Case In Point
Major Court Decisions Impacting New Yorkers This Month
Mon, 12 May 2008 16:05:00
Actually, I’m Sharing My Broker’s Undivided Attention
Rivkin v. Century 21 Teran Realty, LLC
Decided by: Court of Appeals on a Certified Question from the Second Circuit, April 24
In May 2004, Oleg Rivkin decided summers spent in New Jersey were less appealing than those spent in New York. In his search for a summer home, he contacted Century 21 Teran Realty of Woodstock to discuss properties on Ulster Heights Lake. Rivkin learned of a property listed for $100,000—the “Camp Road property”—from an associate broker at Teran Realty, and instructed him to offer $75,000 for the land, although he would go higher if necessary. He signed a statement acknowledging New York law that “buyer’s agent acts solely on behalf of the buyer” and has a duty of undivided loyalty, among other fiduciary responsibilities.
In the meantime, Susanne and Robert Martin had contacted Teran Realty expressing interest in Ulster Heights Lake. The co-owner of Teran Realty, a different agent, told the Martins of the Camp Road property as well, and they signed an offer for $100,000 two days after Rivkin signed his offer.
After receiving no counter-offer to his bid and learning that another bid was accepted, Rivkin contacted the seller’s agent who confirmed that the other offer had also come from a couple represented by Teran Realty. This fact was not known to Rivkin’s agent, as Teran Realty had no internal system to check for conflicts. Rivkin sued Teran Realty in federal court for self-dealing and breach of fiduciary duty.
Reading “agent” to mean “a person who is licensed as a real estate broker,” a unanimous court held that no duty was breached. While an individual agent could not represent two buyers, the court found that a firm could. Based on the assumption that a licensed agent only receives a commission for sales she personally made, the court found that agents at the same firm competing with one another had the same incentives as agents at competing firms. Relying heavily on practical considerations and citing a brief of the New York State Association of Realtors, the court found that in today’s marketplace of mega-brokers, the same firm may comprise several hundred licensed agents, and buyers are on-notice that the same firm may represent many potential buyers.
Searching for Miranda in Body Cavities
People v. Gause
Decided by: Supreme Court, Appellate Division—3rd Department, April 24
Garlyn Gause will have two and a half to five more years to reflect on the new facet of Miranda law that he helped establish. Gause, who is incarcerated at the Elmira Correctional Facility, had his prison cell searched in October 2005. Guards handcuffed him and took him to sit on a special device known as a BOSS chair, which detects objects hidden within body cavities. After Gause twice denied that he had any contraband on his person, the BOSS chair registered that he did. He was then removed to a special room for a strip search. When asked again about contraband, he volunteered that he secreted a razor blade in his buttocks, one end wrapped with tissue paper.
Following his conviction for promoting prison contraband, Gause appealed the state’s use of his statement about the location of the razor blade. Gause argued that the statement should have been suppressed at trial because the guards did not administer Miranda warnings prior to asking questions.
The court agreed with Gause. While prison guards are usually absolved of giving warnings because of the public safety exception to Miranda, where an officer may question freely if he is concerned for his own safety or the general public’s, in Gause’s case of additional restraint and body cavity search, no such concerns existed. While this represents a significant extension of Miranda in prison settings, it was of no help to Gause. The appellate court found the error harmless and affirmed his conviction; saying that even without the confession of the secreted razor blade, the guards would have discovered the blade upon searching Gause.
The Newsworthiness of Borat
Lemerond v. Twentieth Century Fox Film Corp.
Decided by: United States District Court, Southern District of New York, March 31
If the movie Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan had any newsworthy value to American society, Jeffrey Lemerond missed it. Lemerond, who garnered 13 seconds of unwanted fame by running erratically from the movie’s main character down a Manhattan street, filed suit alleging that showing the footage violated his state law right to privacy.
Even though Lemerond never consented to have his image used nor to be parodied in the film, the federal court held that his image was not used for advertising or purposes of trade, so no violation occurred. The court noted that nonconsensual use of an image is permissible for “newsworthy events or matters of public interest,” and Lemerond running down that street was undoubtedly newsworthy. As the court found, “At its core . . . Borat attempts an ironic commentary on ‘modern’ American culture, contrasting the backwardness of its protagonist with the social ills afflicting supposedly sophisticated society.”
Rivkin v. Century 21 Teran Realty, LLC
Decided by: Court of Appeals on a Certified Question from the Second Circuit, April 24
In May 2004, Oleg Rivkin decided summers spent in New Jersey were less appealing than those spent in New York. In his search for a summer home, he contacted Century 21 Teran Realty of Woodstock to discuss properties on Ulster Heights Lake. Rivkin learned of a property listed for $100,000—the “Camp Road property”—from an associate broker at Teran Realty, and instructed him to offer $75,000 for the land, although he would go higher if necessary. He signed a statement acknowledging New York law that “buyer’s agent acts solely on behalf of the buyer” and has a duty of undivided loyalty, among other fiduciary responsibilities.
In the meantime, Susanne and Robert Martin had contacted Teran Realty expressing interest in Ulster Heights Lake. The co-owner of Teran Realty, a different agent, told the Martins of the Camp Road property as well, and they signed an offer for $100,000 two days after Rivkin signed his offer.
After receiving no counter-offer to his bid and learning that another bid was accepted, Rivkin contacted the seller’s agent who confirmed that the other offer had also come from a couple represented by Teran Realty. This fact was not known to Rivkin’s agent, as Teran Realty had no internal system to check for conflicts. Rivkin sued Teran Realty in federal court for self-dealing and breach of fiduciary duty.
Reading “agent” to mean “a person who is licensed as a real estate broker,” a unanimous court held that no duty was breached. While an individual agent could not represent two buyers, the court found that a firm could. Based on the assumption that a licensed agent only receives a commission for sales she personally made, the court found that agents at the same firm competing with one another had the same incentives as agents at competing firms. Relying heavily on practical considerations and citing a brief of the New York State Association of Realtors, the court found that in today’s marketplace of mega-brokers, the same firm may comprise several hundred licensed agents, and buyers are on-notice that the same firm may represent many potential buyers.
Searching for Miranda in Body Cavities
People v. Gause
Decided by: Supreme Court, Appellate Division—3rd Department, April 24
Garlyn Gause will have two and a half to five more years to reflect on the new facet of Miranda law that he helped establish. Gause, who is incarcerated at the Elmira Correctional Facility, had his prison cell searched in October 2005. Guards handcuffed him and took him to sit on a special device known as a BOSS chair, which detects objects hidden within body cavities. After Gause twice denied that he had any contraband on his person, the BOSS chair registered that he did. He was then removed to a special room for a strip search. When asked again about contraband, he volunteered that he secreted a razor blade in his buttocks, one end wrapped with tissue paper.
Following his conviction for promoting prison contraband, Gause appealed the state’s use of his statement about the location of the razor blade. Gause argued that the statement should have been suppressed at trial because the guards did not administer Miranda warnings prior to asking questions.
The court agreed with Gause. While prison guards are usually absolved of giving warnings because of the public safety exception to Miranda, where an officer may question freely if he is concerned for his own safety or the general public’s, in Gause’s case of additional restraint and body cavity search, no such concerns existed. While this represents a significant extension of Miranda in prison settings, it was of no help to Gause. The appellate court found the error harmless and affirmed his conviction; saying that even without the confession of the secreted razor blade, the guards would have discovered the blade upon searching Gause.
The Newsworthiness of Borat
Lemerond v. Twentieth Century Fox Film Corp.
Decided by: United States District Court, Southern District of New York, March 31
If the movie Borat: Cultural Learnings of America for Make Benefit Glorious Nation of Kazakhstan had any newsworthy value to American society, Jeffrey Lemerond missed it. Lemerond, who garnered 13 seconds of unwanted fame by running erratically from the movie’s main character down a Manhattan street, filed suit alleging that showing the footage violated his state law right to privacy.
Even though Lemerond never consented to have his image used nor to be parodied in the film, the federal court held that his image was not used for advertising or purposes of trade, so no violation occurred. The court noted that nonconsensual use of an image is permissible for “newsworthy events or matters of public interest,” and Lemerond running down that street was undoubtedly newsworthy. As the court found, “At its core . . . Borat attempts an ironic commentary on ‘modern’ American culture, contrasting the backwardness of its protagonist with the social ills afflicting supposedly sophisticated society.”
