Ha! I'm a little late. But I'll post this anyway, and then look at the papers.
Tiredretiredlawyer wrote: ↑Wed Apr 17, 2024 10:24 am
Thank you, chancery, for slogging through the “statutory spaghetti” that is Turnip’s sordid attempts to get an appeal bond!
Just to be clear, I only sniffed at the spaghetti; I was too lazy to slog through it.
Here are my thoughts as we wait for the NYAG's papers.
1. The fact that Knight Specialty lacks a certificate of qualification to write indemnity bonds in NYS is no longer an issue. Lack of the certificate means that Knight Specialty's bond is not entitled to automatic approval without a hearing, but now that it has moved to "justify" the bond (the archaic term used in CPLR §§ 2506-07 to mean court approval), Judge Engoron has full discretion to approve or not approve the bond based on the facts and arguments in the record, as I've said all along. Initially I thought that Trump needed to move under CPLR § 5519(a) for a discretionary approval, but on reflection Judge Engoron probably has the same power in a motion under CPLR §§ 2506-07.
2. But Dave Kingman, Esq. told us that indemnity written by a non-admitted out-of-state excess/surplus lines carrier isn't a thing?
I've got no reason to doubt him, and the fact that former Superintendent Serio didn't provide any examples confirms it. But I suspect the reason he's never seen such a thing is due to market forces. Excess/surplus lines insurance is expensive (unless you have a shady pal in the business), because it's specialty insurance, for unusual risks that are hard to assess, and thus comes with a hefty price.
Why would a litigant pay an upcharge for a bond from specialty carrier, which will factor in the cost of hiring counsel and experts to defend the bond, when he can get a cheaper deal from the Elmer Hyde agency, which pretty much wrote the book on NYS surety bonds?
3. What about the fact that the undertaking doesn't contain language that clearly obligates Knight Specialty to pay?
The language is probably good enough. I have anecdotal experience here. I've only ever seen two or three appeal bonds, and the first time I was puzzled, precisely because it didn't seem to work. After reading it several times I noticed a short enigmatic phrase. I concluded that while it could be interpreted to express an obligation to pay, I wouldn't want to bet that a court would necessarily construe it that way. When I mentioned this to an experienced lawyer, he told me not to worry: that was the language used in the tight little world of surety insurance, and since it was an Elmer Hyde bond, it was by definition written correctly.
Dave Kingman, Esq. says as much:
https://twitter.com/DaveKingman8/status ... 6639334510
Dave Kingman, Esq.
@DaveKingman8
Yes. But the bond says that it is provided pursuant to CPLR 5519, which should be enough for a court to construe it as a promise that the surety will pay if Trump doesn't. The language of surety bonds is arcane and they sometimes don't say expressly that the surety will pay.
By "yes" I mean that it's true that the bond doesn't say that the surety will pay with clear language. But I don't believe the bond is a "sham" because it says that it's being provided pursuant to the statute. Any court would enforce this bond against Knight.
4. What about the fact that Trump Jr.'s signature page indicates that the agreement is with a Chubb subsidiary, so that, on its face, there is no collateral security agreement with Knight Specialty?
It's _really weird_, and sloppy, that Trump's lawyers haven't fixed that. Not a good look. But it's probably fixable, and so won't matter.
5. What about the financial statements, the sleazy Cayman Islands incorporation, whether Knight Specialty & the parent can be sued in NYS, the sketchy intra-corporate reinsurance, and the two-days notice to take control of the collateral, etc.?
That's what the the dispute will be about, and I don't know enough to express an opinion. It will be interesting to see what the NYAG says. Remember, it's not about "counting coup" based on stupid things in Trump's papers; it's the practical question of whether the undertaking is sufficient under the imperfect circumstances presented.