author: Meyer, J.

text:
    In the Matter of Waybro Corporation, Appellant, and Clinton Coalition of Concern et al., Intervenors-Appellants, v Board of Estimate of the City of New York et al., Respondents. In the Matter of Rosenthal & Rosenthal, Inc., et al., Appellants, v Board of Estimate of the City of New York et al., Respondents.
    Argued March 25, 1986;
    decided May 8, 1986

      POINTS OF COUNSEL

      Martin J. Schwartz for appellants.
    I. New York City Charter § 197-c, by its express terms, applies to the subject matter of the Board of Estimate’s resolution of November 9, 1984. (Golden v Koch, 49 NY2d 690; Matter of Gerges v Koch, 62 NY2d 84; Matter of Tuck v Heckscher, 65 Misc 2d 1059, 37 AD2d 558, 29 NY2d 288.) II. The UDC’s involvement does not excuse the city respondents from complying with the City Charter. (Scarborough Props. Corp. v Village of Briarcliff Manor, 278 NY 370; New York Tel. Co. v Town of N. Hempstead, 41 NY2d 691; Parone v Rivers, 84 AD2d 686; Brookhaven Hous. Coalition v Solomon, 583 F2d 584; Genesco Entertainment v Koch, 593 F Supp 743; Wein v Beame, 55 AD2d 588, 43 NY2d 326; Consolidated Edison Co. v Town of Red Hook, 60 NY2d 99.) III. The requirements of New York City Charter § 197-c were not satisfied by respondents’ attendance at various meetings. (Orth-O-Vision, Inc. v City of New York, 101 Misc 2d 987.) IV. The Board of Estimate’s November 9 resolution is void and all actions in furtherance thereof should be stayed and enjoined. (Matter of Tri-County Taxpayers Assn. v Town Bd. of Town of Queensbury, 55 NY2d 41; Orth-O-Vision, Inc. v City of New York, 101 Misc 2d 987; Matter of Gerges v Koch, 62 NY2d 84.)

      Frederick A. O. Schwarz, Jr., Corporation Counsel (Edward F. X. Hart, Larry A. Sonnenshein, Jeffrey Schanback and Susan Shapiro of counsel), for Board of Estimate of the City of New York and others, respondents.
    I. The Uniform Land Use Review Procedure is inapplicable to the proposed project because the city’s interest in the real property is contingent; the subway station modernization is not a site selection; the improvements paid for by the private developers benefit the entire city; and the project is neither a housing nor an urban renewal plan. (Mauldin v New York City Tr. Auth., 64 AD2d 114; Matter of Gerges v Koch, 62 NY2d 84; Matter of Abrams v New York City Tr. Auth., 39 NY2d 990; Matter of Tuck v Heckscher, 29 NY2d 288.) II. Assuming, arguendo, that ULURP is appropriate, the four and one-half year process of hearings and opportunity to comment provides greater participation and review than ULURP could ever permit. (Sierra Club v Hennessy, 695 F2d 643; Main-Amherst Business Assn. v Adams, 461 F Supp 1077; National Resources Defense Council v City of New York, 112 Misc 2d 106.)

      Gail S. Port, Susan M. Heilbron and Joseph C. Petillo for New York State Urban Development Corporation and another, respondents.
    I. Compliance with ULURP is not required by any of the project participants, including the city, because the project is being undertaken by UDC pursuant to the UDC Act. (Floyd v New York State Urban Dev. Corp., 33 NY2d 1; People v Miceli, 73 Misc 2d 133; Peters v New York State Urban Dev. Corp., 41 AD2d 1008; Town of Greece v Urban Dev. Corporation-Greater Rochester, 79 Misc 2d 375; Valvo v Urban Dev. Corp., 71 Misc 2d 335; County of Westchester v Village of Mamaroneck, 22 AD2d 143, 16 NY2d 940; Nehrbas v Incorporated Vil. of Lloyd Harbor, 2 NY2d 190; Wein v State of New York, 39 NY2d 136.) II. The UDC Act controls over inconsistent provisions of any other law, including ULURP. (Floyd v New York State Urban Dev. Corp., 33 NY2d 1; Consolidated Edison Co. v Town of Red Hook, 60 NY2d 99; F. T. B. Realty

      Corp. v Goodman, 300 NY 140; Matter of Northeast Mines v State of New York Dept, of Envtl. Conservation, 125 Misc 2d 441; New York State Urban Dev. Corp. v Vanderlex Mdse. Co., 98 Misc 2d 264.)
   OPINION OF THE COURT

Meyer, J.

The provisions of the Uniform Land Use Review Procedure (ULURP; New York City Charter § 197-c) respecting the use, development or improvement of real property subject to city regulation are not applicable to a redevelopment project carried out under the New York State Urban Development Corporation Act (Act; L 1968, ch 174, as amended; McKinney’s Uncons Laws of NY § 6251 if). Special Term, therefore, properly dismissed the article 78 petitions in two proceedings brought to invalidate the November 9, 1984 resolution of the Board of Estimate approving the Times Square Redevelopment Project and authorizing the Mayor to enter into agreements in relation thereto with the Urban Development Corporation (UDC) and designated developers, and to stay the making of or performance under such agreements until ULURP has been complied with. The order of the Appellate Division affirming Special Term’s judgments of dismissal should, therefore, be affirmed, with costs.

I

A description of the Times Square Redevelopment Project, its history and the procedures in relation to it under the State Environmental Quality Review Act and the Eminent Domain Procedure Law is set forth in Matter of Jackson v New York State Urban Dev. Corp. (67 NY2d 400 [decided herewith]) and need not be here repeated. The proceedings involved in this appeal are predicated on the concept that ULURP remains applicable and that the city cannot validly contract with respect to the project without first complying with ULURP.

The first proceeding, brought within a week after adoption of the Board of Estimate resolution, was instituted by Waybro Corporation, which owns a building at 210 West 43rd Street within the project area and, therefore, subject to condemnation. The second was instituted by Rosenthal & Rosenthal, Inc., the occupant, and Broadway 41st Street Realty Corporation, the owner of a building at 1451 Broadway, likewise within the project area and subject to condemnation. The proceedings have been consolidated on consent. Both petitioners contend that the project is within the types of land use activity to which ULURP applies and that, therefore, the development plan and Board resolution should have been submitted to Community Board No. 5, whose district includes the project area. The Board of Estimate and other city officials named as respondents, the UDC and its subsidiary Times Square Redevelopment Corporation denied that the project is within ULURP, set forth the procedures followed in relation to the project which, it was argued in the briefs, constituted substantial compliance with ULURP in any event, and pleaded that when UDC or its subsidiary undertakes a project in cooperation with a municipality compliance with local laws such as ULURP is not required. Special Term, concluding that the UDC’s "override power” made compliance with ULURP unnecessary, dismissed the petitions without reaching the other issues and the Appellate Division affirmed, without opinion.

The thrust of petitioners’ argument as to the compliance with ULURP is that the UDC Act only relieves UDC and its subsidiary of the necessity of complying with local laws, but does not affect the obligation of the city as an active participant in the project to do so. The argument is based upon provisions of the June 27, 1980 Memorandum of Understanding between the city and UDC and the Board of Estimate resolution. The memorandum outlines the parties’ intention "to cooperate in the preparation and implementation of a plan for the redevelopment of the area around 42nd Street in Manhattan,” states that the area’s redevelopment "can best be carried out by cooperation between the City and UDC” and characterizes the project as a "joint effort.” Under it the city agreed to identify goals and priorities and the parties agreed to act jointly in preparing a development program and selecting qualified developers. Implementation of the development program was, however, to be the responsibility of UDC, which agreed to exercise its statutory powers in carrying it out. The memorandum provided for eventual submission of the development program by the Mayor to the Board of Estimate for its approval.

That approval was given in the November 9, 1984 resolution. The resolution recited that the project "is in the best interest of the City in that it will remove blight and physical, economic and social decay”, that "in cooperation and after consultation with the City” pursuant to section 16 of the UDC Act "the City desires that UDC undertake the Project” and that "UDC is undertaking the Project as a land use improvement project as defined” in the UDC Act. Its operative paragraphs adopted and concurred in the UDC findings with respect to the project, in its own findings determined that the project would "be feasible only if undertaken by UDC in accordance with the UDC Act,” and authorized the execution on behalf of the city of contracts with the UDC and developers, provided they contain provisions deeding a presently vested future interest to the city to become absolute at the option of either the city or the UDC upon completion of improvements on a site, upon termination of a lease or upon transfer of UDC’s interest in a site without the city’s consent. Included in those conditions were that rents payable under the leases be assigned, subject to reimbursement of UDC expenses, to the city; that the city have the right as third-party beneficiary to enforce UDC’s rights under any agreement; and that UDC consult with the Mayor prior to exercising its powers of condemnation or its superseding of the building code or zoning or other city regulation in connection with the project.

We conclude that, notwithstanding the city’s presently vested future interest and its substantial role in the planning and implementation of the project, ULURP is not applicable to the city’s participation in the project and need not be complied with. We, therefore, affirm.

II

ULURP requires that upon the filing of proposals for land use activity of specified types with the Department of City Planning the proposal be forwarded to the appropriate Community Board (New York City Charter § 197-c [c]). A Community Board is composed of not more than 50 persons who reside or have a business, professional or other significant interest in the particular Community District (New York City Charter § 2800). Community Districts coincide as far as possible with the historic communities from which the city has developed (New York City Charter § 2701 [b] [1]). The Board is authorized to hold hearings, prepare plans for the improvement and development of its district and cooperate with and advise city agencies and officials (New York City Charter § 2800 [d]).

Upon receipt of a land use proposal a Community Board has 60 days within which to conduct a public hearing and submit its written recommendations to the City Planning Commission. Not later than 60 days thereafter the Commission must reach its own conclusion on the proposal and its determination, if it modifies or disapproves a Board recommendation, "shall be accompanied by a written explanation of its reason for such action” (New York City Charter § 197-c [e]). The Commission’s decision is submitted, in turn, to the Board of Estimate for final action (New York City Charter § 197-c [f]). The Community Board, although it acts in a purely advisory capacity, is, therefore, the means whereby those who live or work in an area affected by a proposal land use are advised of pending proposals and given the opportunity to make known their views.

Despite its salutary and important purpose and the fact that the City Charter has its origin in State statute, ULURP’s provisions will not apply if the Legislature so intends. That it did so intend becomes clear when we examine the UDC Act and its legislative history. Section 16 (3) of the Act (McKinney’s Uncons Laws of NY § 6266 [3]) requires UDC and any of its subsidiaries to "comply with the requirements of local laws, ordinances, codes, charters or regulations applicable * * * provided however, that when, in the discretion of the corporation, such compliance is not feasible or practicable” they shall comply with the State Building Code (emphasis supplied). And while the proviso may be read to limit the discretion it endows to matters relating to construction rather than redevelopment proposals, its reference to "charters” is of some importance in relation to subdivision (6) of the same section. That subdivision authorizes UDC to enter into contracts with municipalities "and any municipality * * * is hereby authorized and empowered, notwithstanding any other law, to enter into such contractual agreements with the corporation” (emphasis supplied). The two subdivisions being part of the same section — having been enacted in the same breath, so to speak — "any other law” as used in subdivision (6) must be construed in light of subdivision (3)’s reference to "charters” to encompass a charter provision such as ULURP.

What is implied by reading the two subdivisions of section 16 together is made explicit by sections 33 and 34 (McKinney’s Uncons Laws of NY §§ 6283, 6284). Section 33 flatly declares that "[i]nsofar as the provisions of this act are inconsistent with the provisions of any other law, general, special or local, the provisions of this act shall be controlling” and section 34 directs that the "act, being necessary for the welfare of the state and its inhabitants, shall be liberally construed to effectuate its purposes.”

Any ambiguity that remains after consideration of those provisions of the Act is dispelled by its legislative history. Prior to passage of the UDC Act in 1968, the Joint Legislative Committee on Housing and Urban Development held hearings, during one of which, relating to construction costs, it was presented with testimony concerned with the costly delays caused by "the chain reaction of applications, approvals, inspections and overlapping jurisdictions set off by any government financed housing project” (Report of Joint Legis Comm on Housing & Urban Development, 1968 NY Legis Doc No. 81-A, at 20). The Committee’s report noted that New York was falling behind in meeting the problems of urban areas and that the average time for completion of an urban renewal project was approximately 10 years. Its report stated (at 44): "We can no longer tolerate these long and costly delays or the inability to provide much needed housing and jobs. Partially, government is to blame because of the impenetrable layers of bureaucratic red tape it imposes at every level. Partially, local disputes as to how best to carry out a project are to blame. And, importantly, the incentives to attract private developers, particularly in the face of these obstacles, have been lacking.” That sentence was echoed by Governor Rockefeller in his Special Message to the Legislature in support of the 1968 legislation (1968 McKinney’s Session Laws of NY, at 2359): "What, then, is the reason for these long and costly delays? Partially, government is to blame because of the impenetrable layers of bureaucratic red tape it imposes at every level. Partially, petty politics at local levels is to blame. And importantly, the incentives to attract private developers, particularly in the face of these obstacles, has been lacking.” (1968 McKinney’s Session Laws of NY, at 2359.)

In sum, the "override power” as it is sometimes referred to (see, People v Miceli, 73 Misc 2d 133, 140) in the UDC Act is not limited to regulatory provisions which would otherwise govern UDC’s activity but encompasses as well the provisions which would otherwise govern the activity of a municipality contracting with UDC with respect to a redevelopment project, whether the municipality’s cooperation is characterized as a participant, joint venturer or partner, and even though the city has a future vested interest and is expected to be the ultimate owner.

Indeed, we held as much, although in a different context, in Wein v Beame (43 NY2d 326). There the question was whether the UDC project for renovation of the Commodore Hotel constituted a violation of the constitutional provisions against contracting away the taxing power. Plaintiff’s contention was that the UDC was but a "straw man,” involved in the project solely as a means of providing a tax exemption the city could not grant directly. We held that "the purchase of the hotel by UDC will result in a valid tax exemption by operation of law, regardless of any action or inaction upon the part of the city. This is true whether the plan was originally developed by the city, UDC, or Wembley [a private developer]; and this is so regardless of the extent of actual participation in the project by UDC” (43 NY2d, at pp 331-332).

This is so because if the city is required to comply with ULURP before it can cooperate with UDC and the developers in the Times Square Redevelopment Project, the project will be impeded just as directly as if UDC itself were subject to such requirements. The Legislature, by providing in section 4 (7) (McKinney’s Uncons Laws of NY § 6254 [7]) for the establishment by UDC of community advisory committees and in section 16 (McKinney’s Uncons Laws of NY § 6266 [2]) for public hearings, has provided the land use review procedures it deemed warranted with respect to redevelopment projects undertaken by UDC (and, indeed, under those procedures the Community Advisory Boards which under ULURP would review the Times Square project have been informed and have participated). It has done so in order to reduce "the impenetrable layers of red tape,” which would not be the case were the largely duplicative ULURP procedures required to be carried out by the city before it could engage in the cooperative activity which the UDC Act clearly contemplated it would. And the Legislature had the authority to do so because, to paraphrase what we said in Floyd v New York State Urban Dev. Corp. (33 NY2d 1, 7), urban redevelopment is a matter of State-wide concern and since the UDC Act affects such redevelopment, it follows that neither local laws nor City Charter provisions in conflict may inhibit the operation of the Act.

For the foregoing reasons, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Titone and Hancock, Jr., concur.

Order affirmed, with costs.

       One of those purposes is "to promote the sound growth and development of our municipalities through the correction of such substandard, unsanitary, lighted, deteriorated or deteriorating conditions, factors and characteristics by the clearance, replanning, reconstruction, rehabilitation * * * of such areas” such as the Times Square Redevelopment Project (UDC Act § 2, McKinney’s Uncons Laws of NY § 6252).


source: Caselaw Access Project

author: Per Curiam.

license: Public Domain

text:
    Barbara Merl, Appellant, v Paul Merl, Respondent.
    Argued March 20, 1986;
    decided May 13, 1986

      POINTS OF COUNSEL

      Donald H. Greener and Thomas J. Sinnickson for appellant.
    I. When a separation agreement is incorporated in but survives a divorce decree, then the separation agreement continues in effect as a separate and independent contract between the parties and should not be disturbed by the court. (Goldman v Goldman, 282 NY 296; Galusha v Galusha, 116 NY 635; Schmelzel v Schmelzel, 287 NY 21; Iseman v Iseman, 48 AD2d 809; Morse v Morse, 45 AD2d 370; Stillman v Stillman, 20 AD2d 723; King v Schultz, 29 NY2d 718; McMains v McMains, 15 NY2d 283; Kleila v Kleila, 50 NY2d 277; Bowmer v Bowmer, 50 NY2d 288; Gardner v Gardner, 33 NY2d 899.) II. The court cannot supply a material term to an agreement that the parties, themselves, did not incorporate therein. (Mitchell v Mitchell, 82 AD2d 849; Stern v Stern, 41 AD2d 676; Craig v Craig, 24 AD2d 588; Ives v Ives, 96 AD2d 643; Pelkey v Pelkey, 79 AD2d 835.) III. The change in surname in and of itself was not sufficient justification to warrant the lower court acting so precipitously to terminate the substantial obligations of defendant to the children as contained in the separation agreement. (Matter of Roe v Doe, 29 NY2d 188; Matter of Parker v Stage, 43 NY2d 128; Cohen v Schnepf, 94 AD2d 783; Kaplan v Wallshein, 57 AD2d 828.) IV. The trial court exceeded its authority by modifying a separation agreement, to which both parties had assented and which contract is clear and unambiguous on its face. (Surlak v Surlak, 95 AD2d 371; Da Silva v Musso, 53 NY2d 543.)

      Paul C. Kurland for respondent.
    I. The factual determinations of the trial court and court below are not subject to review. Appellant’s argument with respect to the facts contrary to those findings may not be considered. (Matter of Hofbauer, 47 NY2d 648; People ex rel. Scarpetta v Spence-Chapin Adoption Serv., 28 NY2d 185, cert denied and appeal dismissed sub nom. DeMartino v Scarpetta, 404 US 805; Matter of Male Infant L., 61 NY2d 420; Hunt v Bankers & Shippers Ins. Co., 50 NY2d 938; Stanton v State of New York, 26 NY2d 990; Laverne v Incorporated Vil. of Laurel Hollow,
      18 NY2d 635, 386 US 682.) II. Appellant mother breached her specific obligations under the separation agreement with the father. This breach is a complete defense to the claim for reimbursement of support for the adult sons. (Warner v Warner, 44 AD2d 904; Matter of Baker v Baker, 33 AD2d 812; Waxstein v Waxstein, 90 Misc 2d 784, 57 AD2d 863; Stone v Stone, 78 Misc 2d 788; Matter of Roe v Doe, 29 NY2d 188; Werber v Werber, 47 Misc 2d 399; Duryea v Bliven, 122 NY 567; Garbarino v Keller, 20 Misc 2d 303; Matter of Catherine W. v Robert F., 116 Misc 2d 377; Matter of Benjamin B. v Rivka M., 90 Misc 2d 850.) III. New York law does not require a father to continue to support two healthy adult sons who have deliberately abandoned him. (Matter of Roe v Doe, 29 NY2d 188; Cohen v Schnepf, 115 Misc 2d 879, 94 AD2d 783; Matter of "Shipley”, 26 Misc 2d 204; Matter of Pollack, 2 AD2d 756.) IV. Circumstances have changed dramatically since Mr. Merl entered into the modification of the separation agreement. (Matter of Boden v Boden, 42 NY2d 210; Cohen v Schnepf, 115 Misc 2d 879; Kaplan v Wallshein, 57 AD2d 828; Haskell v Haskell, 201 App Div 414, 236 NY 635.)
   OPINION OF THE COURT

Per Curiam.

Barbara and Paul Merl were married in June 1960 and had three children, who at the commencement of this proceeding in December 1982 were 22, 19 and 17 years old, respectively. The Merls separated in 1975. In January 1976 they executed a separation agreement that was incorporated into but not merged with the judgment of divorce thereafter obtained. The separation agreement was modified in March 1982, and, as modified, obligates defendant to pay child support of $110 per week per child and one half of each child’s college expenses and to continue health and life insurance coverage for the children’s benefit, until each child becomes emancipated. No argument is made that any of the children are emancipated. The agreement also obligates defendant to bequeath two thirds of his estate to the children. Barbara was given custody of the children with liberal visitation rights allowed Paul.

Barbara Merl has remarried and she and her children reside with her new husband, Ken Zimmerman. By motion made in the divorce proceeding, defendant sought a modification of the support obligations enuring to his two sons and the obligation to bequeath a part of his estate to them contending that they have abandoned him by legally changing their surname to Zimmerman and refusing to visit with, speak to, or maintain any relationship with him. He attributes this change from what he describes as having been a "loving and caring relationship” to a pattern of behavior by plaintiff and her new husband designed to alienate the children from him and destroy his relationship with his sons.

Both Trial Term and a divided Appellate Division, in reliance on our holdings in Matter of Boden v Boden (42 NY2d 210) and Matter of Brescia v Fitts (56 NY2d 132), concluded that the sons’ action in changing their surname from Merl to Zimmerman constituted an unanticipated and unreasonable change in circumstances warranting a modification of the support provisions of the separation agreement. We now reverse.

The case law distinguishes between modification of a separation agreement and that of a divorce decree. A separation agreement that is incorporated into but not merged with a divorce decree is an independent contract binding on the parties unless impeached or challenged for some cause recognized by law (Kleila v Kleila, 50 NY2d 277, 283; Christian v Christian, 42 NY2d 63; Leffler v Leffler, 40 NY2d 1036, affg 50 AD2d 93; Goldman v Goldman, 282 NY 296, 300; Galusha v Galusha, 116 NY 635; Steers v Steers, 69 AD2d 858). Indeed, "courts of this State enjoy only limited authority to disturb the terms of a separation agreement” (Kleila v Kleila, 50 NY2d 272, 283, supra). We have, however, acknowledged a court’s power to modify decrees or orders in respect to child support provisions deriving from a separation agreement incorporated but not merged therein upon a showing that the agreement was not fair and equitable when entered into, or that an unanticipated and unreasonable change in circumstances has occurred resulting in a concomitant need (Matter of Boden v Boden, 42 NY2d 210, 213, supra; Matter of Brescia v Fitts, 56 NY2d 132, 138, supra).

The separation agreement here has neither been impeached nor challenged for any cause recognized by law (Christian v Christian, 42 NY2d 63, supra). Defendant’s request for modification of the support obligations is based on his sons’ legal change of their surname. That conduct is not a valid basis on which to make the modification as requested.

Accordingly, the order of the Appellate Division should be reversed, with costs, and defendant’s motion denied.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye, Alexander and Hancock, Jr., concur in Per Curiam opinion; Judge Titone taking no part.

Order reversed, etc.


text:
    The People of the State of New York, Respondent, v James Bethea, Appellant.
    Argued February 11, 1986;
    decided May 13, 1986

      POINTS OF COUNSEL

      Sheryl M. Gross and Philip L. Weinstein for appellant.
    I. Appellant’s statements, made after he was advised of his rights to remain silent and have counsel, should have been suppressed where, shortly before, he had made the same statements to the same police officer without benefit of Miranda warnings. (People v Chappie, 38 NY2d 112; Oregon v Elstad, 470 US 298; Westover v United States, 384 US 436; Miranda v Arizona, 384 US 436; People v Hawkins, 55 NY2d 474; People v Elwell, 50 NY2d 231; People v Cunningham, 49 NY2d 203; People v Blake, 35 NY2d 331; People v Johnson, 64 AD2d 907, 48 NY2d 674; People v Jones, 87 AD2d 761.) II. The court erroneously denied appellant’s motion to suppress physical evidence and consequent statements, where both the detention of appellant and the exploration of the bag he was carrying exceeded the scope of permissible police action. (People v De Bour, 40 NY2d 210; People v Carney, 58 NY2d 51; Terry v Ohio, 392 US 1; People v La Pene, 40 NY2d 210; People v Russ, 61 NY2d 693; People v Howard, 50 NY2d 583; People v Cantor, 36 NY2d 106; People v Johnson,
      64 NY2d 617; People v Class, 63 NY2d 491; People v Harrison, 57 NY2d 470.)

      Robert M. Morgenthau, District Attorney (Eleanor J. Ostrow and Joyce P. Adolfsen of counsel), for respondent.
    I. Defendant’s second statement was made after a careful and thorough administration of Miranda warnings and was not tainted by the statement made prior to receiving those warnings. (Oregon v Elstad, 470 US 298; People v Chapple, 38 NY2d 112; Miranda v Arizona, 384 US 436; Michigan v Tucker, 417 US 433; People v Gunner, 15 NY2d 226; People v McQueen, 18 NY2d 337; People v Quarles, 63 NY2d 923; People v Newson, 68 AD2d 377; People v Tanner, 30 NY2d 102; People v Hawkins, 55 NY2d 474.) II. The officers’ initial approach and inquiry and subsequent removal of the bag from defendant were in all respects reasonable. (People v Evans, 65 NY2d 629; People v Harrison, 57 NY2d 470; People v De Bour, 40 NY2d 210; People v Benjamin, 51 NY2d 267; People v Carrasquillo, 54 NY2d 248; People v Brooks, 110 AD2d 571, 65 NY2d 1021; People v Belk, 100 AD2d 908; People v Le Grand, 110 AD2d 539; People v Chestnut, 51 NY2d 14, 449 US 1018; People v Finlayson, 76 AD2d 670, 450 US 931.)
   OPINION OF THE COURT

Per Curiam.

This appeal presents the question whether in view of the possible inconsistency between our decision in People v Chap-pie (38 NY2d 112) and that of the Supreme Court in Oregon v Elstad (470 US 298) the rule declared by us in Chappie remains viable. We conclude that the mandate of NY Constitution, article I, § 6 that "[n]o person * * * shall * * * be compelled in any criminal case to be a witness against himself’ would have little deterrent effect if the police know that they can as part of a continuous chain of events question a suspect in custody without warning, provided only they thereafter question him or her again after warnings have been given. The rule of the Chappie case, therefore, continues as a matter of State constitutional law, to govern the admissibility of statements obtained as a result of continuous custodial interrogation.

Defendant and his companion were stopped by three officers while walking down the street. The officer who testified at the suppression hearing, Robert Maas, stated that having been informed about an attempted burglary by two men whose description closely approximated the appearance of defendant and his companion, he, with gun drawn as he approached them, questioned the two men about their activities and the contents of a bag held by defendant. The bag was taken from defendant and, when it was found to contain a revolver, defendant and his companion were placed against the police van and searched. A pair of handcuffs and some marihuana were found on defendant’s person and he was then placed in the police van for transportation to the precinct. While being so transported, defendant was asked by Officer Maas where he got the gun and responded that he bought it downtown for $100 and that he carried the gun and the handcuffs because he had recently been "ripped off” and planned if that happened again to use the gun for protection and then handcuff his assailant. Prior to making that statement defendant had not been advised of his constitutional rights, but upon arrival at the precinct he was so advised and thereafter repeated to the officer what he had said in the van. The hearing Judge suppressed the first unwarned statement but not the physical evidence or the second statement.

The hearing Judge found that there was probable cause to arrest defendant and the Appellate Division affirmed. There being evidence in the record to support that finding, denial of suppression of the gun, handcuffs and marihuana seized from defendant is beyond our power of review (People v Krom, 61 NY2d 187; People v Alexander, 37 NY2d 202; see, People v Rizzo, 40 NY2d 425). Denial of suppression of the second statement is not beyond our reach, however, there being no dispute as to the facts or the inferences to be drawn from them in this case (People v Ferro, 63 NY2d 316, 321).

The second statement, though given after the warnings required by article I, § 6 of our Constitution, must be suppressed. In People v Chapple (supra) we distinguished People v Tanner (30 NY2d 102) as premised on the theory (sometimes referred to as the "cat out of the bag” theory) that Tanner had made his second statement on constraint of the first unwarned custodial statement. Chappie’s later warned statements were suppressed, rather, on the basis that the sequence of events beginning with his arrest and unwarned statement and ending with four typewritten and signed confessions "was, in reality, a single continuous chain of events” (38 NY2d, at p 114). All of Chappie’s statements were suppressed not on the basis of defendant’s testimony concerning his state of mind, but on the testimony of the arresting officer which made clear that Chappie had been subjected to such a continuous interrogation that the warnings administered before the later statements were insufficient to protect his rights (id.).

Here, as in Chapple, the testimony of the arresting officer establishes the close sequence between the unwarned custodial statement in the van and its repetition soon after defendant arrived at the precinct. There must, therefore, be suppression of the second statement as well as the first. As we read Elstad, it is distinguishable on its facts, but to the extent that any part of its determination may be inconsistent with Chap-pie we adhere as a matter of State constitutional law to the rule we set forth in that case.

Accordingly, the order of the Appellate Division should be reversed, defendant’s statements suppressed, defendant’s guilty plea vacated, and the case remitted to Supreme Court, New York County, for further proceedings on the indictment.

Chief Judge Wachtler and Judges Meyer, Simons, Kaye, Alexander and Hancock, Jr., concur in Per Curiam opinion; Judge Titone taking no part.

Order reversed, etc.

       The People suggest that our citation of Elstad in People v Witherspoon (66 NY2d 973, 975) indicates our acceptance of its entire reasoning. That reference was, however, dictum and, as such, not entitled to stare decisis effect (People ex rel. Metropolitan St. Ry. Co. v State Bd. of Tax Commrs., 174 NY 417, 447; see, People v Anderson, 66 NY2d 529; 29 NY Jur 2d, Courts and Judges, § 481, at 248).


author: Kaye, J.

text:
    Kenneth H. Loughry, Respondent, v Lincoln First Bank, N. A., Appellant, et al., Defendants.
    Argued March 17, 1986;
    decided May 1, 1986

      POINTS OF COUNSEL

      Robert C. Bernius and Thane D. Scott for appellant.
    I. Employees acting solely from malice do not expose their employer to punitive damage liability. (Stukuls v State of New York, 42 NY2d 272; Rezey v Golub Corp., 73 AD2d 772, 52 NY2d 713; O’Donnell v K-Mart Corp., 100 AD2d 488; Roginsky v Richardson-Merrell, Inc., 378 F2d 832.) II. There was no proof of publication. (Ramer v Portnick, 78 Misc 2d 404; Egleston v Kalamarides, 58 NY2d 682.) III. Plaintiff did not prove that he was entitled to compensatory damages, therefore punitive damages are unsupportable. (Salomone v MacMillan Pub. Co., 77 AD2d 501; France v St. Clare’s Hosp. & Health Center, 82 AD2d 1; Carney v Memorial Hosp. & Nursing Home, 101 AD2d 990.)

      E. Robert Fussell for respondent.
    I. The sole issue before this court is one of fact, not law, and this court should dismiss the appeal for lack of jurisdiction pursuant to NY Constitutian, article VI, § 3 (a) and CPLR 5501 (b). (O’Donnell v K-Mart Corp., 100 AD2d 488; Doralee Estates v Cities Serv. Oil Co., 569 F2d 716; Pirre v Printing Devs., 468 F Supp 1028.) II. The court below properly reinstated the jury verdict of $105,-000 punitive damages against defendant, Lincoln First Bank, N. A. (Pirre v Printing Devs., 468 F Supp 1028, 614 F2d 1290; Doralee Estates v Cities Serv. Oil Co., 569 F2d 716; Up-Front Indus, v U. S. Indus., 63 NY2d 1004; Rose v Imperial Engine Co., 127 App Div 885.) III. The arguments in defendants’ brief contain many inaccuracies. (Stukuls v State of New York, 42 NY2d 272.) IV. Unconscionable injustice will result if this court now reverses its previous decisions on any issue that resulted in the final finding of liability of the individual defendants.
   OPINION OF THE COURT

Kaye, J.

While an employer may be liable for compensatory damages caused by false statements maliciously published by its employees in the course of employment, punitive damages for the same acts cannot be assessed against the employer in the absence of its complicity. The employer’s complicity not having been established here, the Appellate Division order allowing punitive damages against appellant, Lincoln First Bank, should be modified by striking the punitive damages award.

Plaintiff, first employed by Lincoln in 1975 as a loan collector, by 1979 had advanced to become a collection manager in the Consumer Credit Services Department, responsible for both debt collections and property repossession and disposition. His rise through the ranks was marked by several bank commendations.

At 5 p.m. on September 17, 1979, plaintiff was summoned to a meeting by Robert Mariano, a senior vice-president of the bank and manager of its Community Banking and Consumer Credit Services Departments, to discuss alleged improprieties uncovered in the course of an investigation conducted by defendants Robert Lee (a bank vice-president, manager of its Real Estate Division and Director of Security) and Frank Dovidio (an investigator in the Asset Protection Department of the bank’s Security Department). Mariano, Lee and Dovidio were at the meeting and, at plaintiff’s request, his immediate supervisor — Alan Stanwix — also attended.

Two statements were allegedly made at this meeting — one by Dovidio, and one by Lee — that became the focus of plaintiffs slander action. Defendants denied uttering either statement. First, plaintiff claims Dovidio stated, "I have enough against you for an indictment”, then threw an envelope containing tinfoil packets on the table and demanded, "Come on Ken, you know what these are. Have you ever used cocaine?” Plaintiff responded by denying ever having used cocaine, but claims these words and actions falsely imputed crimes dealing with possession and sale of controlled substances. Second, plaintiff claims Lee falsely accused him of larceny at the meeting when he stated, "We know that you gave a truck to Charles Johnson for bringing back a car from out of state. We’ve verified that this truck is registered in the name of Chuck Johnson.” Plaintiff explained that the truck had been repossessed in Texas, transported to New York free of charge by Charles Johnson, and sold to plaintiffs acquaintance for $800 above the value placed on it in Texas. While the file maintained on the truck was at the meeting, exculpatory documents setting forth the indicated value and the purchaser’s name had been removed. In response to plaintiff’s suggestion that his story could be verified, Lee allegedly responded: "We’ve got a statement saying that you gave this truck to Chuck Johnson. That’s all we need.”

At the conclusion of the meeting, Mariano said he would consider the matter overnight and, after viewing as well the written statements from other employees (see, n 1, supra), the next day terminated plaintiffs employment on the ground the bank had lost confidence in him. The present action followed. Plaintiff claimed that defendants’ slanderous statements resulted in his discharge and damaged his reputation in the banking community.

In a bifurcated trial, the jury first considered liability only, and found for plaintiff against all three defendants. Answering special questions, the jury found that Lee and Dovidio had made the statements attributed to them, that the statements were false, heard by other persons who reasonably understood them to disgrace or discredit plaintiff, uttered solely out of malice, and injurious to plaintiff. After additional proof and a separate charge on damages, the jury awarded plaintiff $55,-000 in compensatory damages against Lee, Dovidio and the bank, and punitive damages totaling $133,000 — $22,000 as to Lee, $6,000 as to Dovidio and $105,000 as to the bank. On a posttrial motion to set aside the jury’s special findings and verdict (see, CPLR 4404 [a]), the trial court reduced compensatory damages to $35,500; reduced punitive damages against Lee and Dovidio to $10,000 and $3,000 respectively, crediting the excessive awards to "improper comments made by plaintiff’s counsel during his summations”; and struck the punitive damages award against the bank, concluding that the individuals’ assault on plaintiff’s character and reputation were "spontaneous and unforeseeable by the superior officers of Lincoln”, and that "[a]dequate monetary penalties were imposed on the parties responsible for the slanders.” On appeal by plaintiff and cross appeals by defendants, the Appellate Division modified on the law and the facts, by reinstating the punitive damages award against Lincoln, reversing all findings of fact inconsistent with its memorandum and making new findings as contained in the memorandum, and otherwise affirmed. Quoting O’Donnell v K-Mart Corp. (100 AD2d 488, 492), the court held that Lee, who was a bank vice-president, manager of its real estate department and director of corporate security, was a superior officer who " ’had sufficient managerial authority upon which to impose liability’ ” for punitive damages on Lincoln (109 AD2d, at p 1075). Alternatively, the court held that Lincoln had not included a "superior officer” charge in its request to charge and registered no objection to the charge given prior to submission of the case to the jury, thus failing to preserve its argument directed to Lee’s status as a superior officer.

All three defendants appealed as of right, but this court dismissed the appeals of Lee and Dovidio because they were not aggrieved by the modification at the Appellate Division (65 NY2d 811), and denied their motions for leave to appeal. Plaintiff’s cross motion for leave to appeal was dismissed on the ground that he was not aggrieved by a reduction in damages he stipulated to accept (66 NY2d 677).

While the Appellate Division modified the trial court’s order only as to punitive damages, still the modification affords defendant the right to appeal from all aspects of the order that aggrieved it (see, Dalrymple v Shults Chevrolet, 39 NY2d 795; Cohen and Karger, Powers of the New York Court of Appeals § 50, at 224 [rev ed]). Lincoln challenges both its liability for compensatory damages and the punitive damages award.

The bank argues strenuously that the September 17 meeting was an example of corporate fairness and due process that should as a matter of policy be promoted not punished, that the statements were privileged, and that in any event the elements of slander were not established. However persuasive such contentions might be in the abstract, they are laid to rest by the record in this case. Statements among employees in furtherance of the common interest of the employer, made at a confidential meeting, may well fall within the ambit of a qualified or conditional privilege (see generally, Toker v Pollak, 44 NY 211, 219; Stukuls v State of New York, 42 NY2d 272; Shapiro v Health Ins. Plan, 7 NY2d 56; Rezey v Golub Corp., 73 AD2d 772, affd, 52 NY2d 713; PJI 3:32 [1986 Cum Supp]). But the privilege is conditioned on its proper exercise, and cannot shelter statements published with malice or with knowledge of their falsity or reckless disregard as to their truth or falsity (see, O’Rorke v Carpenter, 55 NY2d 798, 799; Restatement [Second] of Torts §§ 599-600, 603 comment a; Prosser and Keeton, Torts § 115, at 833-835 [5th ed]). Here, the jury found that the two subject statements were false, that Lee and Dovidio "solely from malice intend[ed] to injure plaintiff when [they] made the statements”, that the statements were made "solely as a result of [the individuals’] malice toward plaintiff”, and that they injured plaintiff. Where, as here, there is some evidence to support the jury’s findings, they are beyond the scope of our review (see, Cohen and Karger, Powers of the New York Court of Appeals § 108 [rev ed]).

Next, Lincoln challenges the compensatory damages award on the ground that, if the individual defendants were acting solely from malice they necessarily could not have been acting in the scope of their employment. But no such objection was taken to the charge either as to liability or as to compensatory damages, which therefore places the issue beyond our review (see, CPLR 4110-b). Indeed, the liability segment of the case was presented throughout as if the bank and each individual were to be viewed as one. While the court charged that the bank would be liable only for acts of its employees within the course of employment, the special findings forms prepared by defense counsel permitted the jury to return findings only as to the individuals and the bank jointly. No request was made to separate the individuals from the entity. In this posture, the bank cannot now complain of error (see, Up-Front Indus, v U. S. Indus., 63 NY2d 1004, 1006; Bichler v Lilly & Co., 55 NY2d 571, 583-584). Finally, Lincoln asserts that as a matter of law no publication was made. For purposes of a slander claim, however, it is clear that a false and malicious utterance by one employee to another can be actionable (see, Ostrowe v Lee, 256 NY 36; Kennedy v James Butler, Inc., 245 NY 204; Pirre v Printing Devs., 468 F Supp 1028, 1041, affd 614 F2d 1290; PJI 3:23 [1986 Cum Supp]). While others in attendance at the meeting may have denied hearing the statements plaintiff alleges were made in their presence, this credibility issue was resolved against the bank. The jury found, in particular, that the Lee and Dovidio statements were heard by two others and reasonably understood by them to disgrace or discredit plaintiff.

We therefore agree with the Appellate Division that the bank’s liability for compensatory damages should be affirmed, and turn to the punitive damages issue.

Consonant with risk allocation theories, liability for compensatory damages is properly placed on an innocent employer for slander by its agents committed in the course of employment (see, Lake Shore & Mich. Ry. Co. v Prentice, 147 US 101, 110; Cleghorn v New York Cent. & Hudson Riv. R. R. Co., 56 NY 44, 47; Prosser and Keeton, Torts § 70, at 505 [5th ed]). But punitive damages are a different matter entirely. Unlike damages that compensate an individual for injury or loss, punitive damages — damages over and above full compensation, and in that sense a windfall for the plaintiff — serve the societal purposes of punishing and deterring the wrongdoer, as well as others, from similar conduct in the future (see, Walker v Sheldon, 10 NY2d 401, 404). Because of a dual recognition that blameless shareholders or owners likely suffer the ultimate burden of punitive damages vicariously imposed on an employer, and yet vicarious punitive damages can advance the goal of deterrence by motivating the employer to take corrective action, the issue of vicarious liability for punitive damages has for decades fueled heated controversy among courts and commentators. Indeed, it has been described as "chief’ among the debates surrounding punitive damages (see, Prosser, Torts § 2, at 12 [4th ed]; see also, Parlee, Vicarious Liability for Punitive Damages: Suggested Changes in the Law Through Policy Analysis, 68 Marq L Rev 27 [1984]; Comment, Recovering Punitive Damages from Employers: The Practical Application of the Restatement [Second] of Torts § 909, 18 Land & Water L Rev 671 [1983]; Ellis, Fairness and Efficiency in the Law of Punitive Damages, 56 S Cal L Rev 1, 63-71 [1982]; Owen, Punitive Damages in Products Liability Litigation, 74 Mich L Rev 1257, 1299 [1976]; Comment, The Assessment of Punitive Damages Against an Entrepreneur for the Malicious Torts of his Employees, 70 Yale LJ 1296 [1961]; and Morris, Punitive Damages in Tort Cases, 44 Harv L Rev 1173, 1199 [1931]).

In this State, the question has long been settled: an employer is not punished for malicious acts in which it was not implicated. While the decision to award punitive damages in any particular case, as well as the amount, are generally matters within the sound discretion of the trier of fact, there is a threshold issue: punitive damages can be imposed on an employer for the intentional wrongdoing of its employees only where management has authorized, participated in, consented to or ratified the conduct giving rise to such damages, or deliberately retained the unfit servant (Cleghorn v New York Cent. & Hudson Riv. R. R. Co., 56 NY 44, 47-48, supra; Craven v Bloomingdale, 171 NY 439; Stevens v O’Neill, 51 App Div 364, affd 169 NY 375), or the wrong was in pursuance of a recognized business system of the entity (Rose v Imperial Engine Co., 127 App Div 885, 887, affd 195 NY 515). Put another way, this “complicity rule” — in essence the position adopted by the Restatement (Second) of Torts § 909 and the Restatement (Second) of Agency § 217 C — results in employer liability for punitive damages only when a superior officer in the course of employment orders, participates in, or ratifies outrageous conduct (see, Morris, Punitive Damages in Personal Injury Cases, 21 Ohio State LJ 216, 221 [I960]; Roginsky v Richardson-Merrell, Inc., 378 F2d 832, 842).

No serious contention is made before us that Lincoln authorized or ratified the Lee and Dovidio statements, or deliberately retained unfit employees, or promulgated such statements as part of its regular business policy. The issue thus is whether Lee (who was superior in rank to Dovidio) was a "superior officer” so as to equate his conduct with participation by Lincoln and provide a basis for imposing punitive damages on the bank.

Initially, we reject the Appellate Division conclusion that the issue was not preserved for review. After the jury’s verdict, proof was taken on damages — consisting solely of an agreed statement as to the net worth of each defendant — and the jury was charged with respect to compensatory and punitive damages. The court instructed the jury that punitive damages could be assessed against each defendant based on the earlier findings on liability: "You have already determined by your answers to the questions submitted to you on Monday that the Defendants did act with malice, the individual Defendants. You may award under those circumstances punitive damages, and you may fix as punitive damages, the amount you fix need bear no relationship to the amount you award for compensatory damages.” But malice for one purpose is not malice for every purpose. The court’s error — equating an agent’s malice sufficient under the doctrine of respondeat superior for compensatory damages against the employer, with the employer’s own complicity necessary for punitive damages — drew timely objection from defense counsel, who protested that there was no basis for punitive damages against the bank. Counsel objected, first, because a finding that malice solely motivated Lee and Dovidio necessarily precluded a finding that they acted in the scope of employment and, second, because "there’s nothing showing sufficient proof of authorization, ratification or condonation of the acts of Lee and Dovidio.” While the first objection was properly rejected— "culpable recklessness” (which was charged to the jury) being one form of malice that can be fully consistent with scope of employment — the second should have alerted the trial court to the need for further instruction regarding a predicate for punitive damages against the bank, but the court declined to give any. Had plaintiff at that point perceived that a "superior officer” finding in particular furnished the necessary predicate for punitive damages against the bank, he might have sought such an instruction; his theory, however — like that of the trial court at the time the charge was given — was that punitive damages could be awarded against the bank on the showing of malice already made as to the individuals. In these circumstances, the failure to request a "superior officer” charge cannot be laid at defendant’s door, or place the issue beyond our review.

The jury thus received no instruction as to what facts were to be found before any punitive damages could be awarded against the bank, and — after hearing evidence of the bank’s net worth — proceeded directly to the question whether punitive damages should be awarded, and in what amount. Where the case was submitted on special questions, and where neither party requested inclusion of the fact question whether Lee was a "superior officer”, both parties are deemed to have waived their right to a trial by jury of the omitted issue (see, CPLR 4111 [b]; Suria v Shiffman, 67 NY2d 87). The trial court, on a posttrial motion, made findings of fact that Lee was "not entrusted with management of the bank,” but was "an ordinary bank officer” and it struck the punitive damages award. The Appellate Division, by contrast, found on the facts that Lee had "sufficient managerial authority” upon which to impose punitive damages liability on the bank and reinstate the verdict. "When confronted with an Appellate Division order of modification which, as here, 'has expressly or impliedly found new facts and a final judgment pursuant thereto is entered’, this court may also review questions of fact (CPLR 5501 [b]), in which case we will determine which of the findings more nearly comports with the weight of the evidence (Oelsner v State of New York, 66 NY2d 636, 637; Miller v Merrell, 53 NY2d 881, 883; Electrolux Corp. v Val-Worth, Inc., 6 NY2d 556, 563).” (Suria v Shiffman, 67 NY2d 97-98, supra.) Having reviewed the evidence, we conclude that the trial court’s findings more closely comport with the weight of the evidence.

The term "superior officer” obviously connotes more than an agent, or "ordinary” officer, or employee vested with some supervisory or decision-making responsibility. Indeed, since the purpose of the test is to determine whether an agent’s acts can be equated with participation by the employer, the term must contemplate a high level of general managerial authority in relation to the nature and operation of the employer’s business (see, Crane v Bennett, 77 App Div 102, affd 177 NY 106; Rose v Imperial Engine Co., 127 App Div 885, 887, affd 195 NY 515, supra). This is not to suggest, however, that a "superior officer” can only be found in the executive suite or topmost reaches of corporate government (see, Doralee Estates v Cities Serv. Oil Co., 569 F2d 716, 722). The agent’s level of responsibility within the entity should be sufficiently high that his participation in the wrongdoing renders the employer blameworthy, and arouses the "institutional conscience” for corrective action (see, Doralee Estates v Cities Serv. Oil Co., supra, citing Morris, Punitive Damages in Personal Injury Cases, op. cit., 21 Ohio St LJ 216, 221), thus serving both the punishment and the deterrence goals of punitive damages.

By this standard we conclude that, on the record before us, Lee was not a "superior officer”. The Appellate Division found determinative the fact that Lee was "a vice-president and manager of the real estate department and director of corporate security” (109 AD2d, at p 1075). But the job titles do not convey what significance his responsibilities may have had in terms of management of this bank; plaintiff himself testified that in 1977 the bank had possibly 150 managers. Indeed, the record lacks evidence that Lee had any significant managerial function in relation to bank operations. Plaintiff points, first, to the testimony of Lee to the effect that his job "entailed the management of all real estate owned or leased in the Rochester division,” which had an estimated value of $100-150,000,000 and, second, to an organization chart showing the positions of the individual defendants within the Real Estate Management Department. Neither, however, reveals the function of the managerial employee in relation to the nature and operation of the employer’s business. Some evidence of Lee’s function and authority within the bank may be found in the transaction before us. The power to terminate plaintiff apparently resided with Mariano, not with Lee. Mariano, not Lee, was responsible for convening the September 17 meeting. Indeed, the thrust of plaintiff’s argument on malice is, and was to the jury, that Lee — pursuing a grievance against plaintiff for embarrassing him before his superiors— duped Mariano in order to obtain plaintiff’s dismissal. Given the state of the record on which this issue must be determined, we conclude that the finding of the trial court that in the circumstances Lee was not a "superior officer” for purposes of imposing punitive damages on the bank more closely comports with the weight of the evidence.

Accordingly, the judgment appealed from and order brought up for review should be modified, with costs to appellant, by striking the award of punitive damages against appellant and, as so modified, affirmed.

Chief Judge Wachtler and Judges Meyer, Simons, Alexander and Titone concur; Judge Hancock, Jr., taking no part.

Judgment appealed from and order of the Appellate Division brought up for review modified, with costs to appellant, in accordance with the opinion herein and, as so modified, affirmed.

      . The bank held three signed statements from other employees alleging in part that bank employees had performed personal errands for plaintiff on bank time; that he had used or possessed marihuana; and that his friends had been involved in questionable purchases of repossessed property. These statements were not produced at the meeting, and are not the basis of plaintiff’s slander claim.

      . Apparently 24 states have adopted the complicity rule, and 18 states have the vicarious liability rule. (See, Ghiardi & Kircher, Punitive Damages Law and Practice §§ 5.05-5.13 & Table 5-1 [1985 Cum Supp]; Note, Corporate Vicarious Liability for Punitive Damages, 1985 BYU L Rev 317; Parlee, Vicarious Liability for Punitive Damages: Suggested Changes in the Law Through Policy Analysis, 68 Marq L Rev 27, 31-32.)

      . The constitutional challenges to punitive damages made by defendant before the trial court are not repeated on this appeal.


author: Chief Judge Wachtler.

text:
    The People of the State of New York, Respondent, v Edward Ferguson, Appellant.
    Argued March 25, 1986;
    decided May 13, 1986

      POINTS OF COUNSEL

      John J. Olszewski for appellant.
    I. The trial court erred in not granting appellant’s motion to dismiss on the grounds of double jeopardy. (People v Michael, 48 NY2d 1.) II. The trial court erred in not granting defendant his motion for a mistrial on the grounds of prosecutorial misconduct, in conducting the voir dire examination and also in the prosecutor’s summation. (People v Garcia, 72 AD2d 356.) III. The court erred in not granting the mistrial motion of defendant after two of the jurors were excused by the court. IV. The court in its charge of "flight” made a reversible error and exception was taken to this part of the charge by defendant. (People v Yazum, 13 NY2d 302; People v Lagana, 43 AD2d 834.) V. The court erred in allowing the murder in the second degree count to go to the jury, without the manslaughter one and manslaughter two charges. VI. The trial court erred in not granting a complete suppression of all of the items seized during a search, the court also committed an error in not granting suppression of the telephone conversation by appellant.

      Richard J. Arcara, District Attorney (Louis A. Haremski and John J. De Franks of counsel), for respondent.
    I. Defendant has not been subjected to double jeopardy since he consented to the court’s declaration of a mistrial when it became physically impossible to continue the trial. (United States v Dinitz, 424 US 600; Matter of Napoli v Supreme Ct., 40 AD2d 159, 33 NY2d 980; United States v Goldstein, 479 F2d 1061, 414 US 873; Johnson v Zerbst, 304 US 458; United States v Bobo, 586 F2d 355, cert denied sub nom. Rowan v United States, 440 US 976; United States v Smith, 621 F2d 350, 449 US 1087; People v Paquette, 31 NY2d 379; People v Cona, 49 NY2d 26; Peters v Quick, 567 F Supp 331, 732 F2d 142; People v Michael, 48 NY2d 1.) II. Defendant was afforded a fair trial unencumbered by any instances of prosecutorial misconduct. (People v Ashwal, 39 NY2d 105; People v Galloway, 54 NY2d 396; People v Bailey, 58 NY2d 272; People v Brosnan, 32 NY2d 254; People v Crimmins, 36 NY2d 230.) III. The court did not err by denying defendant’s motion for a mistrial which was based upon the discharge of two jurors. (People v Tutt, 38 NY2d 1011; People v Cassell, 101 AD2d 1013; People v Karadimas, 99 AD2d 652; People v Wilson, 106 AD2d 146; People v Lombardo, 61 NY2d 97; People v Blyden, 55 NY2d 73.) IV. The trial court’s instructions to the jury with respect to evidence of flight were justified by the evidence and caused no prejudice to defendant. (Ryan v People, 79 NY 593; People v Driscoll, 107 NY 414; People v Yazum, 13 NY2d 302; People v Anderson, 99 AD2d 560.) V. In view of defendant’s express request that the jury be allowed to consider only the indicted charges, the trial court committed no error when it charged no lesser included offenses to the jury. (People v Cohen, 223 NY 406; People v Duncan, 46 NY2d 74; People v Hille, 42 AD2d 881; People v Lang, 36 NY2d 366.) VI. The trial court’s rulings with respect to the suppression of evidence were entirely proper. (Coolidge v New Hampshire, 403 US 443; People v Niemczycki, 67 AD2d 442; United States v Forsythe, 560 F2d 1127; United States v Heldt, 668 F2d 1238.)
   OPINION OF THE COURT

Chief Judge Wachtler.

The defendant’s first trial terminated when the Judge declared a mistrial while defendant was not present in court. After a second trial, defendant was convicted of murder in the second degree, and the conviction has been affirmed by a divided Appellate Division. The issues on this appeal are whether defendant’s lawyer consented to the mistrial, and whether a lawyer has the authority to do so where the defendant is not present and was not consulted. We answer both of these questions affirmatively, and affirm the order of the Appellate Division.

Defendant, Edward Ferguson, shot and killed Ozell Jackson following an argument over whether a light in the stairwell of the apartment building they both lived in should be kept on or off. Defendant was indicted for murder in the second degree (Penal Law § 125.25 [1]), and his trial on the indictment commenced on September 22,1982.

On the evening of the fourth day of trial, one of the jurors was apparently involved in an automobile accident. A court employee received a call the following morning informing the court that the accident had occurred, and that the juror was receiving treatment in a hospital. A call was placed to the hospital confirming this information, but the hospital personnel did not elaborate on the extent of the juror’s injuries or how long he would remain in the hospital.

The Trial Judge was informed as to what had transpired, and she called the attorneys into her chambers for a conference. Although there was no record made of the conference, it is agreed by both sides that the Judge stated that she was considering a mistrial as there were no alternate jurors available and it would thus be impossible to continue the trial. It is also undisputed that no further inquiry was made as to the condition of the juror.

At the end of the conference, the Judge and the attorneys returned to the courtroom, in which the other 11 jurors were present. The defendant had not yet arrived at the court that morning, and was unaware of the consideration being given to the declaration of a mistrial. The defendant’s absence was noted, and, after the Judge opined that there was no need to wait for him, defense counsel waived his appearance. The court then stated that it was going to "inform the jury what has happened” and asked the attorneys if that was agreeable with them. The prosecution stated that it was; defense counsel said nothing. The court then proceeded to tell the jurors about the automobile accident and stated that it would be necessary to declare a mistrial. After some additional comments, the court dismissed the jurors. Defense counsel remained silent throughout the court’s remarks to the jurors.

Prior to the commencement of the second trial, defendant moved to dismiss the indictment on the ground of double jeopardy. Defense counsel claimed in that motion that he had not given an "unqualified consent” to a mistrial but had instead merely stated in chambers that "the Judge must do what she feels must be done.” He also asserted that the Trial Judge desired a mistrial because she felt that the delay in the trial which would otherwise occur would interfere with a planned trip to China. Significantly, however, counsel did not claim that he ever objected to a mistrial, and it may fairly be implied from his motion papers that he realized that the Judge intended to declare a mistrial when they returned to the courtroom. Additionally, defendant did not seek a hearing to reconstruct what had transpired in chambers, nor did he move to have a different Judge decide the double jeopardy claim.

The court denied the motion to dismiss, stating that "[neither attorney suggested or requested [at the conference in chambers] any further action be taken [and] neither attorney objected to the mistrial.” The second trial commenced on December 2, 1982, and defendant was convicted of murder.

The Appellate Division, by a divided vote, affirmed the conviction. The majority noted defense counsel’s failure to object at any time to the mistrial and his statement in chambers that "the Judge must do what she feels must be done”, and concluded that defense counsel impliedly consented to the mistrial. The majority also rejected the claim that the personal consent of the defendant was necessary, holding instead that the express or implied consent of defense counsel is binding on the defendant. The dissenting Justices disagreed with the majority’s finding of implied consent by defense counsel, and also expressed the view that a defense attorney’s consent to a mistrial is effective only if the defendant was present at the time such consent was given.

The double jeopardy clauses of the Federal (US Const 5th Amend) and State Constitutions (NY Const, art I, § 6) protect an accused against multiple prosecutions for the same offense (e.g., United States v Dinitz, 424 US 600, 606; Matter of Bland v Supreme Ct., 20 NY2d 552, 555). In a jury trial, once the jury is impaneled and sworn, jeopardy attaches (e.g., Crist v Bretz, 437 US 28, 35; CPL 40.30 [1] [b]), and the defendant then possesses a " ' "valued right to have his trial completed by a particular tribunal” ’ ” (Illinois v Somerville, 410 US 458, 466; Wade v Hunter, 336 US 684, 689).

Where a mistrial is granted without the consent or over the objection of a defendant, retrial is barred by double jeopardy protections unless there was "manifest necessity” for the mistrial or "the ends of public justice would otherwise be defeated” (United States v Perez, 9 Wheat [22 US] 579, 580; Matter of Enright v Siedlecki, 59 NY2d 195, 199; see, United States v Dinitz, 424 US, at p 607, supra). By contrast, where the defendant either requests a mistrial or consents to its declaration, the double jeopardy clauses do not ordinarily bar a second trial (e.g., United States v Scott, 437 US 82, 93).

The People claim that whether defendant consented to the mistrial is irrelevant here because there was in any event "manifest necessity” for it in view of the juror’s accident. All five Appellate Division Justices properly rejected this argument. Although the trial court’s view as to the necessity for discharging the jury is entitled to deference, its discretion is not unlimited (see, e.g., Matter of Enright v Siedlecki, 59 NY2d, at p 200, supra; People v Michael, 48 NY2d 1, 9). The court has the duty to consider alternatives to a mistrial and to obtain enough information so that it is clear that a mistrial is actually necessary (see, e.g., United States v Jorn, 400 US 470, 487; Hall v Potoker, 49 NY2d 501, 505).

Here, there was no information as to how long the juror would remain unavailable, and the Judge apparently made no effort to ascertain the extent of his injuries. It is quite possible that the juror would have been able to continue service within the next few days, in which case a brief continuance would have been available as an alternative to a mistrial (cf. People v Michael, 48 NY2d, at pp 9-10, supra; United States v Smith, 621 F2d 350, 351, cert denied 449 US 1087). We thus agree with the Appellate Division that "manifest necessity” was plainly lacking.

Accordingly, retrial was permissible only if defendant consented to the mistrial. While express consent to a mistrial is preferable, defendant’s consent may in some cases be implied from the circumstances leading up to the dismissal of the jury (see, United States v Smith, 621 F2d, at p 351, supra; United States v Goldstein, 479 F2d 1061, 1067, cert denied 414 US 873). The Trial Judge and the majority at the Appellate Division found implied consent to the mistrial after examining what transpired prior to the dismissal of the jury.

Whether a party consented to a mistrial is a factual question (cf. People v Bastidas, 67 NY2d 1006; People v Murphy, 55 NY2d 819). As the lower courts correctly found that consent may be implied, their findings of consent must be upheld if there is any support in the record for that conclusion. Although the absence of a transcript of the conference in chambers makes this question a difficult one, we conclude that defense counsel’s own recollections of what happened at the conference and his continued silence while the court addressed the jurors provides support for the conclusions below. This case demonstrates, however, the essential importance of a trial court having all discussions of a mistrial in the courtroom and on the record and having the position of each party on the matter clearly set forth. This is particularly true because there is always the potential claim of double jeopardy (see, e.g., People v Michael, 48 NY2d 1, supra).

We turn to defendant’s contention that his personal consent, or at least his presence, was required. Although the right to not be placed twice in jeopardy is "a fundamental ideal in our constitutional heritage” (Benton v Maryland, 395 US 784, 794), the Supreme Court has stated that a traditional waiver analysis is not appropriate in determining whether a retrial is permissible (see, United States v Dinitz, 424 US, at p 609, supra). Consent to a mistrial allows a retrial regardless of whether defendant knowingly waived the right not to be prosecuted twice (see, id., n 11; United States v Bobo, 586 F2d 355, 363-365, cert denied sub nom. Rowan v United States, 440 US 976). Accordingly, numerous courts have held that there is no requirement that the Trial Judge obtain the personal consent of the defendant to a mistrial or scrutinize whether the attorney has consulted with the defendant (see, United States v Smith, 621 F2d, at p 352, n 3, supra; United States v Bobo, 586 F2d, at pp 363-365, 366, supra; Adkins v Bordenkircher, 517 F Supp 390, 400-403, affd 674 F2d 279, 282-283; United States v Rathburn, 472 F Supp 17; State v Fitzpatrick, 676 SW2d 831, 837 [Mo]; Rios v State, 557 SW2d 87 [Tex Ct Crim App]; People v Moore, 146 Cal App 3d 508, 189 Cal Rptr 487, 489-491; Adkins v Smith, 197 So 2d 865 [Fla Ct App], writ of cert discharged 205 So 2d 530; People v Rosen, 136 Mich App 745, 358 NW2d 584, 589-590). In several of these cases, as here, the defendant was not present when the mistrial was discussed or declared (see, Adkins v Bordenkircher, supra; People v Moore, supra; Adkins v Smith, supra; see also, Anderson v United States, 481 A2d 1299 [DC Ct App]; State v Fedette, 462 A2d 17 [Me]).

These holdings are consistent with the proper role of the attorney and the client. While defendant has a fundamental right to counsel and a fundamental right to represent himself, he has no right to "hybrid” representation (People v Mirenda, 57 NY2d 261, 265-266, n). Thus, a defendant who has a lawyer relegates control of much of the case to the lawyer except as to certain fundamental decisions reserved to the client (see, People v Jordan, 96 AD2d 1060, 1061, affd 62 NY2d 825). In Jones v Barnes (463 US 745), the Supreme Court denoted such fundamental decisions as deciding whether to plead guilty, whether to waive a jury, whether to testify at trial, and whether to take an appeal (id., at p 751; citing ABA Standards on Criminal Justice, Defense Function, Standard 4-5.2 [2d ed]).

We need not decide whether this list is exhaustive, as we do not equate a decision of whether to consent to a mistrial with the type of decisions set forth in Barnes. There is an inherent duality in requesting or consenting to a mistrial: the defendant gives up his right to be tried by a particular tribunal, and subjects himself to a second trial, yet also avoids a verdict in a trial which may have been proceeding very poorly for him. Whether a mistrial is in a defendant’s best interest requires an evaluation of the case, analysis of the evidence, recognition of potential harm to defendant’s case from any errors or inappropriate remarks which may have occurred, and consideration of whether a more favorable jury is likely at a retrial and whether delay is likely to help or harm the defendant’s case. As has been recognized by other courts addressing this issue, such factors make the decision as to a mistrial an appropriate one for the lawyer, not the client (see, State v Fitzpatrick, 676 SW2d, at pp 836-838, supra; Rios v State, 557 SW2d, at pp 90-91, supra; People v Moore, 146 Cal App 3d, at pp 511-514, 189 Cal Rptr, at pp 489-491, supra).

As defendant’s personal consent to the mistrial is not necessary, and the decision of whether to consent is to be made by the attorney, retrial was permissible here despite the defendant’s absence at the time the mistrial was declared and his lack of participation in the decision.

We have considered defendant’s remaining contentions and find them to be unpreserved or without merit.

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

Judges Meyer, Simons, Kaye, Alexander and Titone concur; Judge Hancock, Jr., taking no part.

Order affirmed.

       It would seem preferable, of course, for the lawyer to consult with the client, in court, before making such a decision. We are limited here, however, to the constitutional issue, and we hold only that for purposes of double jeopardy there was consent to the mistrial.


text:
    Mary J. Barile et al., Respondents, v Carol M. Kavanaugh et al., Respondents, and State Farm Fire & Casualty Company, Appellant.
    Decided May 13, 1986

      APPEARANCES OF COUNSEL

      Michael F. Perley for appellant.

      Lawrence A. Schulz for Mary J. Barile and another, respondents.

      Gerald J. O’Reilly for Carol M. Kavanaugh and another, respondents.
   OPINION OF THE COURT

Meyer, J.

A notice of cancellation of an automobile liability policy which contains the statements set forth in section 34.6 of the regulations issued by the Commissioner of Motor Vehicles (15 NYCRR 34.6) but does not advise the policyholder that his or her insurance is required to be maintained continuously throughout the registration period as required by Vehicle and Traffic Law § 313 (1) (a) is ineffective. The order of the Appellate Division should, therefore, be affirmed, with costs.

I

On August 12, 1983, a vehicle owned by defendant Janet Kavanaugh and operated by defendant Carol Kavanaugh collided with a vehicle owned and operated by plaintiff Barile, resulting in property damage and personal injury. The Kavanaugh vehicle had been insured by State Farm Fire and Casualty Company, but on July 22, 1983 State Farm had sent a notice of cancellation, effective August 7, 1983, to Janet Kavanaugh. The Barile vehicle was insured by Nationwide Insurance Company, which reimbursed plaintiff Barile for property damage and first-party benefits. State Farm having disclaimed liability and denied coverage of the Kavanaugh vehicle on the date of the accident, the present action was begun by plaintiffs Barile and Nationwide against State Farm and the Kavanaughs.

State Farm’s cancellation notice bore on its face in large boldface type the legend "see important notice on reverse side”, and on the back set forth a lead sentence reading, "The State of New York requires the following notice” and then reprinted verbatim the two paragraphs provided for in regulations of the Commissioner of Motor Vehicles (15 NYCRR 34.6 [a], [b]). The first cause of action of plaintiffs’ complaint sought recovery from the individual defendants of the sums paid and thereafter to be paid by Nationwide to the individual plaintiff. The second cause of action sought judgment declaring the cancellation notice ineffective and State Farm therefore obligated to defend and indemnify the Kavanaughs and to pay to Nationwide the property damage paid by it to plaintiff Barile. State Farm’s answer alleged as an affirmative defense that its cancellation was effective prior to the date of the accident and its denial of coverage therefore proper. Plaintiffs moved for summary judgment on the second cause of action dismissing the affirmative defense and declaring State Farm obligated to defend and indemnify, and State Farm cross-moved for summary judgment dismissing the complaint as to it.

For reasons not revealed by the record, Special Term granted plaintiffs’ motion and denied State Farm’s cross motion. The order and judgment it entered struck the affirmative defense, adjudged the cancellation notice ineffective and State Farm’s policy in effect on the date of the accident, and declared State Farm obligated to defend and indemnify the individual defendants. On defendant’s appeal to the Appellate Division it argued that the notice was sufficient because it complied with section 34.6 of the Commissioner’s regulations. Plaintiffs’ position was that the notice was invalid because it referred to "insurance” rather than "proof of financial security” as required by Vehicle and Traffic Law § 313 (1) (a). The Appellate Division majority held that the fact that the regulation permitted a notice that did not comply with the statute was of no consequence, that strict compliance with the statute was required, and that the notice did not comply with the statute because "it omitted the required statement that 'proof of financial security is required to be maintained continuously throughout the registration period and a notice prescribed by the commissioner indicating the punitive effects of failure to maintain continuous proof of financial security and actions which may be taken by the insured to avoid such punitive effects.’ ” The dissenter’s position was that the statute simply paraphrases what is required, that the regulation’s reference to "insurance” rather than "proof of financial security” was not out of harmony with the statute and that the notice was, therefore, sufficient. The appeal to us is as of right based on the dissent, the notice of appeal having been filed on December 31, 1985. We conclude, though on different reasoning than the Appellate Division, that the notice did not comply with the requirements of Vehicle and Traffic Law § 313 (1) (a) and, therefore, affirm.

II

Vehicle and Traffic law § 313 (1) (a) provides in pertinent part that: "Every notice or acknowledgement of termination for any cause whatsoever sent to the insured shall include * * * a statement that proof of financial security is required to be maintained continuously throughout the registration period and a notice prescribed by the commissioner indicating the punitive effects of failure to maintain continuous proof of financial security and actions which may be taken by the insured to avoid such punitive effects.” Since enactment of the Motor Vehicle Financial Security Act by Laws of 1956 (ch 655), section 313 or its predecessor provision has required that a notice of termination include "a statement that proof of financial security is required to be maintained continuously throughout the registration period” as well as an additional statement (now referred to as a "notice”) which has varied from time to time concerning the effects of the failure to maintain such proof and in more recent versions how to avoid such effects. It thus imposes two distinct requirements — first, that it include a statement that proof of financial security must be maintained; second, as it presently reads, that it also contain a notice as prescribed by the Commissioner as to the punitive effects of failing to do so and of the actions which can be taken to avoid those effects.

Because the notice as to punitive effects is to be prescribed by the Commissioner, it is clear that language of the statute which so provides is not required to be set forth verbatim in the cancellation notice as the Appellate Division majority held. The Commissioner’s prescription of that notice is contained in section 34.6 of his regulations, entitled "Warning on Notice or Acknowledgement of Termination to Insured.” Subdivision (a) of that regulation prescribes what the notice shall state as to punitive effects and it, together with subdivision (b), which directs that "[i]n addition to the above warning, the following information must also accompany each such notice”, prescribes the language necessary to inform the insured how to avoid such consequences. State Farm’s cancellation notice repeated verbatim the language prescribed by section 34.6, and therefore conforms to the second, notice, requirement of the statute.

Section 34.6 is, however, concerned only with that second requirement of the statute. This is apparent from both its failure to refer to the statement (proof of financial security) requirement of Vehicle and Traffic Law § 313 (1) (a) and from section 32.7 of the regulations (15 NYCRR 32.7). The latter provision, first adopted in 1972 and still in effect, is entitled "Notice of Termination.” It requires that "[a]ll of the information and warnings required to be contained on a notice of termination sent to an insured by subdivision 1 of section 313 of the Vehicle and Traffic Law shall continue to be required on such notices.” Read in the light of section 32.7, it is clear that in adopting section 34.6 the Commissioner was neither reading the statement requirement out of the statute nor attempting to rule that the language set forth in section 34.6 constituted compliance with that requirement. Rather, section 34.6 is concerned only with the second, notice, requirement and presupposes that, in conformance with section 32.7, the notice of termination will also contain language to meet the statute’s statement requirement.

We do not agree, however, with the suggestion of the Appellate Division dissenter that the section 34.6 notices sufficiently comply with the statement requirement of the statute. Our disagreement is not based on the fact that those notices refer to "insurance” rather than "proof of financial security,” but on the fact that the legislative purpose in including the statement requirement simply is not met by the language on which the dissenter relied. That language — "If you do not keep your insurance in force during the entire registration period, your registration will be suspended” — implies that there is a continuous obligation to maintain insurance but is not phrased in the mandatory terms that the statute has contained since its inception. Rather it leaves to the discretion of the motorist whether he or she will continue the insurance or fail to do so at the risk of registration suspension and, thus, undermines the purpose of the Motor Vehicle Financial Security Act, which is "that motorists shall be financially able to respond in damages for their negligent acts, so that innocent victims of motor vehicle accidents may be recompensed for the injury and financial loss inflicted upon them” (Vehicle and Traffic Law § 310 [2]; see, Teeter v Allstate Ins. Co., 9 NY2d 655, affg 9 AD2d 176; Ruggiero v American Fid. Fire Ins. Co., 103 Misc 2d 859), and, we add, so that the State will not be burdened with the care of injured third persons unable to recover from the motorist and too impoverished to provide for their own needs. To fulfill that purpose the Legislature has determined that the notice must clearly and unequivocally declare that insurance must be maintained continuously and section 32.7 of the regulations has put insurers on notice that all of the requirements of Vehicle and Traffic Law § 313 must be complied with.

It is well established that a notice of cancellation is ineffective unless in strict compliance with the requirements of Vehicle and Traffic Law § 313 (1) (a) (Matter of Liberty Mut. Ins. Co. [Stollerman], 50 NY2d 895, affg for reasons stated at 70 AD2d 643; Nationwide Mut. Ins. Co. v Liberty Mut. Ins. Co., 43 NY2d 810, affg on opn at 92 Misc 2d 273; Miller v Maggio, 106 AD2d 907) and of regulations of the Commissioner if properly filed and not inconsistent with specific statutory provision (see, Matter of Midwest Mut. Ins. Co. [Sinnott], 62 NY2d 703, affg for reasons stated at 96 AD2d 530). Here, both the statute and section 32.7 of the regulations required that the notice of termination inform the policyholder that his or her insurance must be continuously maintained. It follows that the State Farm notice, which wholly omitted the statement that the Kavanaughs’ insurance policy was required to be continuously maintained, was ineffective.

For the foregoing reasons, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Simons, Kaye, Alexander and Titone concur; Judge Hancock, Jr., taking no part.

On review of submissions pursuant to section 500.4 of the Rules of the Court of Appeals (22 NYCRR 500.4), order affirmed, with costs.

      . Those paragraphs read:
      "If you do not keep your insurance in force during the entire registration period, your registration will be suspended. If your vehicle is still uninsured after 90 days, your driver’s license will be suspended. To avoid these penalties you must surrender your registration certificate and plates before your insurance expires. By law, we must report the termination of this coverage of vehicle insurance to the Department of Motor Vehicles.”
      "If you have a lapse in insurance coverage of under 90 days, the law permits you to avoid a suspension of your registration by the payment of a civil penalty of $100 for each 30 days or portion thereof your insurance coverage was not in effect. This grace provision applies only once during any 36-month period. Thus, if you have had a lapse in insurance coverage, it is important that you contact the Department of Motor Vehicles immediately.”

      . [2] Although it did not expressly sever the first cause of action, there is party finality because the individual defendants, although interested in, are not parties to the second cause of action and State Farm is not a party to the first cause of action. To the extent that the second cause of action demanded judgment declaring State Farm obligated to pay Nationwide in reimbursement of the property damage paid by it, which might require determination of the reasonable value of the damage inflicted, that demand must be deemed abandoned, the judgment as entered having made no reference to it. There is finality, therefore, as to the second cause of action as well.

      . As is hereafter discussed, the rule that there must be strict compliance with the requirements of the statute is intended to assure that the statutory purpose is carried out. A cancellation notice stating that "proof of financial security” rather than "insurance” (which is what the notice is intended to terminate) must be continuously maintained does nothing to further that purpose, indeed may be confusing to some policyholders. "Proof of financial security” means "proof of ability to respond in damages for liability arising out of ownership, maintenance or use of a motor vehicle” (Vehicle and Traffic Law § 311 [3]). That ability may be evidenced by "liability insurance, a financial security bond, a financial security deposit, or qualifications as a self-insurer” (id.). It is, however, simply unrealistic in light of the statutory definitions of the other options to expect that a motorist whose insurance is being canceled will consider obtaining from a surety a financial security bond (Vehicle and Traffic Law § 311 [6]), making a financial security deposit of $25,000 (Vehicle and Traffic Law § 311 [7]), or purchasing the number of vehicles (25 or more) necessary to become a fleet operator entitled to self-insure (Vehicle and Traffic Law § 316). Whether the statement required refers to "proof of financial security” or simply advises the insured motorist that his insurance must be continuously maintained, therefore, has no relation to the purpose of the statute and the rule of strict compliance.

      . In light of that conclusion it is unnecessary to discuss State Farm’s argument that notwithstanding revocation of section 34.6 on August 4, 1983 (it was readopted on Feb. 1, 1984) and the promulgation of section 35.11 (15 NYCRR 35.11 [since revoked]), a saving clause in section 35.11 continued section 34.6 in effect until November 1,1983.