author: Bellacosa, J.

text:
    [624 NE2d 1003, 604 NYS2d 908]
    In the Matter of the Estate of Elizabeth S. Craig, Deceased. Wayne County Department of Social Services, Appellant.
    Argued October 5, 1993;
    decided November 18, 1993

      POINTS OF COUNSEL

      Gary Lee Bennett, Lyons, for appellant.
    I. A social services claim for assistance granted to a decedent’s predeceased spouse is not limited by Federal or State law. (Matter of Harris, 61 AD2d 881; Matter of Imburgia, 127 Misc 2d 756, 130 AD2d 658; Matter of Waring, 111 Misc 2d 421; Himes v Sullivan, 779 F Supp 258; Young v Community Nutrition Inst., 476 US 974; Baker v Sterling, 39 NY2d 397; Matter of Rummer, 93 AD2d 135; Crabb v Estate of Mager, 66 AD2d 20; Our Lady of Lourdes Mem. Hosp. v Frey, 152 AD2d 73.) II. A social services claim for assistance granted to a decedent’s predeceased spouse is specifically provided for by State law. (Mendelson v Transport of N. J., 113 AD2d 202, 68 NY2d 602; Matter of Colon, 83 Misc 2d 344; Baker v Sterling, 39 NY2d 397; Matter of Thurston v Durose, 76 NY2d 683; Matter of Rummer, 93 AD2d 135; Matter of Holmes, 77 Misc 2d 382; Matter of Imburgia, 127 Misc 2d 756, 130 AD2d 658.) III. The preferred claim for assistance granted to the decedent’s predeceased spouse is not subject to a sufficient means test. (Matter of Imburgia, 130 AD2d 658; Mendelson v Transport of N. J., 113 AD2d 202, 68 NY2d 602; Matter of Colon, 83 Misc 2d 344; Matter of Rummer, 93 AD2d 135; Our Lady of Lourdes Mem. Hosp. v Frey, 152 AD2d 73; Matter of Andrus, 85 Misc 2d 1062; Matter of Lainez, 102 Misc 2d 138, 79 AD2d 78, 55 NY2d 657; Matter of Beaman, 171 Misc 578.)

      Underberg & Ressler, Rochester (Sharon P. Stiller and Linda Prestegaard of counsel), for respondent.
    I. The Federal court and Congress have interpreted the Medicaid law to prohibit the recovery that the Department of Social Services seeks in this case. (Citizens Action League v Kizer, 887 F2d 1003, cert denied sub nom. Department of Health Servs. v Citizens Action League, 494 US 1056.) II. The statutes by their own terms do not allow for recovery from a spouse’s estate or recovery where the spouse was not possessed of sufficient means to support the recipient when care was provided. (Wabco Trade Co. v SS Inger Skou, 663 F2d 369; Matter of Nieves v Haera, 165 AD2d 201; Horowitz v Incorporated Vil. of Roslyn, 144 AD2d 639; Matter of Waring, 111 Misc 2d 421; Matter of Mondello v D’Elia, 39 NY2d 978; Matter of Barton v Lavine, 38 NY2d 785.) III. New York’s case law does not support recovery as sought by the Department of Social Services in this case. (Matter of Colon, 83 Misc 2d 344; Matter of Harris, 88 Misc 2d 60, 61 AD2d 881; Matter of Rummer, 104 Misc 2d 978, 93 AD2d 135; Matter of Waring, 111 Misc 2d 421; Forman v Forman, 96 AD2d 880; Matter of Dabney, 104 AD2d 678; Matter of Imburgia, 122 Misc 2d 1033, 127 Misc 2d 756, 130 AD2d 658; Citizens Action League v Kizer, 887 F2d 1003.)
   OPINION OF THE COURT

Bellacosa, J.

The issue on this appeal is whether the Wayne County Department of Social Services may recoup Medicaid assistance payments provided to a man who died in 1983. The target of the recoupment effort is the estate of that man’s spouse, who died in 1989. The crux of the problem is that the wife lacked sufficient means to be considered a responsible relative at the time the payments were made in 1983 on behalf of her sick husband.

We conclude that the assertion of a nunc pro tune obligation against the widow’s estate is not supportable under presently governing statutes, regulations and decisional reasoning. This Court, therefore, affirms the order of the Appellate Division, which upheld the decree of the Surrogate’s Court that no implied contract is created where the surviving spouse lacked sufficient means contemporaneously to the provision of Medicaid assistance to her predeceased spouse.

Elizabeth and Norman Craig, a retired couple, lived on a small income generated from a mortgage receivable on their primary asset, their home. In 1983, Mr. Craig became ill and soon thereafter died intestate. He had qualified for Medicaid payments for his medical care and Wayne County paid the bill, totalling $4,373.79. After Mr. Craig’s death, there was no attempt to collect all or any portion of the bill from Mrs. Craig, his surviving spouse. It is undisputed that at that time, during her deceased husband’s illness and for the balance of her life, she lacked the means that would have made her a financially responsible relative.

Prior to her death in 1989, Mrs. Craig also had qualified for medical services paid by Medicaid in the sum of $10,478. Mrs. Craig’s will was admitted to probate in 1989, showing her only assets as the remainder of a mortgage receivable from her home and a small amount of cash. The estate was valued at $27,348.50. Wayne County sought to satisfy the Craigs’ Medicaid payments out of that source. The estate paid the claim for $10,478 for assistance granted to Elizabeth Craig and that is not in dispute in this case. The claim for $7,614 ($4,373 plus $3,241 interest since 1983) for assistance granted to Mr. Craig is solely at issue on this appeal.

Surrogate’s Court and the Appellate Division upheld the estate’s refusal to reimburse the County for Medicaid paid on behalf of Mr. Craig in 1983. This Court granted leave to appeal to Wayne County Department of Social Services.

42 USC § 1396a (a) (18) mandates that State programs comply with the provisions of Social Security Act § 1917 (42 USC § 1396p) "with respect to liens, adjustments and recoveries of medical assistance correctly paid.” Section 1396p (b) (1) provides as follows:

"No adjustment or recovery of any medical assistance correctly paid on behalf of an individual under the State plan may be made, except—
"(A) in the case of an individual described in subsection (a) (1) (B) [of this section], from his estate or upon sale of the property subject to a lien imposed on account of medical assistance paid on behalf of such individual, and
"(B) in the case of any other individual who was 65 years of age or older when he received such assistance, from his estate” (emphasis added).

New York’s medical assistance implementing provisions are found in article 5, title 11 of the Social Services Law at sections 363 through 369. Under both Federal and New York State law, recovery for medical assistance from the property of the recipient is generally prohibited (see, 42 USC § 1396a [a] [18]; Social Services Law § 369 [2]). So Wayne County Department of Social Services cannot make individuals liquidate their homes to pay for Medicaid. Thus, surviving spouses cannot be deemed responsible relatives with financial means simply because they own a house. An exception to this prohibition is allowed after the death of persons over 65 years of age when that asset may be liquidated to recoup that person’s Medicaid payments. That is precisely what was done in relation to Mrs. Craig’s Medicaid payments. But the exception is qualified and does not allow Wayne County to reach even farther back for recoupment as to her predeceased husband’s Medicaid payments. The exception is a one shot, not a doublebarrelled opportunity.

This scheme is set forth in Social Services Law § 369 (2), which incorporates Social Services Law § 366 (3). When medical assistance is furnished to an applicant who has a responsible relative with sufficient income and resources to provide medical assistance, the furnishing of such assistance shall create an implied contract with such relative. But a "responsible relative” by necessity and statute is determined by the sufficient ability to pay at the time the expenses are incurred. Social Services Law § 101 ("Liability of relatives to support”) only provides that "the spouse or parent of a recipient of public assistance or care * * * if of sufficient ability, [will] be responsible for the support of such person” (§ 101 [1]; emphasis added).

Appellant Wayne County places unpersuasive weight on Social Services Law § 104 (1) to support its claim against Mrs. Craig’s estate in relation to Mr. Craig’s Medicaid payments. That section does not take the sufficient means test out of contemporaneous assessment as of the time the Medicaid payments are made on behalf of a predeceased relative. Wayne County would have us read section 104 as precluding the use of a sufficient means test in these circumstances. We disagree. Section 104 is not applicable to recovery of medical assistance governed by section 369, which specifically precludes and preempts the overarching reach of general provisions of Social Services Law by the explicit rules applicable to Medicaid recipients (Matter of Waring, 111 Misc 2d 421 [Sur Ct, Nassau County 1981]; Matter of Colon, 83 Misc 2d 344 [Sur Ct, Kings County 1975]).

We conclude that section 104 (1) does not support the strain of appellant’s argument or the countervailing authorities which reject the notion that Mrs. Craig’s responsibility and means can spring to life nunc pro tune only after and on account of her death. She was not responsible or liable at the critical time due to lack of sufficient means and that forecloses this belated recoupment.

Until recently, the case law interpreting the governing provisions of New York law in this area had a consistent thread and rationale. Insufficient means of a responsible adult was determined as of the time the qualified Medicaid payments were made. Then a new branch sprouted and complicated the situation, seeming to allow for recoupment based on a nunc pro tune sufficient means methodology.

The Appellate Divisions of the First and Fourth Departments have adhered to the proposition that forecloses the Department of Social Services from collecting from a relative who did not have sufficient means at the time of accrual of the recipient’s Medicaid assistance (Matter of Harris, 88 Misc 2d 60, affd on opn below 61 AD2d 881 [4th Dept]; Matter of Waring, 111 Misc 2d 421, supra; Matter of Colon, 83 Misc 2d 344, supra).

In Matter of Harris (supra), the court relied on Colon and held that because Social Services Law § 369 makes no mention of permitting recovery from the estate of a responsible relative, recovery is permitted only from a living responsible relative, provided such relative had sufficient means when the assistance was rendered (see also, Matter of Waring, 111 Misc 2d 421, supra).

The Appellate Division, Second Department, has imposed reach-back financial obligation, even if the otherwise responsible person was not of sufficient means at the time of the provision of Medicaid assistance (Matter of Imburgia, 122 Misc 2d 1033, on rearg 127 Misc 2d 756, affd 130 AD2d 658 [2d Dept 1987]; see also, Matter of Dabney, 104 AD2d 678 [3d Dept 1984]).

In Imburgia, the Surrogate (127 Misc 2d 756, 759, supra) held that recovery from the estate of the secondarily deceased spouse could be had upon proof that the initial survivor had " 'sufficient income and resources to provide medical assistance’ ” during the period such assistance was provided. While affirming, the Appellate Division, Second Department, amplified the rule, which appellant Wayne County urges us to endorse:

"DSS was under no obligation to establish that the decedent was of sufficient means to have provided for the medical care of his wife at the time that the assistance was rendered to her as a prerequisite to its recoupment of the medical assistance from the estate of the decedent” (Matter of Imburgia, 130 AD2d 658, 659 [2d Dept 1987], supra [citations omitted]).

We conclude that this view finds no support in the governing statutes or regulations, already discussed. The Imburgia approach contradicts the plain import of Social Services Law § 366 (3) (a), which allows belated recovery from the responsible relative only if that party had sufficient means during the period the medical assistance was rendered. If, as in Imburgia, a responsible relative is available who had sufficient means at the time of accrual, the recovery could be obtained. But the Appellate Division’s embellishment of the rule in Imburgia, to dispense with contemporaneous sufficient means, is not supportable. No express, implied or statutory obligation devolved on Mrs. Craig’s estate in these circumstances, for she concededly had insufficient means and resources at the time of the accrual of the Medicaid bill for her husband in 1983.

Federal law, as noted, does not now expressly provide for recovery of Medicaid payments on behalf of a predeceased spouse from the secondarily dying spouse’s estate. The Omnibus Budget Reconciliation Act of 1993 (Pub L 103-66), signed into law on August 10, 1993, amended the estate recovery provisions of the Federal Medicaid law. This Act gives the States, at their option, the power to recover against a spouse’s estate, but only against the recipient’s assets that were conveyed through joint tenancy and other specified forms of survivorship. This development may be a harbinger of change regarding the "spousal impoverishment” rules dealing with death of a surviving spouse (see, Matter of Harris, 88 Misc 2d 60, 64, supra). The 1993 Act, however, has no relevance to the resolution of this case; it applies only to Medicaid recipients who die after October 1, 1993 (Pub L 103-66, § 13612 [Aug. 1993]). Thus, by its own terms, the amendments, even if eventually implemented by New York, do not aid the appellant’s case for nunc pro tune recovery on the 1983 payments on behalf of Mr. Craig.

We have considered all the arguments of the parties, and for the reasons stated conclude that an affirmance is the correct result. Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges Simons, Titone, Hancock, Jr., Smith and Levine concur.

Order affirmed, with costs.


source: Caselaw Access Project

author: Simons, J.

license: Public Domain

text:
    [624 NE2d 1007, 604 NYS2d 912]
    Ashland Management Incorporated, Appellant, v C. Christopher Janien, Respondent. (And a Third-Party Action.)
    Argued October 14, 1993;
    decided November 22, 1993

      POINTS OF COUNSEL

      Paul, Hastings, Janofsky & Walker, New York City (Lawrence

      I. Weinstein, Lisa M. Buckley and Roger M. Milgrim of counsel), for appellant. I. The award of lost profits damages directly conflicts with Kenford and other controlling decisions of this Court. (Kenford Co. v County of Erie, 67 NY2d 257; Cramer v Grand Rapids Show Case Co., 223 NY 63; Goodstein Constr. Corp. v City of New York, 80 NY2d 366.) II. The Court below erred as a matter of law in holding that Ashland breached its implied contractual covenant of good faith and fair dealing. (Rowe v Great Atl. & Pac. Tea Co., 46 NY2d 62; Zolotar v New York Life Ins. Co., 172 AD2d 27; Murphy v American Home Prods. Corp., 58 NY2d 293; Harris Trust & Sav. Bank v John Hancock Mut. Life Ins. Co., 767 F Supp 1269, 970 F2d 1138.) III. The trial court erred as a matter of law in holding that Janien is free to use or disclose Alpha. (Matter of New York Tel. Co. v Public Serv. Commn., 56 NY2d 213; Kewanee Oil Co. v Bicron Corp., 416 US 470; Tabor v Hoffman, 118 NY 30; Franke v Wiltschek, 209 F2d 493; In re Innovative Constr. Sys., 793 F2d 875; SI Handling Sys. v Heisley, 753 F2d 1244; Rohm & Haas Co. v Adco Chem. Co., 689 F2d 424; Zotos Intl. v Young, 830 F2d 350; Sperry Rand Corp. v A-T-O, Inc., 447 F2d 1387, 405 US 1017; Hope X-Ray Prods. v Marron Carrell, Inc., 674 F2d 1336.) IV. The trial court applied the wrong legal standard in holding that Janien’s Eta model did not misappropriate Ashland’s Alpha trade secrets. (Matter of New York Tel. Co. v Public Serv. Commn., 56 NY2d 213; FMC Corp. v Taiwan Tainan Giant Indus. Co., 730 F2d 61; Reinforced Molding Corp. v General Elec. Co., 592 F Supp 1083; Forest Labs, v Pillsbury Co., 452 F2d 621.)

      Davis & Gilbert, New York City (Michael C. Lasky, Bruce M. Ginsberg and Howard Weingrad of counsel), for respondent.
    I. Ashland seeks to circumvent this Court’s limited scope of review. (Sage v Fairchild-Swearingen Corp., 70 NY2d 579; Matter of Berenhaus v Ward, 70 NY2d 436; Seaview Assn. v Williams, 69 NY2d 987; Van Wagner Adv. Corp. v S & M Enters., 61 NY2d 186; Thoreson v Penthouse Intl., 179 AD2d 29, 80 NY2d 490; Morgan Servs. v Lavan Corp., 59 NY2d 796; National Conversion Corp. v Cedar Bldg. Corp., 23 NY2d 621; Chevron U.S.A. v Roxen Servs., 813 F2d 26; Union Kol-Flo Corp. v Basil, 64 AD2d 861; Defiance Button Mach. Co. v C & C Metal Prods. Corp., 759 F2d 1053, 474 US 844.) II. The trial court’s award of lost profits should not be disturbed. (Hirschfeld v I.C. Sec., 132 AD2d 332, 72 NY2d 841; Kenford Co. v County of Erie, 61 NY2d 257; People v Brown, 10 NY2d 513; Susquehanna Silk Mills v Jacobsen, 185 AD2d 378; Goodstein Constr. Corp. v City of New York, 80 NY2d 366; S & K Sales Co. v Nike, Inc., 816 F2d 843; Van Wagner Adv. Corp. v S & M Enters., 61 NY2d 186; Story Parchment Co. v Paterson Co., 282 US 555; Care Travel Co. v Pan Am. World Airways, 944 F2d 983.) III. In the event this Court disturbs Janien’s award of lost profits, Janien must be awarded his alternative lost compensation damages. (Charles E. S. McLeod, Inc. v Hamilton Moving & Stor., 89 AD2d 863.) IV. Ashland breached its implied covenant of good faith and fair dealing. (Morgan Servs. v Lavan Corp., 59 NY2d 796; Van Valkenburgh, Nooger & Neville v Hayden Publ. Co., 30 NY2d 34.) V. The trial court correctly dismissed Ashland’s claim for trade secret misappropriation. (Delta Filter Corp. v Morin, 108 AD2d 991; Levy v Braley, 176 AD2d 1030; Chevron U.S.A. v Roxen Servs., 813 F2d 26; Tabor v Hoffman, 118 NY 30; Integrated Cash Mgt. Servs. v Digital Transactions, 732 F Supp 370, 920 F2d 171; Julie Research Labs. v Select Photographic Eng’g, 810 F Supp 513; Minnesota Min. & Mfg. Co. v Technical Tape Corp., 23 Misc 2d 671, 15 AD2d 960; Public Relations Aids v Wagner, 37 AD2d 293, 30 NY2d 890; McKay v Communispond, Inc., 581 F Supp 801.)
   OPINION OF THE COURT

Simons, J.

This litigation involves a dispute between an investment management firm and a former employee. The employee developed a mathematical model for determining investment strategy and sought unsuccessfully to sell it to the firm. A dispute arose during the negotiations and plaintiff, Ashland Management Inc., instituted this action seeking to foreclose defendant from using his model. It alleged that the model is based upon trade secrets defendant misappropriated from the firm. Defendant claims he and plaintiff had agreed upon a contract for the use of the model and that plaintiff breached the contract. Defendant, therefore, counterclaimed seeking damages.

After a nonjury trial, Supreme Court found that the parties had entered into a contract and that plaintiff had breached it. Accordingly, the court awarded defendant damages of $625,-000 for lost profits. It held further that the information available to defendant did not constitute a trade secret of Ashland and therefore defendant was not guilty of misappropriation. The Appellate Division, after a minor modification, affirmed the judgment.

The principal legal questions presented concern the availability of damages for lost profits under the rule stated in our two decisions in Kenford Co. v County of Erie (67 NY2d 257 [Kenford I]; and 73 NY2d 312 [Kenford II]) and whether the court applied the correct legal standard for trade secrets in determining the misappropriation claim.

I.

Ashland Management Inc. is a successful investment advisory company which manages over $1 billion in client funds. As part of its investment strategy, Ashland relies on a computerized mathematical stock selection model, known as Alpha, to analyze selected financial information and make an initial determination of which stocks should be bought and sold. Alpha is based on six selected financial criteria which are then evaluated according to various mathematical calculations. In its promotional materials Ashland discloses these criteria, but does not disclose the underlying mathematical calculations used to evaluate them. A decision to purchase or sell a stock selected by Alpha is made only after a detailed analysis by Ashland’s money managers.

Charles Hickox is Ashland’s chairman. Defendant Janien is Hickox’s brother-in-law and was briefly employed by Ashland in 1981 after his graduation from college. Janien left plaintiff to attend the University of Pennsylvania’s Wharton School of Business. He returned to Ashland as a consultant after completing his studies there. While at Wharton, Janien wrote a thesis which investigated the ability of various financial criteria, including the six criteria used by Alpha, to identify undervalued stocks. Based on his research he concluded that one particular model, which Janien named Eta, performed exceptionally well.

In 1985 Hickox and Janien entered into discussions about the development of a second investment model to be used by Ashland. Eta appeared to fit Ashland’s needs for a long-term growth model to supplement Alpha’s short-term characteristics and the parties entered into extensive negotiations to fix their rights and liabilities in its development and ultimate use. Five draft agreements were exchanged before they settled on a sixth writing, denominated Proposal 6. Proposal 6 provided that Janien was to construct a new stock selection model, that upon completion the model would be reviewed by an independent third party, and, if found satisfactory, ownership of the model would then be transferred to an Ashland subsidiary which would employ Janien and in which he was to have an equity interest.

Paragraph C (12) of the Proposal projected the minimum sums expected to be under management by the Eta model for each year between 1988 and 1992. It also provided that if these minimum objectives were not achieved, Ashland could terminate Janien’s employment. Finally, paragraph C (21) provided that if "for any reason” Janien left Ashland’s employment he was entitled to "a royalty of the higher of $50,000 or 15% of gross revenues per annum of any and all existing or future accounts” using the Eta model or "any derivative thereof’. The gross revenue was the 1% fee charged customers by Ashland for the funds under management. In June of 1989, after the parties had settled on Proposal 6, Janien approached Hickox with the draft of a nondisclosure agreement. Hickox refused to sign or discuss the agreement, however, and terminated Janien’s employment with Ashland.

After dismissing Janien, Ashland sought a permanent injunction which would bar Janien from using Eta. It asserted that Alpha was a trade secret of Ashland that formed an integral part of Eta. Ashland claimed, therefore, that any attempt by Janien to use Eta commercially would result in misappropriation of its trade secrets. Janien denied that Alpha was a trade secret or that he had misappropriated it and counterclaimed for damages, asserting that Ashland had breached the contract between the parties and that he was entitled to recover lost profits.

Supreme Court held that: (1) the parties orally agreed to be bound by the terms of Proposal 6; (2) Proposal 6 was a joint venture agreement; (3) defendant’s proposed nondisclosure agreement was consistent with the terms of Proposal 6; (4) Hickox’s refusal to negotiate the terms of the nondisclosure agreement and his termination of Janien constituted a breach of fiduciary duty under the joint venture agreement; (5) Janien was entitled to damages for lost profits based on the projections set forth in paragraph C (12) of Proposal 6; and (6) Alpha was not a trade secret and, therefore, Janien had not misappropriated Ashland’s trade secrets.

The Appellate Division modified the judgment, concluding that since Proposal 6 did not contain an agreement to share losses, it could not be classified as a joint venture. The Court held that defendant was entitled to recover, nonetheless, because the parties had intended to be bound by Proposal 6 and Ashland had breached the agreement’s implied duty of good faith and fair dealing by using the nondisclosure issue as an excuse for failing to implement the contract.

II.

Plaintiff first disputes that the parties had a contract or that Ashland breached it. It is a settled principle of contract construction, however, that when "the intent [of parties to be bound by an agreement] must be determined by disputed evidence or inferences outside the written words of the instrument * * * a question of fact [is] presented” (Mallad v County Fed. Sav. & Loan Assn., 32 NY2d 285, 291 [citing O’Neil Supply Co. v Petroleum Heat & Power Co., 280 NY 50, 56]). Proposal 6 was the product of six months of detailed negotiations between the parties. The testimony surrounding these efforts, and of the parties’ eventual satisfaction with its terms, provides support for the finding of the trial court, affirmed by the Appellate Division, that the parties intended to be bound by it. Accordingly, our power to review the question is at an end.

Plaintiff contends, however, that even if it is assumed there was an agreement, the Appellate Division erred in determining that it breached an implied covenant of good faith and fair dealing by its refusal to negotiate a nondisclosure agreement (see, Kirke La Shelle Co. v Armstrong Co., 263 NY 79, 87; see also, Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 403; see generally, Restatement [Second] of Contracts § 205; 2 Farnsworth, Contracts § 7.17 [a] [2d ed 1990]). Plaintiff’s position is that an implied covenant of good faith and fair dealing cannot create duties which are inconsistent with other terms of the contractual relationship and that here the nondisclosure agreement was inconsistent with the terms of Proposal 6 (see, Murphy v American Home Prods. Corp., 58 NY2d 293, 304).

The contract provisions dealing with the transfer of ownership of Eta make clear that the parties considered confidentiality and determined that Janien was to retain some of the benefits of his work. Paragraph C (27) provided that no proprietary information associated with Eta would be disclosed without the consent of both the board of directors of Ashland and Janien and stated that all research performed before and after acceptance of the model, except as to proprietary information inherent in the model, remained the property of Janien. Under the terms of Proposal 6, Janien was required to present Ashland with detailed information concerning Eta, information which until then had been seen only by Janien and a professor at Wharton. Before doing so, Janien understandably wanted some agreement on the rights to his research. Thus, he requested Hickox to prepare a letter detailing those rights and implementing the confidentiality provisions of Proposal 6. Hickox agreed to prepare such a letter but neglected to do so. Accordingly, Janien brought the draft nondisclosure agreement with him to the meeting at which his research was to be disclosed to Hickox. Janien had based the agreement on a form book example, and told Hickox that it was intended only as a preliminary proposal. Nonetheless, Hickox rejected the draft out of hand and fired Janien.

Supreme Court found that Hickox used the draft as a pretext to breach the agreement and based upon this finding the Appellate Division was warranted in concluding that Ashland failed in its implied duty of acting to implement Proposal 6 in good faith.

III.

Plaintiffs primary contention is that defendant is not entitled to recover lost profits even if it is responsible for breaching the contract.

A party may not recover damages for lost profits unless they were within the contemplation of the parties at the time the contract was entered into and are capable of measurement with reasonable certainty. The rule that damages must be within the contemplation of the parties is a rule of foreseeability. The party breaching the contract is liable for those risks foreseen or which should have been foreseen at the time the contract was made. The breaching party need not have foreseen the breach itself, however, or the particular way the loss came about. It is only necessary that loss from a breach is foreseeable and probable (see, Restatement [Second] of Contracts § 351; 3 Farnsworth, Contracts § 12.14 [2d ed 1990]).

The second requirement, that damages be reasonably certain, does not require absolute certainty. Damages resulting from the loss of future profits are often an approximation. The law does not require that they be determined with mathematical precision. It requires only that damages be capable of measurement based upon known reliable factors without undue speculation (see, Restatement [Second] of Contracts § 352; 3 Farnsworth, Contracts § 12.15 [2d ed 1990]; see, Kenford I, supra, and Kenford II, supra; and see generally, Restatement [Second] of Contracts §§ 351, 352; 3 Farnsworth, Contracts §§ 12.14, 12.15 [2d ed 1990]).

Our decisions in the Kenford appeals illustrate these rules. In 1969, Erie County entered into a contract with the Kenford Co. for the construction of a domed stadium to be built near the City of Buffalo. The contract provided, among other things, that construction of the stadium was to commence within 12 months of the contract date and that the parties would execute an attached 20-year contract authorizing Ken-ford to manage its operation. A breach occurred when construction of the stadium was not timely commenced and Kenford instituted an action for damages sustained as a result of the breach, principally anticipated profits from the management contract. In Kenford II plaintiff sought damages for lost appreciation in the value of real estate located in the periphery of the stadium site.

In Kenford I we held that to recover damages for lost profits, it must be shown that: (1) the damages were caused by the breach; (2) the alleged loss must be capable of proof with reasonable certainty, and (3) the particular damages were within the contemplation of the parties to the contract at the time it was made. We also noted that in the case of a new business seeking to recover loss of future profits, a stricter standard is imposed because there is no experience from which lost profits may be estimated with reasonable certainty and other methods of evaluation may be too speculative (67 NY2d, at 261; see also, Cramer v Grand Rapids Show Case Co., 223 NY 63, 67-68). Whether the claim involves an established business or a new business, however, the test remains the same, i.e., whether future profits can be calculated with reasonable certainty.

In discussing the first requirement, we held that the evidence was insufficient because it did not establish that the parties contemplated at the time of contracting that the County would be liable for lost profits over the 20-year term of the management agreement in the event of breach. The contract was silent on the subject and, therefore, we followed a "commonsense” rule to determine what the parties intended by considering what they would have concluded had they considered the subject at the time of entering into the contract. The evidence surrounding the negotiation and execution of the contract, we said, failed to demonstrate that the parties expected Erie County to bear the heavy responsibility for estimated future profits that plaintiff sought to impose on it. Similarly, in Kenford II, where plaintiff sought damages for loss of anticipated appreciation in the value of land surrounding the proposed stadium site, we held that the evidence did not support the conclusion that the parties contemplated liability, particularly when Kenford was under no contractual obligation with the County to purchase the land (Kenford II, supra).

Applying these standards to the present action, it is manifest from an examination of Proposal 6 that the parties contemplated that Janien could recover damages if the agreement was not completed and that those damages could include lost profits from accounts using Eta. Paragraph C (21) provided that defendant was to receive 15% of the gross revenues per annum if he left Ashland "for any reason” and paragraph C (12) predicted the minimum funds anticipated to be under management from marketing Eta. The amounts set forth were minimum reasonable levels of investment the parties determined Eta would earn after studying and discussing the prospects extensively. Thus, the issue of future earnings was not only contemplated but also fully debated and analyzed by sophisticated business professionals at the time of these extended contract negotiations, projections of the increments to be anticipated over the years were calculated and provisions made for Janien’s share of the anticipated profits. Inasmuch as Janien was entitled to damages based upon the revenues derived from "any and all existing or future” accounts, plaintiff must have foreseen that if it breached the contract defendant would be entitled to lost profits.

Plaintiff relies on Goodstein Constr. Corp. v City of New York (80 NY2d 366) for its claim that damages for lost profits were not contemplated here. Goodstein involved a claim for an estimated $800 million in future profits based on the breach of an agreement to negotiate a contract. We concluded that the claim for future lost profits under those circumstances was "even more 'irrational’ and 'illogical’ ” than the claim advanced in Kenford I (id., at 375). By contrast, the parties before the court on this appeal had concluded a contract, as the courts below found, explicitly projected the dollar amounts they anticipated to be invested in the enterprise and provided that Janien was entitled to 15% of revenues earned from those investments if he was terminated for any reason.

Lost profits must also be established with reasonable certainty. In Kenford I we observed that plaintiff’s evidence on the profits to be earned in managing the stadium was "massive and, unquestionably, represented] business and industry’s most advanced and sophisticated method for predicting the probable results of contemplated projects * * * [i]ndeed, it [was] difficult to conclude what additional proof could have been submitted” (Kenford I, at 261-262). Nevertheless, we determined that the evidence failed to meet the requirement of reasonable certainty because it rested on a host of speculative assumptions and few known factors (Kenford I, at 262). Before accepting plaintiffs figures, the court was obliged to assume not only that the stadium had been completed, opened and operated successfully for 20 years, but that it also attracted professional sporting events, concerts and conventions fully supported by the public.

The projection of future profits in this case requires no such speculation.

First, defendant’s claim rests on the parties’ carefully studied professional judgments of what they believed were realistic estimates of future assets to be managed by the use of Eta. By applying Ashland’s 1% management fee to these sums to determine the revenues derived from them and then allotting defendant 15% of those revenues, as paragraph C (21) provided, Janien’s loss could be easily computed. Second, while the parties were launching a new investment strategy, they were not entering a new or unfamiliar business (cf., Cramer, supra). Ashland had been a substantial presence in the financial management field for several years. The introduction of Eta was viewed as an addition to and an enhancement of Ashland’s existing Alpha strategy, which had been highly successful, and Ashland intended to rely on its experience in marketing Alpha to market Eta. Third, Ashland had a ready reservoir of customers for Eta because it intended to appeal not only to the market in general but also to its existing Alpha customers. Finally, although Eta had never been used in a commercial setting, it had been extensively back-tested over a number of years, and Ashland itself had enough confidence in its ability to perform to predict minimum amounts of funding which Eta would attract. It agreed to compensate Janien on that basis. Based on this evidence, the court properly relied on the projections of paragraph C (12) and the provisions of paragraph C (21) to hold that defendant had met his burden of proving his lost profits with reasonable certainty.

IV.

Plaintiff also contends that the court erred in denying it injunctive relief prohibiting Janien from exploiting Eta. It maintains Alpha is a trade secret of Ashland, that Alpha forms an integral part of Eta and, therefore, that any attempt by defendant to use Eta would constitute misappropriation of its trade secrets. Supreme Court concluded Alpha was not a trade secret.

There is no generally accepted definition of a trade secret but that found in section 757 of Restatement of Torts, comment b has been cited with approval by this and other courts (Matter of New York Tel. Co. v Public Serv. Commn., 56 NY2d 213, 219, n 3; see also, Delta Filter Corp. v Morin, 108 AD2d 991, 992; Eagle Comtronics v Pico, Inc., 89 AD2d 803, 804, lv denied 58 NY2d 601). It defines a trade secret as "any formula, pattern, device or compilation of information which is used in one’s business, and which gives him an opportunity to obtain an advantage over competitors who do not know or use it.” (Id.) The Restatement suggests that in deciding a trade secret claim several factors should be considered:

"(1) the extent to which the information is known outside of [the] business; (2) the extent to which it is known by employees and others involved in [the] business; (3) the extent of measures taken by [the business] to guard the secrecy of the information; (4) the value of the information to [the business] and [its] competitors; (5) the amount of effort or money expended by [the business] in developing the information; (6) the ease or difficulty with which the information could be properly acquired or duplicated by others” (Restatement of Torts § 757, comment b).

As these considerations demonstrate, a trade secret must first of all be secret: whether it is is generally a question of fact (see, Kaumagraph Co. v Stampagraph Co., 235 NY 1, 8-9; Union Kol-Flo Corp. v Basil, 64 AD2d 861, 862; Chevron U.S.A. v Roxen Servs., 813 F2d 26, 29 [2d Cir]; 1 Milgrim, Trade Secrets § 2.03, at 2-32, 2-48 — 2-49 [1993]).

Ashland maintains that in finding Alpha was not a trade secret the court relied on the fact that its six financial criteria were public knowledge. It contends the trade secret at issue is not the published criteria used in the calculations, but rather the series of mathematical formulae used to evaluate the criteria (cf., Integrated Cash Mgt. Servs. v Digital Transactions, 920 F2d 171, 174 [2d Cir]).

There was conflicting evidence on the point but the trial court chose to credit defendant’s expert who testified that a financial analyst could, based on the public disclosures made by Ashland, reproduce the calculations without access to the internal computer commands which constitute the Alpha software. The court concluded that in view of the ease with which others could acquire and duplicate the information, Alpha was not a trade secret but a promotional device. Based on this, it determined defendant was not guilty of misappropriation and the Appellate Division affirmed. This finding is supported by evidence in the record and is, therefore, beyond the scope of our review.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Kaye and Judges Titone, Hancock, Jr., Bellacosa, Smith and Levine concur.

Order affirmed, with costs.


author: Smith, J.

text:
    [624 NE2d 1013, 604 NYS2d 918]
    The People of the State of New York, Appellant, v Dexter Harris, Respondent.
    Argued October 13, 1993;
    decided November 22, 1993

      POINTS OF COUNSEL

      Matthew J. Murphy, District Attorney of Niagara County, Lockport (Thomas H. Brandt of counsel), for appellant.
    The trial court correctly denied defendant’s CPL 30.30 motion to dismiss. (People v McKenna, 76 NY2d 59.)

      William R. Lewis, Public Defender, Lockport (Robert E. Nicely of counsel), for respondent.
    The People were not ready for trial within the time period set forth in CPL 30.30 (1) (a). (People v McKenna, 76 NY2d 59.)
   OPINION OF THE COURT

Smith, J.

The issue in this CPL 30.30 appeal is whether the People may delay producing the Grand Jury minutes in response to a defendant’s CPL 210.30 motion to inspect and dismiss until after the court specifically orders them to do so. The Appellate Division dismissed the indictment on the basis of our decision in People v McKenna (76 NY2d 59) where we held that the People’s postreadiness delay in failing to provide Grand Jury minutes to the court, when added to the prereadiness delay, violated CPL 30.30’s strictures and required the dismissal of the indictment. Because that court correctly determined that a portion of the period of time within which the People failed to provide the Grand Jury minutes should be chargeable to the People, we affirm.

During the course of defendant’s street fight with one James Jones, defendant allegedly struck Jones in the face with a garbage can, causing serious injuries. Defendant’s friend called the police and defendant was arrested.

On June 16, 1990, at the City Court of Niagara Falls, detectives submitted an information/complaint accusing defendant of assault in the first degree and criminal possession of a weapon in the fourth degree. After a number of adjournments properly charged to the People, defendant was indicted on November 13, 1990. Defendant received a 14-day adjournment and was arraigned on the indictment on November 27, 1990. At that time, the People declared their readiness for trial.

Defendant filed an omnibus motion on January 23, 1991, asking the court, inter alia, to inspect the Grand Jury minutes and to dismiss the indictment pursuant to CPL 210.30. The People failed to respond to defendant’s omnibus motion, including the motion to inspect the Grand Jury minutes, until March 28, 1991, 64 days after defendant’s initial request. The People did not oppose the trial court’s review of the minutes but objected to disclosure of the minutes to defendant unless the court found such disclosure "absolutely necessary.” The People also opposed dismissal of the indictment.

On April 18, 1991, defendant made a CPL 30.30 motion alleging that the indictment against defendant should be dismissed for noncompliance with that statute. Supreme Court allowed the trial to proceed and required the People to respond to the motion within three weeks. Jury selection began on April 22, 1991. On May 2, 1991, prior to the court’s determination of defendant’s CPL 30.30 motion, defendant was convicted of assault in the first degree, a class C felony. On May 29, 1991, the court denied defendant’s CPL 30.30 motion, concluding that all the time that had elapsed since the filing of the indictment was attributable to the court.

The Appellate Division reversed, holding that, under People v McKenna (76 NY2d 59, supra), the People were chargeable with a portion of the period of time during which they failed to provide the Grand Jury minutes, and that period, when added to other time chargeable to the People, prevented defendant from receiving a speedy trial, as required by CPL 30.30. A Judge of this Court granted the People’s motion for leave to appeal.

The People argue that the Appellate Division’s affirmance improperly imposes a duty upon the People to provide the Grand Jury minutes within 36 days of defendant’s filing of the motion to provide the minutes. They argue further that since CPL 210.30 contemplates a two-step process for a motion to dismiss based on legally insufficient Grand Jury evidence— first, a decision by the court to inspect and, second, a decision on the dismissal question — they were not obligated to produce the minutes until the court ruled on the motion to inspect. Defendant contends that where the People fail to justify their delay in providing the Grand Jury minutes to the trial court and where they are properly charged with four months and 28 days of preindictment delay, they are not ready for trial within the time period prescribed by CPL 30.30 (1) (a). Thus, defendant argues, the Appellate Division properly dismissed the indictment.

In addressing the postreadiness time properly charged against the People in this case, the People first declared readiness on November 27, 1990. On January 23, 1991, at a pretrial conference, defendant submitted his omnibus motion seeking, inter alla, inspection of the Grand Jury minutes. As of April 18, the date of defendant’s motion to dismiss under CPL 30.30, the People had not provided the trial court with the Grand Jury minutes. This failure occurred despite the court’s specific request for the minutes from the People on April 8, 1991. Indeed, the People had not even responded to defendant’s omnibus motion until March 28, 1991, more than two months after defendant submitted it.

In McKenna, this Court noted that CPL 30.30 "was intended only to address delays occasioned by prosecutorial inaction” (see, People v McKenna, 76 NY2d 59, 63, supra). Thus, in that case, we held that where the trial court’s delay in deciding a CPL 210.30 motion resulted from the People’s failure to provide the Grand Jury minutes five months after they made their statement of readiness, dismissal of the indictment was warranted under CPL 30.30.

The People argue that McKenna does not support the Appellate Division’s reversal here, especially since Supreme Court acknowledged responsibility for the delay. The People contend that this case is distinguishable from McKenna because the People in McKenna had negligently failed to provide the Grand Jury minutes to the court whereas here, there was no finding of negligence and the Appellate Division arbitrarily imposed a 36-day limit on the People’s time to present the Grand Jury minutes to the court. A specific finding of the People’s negligence, however, was unnecessary in McKenna and is unnecessary in this case. It is sufficient that the People’s inaction resulted in a delay in the court’s disposition of the motion. Here, not only did the People fail to make the Grand Jury minutes available in its response to defendant’s motion, it is not clear on this record when the People submitted them to the trial court.

Furthermore, the People did not oppose defendant’s CPL 210.30 motion at the time defendant submitted it and objected to disclosure when they responded in writing without supporting the objection with reasons. Because CPL 210.30 (3) places the burden on the People to show "good cause” why the motion should not be granted, if the People opposed the motion on any grounds, it was incumbent upon them to establish them or presume that the motion would be granted.

Thus, in view of the statutory design, we hold that where the People make no objection to the branch of the CPL 210.30 motion seeking inspection of the Grand Jury minutes, the People’s obligation to produce the Grand Jury minutes within a reasonable time begins to run from the date the defendant’s CPL 210.30 motion (to inspect the Grand Jury minutes and to dismiss the indictment) is made. This holding is consistent with our determination in McKenna where the People’s failure to "simultaneously” supply the Grand Jury minutes upon the defendant’s omnibus motion was charged to the People from the date of that motion (see, People v McKenna, 76 NY2d 59, 62, supra).

This holding is also consistent with the purpose of CPL 210.30. Although the People are correct in their argument that CPL 210.30 contemplates a two-step decision-making process for the trial court, it does not necessarily follow that the People’s duties upon the making of the motion are similarly divisible. In actual practice, most defendants include their requests for inspection and dismissal in the same motion paper (see, CPL 210.30 [1]) and, in the absence of some basis for denying inspection, the court grants the request for inspection as a matter of routine, inspects and then simply announces its decision to grant or deny dismissal in a single ruling. This practice is consistent with the intention of the Legislature, which amended CPL 210.30 in 1980 to eliminate any necessity for a threshold showing by the defendant on a motion to inspect and to require the court to grant the motion unless a showing of "good cause” is made by the People (L 1980, ch 842; see, Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11A, CPL 210.30, at 640-641). Thus, while the preamendment practice may have been otherwise (see, People v Howell, 3 NY2d 672), the current — and statutorily mandated — expectation is that a favorable ruling on the motion to inspect will be automatic, except in those exceptional cases in which the prosecution has asserted some "good cause” ground for denial. In other words, the "inspection” aspect of the defendant’s CPL 210.30 motion is ordinarily not a litigated matter.

Consequently, although the courts’ internal decision-making process theoretically consists of two sequential steps, the courts usually have no need to — and routinely do not — separately announce their decisions to "grant” inspection. Because there is customarily no formal intermediate announcement on the motion to inspect, there is simply no reason for the People to await such an announcement. Instead, it is generally expected that the People will simply produce the Grand Jury minutes within a reasonable time after the CPL 210.30 motion has been made. Indeed, in a case such as this, where the People offered no opposition to inspection by the court, it makes little sense to hold that the People may wait for a "ruling” by the court on the "inspection” aspect of the CPL 210.30 motion before coming forward with the Grand Jury minutes, since the decision on that point is inevitable (see, CPL 210.30 [3]; Preiser, op. cit., at 641). In these circumstances, waiting for a ruling on the defense’s "inspection” request would be pointless.

The Appellate Division held that 36 days was a "reasonable” period within which the People should have provided the minutes. In affirming that determination on the principles of McKenna, we find no reason to upset that Court’s conclusion.

Accordingly, the order of the Appellate Division should be affirmed.

Chief Judge Kaye and Judges Simons, Titone, Hancock, Jr., Bellacosa and Levine concur.

Order affirmed.


author: Chief Judge Kaye.

text:
    [624 NE2d 1017, 604 NYS2d 922]
    The People of the State of New York, Respondent, v Rafael Mendoza, Also Known as Raphael Mendoza, Appellant. The People of the State of New York, Respondent, v Ramon Martinez, Appellant. In the Matter of George J., a Person Alleged to be a Juvenile Delinquent, Appellant. The People of the State of New York, Respondent, v Darius Coleman, Appellant.
    Argued September 2, 1993;
    decided November 22, 1993
    Argued October 6, 1993;
    decided November 22, 1993

      POINTS OF COUNSEL

      Kenneth Finkelman, New York City, and Philip L. Weinstein for appellant in the first above-entitled action.
    I. The trial court improperly denied appellant a Mapp hearing where appellant’s factual allegations were merely countered by the prosecutor. (People v Ray, 65 NY2d 282; People v Carlisle, 172 AD2d 169; People v Gruden, 42 NY2d 214; People v Rivera, 20 NY2d 669; People v Millan, 69 NY2d 514; People v Jones, 47 NY2d 528; People v Horman, 22 NY2d 378; People v Santos, 68 NY2d 859; People v Weldon, 17 NY2d 814.) II. Appellant was improperly adjudicated a second felony offender since, prior to the adjudication, the offense which constituted the prior felony was reduced to a misdemeanor by an ameliorative legislative amendment. (People v Behlog, 74 NY2d 237; People v Morton, 48 AD2d 58; People v Parker, 41 NY2d 21; People v Morse, 62 NY2d 205; People v Dietze, 75 NY2d 47; People v Liberta, 64 NY2d 152; People v Barber, 289 NY 378; People v Shapiro, 100 Mise 2d 662; United States ex rel. Sero v Preiser, 506 F2d 1115; Matter of Abrams v Bronstein, 33 NY2d 488.)

      Robert M. Morgenthau, District Attorney of New York County, New York City (Robert C. F. Reuland and Nikki Kowalski of counsel), for respondent in the first above-entitled action.
    I. The court correctly denied defendant’s unsupported motion for a suppression hearing. (People v Holder, 149 AD2d 325, 74 NY2d 794; People v Mendoza, 186 AD2d 458, 81 NY2d 889; People v Whitfield, 81 NY2d 904; People v Reynolds, 71 NY2d 552; People v Gomez, 67 NY2d 843; People v Gruden, 42 NY2d 214; Matter of Tyrell B., 177 AD2d 375; People v Arnau, 58 NY2d 27, 468 US 1217; People v Pleasant, 76 AD2d 244, 54 NY2d 972, 455 US 924; People v McCoy, 71 Misc 2d 381.) II. The court correctly adjudicated defendant a second felony offender on the basis of his 1985 conviction for possession of stolen property. (People v Mendoza, 186 AD2d 458; Marcus

      Assocs. v Town of Huntington, 45 NY2d 501; Matter of Keane [Bethlehem Steel Co. — Lubin, 2 AD2d 148, 6 NY2d 910; Zaldin v Concord Hotel, 48 NY2d 107; People v Parris, 79 NY2d 69; Palmer v Van Santvoord, 153 NY 612; New York State Bridge Auth. v Moore, 299 NY 410; Matter of Tonis v Board of Regents, 295 NY 286; McGinnis v Royster, 410 US 263.)

      E. Joshua Rosenkranz, New York City, and Diana L. Fogle for appellant in the second above-entitled action.
    Mr. Martinez was entitled to a potentially dispositive suppression hearing based upon his allegations that he was acting lawfully before and at the time of the police seizure and that the police had no reason to suspect him of criminal activity. (People v Harrison, 57 NY2d 470; People v Cantor, 36 NY2d 106; People v Nedo, 177 AD2d 849; People v Rodriguez, 79 NY2d 445; People v Zarate, 160 AD2d 466; People v Mosley, 136 AD2d 500; People v Sutton, 91 AD2d 522; People v Murray, 172 AD2d 437, 78 NY2d 971, 79 NY2d 942; People v Gomez, 67 NY2d 843; People v Reynolds, 71 NY2d 552.)

      Robert T. Johnson, District Attorney of Bronx County, Bronx (Howard B. Sterinbach, Peter D. Coddington and Billie Manning of counsel), for respondent in the second above-entitled action.
    The hearing court’s summary denial of appellant’s Mapp motion was proper since appellant failed to assert any factual allegation supporting his claim that the police lacked reasonable suspicion to stop him. (People v McRay, 51 NY2d 594; People v Allen, 73 NY2d 378; People v Bleakley, 69 NY2d 490; People v Borges, 69 NY2d 1031; People v Morales, 65 NY2d 997; People v Martinez, 80 NY2d 444; People v Reynolds, 71 NY2d 552; People v Gomez, 67 NY2d 843; People v Kitchen, 162 AD2d 178, 76 NY2d 941; People v Covington, 144 AD2d 238, 73 NY2d 890.)

      Kenneth Rabb, New York City, Lenore Gittis and Lance Dandridge for appellant in the third above-entitled proceeding.
    The court below erred as a matter of law in upholding the summary denial of appellant’s suppression motion on the ground that the factual allegations were legally insufficient under CPL 710.60 (a) where that issue was not raised by the presentment agency and was not the basis for the Family Court’s summary denial of the motion. The court below further erred as a matter of law in finding the factual allegations supporting appellant’s suppression motion insufficient to warrant a hearing under CPL 710.60 (1). (People v Millan, 69 NY2d 514; People v Dodt, 61 NY2d 408; People v Rivera, 20 NY2d 669; People v Wesley, 73 NY2d 351; People v Landy, 59 NY2d 369; People v Gruden, 42 NY2d 214; Matter of Dean S., 185 AD2d 324; Matter of Dallas L., 183 AD2d 897; People v Rodriguez, 79 NY2d 445; Matter of Gilbert O., 183 AD2d 466.)

      O. Peter Sherwood, Corporation Counsel of New York City (Julian L. Kalkstein and Larry A. Sonnenshein of counsel), for respondent in the third above-entitled proceeding.
    Appellant’s failure to articulate a factual basis for a Dunaway hearing in his motion papers required that his motion to suppress be denied as a matter of law without the necessity of a hearing. (People v Wharton, 74 NY2d 921; People v Millan, 69 NY2d 514; People v Roberto H., 67 AD2d 549; People v Polanco, 179 AD2d 531, 80 NY2d 1012; People v Roberts, 169 AD2d 284; People v Reynolds, 71 NY2d 552; People v Kitchen, 162 AD2d 178, 76 NY2d 941; People v Murray, 172 AD2d 437, 78 NY2d 971, 79 NY2d 942; People v Rodriguez, 172 AD2d 191, 78 NY2d 926.)

      Diane Pazar, New York City, and Philip L. Weinstein for appellant in the fourth above-entitled action.
    Appellant was deprived of his right to be free from unreasonable searches and seizures and of due process by the court’s summary denial of his request for a Mapp and Dunaway hearing, where appellant raised sufficient allegations of fact to support the grounds alleged for suppression by asserting that he had not engaged in any criminal activity or given the police either probable cause or reasonable suspicion, and where the police observation of appellant with the gun, if true, conferred standing. (Dunaway v New York, 442 US 200; People v Landy, 59 NY2d 369; Wong Sun v United States, 371 US 471; People v Cantor, 36 NY2d 106; People v Martinez, 80 NY2d 444; People v Howard, 50 NY2d 583, 449 US 1023; People v Boodle, 47 NY2d 398, 444 US 969; People v Goodfriend, 64 NY2d 695; People v Murray, 172 AD2d 437, 78 NY2d 971, 79 NY2d 942; People v Millan, 118 AD2d 236, 69 NY2d 514.)

      Robert M. Morgenthau, District Attorney of New York County, New York City (Luke Martland and Marc Frazier Scholl of counsel), for respondent in the fourth above-entitled action.
    The hearing court properly denied appellant’s suppression motion without directing an evidentiary hearing. (People v Reynolds, 71 NY2d 552; People v Gomez, 67 NY2d 843; People v Wesley, 73 NY2d 351; People v Gruden, 42 NY2d 214;
      People v Roberto H., 67 AD2d 549; People v Murray, 172 AD2d 437, 79 NY2d 942; People v Holder, 149 AD2d 325, 74 NY2d 794; People v Goodfriend, 64 NY2d 695; People v Morris, 182 AD2d 856, 80 NY2d 835; People v Morrow, 183 AD2d 853, 80 NY2d 932.)
   OPINION OF THE COURT

Chief Judge Kaye.

These appeals center on the statutory requirement that a motion to suppress "contain sworn allegations of fact” (CPL 710.60 [1]). In each case, the trial court summarily denied a suppression motion and the Appellate Division affirmed because the motion did not satisfy the statutory requirement, placing before us the legal question of what constitutes factual sufficiency for purposes of a suppression motion.

The issue is best understood by first outlining the governing statute, CPL 710.60. When made before trial, suppression motions must be in writing, state the legal ground of the motion and "contain sworn allegations of fact,” made by defendant or "another person.” The factual allegations may be based upon personal knowledge or information and belief, so long as the sources of information and grounds for belief are stated. The prosecutor may then file an answer admitting or denying the movant’s allegations (see, CPL 710.60 [1]).

Based on these papers, the court must decide whether to summarily grant or deny the motion, or conduct a hearing. The motion must be summarily granted if defendant’s papers satisfy the foregoing requirements and the People concede the material factual allegations, or if the People agree not to offer the evidence sought to be suppressed (CPL 710.60 [2]). On the other hand, the motion may be summarily denied if defendant does not allege a proper legal basis for suppression, or (with two exceptions) if the "sworn allegations of fact do not as a matter of law support the ground alleged” (CPL 710.60 [3] [b]).

If the motion is not determined summarily, the court must conduct a hearing and make the necessary findings of fact (CPL 710.60 [4]). And whether or not a hearing was conducted, the court must upon determining the motion set forth its findings of fact, conclusions of law and the reasons for its determination (CPL 710.60 [6]).

The two exceptions to the court’s authority to summarily deny suppression motions for lack of adequate factual allegations relate to motions to suppress statements as involuntarily made (Huntley motions) or an identification stemming from an improper procedure (Wade) (CPL 710.60 [3] [b]). Accordingly, the sufficiency of the movant’s factual allegations most often arises on motions to suppress tangible evidence (Mapp) or other evidence as the fruit of an unlawful seizure (Dunaway), as in the appeals before us.

Hearings are not automatic or generally available for the asking by boilerplate allegations. Rather, as will be discussed, we conclude that factual sufficiency should be determined with reference to the face of the pleadings, the context of the motion and defendant’s access to information. We now turn to the facts of the present appeals.

People v Martinez

Defendant was arrested and indicted for various crimes stemming from an alleged sale of drugs. In response to defendant’s demand for a bill of particulars, the prosecutor averred that on October 21, 1990, at approximately 3:15 p.m. at a specified Bronx location, defendant sold cocaine to an undercover officer in exchange for prerecorded "buy money.” Thereafter, according to the bill of particulars, the undercover left and radioed the field team, which responded to the scene about five minutes later. Defendant fled, grabbing and swinging an occupied baby stroller, and was finally arrested after a struggle. A search revealed the buy money and more cocaine, and defendant allegedly stated that he was using the baby as a shield because he feared being shot.

Defendant then filed an omnibus motion seeking, among other things, hearings to suppress the statement and physical evidence. In support of the Mapp branch of the motion, defense counsel affirmed, on information and belief:

"7. The accused was in a public place acting in a lawful manner. When he was stopped and searched, the police officers removed pre-recorded buy money and other currency from his person.
"8. There was no reasonable suspicion, at the time of the stop, that the accused had committed, was committing, or was about to commit a crime.
"9. The police officers had no reason to believe that they were legally entitled to stop the accused. The stop was therefore in violation of the accused’s Federal and State Constitutional rights.”

Opposing the Mapp hearing, the People argued that defendant’s motion was factually deficient as it focused on the "very moment” of arrest but failed to address his activities five minutes earlier, when he allegedly sold drugs. While granting a Huntley hearing, Supreme Court summarily denied the Mapp motion, explaining that the moving papers failed to set forth any factual issue requiring a hearing.

Defendant was convicted upon a guilty plea and a divided Appellate Division affirmed, holding that defendant’s motion papers "consisted solely of legal conclusions and conclusory allegations” (187 AD2d 310, 310). The dissenting Justice opined that defendant’s papers alleged sufficient facts to require a hearing, and granted defendant leave to appeal to this Court.

Matter of George J.

Respondent, a juvenile, was arrested on March 7, 1990 and charged with acts that, if committed by an adult, would constitute the crime of criminal sale of a controlled substance. Annexed to the juvenile delinquency petition was a supporting deposition of an undercover officer, who stated that at 5:15 p.m. he purchased four vials of crack from respondent. A second supporting deposition, that of the arresting officer, stated that respondent was removed from a nearby community center at about 5:20 p.m. and identified by the undercover officer.

Respondent’s counsel moved to suppress the show-up identification on two theories: that it was suggestive (Wade) and as the fruit of an unlawful seizure (Dunaway). In connection with the Dunaway branch of the motion, the affirmation in support averred that "respondent was stopped while in the Lefrak City housing complex. The respondent denies being involved in any unlawful activity at the time he was seized. The respondent was stopped without reasonable suspicion or probable cause.”

The presentment agency opposed suppression and Family Court entertained oral argument on the motion. After considering the parties’ arguments, the court summarily denied the motion, concluding that "[i]nsufficient evidence has been presented by the respondent to require a suppression hearing on this issue.” Respondent was adjudicated a juvenile delinquent after a fact-finding hearing.

The Appellate Division unanimously affirmed, holding that respondent’s motion stated only conclusory legal grounds for relief which were not supported by sufficient factual allegations. This Court granted respondent leave to appeal.

People v Coleman

Defendant was arrested on a Manhattan street and indicted for criminal possession of a loaded firearm. The People supplied defendant with a disclosure form indicating that $353 in cash and a gun were obtained from him, and that an identification took place at the scene; a postarrest written statement was annexed in which defendant denied any connection to the gun.

Defendant subsequently moved to suppress the statement, identification and tangible evidence. In support of the Mapp motion, defense counsel averred:

"Upon information and belief, based upon conversations with Mr. Coleman, the defendant was not engaged in any criminal activity on August 21, 1990. Nor had he given the police any probable cause to believe that he might be engaged in unlawful behavior. Nevertheless, at about 12:15 a.m., police arrived, threw him against a car, and began to search him. The police contend, and in conversations with affirmant, Mr. Coleman concedes, a quantity of over $300 in cash was seized from his person. The police additionally contend that Mr. Coleman was observed by them to throw down a loaded .22 caliber pistol upon their approach. Although Mr. Coleman denies this allegation, the allegation by the prosecution’s witnesses that the defendant was seen in actual possession of the item is sufficient to confer standing on the defense to challenge the alleged seizure (People v. Sutton, 91 AD2d 522 [1st Dept. 1983]). Affirmant alleges that if the weapon was discarded by the defendant, this action only occurred as a result of illegal police conduct — that is, the detention and arrest of Mr. Coleman on less than reasonable suspicion that he had committed a crime (See People v. Howard, 50 NY2d 583). The defense moves to suppress the pistol, as well as the currency found on the defendant’s person, as the fruits of illegal police conduct.”

In their response, the People stated they intended to introduce the gun, but not the money, on their direct case. Opposing suppression of the gun, the People asserted that defendant failed to allege facts warranting suppression, including a showing of standing. Supreme Court summarily denied the Mapp motion for lack of standing, but granted defendant leave to renew upon further submissions. The court also granted defendant’s request for Wade and Huntley hearings. Defendant did not submit additional papers, and subsequently pleaded guilty. A divided Appellate Division affirmed, and a dissenting Justice granted defendant leave to appeal.

People v Mendoza

Defendant, a customer in a Manhattan discount store, was charged with grand larceny and possession of stolen property after a search by a store security guard uncovered a personal stereo and credit cards belonging to another. In a motion to suppress, defense counsel alleged that "[a]t the time of the apprehension, Mr. Mendoza was committing no criminal act apparent to any law enforcement official. He was forcibly stopped and searched by a security guard. This person is either a licensed peace officer or working under the supervision of a licensed peace officer.” In response, the prosecutor stated that "the search of which defendant complains was undertaken by Pernell Robinson, a private person who was not acting as a agent of law enforcement.”

Supreme Court denied suppression on the ground that the People’s response demonstrated that a Mapp hearing was unnecessary. Defendant thereafter pleaded guilty and the Appellate Division affirmed, holding that defendant’s "clearly speculative allegation” about the guard’s status did not meet the statutory requirement of sufficient facts in support of a suppression motion (186 AD2d 458, 459). A Judge of this Court granted defendant leave to appeal.

Discussion

CPL article 710 reflects competing policies. The Legislature has determined that defendants should have fair pretrial procedures to address alleged constitutional violations (compare, 1 LaFave and Israel, Criminal Procedure § 10.1, at 780 [1984] [noting that some jurisdictions do not have procedures for pretrial suppression]), yet hearings are generally "not available merely for the asking” (People v Gruden, 42 NY2d 214, 217). The requirement that facts be alleged in support of a suppression motion strikes a sensible balance between these competing policies. How, then, should the requirement be read and applied?

We conclude that the sufficiency of defendant’s factual allegations should be evaluated by (1) the face of the pleadings, (2) assessed in conjunction with the context of the motion, and (3) defendant’s access to information. Each of these criteria will be more fully discussed below.

(1) Defendant’s Motion Papers

"It is fundamental that a motion may be decided without a hearing unless the papers submitted raise a factual dispute on a material point which must be resolved before the court can decide the legal issue” (People v Gruden, 42 NY2d, at 215). Courts often struggle, however, with the threshold determination whether assertions in defendant’s motion papers are factual or "merely legal conclusions.” As one practitioner has observed, "[t]he developing case law supplies no easy distinction between the 'conclusory’ and the 'factual.’ ” (Tenenbaum, As a Matter of Fact It’s a Conclusion, NYLJ, Aug. 31, 1993, at 1, col 2.)

The extremes, of course, are easy to identify; the difficulty lies in the continuum in between. For instance, the following allegations are plainly factual: "On June 19, 1993, at 3:00 p.m., I was waiting for a bus on the corner of Broadway and 42nd St. when a uniformed police officer approached me stating 'people like you don’t belong in this neighborhood.’ She reached into my jacket pocket and removed a one-inch vial of cocaine.” These allegations provide sufficient factual information which, if uncontested by the People, would warrant summary suppression and enable the motion court to make the required findings of fact in support of its decision (CPL 710.60 [6]). By contrast, the allegation that "on June 19, 1993 my Fourth Amendment rights were violated” is clearly a legal conclusion. The pleading does not assert sufficient facts from which a court could conclude that suppression is appropriate.

More problematic are those pleadings framed in terms of mixed issues of law and fact. People v Reynolds (71 NY2d 552, 558) is an example. There, we closely divided on the question whether summary denial of a motion to suppress marihuana —alleged by the People to be in open fields — was proper. The majority held (id., at 558) that it was: "While the affidavit of defendant’s counsel submitted in support of the motion in-eludes conclusory assertions that the marihuana was found within the 'curtilage’ of the house, not in an 'open field’ but 'hidden in enclosed areas’, it contains no sworn allegations of fact supporting those conclusions (see, CPL 710.60 [1]).” The dissent argued that these allegations "can hardly be characterized as conclusory; they are statements of fact which could be established at an evidentiary hearing” (id., at 560 [Hancock, Jr., J., dissenting]).

Whether something is within the curtilage of a home is a mixed question of law and fact (see, United States v Arboleda, 633 F2d 985, 992 ["Terming a particular area curtilage expresses a conclusion”], cert denied 450 US 917). Merely alleging that an item is within the curtilage is not informative unless the factual basis for the claim is provided, for example: "the marihuana was growing 25 feet from my front door and was surrounded by a white picket fence.” Only then can a court decide whether there is a factual basis for suppression. Under Reynolds, it is incumbent upon the pleader, where possible, to provide objective facts from which the court can make independent factual determinations.

The logic of this requirement is apparent when tested against pleadings drawn in terms of more familiar mixed legal-factual issues, like probable cause or reasonable suspicion (see, e.g., People v Harrison, 57 NY2d 470, 477-478). An allegation that "I did nothing giving rise to probable cause” is, without more, plainly insufficient because probable cause is a mixed legal-factual issue and the pleading lacks the factual portion of the equation. Unless the pleading on its face sets forth the facts, the court cannot determine whether a hearing is necessary. Indeed, there may be no dispute as to the underlying facts, but only as to application of the law to the facts, in which case the motion could be determined on papers alone.

(2) Defendant’s Motion in Context

Though facially sufficient, a defendant’s factual allegations may be inadequate when read in the context of the case. Conversely, seemingly barebones allegations may, in context, be sufficient to require a hearing. Whether a defendant has raised factual issues requiring a hearing can only be determined with reference to the People’s contentions.

The motion to suppress is not the first document in a prosecution (CPL 710.40 [1]), and indeed is often preceded by information staking out the People’s position with respect to the circumstances of a search or arrest. For example, defendant may have received a CPL 710.30 notice, a voluntary disclosure form, a bill of particulars or supporting depositions. When defendant is able to specifically deny this information but fails to do so, it may be deemed a concession, which may render a hearing unnecessary (see, People v Gruden, 42 NY2d, at 218).

Reynolds again provides guidance. There, we noted that defendant did not "dispute the averments in support of the [search] warrant application that the 'greenhouse’ structure was located 150 feet from the residence on the property and that the marihuana was discovered merely by walking the land. No claim is made that the location and terrain of the area searched is other than is graphically shown in the photographs submitted with the warrant application, and no facts are asserted which would support a finding that the area is in any way related to the intimate activities of the home.” (71 NY2d, at 558.) Thus, defendant’s failure to deny the facts asserted in the search warrant application relating to her home — information which she also had — obviated the need for a hearing to determine those facts (see also, People v Gruden, 42 NY2d, at 218).

The manner in which context bears on the sufficiency of defendant’s factual averments is readily seen by comparing two typical street-crime situations, the buy-and-bust operation and the "suspicious” defendant. In a buy-and-bust, an undercover officer purchases drugs from a suspect (often paying with prerecorded currency), shortly followed by a search and arrest by backup officers (see, e.g, People v Wharton, 74 NY2d 921, 922). By contrast, in the course of routine patrol police may pat-down or search citizens based on perceived suspicious or unlawful behavior (see, e.g., People v Johnson, 64 NY2d 617, 618-619; People v Carney, 58 NY2d 51, 53-54; People v Sobotker, 43 NY2d 559, 562-563). In each case, the suppression motion may allege that when the police conducted the search, the defendant was merely standing on the street doing nothing wrong. The identical pleading may be factually sufficient in one context but not the other.

In the buy-and-bust situation, probable cause is generated by the drug transaction, and thus an allegation that defendant was merely standing on the street at the time of arrest does not frame a factual issue for the court’s determination; to do so defendant must additionally deny participating in the transaction or suggest some other grounds for suppression. But when the police claim that defendant was acting "suspiciously” or "furtively,” defendant could raise a factual issue simply by alleging that he or she was standing on the street doing nothing wrong when the police approached and searched (compare, e.g., People v Millan, 69 NY2d 514, 521; People v Rivera, 20 NY2d 669, 670-671). Indeed, frequently there is little else of consequence defendant can say.

(3) Information Available to Defendant

A third factor in determining the sufficiency of a defendant’s factual allegations is the degree to which the pleadings may reasonably be expected to be precise in view of the information available to defendant. The CPL expressly relieves defendant of the burden of pleading facts in support of a motion to suppress identification testimony (CPL 710.60 [3] [b]), likely because in many instances defendant simply does not know the facts surrounding certain pretrial identification procedures, such as photo arrays (People v Rodriguez, 79 NY2d 445, 452-453). It would be unreasonable to construe the CPL to require precise factual averments when, in parallel circumstances, defendant similarly does not have access to or awareness of the facts necessary to support suppression (see, People v Landy, 59 NY2d 369, 374; People v Gruden, 42 NY2d, at 218; compare, People v Wesley, 73 NY2d 351, 358-359 [CPL 710.60 requires defendant to plead facts demonstrating expectation of privacy: "it is after all the defendant alone who actually knows his or her connection with the searched area”]).

(4) Court’s Discretion to Conduct a Hearing

While technically not part of the test for determining the sufficiency of factual allegations, a fourth consideration bears mention.

The CPL does not mandate summary denial of defendant’s motion even if the factual allegations are deficient (see, CPL 710.60 [3] ["The court may summarily deny the motion”] [emphasis added]). If the court orders a Huntley or Wade hearing, and defendant’s Mapp motion is grounded in the same facts involving the same police witnesses, the court may deem it appropriate in the exercise of discretion to consider the Mapp motion despite a perceived pleading deficiency. Indeed, considerations of judicial economy militate in favor of this procedure; an appellate court might conclude that summary denial of the Mapp motion was improper, requiring the parties and witnesses to reassemble for a new hearing, often months or years later.

In this vein, we note that if neither the People nor the motion court identify a pleading deficiency, an appellate court should generally avoid using such a deficiency as a basis for denying the motion. The People can and often do waive pleading defects (see, People v Millan, 69 NY2d, at 521; People v Taylor, 97 AD2d 381, 381), and while such a waiver of course is not binding on the trial court, the Judge also might have, in the exercise of discretion, chosen not to invoke the defect in denying the motion. When an appellate court in the first instance identifies an inadequacy in defendant’s submission, it deprives the movant of the opportunity to seek leave to cure the defect, often a simple matter.

We next apply these principles to the cases before us.

People v Martinez

In this buy-and-bust case, defendant alleged that he was in a public place "acting in a lawful manner”; that there was no "reasonable suspicion” that he committed a crime; and thus the police had no reason to believe they were "legally entitled” to stop him. We conclude that defendant did not raise any factual issues to be resolved at a hearing, and accordingly affirm the summary denial of his motion.

Looking first at the face of defendant’s submission, it is devoid of any factual information as to his activities at the relevant time and is instead drawn in terms of mixed questions of law and fact. Defendant did not specifically deny having sold drugs to the undercover — indeed, the buy money was found on his person — and thus his failure to address the point (a matter about which he had personal knowledge) may be a factor in assessing the sufficiency of his submission.

We reject defendant’s argument that his averment of acting in a "lawful manner” was tantamount to a denial of drug dealing. First, the allegation is nonspecific as to when he was purportedly acting lawfully. Moreover, a bare claim of "lawful” conduct, without more, does not supply the court with any useful information about defendant’s conduct. Defendants could engage in hand-to-hand narcotics transactions yet still plead that they were acting within the law because of an unstated entrapment defense or lack of mens rea.

The context of the motion underscores the inadequacy of defendant’s submission. In a bill of particulars the prosecutor alleged that defendant sold drugs to an undercover officer and was arrested about five minutes later after a chase in which defendant used a baby as a shield. Probable cause was generated upon defendant’s sale of the drugs to the undercover, and thus defendant’s conduct "at the time of the stop” (motion [[ 8) is essentially irrelevant. Although defendant’s participation in the sale — even if expressly admitted — would not foreclose all possible challenges to the subsequent search and arrest, defendant did not identify any issue upon which a hearing was sought. Instead, defendant claimed in the most general terms that his constitutional rights were violated.

Finally, there is no suggestion that defendant’s lack of access to relevant information was an impediment to the motion.

In sum, we conclude the Appellate Division properly affirmed summary denial of the suppression motion.

Matter of George J.

CPL 710.60 applies to suppression motions made in juvenile delinquency proceedings (Family Ct Act § 330.2 [1]). Respondent raises no issues on appeal with respect to summary denial of the Wade motion, but claims that summary denial of the motion to suppress the same show-up on a Dunaway theory was improper. We disagree.

The allegations in support of the motion stated that "respondent was stopped while in the Lefrak City housing complex. The respondent denies being involved in any unlawful activity at the time he was seized. The respondent was stopped without reasonable suspicion or probable cause.” At oral argument on the motion, counsel again merely alleged that the seizure of defendant was without probable cause.

These allegations are similar to those in Martinez, which we concluded were insufficient. The supporting depositions annexed to the juvenile delinquency petition alleged that respondent was arrested in a buy-and-bust operation, yet the suppression motion provides no facts relating to respondent’s conduct, does not specifically deny selling drugs, and instead merely disclaims involvement in "unlawful activity” at the time of seizure. For the reasons stated in Martinez, we agree with the Appellate Division that these allegations were insufficient to warrant a hearing.

While respondent now claims that he could not know the basis for arresting officer’s actions inasmuch he has no access to the radio communications between the officers, that theory as a basis for suppression was never presented to the motion court (compare, People v Landy, 59 NY2d, at 374) and is thus unpreserved. Moreover, while respondent correctly notes that the presentment agency’s opposition papers did not identify a pleading deficiency, the trial court summarily rejected the motion for lack of evidentiary support — as was its prerogative. Accordingly, the Appellate Division properly based its affirmance on that ground.

People v Coleman

In response to the People’s disclosure that money and a gun were recovered from defendant, he moved to suppress both items. With respect to the money, defendant alleged that the police arrived, threw him against a car, searched him, and seized more than $300 — all without probable cause. The People agreed not to offer the money at trial, thus mandating suppression by operation of law (CPL 710.60 [2]). Accordingly, the only remaining Mapp issue related to the gun.

The face of defendant’s motion did not lay out a factual scenario which, if credited, would have warranted suppression, and thus the Appellate Division properly affirmed the summary denial of the motion. By contrast to his allegations regarding the money, defendant did not contend the gun was seized from his person, and indeed he denied all connection to the gun. Nevertheless, he alleged that if he did discard the gun "upon the[ ] approach” of the police officers, this was a result of an unlawful "detention and arrest.”

Of course, the detention and arrest occurred only after relinquishment of the gun, and hence that allegedly illegal police conduct could not serve as a basis for suppression. Accordingly, defendant now asserts on appeal that the gun was discarded as a result of illegal police pursuit (see, People v Holmes, 81 NY2d 1056, 1057-1058). But defendant never alleged in his motion papers that he was pursued by the police. Thus, defendant’s papers, on their face, do not supply a factual basis for the gun’s suppression.

Nor does the context of the motion aid defendant. Had suppression of the money been at issue it would be a closer question because the People never asserted the basis for the search; consequently, to place in issue the legality of that police conduct defendant could do little more than assert that he was on the street doing nothing wrong. With regard to the gun, however, defendant did not identify any illegal police conduct that would warrant suppression. Finally, lack of knowledge does not provide an excuse; had defendant been chased by the police, for instance, surely he was in a position to allege that.

People v Mendoza

Defendant, arrested after search by a store security guard, alleged that the man was "either a licensed peace officer or working under the supervision of a licensed peace officer,” while the prosecutor alleged that the search "was undertaken by Pernell Robinson, a private person who was not acting as a[n] agent of law enforcement.” With the pleadings in this posture, defendant’s motion was summarily denied and the Appellate Division affirmed. We remit for a hearing.

"It is settled that an unauthorized search or seizure by private individuals, including store detectives, does not render the evidence inadmissible at subsequent civil or criminal proceedings” (People v Jones, 47 NY2d 528, 533). The requisite State action, however, may be present if a store detective functions as an agent of law enforcement (id.) or is licensed to exercise police powers (see generally, People v Ray, 65 NY2d 282, 284-287).

Examining defendant’s motion papers, we note that the allegations about the security guard’s status were factual, as opposed to mixed legal-factual or purely legal. Thus, if the People did not dispute defendant’s claim, the motion court would have had sufficient factual basis for finding State action.

Next considering the context of the motion, we observe that while defendant’s papers focused solely on the "time of apprehension” (compare, People v Martinez, ante; Matter of George J., ante), the People did not object to the motion on this basis, nor did the trial court or the Appellate Division find a deficiency on that ground, and accordingly we do not consider it (see, People v Millan, 69 NY2d, at 521). Moreover, it is unclear whether the People had advised defendant of the predicate for the guard’s search, be it personal observations, a customer’s complaint or some other reason.

This is an instance where defendant’s lack of access to information precluded more specific factual allegations. Although the Appellate Division may have been correct in characterizing as "speculative” defendant’s allegation about the guard’s status — indeed, defendant provided no factual support for his claim — a guard’s licensing status, unlike facts regarding a defendant’s own actions or observations, is not something a defendant could be expected to know and thus allege with particularity. Nor was the allegation farfetched or in bad faith: stores often employ individuals as security guards who are invested with police powers (see, e.g., People v Ray, 65 NY2d, at 284-285).

The People’s denial of defendant’s allegation did no more than place in issue a fact to be resolved at a hearing. Defendant was not obliged to accept the People’s response, but in these circumstances could "ask the court to put the [People] to [its] proof’ (People v Gruden, 42 NY2d, at 218), to be tested by cross-examination. Thus, the trial court erred in summarily resolving a disputed factual issue.

Defendant does not seek vacatur of the guilty plea at this time, and the People do not oppose defendant’s requested remedy. Accordingly, the case should be remitted to Supreme Court, New York County, for a hearing in connection with defendant’s motion to suppress tangible evidence. If, after that hearing, the court concludes that suppression is appropriate, the guilty plea should be vacated and further proceedings on the indictment should be had as the circumstances may warrant. If the court concludes that suppression is not appropriate, the judgment of conviction should be amended to reflect that result. Defendant’s remaining contention is without merit (see, People v Walker, 81 NY2d 661).

Accordingly, in People v Martinez the order of the Appellate Division should be affirmed; in Matter of George J. the order of the Appellate Division should be affirmed, without costs; in People v Coleman the order of the Appellate Division should be affirmed; in People v Mendoza the order of the Appellate Division should be modified by remitting to Supreme Court, New York County, for further proceedings in accordance with this opinion and, as so modified, affirmed.

Judges Simons, Titone, Hancock, Jr., Bellacosa and Smith concur; Judge Levine taking no part.

In People v Mendoza: Order modified and case remitted to Supreme Court, New York County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed.

Judges Simons, Titone, Hancock, Jr., Bellacosa, Smith and Levine concur.

In People v Martinez and People v Coleman: Order affirmed.

In Matter of George J.: Order affirmed, without costs.