Justia U.S. 2nd Circuit Court of Appeals Opinion Summaries

At issue in this civil forfeiture appeal was whether the district court erred by exercising subject matter jurisdiction over a foreign state's property or abused its discretion by rejecting defendants' statute‐of‐limitations defense sua sponte. The Second Circuit held that the district court had jurisdiction because the Foreign Sovereign Immunities Act (FSIA) does not foreclose in rem civil‐forfeiture suits against a foreign state's property.In this case, however, the district court abused its discretion by sua sponte resolving the statute‐of‐limitations issue without providing defendants notice or an opportunity to defend themselves. Finally, an accompanying summary order considered and rejected defendants' additional challenges. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "United States v. Assa Co. Ltd." on Justia Law

The United States filed a civil action seeking forfeiture of property owned by the claimant. The jury ultimately found for the government and the district court entered judgment ordering forfeiture of the claimants' property.The Second Circuit held that the district court abused its discretion by denying the claimants' motion for discovery on their statute-of-limitations defense and erroneously granted the government's motion for summary judgment on the timeliness issue; the district court erroneously denied claimants' motion to suppress by incorrectly concluding that the exclusionary rule's good‐faith exception forgave the warrant's defects and by applying the wrong legal standard for the inevitable‐discovery exception; and the district court abused its discretion in its orders forbidding the former Alavi board members from testifying at trial, allowing the government to play the videotaped Fifth Amendment invocations, and prohibiting the claimants from mounting their preferred defense. Accordingly, the court reversed in part, vacated in part, and remanded for further proceedings. View "In re 650 Fifth Avenue & Related Properties" on Justia Law

The Second Circuit affirmed the district court's order granting in part and denying in part Pangea's motion for a writ of execution upon the proceeds from the sale of a property previously owned by a divorced couple. Pangea, a judgment creditor of husband, claimed that the district court erred in declining to award it the entirety of the proceeds, arguing that its interest in the property took priority over the interest awarded to wife in a divorce judgment.The court certified the question to the New York Court of Appeals, which held that wife's interest vested upon entry of the divorce judgment and did not render her a judgment creditor of husband. The state court held that legal rights to specific marital property vest upon the judgment of divorce and the dissolution of a marriage involving the division of marital assets does not render one ex‐spouse the creditor of another. Rather, the judgment of divorce was, as the Federal District Court explained, a final settling of accounts' between marital partners with an equitable interest in all marital property. Therefore, C.P.L.R. 5203(a), by its plain terms, has no application here, and Pangea can claim no priority. The court held that this holding was binding and dispositive of the case. View "Pangea Capital Management, LLC v. Lakian" on Justia Law

The Second Circuit affirmed the district court's dismissal of plaintiff's complaint for failure to state a claim. Plaintiff sought recovery of a painting by Pablo Picasso that has been in the Metropolitan Museum of Art's possession since 1952, but once belonged to plaintiff's ancestors who sold it in 1938 to a private dealer. Plaintiff alleged that her ancestors sold the painting under duress because they needed funds to flee fascist Italy after having already fled the Nazi regime in their native Germany.The court held that the Holocaust Expropriated Art Recovery Act of 2016 did not preempt the Met's laches defense and plaintiff's claims were barred by laches. The court held that the delay in this case was unreasonable and the Met has been prejudiced by the more than six decades that have elapsed since the end of World War II. View "Zuckerman v. The Metropolitan Museum of Art" on Justia Law

Pangea challenged the district court's order granting in part and denying in part the company's motion for writ of execution upon the proceeds from the sale of a property previously owned by appellees. The Second Circuit certified questions of New York law for which no controlling decisions of the New York Court of Appeals exist: (1) If an entered divorce judgment grants a spouse an interest in real property pursuant to D.R.L. Section 236, and the spouse does not docket the divorce judgment in the county where the property is located, is the spouse's interest subject to attachment by a subsequent judgment creditor that has docketed its judgment and seeks to execute against the property? (2) If the answer to Question (1) is "no," then: If a settlor creates a trust solely for the purpose of holding title to property for the benefit of himself and another beneficiary, and the settlor retains the unfettered right to revoke the trust, does the settlor remain the absolute owner of the trust property relative to his creditors, or is the trust property conveyed to the beneficiaries? View "Pangea Capital Management, LLC v. Lakian" on Justia Law

This appeal involved an intra‐family dispute over who owns a residential house. The Second Circuit held that the district court properly granted defendants' motion for summary judgment on the pleadings with respect to plaintiffs' adverse possession claim where the affirmative complaint did not contain any affirmative facts that plaintiffs did anything that constituted a distinct assertion of a right hostile to defendants. However, with regard to the constructive trust claim, the court held that there may be a genuine dispute of material fact as to whether an implied promise was made and as to whether defendants' refusal to honor this promise unjustly enriched them. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Jaffer v. Hirji" on Justia Law

Plaintiff, individually and on behalf of others similarly situated, filed suit against defendant, alleging violation of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq. Plaintiff alleged that defendant failed to provide the "amount of the debt" within five days after an initial communication with a consumer in connection with the collection of a debt, as required by section 1692g. The court declined to hold that a mortgage foreclosure complaint was an initial communication with a consumer in connection with the collection debt. In this case, the court concluded that neither the Foreclosure Complaint nor the July Letter were initial communications giving rise to the requirements of section 1692g(a). The court held, however, that the August Letter was an initial communication in connection with the collection of a debt, and that the Payoff Statement attached to the August Letter did not adequately state the amount of the debt. The Payoff Statement included a "Total Amount Due," but that amount may have included unspecified "fees, costs, additional payments, and/or escrow disbursements" that were not yet due at the time the statement was issued. The court explained that a statement was incomplete where, as here, it omits information allowing the least sophisticated consumer to determine the minimum amount she owes at the time of the notice, what she will need to pay to resolve the debt at any given moment in the future, and an explanation of any fees and interest that will cause the balance to increase. Accordingly, the court vacated and remanded for further proceedings. View "Carlin v. Davidson Fink LLP" on Justia Law

Claimants-Appellants appealed an award of summary judgment which forfeited to the United States various claimants’ interests in multiple properties, including a 36‐story office building located at 650 Fifth Avenue in Manhattan, real properties in Maryland, Texas, California, Virginia, and New York, and the contents of several bank accounts. Also at issue is the September 9, 2013 order denying a motion to suppress evidence seized from the Alavi Foundation’s and the 650 Fifth Avenue Company’s office. The court vacated the judgment as to Claimants Alavi Foundation and the 650 Fifth Ave. Co., of which Alavi is a 60% owner because there are material issues of fact as to whether the Alavi Foundation knew that Assa Corporation, its partner in the 650 Fifth Ave. Co. Partnership, continued after 1995, to be owned or controlled by Bank Melli Iran, which is itself owned or controlled by the Government of Iran, a designated threat to this nation’s national security; the district court erred in sua sponte considering and rejecting claimants’ possible statute of limitations defense without affording notice and a reasonable time to respond; in rejecting claimants’ motion to suppress evidence seized pursuant to a challenged warrant, the district court erred in ruling that claimants’ civil discovery obligations obviate the need for any Fourth Amendment analysis; and the district court erred in its alternative ruling that every item of unlawfully seized evidence would have been inevitably discovered. Accordingly, the court vacated and remanded for further proceedings. View "In re 650 Fifth Avenue and Related Properties" on Justia Law

This case stems from a dispute between the parties regarding the ownership of a 7.35 carat pear-shaped diamond. WGDC consigned the diamond to celebrity fashion stylist, Derek Khan. Khan, without WGDCʹs permission, subsequently sold the diamond to a third party. Through a series of transfers, the diamond ultimately came into the possession of the Zaretskys. The district court concluded that Khan had the power to transfer WGDCʹs rights to the diamond under NYUCC 2-403(2) solely because, by his occupation, he clearly held himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction. Therefore, the district court found that Khan qualified as a merchant. Pursuant to section 2-403(2), Khan had the power to transfer all rights in a "good" given to him by an "entruster" if he was at the time a merchant who "deals in goods of that kind." However, the court concluded that, although the New York Court of Appeals has not explicitly defined ʺdeal[ing] in goods of that kind,ʺ persuasive authority from New York courts and elsewhere leads the court to conclude that the phrase means the regular sale of the kind of goods at issue in the case; applying that definition, the court concluded that the Zaretskys have not raised a triable issue of fact as to Khanʹs capacity to transfer title under section 2‐403(2) because there is no record evidence that he regularly sold diamonds or other high‐end jewelry; and the Zaretskysʹ remaining arguments - regarding the timeliness of this appeal, whether the consignment is a ʺtransaction of purchaseʺ under section 2‐403(1) of the NYUCC, and the defense of laches - are without merit. Therefore, the court directed the district court to enter summary judgment for WGDC on remand. View "Zaretsky v. William Goldberg Diamond Corp." on Justia Law

The FHFA filed a summons with notice in state court asserting breach of contractual obligations to repurchase mortgage loans that violated representations and warranties and then Quicken removed the action to federal court. Plaintiff, as trustee of the subject residential mortgage‐backed securities trust, took control of the litigation and filed the complaint. Quicken moved to dismiss the suit. The court affirmed the district court's conclusion that (1) the statute of limitations ran from the date the representations and warranties were made; (2) the extender provision of the Housing and Economic Recovery Act,12 U.S.C. 4617(b)(12), did not apply to the Trustee’s claim; and (3) the Trustee’s claim for breach of the implied covenant of good faith and fair dealing was duplicative. View "Deutsche Bank Nat'l v. Quicken Loans" on Justia Law