this costly litigation because Nassau County had indicated that it would indemnify all defendants-thus reasonably giving Mr. Restivo and Mr. Halstead the belief that they would be able to collect on a judgment in their favor. 101. Defendants’ assertion for the first time, after the jury had awarded a large judgment to Plaintiffs, that they may not indemnify the Estate of Volpe caused Plaintiffs extreme emotional harm. 102. For Plaintiffs, who were wrongfully imprisoned for 18 years and deprived of control over their lives, the uncertainty caused by this change in position caused uniquely extreme anxiety and distress that is separate from the emotional distress that had been previously caused by litigating the Civil Rights Lawsuit. Nassau County Finally Agrees to Honor its Obligations 103. Before its response to Plaintiffs’ N.Y. CPLR § 5227 Petition was due, Nassau County and/or its agents contacted Plaintiffs and offered to enter into a binding stipulation that it would pay the full amount of the judgment against the Estate of Volpe. It represented that Nassau County’s indemnification board had reconvened and affirmed that Nassau County would indemnify Volpe’s Estate. 104. The parties spent time negotiating the precise terms of the stipulation. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 20 of 31 PageID #: 20Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 21 of 32 PageID #: 188 21 105. On June 25, 2015, John Restivo and Dennis Halstead, and Carolann Hesseman, as Executrix for the Estate of Joseph Volpe, and the County of Nassau entered into a Stipulation and Consent Decree, in which the County of Nassau agreed, inter alia, that it is indemnifying the Estate for any judgment arising out of the Civil Rights Lawsuit and entered in favor of Plaintiff and against the Estate. It further agreed to pay to the Plaintiffs the complete amount of any final judgment entered in favor of Plaintiffs and against the Estate-including costs and fees-within one hundred and twenty (120) days of the appeal (Docket # 14-4662) being concluded. 106. In exchange for Nassau County’s promise to pay the full amount of any judgment entered against Carolann Hesseman, as Executrix for the Estate of Joseph Volpe, Plaintiffs agreed to dismiss their cross-appeal of the dismissal of Plaintiffs’ respondeat superior claim against Nassau County, which would have provided a basis for Nassau County to be held directly and financially responsible for the judgment. 107. The Stipulation and Consent Decree was ordered by the District Court on July 1, 2015. Nassau County Then Refuses to Agree to Honors its Obligations, Suggesting Continuing Fraud 108. Upon information and belief, the deceptive conduct of each of the individual attorneys and by the County, through its policymakers, is ongoing. 109. In May 2016, counsel for John Restivo and Dennis Halstead approached counsel for Nassau County with a proposed Tolling Agreement. 110. In the Tolling Agreement, Mr. Restivo and Mr. Halstead asked that Nassau County agree to toll the statute of limitations that would otherwise apply to the claims set forth against the Defendant Parties in Plaintiffs’ Notice of Claim filed on March 19, 2015, until sixty Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 21 of 31 PageID #: 21Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 22 of 32 PageID #: 89 22 days after the date by which Nassau County must pay to Plaintiffs the complete amount of any final judgment against Carolann Hesseman as Executrix of the Estate of Joseph Volpe, 111. In exchange for Defendants’ agreement to toll the statute of limitations, Plaintiffs offered to forever relinquish the claims referenced in their Notice of Claim, so long as Nassau County simply satisfied its obligation-should the Second Circuit decide the appeal in Plaintiffs’ favor and the judgment becomes final-to pay to John Restivo and Dennis Halstead the full amount of the judgment, costs, fees, and interest by the date Nassau County had previously agreed to do so. 112. Although under the Tolling Agreement Nassau County’s obligations would have been precisely the same as under the Stipulation and Consent Decree-i.e., that they would have to comply with their indemnification obligation-Nassau County refused to enter into the Tolling Agreement. 113. Because this decision not to enter into the Tolling Agreement was not rational based on the facts known to Plaintiffs about the parties’ obligations, upon information and belief this decision is evidence of an ongoing fraudulent scheme to conceal from Plaintiff Nassau County’s intent not to abide by the Stipulation and Consent Decree and its preexisting indemnification obligation, for example by delaying payment or refusing payment altogether. DAMAGES 114. As a result of the County and the individual defendants’ deceptive actions in first promising unambiguous indemnification, and then denying the County’s indemnification obligations, Mr. Restivo and Mr. Halstead have suffered ongoing damages. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 22 of 31 PageID #: 22Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 3 of 32 PageID #: 190 23 115. Mr. Restivo and Mr. Halstead have suffered economic damages, including but not limited to the costs and attorney’s fees incurred in the actions necessary to enforce Mr. Restivo and Mr. Halstead’s rights. 116. Specifically, Defendants’ tortious conduct damaged Plaintiffs by creating the necessity for additional litigation in the Civil Rights Lawsuit regarding the issue of whether Nassau County would actually indemnify Volpe and/or the Estate of Volpe. Plaintiffs’ attorneys spent hundreds of additional hours litigating this issue and conferred with other attorneys about the matter, generating approximately $150,000 in additional and otherwise unnecessary attorney’s fees. 117. Defendants’ misconduct caused economic damages incurred due to the delay in the payment of Mr. Restivo and Mr. Halstead’s lawful judgment. Any future delay in payment of the judgment, interest, attorney’s fees, and costs owed to Plaintiffs will cause further economic damage. 118. Defendants’ misconduct also caused economic damages in the amount of the potential loss-should the fraud succeed-of the $43 million owed to Plaintiffs from the judgment, costs, interests, and attorney’s fees, in the Civil Rights Lawsuit. 119. Defendants’ misconduct also damaged Mr. Restivo and Mr. Halstead by inducing them to relinquish two causes of action asserted directly against Nassau County, which caused significant economic injury. Defendant’s fraudulent misconduct also induced Mr. Restivo and Mr. Halstead to make strategic litigation decisions that they would not have made absent Defendants’ misconduct and concealment of that misconduct. 120. In addition to the economic damage caused, Defendants’ acts caused Mr. Restivo and Mr. Halstead severe, extreme, and outrageous emotional damage, as described above. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 23 of 31 PageID #: 23Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 24 of 32 PageID #: 191 24 121. Under Judiciary Law § 487, Plaintiffs are entitled to treble damages, in the amount of up to $129 million, should Nassau County fail to comply with its indemnification obligation by refusing to pay Plaintiffs or delaying payment. Under Judiciary Law § 487, Plaintiffs are entitled to treble damages for the harm caused by Defendants’ fraudulent scheme and false statements, even if Nassau County does comply with its indemnification obligation. CLAIMS CLAIM I Violation of New York Judiciary Law § 487(1) 122. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 123. The misconduct described herein was perpetrated by Nassau County as well as Individual Defendants in their roles as attorneys for Nassau County, employed by the Nassau County Attorney’s Office. Individual Defendants were acting within the scope of their employment and/or as agents of Nassau County or the Nassau County Attorney’s Office. 124. Defendants, by making false statements to the court overseeing the Civil Rights Lawsuit, and by making additional false statements in order to conceal the original deceit, did attempt to deceive and did actually deceive the court and Plaintiffs with regards to Nassau County’s intent to comply with its indemnification obligations. 125. Defendants colluded with one another, and with co-conspirators Louis Freeman, Lee Ginsberg, and Nadjia Limani, in order to deceive the court and Plaintiffs. 126. When making false statements and misrepresenting key facts to the court and Plaintiffs in written statements and orally, Defendants acted with the intent to deceive the court and Plaintiffs. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 24 of 31 PageID #: 24Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 25 of 32 PageID #: 192 25 127. The deceit perpetrated by Defendants was extreme and outrageous, and Defendants’ false statements and misrepresentations fall well outside the bounds of what is permissible in an adversarial proceeding. This deceit is extreme and outrageous because of the length of the fraud; Defendants’ behavior demonstrates a repeated pattern of chronic misbehavior, continuing even after they were confronted with evidence of the deceit. This deceit is also extreme and outrageous because of the materiality of the misrepresentations made by Defendants and their knowledge of the harm that the intentional false statements would cause. 128. Defendants’ deceit directly and proximately caused Plaintiffs the damages described above. CLAIM II Common Law Fraud; Fraud by Concealment; Fraudulent Misrepresentation; Fraudulent Inducement; Aiding and Abetting Fraud 129. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 130. Defendants made numerous false statements to Plaintiffs and to the court, which they knew at the time were false, as described above. 131. As described above, these false statements were material to the Civil Rights Lawsuit, and to decisions that Plaintiffs made with regard to that lawsuit. 132. Defendants made these false statements with the intent of inducing Plaintiffs to rely on those statements, and Plaintiffs did indeed rely on Defendants’ misrepresentations and false statements to their detriment. 133. The relationship between Defendants and Plaintiffs John Restivo and Dennis Halstead as opposing attorneys and/or parties to a lawsuit, and the relationship between the court overseeing the Civil Rights Lawsuit and Defendants as attorneys or parties to that suit, created a Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 25 of 31 PageID #: 25Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 26 of 32 PageID #: 193 26 special relationship whereby, once Plaintiffs and the Court demanded such information, Defendants had a duty to disclose to Plaintiffs and the Court the nature of its indemnification obligation and its intent to comply with that obligation. Defendants knowingly concealed this information. 134. Each of the Defendants had knowledge of this fraud and provided substantial assistance to one another, and to co-conspirators Louis Freeman, Lee Ginsberg, and Nadjia Limani, in perpetrating this fraud and the concealment of the fraud. 135. Defendants’ fraudulent, false statements and concealment of material facts directly and proximately caused Plaintiffs to suffer damages as described above. CLAIM III Breach of Contract 136. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 137. The Indemnity Agreement between Nassau County and Joseph Volpe is an enforceable contract. 138. Plaintiffs John Restivo and Dennis Halstead are third-party beneficiaries of the contract, as Nassau County and Joseph Volpe entered into the Indemnity Agreement in order to indemnify Volpe for damages stemming from the specific claims brought by John Restivo and Dennis Halstead in the Civil Rights Lawsuit. The financial benefit that Restivo and Halstead would receive pursuant to the contract, in the event they won a judgment against Volpe, was an intended-not incidental-benefit created by the contract. 139. The parties to the contract, Nassau County and Joseph Volpe, each exchanged valuable consideration upon entering into the contract. Nassau County agreed to fully indemnify Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 26 of 31 PageID #: 26Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 27 of 32 PageID #: 194 27 Joseph Volpe in connection with the Civil Rights Lawsuit, and Mr. Volpe agreed to give Nassau County full control over the direction of said litigation. 140. Joseph Volpe and his legal successor in interest, Carolann Hesseman as Executrix of the Estate of Joseph Volpe, fully performed Volpe’s duties under the contract. 141. The contract created a duty for Nassau County to fully indemnify Joseph Volpe and his Estate for any damages, interest, costs, or fees associated with the Civil Rights Lawsuit. 142. Nassau County did not perform its duties under the contract. Instead, Nassau County breached its duty to Joseph Volpe and the Estate of Joseph Volpe by stating that it would refuse to indemnify Carolann Hesseman as Executrix of the Estate of Joseph Volpe in connection with the Civil Rights Lawsuit. 143. Nassau County’s breach of the Indemnity Agreement directly and proximately caused Plaintiffs the damages described above. CLAIM IV Intentional, Reckless, or Negligent Infliction of Emotional Distress 144. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 145. The improper, deliberate, and traumatizing conduct of Defendants in deliberately causing, or recklessly disregarding the risk of causing, Plaintiffs to rely on their misrepresentations and the concomitant severe emotional distress, was extreme and outrageous, and directly and proximately caused the injuries and damages set forth above. 146. In the alternative, Defendants negligently and grossly negligently, and in breach of their duties owed to Plaintiffs to, inter alia, respond to Plaintiffs’ Civil Rights Lawsuit truthfully and in good faith, and to refrain from knowingly lying to the parties and the Court during the pendency of the suit, directly and proximately caused Plaintiffs’ injuries. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 27 of 31 PageID #: 27Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 28 of 32 PageID #: 195 28 147. The Individual Defendants engaged in these acts within the scope of their employment. 148. These claims are tolled as to the extent the defendants concealed from Plaintiffs- and still are concealing to this day-their conduct giving rise to this cause of action. CLAIM V Negligence and Negligent Misrepresentation 149. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 150. Defendants are liable for negligence, having breached their duty of reasonable care to John Restivo and Dennis Halstead. Specifically and by way of example, these Defendants made material misstatements of fact while defending Nassau County and certain Nassau County employees in the Civil Rights Lawsuit instituted by Plaintiffs. 151. Defendants also negligently failed to have or adhere to adequate policies and procedures for truthfully litigating claims against Nassau County and/or its agents. These negligent acts led to hundreds of hours of otherwise unnecessary litigation and caused Plaintiffs to take certain actions-or refrain from taking certain actions-while litigating the Civil Rights Lawsuit. 152. Defendants’ negligence and gross negligence directly and proximately caused Plaintiffs’ injuries. 153. Defendants engaged in these acts within the scope of their employment. 154. These claims are tolled as to the extent the defendants concealed from Plaintiffs- and still are concealing to this day-their conduct giving rise to this cause of action. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 28 of 31 PageID #: 28Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 29 of 32 PageID #: 196 29 CLAIM VI Conspiracy 155. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 156. Defendants agreed with one another, and with co-conspirators Louis Freeman, Lee Ginsberg, and Nadjia Limani, to commit the tortious acts described herein. 157. Defendants each intentionally committed a number of overt acts, including but not limited to making false statements and/or directing others to make false statements, in furtherance of the agreement to commit the tortious acts described herein. 158. Defendants’ participation in the conspiracy was intentional. 159. The conspiracy to commit the tortious acts described herein, as well as the tortious acts themselves, directly and proximately caused the damages and injuries to Plaintiffs described above. CLAIM VII Respondeat Superior Claim Against Nassau County, the Nassau County Attorney’s Office, and Carnell Foskey 160. Plaintiffs hereby incorporate by reference all of the foregoing paragraphs and further allege as follows: 161. At all times relevant to this Complaint, Defendants LoCurto, Miller, Van der Waag, Mendelson, Ben-Sorek, and Ferguson acted as agents of Nassau County and the Nassau County Attorney’s Office, in furtherance of the business, including law enforcement functions, of the Nassau County and the Nassau County Attorney’s Office, and within the scope of their employment or agency with Nassau County and the Nassau County Attorney’s Office. 162. At all times relevant to this Complaint, outside counsel for Nassau County Lou Freeman, Lee Ginsberg, and Nadjia Limani, acted as agents of Nassau County and the Nassau Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 29 of 31 PageID #: 29Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 30 of 32 PageID #: 197 30 County Attorney’s Office, in furtherance of the business, including law enforcement functions, of the Nassau County and the Nassau County Attorney’s Office. All acts undertaken by Freeman, Ginsberg, and/or Limani were taken at the direction and under the control of, based on communications with, and in cooperation with Nassau County and the individual Defendants. 163. The conduct by which the Defendants committed each of the torts complained of herein was not undertaken for these Defendants’ personal motives, but rather was undertaken while these Defendants were acting pursuant to their duties to Nassau County and the Nassau County Attorney’s Office, carrying out their routine litigation functions as attorneys. 164. Under the doctrine of respondeat superior, Nassau County and the Nassau County Attorney’s Office are liable for their agents’ state law torts complained of herein. WHEREFORE, John Restivo and Dennis Halstead pray as follows: A. That the Court award damages to them and against the defendants, jointly and severally, in an amount to be determined at trial, up to 129 million dollars; B. That the Court award treble damages to them pursuant to Judiciary Law § 487, and against all defendants, in an amount to be determined at trial, that will punish such conduct and deter such conduct by defendants in the future; C. For a trial by jury; D. For pre-judgment and post-judgment interest and recovery of their costs, including reasonable attorneys’ fees to the extent provided for by law; and E. For any and all other relief to which they may be entitled. Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 30 of 31 PageID #: 30Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 31 of 32 PageID #: 198 31 Respectfully submitted, Dated: New York, New York May 16, 2016 /s/ Anna Benvenutti Hoffmann Nick Brustin Anna Benvenutti Hoffmann Alexandra Lampert Julia L. Torti NEUFELD SCHECK & BRUSTIN, LLP 99 Hudson Street, 8th Floor New York, New York 10013 (212) 965-9081 Attorneys for Plaintiffs John Restivo and Dennis Halstead Case 2:16-cv-02492-JS-SIL Document 1 Filed 05/16/16 Page 31 of 31 PageID #: 31Case 2:16-cv-02492-JS- IL Document 27-2 Filed 03/23/17 Page 32 of 32 PageID #: 99 EXHIBIT 2 Case 2:16-cv-02492-JS-SIL Document 27-3 Filed 03/23/17 Page 1 of 3 PageID #: 200 THOMAS R. SUOZZI LORNA B. GOODMAN County Executive County Attorney COUNTY OF NASSAU OFFICE OF THE COUNTYATTORNEY Ralph G. Caso Executiveand Legislative Building One West Street Mineola, New York 11501-4820 516-571-3056 FAX: 516-571-6684 January 11, 2007 Det. Joseph Volpe C/O Nassau County Police Legal Bureau 1490 Franklin Avenue Mineola,New York 11501 Dear Mr. Volpe: This letter will advise you that you have beennamed as a defendant in a complaintin a casecaptioned J()HN KOGUT V: COUNTY OF NASSAU,POLICECOMMISSIONERDONALDKANE,POLICE COMMISSIONERWILLIAM J. WILLETT (2005),POLICE COMMISSIONERJAMESLAWRENCE, DETECTIVESEAN SPILLANE(HEAD OF HOMICIDE 1985);DENNISFARRELL(HEAD OF HOMICIDE 2005); JOSEPHVOLPE; ROBERT DEMPSEY;ALBERTMARTINO; WAYNEBIRDSALL;MILTON GRUBER;CHARLESFRAAS; FRANKSIRIANNI;, HARRYWALTMAN;MICHAELCONNAUGHTON; WILLIAMDIEHL; and JOHN DOS #1-5, which wasfiled in the United StatesDistrict Court for the Eastern District of New York (No. 06 CV--6695)+ A copy of the complaintis enclosed. In brief, the complaint alleges that plaintiff John Kogut, was deprived othis civil rights as a result of being subjectedto, False Arrest, False Imprisonmentand Malicious Prosecution,on the part of the Police Department and/orcertaindefendantsin violation of federal and state law. As a County employee,you are entitled,pursuantto the Nassau County AdministrativeCode § 22-2.8, to legal representationprovided by the Countyto defendyou in this lawsuit, subjectto certainconditions. The purpose of this letter is to describe the conditionsunderwhich the County Attorneywill represent you. You are, of course, free to retain an attorney of your ownchoosing,at your expense. If,however, you want the County Attorney to represent you, and the conditionsof such representationdescribedbelow are acceptable, please sign the enclosed copy of this letterwhere indicatedon the followingpage and return it to me. In the event that the County Attorneyor a courtof competentjurisdiction determinesthat, because of a conflict of interest with the County or anotherdefendant,it would not b appropriate for the County Attorneyto represent you in this lawsuit, you will be entitledto be representedby private counselyou have chosen, and such counsel will be paid reasonable attorney's fees and costs as determinedby the CountyAttorney, so long as the alleged act or omission occurred whileyou were actingwithin the scope of your publicemploymentor duties,. It is a condition of the County Attorney's representationthat you cooperate fullyin the defense of this NC066128 Case 2:06-cv-06720-JS-SIL Document 251-3 Filed 03/09/15 Page 1 of 2 PageID #: 4126Case 2:16-cv-02492-JS-SIL Document 27 23 7 2 3 201 lawsuit. That requirement includes but is not limited to your obligation to transmit promptly to the County Atl:orney any documents or other materials delivered to or served upon you, to make yourself available to meet with any attorney assigned to represent you or other parties represented by the County Attorney in this lawsuit, to assist in providing documents that may be necessary for the defense of the lawsuit and, if necessary, to testify at a deposition or trial. It is further a condition of the County Attorney's representation of you that the County Atturney has the right to control and make all litigation and settlement decisions concerning the defense of the lawsuit. If the Nassau County Police IndemnificationBoard makes a determination,pursuant to NewYork General Municipal Law §50-1 that the act or omission complainedof was within the scope of your public employment or duties, the County will indemnify you for any award of damages againstyou, and the County Attorney will have sole responsibility for determiningwhether to agree to a proposed settlementofthis lawsuit. In that event, you will not have the right to agree to a settlementon your own or to object to a settlement approved by the County Attorney. Finally, the County Attorney's offer to representyou is based on its determinationthat the complaint arises out of an allegedact or omission that occurred or that is allegedto have occurred whileyou were acting within the scope of your public employmentor duties. Accordingly,if the Nassau County Police IndemnificationBoard determines that your actionswere outside the scope of your public employmentor duties, or the County Attomey becomes aware of facts showingthat the act or omission complainedof wasnot within the scope of your public employmentor duties,you mayno longerbe provided with a defenseby NassauCounty and you will not be indemnifiedfor any and all costs, damage and attorneys' fees which couldbe awarded against you. Please be advised that all evidenceand communicationswhich could be viewedas pertaining to the subject matter of this litigation ("Litigation RelatedMaterials") must be preserved in their entirety. Toward that end, any and all automaticprocedures in effect atyour agency concerningthe dispositionof documentsmust be suspended as they pertain to Litigation RelatedMaterials. Litigation RelatedMaterials include, but arenot limited to, all paper documentsand records in draft and final form, notes, charts,manualsphotographs, drawings, and handbooks, as well as all electronicallystored informationor communications,includingthose stored in computer files,drives or othermedia, electronicmail messages, and voice mails.Your duty to preserve Litigation RelatedMaterials exists irrespectiveof whether the County Attorney or othercounsel representsyou. Please note that our deadline to respond to the complainton your behalf is January 30, 2007. It is urgent thatyou respond to this letter as soon aspossible. If you agreeto be representedby theCounty Attorney,please sign the enclosed copy or;this letter where indicatedbelow and return it to me. If you have any questions,please contactRosalieDeSouza immediatelyby phone (516)._-7k--0495by fax at (516) 571-3058. DeputyCounty Attorney BureauChief,GeneralLitigation Agreed and accepted: J_ob_h _lp kq'/@ ---''-"e Dated: January 11,2007 2 NC066129 Case 2:06-cv-06720-JS-SIL Document 251-3 Filed 03/09/15 Page 2 of 2 PageID #: 4127Case 2:16-cv-02492-JS-SIL Document 27 23 7 3 3 20 EXHIBIT 3 Case 2:16-cv-02492-JS-SIL Document 27-4 Filed 03/23/17 Page 1 of 7 PageID #: 203 1 UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF NEW YORK ------------------------------------------------------------------------x JOHN RESTIVO and DENNIS HALSTEAD, Plaintiffs, -against- NASSAU COUNTY, et al., Defendants. 06-CV-6720 (JS) ------------------------------------------------------------------------x DECLARATION OF LISA LOCURTO IN SUPPORT OF DEFENDANT’S MOTION TO STAY ! Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 1 of 6 PageID #: 4051Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 2 7 2 4 2 LISA LOCURTO, declares under penalty of perjury, pursuant to 28 U.S.C. 1746, that the following is true and correct: 1. I have been a Deputy County Attorney in the Office of the County Attorney since 1996. I am currently the Chief Deputy County Attorney in Nassau County (the “County”), and I have held that position for five years. My duties included defending the County against legal claims brought against the County, and encompass the enforcement of judgments and/or settlements. 2. I make this declaration in support of the instant motion for a stay of execution, without a bond or condition, of a judgment entered in this litigation against the Estate of Joseph Volpe, a deceased Nassau County Police Detective who was sued in his individual capacity. 3. The County’s standing with respect to the instant motion arises from the fact that the Estate of Detective Volpe is expected to invoke the deceased’s rights under N.Y. General Municipal Law ("GML") § 50-l after the Plaintiffs seek to enforce any final judgment against the Estate, in which case the County could bear the ultimate financial responsibility for satisfying the judgment against the Estate. 4. The purpose of this declaration is twofold. First, it is intended to acquaint the Court and Plaintiffs’ counsel with the current procedures and law that govern the manner in which the County would raise the funds necessary to satisfy a claim for indemnification by the Volpe Estate for a judgment of the magnitude obtained by Plaintiffs against the Estate. This declaration reiterates in substantial part the representations in a declaration that I submitted to the United States Court of Appeals for the Second Circuit in In Re Strip Search Cases. In that matter, the Court of Appeals stayed the enforcement the judgment without requiring an appeal bond. A copy of that court’s order is annexed hereto. Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 2 of 6 PageID #: 4052Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 3 7 2 3 5. Second, this declaration sets forth the County’s position regarding the Plaintiffs’ demand that the County, as a condition for Plaintiffs’ agreement to suspend enforcement of the judgment against the Volpe Estate pending the Estate’s appeal of the judgment entered against it, agree to have a judgment entered against the County making the County directly liable to Plaintiffs substituted for the Plaintiffs’ judgment against the Estate. THE CURRENT PROCEDURES FOR FUNDING THE PAYMENT OF JUDGMENTS AGAINST THE COUNTY 6. To pay judgments (in this case under a claim for indemnification) of this magnitude ($36 million), the County relies upon its authority, under N.Y. Local Finance Law ("LFL") §10, to issue bonds. Specifically, LFL §10 provides the County with the power to contract indebtedness for any municipal object or purpose set forth in LFL §11.00.a if it is authorized by law to expend money for or to accomplish such object or purpose. LFL §11.00.a.33 sets forth as a financeable purpose the payment of judgments, among other things. Any claim for indemnification by the Volpe Estate for a judgment paid to the Plaintiffs would be encompassed, and could be funded, by a bond issued under LFL §10. 7. Under LFL § 33, the County Legislature is required to approve such a bond by an affirmative vote of at least thirteen out of nineteen members. There would have to be a specific bond issued for this case. It is the County's practice to issue bonds approximately two to three times per year. 8. A bond to provide the funds necessary to indemnify the Volpe Estate would also require approval by the Nassau County Interim Finance Authority ("NIFA"), the County’s New York State oversight authority. Pursuant to N.Y. Public Authorities Law ("PAL") §3669(2) (e), during a control period (as described in §3669) the County may not borrow to pay judgments or other purposes unless so approved by the NIFA. NIFA declared a control period on January 26, Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 3 of 6 PageID #: 4053Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 4 7 2 6 4 2011 which continues to date. Pursuant to PAL §3670, the County is prohibited from filing any petition with any United States district court or court of bankruptcy for the composition or adjustment of municipal indebtedness without the approval of NIFA and the New York State Comptroller, and no such petition may be filed while NIFA bonds remain outstanding. NIFA bonds are outstanding through November 15, 2025. 9. Approval from NIFA is sought after the Legislature has voted to approve a bond. 10. To the best of my knowledge, a bond issue is the only method that Nassau County has used to fund the payment of large judgments. It is not feasible to pay judgments of this magnitude out of funds appropriated for the County’s operating budget. To the contrary, diversion of money from the operating budget would interrupt or impair the functioning of County government to the detriment of the safety and welfare of Nassau County residents. 11. Although there is an alternative to bonds, GML" §82 ("Levy to pay a final judgment; to be in addition to amount authorized by law; money to be paid to judgment creditor"), that option is a last resort that, to my knowledge, one the County has never used. Bonds are a more efficient, effective, and expeditious option. They are easily marketable in the current economy, especially since the purchaser of the bonds benefits from tax exempt interest. 12. Furthermore, GML §82 provides that it shall be the duty of the governing board (in the case of the County, the County Legislature) to assess, levy and cause to be collected a sum of money sufficient to pay a final judgment which has been recovered against the municipality and remains unpaid. Here, there is no judgment against the municipality, Nassau County, nor is there any final judgment against the Volpe Estate. 13. In my experience, the County’s method of satisfying judgments is more than sufficient to guarantee payment of a judgment, if the County were required to make the payment Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 4 of 6 PageID #: 4054Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 5 7 2 7 5 to Plaintiffs. To my knowledge, there has never been a final monetary judgment against the County that was due and payable and not paid in full, and Nassau County has never defaulted on any debt. THE COUNTY’S POSITION REGARDING PLAINTIFFS’ PROPOSED STIPULATION 14. I have reviewed the stipulation that Plaintiffs’ lawyers would have the County sign as a condition for Plaintiffs’ agreement to stay enforcement of the judgment against the Estate of Detective Joseph Volpe without an appeal bond. To the best of my knowledge, the County has never agreed to have a judgment against a police officer converted into a judgment entered directly against the County. Nor has the County ever entered into such an arrangement so that enforcement of the judgment against a police officer would be stayed pending the police officer’s appeal of the judgment entered against him. 15. I am not aware of any instance in which the estate of a deceased police officer has asserted GML § 50-l as grounds for the County to indemnify the deceased police officer’s estate. I cannot recall such a request ever having been made during the years that I have been employed as a County attorney. 16. In any event, I have not been able to find any precedent for the County to enter into the stipulation that Plaintiffs demand as a condition for staying enforcement of the judgment against the Volpe Estate without requiring the Estate to provide an appeal bond. 17. More importantly, to the extent that Plaintiffs demand that a judgment making the County directly liable to them be substituted for the judgment that Plaintiffs obtained solely against the Volpe Estate, acceptance of the terms of Plaintiffs’ proposed stipulation would render the County subject to a charge that it has violated N.Y. Const. art. VIII, § 1, which prohibits the County from making a gift or a loan of property to the Volpe Estate or to the Plaintiffs. In Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 5 of 6 PageID #: 4055Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 6 7 2 8 6 addition, any County official who agreed to Plaintiffs’ terms might face a prosecution and or a taxpayer lawsuit brought pursuant to N.Y. Gen. Mun. Law § 51. Dated: March 3, 2015 Mineola, New York /s/ Lisa LoCurto ___________________ LISA LOCURTO Case 2:06-cv-06720-JS-SIL Document 247-2 Filed 03/03/15 Page 6 of 6 PageID #: 4056Case 2:16-cv-02492-JS-SIL Document 2 4 2 7 7 7 2 9 EXHIBIT 4 Case 2:16-cv-02492-JS-SIL Document 27-5 Filed 03/23/17 Page 1 of 61 PageID #: 210 Perry Auerbach, CSR, RPR Official Court Reporter 1 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF NEW YORK - - - - - - - - - - - - - - X : JOHN RESTIVO, et al, : 06-CV-6720 Plaintiff, : -against- United States Courthouse : Central Islip, New York COUNTY OF NASSAU, et al, : TRANSCRIPT OF MOTION March 17, 2015 Defendants. : 1:45 p.m. - - - - - - - - - - - - - - X BEFORE THE HONORABLE JOANNA SEYBERT UNITED STATES DISTRICT JUDGE APPEARANCES: For the Plaintiff: NEUFELD SCHECK & BRUSTIN 99 Hudson Street New York, N.Y. 10013 BY: NICK BRUSTIN, ESQ. ANNA BENVENUTTI HOFFMAN, ESQ. ELIZABETH DANIELLE VASQUEZ, ESQ. For the Defendants: LOUIS FREEMAN, ESQ STUART GROSSMAN, ESQ. For Defendant County of Nassau and Volpe DEBORAH SCALISE, ESQ. Conflicts Counsel for Freeman firm ROBERT VAN DER WAAG, ESQ. For Defendant County of Nassau THOMAS McNAMARA, ESQ. For Estate MARTIN BROSNAN, ESQ. For Volpe Estate Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 1 of 60 PageID #: 8299 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 2 of 61 PageID #: 11 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 2 Court Reporter: Perry Auerbach 100 Federal Plaza Central Islip, New York 11722 (631) 712-6103 Proceedings recorded by mechanical stenography. Transcript produced by computer. THE CLERK: For motion hearing, Restivo et al versus Nassau County et al. Appearance for the plaintiff. MS. HOFFMAN: Anna Benvenutti Hoffman for the plaintiff. MR. BRUSTIN: Nick Brustin. MS. VASQUEZ: Elizabeth Danielle Vasquez also for the plaintiffs. THE COURT: And for, at this point for the County and for the estate of Joseph Volpe. MR. FREEMAN: Louis Freeman. MR. GINSBERG: And Lee Ginsberg. MR. FREEMAN: Your Honor, also present for our firm is our conflicts counsel Deborah Scalise. She can give her own appearance, but I'd like to set the stage, which I just did. THE COURT: Right. I've read her papers. MR. VAN DER WAAG: Robert Van Der Waag, I am the Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 2 of 60 PageID #: 8300 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 3 of 61 PageID #: 212 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 3 deputy County attorney in charge of appeals for the County, and I am here to -- if the Court needs me or if Mr. Freeman needs me. THE COURT: You're someone with authority, you represent that you can bind the County at this point in time? MR. VAN DER WAAG: Yes. THE COURT: Thank you. MR. McNAMARA Thomas McNamara, Certilman Balin, conflicts counsel for the estate. Your Honor invited Carol Hesseman, the executrix of the estate to be here. Ms. Hesseman is in the back. THE COURT: Ms. Hesseman, I'm sorry to drag you in here at this point in time but I want to make sure that you are aware of what is going on here. MS. HESSEMAN: Yes. THE COURT: Can you hear me? MS. HESSEMAN: Yes. THE COURT: I'll make sure that the attorneys speak loudly enough so that they can relay what they have to tell the Court and if you have any questions later, I'm sure that Mr. McNamara can advise as to the situation and what is going to be done with these various applications and motions that have been made. And get in clarity as to what's going on at this point in time. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 3 of 60 PageID #: 8301 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 4 of 61 PageID #: 213 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 4 With respect to representing Ms. Hesseman, you've reviewed the various positions in terms of a conflict and discussed the underlying bases of how this is coming back, Mr. McNamara. MR. McNAMARA: That's correct, your Honor. THE COURT: And as I think most people would suspect, it's the Court's intention, absent any additional argument, to allow the Freeman firm to withdraw. However, I need to get some indication of a variety of factors as to first, who's paying for the conflicts counsel, for the estate, and secondly, who's going to pay to work on any appeal or any motions that are here with regard to the motions to stay the judgment, whether it will be your firm or some other firm I don't know, because this is something that was sprung on the Court what, about three weeks ago. MR. McNAMARA: Sprung on all of us, your Honor. THE COURT: All right. So can I ask counsel what you see is your role here. MS. SCALISE: Our role is to advise Freeman, Nooter & Ginsberg as to what the issues are. They contacted us a few weeks ago with respect to the information they learned from the County. We vetted it and revetted it and revetted it up until Friday, in trying to find a way so that everybody can be happy. THE COURT: Oh no, you don't get happy. One Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 4 of 60 PageID #: 8302 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 5 of 61 PageID #: 214 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 5 side that's happy and one is miserable. MS. SCALISE: So we can satisfy the issues un the New York rules of professional conduct without doing harm to one party or the other and the clients are in sort of a rock and a hard place given the positions that were taken by the County because they represent the interests of both. So for instance, for the appeal they've appeared solely for the estate. And so when you have that issue and new issues come up how can they advise if the interests are diverge interest or diverse interests. THE COURT: You say they've appealed on behalf of the estate. MS. SCALISE: Yes. THE COURT: What papers were submitted. MS. SCALISE: The appeal is set to be submitted in a few weeks, April 1st. The pre-appeal papers, the usual documents that go into any 4(C) arguments and so forth but not the full appeal. THE COURT: The County's intention, Mr. Van Der Waag, once counsel has been relieved, who is going to represent them on the appeal. MR. VAN DER WAAG: The County will be represented by two law firms, one representing the County to the trial court litigation forced stay or whatever and Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 5 of 60 PageID #: 8303 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 6 of 61 PageID #: 215 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 6 one firm to represent the County on the appeal. THE COURT: Who's going to represent the estate? MR. VAN DER WAAG: We have already talked to the estate, Mr. Brosnan is the primary estate attorney. THE COURT: Yes. Mr. Brosnan is in the back. MR. VAN DER WAAG: And as a result of that, Mr. Brosnan has brought in a counsel to represent the estate which the County is retaining on behalf of the estate. THE COURT: For the appeal or for the judgment? MR. VAN DER WAAG: Well, it depends. MR. McNAMARA: Your Honor, I don't believe that's correct at all. THE COURT: Why am I not surprised, gentlemen? MR. VAN DER WAAG: I'm sorry, I didn't hear that. THE COURT: I said why am I not surprised that that's not accurate at all because your statement was inaccurate. MR. VAN DER WAAG: Then correct me as to what it is. I'm not trying to deceive anybody. MR. McNAMARA: No, no, I think it's just a matter of miscommunication. The estate has an indicated -- the County has indicated that it would pay for counsel to defend this action, it would not pay for a Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 6 of 60 PageID #: 8304 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 7 of 61 PageID #: 216 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 7 cross-claim for indemnification, and the attorney who will represent the estate has not yet been determined. So I'm here today with regard to the issue of the conflict because your Honor invited Ms. Hesseman and I was requested by Ms. Hesseman and by the estate attorney to voice the estate's position with respect to the conflict, which I'm prepared to do. THE COURT: All right. And may I ask who's paying you, sir. MR. McNAMARA: Your Honor, as of now it would be the estate. THE COURT: All right. THE COURT: Let's start at the beginning. There was an official motion made by plaintiffs to move forward on the judgment and also at one point after there was some preliminary discussion between the County by way of Mr. Freeman's representation and Mr. Ginsberg, that firm, there was some indication that the County was going to require initially a bond and then the County's represented that it can't fund the bond at this point in time to stay the judgment. So the initial motion is to stay the judgment that was made by the County. And at that point in time plaintiff's counsel moved forward and said that that there was no basis to stay, however the conflict issue became Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 7 of 60 PageID #: 8305 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 8 of 61 PageID #: 217 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 8 entangled in it. So plaintiff's counsel at this point has no objection to allowing the County to withdraw -- I'm sorry, not the County, I apologize -- allowing the law firm of Freeman, Nooter & Ginsberg to withdraw. MS. HOFFMAN: I think the issue that was created is that after eight years of litigation the County is suddenly taking a position that it had not -- it is not obligated to indemnify the estate which you said was put on all of us within the last month or so. If they continue to take that position that creates a whole host of problems including the unwaivable actual conflict between both the estate and the County but also for the same reasons that Freeman, Nooter & Ginsberg are conflicted out, anybody from the Nassau County Attorney's Office would also be conflicted out from representing the County or the estate. THE COURT: Let's deal with parts. At this time I think it's pretty much conceded since you have the conflict counsel here that Freeman, Nooter & Ginsberg is in an unwaivable direct conflict with regard to the estate. They represented them, but now there's the issue of whether or not the County is going to be required to indemnify, the question created and raised by defense counsel's firm. MS. HOFFMAN: Unless the County withdraws this Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 8 of 60 PageID #: 8306 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 9 of 61 PageID #: 218 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 9 position attempting to challenge indemnification. If they do that, if they stipulate to indemnification, which is the position they've taken all the way throughout, and there's additional information that -- there's additional information relevant to that that came to our attention after our latest filing before the Court. THE COURT: What is that information? MS. HOFFMAN: We spoke to Mr. Brosnan, who is the attorney who represented the -- THE COURT: Representing the estate. MS. HOFFMAN: Represented Ms. Hesseman in the probate proceeding and told us two pieces of information, I'll make proffer but he's present, you can ask him. THE COURT: Come on up, Mr. Brosnan. MR. VAN DER WAAG: May I just say something, your Honor? THE COURT: Okay. I want to hear from Mr. Brosnan. This is a proffer now. MR. BROSNAN: Good afternoon, your Honor. THE COURT: Mr. Brosnan, you've represented the estate of Carol Ann Hesseman as executrix for the estate of Joseph Volpe. MR. BROSNAN: Yes. THE COURT: Can you tell me the relationship between Ms. Hesseman and Mr. Volpe. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 9 of 60 PageID #: 8307s :1 -cv- 2492-J - I c t 7-5 il 03/23/ 7 10 of 61 PageID #: 219 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 10 THE COURT: What's the conflict. MR. BROSNAN: I believe what she's about to represent to the Court that during my initial conversation with she and the partner I advised them that the very first time I learned about this lawsuit was soon after the appointment of Ms. Hesseman as executrix of her brother's will in or about March or April of 2011. I received a phone call from a deputy County attorney Michael Ferguson who advised` me about the pending lawsuit about which I had no knowledge, but then immediately followed up with don't worry, there's complete indemnification here because he was a County employee and the County is fully indemnifying the estate, so the estate has no financial responsibility for this lawsuit or for this claim. And the purpose of the call was really to obtain the substitution of the fiduciary for the decedent in the pending action in this court, which, of course, we complied with and Ms. Hesseman signed whatever paperwork was necessary or authorizing Mr. Freeman to substitute the fiduciary for the deceased Mr. Volpe. THE COURT: Thank you. MS. HOFFMAN: The other piece of information that Mr. Brosnan told me is that he had a conversation with Mr. Freeman in January. THE COURT: Of what year? Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 10 of 60 PageID #: 8308 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 11 of 61 PageID #: 220 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 11 MS. HOFFMAN: This year. When he provided that information to Mr. Freeman before they took these positions and before they made representations to the Court about the lack of any obligation on the County's behalf to indemnify, as well as representations that no one had thought about this and that this issue had never been raised until just now. MR. FREEMAN: Your Honor -- THE COURT: Do you want Mr. Van Der Waag to speak on this matter rather than getting involved in what position you'll take on this indemnification issue? Why don't you talk to your conflicts counsel. MR. FREEMAN: Your Honor, I'm not sure that it's important to do this now, and I think that I'll reserve the right to comment. I'm not sure that Mr. Brosnan has recounted conversation that we had accurately, and I know the date's off but I don't know how relevant that is at this point. THE COURT: There's still an outstanding motion for your withdrawal. So I think it is somewhat relevant. If you want a full blown motion I'll give you folks a full blown motion and hearing, if necessary. MR. FREEMAN: Your Honor -- THE COURT: Mr. Brosnan hasn't really said anything yet. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 11 of 60 PageID #: 8309 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 2 of 61 PageID #: 221 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 12 MR. FREEMAN: I know, but it was a proffer by counsel. MR. BROSNAN: Your Honor, if it helps at all, with respect to the second point raised, I told Mr. Freeman the exact same thing I told Ms. Hoffman regarding the conversation that I had back in spring of 2011 with the deputy County attorney. When that conversation with Mr. Freeman was, I don't know if it was January, could have been February, could have been the first week of February. As to the date of that a representation I can't represent with certainty as to when that was. I dealt with each counsel identically and told them what my impression of what the County's position was from the beginning. THE COURT: Do you have the paperwork for the substitution and all of that. MR. BROSNAN: I do. THE COURT: Do you have correspondence indicating -- MR. BROSNAN: I have notes from my conversation with Michael Ferguson on that day and a note to my paralegal advising that this claim that was a contingent claim, because there was a pending lawsuit the estate was fully indemnified for. MR. FREEMAN: Your Honor, I spoke to Mr. Brosnan Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 12 of 60 PageID #: 8310 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 13 of 61 PageID #: 222 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 13 for the first time with my associate present on February 6th. THE COURT: Okay. MR. FREEMAN: I have no recollection of Mr. Brosnan telling me about the conversation with Mr. Ferguson. I wasn't in the room for the entire time of the conversation. I recently, extremely recently within the last two days had another conversation with Mr. Brosnan where he did tell me about the conversation with Mr. Ferguson and subsequent to the conversation with Mr. Brosnan in February, we did not file any document or make any argument inconsistent with what Mr. Brosnan is saying. MS. HOFFMAN: You're saying -- THE COURT: No, Ms. Hoffman. Let's not forget the rules. I get to ask the questions. All right? Essentially are saying that you didn't know about the substitution of counsel. MR. FREEMAN: Oh, no, I knew about that. THE COURT: And did you not know that Mr. Ferguson had made representations to counsel? MR. FREEMAN: I did not know until within the last two days. THE COURT: And you found that out when you had a second conversation about Mr. Brosnan. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 13 of 60 PageID #: 8311 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 14 of 61 PageID #: 223 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 14 MR. FREEMAN: Yes. THE COURT: And that was two days ago? MR. FREEMAN: Correct. THE COURT: And you're moving now to withdraw as counsel. MR. FREEMAN: Yes. MR. GINSBERG: If I may, your Honor, we did learn from the County that they were potentially changing their position about indemnification, but we didn't learn of what Mr. Ferguson had said to the estate, the attorney representing the estate, the attorney representing the estate until recently. THE COURT: All right. MR. GROSSMAN: So we didn't file anything that said that we were aware that Mr. Ferguson had made this allegation. Once we found that out that confirmed the change in position which also led to our knowledge that we clearly had at that point a conflict. THE COURT: All right. MR. GINSBERG: That's what needs to be clear. THE COURT: Mr. Van Der Waag, do you have something that you want to add to the County's position. MR. VAN DER WAAG: Yes, Judge, please. This came it a head because of the judgment and the notice of appeal, and the was done, the notice of appeal I think was Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 14 of 60 PageID #: 8312 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 15 of 61 PageID #: 224 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 15 in the beginning of December. And when I looked at it, I might add I was in the St. Francis hospital for most of that month and what have you and I looked at it and I called the office, the judgment debtor is of course the estate. THE COURT: Correct. MR. VAN DER WAAG: It's not the County. You had dismissed out the County. THE COURT: And the reason for that was that there was basic agreement as to the theory of the case and -- MS. HOFFMAN: Indemnification. THE COURT: And indemnification. MR. VAN DER WAAG: I'm not familiar with that as far as what the understanding was at that time. It goes back a few years as I recall. I'll definitely check it. We had discussions with Mr. Freeman and what have you regarding a potential stay and questions regarding the estate, make sure they're protected, the County will pay whatever attorney's the estate needs, and as you know -- THE COURT: You have an obligation to represent. Now you're talking about whether or not this is this obligation to indemnify. MR. VAN DER WAAG: The question of indemnification as far as I know is not on the calendar Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 15 of 60 PageID #: 8313 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 16 of 61 PageID #: 225 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 16 for today. THE COURT: That's right. MR. VAN DER WAAG: But this is a very complicated issue because, as you know via the second trial where there was a finding by the jury that the police officer committed some improper act, potentially illegal or criminal, that if that is the case and the Second Circuit affirms the jury verdict and your decision, then the question of indemnification is presented again because the County can't pay for criminal acts. And the indemnification is pursuant to the General Municipal Law which is clear that if the officer acts outside of the scope of employment et cetera, there is no indemnification. Now, right now the indemnification is in place. But it could go back to the Indemnification Board for a review if it continues and the Second Circuit in particular affirms, therefore Mr. Volpe act improperly. I don't know whether that's going to happen, but that's a potential. THE COURT: Don't you think that should have been determined from the beginning and it wasn't done. The case law is pretty clear here. If a determination is, look, this particular defendant acted outside the scope of his employment, we're not going to indemnify him, then you Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 16 of 60 PageID #: 8314 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 17 of 61 PageID #: 226 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 17 make that clear, you advise the defendant, the officer that he has to go out and get counsel or you're required rather to pay for counsel and that's all done. In Dutton at least they did it at the beginning of the trial so someone had a clue who was going on. Now granted, Suffolk County's officer indemnification, the wording may be slightly different than Nassau County, but it's an unfortunate thing, Mr. Van Der Waag, that was the part of the group that helped the draft particular statute involved here when I was a deputy County attorney. So the determinations are made when and if you find out that there is a conflict, I don't think it usually has to wait eight plus more years, I don't know how many years. MS. HOFFMAN: Eight. THE COURT: Since he's got the indemnification letter. MS. HOFFMAN: Eight. THE COURT: So I understand you're attempting to make an argument here now that indemnification is not in play. Whatever that turns out to be at this point in time you certainly have stated as defense counsel, Mr. Freeman has stated in his letter, that there's a conflict and they have to be let out. The issue is -- MR. VAN DER WAAG: We agree with that. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 17 of 60 PageID #: 8315 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 18 of 61 PageID #: 227 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 18 THE COURT: And you're going to pay for conflict counsel, Mr. McNamara, and, Mr. Brosnan, are you going to continue to represent the estate? MR. BROSNAN: Hopefully Mr. McNamara's efforts will be sufficient, your Honor. THE COURT: Mr. McNamara, he's only here on the conflict from what I can tell. MR. McNAMARA: Your Honor, I'd like to address the conflict issue, because there's one way in which we can avoid all of this and it was suggested by plaintiff, that if the County stipulates that it would indemnify the estate and not go with this retraction, that then everybody's interests are back coinciding and there would be no need for Mr. Freeman to withdraw. The havoc, your Honor, that this change has caused, there is appeal that's due in the Second Circuit. THE COURT: April 1. MR. McNAMARA: And according the plaintiff's counsel the Second Circuit has already said. THE COURT: No further adjournments. MR. McNAMARA: Your Honor, there's more than 11,000 pages from the trial transcript from the two trials. Ms. Hesseman, who is in her seventies has numerous medical conditions including tremors and a walker and who is dependent upon Social Security for her income, Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 18 of 60 PageID #: 8316 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 19 of 61 PageID #: 228 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 19 has been served with supplementary proceedings to enforce the judgment, as has her nephew, a 20 year old student at Malloy College, and what the plaintiffs have requested is that they produce their tax returns, their pay stubs, credit cards, everything, individually, individual. There's no judgment against Ms. Hesseman individually, there's no judgment against Joseph Brian Volpe, the 20 year old student at Malloy. Yes, he does have a part-time job, he works with an autistic child and he also works part time as a lifeguard and he's been subpoenaed to appear next week to testify with regard to his personal assets. So all of this, your Honor -- THE COURT: And the County, who served him with the subpoena. MS. HOFFMAN: At the County's direction to enforce the judgment on the estate. MR. McNAMARA: So there was one way out for the County, and the suggestion that I had and I spoke with the County Attorney's Office, not the attorney who's here, as early as this morning, and also with Mr. Freeman last night. Why not stipulate that you'll indemnify, post the bond at least to the amount of the estate assets. Your Honor, the net assets were approximately 300,000, all there was was a house that was sold, there Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 19 of 60 PageID #: 8317 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 20 of 61 PageID #: 229 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 20 was a mortgage, there were other obligations, there were executive commissions, there was administrative expense, the only beneficiary is the trust, it's for the benefit of the son, his education, most of the money has been spent, that's gone to tuition at Malloy, pay his dental bills, and things like this. So the havoc that has been recked with respect to the County's change of position, I spoke to plaintiff's counsel before and said would you agree to a lower bond, the net bangs the estate with regard to the stay, if the County agreed to indemnify and what he said is I won't need any bond if they agreed to indemnify. So the County has it within its power to avoid everything that's happened, let Mr. Freeman go back to work and work on this brief. All they have to do is agree to do what they agreed to do eight years ago. Now, your Honor, I have to address this argument that they have the right to go back to the Review Board for determination. And as your Honor, first of all, there's no such provision in General Municipal Law 50-L, the determination is made by the board which is comprised of three people. And your Honor, this is analogous to the situation where an insurance company wants to reserve its rights, one cause of action may be covered by insurance and one not, the insurance company has the right to say I'm going to reserve until the end of the case to decide Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 20 of 60 PageID #: 8318 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 21 of 61 PageID #: 230 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 21 if you're entitled to indemnification, but if they do, they have to reserve their rights and pay for the insured's counsel from the beginning. And that they did not do. You cannot unring the bell, your Honor, there's been eight years of litigation. If Mr. Volpe had separate private independent counsel paid by the County from the beginning, we might not be here today, the situation could be very different. So what they are going to propose, your Honor, is that they go back to this Review Board and that they do not have an obligation to indemnify. Why? Because they're the County -- there's no estoppel against a municipality. Your Honor, this involves more than the issue of estoppel. This is a conflict of interest and unethical conduct to permit the attorney to represent someone where you have a secret reservation of rights that you want to apply retroactively eight years later. So I would ask that the County reconsider if you want to give them 24 hours, because your Honor, the havoc that this is going to cause it's going to cause expense to the estate and the trust with regard to the payment of the tuition bills for this young boy who's only a junior because they have also told me that they will not pay any fees for affirmative litigation against the County with Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 21 of 60 PageID #: 8319 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 22 of 61 PageID #: 231 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 22 regard to pursuing the indemnification, that their obligation to pay defense cost is limited to defending the estate on the merits but not -- your Honor, this case is so complicated I have spent so much time in reviewing everything and speaking with the executrix and with Mr. Brosnan and Mr. Freeman. You know, if that happens, the trust fund will be depleted just with counsel fees and nobody will get anything. All of this can be an avoided if the County does what it is required to do, what it agreed to do, and what it's seeking to accomplish it cannot accomplish, your Honor, because I believe your Honor would not permit them to escape this indemnification because it was countenancing unethical conduct, in violation of the code of professional responsibility, because that means that was a conflict all along and it's too late. Eight years have gone by. MS. HOFFMAN: If I can add, it's important to pay attention to what they're saying now and what they have said recently because the constant in the last month is they're trying to get out of paying the judgment however possible. But they keep on shifting the basis on what they're saying, which is none of these positions are being taken in good faith. First they say there's no written agreement between Volpe or the estate and the County. We locate Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 22 of 60 PageID #: 8320 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 3 of 61 PageID #: 232 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 23 what looks like a form Nassau County written agreement which is used in every single case, we find it, we provide it to defense counsel, we locate on their privilege log where they had withheld this agreement as privileged and that they brought it to us. It's a signed agreement with Volpe and it's hornbook law, contract rights survive death. It says we will indemnify you for any award of damages, that's number one. They said they never thought of the issue with the estate before, there's been no promise. We talked to the lawyer for the estate. He said actually in 2011, Michael Ferguson promised him that the estate was indemnified of course it makes sense because everyone litigating this case understood all the way throughout that there was full indemnification for the estate and if they said at that point or when they were defending Volpe in his deposition as he was dying, that they weren't going to indemnify his estate, he could have had taken a different action, pointing the finger at other people who were indemnified at that point. Way too late for that now. They said it's a legal question because only 50-L General Municipal Law applied to police officers, Nassau administrative code 22-2.8 which specifically says the definition of employee includes an estate, they say it Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 23 of 60 PageID #: 8321 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 24 of 61 PageID #: 233 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 24 doesn't apply to police officers. Their only letter that they sent to Volpe, that they routinely send as a form to every -- cites the code. It is an important obligation that employees have to the County and the County has to employees, including police officers, are covered by Nassau County administrative code 22-2.8. We point out how all of these things have no basis. In addition, there's estoppel based upon their representation to the estate, based upon the representations to us and to the Court all the way throughout this litigation for eight years through, two trials, and there's a separate breach of fiduciary duty or malpractice claim against the County Attorney's Office and Freeman, Nooter & Ginsberg for representing the estate without disclosing this conflict when if they actually weren't intending to indemnify. So these are four separate bases for why they're bound by the indemnification agreement that he made eight years ago today, now. And this includes -- now as I understand they're coming out with a new justification, they say actually we're allowed to go back to the Review Board. Of course they're not allowed to go back to the Review Board. As Mr. McNamara said you can't unring the bell. We have eight years of litigation based upon the representation by the County that they were indemnifying. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 24 of 60 PageID #: 8322 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 25 of 61 PageID #: 234 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 25 THE COURT: Ms. Hoffman. MR. McNAMARA: If I may. THE COURT: No. Have you had an opportunity to review the record to see at the time of the jury instructions or at the time of the opening statements or during any time during this trial there was ever an indication that the County was not going to indemnify? MS. HOFFMAN: Of course there was no indication and we know that, we searched the record. We've looked at what's there, including instructions that you gave to jurors about how Nassau County -- during voir dire -- about how Nassau County would be paying, would that be a conflict for them as a taxpayer because the County was paying the damages. And I'm sure you have no doubt, had this been raised at all we would have gone ballistic at this point. You would have seen all these motions back then. After they made a representation in July 2007 at the beginning of this case, please be informed the defendants have been indemnified. The same representation they made to Volpe in that letter. If the board votes, which it did in February 2007, that you were acting within the scope of your employment you are indemnified, you will be indemnified, nothing conditional, no reservation of Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 25 of 60 PageID #: 8323 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 26 of 61 PageID #: 235 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 26 rights, you are indemnified. THE COURT: And there was no Monell claim presented because -- MS. HOFFMAN: Exactly. We made all sorts of strategic decisions, of course the most important thing going through this is making sure that you have someone that you can collect the judgment from. What would the point of all of this be if the only person on the hook was Volpe's estate for $300,000. You've seen our fee application. That's five million dollars. There would be no reason to go through any of this litigation if there was any question about that. There is also the respondeat superior claim, if they had raised that at any point, we would have gone back to the court and said there was no reason to dismiss the respondeat superior claim. THE COURT: You said it go back to the board? MS. HOFFMAN: To the Court. And that's the cross appeal right now. So when they talk about the County being represented on appeal, the only claim for which the County is a direct party is not on the appeal, the appeal is solely on behalf of the estate, although everyone has understood throughout that the County is a real party in interest, and the County is only a defendant on the cross appeal to reinstate the respondeat superior. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 26 of 60 PageID #: 8324 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 27 of 61 PageID #: 236 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 27 MR. VAN DER WAAG: If I may, Judge. THE COURT: Let me just clarify one point. The County's position is that respondeat superior -- what's your position on the appeal, on the cross appeal? MR. VAN DER WAAG: On their cross appeal there's no merit to overturn your decision to dismiss the Monell and the respondeat superior and if I may, no decision has been made to revoke indemnification. That is not true. It's been discussed to this extent primarily, certainly with counsel internally, the indemnification is between the municipality and its employee. And the municipality, even without the problem with what type of acts indemnifies the employee to the extent that the employee is paying -- wait a second. THE COURT: I'm not looking at her, I'm listening to you, sir. MR. VAN DER WAAG: So if the estate has $300,000 total, there's an issue that if the County indemnifies it will indemnify up to the $300,000, not beyond that. And indemnification boards review a second time often. I have appeal right now in which a police officer, when he appeared before the Indemnification Board, said he did this, he didn't do that, and so forth, and there's a 1983 case in this court not before your Honor, and it turns out that he misrepresented. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 27 of 60 PageID #: 8325 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 28 of 61 PageID #: 237 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 28 THE COURT: And what did you learn then? MR. VAN DER WAAG: During discovery, during the trial. THE COURT: And what did you do at that point? MR. VAN DER WAAG: It went back to the Indemnification Board, the Indemnification Board based upon that revoked the indemnification. THE COURT: You know why they did that? So the plaintiffs would be required to conflict or the change in strategy and they wouldn't go to trial or even a second trial without that information. And that's exactly -- MR. VAN DER WAAG: But they're on trial now. The thing is that the Indemnification Board -- THE COURT: Does he have his own counsel? MR. VAN DER WAAG: He does have his own counsel. THE COURT: And who is paying for that? MR. VAN DER WAAG: I tell you the truth, I don't know the answer to that. But we said here we will pay for whatever counsel the estate wants, let us know. That's how this gentleman arrived today and there was a question -- THE COURT: This gentleman is asking that you agree to the indemnification and he doesn't want to work if he doesn't have to, essentially, that's what he's saying. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 28 of 60 PageID #: 8326 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 29 of 61 PageID #: 238 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 29 MR. VAN DER WAAG: First of all, as I indicated, Judge, the only thing that the County -- if the indemnification stays the way it is now, would be the extent -- THE COURT: What's the position now? It's in the papers, Mr. Van Der Waag, that the County is not saying it won't indemnify but it's not saying it will indemnify. MR. VAN DER WAAG: It's something that depends first of all on what happens in the Second Circuit. Number two, if the County indemnifies it will indemnify the officer, in this case the estate, to the extent that there were assets there that they have to pay. And if it's 300,000 as opposed to $36 million, then the County's position is it indemnifies the officer. It doesn't bring in what plaintiff is asking for, and there are plenty of cases on it, your Honor. They are not third-party beneficiaries to the indemnification. Now, they say that somebody represented or said something three years ago. Well, if your Honor is thinking of entertaining that we would deny or at least the substance of it, it should be on full papers because you can't decide that on simple representation by plaintiff's attorney. THE COURT: No. You can call on Mr. Ferguson Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 29 of 60 PageID #: 8327 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 30 of 61 PageID #: 239 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 30 and have a hearing. MR. VAN DER WAAG: Unless I have full papers when we have counsel in place to present the arguments and I realize -- THE COURT: You can't represent the County anymore, can you? You're out of this. MR. VAN DER WAAG: The County is going to retain two law firms, one to be in this court and one to be in the Second Circuit. And the County will pay for Mr. Brosnan and what have you and if whoever counsel they want will do that. THE COURT: So now I'm going to be granting a motion to allow defense counsel to withdraw, Mr. Freeman and his firm, and I'm granting a motion to allow the County to withdraw, because of what is been portrayed as an unwaivable conflict of interest. I will do that. MR. VAN DER WAAG: Okay. THE COURT: What you have to do in terms of the County is get a lawyer to represent the County, get a lawyer to represent the estate, and get another lawyer to represent who? The estate? You have to get new appeals counsel, too. You can't go up and represent the estate with this kind of argument. MR. VAN DER WAAG: With all due respect, Judge, Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 30 of 60 PageID #: 8328 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 31 of 61 PageID #: 240 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 31 when my people talked to Mr. Brosnan, he had picked -- this gentleman who is here today, but then they had the question as to whether they wanted to get involved with the appeal as opposed to staying with the potential enforcement by plaintiff. We never got a resolution of that. If it turns out that the estate says we also want an appellate attorney, then yes, the County will find such a person. THE COURT: And they have all of three days or three weeks rather to go get appellate counsel and a review an 11,000 page transcript. MR. VAN DER WAAG: In all due respects, Judge, I appeared -- THE COURT: You can't worry about the appeal, I understand that. MR. VAN DER WAAG: Mr. Freeman wants to withdraw, you're going to grant that. THE COURT: I will. MR. VAN DER WAAG: That is fine, but Mr. Freeman has indicated that he will make a motion to withdraw forthwith in the Second Circuit explaining to the Second Circuit everything that happened here and the fact that there are all new counsel being appointed because of conflicts and what have you, and at the same time asking the Second Circuit to give an extension. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 31 of 60 PageID #: 8329 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 32 of 61 PageID #: 241 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 32 Now, can I predict what the 2nd Circuit do? No. But I will think from past practice and what have you, that under those circumstances the Second Circuit will grant an extension, but Mr. Freeman has indicated he will make that motion forthwith and he'll cooperate as we fully expect he will to get all of his papers together and give them to our new counsel. THE COURT: The County's new counsel. MR. VAN DER WAAG: Yes, correct, correct THE COURT: And also the estate's new counsel. MS. SCALISE: Absolutely. MR. VAN DER WAAG: If I may. The County -- we will have the two law firms as far as the County goes and the estate has to tell me what they want to do as far as their counsel goes, but the County will have those two law firms designated within two weeks. MS. HOFFMAN: The appeal's due in two weeks. We will obviously oppose any extension to the appellate deadline, no one can say what the Second Circuit will do, but we did oppose an extension before. And frankly, the issue here has been created by the County, which is ultimately the party-in-interest, creating a conflict at a last minute. We notified them as soon as they raised this position that there was an unwaivable conflict as soon as Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 32 of 60 PageID #: 8330 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 33 of 61 PageID #: 242 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 33 we got their first motion papers indicating they would take this position in early February. They refused to recognize the conflict that was created, filed papers not only on behalf of the estate without -- its our understanding consulting the estate let alone recognizing that this is a serious ethical violation to file papers against the interests of their nominal client, but signed as if they were representing that client. And this is an 11th hour issue created by the County for delay which is exactly what they want initially which is what the Second Circuit said they weren't entitled to. I also want to address this other new -- new newly raised argument that the indemnification only goes to the extent -- THE COURT: 300,000. MS. HOFFMAN: 300,000. There are two ways you can write an indemnification agreement or statute. You can indemnify for a loss or you can indemnify for a judgment or for damages. If you're indemnifying for a loss then you're indemnifying for money that is paid out of pocket. If you're judgment or for damages awarded you're indemnifying for the full extent, which was the entire purpose of this statute, the entire purpose of the agreement because they didn't want officers to sell their house and pay the Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 33 of 60 PageID #: 8331 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 4 of 61 PageID #: 243 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 34 judgment and then get reimbursed. They wanted them to be held harmless, which is, of course, how the statute has always been interpreted, and Nassau County knows that because this is they do all the time, this is another bad faith argument at the last minute because they want to get out of a 36 million dollar verdict after the fact after all of the litigation, all the way out as the party in interest. MR. McNAMARA: Your Honor, may I be heard? THE COURT: Do you think that you can make much progress asking the County to stipulate to an indemnification without limitation? MR. McNAMARA: Your Honor, I would suggest giving them 24 hours, 48 hours to reconsider their position because if they adhere to this position, which I think is untenable, they cannot succeed for the reason that your Honor just said and I said you can't unring the bell and there's been eight years of conflicted counsel and that -- there's no such thing as a retroactive reservation of rights. Your Honor, I'd like to address where we go from here and any possible role of my firm. That depends upon whether your Honor is going to issue a stay since now there is no counsel for the estate and how long the estate has to get new counsel and there is an issue with regard Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 34 of 60 PageID #: 8332 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 35 of 61 PageID #: 244 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 35 to indemnification. I am prepared to come in and assert to be counsel for the estate on a cross-claim, not the defense of the action, not the appellate attorney, if your Honor would permit it, a cross-claim against the County for indemnification, declaratory judgment that they have to indemnify us. THE COURT: You're talking about an enforcement proceeding? MS. HOFFMAN: An Order to Show Cause that we filed. MR. McNAMARA: No, again, because the County select counsel for all the defendants there were no cross-claims asserted by one defendant against another. If the -- Mr. Volpe knew that they were trying to reserve a right with regard to indemnification presumably he would have asserted a cross-claim for indemnification. That hasn't been done. So at this late date I think it would be appropriate, since this change of position has just been announced to permit an amendment and my firm would be willing to come in solely on the cross-claim. I don't want -- we don't want the responsibility of preparing an appellate brief in two weeks with 11,000 pages and taking on the defense of the merits of the case. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 35 of 60 PageID #: 8333 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 36 of 61 PageID #: 245 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 36 But with regard to that, we would be prepared do that. However, if your Honor is going to grant their Order To Show Cause, the internal proceeding and the judgment going to be entered directly against the County -- THE COURT: I can't do that. It may only be in form, it may not be in reality what the position can be observed to be, but you have a form, the judgment says against the estate of Joseph Volpe. And that's why they're proceeding against the estate, the plaintiffs here. That's their reason. They have to follow the form. MR. McNAMARA: Correct, your Honor. But they've also served an Order to Show Cause to have that judgment served directly against the County. It's not for me -- MR. VAN DER WAAG: If I may be heard on that, Judge. You can't decide that motion to enter a judgment against the County. THE COURT: It's a CPLR proceeding here. It's a motion to enforce a judgment. Clarify the defenses. One, you can't get it together and get a bond; two, you're not a name party; three, I can hold a hearing on all of this and put in motion papers. I would dare to say you want to get off this case, Mr. Van Der Waag. You don't want to come into court before me and move to preclude any stay here. And I'm sure that Mr. Ginsberg and Mr. Freeman and Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 36 of 60 PageID #: 8334 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 37 of 61 PageID #: 246 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 37 other counsel, they want their motion to be granted, they're done with this case. MR. VAN DER WAAG: You mean their motion to withdraw. THE COURT: Yes. The motion to be granted to withdraw. MR. McNAMARA: There's one other possibility, if your Honor would permit, we would be willing to come in to defend the execution of the judgment against the estate assets, if that did not mean that we became merits counsel for the estate solely with regard to that issue, because that is something that, you know, is important. Again you're going after a 70 year old woman who is ill, dependent on Social Security, goes with a walker, they're going against a 20 year old and a trust fund used for his education, and if our defense would be limited to the execution of the judgment, we would consider if we can work out an agreement with the County to come in for that limited purpose, but not to be the new merits counsel in this mess. MR. VAN DER WAAG: I can talk to the County if you give me a little bit of time, I can do that. But I think what you're asking is beyond what I can could. It's -- you're asking the plaintiff to agree with it, that if the County says we will indemnify up to the total assets Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 37 of 60 PageID #: 8335 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 38 of 61 PageID #: 247 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 38 that you have in the estate, the 300,000, I don't think that it's going to satisfy the plaintiff. MR. McNAMARA: No, no, no. They want to agree and so do we that you are going to indemnify in full. You can argue that the extent of your indemnification is limited to the estate assets but they're not going to agree to that. THE COURT: What's going to happen here is if you have, if I'm going to deciding the judgment and the estate loses, which I don't see any defense at this point in time other than the equitable defenses that you have pointed out, if they lose then the estate is going to have to go after the County to seek indemnification. MS. HOFFMAN: Sorry. To be clear, the Order to Show Cause that we filed to have the judgment entered directly against Nassau County -- THE COURT: The estate. MS. HOFFMAN: Nassau County. THE COURT: You can't skip over that. They have a legitimate point here. MS. HOFFMAN: With all due respect, actually they do not. That there is a judgment right now. THE COURT: Who's the judgment against? MS. HOFFMAN: Right now the judgment is against the estate, no question about that. That's the issue Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 38 of 60 PageID #: 8336 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 39 of 61 PageID #: 248 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 39 right now. But there is an Order To Show Cause which we submitted and has not been entered yet is for an Order to Show Cause, it's for a CPLR 5227 proceeding against the County. THE COURT: To go against the County. MS. HOFFMAN: And under that proceeding which is an issue of New York State procedural law which under the Federal Rules of the execution you can make in federal court. THE COURT: You go where it's available. MS. HOFFMAN: Absolutely. If there is a judgment debtor, sorry about the terminology, but a judgment debtor, which is the estate, which is owed money, including under indemnification by a debtor, which is Nassau County we can bring a proceeding to have the judgment, the federal judgment entered directly against the debtor which is Nassau County, and we have asserted four different independent, each one of which is a sufficient bases for which Nassau County can be made directly liable for this judgment. There's a contractual obligation to the estate, there's a statutory obligation to the estate, there's the breach of fiduciary duty, malpractice action, and in this proceeding we assert the estate's rights in order to get the money that's owed to Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 39 of 60 PageID #: 8337 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 40 of 61 PageID #: 249 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 40 the estate and then to us. And the fourth one is the estoppel. And any one of those is sufficient, they're all legally valid. There is no defense, that's why the County keeps on changing and shifting, what it's saying each time. The other issue about going back to the police Indemnification Board, obviously nothing has changed in what Volpe did since 2011 because he's dead. It was exactly what he had done in 2011 when the Nassau County Attorney's Office made a promise to the estate and represented to us. The other thing that happened here was during the negotiations with the outside counsel who was working co-counsel with Nassau County about what we did after Volpe died, what the correct procedure was to substitute someone in, what they suggested to us we'll just call it Volpe's estate and serve us because we're the real party in interest, you don't even have to notify any of his family members because they're obviously not at risk, it's really the County, the County is indemnifying, that was the representation to us. And we said actually technically under the rules we don't think that's proper. We think even though you're indemnifying, the proper way to go about it is to substitute in the fiduciary on behalf of the estate which is what precipitated I am sure Michael Ferguson's call to Mr. Brosnan saying that it's just a technicality, but the forms are asking we have to do the Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 40 of 60 PageID #: 8338 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 41 of 61 PageID #: 250 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 41 substitution in the fiduciary of the estate so that we have them properly as the party to the action going forward but don't worry, because there's no risk to the estate's assets because it's already been determined, that it is indemnified, including the estate. MR. VAN DER WAAG: With all due respect, Judge, I disagree with everything that plaintiff said both on the facts and the law. The law is wrong. There's no way that this court can go ahead and enter a judgment against Nassau County based on that Order To Show Cause because they think it's the right thing to do. But in any event, Judge, I think we're getting far afield here. Mr. Freeman is asking to withdraw. The County agrees. He is going to make an application to withdraw in the Second Circuit for additional time. Quite frankly, if the Second Circuit doesn't grant him a lot of time he ends up winning. That's what the County going to do. The County is going to designate within a week or so two law firms, one for this trial court, one for the appeal. We have worked, I thought, up until now, quite well with the estate, I think. THE COURT: I think the estate might disagree but you. MR. VAN DER WAAG: Okay, fine. You picked Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 41 of 60 PageID #: 8339 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 42 of 61 PageID #: 251 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 42 somebody, what you want to, if you want a separate attorney for enforcement, if you want a separate attorney for the appeal, just let us know. As far as the indemnification of the estate to the extent of the estate assets, which appear to be limited, that's between us and the estate. I can't resolve that right now. But I will certainly see if we can work something out with the estate. THE COURT: Don't you think that you can enter into it despite all of these changes in position? What about the possibility of the County putting up $300,000. MS. HOFFMAN: No, no way. We can't possibly agree to that. THE COURT: You didn't let me finish the sentence. You put up the $300,000 and the defendants agree to be bound by whatever happens in the Second Circuit. If they lose in the Second Circuit, guess what. MR. VAN DER WAAG: We'll bond the full assets of the estate. The plaintiffs don't want that. THE COURT: They're not going to waive indemnification, the plaintiffs are not going to waive indemnification against the County. That's a pipe dream. I'm just attempting to have a situation where the estate is not being batted back and forth by the parties who I perceive to be in interest, the plaintiffs and the County. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 42 of 60 PageID #: 8340 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 43 of 61 PageID #: 252 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 43 MR. VAN DER WAAG: Then if I may suggest, grant a motion of the stay of execution of the judgment as and against the estate under the, some condition that you feel is fair to everyone, namely -- THE COURT: I'm not a determiner of fairness here. I'm here to determine what the law is. And I don't agree with your position, that everything the plaintiffs have represented is necessarily untrue and is not relevant under the law. So I don't. I don't mind, but I don't agree with it. MR. VAN DER WAAG: Okay. MS. HOFFMAN: And to be clear, we've said consistently we've told this to defense counsel if they stipulated that they were indemnifying the full amount of the judgment, which they're legally required to do, if they did that, we would waive the bond requirement. We don't need a bond if Nassau County is agreeing that it's on the hook for this full amount of whatever judgment is entered against the estate. That is not what we're insisting on a bond. We're insisting on what we're legally entitled to, which is assurance that we can collect on the judgment and that's -- the law on stays is crystal clear. If you don't post a bond, you don't provide security, you don't meet the four-prong test. We went through the whole trial. We got a Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 43 of 60 PageID #: 8341 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 44 of 61 PageID #: 253 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 44 federal judgment after a jury trial, the civil rights action, saying that we're entitled to 36 million plus costs and fees. It is now enforceable. That's another thing that they misrepresented, maybe they're confusing state procedure versus federal procedure. Under federal law, they have an enforceable judgment now. They have to do something to make it not enforceable, and they haven't and they can't do that while they're contesting their obligations to pay it. If we don't have assurance to collect the full amount of the judgment there cannot be a stay. The law is crystal-clear. MR. GINSBERG: Your Honor, just very briefly. I sense that the Court is going to permit my firm to withdraw. THE COURT: Yes. MR. GINSBERG: However, during the course of this lengthy discussion plaintiff's counsel occasionally will introduce ad hominem comments about filings that my firm made and when they made it and what we knew. Plaintiff's counsel does not know what we knew when we knew it. I think it's very clear to the Court what happened here. It's very clear to the Court that we had our fault as other parties had, based upon knowledge or a set of knowledge as to what we expected was going to take place to indemnification. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 44 of 60 PageID #: 8342 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 5 of 61 PageID #: 254 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 45 When we learned differently we acted accordingly. We retained counsel to represent us. We recognized our position, and we sought plaintiff's papers, we made our motion to withdraw, and the reason that I'm making that comment is I don't know if this record is going to follow us when we make our motion to withdraw to the Second Circuit, but I don't want to let some of the comments that plaintiff's counsel have made go unmet, at least to the extent that they are not in full knowledge of the facts we have them, and frankly there are facts that we are aware of that can't be discussed here as your Honor can well imagine. THE COURT: I can well imagine. MR. GINSBERG: So I think that that part of it should be left alone. We're going to be allowed to withdraw. The plaintiff's issue is with the County and whatever happens from here on out. THE COURT: And when do you plan on making the motion to withdraw? MR. GINSBERG: We needed to wait for this proceeding to take place. We will advise the Second Circuit immediately, if we can get the papers in tomorrow, as to what took place, that we were permitted to withdraw by this court based upon an actual conflict. We will set forth in our papers as much as we feel we're permitted to, Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 45 of 60 PageID #: 8343 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 46 of 61 PageID #: 255 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 46 given the fact we still have a client that we represent, represented even if we're not representing them after the withdrawal, and the Second Circuit will act accordingly. Frankly, even with the Second Circuit we're in a terrible position because the Second Circuit may turn around and, for all we know, say we're not -- we don't care about what your issue is. We're insisting that you proceed, in which case we have a separate problem we're going to have to address or they'll allow us to withdraw and next counsel will have the problem that we would have otherwise had, which is they'll have two or three weeks to file the brief unless the Court gives additional time. But we can't control that. And we could only put it before the court after we came here first because there was always the possibility, be it small, that after this proceeding something may have been resolved that would have permitted us to proceed, but obviously that's not what has taken place today. THE COURT: No. All right. So unless there's nothing else to be added, you have your statement on the record about what you knew when you knew it, and you're not conceding any facts stated by plaintiff's counsel plaintiff's counsel. Under Rule 1.7 of the New York Rule of Professional Conduct, which precludes a lawyer from Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 46 of 60 PageID #: 8344 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 47 of 61 PageID #: 256 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 47 engaging in representation that will involve the lawyer representing differing interests. I am citing for legal decision as stated in Cinema 5, Ltd. versus Cinerama Inc. at 528 F. 2d 1384 at 1386, Second Circuit case from 1976 which provides as follows: "A lawyer may not place himself in a position where a conflicting interest may, even inadvertently, affect, or give the appearance of affecting, the obligation of the professional relationship." Because the estate and the County's interest were aligned at trial, it was appropriate for the County and the estate to put on a joint defense. However, it appears that the interests of the County and the estate have now diverged. That much is clear from the estate's statements in its briefs, statements today before the Court, certainly the County does not, at least at this point in time has indicated it does not intend to indemnify the estate under the General Municipal Law Section 50-L unless a Court orders it to do so. A court of competent jurisdiction I might add. However, I'll make the following rulings: Freeman, Nooter & Ginsberg 's motion to withdraw (Docket Entry 257) is granted and the plaintiff's motions to disqualify at (Docket Entry 244 and 255) are found to be moot. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 47 of 60 PageID #: 8345 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 48 of 61 PageID #: 257 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 48 I am also disqualifying the County Attorney's Office from representing the estate. The County's recent position that it will not indemnify the estate for the judgment, and the judgment obviously is in excess of $300,000 of the estate's assets it being $36 million, and based upon that representation the Court has no choice but to have them withdraw based upon that obvious conflict and change of position. In addition, I'm staying enforcement of the judgment for 30 days pursuant to Federal Rule Civil Procedure 62(d) while the County and the estate retain new you counsel, and I'm waiving the requirement the estate post a bond during the 30 day period. After 30 days, the stay will be lifted, the plaintiff's motion to stay the judgment pending appeal are denied without prejudice. However, I am going to let the Order To Show Cause stand. I think that I'll have to take some briefings on that when counsel is appointed. And motions to stay the judgment, that's under docket entries 243 and 246 are denied, as I said, without prejudice. A motion to stay may be re-filed once the estate retains new counsel. I'm going to go forward, give them 30 days to get new counsel. I have the stipulation that defense counsel, former defense counsel will notify the Second Circuit and I would ask that those papers requesting an extension for Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 48 of 60 PageID #: 8346 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 49 of 61 PageID #: 258 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 49 new counsel also be submitted to the Court. MR. GINSBERG: Yes, your Honor. THE COURT: So the County is now telling the Court that within two weeks you'll have new counsel on board representing the County, new counsel on board representing the estate on the appeal, new counsel on board for the matters below here with respect to enforcement of the judgment. Is there anything else? MR. McNAMARA: Yes, your Honor, would your Honor entertain a motion for my firm to serve a notice of appearance and to assert a cross-claim for indemnification against the County? THE COURT: And you want to do that in the context of -- MR. McNAMARA: Representing the estate on the cross-claim for indemnification only. A cross-claim that would have been asserted initially years ago had the estate been aware of this position that they did not necessarily have to indemnify. So I believe that that issue is separate and distinct from the merits. And your Honor, there are cases where I've seen separate counsel on a counterclaim, a legal malpractice action, there is a counterclaim for attorneys fees, that's not covered by insurance. So this would be a separate pleading, a cross-claim, I would serve Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 49 of 60 PageID #: 8347 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 50 of 61 PageID #: 259 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 50 a motion for leave if necessary to interpose the cross-claim. THE COURT: So you're seeking indemnification of a separate action against the County. MR. McNAMARA: Cross-claim, a cross-claim in this action, your Honor, a cross-claim that would have been asserted years ago had this position of the County been communicated to the estate. MS. HOFFMAN: That isn't the question, I don't know. Is there a way to join that with our briefing on the Order To Show Cause, because I believe what you're asking -- THE COURT: You're asking to intervene essentially so you can move forward on this cross-claim. MR. McNAMARA: One issue is internal, proceeding to have a direct judgment entered which your Honor may or may not grant. We believe a declaratory action for indemnification is appropriate in this case, and the County has already indicated they will not pay for that. THE COURT: When you say in this case. MR. McNAMARA: In this case to indemnify. THE COURT: Under what docket number, the case now shortly going to be on appeal. MR. McNAMARA: Your Honor, there are still matters pending before your Honor, including the attorneys Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 50 of 60 PageID #: 8348 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 51 of 61 PageID #: 260 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 51 fees. THE COURT: Yes. MR. McNAMARA: Including the post-judgment turnover proceeding, and I think in this case it would be appropriate to entertain a cross-claim for indemnification against the County. So that your Honor can decide whether they have to indemnify the estate in full, which we all thought they had already agreed to. THE COURT: Do you want to be heard on this? MR. VAN DER WAAG: Judge, I don't want to say anything, but you need a plenary action in order to do this. MR. McNAMARA: Why can't it be asserted as a cross-claim between the parties, because it related to the cross-claim in this action, and the only reason that the cross-claim was not asserted earlier was because they did not assert the change of position earlier. THE COURT: I don't see how that theory that you're attempting to put in still viable at this point in time. MR. VAN DER WAAG: May I also say the indemnification ruling by the Indemnification Board has not been changed. There is a question as to the County or any municipality indemnifying this officer, in this case to the estate, to the assets that are subject to that Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 51 of 60 PageID #: 8349 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 52 of 61 PageID #: 261 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 52 police officer. Not $36 million. But there is an indemnification in place to the extent of the assets of the estate 300, 400 thousand. MR. McNAMARA: But I was told several hours earlier when I spoke to the County Attorney's Office that the want to go back to the Indemnification Review Board and have them revisit this, something I believe they cannot do because they cannot unring the bell, and there's already been eight years of representation, so part of cross-claim would be that they are bound by the final decision, and it actually says "final" on the decision of the Indemnification Review Board that they are bound by that and required to indemnify the estate for the full amount of any judgment entered in this action. MR. VAN DER WAAG: Of the judgment? MR. BROSNAN: May I supplement? The estate is prejudiced right now, procedurally it has no legal claim against the County, because no such cross-claim was raised in the initial pleading in this case because they were represented by one firm. So what Mr. McNamara is proposing is to allow an amendment of that answer to allow a cross-claim by -- now there are two parties, the estate and the County -- up until today it was one party -- and he's asking that the estate be permitted an opportunity, albeit belatedly, but Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 52 of 60 PageID #: 8350 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 53 of 61 PageID #: 262 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 53 in view of what's been told to the Court and to us, for the estate to set forth its rights for indemnification so that issue can be ultimately determined by this court. MR. VAN DER WAAG: May I say, Judge, what happens procedurally is if the County were to go back to the Indemnification Board. THE COURT: What you're saying is basically doing that. MR. VAN DER WAAG: No, I am not saying that. If you thought that I said that, I'm sorry, I did not mean that. The County reserves its right in light of the jury verdict in the second trial, the facts are different than what was represented to begin with but, two, if by chance it is resubmitted to the Indemnification Board and if by chance the Indemnification Board changes its mind, then the party-in-interest there, the estate, has an absolute right to take an Article 78 proceeding and challenge that on all the grounds that they just mentioned here. That's how -- as a matter of fact I mentioned before I have an appeal on that right now in a similar type thing where it was discovered during trial that the facts as presented by the police officer was different, the Indemnification Board changed, et cetera, Article 78 proceeding was started and that's the remedy. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 53 of 60 PageID #: 8351 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 54 of 61 PageID #: 263 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 54 THE COURT: What's the name of the case? MR. VAN DER WAAG: In the matter of Lemma, L-E-M-M-A versus Nassau County police Indemnification Board, the Lemma part is correct. THE COURT: That was the one before Judge Bianco, it would be. MR. VAN DER WAAG: Yes. MS. HOFFMAN: This is yet another new argument that they've raised since their filings before the court for why they should be able to get out of it, it's another argument that's contrary to all of their prior representations and the law, for example, the binding contract that they had with Volpe, setting out their obligation under General Municipal Law 50-L which says that if the Nassau County police Indemnification Board makes a determination pursuant to New York General Municipal Law -- THE COURT: I don't think it's necessary that you read it again. MS. HOFFMAN: It says the County will indemnify you for an award of any damages against you, no reservation of rights, no questions, no uncertainty, that's the promise that was made in January 2007 if you agree and accept these terms then we'll represent you, he signed it back, agreed and accepted, and everything Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 54 of 60 PageID #: 8352 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 55 of 61 PageID #: 264 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 55 proceeded after that based upon that representation and the idea of the facts have changed we've been making the same allegations about what happened since day one of this lawsuit, that's what they were examining when they made the decision to indemnify, that this was within the scope of employment, and nothing could have changed since his death, first because he's dead, he can't say anything different and second, because he wasn't separately represented in this lawsuit. Everything that happened in lawsuit, the decision was made by the County's counsel on their behalf. MR. McNAMARA: Your Honor, one other point. You can't wait for an Article 78 because they're seeking to enforce the judgment against estate now. THE COURT: I know. All right, Mr. McNamara, what I want you to do and all the parties involved here except Freeman and you, Mr. Van Der Waag, you can't get involved in it. We are going to have letters submitted to the Court as to how you can file this cross-claim, the procedural vehicle, how it's prejudicing the estate, and how the County ultimately should pay this. And if you submit those types of papers to me, I'll make a determination as to whether or not I can go forward with your request. MR. McNAMARA: Thank you, your Honor. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 55 of 60 PageID #: 8353 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 6 of 61 PageID #: 265 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 56 THE COURT: On cross-claim, and I guess that will require what, a fourth adjournment now for the County to hire. MR. VAN DER WAAG: No. Let me say this to make sure that I'm clear. If you are prohibiting the County Attorney from responding to those papers then I need the newly appointed soon attorney time to respond to those papers. THE COURT: Sure. When do you think that you'll have that newly appointed attorney? MR. VAN DER WAAG: I said two weeks, it could be faster. I left the office at two o'clock talking to Ms. Locurto. THE COURT: And you're representing that this is in the works. MR. VAN DER WAAG: Most assuredly, yes. As a matter of fact, I could --I don't want to tell you the name of the two firms because until they sign off, that would be unfair. But they are there. I just need a short time for the County to finalize it. And I think two weeks. THE COURT: 10 days. How long do you need to get your papers? MR. McNAMARA: Two weeks, your Honor. THE COURT: You have two weeks. Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 56 of 60 PageID #: 8354 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 57 of 61 PageID #: 266 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 57 MR. VAN DER WAAG: Yes, very good. Thank you. Okay. THE COURT: Then I'll deal with the new attorney. But tell the new attorney that the Court expects this motion to be dealt with very quickly. MR. VAN DER WAAG: If I may, I would be more than happy to sit down with the -- you said you are prohibiting me -- but to sit down with the estate attorney to see if between the estate and what have you we can resolve any questions, I am not going to be able to make the plaintiffs feel good because they want the County to pay $36 million. THE COURT: This isn't about feeling good, Mr. Van Der Waag. This is about legal obligations and representations. And that is why you're out of the case and that is why the Freeman firm is out of the case because you have presented to the Court an unwaivable conflict of interest after eight years of litigation. So you're out. The only thing that you have to do is to bring in new counsel. MR. VAN DER WAAG: Yes. THE COURT: All right. And I'm holding off on the Order to Show Cause in that you'll present paperwork, Mr. McNamara, and Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 57 of 60 PageID #: 8355 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 58 of 61 PageID #: 267 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 58 hopefully we can proceed on the cross-claim. MS. HOFFMAN: And we would request that the Order To Show Cause be dealt with as soon as possible. THE COURT: I'm not adjourning it without a date. I'm not letting it lie dormant. What's the current status of discovery against the estate for the enforcement? MS. HOFFMAN: Nothing has happened yet. We served deposition notices and document requests due at the end of the month. Once all of this came to light and once we were instructed by the County to begin enforcement efforts against the estate. So nothing has yet come due, nothing has been provided to us but there are due dates for depositions next week and I think based upon this information we need additional depositions of Michael Ferguson and other members of the County Attorney's Office about probably information that Mr. Freeman and Mr. Ginsberg are saying that they have, what the County has represented to them, a number of things. We have a right to get at now based upon everything that's come up at this point. THE COURT: There is that little tricky issue of attorney/client privilege. I don't think that with this appeal pending and representations that have been made, that Mr. Freeman and Mr. Ginsberg, Ms. Limani necessarily Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 58 of 60 PageID #: 8356 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 59 of 61 PageID #: 268 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 59 are going to be open for deposition. I don't know. I'll keep an open mind on that. But is there any possibility, I know it's remote, that you might go downstairs, you can't meet with all new counsel, to see if this can be resolved short of -- MS. HOFFMAN: We made clear that we need a stipulation and agreement that they're indemnifying for the full amount of the judgment which is promised. THE COURT: Plus attorneys fees. MS. HOFFMAN: Yes, the judgment plus costs and fees, we cannot possibly agree to less than that, that's what our clients are entitled to under the law. If we did that we can agree to no bond, we would agree if Nassau County was made to pay what it's supposed to pay, we can -- we don't need a bond, we agree to that, there's no conflict anymore, all of the problems go away if they do that, they've made crystal clear they don't want to do that. THE COURT: They've made that clear. MS. HOFFMAN: That's the only way we can agree with anything. MR. McNAMARA: Your Honor, with regard to the subpoenas for deposition next week, my understanding is your Honor has stayed the action for 30 days? Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 59 of 60 PageID #: 8357 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 60 of 61 PageID #: 269 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Perry Auerbach, CSR, RPR Official Court Reporter 60 MR. VAN DER WAAG: Stayed the enforcement for 30 days. MR. BROSNAN: Stayed the enforcement. MR. McNAMARA: You need new counsel to come in. THE COURT: I know. I hear you. Have a good day. MR. McNAMARA: Thank you, your Honor. MS. SCALISE: Thank you, your Honor. THE COURT: Let my know who the lawyers are and the counsel for the estate. (Matter concluded.) C E R T I F I C A T E I certify that the foregoing is a true and accurate copy of the record of proceedings in the above-entitled matter. PERRY AUERBACH, CSR March 23, 2015 SIGNATURE Date PERRY AUERBACH, CSR Case 2:06-cv-06720-JS-SIL Document 291 Filed 12/11/15 Page 60 of 60 PageID #: 8358 :1 - - 2492- - I t 7-5 Filed 03/23/17 Page 61 of 61 PageID #: 270