By Renwick, J.P., Kapnick, Gesmer, Kern,JJ.The People of the State of New York, Respondent, -against- Dominique Peters, Defendant-Appellant. Defendant appeals from a judgment of the Supreme Court, New York County (Bruce Allen, J.), rendered November 7, 2014, convicting him, after a nonjury trial, of criminal sale of a controlled substance in the third degree, and imposing sentence. Christina Swarns, Office of the Appellate Defender, New York (Kate Mollison of counsel), for appellant. Cyrus R. Vance, Jr., District Attorney, New York (Alice Wiseman of counsel), for respondent.GESMER, J.In this observation drug sale case, defendant, an alleged seller, was appointed the same attorney at his Criminal Court arraignment as Edward Jones, one of the alleged buyers. During the course of counsel’s simultaneous representation of defendant and Jones, Jones accepted a plea that required him to allocute to a description of one of the drug sellers. Jones allocuted to a description fitting defendant, and testified consistently with the allocution as a prosecution witness at trial. Since we find that counsel’s simultaneous representation of defendant at the time of Jones’s plea constituted an actual conflict, we reverse and remand for a new trial. In addition, because Jones’s testimony is interwoven with a violation of defendant’s New York State and Federal right to the effective assistance of counsel, we preclude the People from using Jones’s testimony at any retrial.Defendant was arraigned in Criminal Court on July 8, 2012. The felony complaint alleged that, along with a codefendant, defendant had been observed speaking with Edward Jones and another man in the vicinity of 333 Sixth Avenue. The complaint identified Jones by name, described him as a “separately charged defendant,” and listed his arrest number.1 According to the complaint, Jones allegedly handed money to defendant, who walked over to a magazine stand. Jones then walked to the magazine stand, picked up an object, and placed it in his pocket. When Jones was arrested, he possessed crack cocaine.During defendant’s arraignment, he was appointed the same counsel as Jones. Defendant and Jones’s simultaneous representation continued for the next six months.Counsel represented defendant during his arraignment in Supreme Court on August 1, 2012. He filed an omnibus motion on defendant’s behalf on August 20, 2012. In his supporting affirmation, counsel stated, “It is alleged the defendant… did sell a bag of cocaine to Edward Jones… in the vicinity of 333 [Sixth Avenue]… .”On January 17, 2013, counsel appeared with Jones in Criminal Court and informed the sitting judge that “[t]here is an offer of a violation, 15 days. My client will allocute as to the seller. That’s what they want him to do, they want him to describe the seller that he bought from… .” The People confirmed that they were offering a disorderly conduct violation that required a “particular allocution” from Jones. ”After a conversation with Mr. Jones,” counsel informed the court that he was authorized to enter Jones’s plea.Jones was sworn in and the People allocuted him as follows:“[The People]: [I]s it true that you . bought crack cocaine from two men… ?“[Jones]: Yes.“[The People]: One of those men was anAfrican American who was about 24 years old?“[Jones]: Yes.“[The People]: Six feet tall?“[Jones]: Yes.“[The People]: Weighed about 180 pounds?“[Jones]: Yes.”2Counsel continued to represent defendant after Jones’s plea. In June 2013, counsel asked to be relieved because defendant had filed a disciplinary complaint against him. Defendant was appointed a new attorney. That attorney was also relieved, and in October 2014, defendant proceeded to hearings and a nonjury trial under the representation of his third attorney (trial counsel).The People subpoenaed Jones to testify at defendant’s trial. Before Jones was called as a witness, the Assistant District Attorney informed the trial court that, “[o]n the advice of some of my supervisors, I obtained an order… for counsel to be assigned, based on the fact that Mr. Jones said that if he were to testify, he would testify inconsistently with his sworn plea minutes, sworn plea allocution.” Counsel was thus appointed to “explain… the dangers of giving testimony that could lead to perjury charges.” Trial counsel notified the trial court that, from his review of Jones’s plea minutes, it appeared that, at the time of the plea, Jones and defendant had been represented by the same counsel. The trial court asked the Assistant District Attorney how this could have happened, and he replied that he did not know.When Jones was called as a witness, he identified defendant in the courtroom and testified that he knew defendant from seeing him in the area of Sixth Avenue and West Fourth Street. Jones further testified that he saw defendant on Sixth Avenue on July 8, 2012 and that he indicated to defendant that he wanted to buy crack cocaine. Jones testified that he placed 10 dollars on a magazine stand for defendant and defendant placed a glassine of crack cocaine on the magazine stand that Jones took.After the completion of Jones’s direct examination, the trial court recessed for trial counsel to prepare his cross-examination. When the proceedings resumed, trial counsel informed the trial court that he had confirmed with the People that prior counsel had simultaneously represented Jones and defendant. Trial counsel moved to strike Jones’s testimony on the basis that defendant’s right to the effective assistance of counsel had been violated by a “clear conflict.” The People argued that, while it was “pretty clear that there was an issue with a conflict of interest between [prior counsel] representing both Mr. Jones and [] defendant,” the appropriate remedy was not to exclude Jones’s testimony. The People contended that nothing showed that the conflict had affected Jones’s plea and allocution, or defendant’s ability to be effectively represented. The trial court reserved decision.During cross-examination, Jones admitted that he did tell the Assistant District Attorney, in his office, that defendant did not sell him crack cocaine. During redirect, Jones explained that he believed he did not have to tell the prosecutor the truth in his office, but that, now that he was under oath, he was “not going to perjure [him]self… .”Prior to resting, trial counsel asked for a ruling on his application to strike Jones’s testimony. The trial court denied the application. Trial counsel renewed his motion for a trial order of dismissal on these grounds, which was also denied. The trial court found defendant guilty of criminal sale of a controlled substance in the third degree and imposed a sentence of time served.A defendant’s right to the effective assistance of counsel includes the right to be represented by an attorney who has no conflicts and is “single mindedly devoted to the client’s best interests” (People v. Berroa, 99 NY2d 134, 139 [2002] [internal quotation marks ommitted]; US Const, 6th Amend; NY Const, art I, 6). The Court of Appeals has distinguished between two types of conflicts of interest: actual conflicts and potential conflicts (People v. Sanchez, 21 NY3d 216, 223 [2013]; People v. Solomon, 20 NY3d 91, 95 [2012]). An actual conflict exists when “an attorney simultaneously represents clients whose interests are opposed” (Sanchez, 21 NY3d at 223). In the case of an actual conflict, “reversal is required if the defendant does not waive the actual conflict” (id. at 223; see also Solomon, 20 NY3d at 97). Where an attorney’s representation merely creates the potential for conflict, reversal is required only if the potential conflict “operates on or affects the defense” and is not waived (Sanchez, 21 NY3d at 223 [internal quotation marks omitted]).Here, defendant’s right to the effective assistance of counsel was infringed by an actual conflict. At the time of their simultaneous representation and Jones’s plea, the interests of defendant and Jones were clearly opposed. Jones had an interest in avoiding a criminal conviction by allocuting to identify defendant as one of the people who had sold him drugs. Defendant had an interest in not being so identified. Counsel was thus placed in the “very awkward position of a lawyer subject to conflicting demands” (Solomon, 20 NY3d 91, 97 [2012] [internal quotation marks omitted]), and could not provide his “undivided loyalty” (People v. Prescott, 21 NY3d 925, 927 [2013] [internal quotation marks omitted). Indeed, despite defendant's right to representation by an attorney single-mindedly devoted to his best interests, counsel pursued a strategy in Jones's case directly at odds with defending defendant from the drug sale charges that he faced (see Prescott, 21 NY3d at 927-928; People v. Lynch, 104 AD3d 1062, 1063-1064 [3d Dept 2013]). After swearing to a description of one of the sellers that fit defendant, Jones became unavailable to defendant as a trial witness and his strength as a prosecution witness was enhanced.3 Counsel’s actions with respect to Jones were inconsistent with representing defendant in the best way possible, so defendant was denied the “right to receive advice and assistance from an attorney whose paramount responsibility is to that defendant alone” (Solomon, 20 NY3d at 97 [internal quotation marks omitted]).In finding an actual conflict, we reject the People’s argument that counsel’s simultaneous representation of defendant and Jones gave rise only to a potential conflict. The People’s reliance on People v. Harris (99 NY2d 202 [2002]) is misplaced. In that case, counsel was unaware that he had represented both the defendant and a confidential informant who had testified against the defendant in the grand jury (Harris, 99 NY2d at 210). Here, Jones’s connection to defendant was not hidden from counsel; the felony complaint alleged that Jones had purchased drugs from defendant, and counsel demonstrated he was aware of that allegation. Moreover, while the Court of Appeals acknowledged in Harris that, had the defendant and the informant been represented by separate counsel, defendant would not have received more vigorous representation, this case presents an actual conflict where reversal is required regardless of whether the conflict operated on the defense (id. at 211). Indeed, the issue here is not that a different attorney might have similarly advised Jones, but that counsel acted against defendant’s interests by advising Jones as he did.We have also considered and rejected the People’s argument that the record on appeal is insufficient to decide the conflict of interest issue (cf. People v. Mora, 290 AD2d 373 [1st Dept 2002], lv denied 98 NY2d 639 [2002]; People v. Frias, 250 AD2d 495, 496 [1st Dept 1998], lv denied 92 NY2d 982 [1998]). We turn now to the issue of the appropriate remedy. While the presence of an actual conflict mandates reversal, defendant has argued that we should also either dismiss the indictment or remand for a new trial at which Jones’s testimony is excluded. We reject defendant’s request for dismissal, but we agree that the People should be precluded from using Jones’s testimony.Defendant’s request for dismissal is unavailing for two reasons. First, the record before us establishes that, even without Jones’s testimony, the People possess other evidence with which to establish a prima facie case against defendant should they retry him (compare People v. Rossi, 80 NY2d 952, 954 [1992], with People v. Perkins, 189 AD2d 830, 833 [2d Dept 1993]). Second, while defendant has completed his sentence, he was convicted of a class B felony, a serious offense for which a “penological purpose []” would be served by remanding the matter for further proceedings (People v. Allen, 39 NY2d 916, 918 [1976]; People v. Conceicao, 26 NY3d 375, 385 n 1 [2015]).However, we agree that it is necessary and appropriate to preclude the People from using Jones’s testimony should they retry defendant. In other cases, courts have granted remedies uniquely tailored to dissipating the taint of counsel’s ineffective assistance. Thus, in cases where a defendant received ineffective assistance because of counsel’s failure to seek suppression, the matter was remitted for a suppression hearing (People v. Bilal, 27 NY3d 961, 962 [2016]; People v. Zeh, 144 AD3d 1395, 1398-1399 [3d Dept 2016], lv denied 29 NY3d 954 [2017]). Where appellate counsel failed to argue that trial counsel was ineffective for failing to object to the submission of a time-barred charge of manslaughter in the first degree and the jury acquitted the defendant of murder and convicted on the time-barred manslaughter count, the indictment was dismissed upon the granting of the defendant’s coram nobis application (see People v. Turner, 10 AD3d 458, 460 [2d Dept 2004], affd 5 NY3d 476 [2005]). Where defense counsel was ineffective for failing to make a CPL 30.30 motion, the matter was remitted for the appointment of new counsel and a hearing on the defendant’s speedy trial claim (see People v. St. Louis, 41 AD3d 897, 898-899 [3d Dept 2007]).Under the unique circumstances of this case, the exclusion of Jones’s testimony at any future trial is necessary to dissipate the taint of counsel’s conflicted and ineffective representation. Counsel acted against defendant’s interests when he advised Jones to accept a plea requiring an allocution adverse to defendant. The allocution eliminated any possibility that Jones could have provided exculpatory testimony as a defense witness, and ensured instead that Jones’s testimony would be inculpatory when he was called as a witness by the People. Accordingly, Jones’s testimony was, and continues to be, interwoven with a violation of defendant’s State and Federal right to the effective assistance of counsel.We have considered and rejected defendant’s arguments concerning suppression rulings. Since we are ordering a new trial, we find it unnecessary to reach any other issues.Accordingly, the judgment of the Supreme Court, New York County (Bruce Allen, J.), rendered November 7, 2014, convicting defendant, after a nonjury trial, of criminal sale of a controlled substance in the third degree, and sentencing him totime served, should be reversed, on the law, the matter remanded for a new trial, and the People precluded from using the testimony of Edward Jones at any retrial.All concur.THIS CONSTITUTES THE DECISION AND ORDER OF THE SUPREME COURT, APPELLATE DIVISION, FIRST DEPARTMENT.ENTERED: DECEMBER 5, 2017
1. Jones was separately charged with the misdemeanor offense of criminal possession of a controlled substance in the seventh degree based on his possession of crack cocaine allegedly purchased from defendant. 2. At the time of his arraignment, defendant was 20 years old, six feet, three inches tall, and weighed 200 pounds. 3. If Jones deviated from his sworn allocution, the People would have been within their rights to impeach Jones with his plea minutes (see CPL 60.35[1]; People v. Liggan, 62 AD3d 523, 524 [1st Dept 2009], lv denied 13 NY3d 908 [2009]), and he would have faced perjury charges. Cases decided on:December 5, 2017By Friedman, J.P., Richter, Moskowitz, Gische, Kapnick, JJ.4033-4034. Deutsche Bank National Trust Company, etc., plf-res, v. Barclays Bank PLC, def-ap — Deutsche Bank National Trust Company, etc., plf-res, v. HSBC Bank USA, National Association, def-ap — Sullivan & Cromwell LLP, New York (Jeffrey T. Scott of counsel), for Barclays Bank PLC, ap — Mayer Brown LLP, New York (Michael O. Ware of counsel), for HSBC Bank USA National Association, ap — Ropes & Gray LLP, New York (Harvey J. Wolkoff of counsel), for res — Order, Supreme Court, New York County (Marcy S. Friedman, J.), entered November 27, 2015, which, in each of the above-captioned actions, to the extent appealed from as limited by the briefs, denied each defendant’s motion to dismiss the surviving cause of action for breach of contract on the ground of the statute of limitations, unanimously reversed, on the law, with costs, and the motion granted. In each action, the Clerk is directed to enter judgment for defendant dismissing the complaint.In 2013, plaintiff commenced the two above-captioned actions, each solely in plaintiff’s capacity as trustee of one of two trusts. In each action, plaintiff asserts, as relevant to this appeal, a cause of action for breach of contract based on each defendant’s alleged breaches of the representations and warranties it had made in connection with the sale, in 2007, of the residential mortgage-backed securities that are pooled in the relevant trust. Each defendant moved to dismiss the action against it, arguing, in pertinent part, that, because plaintiff’s principal place of business is in California, plaintiff’s contractual claim is barred by California’s four-year statute of limitations, pursuant to the borrowing statute (CPLR 202), although it is conceded that the claims would be timely under New York’s six-year statute of limitations (CPLR 213[2]). Upon defendants’ respective appeals from Supreme Court’s denial of this aspect of their motions, we reverse.1CPLR 202 requires that an action brought by a nonresident plaintiff, “based upon a cause of action accruing without the state,” be timely under the respective statutes of limitations of both New York and “the place without the state where the cause of action accrued.” In Global Fin. Corp. v. Triarc Corp. (93 NY2d 525, 529-530 [1999]), the Court of Appeals set forth the general rule that, in cases where (as here) the alleged injury is purely economic, a cause of action is deemed, for purposes of CPLR 202, to have accrued in the jurisdiction of the plaintiff’s residence.Plaintiff, a California domiciliary, argues that the plaintiff-residence rule of Global Financial — a case in which the plaintiff was a corporation suing to recover for an injury to itself — should not be applied here, where plaintiff is suing solely in its capacity as trustee of the subject trusts. Rather, plaintiff argues that we should apply the multi-factor test used in Maiden v. Biehl (582 F Supp 1209 [SD NY 1984]), which also dealt with a trustee-plaintiff, to determine where the injury occurred. However, we need not decide whether the plaintiff-residence rule or the multi-factor test applies in this context because, even under the multi-factor test, we find that the injury/economic impact was felt in California and the claims are thus deemed to have accrued there.Initially, it is undisputed that the domiciles of the trust beneficiaries, which are in various jurisdictions, do not provide a workable basis for determining the place of accrual. As to the New York choice-of-law clauses of the relevant agreements, because these provisions do not expressly incorporate the New York statute of limitations, they “cannot be read to encompass that limitation period” (Portfolio Recovery Assoc., LLC v. King, 14 NY3d 410, 416 [2010]). By contrast, the subject trust in each action comprises a pool of mortgage loans, originated by California lenders and encumbering California properties, either exclusively (in the Barclays case) or predominantly (in the HSBC case), and, as previously discussed, administered in California by plaintiff, a California-based trustee.2 Further, it is undisputed that the relevant pooling and servicing agreement (PSA) for each trust contemplates the payment of state taxes, if any, in California.3 To the extent the physical location of the notes memorializing the securitized mortgage loans has relevance to the analysis, each trust’s PSA contemplates that the notes may be maintained in California, but neither contemplates maintaining the notes in New York.4We agree with defendants that the claims are barred by the California’s four-year statute of limitations for contract actions (Cal Code Civ Proc §337). As previously noted, the alleged breaches of representations and warranties occurred in 2007, when allegedly nonconforming mortgage loans were deposited into the trust pools, and these actions were not commenced until 2013. Under California law, plaintiff’s claims for the alleged breaches accrued “at the time of the sale” (Mary Pickford Co. v. Bayly Bros., Inc., 12 Cal 2d 501, 521, 86 P2d 102, 112 [1939]). Although plaintiff seeks to enforce the repurchase protocol under the relevant agreements, its failure to demand cure or repurchase until after the expiration of four years from the original breach did not serve to extend the statute of limitations (Meherin v. S.F. Produce Exch., 117 Cal 215, 217, 48 P 1074, 1075 [1897]; Taketa v. State Bd. of Equalization, 104 Cal App 2d 455, 460, 231 P2d 873, 875 [Cal Ct App 1951]). Moreover, under New York law, which, pursuant to the choice-of-law clauses, governs substantive matters, the contractual provisions for demand under the repurchase protocol are not conditions precedent to suit for a preexisting breach (see ACE Sec. Corp., Home Equity Loan Trust, Series 2006-SL2 v. DB Structured Prods., Inc., 25 NY3d 581, 597 [2015]). Nor do any of the relevant agreements expressly waive or extend the statute of limitations. Plaintiff’s claims are not saved by California’s discovery rule, inasmuch as the record establishes that plaintiff reasonably could have discovered the alleged breaches within the limitation period, based on information in the prospectuses, the underwriting and default information it received after the closing (cf. April Enters., Inc. v. KTTV, 147 Cal App 3d 805, 832 [Cal Ct App 1983] [a discovery rule may apply in contract cases where "breaches will not be reasonably discoverable by plaintiffs until a future time"] [emphasis added]). Finally, whether a California court would apply New York’s statute of limitations is irrelevant to the analysis under CPLR 202, which demands application of the shorter of the two limitation periods at issue (see Ledwith v. Sears, Roebuck & Co., 231 AD2d 17, 24 [1st Dept 1997] ["CPLR 202 is to be applied as written, without recourse to a conflict of law analysis"]).This constitutes the decision and order of the Supreme Court, Appellate Division, First Department.
