NY appellate ct: trial court erred in imputing income for appointed counsel decision

03/23/2018, Litigation, All Basic Human Needs

One of the hidden issues in right to counsel involves the sometimes-questionable methods used by trial courts to determine if a person is “indigent” for purposes of appointing counsel.  A most extraordinary case has been going on for several years in NY as to whether a particular parent in a child custody civil contempt case was “indigent”, where the trial judge went to great lengths to find the parent not indigent by imputing income.  Last week, an appellate court in NY reversed the trial court’s decision on the law.  Here's the summary of the case


Trial judge begins exploration of whether defendant is indigent


In Carney v. Carney, a defendant parent in a NY custody-related civil contempt proceeding sought appointed counsel, as was his right under a NY statute.  It was uncontested that the parent had no income (he was an unemployed graduate student who lived with his parents) and virtually no assets, but the trial judge decided to consider whether to impute income to the parent in determining his “indigence”.  The Public Defender office had already determined the parent was entitled to counsel, but the judge relied on what it had heard about the party’s “professional credentials and job skills.”  The judge conceded that "there are constitutional and statutory rights, held by the father, that easily justify appointment of counsel”, but added that "while those rights are fundamental, they are conditioned upon a finding of an inability to pay private counsel.”  


The PD’s office argued that the judge ought only take into account the parent's current assets and income, but the judge disagreed.  It also stated that by leaving the screening to the PD office’s informal process, the parent "will have an enormous temptation to disclose less than the truth, the whole truth, and nothing but the truth, in his application if he knows that he will never be challenged on any representation therein”, and that the process set up by the Hurrell-Harring v. State of New York case (which was about appointment of counsel in the criminal context) would leave the judge unable to challenge the determination.  


Ultimately, the judge decided to hold a hearing on indigence.  The judge justified this approach by saying that in a civil proceeding, “there is no urgency”, and "The need to protect a defendant's rights from governmental interference, especially in the form of pretrial restrictions of his liberty, are not present.”  The judge appointed the PD to represent the parent for such hearing, and also appointed a private attorney "as special counsel to present the facts that favor an imputation of income to the applicant and which might result in either a denial or appointed counsel or a plan for reimbursement of the costs of counsel, as permitted under the County Law. Mr. Meyer will be paid under the voucher program at the state pay rate.”   The judge declined to apply the Hurrell-Harring burden of proof standard (which creates a presumption in favor of appointed counsel), but rather left it to the parent to demonstrate by a preponderance of evidence that he or she is entitled to counsel.  


Judge refuses PD’s request to recuse himself


The PD’s office asked the judge to recuse himself because the judge was acting on the judge’s prior contact with and knowledge of the litigant.  The judge noted that the PD’s office wasn’t contesting any of the judge’s conclusions about the litigant, but rather argued that the judge’s prior knowledge cast doubt on his impartiality.  The judge then held that since his knowledge of the litigant was fair game because it wasn’t developed extrajudicially, that "New York courts have permitted trial judges to take an active role in facilitating the truth-seeking process”, and that the judge had protected the litigant’s rights by a) holding a hearing on indigence rather than simply denying the appointment of counsel based on non-indigence; and b) appointing counsel for that special hearing.  The judge concluded:


This court acknowledges that the Public Defender's motion raises a difficult question. The Public Defender suggests that the rationale advanced by this court in ordering a hearing was that the court did not believe the applicant and therefore was impinging on his right to counsel solely on the basis of the court's prior determination that he lacked veracity. This court understands the Public Defender's concern. An applicant's prior behavior, no matter the degree of its culpability or extent of its harm, should not impact whether counsel is appointed. Put succinctly, could this court deny the appointment of counsel simply because it concluded that the applicant was being untruthful during the hearing on his application? The answer, in order to fulfill the command of the court-appointed attorney statutes, has to be yes. The Legislature has told this court to conduct that inquiry and make an evaluation; credibility can be - and should be - part of that analysis.  The Public Defender also claims that bias is demonstrated in the court's implementation of a "one-of-a-kind" proceeding and suggests that this court is handling this matter different from other cases. This argument is partly correct on both counts. The hearing required by this court is a "first-of-its-kind" hearing, for which the court could find no precedent, even though, as documented in the earlier opinion, other New York courts have grappled with the question. In addition, the court acknowledges that this case is different from others that have involved the appointment of counsel. One fact - undisputed and gathered solely from proceedings before the court - justifies the distinction. In this case, this court knows that the applicant is highly skilled and talented - facts never challenged by his counsel. Whether this court holds that as a result of those apparently untapped talents the applicant could earn substantial sums and hence be ineligible for appointment of counsel is the issue to be resolved at a hearing. Whether such a detailed inquiry has been undertaken before by an inquiring court in this state under state law is not evidence of bias on the part of this court. In fact, under the federal system, trial courts are required to conduct an "appropriate inquiry" into a defendant's financial eligibility before appointing counsel. United States v. Parker, 439 F3d 81, 93 (2nd Cir. 2006). When requesting the appointment of counsel under the federal system, the burden is on the defendant to show that he is unable to afford representation. United States v. Barton, 712 F3d 111, 117 (2nd Cir. 2013); United States v. O'Neil,118 F3d 65, 74 (2nd Cir. 1997). In these federal cases, there is no suggestion that holding a hearing on eligibility and requiring the applicant to prove his entitlement to an appointment of counsel in any way violates the applicant's constitutional rights or is evidence of a judicial bias against the applicant. In this court's view, the requirement for a hearing, the assignment of the burden of proof and the right for an advocate to cross-examine the applicant are necessary in order for this court - or any court - to fulfill its command from the state Legislature that counsel should only be appointed when the applicant is "financially unable to retain the same."


Judge decides to impute $50,000 in income


After the hearing, the judge held that Mr. Carney wasn't indigent based on imputation of $50,000 in income due to under-employment.  The judge conceded that the parent had been granted appointed counsel by the Appellate Division but questioned the Appellate’s Division’s screening methods, which the judge investigated itself:


[T]he Public Defender confirmed that the respondent had been appointed counsel for an appeal before the Appellate Division Fourth Department. There was an extensive discussion about the relevance of such an inquiry, and the court noted that it was not familiar with the criteria used by the Appellate Division in determining an application for indigent status and representation on appeal. The Public Defender argued that the procedure and approval of the Appellate Division Fourth Department regarding the respondent's poor person status should be an important factor for the court to consider. However, despite ample opportunity to do so, the respondent did not introduce any evidence of his application to the Appellate Division Fourth Department. There is no suggestion that any of the representations made by this respondent to the Appellate Division were checked or approved for accuracy or their truthfulness. The respondent testified that he had gone to the Appellate Division Law Library and obtained an application. He testified that he had provided information on current bank accounts, current employment, and a list of possessions as part of his application. The respondent's application was never offered for admission (respondent's counsel stated that "we don't have a copy of that"). The respondent never offered the order of the Appellate Division approving his application. The respondent's counsel seems to infer that the mere statement - "the Appellate Division has granted his application" - somehow meets the applicant's burden of proof before this court. This in-court unsworn statement made by the Public Defender about a fact relating to the respondent's application before another court, while entitled to a certain collegial respect, hardly meets the respondent's burden of proof.


In the absence of any evidence of the Appellate Division's approval process, this court went to the Appellate Division website - publicly available - and downloaded the application for appointment of counsel. The application requires a sworn statement of the applicant's financial status. The application demands reporting of an applicant's "GROSS monthly income" and a list of assets. Importantly, there is no requirement for documentation of income or assets - the applicant's statement alone is sufficient. It appears that there is no review of the applicant's statement and, based on the document, no indication that anyone at the Appellate Division inquires about the accuracy of the applicant's disclosures.


The judge also rejected the PD’s suggestion that it appoint counsel and seek recoupment after the fact if it turned out Mr. Conley actually had the assets, stating that "even the ILS and the courts have recognized that this ‘wimpy,’ 'after-the-horse-is-out-of-the-barn' approach yields little or no benefit to the state. Its apparent lack of use by the courts demonstrates its limited value to the public entities that front the cost of legal representation.”


Superior Court (Appellate Division) reverses on the law


The Superior Court (Appellate Division) reversed as a matter of law the trial court’s decision to impute income (see the attached opinion).  Some notable things in it:


  • As a threshold matter, the appellate court ruled that the Public Defender lacked standing to appeal because it was not an aggrieved party: "Here, [PD] Donaher has no direct interest in the controversy between plaintiff and defendant, and the fact that the court's determinations may contingently affect interests that Donaher and his office represent does not give him a right to appeal.”  Thus, only the parent denied counsel was permitted to appeal.

  •  The appellate court held that the defendant was clearly indigent and that "the [trial] court had no authority to deprive defendant of his constitutional and statutory right to counsel on the basis of imputed income.”  The key language:


We agree with defendant that a plain reading of the phrase "is financially unable to obtain" counsel (Family Ct Act § 262 [a]), which is written in the present tense, evinces that the requisite inquiry must relate to the person's present financial ability to pay for counsel. That interpretation is logically and legally cogent because the concern addressed in the relevant legislation is whether a party currently possesses the financial ability to obtain private counsel to represent him or her in the immediate, impending legal proceeding, not whether the party should have such an ability or may have such an ability in the future.


  • The appellate court pointed out that unlike in the context of calculating child support or spousal maintenance, there was no statutory support for imputing income in determining whether to appoint counsel, since the former contexts refer to determining if a person is "possessed of sufficient means or able to earn such means”, or “future earning capacity", whereas the appointment of counsel statute simply says “financially unable to retain counsel.”   The appellate court also held that the trial court’s approach was “unsound” as a matter of public policy:


Imputing income for purposes of calculating child support or spousal maintenance is justified on the basis that the obligation imposed upon the parent or former spouse is an ongoing responsibility over a period of time and may be paid over that period … Conversely, the evaluation of eligibility for assigned counsel requires a determination whether a party has presently available financial resources to pay an attorney to fulfill the immediate need for representation (see e.g. Family Ct Act § 262 [a]). Indeed, the legislature has specifically recognized that, in proceedings such as those in this case, "[c]ounsel is often indispensable to a practical realization of due process of law and may be helpful to the court in making reasoned determinations of fact and proper orders of disposition" (§ 261). A party cannot, however, fulfill the immediate need for representation by paying a private attorney with hypothetical, imputed income. 


  • The appellate court pointed out that the statute permitted appointed counsel to alert the court that his/her client could actually afford counsel, which satisfied any concern about potential misuse of funds (although, to me, it raises some possible conflict of interest issues).  And the appellate court dismissed the concept that it was unfair to require one parent to privately pay for counsel to file a petition to enforce prior court orders while giving appointed counsel to the other parent, stating that "a person facing potential jail time for willfully violating court orders has a significant stake in the proceedings, and the legislature has guaranteed an equal playing field between the parties by providing such a person with assigned counsel if he or she is financially unable to obtain private counsel.”