Gevorkyan v. Judelson, No. 15-3249 (2d Cir. 2017)

Annotate this Case
Justia Opinion Summary

The Second Circuit certified to the Court of Appeals of the State of New York the following question: Whether an entity engaged in the “bail business,” as defined in NYIL 6801(a)(1), may retain its “premium or compensation,” as described in NYIL 6804(a), where a bond posted pursuant to NYCPL 520.20 is denied at a bail-sufficiency hearing conducted pursuant to NYCPL 520.30, and the criminal defendant that is the subject of the bond is never admitted to bail. The Court of Appeals answered in the negative and its conclusion was determinative of this appeal. Accordingly, the court reversed and remanded.

This opinion or order relates to an opinion or order originally issued on November 15, 2016.

Download PDF
15-3249-cv Gevorkyan v. Judelson 1 In the 2 United States Court of Appeals 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 For the Second Circuit ________ August Term, 2016 No. 15-3249-cv KARINE GEVORKYAN, ARTHUR BOGORAZ, INNA MOLDAVER, AND SAM MOLDAVER, Plaintiffs-Appellants, v. IRA JUDELSON, Defendant-Appellee. ________ Appeal from the United States District Court for the Southern District of New York. No. 13-cv-08383 (RMB) ¯ Richard M. Berman, Judge. ________ Argued: September 14, 2016 Question Certified: November 14, 2016 Certified Question Answered: June 27, 2017 Decided: July 28, 2017 ________ Before: JACOBS, PARKER, and LIVINGSTON, Circuit Judges. ________ 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 We certified to the New York Court of Appeals the question of whether New York law permits a bail bondsman to retain a premium where the bail was rejected pursuant to NYCPL § 520.30 and the defendant was never admitted to bail. The Court of Appeals answered in the negative, ruling that New York Insurance Law “prohibits a bail bond surety from retaining a premium when the criminal defendant is not released on bail.” That conclusion being determinative of this appeal, we REVERSE the judgment of the district court and REMAND the case with instructions to enter judgment in favor of appellants. 17 18 19 KYLE B. WATTERS, Kyle B. Watters, PC, Bayside, NY, for Defendant-Appellee Ira Judelson.* ________ ________ ANDREW LAVOOTT BLUESTONE, New York, NY, for Plaintiffs-Appellants Karine Gevorkyan, Arthur Bogoraz, Inna Moldaver, Sam Moldaver. * Attorney Jonathan Svetkey authored Defendant-Appellee’s brief on appeal and argued before us. Attorney Svetkey withdrew as Defendant-Appellee’s counsel on July 12, 2017, and Attorney Watters filed a notice of appearance the same day. 2 1 PER CURIAM: 2 3 4 5 6 7 8 9 10 11 12 13 14 On November 14, 2016, we certified the following question to the New York Court of Appeals. 15 Gevorkyan v. Judelson, 841 F.3d 584, 589 (2d Cir. 2016).1 In certifying 16 this question, we noted that “the resolution of this question will 17 determine the outcome of this appeal,” because if “New York law 18 does not permit a bail bond agent to retain its premium following 19 the rejection of a bail package at a sufficiency hearing, the district 20 court would be reversed.” Id. Whether an entity engaged in the “bail business,” as defined in [New York Insurance Law (“NYIL”)] § 6801(a)(1), may retain its “premium or compensation,” as described in NYIL § 6804(a), where a bond posted pursuant to NYCPL § 520.20 is denied at a bail-sufficiency hearing conducted pursuant to NYCPL § 520.30, and the criminal defendant that is the subject of the bond is never admitted to bail. 21 The New York Court of Appeals has now answered our 22 certified question. See Gevorkyan v. Judelson, – N.E. 3d –, 2017 WL 23 2742192 (June 27, 2017). 24 Insurance Law “prohibits a bail bond surety from retaining a 25 premium when the criminal defendant is not released on bail,” and 26 that a bail bond surety’s retention of a premium under such 27 circumstances contravenes the “insurance law principle that 28 premium follows risk.” Id., slip op. at 10. The Court concluded that New York 29 The Court of Appeals’ ruling requires that we reverse the 30 judgment of the district court. As we previously noted, the district 1 We assume familiarity with our certification opinion. 3 1 court rested its conclusion that Judelson could retain his premium 2 exclusively on principles of contract interpretation. It did so because 3 it found that existing New York precedent was “not dispositive” of 4 the present issue. App’x at 37. The Court of Appeals has now made 5 clear the principle of New York law that decides this issue: because 6 Bogoraz was never admitted to bail, New York Insurance Law 7 precludes Judelson from retaining the premium. This prohibition 8 applies regardless of the terms of the parties’ contract because, 9 under New York law, contractual provisions that contravene 10 applicable laws in ways that harm the public policies underlying 11 those laws are unenforceable. 12 A.D.3d 92, 99–100 (2d Dep’t 2011) (citing, inter alia, Galbreath-Ruffin 13 Corp. v. 40th & 3rd Corp., 19 N.Y.2d 354, 364 (1967)). The Court of 14 Appeals has now clearly opined that a bail bondsman’s retention of 15 a premium after the denial of bail violates New York law and runs 16 afoul of an important public policy underlying New York Insurance 17 Law. Accordingly, we REVERSE the judgment of the district court 18 and REMAND the case with instructions to enter judgment in favor 19 of appellants. See Village Taxi Corp. v. Beltre, 91 4