United States v. Fried

• Decision Date: 04 December 1967
• Docket Number: No. 168,Docket 31701.,168
• Citation: 386 F.2d 691
• Parties: UNITED STATES of America, Plaintiff-Appellee, v. Solomon FRIED et al., Defendants, Albert FRIED, Third-Party Witness-Appellant.
• Court: U.S. Court of Appeals — Second Circuit

386 F.2d 691 (1967)

UNITED STATES of America, Plaintiff-Appellee, v. Solomon FRIED et al., Defendants Albert FRIED, Third-Party Witness-Appellant.

No. 168, Docket 31701.

United States Court of Appeals Second Circuit.

Argued November 13, 1967.

Decided December 4, 1967.

H. Stuart Klopper, Jamaica, N. Y., for Albert Fried, third party witness-appellant.

Howard L. Stevens, Asst. U. S. Atty. (Joseph P. Hoey, U. S. Atty., Eastern District of New York), for plaintiff-appellee.

Before WATERMAN, FRIENDLY and SMITH, Circuit Judges.

FRIENDLY, Circuit Judge:

Seven years have passed since the United States recovered a judgment against Dr. Solomon Fried, a Brooklyn dentist, for unpaid income taxes and penalties on which a balance of $175,000, with interest, remains unpaid. The Government's sense of frustration has been augmented by the facts that Dr. Fried liquidated several brokerage accounts and received $269,000 in cash immediately upon the making of the assessment underlying the judgment, removed himself to Miami after having been served with a subpoena in supplementary proceedings, and apparently has avoided examination or punishment despite an order of contempt. Not unnaturally the Government has sought information from members of Fried's family in the Eastern District of New York who it thinks may be holding property belonging to or fraudulently transferred by the taxpayer. Among these is his son Albert Fried, the appellant here, who has been employed for many years as a retail furniture salesman and lives with his wife and three children.

The Government's first effort to examine Albert Fried, a subpoena served in May 1965 for an oral deposition, provoked a motion to quash on the ground, supported by a physician's report, that a history of psychoneurosis, resulting in rejection for military service during World War II, attendance at an out-patient clinic, and a nervous breakdown in 1958, would make any appearance as a witness detrimental to his health. Judge Dooling reserved decision on the motion but granted the Government leave forthwith to serve "an information subpoena, accompanied by a copy and original of written questions" pursuant to New York C.P.L.R. § 5224(a)-3, here applicable by virtue of F.R.Civ.P. 69(a). There followed a long interval during which the Government allegedly sent an agent to interview Fried and sought, in May 1966, an order compelling him to submit to a psychiatric examination, which Judge Rosling denied as an "extraordinary invasion of respondent's Albert Fried's right of privacy" and because of the Government's failure to utilize the written interrogatory procedure. In November 1966 the Government mailed Fried an information subpoena and questions. He retained a new attorney who advised that he was under no duty to comply. When this predictably resulted in a motion to punish for contempt, counsel offered to submit Fried for oral examination. Thereafter Fried consulted a psychiatrist of repute who had furnished him a report when the Government was seeking to compel a psychiatric examination, and returned to the counsel who had represented him at that time. This attorney appeared before Judge Dooling on February 21, 1967, two days before the date to which the contempt motion had been adjourned. The attorney offered to make Fried available for a psychiatric examination but withdrew the offer of the preceding counsel to submit him for oral deposition. Although the judge made no direction of any sort, Fried, accompaned by his lawyer, presented himself for oral examination in the office of the United States Attorney. After being sworn, he slumped and fell to the floor, displaying symptoms of acute distress; thereafter he was hospitalized for 13 days in a private hospital under the psychiatrist's care. The judge thereupon extended Fried's time to answer the questionnaire to June 1 and denied the contempt motion without prejudice to renewal if the questions were not answered by that time.

Late in May 1967, Fried's counsel moved to vacate and quash the information subpoena. A supporting affidavit recited that at the lawyer's request Fried had appeared in his office in mid-April in order to prepare answers but had become so agitated that counsel recommended another visit to the psychiatrist. Fried made this, and saw the attorney and the psychiatrist again during May. The psychiatrist's last report, confirming earlier ones of May 1966 and February 1967, was that Fried was "incompetent to answer questions pertaining to his father because of the violent emotional upheaval which they precipitate in him" and that any further attempt to answer the questionnaire "would probably cause the same mental collapse as the one suffered by him on February 21, 1967, with a real possibility of permanence." An opposing affidavit of an Assistant United States Attorney recited, in addition to matters already here summarized, that Fried maintains a stock brokerage account,¹ has access to a safe deposit box in a Brooklyn bank rented by his father, and has attended annual meetings of a company in which he owns stock and has presented the complaints of dissident shareholders "in a reasoned and competent manner."

The effectiveness of this as rebuttal depended on the exact nature of Fried's alleged disturbance, on which unfortunately the psychiatrist's reports shed little light. One theory, perhaps hinted at in the reports, is that Fried's illness is causally related to an unconscious fear of or guilt concerning his father, and that this fear or guilt paralyzes him from any action, such as disclosing his father's assets, which would bring him in conflict with his father. If this were the case, evidence that appellant is capable of handling matters not connected with his father would be of little relevance, and the court would be squarely faced with the question whether it should attempt to coerce appellant to overcome his inhibition, with possibly serious consequences to his future mental equilibrium, or should resign itself to non-disclosure from appellant and perhaps non-collection of the judgment. Another theory not inconsistent with the psychiatrist's reports is that appellant's psychological difficulties are not the result of such a relationship with his father, but that whatever their cause, they place such a load on his personality structure that this might collapse under the additional stress from having to answer possibly embarrassing questions. If this were the theory, the prediction that even the answering of a questionnaire under oath would produce dire results would be effectively countered by evidence that Fried takes similar amounts of stress in his stride. Judge Dooling apparently assumed the psychiatrist was proceeding on the latter theory and gave greater weight to the evidence of Fried's regular involvement with financial matters than to the medical prediction. Accordingly he denied the motion to quash the information subpoena, except for extending the time for compliance to August 1. Fried, represented by still another attorney, appealed, and c...