text:
    [639 NE2d 1124, 616 NYS2d 327]
    In the Matter of Avon Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 1.) In the Matter of Avon Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 2.) In the Matter of Briody Nursing Home, Respondent, v Loretta McBarnette, as Acting Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 3.) In the Matter of Conesus Lake Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 4. ) In the Matter of Conesus Lake Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 5. ) In the Matter of Elm Manor Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 6. ) In the Matter of Hurlbut Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 7.) In the Matter of Manor Oak Skilled Nursing Facility et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 8.) In the Matter of Newark Manor Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 9.) In the Matter of Newark Manor Nursing Home et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 10.) In the Matter of Sylcox Nursing Home and Health Related Facility et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 11.) In the Matter of Woodside Manor Nursing Home, Inc., et al., Respondents, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 12.) In the Matter of Valley View Manor Nursing Home, Respondent, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 13.) In the Matter of Valley View Manor Nursing Home, Respondent, v David Axelrod, as Commissioner of Health of the State of New York, et al., Appellants. (Proceeding No. 14.) In the Matter of Brothers of Mercy Nursing and Rehabilitation Center, Appellant, v Commissioner of the New York State Department of Health et al., Respondents.
    Argued May 4, 1994;
    decided June 30, 1994

      APPEARANCES OF COUNSEL

      G. Oliver Koppell, Attorney-General, Albany (Victor Pala

      dino, Jerry Boone and Peter H. Schiff of counsel), for appellants in the first 14 above-entitled proceedings and respondents in the last above-entitled proceeding.

      Cadwalader, Wickersham & Taft, New York City (William J. Natbony and Peter G. Bergmann of counsel), for appellant in the last above-entitled proceeding.

      Harter, Secrest & Emery, P. C., Rochester (Thomas G. Smith of counsel), for respondents in the first 12 above-entitled proceedings.

      Michael A. Rosenbloom, Rochester, for respondents in the 13th and 14th above-entitled proceedings.
   OPINION OF THE COURT

Memorandum.

In Matter of Avon Nursing Home v Axelrod (and 13 other proceedings), the orders of the Appellate Division should be affirmed, with costs; in Matter of Brothers of Mercy Nursing & Rehabilitation Ctr. v Commissioner of N. Y. State Dept. of Health, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and the judgment of Supreme Court, Albany County, reinstated.

In 1986, the Department of Health (DOH), which is responsible for setting the State’s Medicaid reimbursement rates for nursing homes and health-related facilities, implemented a new methodology for computing such rates based on several cost components (see, New York State Assn. of Counties v Axelrod, 78 NY2d 158). In 1987, DOH concluded that certain adjustments to key components had to be made because of a perceived hardship experienced by publicly operated facilities whose labor costs exceeded the regional average as a result of factors beyond their control. Thus, DOH promulgated the regional input price adjustment factor (RIPAF) (10 NYCRR 86-2.10 [c] [3] [i]).

In 1991, the United States Court of Appeals for the Second Circuit declared the RIPAF adjustment invalid on the ground that the State had violated the requirements of the Federal Boren Amendment. That provision demands that the States make certain "findings” and give certain "assurances” of adequacy before submitting changes in the State reimbursement plan for approval by the Federal Health Care Financing Administration (HCFA) (Pinnacle Nursing Home v Axelrod, 928 F2d 1306; see, 42 USC § 1396a [a] [13] [A]; 42 CFR 447.250 [a]; see also, 42 CFR 447.253). The Second Circuit ruled that the RIPAF adjustment was "null and void until such time that proper findings are submitted and approved by HCFA” (928 F2d, at 1318). Shortly after the Second Circuit’s decision was handed down, petitioners commenced these CPLR article 78 proceedings to annul DOH’s decision to apply the RIPAF adjustment to the calculation of their rates for prior years.

Inasmuch as the Second Circuit’s decision nullifying the RIPAF adjustment remains undisturbed, respondents must recalculate petitioners’ reimbursement rates for the affected years under the previously existing rate structure and without regard to the RIPAF adjustment. Respondents’ contention that the defect in the rate adjustment was "procedural” in nature and therefore subject to cure does not provide a valid reason to deny petitioners relief as to the rate adjustment that the Federal courts have already nullified. Equally unpersuasive are the State’s contentions based on its continuing efforts to obtain Federal approval of a pre-1992 effective date for the rate structure that was authorized in that year. If and when the State succeeds in those efforts, it may then pursue whatever remedies the law permits (cf., Matter of Jewish Home & Infirmary v Commissioner of N. Y. State Dept. of Health and Matter of New York Assn. of Homes v Commissioner of N. Y. State Dept. of Health, 84 NY2d 252 [decided herewith]).

At this point, petitioners are entitled to have their rates for the years in dispute recalculated and to be reimbursed for any amounts owed them by reason of that recalculation. We note that our rationale renders it unnecessary to determine whether the RIPAF adjustment promulgated in 1987 lacked a rational basis.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith and Ciparick concur; Judge Levine taking no part.

In Matter of Avon Nursing Home et al.: Orders affirmed, with costs, in a memorandum.

In Matter of Brothers of Mercy Nursing & Rehabilitation Ctr.: Order, insofar as appealed from, reversed, with costs, and judgment of Supreme Court, Albany County, reinstated in a memorandum.

       In Matter of Avon Nursing Home v Axelrod and the 13 related proceedings, petitioners’ reimbursement rate for the period between 1987 and 1991 is at issue. In Matter of Brothers of Mercy Nursing & Rehabilitation Ctr., only the reimbursement rate for 1992 is at issue, because the trial court determined that any claims challenging the RIPAF adjustment for earlier years are time barred. That ruling has not been placed before us on this appeal.


source: Caselaw Access Project

license: Public Domain

text:
    [639 NE2d 1127, 616 NYS2d 330]
    In the Matter of Richard Glosenger, Respondent-Appellant, v Cesar Perales, as Commissioner of the New York State Department of Social Services, Appellant-Respondent, et al., Respondent.
    Argued June 7, 1994;
    decided July 5, 1994

      APPEARANCES OF COUNSEL

      G. Oliver Koppell, Attorney-General, Albany (Victor Paladino, Jerry Boone and Peter H. Schiff of counsel), for appellant-respondent.

      Philip J. Barton, Elmira, for respondent-appellant.

      Peter Vollmer, Freeport, amicus curiae.

      Archibald R. Murray, Albany, and Gerald Norlander, Rensselaer, for New York State Bar Association, amicus curiae.

   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be modified, without costs, by dismissing the petition in its entirety and, as so modified, affirmed.

Petitioner, age 60 and disabled, had monthly income in 1991 of $763.80, consisting primarily of SSI disability benefits. Petitioner’s income was the sole means of support for himself and his wife, then 58 years old and not disabled, who had no income of her own. Petitioner also received Medicaid coverage; his monthly income less applicable disregards — $710.90—fell below the Medicaid eligibility standard for a two-person household of $716.66 per month.

Pursuant to Social Services Law § 366 (2) (a) (7), respondent Department of Social Services promulgated 18 NYCRR 360-4.2 (b) effective May 31, 1991, which provides that an ineligible spouse living with a Medicaid applicant not be counted as part of the Medicaid household in determining eligibility unless the spouse is aged, blind or disabled, or has income equal to or greater than the difference between the medically needy income standard for a one- and two-person household. Known as an "income-deeming” provision, the regulation deems certain income of the ineligible spouse to be available for the support of the medically needy spouse in determining Medicaid eligibility. Households with two incomes are compared to the two-person income standard, and those with one income are compared to the one-person income standard.

Accordingly, petitioner was informed by Chemung County Department of Social Services that his Medicaid eligibility would thereafter be determined according to the income standard for a household of one, not two. Because petitioner’s net income exceeded the income standard for a one-person household — $500—he was thus rendered ineligible for Medicaid unless he qualified for coverage on a monthly basis under the "spenddown” provisions (see, Social Services Law § 366 [1] [a] [5]). As a result, petitioner qualified for Medicaid coverage only in months in which he incurred medical expenses of more than $210.90.

We reject petitioner’s contention that 18 NYCRR 360-4.2 violates Federal or State law and uphold the regulation.

Petitioner’s reliance on 42 CFR 435.811, providing that "a Medicaid agency must use an income standard * * * that is (a) [b]ased on family size; [and] (b) [u]niform for all individuals in a covered group” is misplaced (emphasis added). Although not defined terms, courts and Congress have consistently recognized the difference between "income standards” and "methodologies” used to determine Medicaid eligibility (see, Atkins v Rivera, 477 US 154, 163-166; Camacho v Perales, 786 F2d 32, 43-45 [2d Cir]). An income-deeming provision, such as the one at issue here, is a methodology, not an income standard (see, 46 Fed Reg 47980). Indeed, addressing a similar challenge to New York’s Medicaid eligibility requirements in effect prior to the regulation at issue, the Second Circuit expressly rejected application of 42 CFR 435.811 on the ground that it applied only to income standards, and rejected the petitioner’s argument that New York was required by that regulation to apply the income standard for a two-person household to an applicant living with an ineligible spouse (see, Camacho v Perales, 786 F2d, at 43-45). The difference between an income standard and a methodology recognized in Camacho was subsequently adopted by Congress in amending the Medicaid laws (see, HR Rep No. 100-391 [I], 100 Cong, 1st Sess 504-505, reprinted in 1987 US Code Cong & Admin News 2313-1, 2313-324 — 2313-325), and has also been adopted by the Supreme Court (see, Atkins v Rivera, 477 US, at 165).

The applicable Federal provision is 42 USC § 1396a (a) (10) (C) (i) (III), which provides that "the methodology to be employed in determining such eligibility * * * shall be no more restrictive than the methodology which would be employed under the [SSI] program.” A methodology is considered to be no more restrictive if, by its use, additional individuals may be eligible for medical assistance and no individuals who are otherwise eligible are made ineligible for Medicaid (see, 58 Fed Reg 4919). Despite petitioner’s claim of unfairness — that his status changed under the new rule and he is now treated as if he were living alone — New York’s income-deeming provision is essentially identical to the income-deeming provision employed for purposes of determining eligibility for SSI benefits (see, 20 CFR 416.1163 [d]), and thus is not more restrictive than Federal law permits.

Under State law, eligibility for Medicaid must be determined with reference to the number of family members in the household "as defined in regulations by the commissioner consistent with federal [Medicaid] regulations” (Social Services Law § 366 [2] [a] [7]). The Federal Medicaid regulations provide that the income or resource methodology used must be "(a) [u]niform for all individuals in a covered group; and (b) [reasonable” (see, 42 CFR 435.850).

The term "covered group” refers to the identified groups to whom States may offer Medicaid coverage, such as the aged, the blind and the disabled (see, 42 CFR 435.301 [b] [2]-[3]; 46 Fed Reg 47978-47979). Petitioner is eligible for Medicaid because he is disabled, and thus belongs to that covered group. Coverage is uniform for all members of a covered group if New York "provide[s] Medicaid to all individuals eligible to be members of that group” (42 CFR 435.301 [b] [3]). Because the regulation at issue does not distinguish among disabled SSI-related Medicaid applicants, but applies uniformly to anyone in that group, this requirement is met. As petitioner only claims that he is treated less favorably than SSI recipients who qualify for the two-person income standard, he does not allege a violation of the uniformity requirement.

The reasonableness of 18 NYCRR 360.4-2 is presumed in light of the fact that the regulation employs "[t]he methodology used to determine eligibility of individuals in the cash assistance program related to the covered medically needy group” (42 CFR 435.851 [b]). That presumption was not rebutted by petitioner.

We further reject petitioner’s claim that the regulation violates the guarantee of equal protection (NY Const, art I, § 11). Because it neither impinges on a fundamental right nor discriminates against a suspect class, the regulation is valid if rationally related to a legitimate State interest (see, Matter of Lee v Smith, 43 NY2d 453, 460). The State’s legitimate interest in conserving public assistance funds and allocating those funds to the neediest applicants (see, Matter of Jones v Blum, 101 AD2d 330, affd 64 NY2d 918) is rationally advanced by the requirement that income of an ineligible spouse be deemed available to the applicant. The concomitant requirement that a household in which only one spouse has income be assessed with reference to the one-person income standard, also rationally serves that objective.

Inasmuch as petitioner has not prevailed, he is not entitled to attorneys’ fees (see, 42 USC §§ 1983, 1988; CPLR 8601 [a]).

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur in memorandum.

Order modified, etc.

      . This regulation applies only to calculation of household size for income eligibility. As to resource eligibility, petitioner’s household remains a two-person household (see, 18 NYCRR 360-4.2 [b]).

      . As petitioner’s wife was determined to be disabled as of March 1, 1994, petitioner’s eligibility is determined with reference to the income standard for a two-person household as of that date (see, 18 NYCRR 360-4.2 [b]). Thus, his challenge is limited to the period between June 1, 1991 and March 1, 1994. Moreover, as of February 18, 1994, 42 CFR 435.811 and other Federal Medicaid regulations were substantially amended (see, 58 Fed Reg 4908). Our analysis is limited to the regulations as they existed before amendment.


text:
    [639 NE2d 1130, 616 NYS2d 333]
    The People of the State of New York, Respondent, v James Ortiz, Appellant.
    Argued June 7, 1994;
    decided July 5, 1994

      APPEARANCES OF COUNSEL

      Elizabeth Manning, New York City, and Philip L. Weinstein for appellant.

      Robert T. Johnson, District Attorney of Bronx County, The Bronx (Mark S. DeMarco and Billie Manning of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be affirmed.

The dispositive issue is whether the trial court’s denial of the requested missing witness instruction is reversible error under the facts and circumstances of this case applying our standard rubrics. At trial, defendant Ortiz joined in a request for an adverse inference instruction as to a nontestifying police officer, who was in a car near the scene of the buy-and-bust criminal drug transaction that led to the arrest and conviction. The undercover officer who actually engaged in the drug sale and the arresting officer testified concerning identification aspects of the case. The jury convicted defendant, the Appellate Division affirmed the judgment, and a Judge of this Court granted leave to appeal. We now affirm, because on this record it was not unreasonable for the trial court to refuse to give the requested instruction on the ground that the nontestifying undercover officer’s testimony would have added only cumulative evidence. Defendant Ortiz and a codefendant were arrested after an ordinary buy-and-bust drug transaction in The Bronx. At trial, the purchasing undercover officer testified that he was part of a police team sent to East 153rd Street and Melrose Avenue, a drug-prone location. It was 2:55 p.m. on a sunny August day. The officer left his partner in an unmarked car and walked some 50 feet to the corner, when the codefendant yelled out, "Blue Tops.” The officer responded, "Let me get two,” at which point two blue vials of cocaine were produced from the codefendant’s pocket. He gave them to defendant Ortiz, who passed them along to the officer, who paid Ortiz in prerecorded buy money. Upon notification by the purchasing officer, a back-up team closed in and made the arrest.

The trial court weighed the entire proof from the People in rendering its instruction ruling. That court did not commit any error or shift any burdens with respect to this ruling. The record justifies the inferences and conclusions drawn by the trial court to support its well-informed and supportable denial of the requested instruction (People v Gonzalez, 68 NY2d 424, 430; People v Macana, 84 NY2d 173, 177 [decided today]).

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur.

Order affirmed in a memorandum.


text:
    In the Matter of Carlson Associates et al., Appellants, v Thomas C. Jorling, as Commissioner of the New York State Department of Environmental Conservation, Respondent.
    Submitted June 27, 1994;
    decided July 5, 1994
   Motion, insofar as it seeks leave to appeal from that portion of the Appellate Division order which severed the third counterclaim and remitted to Supreme Court for a trial on the severed third counterclaim, dismissed upon the ground that that portion of the order does not finally determine the proceeding within the meaning of the Constitution; motion for leave to appeal otherwise denied. Motion for a stay dismissed as academic.


text:
    In the Matter of Stephen Gary Effron, a Disbarred Attorney, Appellant.
    Submitted June 20, 1994;
    decided July 5, 1994
   Motion, insofar as it seeks leave to appeal from the Appellate Division order denying petitioner’s motion for reargument or, in the alternative, leave to appeal to the Court of Appeals, dismissed upon the ground that that order does not finally determine the proceeding within the meaning of the Constitution; motion for leave to appeal otherwise denied.


text:
    Amir Manocherian et al., Appellants, v Lenox Hill Hospital et al., Respondents, et al., Defendants.
    Decided July 5, 1994
   Chief Judge Kaye and Judge Smith taking no part.


text:
    Aldofina Montes et al., Appellants, v Manufacturers Hanover Trust Company, Respondent and Third-Party Plaintiff. John J. Montes, Third-Party Defendant-Respondent.
    Submitted June 6, 1994;
    decided July 5, 1994
   Motion for clarification denied. [See, 83 NY2d 797, 907.]


text:
    The People of the State of New York, Respondent, v Elkanoh Krausz, Appellant.
    Submitted June 27, 1994;
    decided July 5, 1994
   Motion to extend the time for argument or submission of the appeal and to continue the stay granted and stay continued until determination of the appeal.


text:
    The People of the State of New York, Appellant, v John N. Royko, Respondent.
    Decided July 5,1994
   On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), appeal dismissed upon the ground that the reversal by the Appellate Division was not "on the law alone or upon the law and such facts which, but for the determination of law, would not have led to reversal” (CPL 450.90 [2] [a]).


text:
    Laurence Sovik, Individually and Doing Business as 300 Sauna Co., Appellant, v Dawn M. Hogan et al., Respondents.
    Submitted May 16,1994;
    decided July 5,1994
   Motion for leave to appeal dismissed upon the ground that the paper sought to be appealed from is not a judgment or order from which an appeal to the Court of Appeals may be taken (CPLR 5512 [a]).


text:
    Joan C. Lipin, Appellant, v Robert M. Bender, Jr., et al., Respondents.
    Submitted May 31, 1994;
    decided July 5, 1994
   Motion by appellant for leave to inspect documents submitted for the Court of Appeals in camera review denied. Motion by appellant to strike denied. Motion by appellant for the imposition of sanctions denied. Cross motion by respondents for the imposition of sanctions denied.


text:
    In the Matter of The Buffalo News, Inc., Respondent, v Buffalo Enterprise Development Corporation, Appellant.
    Submitted June 13, 1994;
    decided July 5, 1994
   Motion to dismiss appeal as moot denied. Motion by respondent for an extension of time to file its brief granted. Respondent’s brief must be served and 20 copies filed within 30 days.


text:
    [639 NE2d 1131, 616 NYS2d 334]
    The People of the State of New York, Respondent, v Hilario Rosario, Appellant. The People of the State of New York, Respondent, v Jose Lopez, Appellant.
    Argued June 8, 1994;
    decided July 7, 1994
    APPEARANCES OF COUNSEL

      Elon Harpaz, New York City, and Philip L. Weinstein for Hilario Rosario, appellant.

      Ronna Gordon-Galchus, Kew Gardens, for Jose Lopez, appellant.

      Richard A. Brown, District Attorney of Queens County, Kew

      Gardens (Linda Cantoni and Steven J. Chananie of counsel), for respondent.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division in each case should be reversed and a new trial ordered.

In these cases involving charges of criminal narcotics sale arising out of a street "buy and bust,” the trial court erred by closing the trial to the public during the undercover officers’ testimony. The trial court’s ruling in 1991 was based on a legal standard that is no longer viable under our analysis and holding in People v Martinez (82 NY2d 436), decided in 1993.

In view of our disposition of the closure issue, we have no need to reach the parties’ arguments regarding the claimed Rosario violation.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur in memorandum.

In each case: Order reversed, etc.


text:
    John Abbott et al., Appellants, v Herzfeld & Rubin, P. C., et al., Respondents, et al., Defendants.
    Submitted May 9, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal as against defendant Marks Shron and Company, dismissed upon the ground that as to that party the order sought to be appealed from does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied, with $100 costs and necessary reproduction disbursements.


text:
    Steven Bauman, Appellant, v Bonnie Bauman, Respondent.
    Submitted May 16, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed Supreme Court’s order denying plaintiffs motion to vacate the amended judgment of divorce, dismissed upon the ground that that part of the order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied.


text:
    Barbara E. Cohen, Respondent, v Michael Natif, Appellant.
    Submitted May 23, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed that part of the Supreme Court’s judgment denying defendant’s motion to amend his answer, dismissed upon the ground that that portion of the Appellate Division order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied, with $100 costs and necessary reproduction disbursements.


text:
    Colgate-Palmolive Corporation, Respondent, v Bell, Kalnick, Sassower, Jackson, Klee, Green & Rudd, Respondent. Robert Bell, Appellant.
    Submitted June 27,1994;
    decided July 7, 1994
   Judge Simons taking no part.


text:
    Joan Dawson et al., Appellants, v Richard L. Higgins, as Commissioner of the New York State Division of Housing and Community Renewal, et al., Respondents.
    Submitted June 27, 1994;
    decided July 7, 1994
   Appeal dismissed, without costs, by the Court of Appeals, sua sponte, upon the ground that the issues presented have become moot.


text:
    Joseph Fischer, Individually and as Legal Representative of Alter Fischer, Also Known as Aladar Fischer, et al., Appellant, v Miriam Fischer, Also Known as Jolan Fisher, et al., Respondents, et al., Defendants.
    Submitted May 16, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed that portion of the Supreme Court’s order denying plaintiffs cross motion, dismissed upon the ground that that portion of the order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied.


text:
    Robert A. Glasser et al., as Administrators c. t. a. of the Estate of Charlotte Glasser/Charlotte Kessler, Deceased, et al., Appellants, v Marvin Keller et al., Defendants, and K. V. Sastry, Respondent.
    Submitted May 23,1994;
    decided July 7,1994
   Motion, insofar as it seeks leave to appeal from the order of the Appellate Division denying reargument or, in the alternative, leave to appeal to the Court of Appeals, dismissed upon the ground that that order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied, with $100 costs and necessary reproduction disbursements.


text:
    Krapf Business Systems, Inc., Doing Business as Magnatag Products, Appellant, v Data Control, Inc., et al., Respondents.
    Submitted May 2, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed that part of Supreme Court’s order denying in part plaintiffs discovery motion and granting in part defendants’ cross motions pertaining to discovery, dismissed upon the ground that that portion of the order sought to be appealed from does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied, with $100 costs and necessary reproduction disbursements.


text:
    The People of the State of New York, Appellant, v Cary Fernandez, Respondent.
    Submitted June 6, 1994;
    decided July 7, 1994
   Motion to dismiss appeal denied. Motion by the Legal Aid Society for leave to file a brief amicus curiae and to participate in oral argument of the appeal herein granted in each respect. A brief may be served and 20 copies filed by the Legal Aid Society within 30 days of its receipt of appellant’s brief and appendix.


text:
    The People of the State of New York, Appellant, v Gregory Hampton, Respondent.
    Decided July 7,1994
   On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), appeal dismissed upon the ground that the reversal by the Appellate Division was not "on the law alone or upon the law and such facts which, but for the determination of law, would not have led to reversal” (CPL 450.90 [2] [a]).


text:
    In the Matter of Robert L. Schulz, Appellant, v State of New York et al., Respondents.
    Submitted June 27, 1994;
    decided July 7,1994
   Appeal transferred, without costs, by the Court of Appeals, sua sponte, to the Appellate Division, Third Department, upon the ground that a direct appeal does not lie when questions other than the constitutional validity of a statutory provision are involved (NY Const, art VI, § 3 [b] [2]; § 5 [b]; CPLR 5601 M [2]).


text:
    In the Matter of State Farm Mutual Automobile Insurance Company, Respondent, v Irene Trovato, Appellant, and Continental Insurance Company, Respondent.
    Submitted May 23, 1994;
    decided July 7, 1994
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed Supreme Court’s order denying appellant’s motion to vacate the judgment, dismissed upon the ground that that portion of the order does not finally determine the proceeding within the meaning of the Constitution; motion for leave to appeal otherwise denied, with $100 costs and necessary reproduction disbursements.


text:
    Milhelm Attea & Brothers, Inc., Also Known as Milhem Attea & Brothers, Inc., Appellant, v Department of Taxation and Finance of the State of New York et al., Respondents.
    Decided July 18, 1994
   Judge Levine taking no part.


author: Chief Judge Kaye. Titone, J.

text:
    [636 NE2d 1387, 613 NYS2d 854]
    The People of the State of New York, Appellant, v Crystal L. England, Respondent.
    Argued May 5, 1994;
    decided June 14, 1994

      POINTS OF COUNSEL

      Richard V. Manning, District Attorney of St. Lawrence County, Canton, for appellant.
    The People’s announcement of their readiness for trial after indictment and before arraignment satisfied the People’s obligations under CPL 30.30. (People v Kendzia, 64 NY2d 331; People v Jones, 185 AD2d 655; People v Battaglia, 187 AD2d 808; People v Correa, 77 NY2d 930; People v Smith, 82 NY2d 676; People v Cortes, 80 NY2d 201; People v Thompson, 107 Misc 2d 258; People v Anderson, 66 NY2d 529; People v Marsh, 127 AD2d 945, 70 NY2d 650.)

      F Birt Evans, Jr., Canton, for respondent.
    The People were not ready for trial within the meaning of CPL 30.30 because defendant-respondent was neither arraigned on the indictment nor was a bench warrant issued prior to the expiration of the six-month period. (People v Kendzia, 64 NY2d 331; People v Cortes, 80 NY2d 201; People v Staley, 41 NY2d 789; People v Bolden, 81 NY2d 146; People v Rhee, 111 AD2d 655; People v Marsh, 127 AD2d 945, 70 NY2d 650; People v Thompson, 107 Misc 2d 258; People v Rivera, 160 AD2d 234; People v McKenna, 76 NY2d 59.)
   OPINION OF THE COURT

Chief Judge Kaye.

In People v Kendzia (64 NY2d 331, 337), we held that a valid statement of readiness for trial under CPL 30.30 requires a communication of readiness on the record at a time when the People are in fact ready to proceed. On this appeal, we consider the narrow issue whether the People can validly answer ready where, wholly as a result of their own conduct defendant could not be arraigned, and thus trial could not commence, within the statutory time period.

On June 24, 1992, defendant was arrested on a felony complaint charging her with burglary in the third degree. She was arraigned in Oswegatchie Town Court and released under the supervision of the St. Lawrence County Probation Department. On December 24, 1992, a full six months after the filing of the felony complaint, the St. Lawrence County Grand Jury —as it was being discharged, after approximately 2 Vi months of service — handed up an indictment charging defendant with burglary in the second and third degrees and grand larceny in the third and fourth degrees. That indictment and 23 other indictments returned at the same time were filed that day in St. Lawrence County Court. With the indictments, the People filed notice of readiness for trial and declared readiness in all 24 cases.

On December 30, defendant sought dismissal of the indictment for failure to comply with CPL 30.30 alleging that, by the time of the scheduled arraignment — January 7, 1993 — 196 days would have elapsed from the commencement of the criminal action. The court found no excludable preindictment periods, and the People claimed no exclusion for the period between indictment and arraignment. County Court granted defendant’s motion and dismissed the indictment. The Appellate Division affirmed, noting that the timing of the People’s presentation to the Grand Jury was within the control of the People. As stated by the Appellate Division, in opposing defendant’s motion to dismiss "the People failed completely to offer any excuse or explanation for that delay, resulting in the reporting of the indictment on the last day of the period within which the People were required to be capable of bringing defendant to trial under CPL 30.30. Thus, it was the People’s unexplained laxity in obtaining an indictment that 'was a direct, and virtually insurmountable, impediment to the trial’s very commencement’ within the statutory period (People v McKenna, [76 NY2d 59,] 64)” (195 AD2d 751, 753 [Levine, J.]).

The sole question before us is whether, in the unusual circumstances presented — where, owing entirely to the People’s delay, no indictment was handed up for the full six months — the People could prior even to defendant’s arraignment genuinely have declared trial readiness. We agree with both County Court and the Appellate Division that the People’s announcement of readiness was insufficient to satisfy CPL 30.30, and conclude that the indictment therefore was correctly dismissed.

CPL 30.30 requires dismissal of a felony indictment where the People are not ready for trial within six months of the commencement of the criminal action (CPL 30.30 [1] [a]). The statutory period, 183 days in this case, commenced with the filing of the felony complaint on June 24, 1992 (see, People v Sinistaj, 67 NY2d 236, 237), and expired on December 24, 1992. County Court determined that all of that time was chargeable to the People, a holding not questioned on appeal.

There is no dispute that the People made a facially sufficient declaration for the record on December 24, 1992 by serving written notice of readiness upon defense counsel and declaring readiness in open court. Appellant’s challenge centers instead on whether the People were presently ready to try this defendant at the time they made the declaration. A statement of readiness at a time when the People are not actually ready is illusory and insufficient to stop the running of the speedy trial clock (see, People v Cole, 73 NY2d 957, 958).

We have on several occasions made clear that readiness is not defined simply by an empty declaration that the People are prepared to present their direct case. Trial readiness in CPL 30.30 means both a communication of readiness by the People on the record and an indication of present readiness (Kendzia, 64 NY2d, at 337). The inquiry is whether the People have done all that is required of them to bring the case to a point where it may be tried (see, People v McKenna, 76 NY2d 59, 64-65, and n, supra). The People are not presently ready for trial, for example, where they fail to provide Grand Jury minutes necessary for resolution of defendant’s motion to dismiss (see, McKenna, 76 NY2d, at 64) or where they fail to produce an incarcerated defendant for trial (see, Cole, 73 NY2d, at 958; People v Jones, 66 NY2d 529, 539-540). Delays caused by court congestion, on the other hand, do not affect the People’s readiness (see, People v Smith, 82 NY2d 676, 678; People v Correa, 77 NY2d 930, 931; People v Brothers, 50 NY2d 413, 417; People ex rel. Franklin v Warden, 31 NY2d 498, 501-502).

Defendant could not have been brought to trial before arraignment, the process by which the court acquires jurisdictian over a defendant (CPL 1.20 [9]). That is an elemental prerequisite to trial readiness. Here, the undisturbed factual finding is that the long delay was directly attributable not to defendant or court congestion, but to the People’s laxity in securing an indictment that provided a jurisdictional basis for the court to act at all. With arraignment within the statutory period impossible (see, CPL 210.10 [2]), the People’s statement of readiness for trial on December 24, 1992 was meaningless (see, Cole, 73 NY2d, at 958). In the circumstances, the People could not validly declare readiness until January 7, 1993 at defendant’s arraignment, entitling defendant to dismissal of the indictment. As the Appellate Division noted, "[pjostreadiness delay is not chargeable to the People when prosecutorial laxity merely affects the defendant’s ability to proceed to trial, but will be chargeable when such laxity, even if inadvertent, constitutes a direct impediment to commencement of the trial (see, People v McKenna, [76 NY2d, at 64]; People v Anderson, 66 NY2d 529, 536-538; Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11 A, CPL 30.30, at 174)” (195 AD2d 751, 752, supra).

The nub of our disagreement with the dissent is a simple one, amply supported by our case law: that the statement "ready for trial” contemplates more than merely mouthing those words. Where the trial court and Appellate Division have found the relevant period to be entirely chargeable to the unexplained laxity of the People, the announcement of trial readiness before defendant was even brought before the court can only be an empty declaration, insufficient to satisfy CPL 30.30.

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

Titone, J.

(dissenting). Before the decision in this case, the People had a full six months from the filing of the first accusatory instrument (plus any excused period of delay) to prepare a felony case and declare themselves "ready” to proceed to trial. Further, under our existing decisional law, the obligation to become "ready” consisted of no more than obtaining and filing an indictment and making a record statement of present readiness (see, People v Kendzia, 64 NY2d 331; People v Colon, 59 NY2d 921; People v Sturgis, 38 NY2d 625). While the People were free to do whatever else they deemed necessary to prepare their case for trial, the case law construing CPL 30.30 neither "looked behind” a record readiness statement nor imposed obligations unrelated to either the preparation of the People’s case or the fulfillment of the People’s statutory duties (see, People v McKenna, 76 NY2d 59; People v Giordano, 56 NY2d 524). Now, the majority turns the case law, as well as the purpose of the statute, on its head by ruling that CPL 30.30 requires the People not only to file an indictment, ready their case and declare readiness within the statutory period but also to take those steps in time to assure that the defendant can theoretically be arraigned within that period. Under the holding of this case, the People will no longer have the full six months provided by CPL 30.30 to become ready if they choose to file their indictment as the last step in the preparation of their case. Inasmuch as that conclusion has no support in the statutory language, the case law or the legislative history, I dissent.

Like the majority, I begin with the premise that the proper inquiry under CPL 30.30 is whether the People have "done all that is required of them to bring the case to the point where it may be tried” (People v McKenna, 76 NY2d 59, 64, supra [emphasis supplied]; see, People v Cole, 73 NY2d 957, 958; People v Brothers, 50 NY2d 413, 417). However, it does not follow from that truism that the People are obliged to do everything they can to assure that other nonprosecutorial procedures necessary to trying the defendant may be accomplished within the time allotted by the statute.

It is by now commonplace to observe that in adopting CPL 30.30, the Legislature eschewed a rule that would have required the accomplishment of particular pretrial procedures within specified time periods and instead embraced a rule that demands only that the essential prosecutorial functions be completed by a designated deadline (see, Preiser, Practice Commentaries, McKinney’s Cons Laws of NY, Book 11 A, CPL 30.30, at 167-168). By holding in this case that the People’s completion of those functions within the requisite 183 days was not sufficient because the defendant could not also have been arraigned within that period, the majority has, in effect, taken a giant step toward doing what the Court refused to do in People ex rel. Franklin v Warden (31 NY2d 498, 501-502), i.e., reading CPL 30.30 as though it contained the substance of the Administrative Board’s so-called "prompt trial” rule, which the Legislature resoundingly rejected.

The majority’s assertion that the People’s readiness declaration was insufficient to satisfy CPL 30.30 here is susceptible of

two distinct interpretations. On the one hand, the majority writing could be construed as holding that, as an element of their pretrial readiness obligations, the People must ensure that the defendant is arraigned as well as indicted before the expiration of the CPL 30.30 period so as to secure a jurisdictional predicate for trial (cf., People v Colon, supra; People v Sturgis, supra). On the other hand, the majority’s opinion could be read as holding that the People’s otherwise valid readiness declaration was vitiated because their choice to file an indictment on the very last day of their readiness period " 'constitute^] a direct impediment to commencement of the trial’ ” (majority opn, at 5, quoting 195 AD2d 751, 752). In either event, the analysis is insupportable.

To the extent that the majority adopts the Appellate Division’s view that ensuring a prompt arraignment is part of the People’s readiness obligation (see, 195 AD2d, at 752), its holding is inconsistent with both the statute and the relevant case law. Under CPL 210.10 (2), the very statute on which the majority relies, it is the duty of the court, not the prosecutor, to set an arraignment date and arrange for an at-liberty defendant to be notified. Additionally, we have already held that delays attributable to the need to arraign the defendant do not prevent the People from becoming ready (People v Cortes, 80 NY2d 201, 213; People v Correa, 77 NY2d 930). From this holding it is readily inferable that ensuring the arraignment of the defendant is not one of the tasks the prosecution must perform before it can validly declare its readiness (see, People v Giordano, 56 NY2d 524; cf., People v Brothers, 50 NY2d 413). Just as the court’s inability to arraign the defendant does not prevent the People from becoming ready within the prescribed period, so too does that inability not prevent the People from making a valid and legitimate declaration of readiness once they have filed an indictment. Indeed, as we stated in People v Giordano (supra, at 525 [emphasis supplied]), once the People announce their readiness on the record, they have satisfied their obligation under CPL 30.30, and '[w]hatever may in fact have been the reason why the case was not reached for trial thereafter, there is no basis for dismissal pursuant to that statute.”

Moreover, contrary to the majority’s repeated assertions, there was nothing "empty” or "illusory” about a readiness declaration made under these circumstances. The People declared themselves ready at a time when there was a jurisdictionally sufficient accusatory instrument filed and, accordingly, they could have proceeded to trial if all of the other, court-related conditions precedent to trial had been satisfied (cf., People v Colon, supra; People v Sturgis, supra). The fact that there was an additional impediment to the court’s acquisition of jurisdiction — i.e., the need to conduct an arraignment —is irrelevant to the legitimacy of the People’s readiness declaration, since, as previously noted, the responsibility for that aspect of jurisdiction-acquiring process rests with the court, not the prosecution.

To the extent that the majority’s holding rests on the premise that the People were "dilatory” in their case preparation and that their laxity delayed the proceeding, the analysis is equally flawed. First, the People were not "lax” or "dilatory,” at least insofar as CPL 30.30’s dictates are concerned, since they performed all of the tasks they were required to perform within the prescribed 183 days. To be sure, the People waited until the last day of the 183-day period to perform the final act of filing an indictment. However, up until the decision in this case, there was no apparent rule of law forbidding the People from using the full extent of their CPL 30.30 time or, alternatively, requiring them to perform in any particular order the various tasks collectively constituting the prosecutor’s duty. Thus, although the majority is apparently distressed about the People’s choice not to file their indictment at some earlier point in their readiness period, there is really no basis for attaching pejorative labels such as "dilatory” or "illusory” to the People’s conduct here.

Second, the delay which concerns the majority — the hiatus between the prosecutor’s readiness statement and arraignment — was necessitated not by any action or inaction on the People’s part, but rather by a mandate of the Legislature that imposes a duty on the courts to give the accused advance notice of an upcoming arraignment. This case is thus clearly distinguishable from People v McKenna (supra), in which it was the People’s negligent failure to procure Grand Jury minutes for some five months that prevented the proceedings on the defendant’s CPL 210.30 motion from going forward. Here, unlike in McKenna, the People did what was required of them during the 183 days they were given and were, at worst, indirectly responsible for foreclosing the theoretical possibility of an arraignment within the statutorily prescribed period. The delay in arraignment itself was not of the People’s making.

Yet another flaw in the majority’s theory is that it, in effect, converts the specific time frames set forth in CPL 30.30 into indeterminable periods whose length can be made to depend on the existence of other durational requirements unrelated to prosecutorial readiness. As a result, the People will no longer be certain that a readiness declaration made on the 180th or even the 175th day after the filing of the first accusatory instrument will suffice. After this case, for example, the People will have to file their indictment at least two days before the end of their six-month readiness period to ensure that the defendant could be arraigned and, at least theoretically, tried within that period. In the next case, the defendant may well claim that the People were required to file the indictment even earlier, since the accused must be given a reasonable time to make motions before he can be tried and the usual battery of pretrial motions cannot be made until the indictment has been filed and the arraignment held. In any event, the majority’s holding has injected an element of uncertainty into a statutory mandate that was intended to provide clear and unambiguous deadlines for prosecutors.

Finally, the majority’s theory is faulty because it takes elements of the analysis for prereadiness delay and combines them with elements of the entirely separate analysis for postreadiness delay, despite this Court’s repeated prior admonitions that those two classes of delay have very different legal consequences (People v Cortes, supra; People v McKenna, supra, at 63; People v Anderson, 66 NY2d 529). The core of the majority’s rationale is the assumption that the People were never actually ready despite their record declaration of readiness (see, majority opn, at 5). In other words, the problem in the case, as it is cast by the majority’s analysis, is an omission by the People that occurred before they made their supposedly "illusory” readiness declaration. Indeed, the majority implicitly recognizes the prereadiness character of the delay by citing People v Smith (82 NY2d 676, supra), People v Correa (supra), People v Brothers (supra) and People ex rel. Franklin v Warden (supra) in its discussion of when certain classes of delays do not affect the People’s readiness. However, rather than looking to those same cases to determine the proper disposition of this case, the majority unaccountably shifts to a line of authority and cases addressing pas ¿readiness delay (People v Jones, supra, at 539-540; People v Anderson, supra; People v Cole, supra; People v McKenna, supra; Preiser, op. cit., at 174). The analysis in those cases, however, has no bearing on this prereadiness case.

In prereadiness cases, all of the elapsed time that precedes the readiness declaration is "charged” to the People except to the extent that particular "delay” periods may be "excused” under the explicit statutory provisions. After the People’s readiness declaration, in contrast, delays by the People do not ordinarily implicate CPL 30.30 and do not require dismissal unless they constitute an actual impediment to the forward progress of the proceeding (see, e.g., People v McKenna, supra; People v Anderson, supra). Thus, in cases such as McKenna, Jones, and Cole, where the People neglected their responsibilities after they had declared readiness, it was appropriate and necessary to consider the effect of the People’s omissions on the court’s ability to commence trial. The same cannot be said in a prereadiness case such as this, where the timeliness and legitimacy of the readiness declaration itself are the only issues. The majority has reached a different conclusion only by devising a formula that, in effect, mixes apples and oranges.

Moreover, a close review of the analyses in two of the postreadiness cases on which the majority relies readily reveals the inapplicability of their holdings to these circumstances. In McKenna (supra), the forward progress of the proceedings was delayed because the People did not perform their obligation to supply the Grand Jury minutes in response to the defendant’s CPL 210.30 dismissal motion. In Jones, a delay in the proceedings was caused by the People’s failure to produce a defendant who was within their control. In both cases, the Court held that the period during which the People had not fulfilled their prosecutorial duty should be charged to the People because the proceedings could not go forward until the neglected task was completed. However, in both cases, dismissal under CPL 30.30 was deemed required only to the extent that the total period during which the People’s obligations remained unsatisfied exceeded the readiness period prescribed in CPL 30.30.

Thus, in People v McKenna, the indictment was dismissed because the five-month postreadiness period during which the People failed to produce the Grand Jury minutes, when "tacked” to the prereadiness delay periods attributable to the People, exceeded the allotted six-month period (see, 76 NY2d, at 66). Similarly, in Jones, dismissal was not required, notwithstanding the People’s trial-postponing 103-day delay in producing the defendant, because the total period of the People’s unexcused delay was less than six months (66 NY2d, at 539-540). In neither case did the Court sanction dismissal solely because inaction by the People had delayed the start of trial. Accordingly, under the McKenna-Jones formula, dismissal is required only when two conditions are present: (1) the periods of postreadiness delays to be charged against the People must be of such a nature as to prevent the proceedings from going forward (cf., People v Allen, 66 NY2d 529, 541-542) and (2) the total time during which the People failed to perform mandatory prosecutorial functions must exceed the statutory time period.

In this case, of course, application of that formula does not lead to dismissal, since only the first condition is satisfied. While it is unquestionably true that defendant could not be arraigned or tried until the People had performed their duty to obtain and file an indictment, it is also indisputable that, unlike in McKenna, the People here did not fail to perform that prosecutorial task within the six-month period that CPL 30.30 allows. Indeed, this case more nearly resembles People v Jones (supra), in which dismissal was not required, than it resembles People v McKenna (supra), in which a dismissal was ordered. Accordingly, whatever annoyance the majority may feel about the People’s timing, it cannot be said that the People overstepped their statutory deadline. Even assuming that the analysis for postreadiness delays has any application as to this prereadiness situation, the People, who filed an indictment and declared their readiness within the allotted 183 days, did not earn a CPL 30.30 dismissal.

Accordingly, the indictment in this case should not have been dismissed, and the courts below erred in sanctioning that result.

Judges Bellacosa, Smith and Ciparick concur with Chief Judge Kaye; Judge Titone dissents and votes to reverse in a separate opinion in which Judge Simons concurs; Judge Levine taking no part.

Order affirmed.

      . To the extent that the majority opinion suggests that the holdings in People v Smith (82 NY2d 676), People v Correa (77 NY2d 930, supra), People v Brothers (50 NY2d 413, 417, supra) and People ex rel. Franklin v Warden (31 NY2d 498, supra) are limited to delays (including arraignment delays) occasioned by "court congestion,” its rationale is inconsistent with the language of Giordano. Further, it is legally perilous, since there exists a myriad of systemic reasons other than court congestion and prosecutorial laxity that prevent the defendant from being tried on the precise day that he is indicted. If the Court means to say that the delays resulting from these impediments are not to be handled within the Brothers-Giordano-Correa framework, it is creating a vast realm of uncertainty and raising a whole new host of questions as to what types of delays will excuse prosecutorial unreadiness and what type of delays will vitiate declared prosecutorial readiness.

      . The Court’s holding leaves unclear, for example, what portion of the so-called "long” 14-day delay is properly chargeable to the People. Only 2 of those 14 days are attributable to the statutory "impossibility” of arraigning defendant because of the need to furnish advance notice (see, CPL 210.10 [2]). The remaining 12 days were, presumably, attributable to some scheduling difficulty, perhaps even to court congestion. Nothing in the Court’s writing addresses how the responsibility for this part of the delay should be allocated. The omitted analysis is critical because, as discussed below (see, at 11, infra), CPL 30.30 relief cannot be had for mere delay occasioned by prosecutorial "laxity.” Rather, dismissal under that statute is required only when the delay was chargeable to the People and exceeded the specified period for readiness (see, People v Jones, 66 NY2d 529, 539-540).

      . The underlying facts in People v Cole (supra), the other case on which the majority relies, are not apparent from the brief writings that were published in that case (see, 73 NY2d 957; 141 AD2d 829). Accordingly, it would not be fruitful to analyze the significance of the Cole holding in this context.


author: Smith, J.

text:
    [636 NE2d 1394, 613 NYS2d 861]
    In the Matter of the Claim of Roosevelt T. Johnson, Respondent, v Buffalo & Erie County Private Industry Council et al., Appellants. Workers’ Compensation Board, Respondent.
    Argued May 4, 1994;
    decided June 21, 1994

      POINTS OF COUNSEL

      Carl D. Copps, Albany, and Raymond C. Green, New York City, for appellants.
    I. The Court below erred in holding that workers’ compensation payments for permanent partial disability beyond three years postaccident are with "basic economic loss” and thus not subject to a compensation carrier’s lien or credit (offset) rights under Workers’ Compensation Law § 29. In so holding, the Court below erred in its reading of the Court of Appeals decision in Dietrick v Kemper Ins. Co. (76 NY2d 248); in failing to adhere to its own precedent in Matter of Fellner v Country Wide Ins. (95 AD2d 106) and Matter of Simmons v St. Lawrence County CDP (147 AD2d 323); and in its interpretation of Insurance Law §§ 5102, 5104 and Workers’ Compensation Law § 29 (1-a). In essence, the Court below has usurped the authority of the Legislature and judicially redefined "basic economic loss.” (Montgomery v Daniels, 38 NY2d 41; Pascente v Stoyle, 116 Misc 2d 641; Hughes v Ryder Truck Rental, 125 AD2d 177; Tortorello v Landi, 136 AD2d 545; Rulison v Zanella, 119 AD2d 957; Watkins v Bank of Castile, 172 AD2d 1061; Matter of Granger v Urda, 44 NY2d 91.) II. The Court below erred in holding that claimant’s third-party settlement without the carrier’s consent did not bar claimant from receiving further compensation payments for permanent partial disability. Said holding announced without rationale and without citation to authority, is in direct conflict with the relevant statutory and decisional law. (Matter of Daly v Daly Constr. Corp., 136 AD2d 798, 72 NY2d 807; Matter of Durham v Barker Chem. Corp., 151 AD2d 887; Matter of Parmelee v International Paper Co., 157 AD2d 878; Matter of Simmons v St. Lawrence County CDP, 147 AD2d 323; Matter of Fellner v Country Wide Ins., 95 AD2d 106; Scarpelli v Marshall, 92 Misc 2d 244; Pascente v Stoyle, 116 Misc 2d 641; Marc-Charles v Krug, 93 Misc 2d 603; Montgomery v Daniels, 38 NY2d 41; Hughes v Ryder Truck Rental, 125 AD2d 177.)

      Paul Shatkin, Buffalo, for Roosevelt T. Johnson, respondent.
    The Court below did not err in its application of Dietrick v Kemper Ins. Co. (76 NY2d 248) to the facts of this case and should in all respects be affirmed. (Harris v Channel Master, 59 AD2d 903; Matter of Parmelee v International Paper Co., 157 AD2d 878; Matter of Granger v Urda, 44 NY2d 91; Matter of Simmons v St. Lawrence County CDP, 147 AD2d 323.)

      Paul A. Crotty, Corporation Counsel of New York City, Brooklyn (Larry A. Sonnenshein, Steven M. Scotti and John Sweeney of counsel), for City of New York, amicus curiae.

    I. The Court below erred as a matter of law in determining that compensation payments for lost time from work more than three years from the date of accident represent payments for basic economic loss because Insurance Law § 5102 (a) (2) limits "basic economic loss” wage loss to a period of three years from the date of accident. Accordingly, pursuant to Workers’ Compensation Law §29 (1) and (1-a), the carrier has a lien for payments made for lost time from work more than three years postaccident. (Dietrick v Kemper Ins. Co., 76 NY2d 248; Matter of Simmons v St. Lawrence County CDP, 147 AD2d 323; Matter of Fellner v Country Wide Ins., 95 AD2d 106.) II. The claimant failed to obtain the workers’ compensation carrier’s consent to his third-party settlement and failed to obtain a compromise order pursuant to Workers’ Compensation Law §29 (5). Because the carrier’s lien may encompass payments for medical and other services as well as compensation, failure to obtain consent bars further compensation payments whether or not they represent first-party benefits for basic economic loss. (Matter of Parmelee v International Paper Co., 157 AD2d 878; Matter of Durham v Barker Chem. Corp., 151 AD2d 887; Matter of King v New York City Bd. of Educ., 132 AD2d 742.)
   OPINION OF THE COURT

Smith, J.

In this proceeding the issues are (1) whether workers’ compensation benefits paid to a claimant beyond three years may properly be construed as payment for "basic economic loss” under this Court’s decision in Dietrick v Kemper Ins. Co. (76 NY2d 248), and thus not subject to a compensation carrier’s Workers’ Compensation Law §29 lien and (2) whether a claimant may continue to receive compensation payments for permanent partial disability where the carrier’s consent was not obtained prior to the claimant’s settlement of a third-party action. Because payment of workers’ compensation benefits for more than three years may not be considered as payment for basic economic loss and a carrier’s consent is required prior to the settlement of a claimant’s third-party action, we reverse the order of the Appellate Division.

The facts are not disputed. Claimant Johnson, employed by appellant Buffalo and Erie County Private Industry Council, sustained compensable injuries during a September 11, 1986 car accident. Claimant filed for workers’ compensation benefits and also commenced a civil suit against the driver. Without the compensation carrier’s consent, however, claimant settled the civil suit for $10,000 — the full amount of the driver’s insurance policy, netting $6,666.67 after attorney’s fees.

Claimant was examined by a State Medical Examiner employed by the Workers’ Compensation Board who concluded that claimant had a permanent partial disability. The Workers’ Compensation Law (WCL) Judge adopted that determination in his decision following a hearing held on August 16, 1988 to determine claimant’s payments. Claimant’s compensation rate was set at $82.97 per week.

On March 28, 1989 at a hearing before the Board, in response to the Judge’s question whether the third-party action was pending, defendant’s counsel indicated that the matter had been settled and that the carrier’s consent was not necessary. At a hearing held January 23, 1990, the WCL Judge found that the claim came within the purview of Workers’ Compensation Law § 15 (8) (d) which provides a Special Injury Disability Fund allowing reimbursement to employers or carriers for all awards for permanent disability where the claimant’s injuries meet specified criteria (see, Minkowitz, Practice Commentaries, McKinney’s Cons Laws of NY, Book 64, Workers’ Compensation Law § 15, at 31).

By decision dated May 1, 1990, the State Insurance Fund, the insurance carrier, suspended claimant’s payments in light of his settlement of the third-party action without its consent. The carrier also requested that the Board formally close claimant’s file.

After a hearing to determine the implications of claimant’s third-party settlement, the WCL Judge held that the settlement was for pain and suffering and directed the carrier to continue the payments at the previous rate of $82.97 per week. The carrier and the Special Funds Conservation Committee appealed the WCL Judge’s decision to the Board. The Special Funds Conservation Committee’s standing in this case was based upon its requirement, pursuant to Workers’ Compensation Law § 15 (8) (d), to reimburse the carrier.

By a decision filed on September 18, 1991, the Board modified the WCL Judge’s decision, holding that as a result of claimant’s settlement of the third-party action without the carrier’s consent, claimant was precluded from receiving further compensation benefits subsequent to April 23, 1990. The Board also noted that "a carrier’s lien attaches to any recovery other than first party benefits under the Insurance Law.”

The Appellate Division reversed the Board’s determination (192 AD2d 763). Disagreeing with the Board that the carrier had a lien on claimant’s third-party action, that Court found no distinction between the disability award in Dietrick and the weekly award paid to claimant here for purposes of "basic economic loss” as defined in Insurance Law § 5102 (id., at 764). The Appellate Division further stated that both awards, "by their nature, extend beyond the three-year period for payment for loss of wages set by Insurance Law § 5102 (a) (2)” (id., at 764).

Here, the carrier argues that the Appellate Division erred by holding that claimant’s payments, which extend beyond three years, may constitute "basic economic loss” and by concluding that the carrier’s consent was unnecessary in the third-party action. Claimant contends that the Appellate Division correctly applied Dietrick to the facts of this case and that because his compensation payments constitute payment for economic loss, no lien may properly attach. This Court granted leave to appeal.

The legislative history of Workers’ Compensation Law § 29 (1-a) indicates the remedial nature of the statute (see, News Mem of State Exec Dept. 1978 McKinney’s Session Laws of NY, at 1748). Prior to the enactment of that subdivision, our 1978 decision in Matter of Granger v Urda (44 NY2d 91) recognized the clash of the provisions of Workers’ Compensation Law § 29 (1) and Insurance Law § 671 (2) (b) (former no-fault automobile insurance law) which resulted in (1) the no-fault scheme allowing the no-fault insurer to deduct from its payments to an insured the amounts the insured recovered or could recover under workers’ compensation and (2) continuing the Workers’ Compensation Law § 29 (1) lien upon any recovery by the claimant in a third-party action. The Granger Court was constrained to implement the "harsh, unintended result” of the simultaneous application of those statutes (see, id., at 99). Thus, injured employees became "self-insurer[s]” for at least part of their basic economic loss (id., at 99; Dietrick v Kemper Ins. Co., 76 NY2d 248, 253, supra; see also, Grello v Daszykowski, 44 NY2d 894, 895; see, News Mem of State Exec Dept, 1978 McKinney’s Session Laws of NY, at 1748). The Granger Court further urged that "corrective legislative action is advisable, if not imperative” (Granger, supra, at 99).

The Legislature responded to Granger, enacting Workers’ Compensation Law § 29 (1-a). The relevant portion of that subdivision precludes the compensation carrier from imposing a lien "for compensation and/or medical benefits paid which were in lieu of first party benefits which another insurer would have otherwise been obligated to pay under [the no-fault provisions] of the insurance law” (see, Matter of Simmons v St. Lawrence County GDP, 147 AD2d 323, 324-325; Matter of Fellner v Country Wide Ins., 95 AD2d 106).

The No-Fault Automobile Insurance Law defines "first party benefits” as "payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle” (Insurance Law § 5102 [b]). Pivotal for resolution of this case is whether claimant’s compensation fits within the term "basic economic loss” as delineated by the statute. Insurance Law § 5102 (a) (2) limits the definition of "basic economic loss” to "[l]ass of earnings from work which the person would have performed had he not been injured * * * up to one thousand dollars per month for not more than three years from the date of the accident causing the injury.” Here, it is uncontested that payments to claimant continued far beyond three years from the date of the accident. Thus, at least a portion of claimant’s payments may not be properly characterized as for "basic economic loss” and the Workers’ Compensation Law §29 (1-a) lien restrictions should not have been applied to the carrier.

Claimant relies on this Court’s decision in Dietrick v Kemper Ins. Co. (76 NY2d 248, supra) to support his position that the Workers’ Compensation Law § 29 (1-a) lien restriction is applicable here. First, Dietrick makes clear that compensation for permanent partial disability or facial disfigurement may be deemed compensation in lieu of first-party benefits because it often relates to a claimant’s basic economic loss, as in lost earnings, "whether actual or presumed” (see, id., at 252). This Court’s holding in Dietrick, however, was to establish facial disfigurement as an injury which requires acknowledgement of its often income-impairing characteristics, and, thus, awards for such injuries may often be deemed "compensation 'in lieu of first party benefits’ ” (id., at 252, quoting Workers’ Compensation Law § 29 [1-a]; see, Dietrick v Kemper Ins. Co., 145 AD2d 8 [indicates that issue at Appellate Division was whether compensation for facial disfigurement constituted first-party benefits]). Dietrick did not effect a change in the statutory requirement that compensation for "basic economic loss” be limited to three years (see, Insurance Law § 5102 [a] [2]). Additionally, there is no showing that the award in Dietrick fell outside the parameters of Insurance Law § 5102 (a) (2) requiring that monthly compensation not exceed $1,000 and that the award not exceed three years from the date of injury.

Claimant’s contention that the carrier’s consent was unnecessary in this case is meritless. Workers’ Compensation Law § 29 (5) requires either the carrier’s consent or a compromise order from the court in which a third-party action is pending for a claimant to settle a third-party action and continue receiving compensation benefits (see, Matter of Parmelee v International Paper Co., 157 AD2d 878 [claimant precluded from receiving further compensation benefits where he settled the third-party negligence action without the consent of self-insured employer]; Matter of Durham v Barker Chem. Corp., 151 AD2d 887; see also, Matter of Vincent v Geneva Pizza, 196 AD2d 917).

Further, claimant mistakenly assumes that a third-party settlement that constitutes 100% of a liability policy obviates the need for an insurance carrier’s consent. Nothing in Workers’ Compensation Law §29 so states, and decisional law of this State has held to the contrary (see, Matter of Daly v Daly Constr. Corp., 136 AD2d 798, lv denied 72 NY2d 807 [claimant barred from further compensation even where settlement for full policy limits, absent carrier’s consent]). Claimant’s remaining contentions concerning consent, supported essentially by claimant’s interpretation of the application of Dietrick to the facts of this case, are without merit.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the decision of the Workers’ Compensation Board reinstated.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa and Ciparick concur; Judge Levine taking no part.

Order reversed, etc.

       The statute was amended in 1991 raising the monthly compensation limit to $2,000 (see, L 1991, ch 320, § 1). The new limit is not applicable to this case.


author: ClPARICK, J.

text:
    [637 NE2d 253, 614 NYS2d 362]
    Barbara J. Morris, Appellant-Respondent, v Snappy Car Rental, Inc., Respondent-Appellant.
    Argued May 3, 1994;
    decided June 16, 1994

      POINTS OF COUNSEL

      H. Jeffrey Marcus, Buffalo, and Thomas H. Burton for appellant-respondent.
    I. The Court below’s holding is inconsistent with the legislative intent underlying Vehicle and Traffic Law § 388 and existing case law. (Motor Vehicle Acc. Indem. Corp. v Continental Natl. Am. Group Co., 35 NY2d 260; Wynn v Middleton, 184 AD2d 1019; Matter of Liberty Mut. Ins. Co. v Clench, 180 AD2d 684; Barlow v Hertz Corp., 160 AD2d 580; Rosado v Eveready Ins. Co., 34 NY2d 43; Randazzo v Cunningham, 56 AD2d 702, 43 NY2d 937; Fried v Seippel, 80 NY2d 32; Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392; Tom Sawyer Country Day School v Providence Wash. Ins. Co., 108 AD2d 810, 65 NY2d 608; Mount Vernon Fire Ins. Co. v Travelers Indem. Co., 63 AD2d 254, 47 NY2d 575.) II. The contract provisions relied upon by Snappy do not provide that plaintiff indemnify Snappy for her own injuries. (Hooper Assocs. v AGS Computers, 74 NY2d 487; Pennsylvania Gen. Ins. Co. v Austin Powder Co., 115 AD2d 243, 68 NY2d 465; Two Guys from Harrison v S.F.R. Realty Assocs., 63 NY2d 396; Loba v Carey, 29 NY2d 302; Drzewinski v Atlantic Scaffold & Ladder Co., 70 NY2d 774; Niagara Frontier Transp. Auth. v Tri-Delta Constr. Corp., 107 AD2d 450, 65 NY2d 1038; Evington v Syracuse Equip. Co., 170 AD2d 744.) III. Under the circumstances of this case, the indemnification agreement embedded in the context of an adhesion contract should be declared void. (Dalton v Educational Testing Serv., 155 Misc 2d 214; Levine v Shell Oil Co., 28 NY2d 205; Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153; Sabiosky v Gordon Co., 73 NY2d 133; Matter of State of New York [Abrams] v Ford Motor Co., 74 NY2d 495; Morris v New York Football Giants, 150 Misc 2d 271.) IV. There are material issues of fact as to whether plaintiff assented to Snappy’s rental contract. (Alvarez v Prospect Hosp., 68 NY2d 320; Tri-City Renta-Car & Leasing Corp. v Vaillancourt, 33 AD2d 613; Matter of Tanen

      boum Textile Co. v Schlanger, 287 NY 400; Matter of Philip Export Corp. [Leathertone, Inc.], 275 App Div 102; Egan v Kollsman Instrument Corp., 21 NY2d 160, cert denied sub nom. American Airlines v Egan, 390 US 1039; Matter of Allstate Ins. Co. [La Perta] 42 AD2d 104; Hooper Assocs. v AGS Computers, 74 NY2d 487.)

      Burgio, Kita & Curvin, Buffalo (Steven P. Curvin of counsel), for respondent-appellant.
    I. Snappy’s claim for indemnification is not contrary to the public policy of New York State. (State of New York v Stewart’s Ice Cream Coindemnif., 64 NY2d 83; Rosado v Proctor & Schwartz, 66 NY2d 21; McDermott v City of New York, 50 NY2d 211; Schwalm v County of Monroe, 158 AD2d 994; Martinez v Fiore, 90 AD2d 483; L. B. Smith, Inc. v Bradley & Williams, 88 AD2d 782, 58 NY2d 672; Levine v Shell Oil Co., 28 NY2d 205; Murray v Rupp Rental Corp., 39 AD2d 637; Arocho v Town of Brookhaven, 71 AD2d 635, 51 NY2d 778; Colton v New York Hosp., 53 AD2d 588.) II. The ication agreement between plaintiff and Snappy is not unconscionable. (Martin Delicatessen v Schumacher, 52 NY2d 105; Raphael v Booth Mem. Hosp., 67 AD2d 702; Gill-man v Chase Manhattan Bank, 73 NY2d 1; Douglas EllimanGibbons & Ives v Kellerman, 172 AD2d 307, 78 NY2d 856; Kadan v Volkswagen of Am., 111 AD2d 540; Brent-Grand v Megavolt Corp., 97 AD2d 783; Nalezenec v Blue Cross, 172 AD2d 1004; Evington v Syracuse Equip. Co., 170 AD2d 744; Denton Leasing Corp. v Breezy Point Surf Club, 133 AD2d 95.) III. Plaintiff cannot avoid the terms of the contract by relying on her own failure to read the contract or have the terms of the contract explained to her. (Sofia v Hughes, 162 AD2d 518; Manufacturers & Traders Trust Co. v Commercial Door & Hardware, 51 AD2d 362; James Talcott, Inc. v Wilson Hosiery Co., 32 AD2d 524; Fiorentino Assocs. v Green, 85 AD2d 419; American Utex Intil. v ICC Corp., 74 AD2d 747, 52 NY2d 888; Blair v County of Albany, 127 AD2d 950; Rodas v Manitaras, 159 AD2d 341.) IV. Giving effect to the indemnity agreement should result in dismissal of plaintiff’s claim against Snappy Car Rental, Inc. (Seneca v Novaro, 80 AD2d 909; Wandsch neider v Bekeny, 75 Misc 2d 32.) V. Snappy Car Rental, Inc. is entitled to the costs and expenses of defending this lawsuit, including reasonable attorneys’ fees, from plaintiff. (Merchants Mut. Ins. Co. v Saxon Indus., 170 AD2d 654; Lavorato v Bethlehem Steel Corp., 91 AD2d 1184.)

      Rivkin, Radler & Kremer, Uniondale (Arthur J. Kremer,

      Evan H. Krinick and Christine M. Metzner of counsel), for Enterprise Rent-A-Car and others, amici curiae.

    The established case law and public policy of this State mandate that indemnification provisions in automobile rental agreements be upheld without exception. (McDermott v City of New York, 50 NY2d 211; Schubert v Schubert Wagon Co., 249 NY 253; Dunn v Uvalde Asphalt Paving Co., 175 NY 214; McFall v Compagnie Mar. Belge [Lloyd Royal], 304 NY 314; New England Mut. Life Ins. Co. v Caruso, 73 NY2d 74; Austro v Niagara Mohawk Power Corp., 66 NY2d 674; Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392; Naso v Lafata, 4 NY2d 585; Traub v Dinzler, 309 NY 395; Motor Vehicle Acc. Indem. Corp. v Continental Natl. Am. Group Co., 35 NY2d 260.)

      Cellino, Bernstein, Dwyer & Barnes, Buffalo (Robert E. Dwyer of counsel), for New York State Trial Lawyers Association, amicus curiae.

    It is the public policy of the State of New York that one injured by the negligent operation of a motor vehicle should have recourse to a financially responsible defendant. (Continental Auto Lease Corp. v Campbell, 19 NY2d 350; Cohen v Neustadter, 247 NY 207; New England Mut. Life Ins. Co. v Caruso, 73 NY2d 74; Public Serv. Mut. Ins. Co. v Goldfarb, 53 NY2d 392.)
   OPINION OF THE COURT

ClPARICK, J.

In this personal injury action by plaintiff car renter against defendant car rental agency, we are required to decide whether and to what extent plaintiff is bound by an indemnification provision contained in the rental agreement requiring her to indemnify defendant for liability arising out of the use of the vehicle which exceeds the insurance coverage defendant is required to maintain under State law.

I

On October 5, 1989, plaintiff Barbara J. Morris entered into a 30-day rental agreement with defendant Snappy Car Rental (Snappy). On October 8, 1989, plaintiff was injured when the vehicle she leased, a 1990 Dodge Spirit, collided with another vehicle owned by Laura A. Sherry. Plaintiff’s husband, Kenneth Morris, a permissive user of the vehicle under the rental agreement, was driving the vehicle at the time of the accident. The Sherry vehicle was being driven by Eric Sherry, who was delivering pizza for his employer, Franco’s Pizzeria. As a result of the accident, plaintiff sustained a fractured right femur for which she has undergone three corrective surgeries.

Plaintiff commenced this action and named Eric Sherry, Laura Sherry, Snappy, and 864 Kenmore Avenue, Inc., doing business as Franco’s Pizzeria, as defendants. The complaint alleged that plaintiff’s injuries were caused by the negligence of Eric Sherry and Kenneth Morris and asserted causes of action based on vicarious liability against Laura Sherry and the two corporate defendants. In its answer, Snappy denied the substantive allegations of plaintiff’s complaint and asserted as a fourth affirmative defense that plaintiff had covenanted not to sue Snappy. As a fifth affirmative defense and counterclaim, Snappy asserted that it was entitled to full indemnification pursuant to the terms and conditions of the rental agreement.

Snappy moved for summary judgment dismissing plaintiff’s complaint based on the indemnification counterclaim. Plaintiff cross-moved for summary judgment dismissing Snappy’s counterclaim and for partial summary judgment on Snappy’s liability based on Vehicle and Traffic Law § 388. In support of its motion, Snappy argued that the indemnification agreement required dismissal of the complaint or, alternatively, entitled it to judgment against plaintiff for any amounts she recovered against Snappy. Snappy also asserted that it was entitled to costs, disbursements, expenses, and attorney’s fees under the rental agreement.

Supreme Court denied Snappy’s motion for summary judgment dismissing the complaint, granted Snappy’s motion for a conditional order of summary judgment on the counterclaim for indemnification to the extent that plaintiff recovered any damages from Snappy, granted Snappy’s request for attorney’s fees, expenses and costs, and denied plaintiff’s cross motion for summary judgment.

The Appellate Division, with two Justices dissenting, modified the order of Supreme Court "to provide that Snappy’s motion for a conditional order of summary judgment is granted in part on its counterclaim for indemnification from plaintiff to the extent Snappy may be required to pay plaintiff monies over and above those to which plaintiff is entitled pursuant to section 370 (1), (3) and section 388 of the Vehicle and Traffic Law and to deny Snappy costs and expenses including reasonable attorney’s fees.” (189 AD2d 115, 124.) As so modified, the court affirmed. Both parties appeal pursuant to leave granted by the Appellate Division which certified the following question: "Was the order of this Court entered March 12,1993, properly made?”

II

At common law, the owner of a motor vehicle who permitted another to operate it was not liable for the driver’s negligence except under theories of respondeat superior or agency (see, Plath v Justus, 28 NY2d 16, 20; Rolfe v Hewitt, 227 NY 486). Vehicle and Traffic Law § 388 was enacted to change this common-law rule and to impose liability upon the owner of a vehicle "for the negligence of a person legally operating the car with the permission, express or implied, of the owner” (Gochee v Wagner, 257 NY 344, 346, overruled on other grounds Kalechman v Drew Auto Rental, 33 NY2d 397). The statute created liability where none previously existed, the nature of that liability being vicarious and its predicate purely statutory (Gochee, supra, at 347). Section 388’s enactment was designed to ensure access by injured persons to "a financially responsible insured person against whom to recover for injuries” (Plath, 28 NY2d, at 20, supra; see, MVAIC v Continental Natl. Am. Group Co., 35 NY2d 260, 264), and to "remove the hardship which the common-law rule visited upon innocent persons by preventing 'an owner from escaping liability by saying that his car was being used without authority or not in his business’ ” (Mills v Gabriel, 259 App Div 60, 61-62 [quoting Plaumbo v Ryan, 213 App Div 517, 518]). We stated recently that the "linkage of an owner’s vicarious liability to an owner’s obligation to maintain adequate insurance coverage suggests that the Legislature’s goal was to ensure that owners of vehicles that are subject to regulation in New York 'act responsibly’ with regard to those vehicles” (Fried v Seippel, 80 NY2d 32, 41).

In light of these principles, the Appellate Division was unquestionably correct in concluding that an attempt to disclaim completely the liability imposed by section 388 would be contrary to public policy. The more difficult question presented for our consideration, however, is whether the Appellate Division’s decision is inconsistent with the legislative intent underlying section 388 to the extent it held that Snappy can legally disclaim that portion of its liability which exceeds the amount for which motor vehicle owners are required to be insured under sections 388 and 370 of the Vehicle and Traffic Law.

Under the statutory scheme, an owner is required to maintain a minimum liability coverage for bodily injury and for death, but nothing in the statute’s scheme, language, or legislative history suggests that a lessor/owner cannot by contract secure indemnification from a lessee/driver for liability stemming from the latter’s negligence which exceeds the amounts for which owners are required to be insured.

It has long been recognized that in granting an injured party a right of action under section 388, the Legislature did not otherwise intend to change any of the rules of liability in this area (see, e.g., Sikora v Keillor, 17 AD2d 6, 8, affd 13 NY2d 610; Mills v Gabriel, 259 App Div 60, 61-62, supra; Singerman Bus Corp. v American Fid. Fire Ins. Co., 44 Misc 2d 4, 7; 8 NY Jur 2d, Automobiles and Other Vehicles, § 693). The law concerning indemnification agreements is, as the Appellate Division noted, "long standing and well settled.” (189 AD2d, at 121.) As this Court recognized in McDermott v City of New York (50 NY2d 211, 216-217), the right of indemnification springs conceptually from principles of equity and finds its expression in contract, express or implied. We stated, "It is nothing short of simple fairness to recognize that '[a] person who, in whole or in part, has discharged a duty which is owed by him but which as between himself and another should have been discharged by the other, is entitled to indemnity’ ” (id., at 217 [quoting Restatement of Restitution §76]).

It is axiomatic concerning legislative enactments in derogation of common law, and especially those creating liability where none previously existed, that they are deemed to abrogate the common law only to the extent required by the clear import of the statutory language (see, Psota v Long Is. R. R. Co., 246 NY 388, 393 [section 388 "may not be presumed to make any innovation upon the common law further than is required by the mischief to be remedied”]; see also, B & F Bldg. Corp. v Liebig, 76 NY2d 689, 693). In view of the fact that we are to narrowly construe the terms of section 388, we can discern no basis for inferring that the Legislature, in its desire to ensure that owners "act responsibly”, intended to go so far as to abrogate the right of indemnification. Indeed, we could not do so here without simultaneously disparaging the important countervailing right of freedom of contract, which is itself deeply rooted in public policy. As the majority at the Appellate Division stated, there are no statutory or common-law prohibitions precluding defendant’s indemnification provision; indeed, "[t]o the contrary, the common law permits a vehicle owner/lessor to recover indemnity from a negligent user/lessee, even absent an express indemnity provision” (189 AD2d 115, 121, supra [citations omitted]).

MVAIC v Continental Natl. Am. Group Co. (supra), upon which plaintiff relies, involved the attempted evasion of section 388’s liability altogether through the imposition of restrictions and conditions on the use of the leased vehicle. The restrictions sought to be imposed there, if upheld, would have rendered an injured victim devoid of recourse to a financially responsible defendant, contrary to the legislative intent of Vehicle and Traffic Law § 388. As such, we concluded that the restrictions contained in the rental agreement violated the public policy of this State. This case presents a different situation. Here, the rental agency does not seek to entirely exculpate itself from section 388’s liability. Rather, the rental agreement explicitly acknowledges that Snappy’s right of indemnification is subject to other provisions of State law, in this case section 388. Paragraph 6 of the rental agreement provides that Snappy will indemnify and hold harmless a renter to the extent required by State law and states additionally that "Renter agrees to indemnify Snappy for any loss, liability or expense arising out of the use of the vehicle which exceeds the limits of the indemnification and hold harmless provision stated above.”

Ill

We do not accept plaintiffs contention that the indemnification agreement is void and unenforceable because it was part of an adhesion contract or the result of procedural unconscionability in the contract formation process. Plaintiffs claim must be judged "by whether the party seeking to enforce the contract has used high pressure tactics or deceptive language in the contract and whether there is inequality of bargaining power between the parties” (Sablosky v Gordon Co., 73 NY2d 133, 139). Plaintiff signed her name immediately beneath the following prominently displayed language: "I HAVE READ, UNDERSTAND AND AGREE TO BE BOUND BY THE TERMS AND CONDITIONS ON BOTH SIDES OF THIS RENTAL AGREEMENT.” Plaintiff not only signed the contract, she also initialled the space next to the provision which permitted her to decline to purchase additional personal accident insurance.

Nothing in the record indicates that plaintiff, a high school graduate who attended college, was prevented from reading the agreement or asking that its contents be explained to her by one of Snappy’s representatives. She has made no allegation that she was the victim of deceptive or high pressure tactics (see, Gillman v Chase Manhattan Bank, 73 NY2d 1, 11). The contract provisions at issue were set forth in a clear and legible manner and were printed in the size required by CPLR 4544. Plaintiff has proffered no basis as would excuse her from being bound by the terms of the rental agreement. Although plaintiff would use to her advantage the fact that she did not read the terms of the rental agreement and was unaware of its indemnification language, this is simply no bar to enforcement of the rental agreement. Freedom of contract permits plaintiff, as lessee, to agree to limit her statutory protection of recourse against the owner under section 388.

Finally, we agree with the Appellate Division that Snappy is not entitled to the costs and expenses of litigation, including attorney’s fees.

Accordingly, the order of the Appellate Division should be affirmed, without costs, and the certified question answered in the affirmative.

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

Order affirmed, etc.

      . This provision was originally enacted by the Legislature in 1924 as section 282-e of the Highway Law and later reenacted as section 59 of the Vehicle and Traffic Law in 1929.

      . Paragraph 6 provides, inter alla, that Snappy will indemnify renters and authorized operators for bodily injury and property damage claims arising out of the authorized use of the vehicle up to the minimum dollar amounts required by State law only if required by statute or the express terms of the agreement. In the event the renter is covered by any other insurance, the indemnification provision is said to constitute excess coverage. Further, if any of the conditions or restrictions contained in the indemnity provision conflict with applicable State law, then the provision is considered amended to conform with State law. Paragraph 6 requires the renter to indemnify Snappy for any loss or liability in excess of the limits of the indemnification provision, i.e., for any amounts Snappy is required to pay in excess of the minimum imposed under State law. In the event that there is no indemnification requirement under State law, the renter is to indemnify Snappy for all loss, liability and expense arising out of the use of the vehicle.