Decisions of Interest

The third mortgagee's lawyer knew of the restraining order at the time the mortgage was executed. During the pendency of the divorce proceedings, the first mortgagee brought this foreclosure proceeding, and the home was sold, yielding $490,000 in surplus funds. The second mortgagee, third mortgagee and the husband all asserted claims to the funds. Meanwhile, in the matrimonial action, a referee determined that the wife had used proceeds from the third mortgage loan for her individual benefit, and ordered that any surplus funds remaining after satisfying the second mortgage should belong to the husband. The latter then moved in the foreclosure action to have the county treasurer release the surplus funds to him in the sum of $282,644. The third mortgagee objected, but the foreclosure court granted the husband's motion. The third mortgagee appealed.

In affirming, the Appellate Division indicated that the third mortgagee had a prima facie entitlement to a share of the surplus funds, but held that the matrimonial court had authority to determine that the husband was entitled to the surplus funds as part of the equitable distribution of the marital property. Because the wife executed the mortgage in violation of the restraining order, and the third mortgagee's lawyer knew or should have known of the order, the third mortgagee's interest was limited to the interest the wife had ' an interest the matrimonial court had divested. As a result, the husband was entitled to the surplus funds.

Civil Rights Suit Against Placement Agencies Goes Forward

Some of the special needs children who were placed in the care of a woman who abused them are being permitted to go ahead with their federal civil rights suits against the private foster care agencies that oversaw their cases. A New York judge ruled that their causes of action accrued not when the alleged negligent placements were made, but after the 2007 arrest of their mother. S.W. v. City of New York, 09-cv-01777 (Vitaliano, J.).

The adoptive mother, Judith Leekin, is now serving an 11-year sentence for a scheme that involved the adoption of 11 children, which she orchestrated in order to collect subsidies for their care. In all, she amassed $1.68 million, all the while abusing and neglecting the children. In 2009, 10 of the children sued the City of New York (which settled in 2012 for $9.7 million) and the private agencies that oversaw their placement with Leekin, claiming, among other things, that these entities should have uncovered Leekin's fraud and child abuse. The plaintiffs are all currently between the ages of 22 and 33.

The private foster care agencies sought, inter alia , a ruling that the federal civil rights claims of those plaintiffs who were over the age of 21 when they filed suit were time-barred. In New York, the statute of limitations for a ' 1983 civil rights claim is three years, tolled until a minor reaches 18 years of age. However, the question of when these claims accrued was in issue. The judge noted that a federal ' 1983 claim accrues when a plaintiff “knows or has reason to know of the allegedly impermissible conduct and the resulting harm.” The children asserted that they could not know that they had a valid claim based on wrongful placement until Leekin was arrested. The agencies did not offer any counter-argument on this point. The judge agreed with the plaintiffs, stating that “it is not necessary to determine when, exactly, accrual of each plaintiff's ' 1983 claim occurred; it is sufficient to say that it could not have occurred while plaintiffs were in Leekin's custody.”

Surrogacy Contract May Be Illegal, But Adoption Is Not

Family Court Judge Barbara Salinitro has found that, although the surrogacy contract that resulted in the birth of twins was void under New York law, this fact should not prohibit the husband of the chidren's biological father from adopting the twins. Matter of J.J., 2014 NY Slip Op 24089 (Fam. Ct., Queens Cty. 4/3/14) (Salinitro, J.).

The children were conceived with a donated egg and the sperm of the man who is married to the would-be adoptive parent. The resulting embryos were implanted in a gestational surrogate under the terms of a contract entered into in India, the surrogate's home country. When the children were born in India in May 2013, the surrogate mother, in accordance with the contract, placed the children with the biological father. They were granted U.S. Citizenship two weeks later, and the twins' biological father then immediately brought them to the United States. They have been raised since that time by their biological father and his same-sex spouse. A home study in anticipation of adoption found that the children were thriving in the two men's care.

The court noted that New York law has developed to permit second-parent adoption, in which one spouse may adopt the child of the other spouse; and same-sex marriage is now recognized. The only possible glitch in this case, as explained by Judge Salinitro, was one of first impression in New York: that “[t]he proposed adoption calls upon the Court to decide if a court may approve an adoption for finalization where New York statutorily deems the underlying surrogacy contract against public policy, and void and unenforceable.”

New York enacted legislation outlawing surrogacy agreements in the wake of the contentious New Jersey case, Matter of Baby M., 109 N.J. 396 (N.J. Sup. Ct. 1988), in which the surrogate mother sought to keep the baby she had contracted to carry and then give up. Since that time, New York has not changed its position on surrogacy. “Accordingly,” wrote Salinitro, “in New York, it is well-settled that a party to a surrogacy contract may not seek a court's assistance to enforce the agreement, nor will such contract be deemed viable for any other claims arising under its arrangement. See Itskov v. NY Fertility Institute, Inc', 11 Misc 3d 68 (2d Dep't 2006).” Here, however, the issue before the court had nothing to do with the enforcement of the surrogacy contract, or any portion of it.

“Rather, the Proposed Adoptive Parent, although not a biological parent, wants desperately to have equivalent legal status as the Birth Parent, which is what the couple had always envisioned as they proceeded on their bumpy road towards starting a family together, and is prepared to assume the rights and responsibilities that accompany legal parentage,” the court explained. In this case, the judge said, the state legislature's goal of encouraging loving and happy families, in accordance with the best interests of the children involved, must take precedence over its disapproval of the way in which the children were brought into the world. The court therefore held that the surrogacy contract's legality was of no consequence to the matter, and that “if all other requirements are met, the Court shall approve the instant adoption.” Judge Salinitro added, however, that her decision “should in no way be read to condone any violation of any New York State law.”

Court Determines Mortgagee Priority

The Appellate Division affirmed Supreme Court's order releasing funds to the husband mortgagor, holding that the third mortgagee knew or should have known that the mortgagor wife was under a restraining order preventing her from encumbering her interest in the property. Emigrant Mortgage Co. v. Biggio, NYLJ 10/4/13, p. 29, col. 4, AppDiv, Second Dept.

The husband and wife jointly owned the marital home. During divorce proceedings, the matrimonial court issued a restraining order preventing either party from transferring marital property except in the ordinary course of business or for day-to-day living expenses. The wife nevertheless encumbered the home with a third mortgage.

The third mortgagee's lawyer knew of the restraining order at the time the mortgage was executed. During the pendency of the divorce proceedings, the first mortgagee brought this foreclosure proceeding, and the home was sold, yielding $490,000 in surplus funds. The second mortgagee, third mortgagee and the husband all asserted claims to the funds. Meanwhile, in the matrimonial action, a referee determined that the wife had used proceeds from the third mortgage loan for her individual benefit, and ordered that any surplus funds remaining after satisfying the second mortgage should belong to the husband. The latter then moved in the foreclosure action to have the county treasurer release the surplus funds to him in the sum of $282,644. The third mortgagee objected, but the foreclosure court granted the husband's motion. The third mortgagee appealed.

In affirming, the Appellate Division indicated that the third mortgagee had a prima facie entitlement to a share of the surplus funds, but held that the matrimonial court had authority to determine that the husband was entitled to the surplus funds as part of the equitable distribution of the marital property. Because the wife executed the mortgage in violation of the restraining order, and the third mortgagee's lawyer knew or should have known of the order, the third mortgagee's interest was limited to the interest the wife had ' an interest the matrimonial court had divested. As a result, the husband was entitled to the surplus funds.

Civil Rights Suit Against Placement Agencies Goes Forward

Some of the special needs children who were placed in the care of a woman who abused them are being permitted to go ahead with their federal civil rights suits against the private foster care agencies that oversaw their cases. A New York judge ruled that their causes of action accrued not when the alleged negligent placements were made, but after the 2007 arrest of their mother. S.W. v. City of New York, 09-cv-01777 (Vitaliano, J.).

The adoptive mother, Judith Leekin, is now serving an 11-year sentence for a scheme that involved the adoption of 11 children, which she orchestrated in order to collect subsidies for their care. In all, she amassed $1.68 million, all the while abusing and neglecting the children. In 2009, 10 of the children sued the City of New York (which settled in 2012 for $9.7 million) and the private agencies that oversaw their placement with Leekin, claiming, among other things, that these entities should have uncovered Leekin's fraud and child abuse. The plaintiffs are all currently between the ages of 22 and 33.

The private foster care agencies sought, inter alia , a ruling that the federal civil rights claims of those plaintiffs who were over the age of 21 when they filed suit were time-barred. In New York, the statute of limitations for a ' 1983 civil rights claim is three years, tolled until a minor reaches 18 years of age. However, the question of when these claims accrued was in issue. The judge noted that a federal ' 1983 claim accrues when a plaintiff “knows or has reason to know of the allegedly impermissible conduct and the resulting harm.” The children asserted that they could not know that they had a valid claim based on wrongful placement until Leekin was arrested. The agencies did not offer any counter-argument on this point. The judge agreed with the plaintiffs, stating that “it is not necessary to determine when, exactly, accrual of each plaintiff's ' 1983 claim occurred; it is sufficient to say that it could not have occurred while plaintiffs were in Leekin's custody.”

Surrogacy Contract May Be Illegal, But Adoption Is Not

Family Court Judge Barbara Salinitro has found that, although the surrogacy contract that resulted in the birth of twins was void under New York law, this fact should not prohibit the husband of the chidren's biological father from adopting the twins. Matter of J.J., 2014 NY Slip Op 24089 (Fam. Ct., Queens Cty. 4/3/14) (Salinitro, J.).

The children were conceived with a donated egg and the sperm of the man who is married to the would-be adoptive parent. The resulting embryos were implanted in a gestational surrogate under the terms of a contract entered into in India, the surrogate's home country. When the children were born in India in May 2013, the surrogate mother, in accordance with the contract, placed the children with the biological father. They were granted U.S. Citizenship two weeks later, and the twins' biological father then immediately brought them to the United States. They have been raised since that time by their biological father and his same-sex spouse. A home study in anticipation of adoption found that the children were thriving in the two men's care.

The court noted that New York law has developed to permit second-parent adoption, in which one spouse may adopt the child of the other spouse; and same-sex marriage is now recognized. The only possible glitch in this case, as explained by Judge Salinitro, was one of first impression in New York: that “[t]he proposed adoption calls upon the Court to decide if a court may approve an adoption for finalization where New York statutorily deems the underlying surrogacy contract against public policy, and void and unenforceable.”

New York enacted legislation outlawing surrogacy agreements in the wake of the contentious New Jersey case, Matter of Baby M., 109 N.J. 396 (N.J. Sup. Ct. 1988), in which the surrogate mother sought to keep the baby she had contracted to carry and then give up. Since that time, New York has not changed its position on surrogacy. “Accordingly,” wrote Salinitro, “in New York, it is well-settled that a party to a surrogacy contract may not seek a court's assistance to enforce the agreement, nor will such contract be deemed viable for any other claims arising under its arrangement. See Itskov v. NY Fertility Institute, Inc ', 11 Misc 3d 68 (2d Dep't 2006).” Here, however, the issue before the court had nothing to do with the enforcement of the surrogacy contract, or any portion of it.

“Rather, the Proposed Adoptive Parent, although not a biological parent, wants desperately to have equivalent legal status as the Birth Parent, which is what the couple had always envisioned as they proceeded on their bumpy road towards starting a family together, and is prepared to assume the rights and responsibilities that accompany legal parentage,” the court explained. In this case, the judge said, the state legislature's goal of encouraging loving and happy families, in accordance with the best interests of the children involved, must take precedence over its disapproval of the way in which the children were brought into the world. The court therefore held that the surrogacy contract's legality was of no consequence to the matter, and that “if all other requirements are met, the Court shall approve the instant adoption.” Judge Salinitro added, however, that her decision “should in no way be read to condone any violation of any New York State law.”