Reply Brief — Dayon v. Downe Communications, Inc.

C THE ALPERT PRESS INC.. 644 PACIFIC ST. BKLYN. N.Y

Supreme Court of the United

October 1975 Term

Docket No. 75-1750

AL DAYON, individually and on Behalf of Mastercraft

Electronics Corp.,

Appellant,

—against—

DOWNE COMMUNICATIONS, INC., THE AETNA

CASUALTY AND SURETY COMPANY AND

H. WILLIAM KEHL, as Sheriff of the City of

New York,

Appellees.

ON APPEAL FROM THE COURT OF APPEALS

FOR THE STATE OF NEW YORK

ANSWER TO MOTION TO DISMISS APPEAL

PETITION OF APPELLANT FOR LEAVE TO

AMEND JURISDICTIONAL STATEMENT

PETITION FOR WRIT OF CERTIORARI

BERNARD G. EHRLICH, ESQ.

Attorney for Appellant

299 Broadway

New York, N.Y. 10007

212 - 964 - 8612

CHARLES SUTTON

Of Counsel

INDEX

Statement of Petition.......... l

Argument

Point I

The appeal is properly be-

fore this Court and this

Court has jurisdiction

of every other denial of

Dn Mis oceccececeess 1

Point II

This Court has jurisdiction

of the appeal from the sumn-

ary judgment in favor of

appeliee Downe Communica-

tions, Inc. on grounds

properly raised below

and presented to this

Court in the Jurisdict-

ional Statement........... 4

Point III

The motion to dismiss by

appellee Downe Communica-

tions, Inc. is not well

Dh. 6 ee6e46% 00060000 15

Conclusion

It is respectfully urged

that the appellee's motion

to dismiss should be den-

ied and that the appell-

ant's petitions should

es 6cc¢beaeedace 19

ii | iii

Windsor v. McVeigh,

CITATIONS Federal Cases continued:

Pages | Pages

Federal Cases: | Lindsey v. Normet,

' 405 U.S. 56 (1972).........

Bigelow v. Forrest, | ssa 7

76 U.S. 339, 350, 351 (1869). 10 af

Blonder-Tongue v. University

93 U.S. 274, 282,283 (1876).. 10

Foundation, | Missouri, Kansas etc. R

, ™— -

402 U.S. 313, 329 (1970)..... 12 Co. v. Elliott,

a a : 184 U.S. 530, 534 (1902)... 4

Carolina

, Postal Telegraph Cable

281 U.S. 537, 540 (1929).... 4 : Co. v. Newport,

2 n % 4, 473, ,

ihe. &. 6% tc &. 47 U.S. 46 73, 474 (1918)5,11

v. Babcock

’ Powell v. Brunswick County,

204 U.S. 585, 598 (1906).... 9 | 150 U.S. 433, 440 (1893)... 13

Coe v. Armour Fertilizer Prudential Insurance Co.

Works , v. Cheek,

237 U.S. 413, 423 (1914).... 5,11 | 259 U.S. 530, 547 (1921)... 3,4

Cole v. Arkansas

, Reynolds v. Stockton,

333 U.S. 196, 291 (1947).... 5 | 140 U.S. 254, 265, 268, 269

ins ween Whitin. Dts 01ieeene oe teneeWées 5,11

114 U.S. 417, 421 (1885).... 10 | Sen-tend Servbene. tee.

l v. Gaudet,

Green Bay & Canal Co. | 414 U.S. 573, 578-579 (1973) 12

v. Patten Paper Co.,

172 U.S. 58, 68 (1898)...... 13 , Smith v. Bennett,

r 05 U.S. Se

Hansberry v. Lee, ' i pew 7

311 U.S. 32, 37, 40 (1940).. 12 Thompson v. Louisville,

362 U.S. 199 (1960)....... 5

iv

Federal Cases continued:

Time, Inc. v. Firestone,

___ U.S. ___—s-« 96S. Ct.

58, 969, 970 (1976)......

United States v. Moser,

266 U.S. 236, 242 (1924)...

United States v. Pink,

315 U.S. 203, 215, 216 (1942)

Yachon v. Louisiana,

SES U.8. S76 CEPFaP cccces

Federal Statutes:

28 U.S.C. Section 1257(2)

Federal Texts:

Moore's Federal Practice,

Judicial Code, p. 371

(Rel. No. 31-1976), Ch. 31,

Supreme Court, Section 1257

New York State Cases:

Ballen v. Potter,

253 B.Y. 228 CEPZ9)°°°*°°

Bannon v. Bannon,

270 N.Y. 484 (1936)------

Bridgeport Ins. Co. v.

Wilson,

34 N.Y. 275 (1866).......

Pages

10

12

12

Vv

New York State Cases continued:

"Dayon v. Downe Communica-

tions,

41 A.D. 2d 611,

Gan GG. Fe Bade 26: GOl cceess

Herskowitz v. Travelers

Ins. Co.

272 A.D. 584 (lst Dept. 1947) 12

Liberty Mutual Ins. Co. v.

George Colon & Co.,

Fy ee Be: >) eee 12

Sears, Roebuck & Co. v. 9th

Avenue and 3lst Street Corp.,

7 0 x 6, 12

Subin v. United States Fid.

& Guar. Co.,

Ff = 5 errr rr 8

New York State Statutes:

N.Y.C.P.A. Section 907..... 9

NYCPLR Section 5501(b)..... 10

NYCPLR Section 5601........ 10

NYCPLR Section 5712(c)(2).. 6

NYCPLR Section 6212(b)..... 8,9,13

Pages

10

vi

New York State Statutes:

Papes

NYCPLR Section 8012(b) (3). 13

New York State Texts:

7B McKinney's Consolidated

Laws of New York Annotated,

Legislative Studies and Re-

DOSER, DR. FerGGc cecccess 9

7A Weinstein-Korn-Miller,

N.Y. Civ. Prac., Section

Serr ee ee 6,7,9

New York State Constitution:

Agtiele VI, Gee. 3... 10

1

To: The Honorable Justices of the

Supreme Court of the United States:

_ The petition of Al Dayon, individu-

ally and on behalf of Mastercraft Elect-

ronics Corp. for leave to amend the juris-

dictional statement nunc pro tunc, and

to consider the jurisdictional statement,

as necessary, nunc pro tunc,as a petition

for a writ of certiorari to the New York

Court of Appeals, and the answer to the

motion of Downe Communications, Inc. to

dismiss the appeal as to it, by Bernard

G. Ehrlich, his attorney, respectfully

shows:

Point I

The appeal is properly before

this Court and this Court has

jurisdiction of every other

denial of federal right.

The appellee Downe Communications,

Inc., hereinafter DCI, concedes at pp.

1, 2 of its motion to dismiss that

The appellant in his jurisdictional

statement questions the validity of

two New York Statutes...

and that their

validity has been drawn into ques-

tion.

Plainly, the appeal to this Court

2

is proper and this Court has juris-

diction of every other denial of fed-

eral right. (Jurisdictional State-

ment, pp. 5-6, 6-13, 39-43).

The Jurisdictional Statement at

pp. 3, 4 states:

The jurisdiction of this Court is

involved pursuant to 28 U.S.C.

Section 1257(2) because this is

an appeal from a final order of

the highest court of the State of

New York... which denied inter-

pleaded defendant Dayon and de-

fendant and interpleading plain-

tiff Aetna Casualty and Surety Co.

due process of law and equal pro-

tection of law by granting summary

judgment to plaintiff Downe Comnu-

nications, Inc. upon a cause of

action not pleaded and not proved

and which denied said Dayon and said

Aetna Casualty and Surety Co. due pro-

cess of law and equal protection of

law by denying each of them the right

to defend the action upon the attach-

ment bond by the plaintiff, Downe

Communications, Inc.

Moore's Federal Practice, Judicial

Code, p. 371 (Rel. No. 31-1976), Ch. 81,

Supreme Court, Section 1257, states:

Where an appeal is proper, the app-

ellant can include in his assignments

of error any other denial of federal

right whether or not capable in it-

self of being brought here by appeal.

Prudential Insurance Co. v. Cheek, 259

U.S. 530, 547, 42 S. Ct. 516, 523, 66

L. Ed. 1044, 27 ALR 27. Or he...(can

file) a petition for certiorari in addi-

tion to his appeal. Columbus & Green-

ville Ry. Co. v. Miller, 283 U.S. 96,

98, 51 S. Ce. 392, 393, 75 L. Ed. 861.

Fluornoy v. Weiner, (1944) 321 U.S. 253,

263, 64 S. Ct. 548, 88 L. Ed. 708.

This Court, in Prudential Ins. Co. v.

Cheek, 259 U.S. 530, 547 (1921) held:

It is assigned for error, aside from

the Statute, that the dec: ‘ton of the

Missouri court sustaining the cause of

action under the second count amounts

to depriving plaintiff in error of prop-

erty without due process of law. This

point was set up properly in the State

courts as a special claim of immunity

under the Fourteenth Amendment; and al-

though under Section 237, Judicial

Code, as amended by the Act of Septem-

ber 6, 1916, c. 448, 39 Stat. 726, it

could not have been made the basis of

a writ of error from this court, but

only a writ of certiorari, we think

that, by the fair intendment of the

Act, since the record has been brought

here properly under the writ of error

because involving the constitutional-

ity of a statute, plaintiff in error

is at liberty to assign any other

ground of error therein, based upon

an adverse decision by the State

court of last resort upon any right,

4

title, privilege or immunity specially

set up or claimed under the Constitu-

tion or laws of the United States.

The Jurisdictional Statement on be-

half of appellant Dayon shows at pp. 53-

54 that Dayon and Aetna were denied the

fundamental federal constitutional right

to be heard, to have their dey in court

and to defend the action pon the statu-

tory attachment bond by DCI against

Aetna; it shows at pp. 54-56 that these

issues were raised in the State courts

and were passed upon by the State courts.

Prudential Ins. Co. v. Cheek, 259 U.S.

530, 547 (1921); Missouri, Kansas etc.

Ry. Co. v. Elliott, 184 U.S. 530, 534

(1902).

Point II

This Court has jurisdiction of the

appeal from the summary judpment in

favor of Downe Communications, Inc.

on grounds properly raised below

and presented to this Court in the

Jurisdictional Statement.

This Court in Broad River Co. v.

South Carolina, 281 U.S. 537, 540 (1929)

stated: ‘Where the state court has den-

ied to rights asserted under local law,

the protection which the Constitution

ruarantees is the question upon which the

petitioners are entitled to invoke the

judgment of this Court.”

The state courts denied Dayon and

Aetna their federal constitutional rights

under the due process and equal protection

clauses by granting DCI summary judpment

5 -

upon a cause of action which was not

pleaded, Coe v. Armour Fertilizer Works,

237 U.S. 413, 423 (1914); porneide v.

Stockton, 140 U.S. 254, 265, . 9,

(1891) and which was not proved and

which had no basis in fact whatever.

Time, Inc. v. Firestone, U.S.

96 S. Ct. 958 (1976); Postal Telegra raph

Cable Co. v. Newport, 247 U.S. ier 473;

See, Thompson v. Louisville, 362 U.S.

199 (1960); Cole v. Arkansas, 333 U.S.

196, 291 (1947); Vachon v. Louisiana,

414 U.S. 478 (1973).

The Jurisdictional Statement at

pp. 3, 4 showed that this issue was be-

fore the Court and that it was within

the jurisdiction of this Court.

The Jurisdictional Statement at

pp. 13, 14 includes this issue in Ques-

tions 3, 4, and 6 of the Questions Pre-

sented by the Appeal.

The Jurisdictional Statement at

pp. 33 shows that the cause of action

pleaded by DCI alleged only

that in the prior Dayon attachment

action against DCI in which that statu-

tory attachment bond was filed, that the

Appellate Division, by a non-final

order dated February 13, 1973, merely

vacated the order of attachment./” It

did not decide that Dayon was not en-

titled to the attachment of DCI's prop-

erty. Jurisdictional Statement pp.

A17-A19. 7

The Jurisdictional Statement shows

at pp. 22-24 that the condition for liab-

6

ility under the statutory attachment

bond is the finding that it was "fin-

ally decided that the plaintiff was not

entitled to an attachment of the defend-

ant's DCI's property,” and that the mere

vacatur of the order of attachment does

not create any liability under that statu-

tory attachment bond. 7A Weinstein-Korn-

Miller, N.Y. Civ. Prac., Section 6212.08.

(See, also, Jurisdictional Statement pp.

33-34)

The Jurisdictional Statement at pp.

53-56 shows that the New York Courts

passed on this issue.

The Jurisdictional Statement at pp.

A17-Al19 shows that in the Dayon attach-

ment action, in reversing the lower court

and vacating the Dayon order of attach-

ment, the Appellate Division made no

finding of fact that Dayon was not en-

titled to the order of attachment. The

lower court in that action had found, on

the other hand, that Dayon was entitled

to the order of attachment. Jurisdict-

ional Statement, pp. A9-Al4, NYCPLR 5712

(c)(2) requires the Appellate Division,

on reversing a lower court, to

specify the findings of fact which are

reversed or modified and set forth any

new findings of fact made by the App-

ellate Division with such particular-

ity as was employed for the statement

of the findings of fact in the court

of original instance. NYCPLR_5712(c)

(2).

Since the plain findings of fact of

the lower court in the Dayon attachment

action was that Dayon was entitled to

the order of attachment. (Jurisdictional

Statement pp. A9-Al4), and since those

findings of fact were not overruled and

were not substituted by contrary find-

ings of fact by the Appellate Division

when it vacated the Dayon order of

attachment, then it must be deemed that

the Appellate Division vacated the order

of attachment on grounds other than that

Dayon was not entitled to the attachment

of DCI's property. See, 7A Weinstein-

Korn-Miller, N.Y. Civ. Prac., Section

6212.08, which shows that an order of

attachment under present practice can

be vacated on "technical grounds" with

the result that no liability accrues un-

der the statutory attachment bond.

Yet, upon the fact of the bare vaca-

tur of the order of attachment by the

Appellate Division in the action of Dayon

against DCI, DCI moved for summary judg-

ment upon the complaint which alleged

only that the Appellate Division had "va-

cated" the Dayon order of attachment;

that motion for summary judgment was

pranted. The lower court, New York Sup-

reme Court, Special Term Part I, in its

decision in this action stated:

...The order of attachment was ulti-

mately vacated by the Appellate Div-

ision.... Accordingly, the liabil-

ity of the Surety to the plaintiff

and the Sheriff has been established.

8

(Underscoring added) (Jurisdictional

Statement, pp. A5-A6)

The sole basis for granting DCI sum-

mary judgement was the bare fact that the

Appellate Division had vacated the Dayon

order of attachment. The statutory

attachment bond and NYCPLR 6212(b),

(Jurisdictional Statement pp. 22-24)

however, condition liability not on mere

vacatur of an order of attachment, but

upon a final decision that "plaintiff

was not entitled to an attachment of

plaintiff's property." This condition

was not alleged in the complaint, and

it was not proved on the motion for

summary judgment. The court did not

find that this condition of the statu-

tory attachment bond had been met.

In this action, the state court of

first instance did not make any finding,

as it could not, that the Appellate Div-

ision in the Dayon attachment action had

"finally decided that Dayon was not en-

titled to an attachment of the property

of Downe Communications, Inc."; (Juri-

sdictional Statement, pp. A5-A6); nei-

ther did the Appellate Division on the

appeal in this action (Jurisdictional

Statement, pp. A-4). However, the New

York Court of Appeals, in its opinion at

37 N.Y. 2d 903 (1975) (Jurisdictional

Statement, pp. Al-A4) stated that:

In the prior action by interpleaded

defendant-appellant Dayon aprainst

plaintiff Downe Communications, Inc.,

9

it was conclusively decided that Dayon

was not entitled to the order of

attachment (Dayon v. Downe Communica-

tions, 41 A.D. 2d 611, aff'd. 32 NY

2d 937). Thus, plaintiff was properly

awarded summary judgment on the issue

of liability on the bond. (See,

Subin v. United States Fid. & Guar. Co.,

.12 A.D. 2d. 49, 50).

The Subin case, cited by the New

York Court of Appeals, was decided under

the predecessor statute to the present

NYCPLR 6212(b); under the predecessor

statute, liability upon the attachment

bond accrued upon mere vacatur, in those

words, of the order of attachment. 7A

Weinstein-Korn-Miller, N.Y. Civ. Prac.

Section 6212.08; N.Y.C.P.A. Section 907;

7B McKinney's Consolidated Laws of New

York Annotated, Legislative Studies and

Reports, pp. 59-60. The present statute,

NYCPLR 6212(b) conditions liability on

the attachment bond on a very different

basis, namely upon a final decision by

the attachment court that the ‘plaintiff

was not entitled to an attachment of de-

fendant's property’.

The reliance by the New York Court

of Appeals on the Subin case, 12 A.D. 2d

49, 50, shows that the said court was

clearly adopting and applying a plainly

wrong principle of law, Chicago, B. & O.

Ry. Co. v. Babcock, 204 U.S. 585, 598

(1906) and shows that it was arbitrary

and denied Dayon and Aetna the equal pro-

tection of law.

10

The New York Court of Anneals cita-

tion of "Dayon v. Downe Communications

(41 A.D. 2d 611, aff'd. 32 N.Y. 2d 937)"

is factually wrong because the Appellate

Division order vacating the attachment

was never appealed to or reviewed by the

New York Court of Appeals. The applica-

tion by Dayon to the Appellate Division

for leave to appeal to the New York Court

of Appeals was denied. Since that App-

ellate Division order was not a final

order, it was not appealable as of right

to the New York Court of Appeals. NYCPLR

5601. The citation, "32 N.Y. 2d 937" in-

volved another appeal.

The jurisdiction of the New York

Court of Appeals under the settled law

of that state is confined to ruling on

issues of law only. N.Y. Const. Article

VI, Section 3; Ballen v. Potter, 251 N.Y.

224 (1929); NYCPLR Section 5501(b). The

New York Court of Appeals has no power

and no jurisdiction under the settled

construction of the New York State Con-

stitution, Article VI, Sec. 3, and the

NYCPLR Section 5501(b) to make original

findings of fact. Bigelow v. Forrest,

76 U.S. 339, 350, 351 (1869); Ex-parte

Wilson, 114 U.S. 417, 421 (1885);

Windsor v. McVeigh, 93 U.S. 274,282,

283 (1876).

There is absolutely no basis in fact

in the Dayon attachment action for the

above-quoted statement of the New York

Court of Appeals in this action that "it

was conclusively decided that Dayon was

ll

not entitled to the order of attachment";

(Jurisdictional Statement, pp. Al-A4) and

no court had made such a finding in the

Dayon attachment order. Time, Inc. v.

Firestone, U.S. _, 96S. Ct. 958,

969, 970 (1976); Postal Telegraph Cable

Co. v. Newport, 247 U.S. 464, 473, 474

(1918).

The New York courts gave summary

judgment to DCI upon a cause of action

which it had not pleaded and which it

had not proved, and thereby denied

Dayon and Aetna their constitutional

right to due process of law and equal

protection of the law. Coe v. Armour

Fertilizer Works, 237 U.S. 413, 423

(1914); Reynolds v. Stockton, 140 U.S.

254, 268, 269 (1891).

The New York Court of Appeals vio-

lated Dayon's and Aetna's constitutional

right to due process of law and equal

protection of law by giving to the non-

final order of the Appellate Division

dated February 13, 1973 in the Dayon

attachment action against DCI (Juris-

dictional Statement pp. Al7-19), which

involved different parties and different

issues, and in which no court made any

finding of fact that 'Dayon was not en-

titled to an attachment of DCI's prop-

erty, (Jurisdictional Statement pp. 22-

24, Al7-Al9), a construction that had no

basis in fact, as noted above, and also

by holding that such construction of the

Appellate Division order in the attach-

ment action, Jurisdictional Statement,

12

pp. Al7-Al19, was conclusive against

Aetna Casualty and Suretv Co. in this

action (Jurisdictional Statement pp.

Al-A4), even though Aetna was not a party

to the Dayon attachment action against

DCI, Hansberry v. Lee, 311 U.S. 32, 37,

40 (1940); United States v. Moser, 266

U.S. 236, 242 (1924), and even though

this action involves a different cause

of action, between different parties

upon different facts than the attachment

action. Sea-Land Services, Inc. v.

Gaudet, 414 U.S. 573, 578-579 (1973).

Under New York Law the non-final

order in the Dayon attachment action has

no conclusive effect in a subsequent

action against the surety on the attach-

ment bond and it is not conclusive

against the surety even if it had been

on the same point, and even if there had

been a specific finding of fact on that

point. Liberty Mutual Ins. Co. v.

George Colon & Co., 260 N.Y. 299 (1932);

Sears, Roebuck & Co. v. 9th Avenue and

31st Street Corp., 274 N.Y. 388 (1937) ;

Bannon v. Bannon, 270 N.Y. 484 (1936);

Bridgeport Ins. Co. v. Wilson, 34 N.Y.

275 (1866); Hershkowitz v. Travelers

Ins. Co., 272 A.D. 584 (lst Dept. 1947).

Aetna is entitled to its day in

court and to present a full defense

against the complaint of DCI against

Aetna. Blonder-Tongue v. University

Foundation, 402 U.S. 313, 329 (1970).

It is respectfully submitted that

13

the challenge to the constitutionality

to NYCPLR 8012(b)(3) by Dayon necess-

arily implicated and thereby challenged

the constitutionality of NYCPLR 6212(b)

and that the judgment of the court could

not have been rendered without deciding

that issue. The jurisdiction of this

Court is properly involved in this issue.

Green Bay & Canal Co. v. Patten Paper

Co., 172 U.S. 58, 68 (1898); also,

Jurisdictional Statement pp. 42, 43;

Powell v. Brunswick Surety, 150 U.S. 433,

440 (1893).

The Jurisdictional Statement at pp.

32-33 shows that the complaint in this

action by Downe Communications, Inc.

against Aetna Casualty & Surety Co.

alleged it to be an action upon a statu-

tory attachment bond which had been filed

in court in the state attachment action

wherein Al Dayon, individually and on be-

half of Downe Communications, Inc., was

the plaintiff against Downe Communica-

tions, Inc. and others, as defendants.

The Jurisdictional Statement shows at pp.

22-24 that the said Dayon attachment bond

was made pursuant to the New York Civil

Practice Law and Rules Section 6212(b).

The text of NYCPLR 6212(b), which was not

set out in the Jurisdictional Statement,

and for which amendment numc pro tunc is

sought to do so, is as follows:

Undertaking. On a motion for an order

of attachment, the plaintiff shall give

an undertaking, in a total amount fixed

by the court, but not less than two

hundred fifty dollars, a specified part

14

thereof conditioned that the plaintiff

shall pay to the defendant all legal

costs and damages which may be sus-

tained by reason of the attachment if

the defendant recovers judgment, or if

it is finally decided that the plain-

tiff was not entitled to an attachment

of the defendant's property, and the

balance conditioned that the plaintiff

shall pay to the Sheriff all of his

allowable fees. The attorney for the

plaintiff shall not be liable to the

Sheriff for his fees.

It is respectfully submitted that

NYCPLR 6212(b) on its face and as applied

is unconstitutional and deprives vetit-

ioner of his federal constitutional

rights. It is vague and overbroad, and

fails to set forth any standard for the

court to apply the terms thereof includ-

ing the setting of the amount of the

bond. The statutory requirement for an

attachment bond is not tailored to meet

any state or valid public welfare pur-

pose. See, Lindsey v. Normet, 405 U.S.

56 (1972); (See, also, Jurisdictional

Statement and citations, pp. 46-53).

NYCPLR 6212(b)requires that a plaintiff

file a statutory bond in an amount to be

set by the court as a condition prece-

dent to being allowed to make use of and

to employ the statutory procedure of

attachment; it thereby unconstitutionally

conditions and limits the right of a

plaintiff to resort to the court to re-

solve his problem to resort to and employ

the universal and long-established pro-

15

cedure of attachment, and discriminates

between plaintiffs on the basis of

wealth, allowing only those plaintiffs

with enough money to satisfy the arbit-

rary demands of the court to employ that

procedure. Jurisdictional Statement and

citations, pp. 46-53; Smith v. Bennett,

305 U.S. 708 (1961). There is no stand-

ard in the statute by which a court is

guided in setting the amount of the bond

and any court can arbitrarily fix a bond

in an amount so high as to preclude the

use of that statutory attachment remedy

against any particular defendant. Juri-

sdictional Statement and Citations, pp.

46-53.

Point III

The motion to dismiss by DCI is

not well founded.

The appellee, Downe Communications,

Inc. , hereinafter DCI, moved to dismiss

the appeal on the grounds stated in its

motion at page 1 that

No federal question is presented

with respect to appellee, DCI,

and at page 2 that

The award of summary judgment to DCI

was not based on the statutes whose

validity has been drawn into ques-

tion, rather the judgment in favor

of DCI on the attachment bond was

16

made because no triable issue of fact

existed as to appellant's liability.

The appellee DCI, relying, upon United

States v. Pink, 315 U.S. 203 (1942),

argues that there is no federal question

in this appeal from the decision of the

New York Court of Appeals, and that only

a state question is involved. United

States v. Pink, supra, is not applicable

either on the law or on the facts and is

distinguishable on both the law and the

facts from this case at bar.

The order which was given conclusive

effect by the New York Court of Appeals

was a non-final order; it was not a

final judgment on the merits.

Jurisdictional Statement, pp. Al7-Al19.

The appellee, at page 3 of its

motion, quoted a portion of the decision

of this Court in United States v. Pink,

supra. However, the appellee omitted

to include relevant portions of the full

quotation which show that it is not appli-

cable to the case at var. Thus, the full

quotation appears as follows:

First. Respondent insists that the

complaint in this action was identi-

cal in substance and sought the same

relief as the petition of the United

States in the Moscow case, and that

his answer set up the same defenses

as were successfully sustained against

the United States by the defendants in

that case. He also maintains that both

17

parties apreed, on the motion, for

summary judgment, that the decision

in the Moscow case governed this

cause, having no issues to be tried.

We apree with those contentions. It

is in accord not only with the motion

papers, but also with the rulings of

the New York Court of Appeals that the

Moscow case ‘left open no question

which has been argued on this appeal’.

In view of that ruling we are not free

to inquire, as petitioner suggests,

into the propriety under New York pra-

ctice of grounding the motion for sumn-

ary judgment on the record in the Mos-

cow case. That is distinctly a ques-

tion of state law, on which New York

has the last word. United States v.

Pink, 315 U.S. 203, 215, 216 (1942).

The complaint in this action has no

counterpart in or to any other complaint

by appellee DCI, or any other plaintiff

against the same defendant for the same

cause. The issues presented by this

complaint of appellee DCI against Aetna

Casualty and Surety Co. are unique to

this complaint of appellee DCI against

Aetna Casuaity and Surety Co.; they are

not “identical in substance and sought

the same relief" United States v. Pink,

supra, at p. 215, as in any ‘prior'

complaint, because there was no ‘'prior'

complaint on that or any similar claim

by appellee DCI; and, of course, there

was no 'prior' answer, and there was no

“answer that set up the same defenses".

United States v. Pink, supra, at p. 215.

18

The "propriety under New York law of

grounding the motion for summary judgment

on a prior adjudicated case", United

States v. Pink, supra, is not the issue

in this case.

This court, in United States v. Pink,

supra, at p. 216, 217, even under the

facts in that case, went on to show and

to hold that the

Moscow case is not res judicata, since

respondent was not a party to that

suit ....Nor was our affirmance of the

judgment in that case by an equally

divided court an authoritative pre-

cedent. While it was conclusive and

binding upon the parties as respects

that controversy (Durant v. Essex

Company, 7 Wali. 107), the lack of

an agreement by a majority of the

Court on the principles of law in-

volved prevents it from being an

authoritative determination for

other cases. Hertz v. Woodman, 218

U.S. 205, 213-214.

The upshot of the matter is that we

now reach the issues in the Moscow

case insofar as they are embraced in

the pleadings in this case. And there

is no reason why we cannot take judi-

cial notice of the record in this

Court of the Moscow case....

This Court, in United States v. Pink,

19

supra, at p. 217 thereupon reviewed the

case, decided that the “question of foreign

law is not to be determined exclusively by

the state court", and that "The claim of

the United States based on the Litvinov

Assignment raises a federal xsuestion," and

that "This Court will review o. independ-

-ently determine all questions on which a

federal right is necessarily dependent."

(Underscoring added)

The issue in Pink was whether the New

York Court of Appeals could impose a state

view which was opposed by and contrary to

a federal view on a matter governed exclu-

sively by the federal power. This court

held that since the matter was governed

exclusively by the federal power, that the

federal view must prevail over that of the

state view and the state could not decide

the issue.

Conclusion

It is respectfully urged that the

appellee's motion to dismiss

should be denied and that the

appellant's petitions should be

granted.

Respectfully submitted,

Bernard G. Ehrlich

Dated : September 7, 1976

New York, New York