Lang v. State of NY

• Decision Date: 02 September 1999
• Citation: 696 N.Y.S.2d 3,258 A.D.2d 165
• Court: New York Supreme Court — Appellate Division
• Parties: JUDY A. LANG, Appellant,<BR>v.<BR>STATE OF NEW YORK, Respondent.<BR>STATE OF NEW YORK, Respondent,<BR>v.<BR>ANTHONY CONSALVO, Appellant.

258 A.D.2d 165

696 N.Y.S.2d 3

JUDY A. LANG, Appellant,

v.STATE OF NEW YORK, Respondent.

STATE OF NEW YORK, Respondent,

v.ANTHONY CONSALVO, Appellant.

TOM, J.

September 2, 1999.

Steve S. Efron, New York City, for appellants.

Jacqueline E. Berkowitz of counsel (Elizabeth T. Bogren on the brief; Eliot Spitzer, Attorney General, attorney), for respondent.

WILLIAMS, J.P., WALLACH AND BUCKLEY, JJ., concur.

OPINION OF THE COURT

TOM, J.

This appeal involves an attorney's attempts to recover her legal fees from funds paid by her client to the State as restitution for his criminal activity. The question presented is whether these funds, held in escrow postjudgment pending the outcome of further proceedings, were still the client's and available to him to pay the legal fees incurred in connection with his appeal and other proceedings.

These consolidated appeals arise from the 1993 criminal conviction of present defendant-appellant Anthony Consalvo, a podiatrist, upon his plea of guilty, of grand larceny in the fourth degree, in connection with his submission of false billings for reimbursement under New York's Medicaid program. Consalvo's plea incorporated restitution of $500,000 to be paid prior to sentencing, and he was promised a sentence of six months' incarceration and five years' probation. Prior to sentencing, Consalvo retained new counsel, present petitioner Judy Lang, who immediately moved to vacate his plea. She argued that the restitution was coerced and not subject to imposition prior to an actual assessment of the victim's losses. In the alternative, she sought a restitution hearing to determine the State's actual losses. Nevertheless, at the court's direction (Steven Barrett, J.) the funds were turned over to the Attorney General. Subsequently, that court denied Consalvo's motion. The court relied on a statistician's affidavit extrapolating from Consalvo's six fraudulent claims and losses therefrom, and indicating that the State's losses exceeded $571,000.

By judgment rendered November 4, 1994, Justice Barrett sentenced Consalvo in accordance with the plea agreement, including the restitution. That day, Consalvo took an appeal from that judgment, including the sentence of restitution. By orders also entered November 4, 1994 (Rosenberger, J.), this Court granted bail pending appeal and, on an interim basis, stayed execution of judgment as to the $500,000 restitution, directing that these funds be held in escrow by the Attorney General pending determination of the appeal.

Subsequently, we unanimously affirmed the judgment of conviction (People v Consalvo, 222 AD2d 302), specifically rejecting any challenge to the voluntariness of all aspects of the plea. We also specifically found that Consalvo had admitted wrongfully taking from the State the amount that was the subject of restitution, that he had agreed to this amount in negotiating his plea, that the People's proof demonstrated that he had wrongfully obtained in excess of this amount, and that the court had properly set restitution in this amount without first conducting a hearing. This Court found the bargained-for sentence to be lenient. The Court of Appeals (89 NY2d 140) found the plea to have been voluntary. However, that Court concluded that, in the absence of trial evidence establishing the pecuniary loss to which restitution is to be applied, the defendant, upon request, was entitled to a hearing under Penal Law § 60.27 to determine the precise amount. The Court of Appeals remitted for a restitution hearing. The practical effect of that order, as was subsequently noted by the hearing court, is that the plea agreement was found to be valid, including Consalvo's agreement that he would pay restitution, and the judgment, as such, was basically affirmed, but a precise amount had to be determined for restitution.

The Court of Appeals denied a postargument request for return of the funds pending the hearing, but referred the matter to the hearing court. The hearing court (Barrett, J.) denied a similar application on December 10, 1996 and ordered that the funds remain in escrow pending a final order of restitution. Counsel moved for an order of attachment, but the court directed "that the check previously delivered * * * to the Attorney General's Office in satisfaction of the plea agreement should remain in the Attorney General's control". Consalvo then commenced a CPLR article 78 proceeding before this Court, seeking an order prohibiting Justice Barrett from conducting the restitution hearing. We unanimously dismissed the petition (Matter of Consalvo v Barrett, 237 AD2d 999). After the subsequent restitution hearing, Justice Barrett issued an extensive and detailed decision and order on or about December 10, 1997. He concluded that Consalvo had overbilled the State in excess of $500,000, and directed that the escrowed funds be released to the State.

During the pendency of the criminal matter, the civil proceedings between the parties were moving along a parallel track. In 1994, the State had commenced the present civil action to recover $610,000 in restitution for monies had and received, overpayment of public funds and unjust enrichment, in addition to seeking treble damages pursuant to Social Services Law § 145-b. In June 1995, the State moved for an order of attachment pursuant to CPLR 6201 (1), although, after numerous adjournments, the matter was marked off the calendar. On December 5, 1996, present petitioner Lang filed with the County Clerk a confession of judgment from Consalvo in the amount of $100,918.09, purportedly reflecting legal services rendered since counsel's entry into the criminal case. This was just prior to the December 10, 1996 criminal proceeding in which Justice Barrett denied counsel's application to release the funds and directed that they remain in the custody of the Attorney General. She then filed an execution with the sheriff, served a restraining notice on the State on December 23, 1996, and obtained and filed a second confession of judgment and execution in the amount of $55,926.97 in March 1997 for additional legal fees. By order entered April 7, 1997, another Justice (Lorraine Miller, J.) granted the State's motion made under CPLR article 62 to attach the funds.

In June 1997, Lang commenced a turnover proceeding pursuant to CPLR 5225, 5227, 5239 and 6221 against the State to establish the priority of her liens against the funds and to compel the State to release sufficient funds to satisfy her judgments, purportedly reflecting her legal fees, against Consalvo. Petitioner Lang claims priority of her liens since the confessions of judgment were filed prior to the issuance of the State's order of attachment. In cross-moving to dismiss the petition, the State contended that Lang, as a judgment creditor, could enforce only against property that Consalvo could legally assign or transfer, a capacity Consalvo lacked with respect to the escrowed funds.

By order entered November 28, 1997, presently on appeal, the court dismissed the petition, finding that Consalvo had no interest in the funds capable of assignment, by virtue of the order directing their payment into escrow for subsequent payment to the State. Moreover, the State's interest in the funds was superior to that of Lang, who was simply another judgment creditor.

In September 1997, Consalvo moved pursuant to CPLR 1312 (4) to modify the April 7, 1997 order of attachment to release funds for reasonable living expenses and...