New York Law Review

Tag: 1988

  • Edward J. Dillon M.D. v. State of New York, 71 N.Y.2d 556 (1988): State Liability Under Unapproved Contracts

    Edward J. Dillon M.D. v. State of New York, 71 N.Y.2d 556 (1988)

    A party contracting with the State is presumed to know the statutes regulating its contracting powers, and the State’s acceptance of benefits under an unauthorized contract does not create liability.

    Summary

    Dr. Dillon, a pathology professor at Downstate College of Medicine, sought additional compensation for services in the kidney transplant program beyond his state salary and supplemental payments. A draft agreement for $145,000 annually was never executed or approved by the State Comptroller. Downstate received Medicare benefits for these services and partially compensated Dillon, who deemed it insufficient and sued the state. The Court of Appeals held that because the contract was not approved by the State Comptroller as required by State Finance Law § 112, Dillon could not recover the additional compensation, even under an implied contract theory. This case highlights the strict requirements for contracting with the state and the limitations on recovering payments without proper authorization.

    Facts

    Dr. Dillon, a professor at Downstate College of Medicine, provided pathology services in the college’s kidney transplant program for end-stage renal disease (ESRD) patients from April 1981 to March 1983.
    A draft agreement proposed paying Dillon $145,000 per year for these services, but it was never executed by Downstate or approved by the State Comptroller.
    Downstate received Medicare funds for ESRD patient care and paid Dillon a portion, which he rejected as inadequate.

    Procedural History

    Dillon sued the State in the Court of Claims, seeking additional compensation.
    The State moved to dismiss, arguing the lack of Comptroller approval under State Finance Law § 112.
    The Court of Claims granted the motion.
    The Appellate Division modified the order, reinstating the causes of action for money had and received.
    The Court of Appeals reversed the Appellate Division’s order and dismissed the claim.

    Issue(s)

    Whether the State is liable to Dr. Dillon for additional compensation for services rendered under a contract that was neither executed by the State nor approved by the State Comptroller, based on a theory of money had and received (implied contract).

    Holding

    No, because the Medicare statute does not give claimant any legal claim to funds paid to Downstate for his services and Dillon’s contract was never approved by the State Comptroller as required by law. Dillon cannot maintain an action against the state.

    Court’s Reasoning

    The Court distinguished between contracts implied in fact (based on conduct) and contracts implied in law (quasi-contracts). The court stated that a contract implied in fact is subject to the requirements of section 112 of the State Finance Law.
    The court noted, “Although the action is recognized as an action in implied contract, the name is something of a misnomer because it is not an action founded on contract at all; it is an obligation which the law creates in the absence of agreement when one party possesses money that in equity and good conscience he ought not to retain and that belongs to another.”
    The court explained that the Medicare statute governs the relationship between the Secretary of Health and Human Services and providers of medical services, not individual physicians. “In short, the State has not received nor is it holding sums of money to which claimant is entitled any more than any of the several physicians or therapists are entitled to the itemized sums listed on the hospital’s bill for various services they supplied to in-patients and which, in the aggregate, constituted the hospital’s total charge.”
    Because the contract was not approved by the State Comptroller, as required for contracts exceeding $5,000, it was not enforceable against the State. The court emphasized that parties contracting with the State are presumed to know the limitations on the State’s contracting power: “A party contracting with the State is chargeable with knowledge of the statutes which regulate its contracting powers and is bound by them (Belmar Contr. Co. v State of New York, 233 NY 189,194).”
    Even if the State benefitted from Dillon’s services, this did not estop it from challenging the contract’s validity. The court referenced the established principle that the State’s acceptance of benefits does not imply liability when a contract lacks proper authorization, citing Becker & Assoc. v State of New York, 48 NY2d 867.

  • Bard v. Bard, 73 N.Y.2d 813 (1988): Appellate Courts Cannot Grant Relief on Untried Theories

    Bard v. Bard, 73 N.Y.2d 813 (1988)

    An appellate court cannot grant relief to a party based on a new legal theory that was not presented at the trial court level, thereby denying the opposing party the opportunity to present evidence and defenses against that theory.

    Summary

    In a dispute arising from divorce proceedings, a husband sued his wife seeking a constructive trust over properties held in her name. The trial court dismissed the claim. While the appellate court agreed a constructive trust was not warranted, it granted the husband an equitable lien. The New York Court of Appeals reversed, holding that the appellate court erred by awarding relief on a theory (equitable lien) not raised at trial. The wife was prejudiced because she had no opportunity to present evidence or defenses, such as a statute of limitations defense, against this new theory.

    Facts

    The husband initiated an action against the wife seeking to impose a constructive trust on three parcels of land, the title to which was held solely by the wife. He requested that the properties be conveyed to him or, alternatively, sought monetary damages. This action was associated with, but separate from, two pending divorce actions between the parties.

    Procedural History

    The trial court, after a non-jury trial, found insufficient evidence to establish a constructive trust and dismissed the husband’s complaint. The Appellate Division agreed that the husband failed to prove a constructive trust. However, the Appellate Division determined that the husband was entitled to an equitable lien to the extent of 50% of the value of each of the three parcels. The wife appealed to the New York Court of Appeals.

    Issue(s)

    1. Whether an appellate court can grant relief based on a legal theory (equitable lien) that was not pleaded or raised in the trial court.
    2. Whether the husband, who did not appeal the Appellate Division’s decision, can argue before the Court of Appeals that the evidence supports the imposition of a constructive trust.

    Holding

    1. No, because granting relief on a new theory at the appellate level denies the opposing party the opportunity to present evidence and defenses against that theory.
    2. No, because a party who does not appeal cannot obtain affirmative relief in the Court of Appeals.

    Court’s Reasoning

    The Court of Appeals held that the Appellate Division erred in granting the husband an equitable lien because this theory was not presented in the trial court. The wife had no opportunity to seek discovery, introduce evidence to rebut the claim, or raise defenses, such as the statute of limitations. The court noted that the wife plausibly asserted that she would have pleaded the six-year statute of limitations (CPLR 213, subd. 1) as a bar to the equitable lien claim had it been raised earlier. The court emphasized that appellate courts cannot use their equitable powers to grant relief on a new theory first introduced on appeal, especially when it prejudices the opposing party. Regarding the husband’s argument for a constructive trust, the court stated that because he did not appeal the Appellate Division’s decision, he could only present arguments to sustain the relief he received, not to obtain additional affirmative relief. The Court also pointed out that the affirmed finding that the wife did not promise to reconvey the property negated any right to a constructive trust, thus failing to support the Appellate Division’s disposition.

  • People v. Grega, 72 N.Y.2d 489 (1988): Amending Indictments and Material Elements of Robbery

    People v. Grega, 72 N.Y.2d 489 (1988)

    A trial court does not constructively amend an indictment in violation of a defendant’s rights when the jury is instructed that they can find the defendant guilty even if the stolen property differs from what was specified in the indictment, provided the nature of the property is not a material element of the crime.

    Summary

    The defendant was indicted for first-degree robbery, accused of stealing jewelry and money. At trial, he testified he stole cocaine instead. The trial court instructed the jury they could convict even if the stolen items were drugs. The New York Court of Appeals held that this instruction did not constructively amend the indictment because the specific type of property stolen isn’t a material element of robbery under New York law, as long as ‘property’ was indeed stolen. The court emphasized that the discrepancy arose from the defendant’s own testimony.

    Facts

    Shaniqua Montgomery reported that the defendant stole jewelry and money from her apartment on October 18, 1979, while displaying what appeared to be a firearm. At trial, Montgomery testified the defendant took two watches, gold chains, and $70. The defendant testified he was seeking heroin from Montgomery and forcibly took cocaine from her purse instead, denying the theft of money or jewelry.

    Procedural History

    The Bronx County Grand Jury indicted the defendant for first-degree robbery. At trial, the court instructed the jury that they could find the defendant guilty even if they found he had stolen drugs rather than “money or jewelry.” The jury acquitted the defendant of first-degree robbery but convicted him of third-degree robbery. The Appellate Division affirmed the conviction, and the defendant appealed to the New York Court of Appeals.

    Issue(s)

    Whether the trial court constructively amended the indictment by instructing the jury that they could find the defendant guilty of robbery even if they found that he had stolen drugs rather than “money or jewelry” as specified in the indictment, thereby violating the defendant’s right to indictment by a grand jury under the New York State Constitution.

    Holding

    No, because the particular nature of the property stolen is not a material element of the crime of robbery under New York law, and the discrepancy between the indictment and the proof at trial was caused by the defendant’s own testimony.

    Court’s Reasoning

    The Court of Appeals reasoned that the indictment adequately informed the defendant of the charges against him, satisfying due process and fair notice requirements. The indictment specified the date, victim, and the use of a weapon in forcibly stealing property. The court emphasized that under CPL 200.70, subd 1, amendments to indictments are permissible for matters of form, time, place, and names, provided they do not change the prosecution’s theory or prejudice the defendant. Robbery, as defined in Penal Law Article 160, merely requires the forcible stealing of “property,” broadly defined in Penal Law § 155.00(1). The court noted that the defendant’s own testimony created the discrepancy between the indictment and the evidence presented at trial. The court stated, “Most importantly, it must be remembered that, unlike the cases relied upon by the defendant (e.g., Stirone v United States, 361 US 212; People v Geyer, 196 NY 364), any discrepancy between the indictment and the proof at trial was caused by the defendant voluntarily taking the stand in his own behalf and admitting that he committed a different version of the robbery than was alleged in the indictment.” The court concluded that the charge to the jury provided no basis for overturning the conviction of third-degree robbery.