What Constitutes Delivery of a Gift?

We all understand what delivery of a gift means, or so we think.    After all, we all receive gifts and these are delivered by the donor, by a mail carrier, or by a delivery service.  When the item arrives, it has been delivered.  But at law, the concept of the “delivery” of a gift is much more complicated.

When a person makes a gift to another during the donor’s lifetime, this is called an inter vivos gift.   At times, the person making the gift wishes to retain possession of the gift, all the while “gifting” the item in question to another person.  In such a situation, when is the item delivered?  To determine the answer, we are going to look at the inter vivos “delivery” of a significant artwork:  Gustav Klimt’s  “Schloss Kammer am Attersee II,” which sold at auction in 1997 for $23,590,177.

In the case of Gruen v. Gruen, 68 N.Y.2d 48, 505 N.Y.S.2d 849, 496 N.E.2d 869 (1986), Victor Gruen was a prominent architect of Austrian origin with offices in New York and Los Angeles.  He purchased “Schloss Kammer am Attersee II” by noted Austrian artist Gustav Klimt in 1959.   Two important events occurred in Victor’s life in 1963:  he remarried a woman named Kemija, the defendant in this case, and his son Michael by a previous marriage, the plaintiff, turned 21.   Upon his son’s achieving majority, Victor gifted him with the painting, a gift that Victor memorialized in two letters signed by him and which were sent to his son Michael.  The painting remained in Victor’s possession for the remainder of his life, except for those times when it was loaned out for exhibition purposes.

For the purposes of an inter vivos gift, three elements must be met.  The first element is “delivery.”  Delivery can be accomplished by a writing or “instrument” to the donee.  It is the delivery of the written instrument from the donor to the donee that fulfills this first requirement.  In the case of Victor Gruen, he delivered the letters not only to his son but copies were also sent to his lawyer and his accountant.

This also goes to show the second element for an inter vivos gift:  donative intent.  The donor must intend to make a transfer of present ownership to the donee.  Merely intending to give something to someone in the future is not sufficient.  The transfer of ownership with an inter vivos gift is immediate.   What can be postponed, however, is the right of enjoyment.  The donor can continue to enjoy the tangible asset until s/he dies, so long as s/he intends to transfer a present ownership right to the donee.  In effect, the donor grants himself a life estate in the tangible asset.

The third element for the completed transfer of an inter vivos gift is acceptance by the donee.  The legal presumption is that, absent a renunciation, a gift is deemed accepted if the gift is beneficial to the donee.   Since Michael Gruen never renounced or repudiated the gift of the painting, either verbally or through his actions, the gift was deemed accepted.  Even the fact that he did not declare the painting in financial affidavits that he submitted as part of his divorce action in 1973 was insufficient to show that Michael had not accepted the painting.

Why is this legal concept of delivery so important?  It’s because inter vivos gifts are often part of an estate planning strategy to reduce the corpus of one’s estate by using gifts during one’s lifetime, or as a tax credit on his/her income taxes using charitable trusts.  But unless all three elements of “delivery” are met, the gift will fail and will be subject to taxes and penalties.

If you would like to discuss your own personal situation with me, or how an inter vivos gift can be tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.


When Is a Child an Heir under New York Law?

In days gone by, legitimate heirs were the product of a legitimate marriage.   Any child born of a legitimate wife was considered to be the heir of her husband.  Hence, a woman’s virginity prior to marriage was a necessary precondition of the propertied classes, as was her fidelity during marriage.  Adultery by the wife was a crime against property for it chanced to produce an heir who was not the issue of her spouse, thereby depriving the legitimate heirs of a portion of their birthright.    Of course, a man could sow his “seed” far and wide and, unless he recognized the child as his own, the illegitimate child would never inherit from the father.  

But family construction is much more fluid these days, and the laws of New York have sought to respond to these changes.  The legal standard remains the best interest of the child, and the laws seek to protect the child’s welfare.  Let us look at a few of the more common scenarios where establishing legal paternity means that the child will also inherit from his/her father in intestacy.

 A.  Child Born of an Unwed Mother

While our society and our laws no longer impose the stigma of illegitimacy or bastardy on an innocent child, the laws governing intestacy in New York nonetheless provide the parameters for defining who is a legitimate heir.  This is necessary to protect the rights of succession of legally-recognized descendants and to arrange for the orderly transfer of property. 

Until 1997,  no formal acknowledgment was required by the father for the mother to list his name as the child’s father.   But because paternity brings with it a host of legal and financial obligations, New York State’s Public Health Law §4135 now requires that the father fill out and sign a form formally acknowledging legal paternity of the child.   The law was passed to prevent fraud.

A putative father can also petition the court for an order of filiation to establish paternity.  The court may order DNA testing in order to establish filiation.  Putative fathers are also encouraged to register with the New York State Putative Father Registry (a non-public registry) so that they can be notified should the child, for example, be put up for adoption.

With an acknowledgment of paternity, the child is vested with certain rights, including inheritance rights, rights to support until age 21 or emancipation, Social Security survivor benefits, among others.  The father also gains support obligations and rights such as the right to refuse adoption or foster care of the child, the right to consent to medical treatment for the child, and the rights of shared custody and visitation, among others.

It is worth noting here that if the putative father is under the age of 18, he does not have the legal capacity to establish paternity in this way (or in court) without legal representation.  As a minor he cannot enter into a legally binding contract.  The contract is voidable.  However, upon reaching majority the putative father can expressly ratify the contract, and the ratification brings with it all of the rights and obligations of paternity.

B. Adopted Child

Adoption was uncommon prior to the 19th century, and today remains the province of each state to govern. In New York, adopted in children may inherit from their adoptive parents but not from their biological parents, unless the biological parent specifically names the adopted out child as a beneficiary in a duly executed Will. The law also permits step-parent adoption and second parent adoption in cases of same-sex couples. Where a child has been conceived through surrogacy, a practice not permitted in New York, then the non-biological parent(s) must petition the court for paternity in the case of the father and for adoption in the case of the second  mother. 

C. A Child Born of a Marriage but Where the Father is not the Wife’s Husband

Because a child born of a legal marriage is presumptively the husband’s child, this raises special concerns for both the husband and the biological father.  As we discuss these scenarios, it is important to remember that the best interests of the child remains the legal standard.

Should the biological father wish to be declared the legal father of the child, then either the mother or the alleged father can petition the Family Court.  The petition will state that the child was not a product of the marriage, that the mother is married but not to the alleged father, and that the mother and the alleged father had sexual relations during which time the child was allegedly conceived.  The alleged father may also provide an affidavit stating these same facts and admitting paternity. 

If the non-biological father does not wish to block the challenge to paternity, then he may provide an affidavit of “no access”  in which he will swear that he had no sexual relations with his wife during the time period when the child could have been conceived.   The legal presumption for the time of conception is between 266 and 299 days from the beginning of the mother’s last menstrual period.

It is worth noting that New York public policy limits third party challenges to paternity of a child born in wedlock.  Thus  the husband has the right to block this petition if he wishes to raise the child as his own.  The court has the right to deny DNA testing if in the court’s opinion this would not be in the best interest of the child, especially if the child is no longer an infant and has been part of the family unit for some time. 

The legal principle of equitable estoppel may also prevent a husband or wife from challenging paternity several years after the birth.  Thus is particularly true where the non-biological father has established himself in the role of the father, where both husband and wife have held out the non-biological father as the father of the child, and where the child has relied upon these representations of paternity 


Because of the importance of establishing and clarifying filiation, it is important that parents take the necessary steps to ensure that their child is properly filiated so that his/her inheritance rights are secure.

If you would like to discuss your own personal situation with me, or how a revocable living trust for your digital assets can be tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

Death and Passwords: Estate Planning for Your Digital Assets, Part 1

If you are reading this, it is because you have Internet access. With Internet access comes a host of services, including online banking, online businesses, and online access to pension savings and other investments.  All of these services require you to create a user name and a password.  Many have challenge questions as well.  What is your plan for these digital assets if you should become incapacitated or die?

With the exception of Oklahoma, state laws that control the disposition of your estate have not been enacted to keep up with this massive societal change in the way we transact our financial lives. For instance, if a family member has given you a power of attorney over their financial affairs, a bank will work with you with respect to their non-virtual accounts. But if that family member schedules payments and transactions through their online account, the power of attorney may be ineffective to gain access to that online account. You must have  at least the password.

But you or your family members may not want to give out passwords to online banking or investment accounts. The possibilities for fraud or mismanagement are large. In addition, many people do not want to reveal the full extent of their financial lives. Access to passwords provide that full view.

On the other hand, there are good reasons to give access to passwords to these trusted sites. Mental incapacity due to illness can rob the individual of the ability to manage their online financial life. At the same time, mental incapacity prevents a person from legally drafting a Will or trust. Thus, estate planning for our digital assets becomes a priority for anyone with anyone who manages their financial life online.

Even if you have a Will, you probably did not make provisions in this document for your digital life. In any case, a Will is not the proper place to list your passwords. If you include your passwords as part of your Will,  a probated Will is   a public document, exposing your digital assets to prying eyes.  These user names, passwords, challenge questions, and other online account identifiers are best protected in a digital assets trust. Trusts, in contrast to Wills, are private documents and a safe way of communicating your online passwords to your trusted family members and advisers.

So who is a candidate for digital asset estate planning? If you can answer “yes” to any of the following questions, then you need an estate plan for your digital assets.

— Do you do online banking?

— Do you regularly schedule payments through your online banking accounts?

— Do you use an online password to access your retirement accounts?

— Do you use an online password to reach your investment accounts?

— Do you have an online business?

— Do you sell items on eBay or other online auction sites?

— Do you have a PayPal account?

— Do you have a business website?

— Do you have a blog or other social media site associated with your business?

In the next part of this series, we will look at why a digital asset trust may be a good solution for your estate planning needs.

If you would like to discuss your own personal situation with me, or how a digital assets estate plan can be tailored to your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

Protecting Individual Wealth in New York with Prenuptial Agreements

Prior to 1980, New York’s statutory regime for the distribution of property at divorce was a simple one.  The property in question was awarded to whichever spouse held title to it.  Given that women had recently begun entering the labor force as a result of the feminist movement, few women had accumulated much wealth before marriage or even after marriage.  Most husbands still held title to the property shared by the couple.  More often than not, the title system of property division at divorce left the wife in financially difficult circumstances.  A wife could be awarded alimony, but courts were reluctant to do so.  Thus divorced women easily slipped into poverty, at times becoming wards of the State.

Then in 1979 the United States Supreme Court in Orr v. Orr (440 U.S. 278 (1979)) declared that divorce laws that only provided alimony for wives and not husbands were unconstitutional because these laws violated the Equal Protection Clause of the Fourteenth Amendment.  The New York law was thus unconstitutional under Orr, and the State legislature was pressured to act to reform New York’s divorce law.

The enactment of Domestic Relations section 236 part B, known as the equitable distribution law, was the result of the redrafted law.  Equitable distribution means that a court can look at the totality of the marital assets acquired jointly or separately during the marriage and divide them fairly between the spouses.  In practice and under the law, this means that no two marriages are alike.  Under equitable distribution, the goal is fairness and judges have latitude and discretion to assess each spouse’s economic and non-economic contributions to the marriage.

In New York, marriage is viewed by the courts as an economic partnership and not solely as a sacred bond.  The judge determines the dollar value of a spouse’s non-economic activities, such as housework and child-rearing, and then adds that figure to the totality of the assets to be divided equitably.  Equitable distribution replaces alimony in New York.  Thus, a spouse’s post-marriage economic welfare often depends upon the size of the equitable distribution award.

Since the passage of New York’s equitable distribution law in 1980, an individual’s ability to earn a living and to create wealth prior to marriage has vastly increased.  Women and men are earning college and professional degrees in increasing numbers.  Career and professional women are also delaying marriage and child-bearing, factors that contribute to wealth-building.   Both men and women are saving for retirement in their own savings vehicles.

As a result, each person’s personal wealth acquired prior to a marriage may need to be protected in case of a termination event (divorce, separation, and death).  It is possible that one spouse entering a marriage may have substantially more assets than the other spouse and that one person’s ability to earn money may far outstrip the wage-earning capacity of his/her spouse after the marriage.  Should the couple divorce at a later time, absent a prenuptial agreement the court under equitable distribution will look to the couple’s standard of living during the marriage, among other things.

In order to be valid, each person engages separate legal representation so that the prenuptial agreement can be negotiated at arms length, as with any contract negotiation.  In addition, each party must fully disclose all assets and liabilities.   Like any other contract, it must be a signed writing that clearly states that the parties understand and intend to circumvent equitable distribution.

Therefore, a couple about to enter marriage and wishing to protect their separate future earnings and capital investments from equitable distribution in the event of a divorce or separation may want to budget for the legal fees associated with the drafting of a prenuptial agreement.

If you would like to discuss your own personal situation with me, or put together a prenuptial agreement that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

Costly Drafting Errors and the Rule Against Perpetuities: The Case of Symphony Space

There’s a saying in New York that every building tells a story.  In the case of Symphony Space, that story is a fascinating legal story with an unforgettable lesson.  Symphony Space is a cultural landmark on New York’s Upper West Side, located on Broadway and 95th Street.  I walk by it every day.  And yet I did not know its legal story until I was doing some research recently on New York’s Rule Against Perpetuities contained in EPTL § 9-1.1(b).

Simply stated, the Rule Against Perpetuities (RAP) works this way: “No interest is good unless it must vest, if at all, no later than twenty-one years after some life in being at the creation of the interest” (John Chipman Gray, The Rule Against Perpetutities § 201 at 191 [4th ed. 1942]).

At one time, Symphony Space’s theater and commercial space was owned by Broadwest Realty Corporation.  Broadwest also owned Pomander Walk and a commercial building, the Healy Building, named after nightclub impresario Thomas J. Healy who had built Pomander Walk in 1921.  Pomander Walk was granted landmark status by New York City in 1982.

In 1978, the New York real estate market was experiencing a severe downturn.  Broadwest needed to sell its properties, but was looking for a way to postpone a final sale of it properties until the market conditions were more favorable.   Broadwest set about looking for a short-term solution to its economic problems by looking for a buyer for its theater and commercial space.

Symphony Space, Inc, a non-profit arts organization, became the perfect candidate for two reasons.  First, the organization had an immediate need for the theater space.  Secondly, and equally important for Broadwest, Symphony Space’s non-profit status meant that the entire building — the theater and the commercial space — would benefit from a property tax exemption. 

So in 1978 Symphony Space purchased the building housing the theater and the commercial space from Broadwest for $10,010.  The deal included the following parts.  Broadwest would continue to pay the $243,000 mortgage on the property.  Symphony Space, Inc. would lease back the commercial space to Broadwest for $1 per year.  Because of Symphony Space’s non-profit status, its use of the theater would grant a property tax exemption for the entire building, including the commercial space.  Finally, as a condition of the sale, Symphony Space granted Broadwest the option to repurchase the building in exchange for $10 consideration.

The option to repurchase the building granted to Broadwest by Symphony Space was a covenant running with the land, meaning that the option could be exercised by Broadwest and its heirs, successors and assigns.  The contract specified four exercise periods for the option:  “$15,000 if (…) on or before December 31, 1987; $20,000 if on or before December 31, 1993; $24,000 if on or before December 31, 1998; and $28,000 if on or before December 31, 2003.”  Symphony Space, Inc. v. Pergola Properties, Inc., 669 N.E.2d 799, 801 (N.Y. 1996).

In 1981, Broadwest sold all of its interests, including the option to repurchase, to a nominee who then transferred to rights to Pergola Properties, Inc., Bradford N. Swett, Casandium Limited, and Darenth Consultants as tenants in common.  A year later, Pomander Walk received landmark status, thereby increasing the value of the entire block front to $27 million, assuming that the option to repurchase from Symphony Space was enforceable.  Without the enforceable option, the appraised value decreased to $5.5 million.  It thus became in the new owners’ best interest to exercise the repurchase option.

Alleging that Symphony Space had defaulted on the mortgage, Swett served Symphony Space with notice in January 1985 that Swett was exercising the option to repurchase on behalf of all the defendants.  Symphony Space countered that the option agreement might be invalid and in March of 1985 Symphony Space began an action for a declaratory judgment against the defendants.  At issue was whether the option agreement violated New York’s Rule Against Perpetuities.

In the case of the Broadwest repurchase option, it was created in 1978.  If RAP was applicable to option agreements, then the latest year during which the option could have been exercised would have been 1999.  Accordingly, if RAP applied, then only three exercise periods were legitimate.  The fourth option exercise period, on or before 31 December 2003,  was outside of the statutory period for RAP.  If RAP were applicable to commercial options, then the entire repurchase option with Symphony Space was invalid and unenforceable by the defendants.  Without a valid option, the value of their properties would decrease by around $21 million.

For the next eleven years, the case wound its way through the courts.  The trial court  ruled that RAP applied to commercial options, that the repurchase option in question violated RAP, and that Symphony Space was entitled to redeem the mortgage.  The defendants appealed and the Appellate Division certified the question to  the Court of Appeals, New York’s highest court.  At issue was the novel question of whether options to purchase commercial property are exempt from RAP.

Citing Buffalo Seminary v. McCarthy (86 AD2d 435, affd 58 NY2d 867), the court ruled that RAP did indeed apply to commercial real estate options and that the New York State Legislature had intended for the prohibition against remote vesting to apply to commercial purchase options.  The reason for the legislature’s prohibition against remote vesting was to encourage land use and development.

Moreover, the court cited the following defects with the purchase option.  First, the option involved the entire building, the theater and the commercial space, even though the defendants were leasing only the commercial space.  This created a disincentive for Symphony Space to invest in maintaining the property since the option holder would reap the benefit of its investments.  Secondly, the option was not drafted as part of the lease itself, but as a separate agreement.  The purchase option exceeded the term of the lease, meaning that under the terms of the option the defendants could force Symphony Space to sell them the property even though they were no longer tenants of the commercial space.

Nor could the “saving statute” (EPTL 9-1.3), a rule of construction meant to avoid frustrating the creator’s intention “unless a contrary intention appears,”  be invoked in this case.  Here the plain language of the option rendered it unambiguous and thus not subject to a rule of construction.

In practical terms, a drafting error in the original repurchase option had neglected to take into account RAP.  During the time of their purchase from Broadwest, the defendants could have caught the error with a thorough legal review of the original documents.  These two failings combined had ultimately cost the defendants over $21 million.

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.

The Basquiat Estate: Trumping The Dead Man’s Statute with The Federal Rules of Evidence?

Jean-Michel Basquiat was one of the most gifted artists of the late 20th century, raising graffiti art from its street roots to the pinnacle of fine art and in the process redefining Neo-Expressionism.  His untimely death from a drug overdose in 1988 stunned the art world.  He was 27 years old.  According to Phoebe Hoban in her book Basquiat:  A Quick Killing in Art, the auction house Christie’s determined that the artist had left behind a prodigious collection of  917 drawings, 25 sketchbooks, 85 prints, and 171 paintings.

Basquiat died without a Will (intestate).  At the time of his death, his parents Gerard and Matilde were estranged, but not divorced.  New York’s EPTL § 4-1.1 (a) (4) states that, where a person dies without a Will and is survived by one or both parents, the whole of the estate goes to the surviving parent or parents.  Gerard Basquiat began the long process of probating the estate, a process slowed by a number of lawsuits against the estate.  Matilde Basquiat died in November of 2008, leaving Gerard as the sole administrator of their son’s valuable collection.

In 1993, an art dealer named Michelle Rosenfeld sued the Basquiat Estate for allegedly failing to deliver three paintings that had been purchased from Jean-Michel pursuant to a partly written and partly oral purchase agreement.   At trial, defense counsel for the Basquiat Estate affirmatively waived his objection based on New York’s Dead Man’s Statute (CPLR  § 4519) to Michelle Rosenfeld’s testimony concerning her conversations with the deceased Basquiat.  This affirmative waiver came after the judge in the case said that he would instruct the jury about the Dead Man’s Statute if Basquiat chose to invoke it.    Rosenfeld proceeded to testify about her conversations with Basquiat. 

Rosenfeld testified that she had met Jean-Michel Basquiat at his apartment on 25 October 1982.  She said that during their meeting, Jean-Michel had agreed to sell her three paintings, identified in her complaint, for $4,000 each.  Jean-Michel then asked her for a 10% deposit.  Rosenfeld returned ten days later with $1,000 in cash whereupon she asked for a receipt.  According to Rosenfeld, Jean-Michel then set upon writing a “contract” in crayon that identified the three paintings and recited the agreed-upon price and the deposit.  The dated document was signed by both Basquiat and Rosenfeld (Rosenfeld v. Basquiat, 78 F.3d 84).

That trial ended in a hung jury. Rosenfeld filed for a new trial in the United States District Court for the Southern District of New York.  In a pretrial conference, the parties were asked to brief the court regarding the threshold question as to the applicability of the Dead Man’s Statute (Rosenfeld v. Basquiat, 866 F. Supp. 790; 1994 U.S. Dist. LEXIS 15662).  The court had to decide three preliminary questions:

“1. Does Basquiat’s waiver of his objection based on CPLR 4519 at the first trial, allow Rosenfeld to testify about her transactions with the decedent at the retrial?

2. Is Rosenfeld entitled to a jury instruction concerning the effect of CPLR 4519, if I exclude her live testimony?

3. Is Rosenfeld’s prior trial testimony admissible in evidence at the retrial?” Id. at 792.

The district court judge reasoned that the Federal Rules of Evidence (FRE) and specifically FRE 804(b)(1) governed hearsay, and not the Dead Man’s Statute. FRE 804(b)(1) “provides that a declarant is ‘unavailable’ if ‘exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant’s statement.'”  Id. at 793.  As a result, the judge ruled that if Basquiat asserted the Dead Man’s Statute, which the judge termed a “privilege” (FRE 804(a)(1)),  then Rosenfeld would become “unavailable” within the meaning of FRE 804(b)(1).  The judge would then admit Rosenfeld’s prior testimony, and so instruct the jury.

At the second trial, the trial court allowed the reading of Rosenfeld’s prior testimony from the first trial to the jury.  The jury found in Rosenfeld’s favor:  “The jury in the second trial reached a verdict in favor of Rosenfeld, returning answers to special interrogatories as follows: Basquiat entered into a written agreement in October 1982 to sell the three paintings to Rosenfeld for $12,000; although there was no initial agreement establishing a delivery date, they made a separate oral agreement approximately ten days later setting the delivery date; a reasonable delivery date was October 1987; Rosenfeld first learned of the breach in August 1988, when Jean-Michel Basquiat died; and the market price of the three works at that time was $395,000.” (Rosenfeld v. Basquiat, 78 F.3d 84).  The jury awarded Rosenfeld $384,000, the market value of the paintings minus the remainder of the purchase price, plus $217,301.92 in interest.  The Basquiat Estate appealed to the Second Circuit Court of Appeals.

The Second Circuit Court of Appeals distinguished the hearsay exceptions under the Federal Rules of Evidence from the Dead Man’s Statute.  The court said that the hearsay rule (Rule 802) is a rule of exclusion that makes certain out-of-court statements inadmissible as evidence.  FRE 804 lists several exceptions to the exclusionary rule for when a witness is “unavailable” to testify.  FRE 804 (a) defines “unavailability,” one instance of which is that the declarant “is exempted by ruling of the court on the ground of privilege from testifying concerning the subject matter of the declarant’s statement.” The District Court had ruled that New York’s Dead Man’s Statute was such a privilege, thus making Rosenfeld “unavailable” and her prior testimony admissible if the Basquiat Estate asserted the Dead Man’s Statute.

But the Second Circuit declined to follow the District Court in its definition of the Dead Man’s Statute as a “privilege” under the FRE.  Instead the Second Circuit defined the Dead Man’s Statute as a statute regarding witness competency.  But the court went on the say that even if Rosenfeld’s prior testimony could have been brought in under an exception to the hearsay rule of the FRE, that testimony would still have been barred by the Dead Man’s Statute.  The Federal Rules of Evidence are not independent of state statutes  While FRE 804(b)(1) does not bar the admission of prior testimony of a witness who is now “unavailable,” it does not resolve the threshold issue of whether that testimony is admissible in the first place.  New York’s Dead Man’s Statute made Rosenfeld legally incompetent as a witness.  Therefore, the FRE was irrelevant in this case.  Absent a compelling federal interest, federal courts may not ignore state statutes in their rulings unless the statute is unconstitutional.  The judgment of the district court was reversed a new trial was ordered.

If you would like to discuss your own personal situation with me, review your current legal life plan, or put together a legal life plan that is tailored for your needs, you can get a free 30-minute consultation simply by filling out this contact form. I will get back to you promptly.

I invite you to join my list of subscribers to this blog by clicking on “Sign me Up” on the left-hand side of the page or the “Subscribe” button at the top of the page so that you can receive a notification when the next blog post has been published.   Thank you.