New York Law Review

Tag: 1998

  • H. Uribe, Inc. v. Merchants Bank of New York, 91 N.Y.2d 336 (1998): Defining ‘Valuable Papers’ in Safe Deposit Box Agreements

    H. Uribe, Inc. v. Merchants Bank of New York, 91 N.Y.2d 336 (1998)

    The term “valuable papers” in a safe deposit box rental agreement, when listed alongside specific items like “securities,” “jewelry,” and “precious metals,” does not unambiguously include cash or currency.

    Summary

    H. Uribe, Inc. sued Merchants Bank to recover for the alleged theft of approximately $2,000,000 in cash, gems, and other items from its safe-deposit box. The rental agreement allowed for the storage of “securities, jewelry, valuable papers, and precious metals only.” The issue was whether “valuable papers” could be interpreted to include currency. The Court of Appeals held that “valuable papers” is unambiguous and does not include legal tender, thus the bank was not liable for the missing cash. The court applied principles of contract interpretation, including ejusdem generis and inclusio unius est exclusio alterius, to reach its conclusion. The court reasoned that the term should be given a limited interpretation, further emphasized by the adverbs “solely” and “only.”

    Facts

    • Hernando Uribe leased a safe-deposit box from Merchants Bank in December 1990. The title was later transferred to his corporation, H. Uribe, Inc.
    • In November 1992, Uribe sold emeralds for cash and allegedly placed the proceeds ($555,000, including $170,270 that is the subject of this suit) in the safe-deposit box.
    • In December 1992, Uribe reported the cash, gems, and other property stolen from the box.
    • The safe-deposit box rental agreement stated that the safe was leased “solely for the purpose of keeping securities, jewelry, valuable papers, and precious metals only.”
    • The bank’s rules and regulations stated that the bank was not a bailee and was not liable for any loss unless caused by a “specific, clearly proven and willful act of Bank.”

    Procedural History

    • Uribe sued Merchants Bank to recover the missing cash.
    • The Supreme Court granted partial summary judgment to the bank, dismissing the claim for the missing currency.
    • The Appellate Division affirmed, holding that the agreement unambiguously excluded currency as an authorized item for deposit.
    • The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether the term “valuable papers” in the safe-deposit box rental agreement is ambiguous and can be interpreted to include currency or cash.

    Holding

    1. No, because the term “valuable papers” in this context is unambiguous and does not encompass legal tender.

    Court’s Reasoning

    The court reasoned that “valuable papers,” in usual parlance, is limited to legal or business documents. It cited dictionary definitions and other statutes that distinguish between “valuable papers” and “money.” The court applied the principle of ejusdem generis, stating that “valuable papers” should be interpreted narrowly because it is listed among other specific items like “jewelry,” “securities,” and “precious metals.” The court also invoked the maxim inclusio unius est exclusio alterius, arguing that the omission of “cash,” “currency,” or “legal tender” indicates an intentional exclusion. The court rejected Uribe’s argument that the custom of gem merchants to hold large sums of cash in safe-deposit boxes should apply, stating that the average merchant would deposit cash in accounts. The court emphasized that contracts should be enforced according to their plain and clear meaning and should not be subverted by straining to find an ambiguity that does not exist. The court noted that banks are authorized to rent safe deposit boxes upon such terms and conditions as may be prescribed. The court concluded that the term “valuable papers” should be given its usual, plain, and common meaning, and that the agreement excludes cash, currency, or legal tender.

  • Judge Rotenberg Educ. Ctr. v. Maul, 91 N.Y.2d 301 (1998): Voluntary Nature of Transitional Care Funding

    Judge Rotenberg Educ. Ctr. v. Maul, 91 N.Y.2d 301 (1998)

    A social services district’s participation in New York State’s transitional care funding program for disabled young adults is voluntary, and therefore the district is not prohibited from withdrawing from the program.

    Summary

    Judge Rotenberg Educational Center sued to compel New York City to continue funding the care of eight severely disabled young adults placed at the Center by the City when they were children. The City withdrew from the State’s transitional care funding program, arguing that participation was optional under Social Services Law § 466. The New York Court of Appeals held that the City’s participation in the transitional care funding program is voluntary, based on the plain language of the statute and legislative history. The court affirmed the lower courts’ dismissal of the petition, finding the City could withdraw without following administrative procedures applicable to individual placement changes.

    Facts

    The Judge Rotenberg Educational Center, located in Rhode Island, provides residential schooling for severely disabled children. New York City had placed eight disabled children at the Center. These children “aged out” of the educational programs at age 21. New York State law requires localities to contract with out-of-state facilities when in-state facilities are not available. A transitional care funding program was created in 1982 to provide funding for these individuals until appropriate in-state adult care placements became available. The City participated in this program, with the State reimbursing 50% of the costs. In October 1994, the City announced its withdrawal from the transitional care funding program, citing the State’s primary responsibility for specialized care for mentally disabled adults. The City and State entered a memorandum of understanding in January 1995, where the City agreed to provide $1.116 million for transitional care until funds ran out, with explicit recognition that participation was optional. The funds were exhausted on May 31, 1995, and the City ceased funding.

    Procedural History

    The Judge Rotenberg Educational Center commenced a CPLR article 78 proceeding in Supreme Court to compel the City to continue payments. The Supreme Court dismissed the petition. The Appellate Division affirmed. The Court of Appeals granted leave to appeal and affirmed the Appellate Division’s order.

    Issue(s)

    Whether Social Services Law § 466 prohibits New York City from withdrawing from the State’s transitional care funding program for severely disabled young adults.

    Holding

    No, because Social Services Law § 466 makes participation in the transitional care funding program voluntary for social services districts, thus districts are not prohibited from withdrawing from the program.

    Court’s Reasoning

    The Court based its reasoning on the plain language of Social Services Law § 466 (2), which states that social services districts “may expend funds to provide transitional care.” The Court emphasized that “[i]t is fundamental that a court, in interpreting a statute, should attempt to effectuate the intent of the Legislature, and where the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used.” The Court found that the legislative history supported the interpretation that the program was always intended to be voluntary. The Court cited the State Executive Department’s memorandum, noting that the Legislature was aware that some localities had already withdrawn from the program. The legislative response was to shift responsibility to the State, not to lock localities into the program. Regarding the petitioner’s argument about Social Services Law § 466 (5), the Court clarified that the administrative procedures outlined therein apply only when an individual is offered an appropriate in-state placement, and the individual’s procedural rights have been exhausted. Section 466(5) provides a mechanism to terminate payments by a participating locality; it does not define a substantive right to locally funded transitional care. The Court also emphasized Section 16 of chapter 600 of the Laws of 1994, which states that no provision of the act creates any right or entitlement for any individual to receive funds or services.

  • People v. Miller, 91 N.Y.2d 372 (1998): Admissibility of Prior Conviction Based on Alford Plea for Impeachment

    People v. Miller, 91 N.Y.2d 372 (1998)

    A conviction based on an Alford plea can be used for impeachment purposes, subject to the same limitations as any other conviction.

    Summary

    The New York Court of Appeals addressed whether a prior conviction resulting from an Alford plea (a guilty plea where the defendant does not admit the acts but concedes the prosecution has enough evidence to convict) is admissible for impeachment purposes. The Court held that it is, subject to the same evidentiary rules governing the admissibility of any other conviction. The Court also addressed the admissibility of expert testimony regarding the victim’s time of death and the propriety of cross-examining a defense witness about a pending arrest warrant, finding the latter to be error, but harmless in this case due to the overwhelming evidence of the defendant’s guilt.

    Facts

    Defendant was indicted on murder and rape charges related to the death of a woman. Key evidence included clothing found at the scene belonging to the defendant and covered in the victim’s blood. The prosecution presented expert testimony regarding the victim’s estimated time of death, which was crucial because defense witnesses claimed to have seen the victim alive after that time. The defendant had previously entered an Alford plea to attempted rape in Virginia. The defendant’s statement to the police admitted to struggling with the victim: “I put my arms around her chin, my hands around her neck and we were fighting, and then she gasped and went limp.” Others testified that the defendant confessed to killing the victim.

    Procedural History

    The defendant was convicted of second-degree murder. The Appellate Division affirmed the conviction. The New York Court of Appeals granted leave to appeal.

    Issue(s)

    1. Whether a prior conviction based on an Alford plea is admissible for impeachment purposes.
    2. Whether the expert testimony presented by the prosecution regarding the victim’s time of death was erroneously admitted.
    3. Whether it was proper to cross-examine a defense witness about a pending arrest warrant.

    Holding

    1. Yes, because a conviction premised upon an Alford plea may generally be used for the same purposes as any other conviction, subject to the usual evidentiary limitations.
    2. No, because the admission of expert testimony lies within the sound discretion of the trial court, and the time of death based on autopsy evidence is beyond the knowledge of the average juror.
    3. No, because “a witness may not be impeached or discredited by showing on his cross-examination or in any other way that he has been indicted.” However, in this case the error was harmless.

    Court’s Reasoning

    Regarding the Alford plea, the Court reasoned that because an Alford plea results in a conviction, it can be used for impeachment purposes just like any other conviction. The Court cited North Carolina v. Alford, stating “an individual accused of crime may voluntarily, knowingly, and understandingly consent to the imposition of a prison sentence even if he is unwilling or unable to admit his participation in the acts constituting the crime.” The Court emphasized that the trial court appropriately limited the scope of cross-examination regarding the prior conviction and gave limiting instructions to the jury.

    The Court found the expert testimony on time of death admissible because such conclusions “depend upon professional or scientific knowledge or skill not within the range of ordinary training or intelligence.” The Court noted that the expert’s opinion was based on facts in the record, such as autopsy reports and photographs, and that the defendant had the opportunity to cross-examine the expert and present his own expert witness.

    Regarding the cross-examination of a defense witness about a pending arrest warrant, the Court acknowledged that it was improper. Citing People v. Rodriguez, the Court stated, “the fact of an arrest or an indictment filed incident to an arrest is ‘not a permitted area for impeachment’.” However, the Court deemed the error harmless because the witness’s credibility was already questionable, and the evidence of the defendant’s guilt was overwhelming. Thus, the court held that the improper cross-examination did not warrant reversal of the conviction.

  • Cron v. Hargro Fabrics, Inc., 91 N.Y.2d 362 (1998): Statute of Frauds and Bonus Agreements

    Cron v. Hargro Fabrics, Inc. 91 N.Y.2d 362 (1998)

    An oral agreement to pay a bonus based on a percentage of a company’s annual pre-tax profits is not automatically barred by the Statute of Frauds simply because the calculation occurs after one year, if the employment itself is terminable at will.

    Summary

    Cron sued Hargro Fabrics, alleging breach of an oral agreement for a bonus based on 20% of annual pre-tax profits, in addition to his base salary matching the president’s. Hargro moved to dismiss based on the Statute of Frauds, arguing the bonus calculation couldn’t be completed within one year. The Court of Appeals reversed the Appellate Division’s dismissal, holding that because Cron’s employment was at-will, the agreement could be performed within a year, even if the bonus calculation extended beyond that timeframe. The court reasoned that the key is whether the contractual relationship, not merely a calculation of compensation, necessarily extends beyond a year.

    Facts

    Cron was employed by Hargro Fabrics for 13 years until January 1996. He alleged an oral agreement with Hargro, stipulating that in addition to his annual salary, he would receive a bonus equal to 20% of Hargro’s annual pre-tax profits. Cron claimed that Hargro failed to pay him the proper share of the profits and that the company president received a much higher salary. The alleged agreement was reached through annual discussions where anticipated profits were estimated, and Cron received monthly payments toward the bonus based on these estimations. Cron affirmed his at-will employment status, stating that if his employment ended mid-year, his bonus would be calculated only up to his termination date.

    Procedural History

    The Supreme Court denied Hargro’s motion to dismiss. The Appellate Division reversed, granting the motion and dismissing the complaint, reasoning the amount owing was not ascertainable or payable before the year’s end and the contract imposed obligations exceeding one year, even if employment ended sooner. The Court of Appeals granted leave to appeal.

    Issue(s)

    Whether an oral agreement to pay a bonus based on a percentage of annual pre-tax profits, where the employment is at-will, falls within the Statute of Frauds and is unenforceable if the bonus calculation extends beyond one year from the agreement’s making.

    Holding

    No, because when the employment relationship is terminable within a year, and the compensation measure is fixed and earned within that period, the obligation to calculate that compensation does not bring the contract under the Statute of Frauds’ one-year proscription.

    Court’s Reasoning

    The Court of Appeals emphasized that the Statute of Frauds applies only to contracts that have absolutely no possibility of full performance within one year. Since Cron’s employment was at-will, it could be terminated by either party at any time. The court distinguished cases where the obligation to pay commissions extended indefinitely based on business relationships initiated during employment, as in Martocci v. Greater N.Y. Brewery, 301 N.Y. 57 (1950). The court cited Nat Nal Serv. Stas. v Wolf, 304 N.Y. 332 (1952), emphasizing that contracts terminable within a year do not fall under the Statute of Frauds. The Court found persuasive the reasoning in Rifkind v. Web IV Music, 67 Misc.2d 26 (1971), which held that the mere calculation of a bonus after termination relates to past performance and doesn’t create new obligations. The court acknowledged conflicting Appellate Division rulings but adopted the reasoning that the bonus calculation method does not determine the contract’s duration. The court reinforced the purpose of the Statute of Frauds, which is to prevent fraud, not to allow the evasion of just obligations. The court stated that “when the employment relationship is terminable within a year and the measure of compensation has become fixed and earned during the same period, the sole obligation to calculate such compensation will not bring the contract within the one-year proscription of the Statute of Frauds.” The court also noted that even if the Statute of Frauds were applicable, Cron’s allegations raise a factual question as to whether complete performance by all parties was possible within a year.

  • People v. Kim, 91 N.Y.2d 407 (1998): Restitution to Insurers and Joint & Several Liability

    People v. Kim, 91 N.Y.2d 407 (1998)

    Under New York law, a crime victim’s insurer can be a recipient of restitution for medical expenses paid, and courts can impose joint and several liability for restitution on perpetrators of a crime.

    Summary

    Kim pleaded guilty to attempted murder, robbery, and weapons possession after shooting the victim during a failed robbery. The trial court ordered him to pay restitution for the victim’s medical expenses. Kim appealed, arguing that the court should have held a hearing on the restitution amount, that restitution cannot be ordered to reimburse the victim’s insurer, and that he should only be responsible for a portion of the total medical expenses, not the entire amount. The New York Court of Appeals affirmed the restitution order, holding that no hearing was required because the presentence report provided sufficient evidence of the expenses, insurers can be considered victims for restitution purposes, and imposing joint and several liability is appropriate in such cases.

    Facts

    Defendant Kim and two accomplices attempted to rob the victim at his home. During the robbery, Kim shot the victim three times. The victim incurred $37,754.07 in medical expenses as a result of the shooting. The victim’s health insurer paid $35,301.35 of those expenses. Kim pleaded guilty to attempted murder, attempted robbery, and criminal possession of a weapon.

    Procedural History

    The County Court convicted Kim based on his guilty plea and sentenced him. The Appellate Division affirmed the conviction and sentence. The New York Court of Appeals granted Kim leave to appeal.

    Issue(s)

    1. Whether the trial court erred in failing to hold a hearing to determine the actual amount of the victim’s medical expenses before ordering restitution.
    2. Whether the trial court erred in ordering restitution to reimburse the victim’s health insurer for medical expenses it paid.
    3. Whether the trial court erred in imposing joint and several liability on Kim for the full amount of the victim’s medical expenses, rather than dividing the amount among Kim and his accomplices.

    Holding

    1. No, because the record contained sufficient evidence to support the finding of the amount of loss, and the defendant did not request a hearing.
    2. No, because the statute authorizes restitution for actual out-of-pocket loss, and includes a crime victim’s representative, which includes an insurer.
    3. No, because imposing joint and several liability is consistent with the purposes of restitution and with tort principles.

    Court’s Reasoning

    Regarding the hearing, the Court of Appeals noted that Penal Law § 60.27(2) mandates a hearing only if the record lacks sufficient evidence or if the defendant requests one. Here, the presentence report itemized the medical expenses, and Kim’s attorney conceded the accuracy of the amount. Thus, the court had a sufficient evidentiary basis. The court cited People v. Consalvo, 89 N.Y.2d 140, 145 (1996), stating that a defendant’s concessions may furnish the facts necessary to establish the amount of restitution.

    Addressing restitution to the insurer, the court pointed to Penal Law § 60.27(1), which authorizes restitution for “actual out-of-pocket loss caused” by the offense, and § 60.27(4)(b), which includes a crime victim’s “representative” as defined in Executive Law § 621(6). Executive Law § 621(6) defines representative broadly. The court cited People v. Hall-Wilson, 69 N.Y.2d 154, 157 (1986), emphasizing the legislative policy favoring restitution for all actual monetary losses caused by criminal conduct. The insurer, being legally obligated to pay the victim’s expenses, can be classified as a victim in its own right. The court referenced People v. Cruz, 81 N.Y.2d 996, 997-998 (1993) and People v. Hall-Wilson, 69 N.Y.2d 154, 157-158 (1986).

    On joint and several liability, the court observed the statute’s silence but stated that imposing such liability aligns with the goals of restitution: to make victims whole and to rehabilitate offenders. The court stated that requiring all defendants to take responsibility for the entire harm promotes these goals. The court cited People v. Hall-Wilson, 69 N.Y.2d 154, 157 (1986) and People v. Turco, 130 A.D.2d 785, 786 (2d Dept. 1987). Furthermore, the court noted the consistency with tort principles of liability for actors in concert.

  • Matter of Diaz Chemical Corp. v. New York State Div. of Human Rights, 91 N.Y.2d 932 (1998): Prejudice Due to Agency Delay

    91 N.Y.2d 932 (1998)

    A lengthy delay by an administrative agency in resolving a discrimination claim does not automatically require dismissal of the claim; the protesting party must demonstrate substantial actual prejudice resulting from the delay.

    Summary

    Diaz Chemical Corp. appealed a decision by the New York State Division of Human Rights (SDHR) finding gender discrimination. The company argued that the 11-year delay between the complaint and the hearing, plus an additional three-year delay before the order, prejudiced their case and warranted dismissal. The Court of Appeals affirmed the Appellate Division’s judgment, holding that while the delay was significant, Diaz Chemical failed to demonstrate substantial actual prejudice, such as lost evidence or unavailable witnesses, needed to justify dismissal. The court reiterated its concerns regarding SDHR’s chronic delays, urging improvements in the agency’s efficiency.

    Facts

    An employee filed a gender discrimination complaint against Diaz Chemical Corp. with the SDHR. Eleven years passed before the SDHR held a hearing on the complaint. Three years after the hearing, the SDHR issued an order awarding the complainant back pay and damages for mental anguish. Diaz Chemical Corp. appealed, arguing the extensive delay prejudiced their ability to defend against the claim.

    Procedural History

    The SDHR found Diaz Chemical Corp. guilty of gender discrimination. The Appellate Division reduced the damages awarded for mental anguish. Diaz Chemical Corp. appealed to the New York Court of Appeals, arguing the excessive delay by the SDHR warranted dismissal of the complaint.

    Issue(s)

    Whether an eleven-year delay by the State Division of Human Rights in holding a hearing on a discrimination complaint, followed by a three-year delay in issuing an order, constitutes per se prejudice requiring dismissal of the complaint, absent a showing of substantial actual prejudice to the charged party.

    Holding

    No, because while the length of the delay is an important factor, the party protesting the delay must demonstrate substantial actual prejudice to warrant dismissal. Diaz Chemical Corp. failed to show that the delay resulted in lost evidence, unavailable witnesses, or impaired memories that specifically hindered their defense on the issues upon which SDHR based its finding of discrimination.

    Court’s Reasoning

    The Court of Appeals relied on its prior decisions in Matter of Corning Glass Works v Ovsanik and Matter of Harris & Assocs. v deLeon, which established that a lengthy administrative delay in deciding a discrimination claim is not per se prejudicial. Instead, the party claiming prejudice must demonstrate “substantial actual prejudice” resulting from the delay. The Court emphasized that a “close scrutiny” of the record is required to determine whether such prejudice exists.

    In this case, the Court found that Diaz Chemical Corp. failed to demonstrate any specific prejudice. They did not point to any lost evidence, nor did they claim that necessary witnesses were unavailable. The Court noted that Diaz Chemical’s witnesses were able to adequately describe the relevant events and the company’s treatment of similarly situated male employees. The court emphasized the lack of difficulties due to memory loss regarding the central issues of the discrimination claim. The court distinguished this case from situations where memories had dimmed regarding the topics upon which the SDHR based its finding of discrimination.

    Despite upholding the SDHR’s decision, the Court reiterated its concern about the agency’s protracted delays, stating: “The interests of the parties and the larger societal interest in proper administration of the executive agency segment of the justice system require more than mere representations.”

    Judge Bellacosa, in his concurring opinion, expressed even stronger concerns about the SDHR’s systemic delays, emphasizing the “intrinsic” prejudice that such delays inflict on the adjudicatory process itself. He called for legislative action to address the agency’s resource and procedural deficiencies, suggesting that continued delays may eventually warrant a modification of the stare decisis doctrine.

  • Brushton-Moira Central School District v. Fred H. Thomas Associates, P.C., 91 N.Y.2d 362 (1998): Date for Calculating Breach of Contract Damages

    Brushton-Moira Central School District v. Fred H. Thomas Associates, P.C., 91 N.Y.2d 362 (1998)

    In a breach of contract action involving defective design or construction, damages are generally ascertained as of the date of the breach, which is typically the completion of the work, and prejudgment interest is calculated from that date.

    Summary

    Brushton-Moira Central School District sued Fred H. Thomas Associates for breach of contract and malpractice related to the installation of defective insulated panels in a school building. The New York Court of Appeals held that damages for the breach should be measured as of the date the cause of action accrued (completion of the work) and not the date of trial, and prejudgment interest should be awarded from that earlier date. This decision reinforces the principle that damages are intended to place the non-breaching party in the same position as if the contract had been performed, and that measuring damages at the time of trial could incentivize a failure to mitigate damages.

    Facts

    The Brushton-Moira Central School District hired Fred H. Thomas Associates as the architect for renovations, including replacing windows with insulated panels, to conserve energy. The architect recommended specific panels that were installed by December 12, 1980. A certificate of occupancy was issued on April 9, 1982. By the summer of 1982, the panels began to deteriorate and allow water penetration.

    Procedural History

    The school district sued the architect for professional malpractice and breach of contract in 1984. The Supreme Court initially dismissed the malpractice claim, finding only economic damages were sought and dismissed the breach of contract claim because the defendant obtained a warranty from the manufacturer. The Appellate Division reversed, granting judgment to the plaintiff on the breach of contract claim and remanding for a trial on damages, measured as of the date of the trial. After a damages trial, the Supreme Court awarded damages measured as of the trial date, less a setoff, plus prejudgment interest from the trial date. The Appellate Division modified, awarding prejudgment interest from April 9, 1982. The architect appealed to the Court of Appeals.

    Issue(s)

    1. Whether, in a breach of contract action for defective design or construction, damages should be measured as of the date of the breach or the date of the trial?

    2. Whether prejudgment interest should be awarded from the date of the accrual of the cause of action or the date of the trial?

    Holding

    1. No, because damages for breach of contract are ordinarily ascertained as of the date of the breach to return the parties to the point at which the breach arose and place the non-breaching party in as good a position as if the contract had been performed.

    2. Yes, because CPLR 5001(b) mandates that interest shall be computed from the earliest ascertainable date the cause of action existed, reflecting that damages are properly ascertained as of the date of the breach.

    Court’s Reasoning

    The Court of Appeals reasoned that the Appellate Division erred in holding that damages should be measured as of the date of the trial. The court stated, “[i]t has long been recognized that the theory underlying damages is to make good or replace the loss caused by the breach of contract.” The goal is to return the parties to the position they would have been in had the contract been performed. The court cited Rodriguez & Co. v Moore-McCormack Lines, 32 NY2d 425, 429, to support the premise that contract damages are ordinarily ascertained as of the date of the breach.

    The Court emphasized that the appropriate measure of damages is the cost to repair the defects as of the date of the breach or, if irreparable, the difference in value between a properly constructed structure and the one actually built. It further explained that CPLR 5001(a) provides that interest shall be recovered upon a sum awarded for a breach of contract, and CPLR 5001(b) mandates that interest be computed from the earliest ascertainable date the cause of action existed. According to the Court, awarding interest from a date other than the accrual date could lead to anomalous results. The court explained, “[i]n view of the clear statutory direction that interest must be computed from the date of accrual, we need not deviate from the general rule that damages should be measured as of that same date.”

    Finally, the Court noted that measuring replacement costs as of the trial date might contradict the duty to mitigate damages. “There would be no incentive to mitigate damages if plaintiff could wait until trial to recover damages measured as of the trial date and, in addition, receive interest from the earlier date of accrual.”

  • Matter of Rose/Chaikin/Winkler v. Assessor of Town of Islip, 92 N.Y.2d 84 (1998): Correcting Defective Verification in Tax Certiorari Petitions

    Matter of Rose/Chaikin/Winkler v. Assessor of Town of Islip, 92 N.Y.2d 84 (1998)

    A defectively verified tax certiorari petition can be corrected by filing written authorizations from the property owners prior to the return date of the petition, provided no substantial right of the opposing party is prejudiced.

    Summary

    This case addresses the issue of defective verification in tax certiorari petitions under Real Property Tax Law (RPTL) Article 7. The petitioners filed a tax certiorari petition for multiple properties without written authorizations from all property owners. After the town raised objections, the petitioners obtained and filed authorizations for most properties before the return date. The Court of Appeals held that the defect was cured for those properties where authorizations were filed before the return date, as no substantial right of the town was prejudiced. The decision emphasizes that technical defects should be disregarded when no prejudice results and the matter can be resolved on its merits.

    Facts

    On August 4, 1994, petitioners served the Town of Islip with a single notice of petition and petition relating to 30 separate properties, initiating a tax certiorari proceeding. Respondents moved to dismiss the petition, citing the lack of written authorizations from the property owners for the attorney verifying the petition, as required by RPTL 706. Respondents’ attorney sent a letter identifying 17 properties lacking proper authorization. Prior to the petition’s return date, petitioners obtained and served written authorizations for 16 of those 17 properties.

    Procedural History

    The Supreme Court initially denied the motion to dismiss for properties with authorizations filed with the petition, holding that lack of authorization at the grievance stage was not a bar. The court granted the motion to dismiss for the 17 properties lacking authorizations with the original petition, finding the town acted with due diligence in objecting. The Appellate Division affirmed. The Court of Appeals granted petitioners’ cross-motion for leave to appeal, reversing the lower court’s decision regarding the 16 properties for which authorizations were subsequently filed.

    Issue(s)

    Whether a tax certiorari petition should be dismissed when the written authorizations required by RPTL 706(2) are not included with the initial filing but are provided before the return date of the petition.

    Holding

    Yes, because the defect in verification was cured by filing the written authorizations before the return date, and no substantial right of the respondents was prejudiced. Supreme Court should have disregarded the technical infirmity pursuant to CPLR 2001 and 3026 and denied the motion to dismiss with regard to 16 of the properties.

    Court’s Reasoning

    The Court of Appeals reasoned that while RPTL 706(2) requires written authorization for an agent to verify a tax certiorari petition, the absence of such authorization is not a jurisdictional defect. The court emphasized that the purpose of the authorization requirement is to prevent unauthorized filings. Citing CPLR 3022, the court acknowledged that a recipient of a defectively verified pleading can treat it as a nullity if returned with due diligence. However, even assuming the town acted with due diligence in objecting, the court found that the defect was corrected when the authorizations were filed before the return date. The court stated, “Supreme Court specifically found that no substantial right of respondents was prejudiced as a result of petitioners’ defective verification (164 Misc 2d, at 66). Therefore, Supreme Court should have disregarded the technical infirmity pursuant to CPLR 2001 and 3026 and denied the motion to dismiss with regard to 16 of the properties.” The Court applied the principle that technical defects should be disregarded when no prejudice results, allowing the case to be decided on its merits. The court also noted that the error in naming the prior owner of one property was similarly a technical defect that was corrected by the subsequent authorization from the current owner, referencing Matter of Divi Hotels Mktg. v Board of Assessors, 207 AD2d 580; Matter of Rotblit v Board of Assessors, 121 AD2d 727.

  • In re Embser, 91 N.Y.2d 711 (1998): Judicial Removal for Misconduct as Attorney

    In re Embser, 91 N.Y.2d 711 (1998)

    A judge may be removed from judicial office for misconduct, including actions taken in their prior capacity as an attorney, that demonstrate a lack of integrity and abuse of trust.

    Summary

    W. Joseph Embser, a Justice of the Wellsville Town Court, was removed from his judicial position following his disbarment for misconduct involving dishonesty, fraud, and deceit related to his handling of an estate as a private attorney. The New York Court of Appeals upheld the State Commission on Judicial Conduct’s determination, finding that Embser’s misappropriation of estate funds and failure to properly report or obtain approval for attorney’s fees and executor’s commissions demonstrated a gross abuse of trust and a lack of integrity, rendering him unfit to serve as a judge. The court relied on the factual findings from the disbarment proceeding, which Embser did not successfully dispute.

    Facts

    Embser, an attorney and later a Town Justice, had a long-standing relationship with Edward and Edna Antoon. He drafted Edward’s will and served as the attorney for Edward’s estate after his death in 1989, with Edna as the executrix. Edna moved to Ohio and granted Embser a general power of attorney. Embser opened an estate bank account, controlling all checks. He issued numerous checks to himself, purportedly for attorney’s fees and executor’s commissions, totaling $399,320 between 1989 and 1993. He did not obtain court approval for these payments, as required. He also filed a Petition to Determine Estate Tax, declaring a significantly lower attorney’s fee ($156,575) than he actually received.

    Procedural History

    The Appellate Division disbarred Embser based on findings that he misappropriated estate funds. The State Commission on Judicial Conduct then charged Embser with judicial misconduct. Relying on the disbarment proceeding and Embser’s failure to dispute the factual allegations, the Commission summarily determined that he was guilty of misconduct and should be removed from office. Embser appealed, arguing the Referee’s findings were inaccurate, but the Court of Appeals affirmed the Commission’s determination.

    Issue(s)

    Whether the State Commission on Judicial Conduct appropriately determined the judicial misconduct charge against Justice Embser on the basis of findings in a prior attorney disciplinary proceeding.

    Holding

    Yes, because the statutory requirement authorizing the Commission to make a determination after a hearing does not require a formal hearing where no issue of fact is raised. The evidence presented during the disbarment proceedings sufficiently demonstrated judicial misconduct.

    Court’s Reasoning

    The Court of Appeals found that Embser’s actions constituted a gross abuse of trust. Even considering the broad powers granted in the will or Edna Antoon’s purported desire for Embser to be well-compensated, it did not justify the unauthorized removal of large sums of money from the estate. The court emphasized that Embser’s Declaration of Executor’s Commissions and Attorney’s Fees, submitted to the Surrogate’s Court, was misleading because it understated the amount of fees he had taken. The court stated, “[t]he statutory requirement authorizing the commission to make a determination after a hearing does not require the commission to go through a meaningless formal hearing where no issue of fact is raised” (Matter of Petrie v State Commn. on Judicial Conduct, 54 NY2d 807, 808). The evidence presented during the disbarment proceedings, specifically the record of misappropriated funds, was sufficient to prove that Embser helped himself to over $200,000 of estate funds without proper authorization. This abuse of trust warranted his removal from judicial office.

  • Matter of Save the Pine Bush, Inc. v. Village of Roslyn, 92 N.Y.2d 162 (1998): Agency’s Duty to Take a ‘Hard Look’ at Environmental Concerns

    Matter of Save the Pine Bush, Inc. v. Village of Roslyn, 92 N.Y.2d 162 (1998)

    Under SEQRA, an agency must take a ‘hard look’ at relevant environmental concerns and make a reasoned elaboration of the basis for its determination, considering the specific circumstances and nature of the proposal.

    Summary

    This case addresses the scope of environmental review required under the State Environmental Quality Review Act (SEQRA). The Village of Roslyn approved a supermarket project, relying partly on a prior Environmental Impact Statement (EIS) for a different, earlier project. The Court of Appeals held that the Village Board failed to take the required ‘hard look’ at the specific environmental impacts of the supermarket project, especially considering that the new project differed significantly from the one previously approved and that the Board’s own consultant had identified areas of concern. The Court affirmed the annulment of the Village’s negative declaration and site plan approval.

    Facts

    In 1989, the Village of Roslyn approved a large mall project (Delco project). The developer obtained a Tidal Wetlands Permit from the DEC but was required to reduce the mall’s size and eliminate certain features. The developer then abandoned the project.
    In 1994, LCS Realty acquired the site and proposed a 24-hour supermarket. This new project was projected to generate higher traffic volumes. LCS Realty submitted an Environmental Assessment Form (EAF).
    The Village Board’s environmental consultant identified nine areas needing further address before an environmental determination could be made.

    Procedural History

    Petitioners commenced a CPLR article 78 proceeding to annul the site plan approval.
    Supreme Court annulled the negative declaration and site plan approval, remanding for a supplemental environmental impact statement. The Supreme Court found that the Board issued a negative declaration despite the environmental consultant’s request for more information and was misinformed about the DEC permit for the original project. The Appellate Division affirmed, finding that the Board failed to take a ‘hard look’ at environmental concerns and issued what amounted to a conditioned negative declaration. The Court of Appeals then reviewed the Appellate Division’s decision.

    Issue(s)

    Whether the Village Board satisfied its obligations under SEQRA by taking a ‘hard look’ at the relevant environmental concerns associated with the proposed supermarket project before issuing a negative declaration.

    Holding

    No, because the Village Board did not adequately consider the specific environmental impacts of the supermarket project, particularly given the differences between the proposed project and the previously approved project, and because it acted without waiting for necessary information identified by its own consultant.

    Court’s Reasoning

    The Court emphasized that an agency’s SEQRA review is limited to whether the determination was made in violation of lawful procedure, affected by an error of law, or was arbitrary and capricious. The central question is whether the agency identified relevant areas of environmental concern, took a “hard look” at them, and made a “reasoned elaboration” of the basis for its determination. (Matter of Gernatt Asphalt Prods. v Town of Sardinia, 87 NY2d 668, 688). The extent of environmental factors to be considered varies with the circumstances and nature of the proposals (Akpan v Koch, 75 NY2d 561, 570).

    The Court found that the Village Board improperly relied on the EIS from the earlier Delco project without adequately considering the differences between that project (as ultimately scaled down by DEC) and the proposed supermarket. The Board disregarded the reductions in scope required for the Delco project and failed to address the nine areas of concern identified by its own consultant before issuing the negative declaration. The Court cited Matter of New York Archaeological Council v Town Bd., 177 AD2d 923, 925 and Matter of Shawangunk Mtn. Envtl. Assn. v Planning Bd., 157 AD2d 273, 276 in support of its holding. The Court thus agreed that the Board failed to take the required ‘hard look’ at the relevant environmental concerns.