Kuriansky v. Azam
| Decision Date | 07 June 1991 |
| Citation | 573 N.Y.S.2d 369,151 Misc.2d 176 |
| Parties | In the Matter of the Application of Edward J. KURIANSKY, Deputy Attorney General for Medicaid Fraud Control, for an Order Adjudging Chowdhury Azam and Church Avenue Pharmacy Corp., Inc. in Contempt of Court Pursuant to Sections 750A(3) and 751 of the Judiciary Law for their Wilful Disobedience to the Mandate of the Court, and Committing Chowdhury Azam to Jail for a Period not to Exceed Thirty Days, and/or Fining Chowdhury Azam and Church Avenue Pharmacy Corp., Inc., each a Sum of Money not to Exceed $1,000, Petitioner, v. Chowdhury AZAM and Church Avenue Pharmacy Corp., Inc., Respondents. |
| Court | New York Supreme Court |
Robert Abrams, Atty. Gen., Dick L. Sedefian, Sp. Asst. Atty. Gen., for petitioner.
Ronald M. Kleinberg, New York City, for Church Ave. Pharmacy.
Arthur S. Friedman, New York City, for Chowdhury Azam.
In this criminal contempt proceeding for failure to comply with a Grand Jury subpoena, respondent Chowdhury Azam moves at the end of petitioner's case for dismissal.
The motion brings once again into focus the nature of the criminal contempt in this case. Is criminal contempt a civil proceeding, a criminal proceeding or a proceeding which is "sui generis" without any rules except those created by the courts? In particular, on a motion such as this does the court apply the criteria set forth in CPLR 4401, CPL 290.10 or does the court create its own criteria since Judiciary Law 750-752 does not specify any standard? What is the standard for holding an individual liable for the acts of a corporation? Does the court apply the civil rule regarding liability of an individual for the omissions of a corporation, Penal Law 20.25 as to liability of an individual for corporate conduct, or does the court create its own criteria since Judiciary Law 750-752 contain no such standards?
Throughout this proceeding and trial the Court had to determine procedural rules, discovery rules (such as whether the petitioner must disclose any written or recorded statement of witnesses in accordance with CPL 240.45 or People v. Rosario, 9 N.Y.2d 286, 213 N.Y.S.2d 448, 173 N.E.2d 881) and the criteria for determining the adequacy of the pleading in this case. All these issues require the application of standards, but which standards are to be applied has been the subject of much discussion and debate between the parties and the court. 1
CPL 1.10(1) states that the Criminal Procedure Law is applicable to criminal actions and proceedings. A criminal action commences with the filing of an accusatory instrument (CPL 1.20[17]. This matter was commenced by an order to show cause which is not an accusatory instrument listed under CPL (see CPL 1.20[1]. 2 This proceeding is not a criminal action.
While the proceeding is not a criminal action it may be a criminal proceeding (see Matter of Darvin M. v. Jacobs, 69 N.Y.2d 957, 516 N.Y.S.2d 641, 509 N.E.2d 336). If it is a criminal proceeding, the Criminal Procedure Law will apply.
CPL 1.20[18][b] as is relevant here reads as follows:
" 'Criminal proceeding' means any proceeding which * * * (b) occurs in a criminal court and is related to a prospective * * * criminal action, * * *, or involves a criminal investigation."
In the instant case, the criminal contempt proceeding is being tried in a criminal part of this court and relates to a prospective indictment for Medicare fraud. The Attorney General is conducting a criminal investigation into potential criminal liability. While these factors would indicate that this matter is a criminal proceeding, they are not determinative (Matter of Abrams, 62 N.Y.2d 183, 190-191, 476 N.Y.S.2d 494, 465 N.E.2d 1). The court must examine the "true nature of the proceeding and the relief sought" (Matter of Abrams, supra at 191 and 193, 476 N.Y.S.2d 494, 465 N.E.2d 1).
In determining the "true nature" of this proceeding the court has considered the following: (a) the subpoena that was issued in this case was made pursuant to CPL 610.20(2) which authorizes a prosecutor to issue a subpoena for attendance of any witness at a grand jury. The subpoena issued is not an office subpoena but a mandate of the court issued in the name of the court or as in this case in the name of the grand jury (People v. Natal, 75 N.Y.2d 379, 384-385, 553 N.Y.S.2d 650, 553 N.E.2d 239). It was issued under the grand jury's authority to investigate criminal activity (see Virag v. Hynes, 54 N.Y.2d 437, 446 N.Y.S.2d 196, 430 N.E.2d 1249). The grand jury under whose authority the subpoena was issued is a creature of CPL Article 190 as well as the New York State Constitution; (b) Historically, criminal contempt arising out of criminal matters are deemed criminal proceedings (People ex rel. New York Society for the Prevention of Cruelty to Children v. Gilmore, 88 N.Y. 626, 628; see also People ex rel. Negus v. Dwyer, 90 N.Y. 402, 407). 3
Thus, courts have applied criminal rules to criminal contempt arising out of criminal proceedings; (c) Due process accorded respondents/defendants in criminal contempt actions are those accorded a criminal defendant in a criminal proceeding and not those accorded a civil defendant in a civil action (see Ingraham v. Maurer, 39 A.D.2d 258, 259, 334 N.Y.S.2d 19 supra; State University of New York v. Denton, 35 A.D.2d 176, 180-181, 316 N.Y.S.2d 297). Persons prosecuted for criminal contempt are entitled to appointment of counsel (Department of Housing v. Lamison, 118 Misc.2d 1013, 1014-1016, 462 N.Y.S.2d 109), the right to cross examine witnesses (State University of New York v. Denton, supra * ) the right to be heard before being held in contempt (Rodriguez v. Feinberg, 40 N.Y.2d 994, 391 N.Y.S.2d 69, 359 N.E.2d 665), the right to be "present and proffer evidence" (Sassower v. Finnerty, 96 A.D.2d 585, 586, 465 N.Y.S.2d 543 lv. denied sub nom. Sassower v. Signorelli, 61 N.Y.2d 985, 475 N.Y.S.2d 283, 463 N.E.2d 624), the right to trial by jury in accordance with criminal rules (Bloom v. Illinois, 391 U.S. 194, 88 S.Ct. 1477, 20 L.Ed.2d 522). The burden of proof in criminal contempt is that the petitioner must show each element beyond a reasonable doubt (People v. Shapolsky, 8 A.D.2d 122, 129, 185 N.Y.S.2d 639). Thus a respondent/defendant in criminal contempt is accorded all of the procedural safeguards of a criminal defendant (see also 22 NYCRR 701.3); (d) nisi prius courts have applied the penal law defense of justification to Judiciary Law criminal contempt (People v. Lennon, 115 Misc.2d 738, 742-743, 454 N.Y.S.2d 621, contempt determination confirmed on other grounds sub nom. Balter v. Regan, 97 A.D.2d 953, 468 N.Y.S.2d 750 affd. 63 N.Y.2d 630, 479 N.Y.S.2d 506, 468 N.E.2d 688; People v. Gumbs, 124 Misc.2d 564, 478 N.Y.S.2d 513; see also Matter of Fuhrer v. Hynes, 72 A.D.2d 813, 421 N.Y.S.2d 906; People v. Joy, 133 Misc.2d 779, 508 N.Y.S.2d 147). It is clear that the nisi prius courts found that criminal contempt is a criminal proceeding; (e) all the elements of Judiciary Law 750 are contained in Penal Law 215.50 (). The facts and the burdens of proof and all other matters are identical in Judiciary Law 750 and Penal Law 215.50. Thus, a prosecution pursuant to Judiciary Law 750 may bar Penal Law prosecution under double jeopardy principles (see People v. Colombo, 31 N.Y.2d 947, 341 N.Y.S.2d 97, 293 N.E.2d 247). The two contempts are thus identical and there appears to be no reason why the two should be treated differently ( cf. People v. Leone, 44 N.Y.2d 315, 405 N.Y.S.2d 642, 376 N.E.2d 1287); (f) The nature of the relief sought is incarceration. Incarceration is an extreme limitation on an individual's freedom of movement. The relief is thus more in the nature of a criminal relief than a civil relief.
Considering all the above factors, the court concludes that criminal contempt for failure to comply with a grand jury subpoena arising out of a criminal investigation is a criminal proceeding within the definition of CPL 1.20[18][b]. 4
The Attorney General argues that Azam's criminal liability is based upon the corporation's liability for failure to comply with this subpoena. The Attorney General cites many federal cases to support this proposition. In New York however, the courts are not free to create criminal liability of an individual for the failure of a corporation to comply with an order unless specifically provided by statute. Absent statutory authority the court cannot create personal liability of an individual for the acts or conduct or omission of a corporation (People v. Byrne, 77 N.Y.2d 460, 568 N.Y.S.2d 717, 570 N.E.2d 1066; People v. Brainard, 192 App.Div. 816, 819, 183 N.Y.S. 452; People v. Smith, 190 Misc. 871, 74 N.Y.S.2d 845; People v. Fleishman, 133 Misc. 288, 232 N.Y.S. 187).
The Judiciary Law does not contain any provision for creating personal liability for the failure of a corporation to abide by the mandates of a court. However, the Penal Law does have a specific statute creating personal liability for the crimes committed by a corporation.
Penal Law 5.05(2) as is relevant, reads as follow:
"Unless otherwise expressly provided, or unless the context otherwise requires, the provisions of this chapter shall govern the construction of and punishment for any offense defined outside of this chapter and committed after the effective date thereof, as well as the construction and application of any defense to a prosecution for such an offense." (emphasis supplied).
If something is an "offense" defined by a statute outside the Penal Law, Penal Law provisions will still apply.
The term "offense" is defined as follows:
"Offense" means conduct for which a sentence to a term of imprisonment or to a fine is provided by any law of this state or by any law, local law, or ordinance of a political subdivision of this state, or by any order, rule or regulation of any governmental...
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