RUTHFULLY YOURS

It’s another small victory for the terror victims over the Palestinian Authority (“PA”). Last week, New York Supreme Court’s Appellate Division handed down a groundbreaking decision, ruling that an enforcement proceeding concerning the ownership of over $100 million in frozen Palestinian assets will be heard by a jury and not at a bench trial. The problem confronting the court was that there has never been a case quite like this one. To reach its decision the court had to delve back 200 years, citing early foundational cases from as far back as 1814.

This procedural victory for the plaintiffs means that a jury of regular New Yorkers will decide if an investment portfolio controlled by Yasser Arafat and his cronies belongs to an alleged Palestinian “Pension Fund” or was merely a fraudulently labeled bank account being utilized by the late Terrorist-in-Chief as a private slush fund. Judge for yourself; here’s the signature card for the account that contains the funds: 

In 2005, the family of Yaron Ungar, an American citizen who was murdered by terrorists near Beit Shemesh, sought to enforce a $116 million court judgment against the PA awarded to them by the federal court in Rhodes Island. After the Ungars’ lawyers located assets in New York, they moved to restrain a stock portfolio being managed by the Swiss American Securities Inc. (“SASI”). The name on the account at the time it was frozen was the “Palestinian Pension Fund for the State Administrative Employees.” The plaintiffs contend, however, that the frozen account was never a pension fund, that there never were any workers who paid into it, nor any retirees who ever received any benefits from it. Instead, it contained nothing more than funds that Israel was required to transfer to the PA under the Oslo Accords. Thus, it was simply a PA-owned asset and the Ungar Family should be allowed to enforce its judgment against it. The plaintiffs submitted an affidavit by the first manager of the disputed funds who clearly stated that the funds had never been part of any Pension Fund. The Ungars are asking the court to declare that the funds are a PA asset and do not belong to an actual pension fund.

As the case advanced towards trial a dispute arose over whether the plaintiffs were entitled to have the matter of the ownership of the SASI accounts heard by a jury. The attorneys for the so-called “Pension Fund” argued that the case should be heard solely by a judge. However, the civil procedure law in New York provides that a party is entitled to a jury trial if it was the sort of case that would have been heard by a jury under common law at the time the New York State Constitution was enacted in 1894.

Interestingly, the action for declaratory judgment, as the Ungars have filed here, was unknown in 1894. However, New York courts have held that the right to trial by jury should also extend to cases that are analogous to those which were traditionally tried by jury. So, the question posed was whether an action for declaratory judgment is analogous to another type of suit that existed in 1894 which would require a jury trial in New York?

Last  week, the Appellate Division ruled that it was, writing as follows:

“The plaintiffs assert that the gravamen of their complaint is that the Gaza Fund is a fictitious name used by the judgment debtor PA to shield PA assets…. Thus, the plaintiffs argue that the motion court held correctly that the action is substantively analogous to an action at law for tortious interference with the enforcement of a judgment. We agree. The plaintiffs further assert correctly that a cause of action for unlawful interference with enforcement of a judgment has long been recognized in New York, and that it was always an action triable by a jury.”

Accordingly, a New York jury will now get a rare opportunity to delve into the secret finances of the Palestinian Authority and see for themselves the fraud Arafat and his associates were perpetrating using fictitiously labeled accounts to launder and hide funds.

For a Copy of the Decision:
http://www.nycourts.gov/reporter/3dseries/2010/2010_02673.htm <http://www.nycourts.gov/reporter/3dseries/2010/2010_02673.htm>
_________________________
Nitsana Darshan-Leitner, Esq.
10 Hata’as St. Ramat Gan, 52512 Israel
Tel: 972-3-7514175
Fax: 972-3-7514174
nleitner@zahav.net.il