     15-3249-cv
     Gevorkyan v. Judelson




 1                                    In the
 2               United States Court of Appeals
 3                           For the Second Circuit
 4                                   ________
 5
 6                              August Term, 2016
 7
 8                                No. 15-3249-cv
 9
10                    KARINE GEVORKYAN, ARTHUR BOGORAZ,
11                    INNA MOLDAVER, AND SAM MOLDAVER,
12                             Plaintiffs-Appellants,
13
14                                       v.
15
16                                 IRA JUDELSON,
17                               Defendant-Appellee.
18                                    ________
19
20                Appeal from the United States District Court
21                   for the Southern District of New York.
22            No. 13-cv-08383 (RMB) ¯ Richard M. Berman, Judge.
23                                   ________
24
25                          Argued: September 14, 2016
26                    Question Certified: November 14, 2016
27                  Certified Question Answered: June 27, 2017
28                             Decided: July 28, 2017
29                                   ________
30
31           Before: JACOBS, PARKER, and LIVINGSTON, Circuit Judges.
32                                 ________
33
 1          We certified to the New York Court of Appeals the question of
 2   whether New York law permits a bail bondsman to retain a
 3   premium where the bail was rejected pursuant to NYCPL § 520.30
 4   and the defendant was never admitted to bail. The Court of Appeals
 5   answered in the negative, ruling that New York Insurance Law
 6   “prohibits a bail bond surety from retaining a premium when the
 7   criminal defendant is not released on bail.” That conclusion being
 8   determinative of this appeal, we REVERSE the judgment of the
 9   district court and REMAND the case with instructions to enter
10   judgment in favor of appellants.
11
12
13                                       ________
14                           ANDREW LAVOOTT BLUESTONE, New York, NY, for
15                           Plaintiffs-Appellants Karine Gevorkyan, Arthur
16                           Bogoraz, Inna Moldaver, Sam Moldaver.

17                           KYLE B. WATTERS, Kyle B. Watters, PC, Bayside,
18                           NY, for Defendant-Appellee Ira Judelson.*
19                                      ________




     *
     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         On November 14, 2016, we certified the following question to
 3   the New York Court of Appeals.
 4
 5               Whether an entity engaged in the “bail business,”
 6               as defined in [New York Insurance Law (“NYIL”)]
 7               § 6801(a)(1), may retain its “premium or
 8               compensation,” as described in NYIL § 6804(a),
 9               where a bond posted pursuant to NYCPL § 520.20
10               is denied at a bail-sufficiency hearing conducted
11               pursuant to NYCPL § 520.30, and the criminal
12               defendant that is the subject of the bond is never
13               admitted to bail.
14
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.
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).               The Court concluded that New York
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.
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.     See Village Taxi Corp. v. Beltre, 91
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.




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