author: Meyer, J.

text:
    In the Matter of Harrison J. Goldin, as Comptroller of the City of New York, Appellant, v Robert Greenberg, et al., Respondents.
    Argued February 7,1980;
    decided April 1, 1980

      POINTS OF COUNSEL

      Allen G. Schwartz, Corporation Counsel (Stephen J. Mc-Grath and L. Kevin Sheridan of counsel), for appellant.
    The subpoena herein is authorized and the order of Special Term should be reinstated. (Matter of Maloff v City Comm. on Human Rights, 38 NY2d 329; Matter of Edge Ho Holding Corp., 256 NY 374; Matter of New York World’s Fair 1964-1965 Corp. v Beame, 22 AD2d 611, 16 NY2d 570; Matter of Ronan v Levitt, 42 AD2d 10, 33 NY2d 514; Matter of Comptroller v City of N. Y. [Greenberg], 181 Misc 860; Matter of Erb Strapping Co. v Waterfront Comm. of N. Y. Harbor, 31 AD2d 101.)

      Peter R. Silverman for respondent.
    I. The Comptroller of the City of New York did not have authority to issue the subpoena in issue herein. (Matter of New York World’s Fair 1964-1965 Corp. v Beame, 22 AD2d 611; Matter of Edge Ho Holding Corp., 256 NY 374; Carlisle v Bennett, 268 NY 212.) II. Respondent has not waived its right to object to the validity of the subpoena herein. III. Petitioner’s appeal should be dismissed as moot since a final report on the subject of the audit has been issued.
   OPINION OF THE COURT

Meyer, J.

Does section 93 of the New York City Charter empower the comptroller of the city to issue a subpoena duces tecum for books and records of a corporation which for some six years prior to the date of the subpoena has transported handicapped children under a contract with the board of education of the city? On the comptroller’s petition for an order pursuant to CPLR 2308 compelling compliance Special Term held that it did and commanded compliance. The Appellate Division, two Justices dissenting, reversed and denied the application. The order of the Appellate Division should be reversed, with costs, and the judgment of the Supreme Court should be reinstated.

New York City’s Comptroller is authorized by section 93 of the City Charter to make recommendations concerning the operations, fiscal policies and financial transactions of the city (subd a), to investigate all matters relating to or affecting city finances, including performance of contracts and expenditure of city funds and for that purpose to require the attendance of and examine under oath "such persons as he may deem necessary” (subd b), to audit expenditure of city funds by any public agency that receives funds from the city (subd c), to audit operations and programs of city agencies as to efficiency, economy and achievement of goals and to undertake studies "of purchases of * * * services by agencies * * * that use city funds for such purposes” (subd d) and make recommendations based on such studies. The board of education of the city is an "agency” of the city (New York City Charter, § 1150, subd 2; Matter of Maloff v City Comm. on Human Rights, 38 NY2d 329, 332).

While the status of the board as a city agency does not permit the comptroller to audit matters strictly educational or pedagogic, the board is subject to municipal control in matters not in that category (Matter of Hirshfield v Cook, 227 NY 297, 304; see Matter of Maloff v City Comm. on Human Rights, supra; Matter of Board of Educ. v Goldin, 94 Misc 2d 574, 581, affd 72 AD2d 603). Petitioner’s papers establish that the subpoena issued to respondents was part of the comptroller’s investigation and audit of pupil transportation contracts made by the board, that such contracts cover transportation of some 133,000 pupils daily at an annual cost in 1976-1977 of $73,000,000, that the purpose of the audit was to determine whether city funds were being expended efficiently, and that the inquiry was into four basic areas: competitive bidding procedures, contract specifications, performance monitoring and contract enforcement.

Respondents argue that the claim that the comptroller is investigating transportation contracts generally is but a subterfuge. Were that so respondents could be entitled to protection, for investigatory power may not be used to harass or as a substitute for discovery (Matter of A ’Hearn v Committee on Unlawful Practice, 23 NY2d 916, 918; Matter of Hirshfield v Hanley, 228 NY 346, 349). Here, however, the Appellate Division made no such finding and reversed on the law, so the issue does not appear to be open in this court. Were it, we would have to say, as did Chief Judge Cardozo in Matter of Edge Ho Holding Corp. (256 NY 374, 381; see Matter of Hirshfield v Craig, 239 NY 98, 110; Matter of New York World’s Fair 1964-1965 Corp. v Beame, 22 AD2d 611, 617, affd 16 NY2d 570) that, assuming that motive is subject to judicial review, nothing in the record gives support to the conclusion that "the professed object of the inquiry * * * is merely a cover and a sham.” To the contrary, the interim report prepared under supervision of the division chief of the bureau of performance analysis in the comptroller’s office shows that more than 40 contractors have been similarly audited, that operators of more than 15 wagons are required to provide performance bonds the security for which may amount to one third the value of the contract, and that since only 3 of the 40 contractors have performance bonds, many operators appear to be avoiding the performance bond requirement by using joint staff and resources for carriers with but 15 or fewer wagons.

No more of an objection to the subpoena is it that respondents are not city employees, or that the subpoena served on them is directed to but a single contract, since the inquiry is into pupil transportation contracts generally and respondents are not protected from disclosure of their own affairs in such an inquiry (Matter of Edge Ho Holding Corp., supra, at p 380; Matter of Erb Strapping Co. v Waterfront Comm. of N. Y. Harbor, 31 AD2d 101, 103). Moreover, there is no question, notwithstanding the revision made by CPLR 2302 (subd [a]) in the language of section 406 of the Civil Practice Act, about the power of the comptroller under section 93 of the City Charter to issue a subpoena duces tecum (Matter of New York World’s Fair 1964-1965 Corp. v Beame, 22 AD2d 611, affd 16 NY2d 570, supra).

Respondents argue also that the appeal is moot since the comptroller issued a report on February 13, 1978 and has thus concluded the investigation of school bus contracts which was part of his audit of the board of education. The comptroller characterizes the report as "interim”, however, and respondents have offered nothing to suggest that that characterization is untrue. Moreover, to dismiss the appeal as moot would be contrary to the public interest, for it would frustrate the purpose of the investigatory powers given the comptroller by requiring that he either withhold any report until all legal roceedings had been terminated or forego the information t would otherwise be obtained from a recalcitrant and s witness.

main only the questions whether the inquiry undertaken is within the powers granted the comptroller by section 93 of the City Charter and, if so, whether the materials requested bear a reasonable relationship to that inquiry. There can be little question that the section authorizes the investigation of pupil transportation contracts of the board of education. As already noted, the board is a city agency which receives funds from the city. Subdivision d expressly authorizes, if not mandates, the comptroller’s studying the purchase of services by agencies using city funds for that purpose, and subdivision c directs that he audit expenditures of such an agency. Moreover, subdivision b empowers him to investigate performance of contracts and gives him power to examine "such persons as he may deem necessary”. While the latter provision does not give him unbridled discretion to examine anyone he chooses without reference to whether the person is related to the inquiry, there can be no question that Colonial, a contractor with the board since 1971, receiving some $500,-000 per year from the operation of its 31 wagons in transportation of handicapped children, and which has no other source of income, is so related.

The Appellate Division’s memorandum suggests that without a showing of collusive bidding the comptroller cannot make an audit broader in scope than already done by the board. Nothing in the wording of section 93 suggests any such limitation. Indeed, so to limit the comptroller would make it impossible for him to audit the board’s expenditure of funds, as subdivision c directs him to do, in any case in which the board had failed to conduct a proper audit. Nor can the limitation be justified on the basis of the oppressiveness of multiple audits, for respondents have indicated their willingness to allow the comptroller to examine with respect to contract compliance.

There is a further basis for holding the inquiry into respondents’ records authorized. Petitioner’s preliminary audit, its director swears, disclosed that the president and owner of Abco Bus, another contractor with the board, shared premises with and dispatched for Colonial and that Colonial was Abco’s answering service and provided Abco’s health insurance. Respondents deny these allegations, other than that relating to health insurance, and swear that the two companies do not compete and do not have common stockholders or directors, but that denial does not authorize the courts by denying access to respondents’ records to decide the question which the inquiry seeks to determine (Matter of Erb Strapping Co. v Waterfront Comm. of N. Y. Harbor, 31 AD2d 101, 103, supra). All that need be shown is " 'a reasonable relation to the subject matter under investigation and to the public purpose to be achieved’ ” (Matter of La Belle Creole Int. v Attorney-General of State of N. Y., 10 NY2d 192, 196, quoting from Carlisle v Bennett, 268 NY 212, 217). We cannot say that "the futility of the process to uncover anything legitimate is inevitable” (Matter of Edge Ho Holding Corp., 256 NY 374, 382, supra; see, also, Matter of La Belle Creole Int. v Attorney-General of State of N. Y., supra). Subject to respondents’ right to make a further application should the inquiry become unduly protracted, intrusive or burdensome (Matter of A’Hearn v Committee on Unlawful Practice of Law of N. Y. County Lawyers’ Assn., 28 NY2d 916, 918), the subpoena should not be quashed or limited, unless it calls for documents wholly irrelevant to proper inquiry (Matter of La Belle Creole Int. v Attorney-General of State of N. Y., supra).

The papers called for by the subpoena are Colonial’s books of account and financial statements, the workpapers underlying those books and statements, payroll records and insurance policies and statements, each for three years prior to the date of the subpoena. Respondents, as already noted, are willing to have the comptroller examine as to contract compliance, but argue that the papers subpoenaed are "internal corporate records which have no direct or indirect bearing upon the financial condition of the City” and that, in any event, they have no "workpapers underlying books of account and financial statements”.

The fact that respondents do not have workpapers is a matter to be stated in response to the subpoena, not a basis for quashing it. Respondents’ payroll and insurance records cannot be deemed wholly irrelevant to the inquiries concerning the relationship between Colonial and Abco, and we cannot say that those records together with books of account and financial statements are unrelated to the comptroller’s inquiry into efficiency, involving as it does not only what the present practice is but also what the future practice should be (Matter of Edge Ho Holding Corp., supra, at pp 379, 380; Matter of Dairymen’s League Coop. Assn. v Murtagh, 274 App Div 591, 595, affd 299 NY 634).

For the foregoing reasons, the order of the Appellate Division should be reversed, with costs, and the judgment of the Supreme Court, New York County, reinstated.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler and Fuchsberg concur.

Order reversed, etc.

       Those cases concerned the commissioner of accounts, predecessor of the present commissioner of investigations, rather than the comptroller. While the former was empowered to examine "the accounts and methods of the departments and offices of the city” as the Mayor directed, and to make "such other examinations as the commissioner may deem for the best interests of the city”, the difference in language goes to the scope of inquiry, discussed below, rather than motive or method of tbe investigating official. The commissioner of accounts cases are, therefore, "applic^y in principle, and in rule of construction” (Matter of Comptroller of City of [Greenberg], 181 Misc 860, 863).


source: Caselaw Access Project

author: Wachtler, J. Jones, J.

license: Public Domain

text:
    Ehrlich-Bober & Co., Inc., Appellant, v University of Houston, Respondent.
    Argued February 14, 1980;
    decided April 3, 1980

      POINTS OF COUNSEL

      John S. Martin, Jr., and Irwin J. Sugarman for appellant.
    I. The University of Houston is not immune from suit in New York. (Nevada v Hall, 440 US 410; Tiernan v Missouri New World’s Fair Comm., 48 Misc 2d 376; Georgia v Chattanooga, 264 US 472; Ohio v Helvering, 292 US 360; South Carolina v United States, 199 US 437; Dunhill of London v Cuba, 425 US 682; National Bank v Republic of China, 348 US 356; Heaney v Government of Spain, 445 F2d 501; Isbrandtsen Tankers v President of India, 446 F2d 1198, 404 US 985; Petro Shipping Corp. v Kingdom of Greece, Ministry of Commerce, Purchase Directorate, 360 F2d 103, 385 US 931.) II. The University of Houston transacted substantial business in New York and is, therefore, subject to the jurisdiction of the courts of New York under CPLR 302. (Hi Fashion Wigs v Hammond Adv., 32 NY2d 583; Parke-Bernet Galleries v Franklyn, 26 NY2d 13; Sterling Nat. Bank & Trust Co. v Fidelity Mtge. Investors, 510 F2d 870; Federal Deposit Ins. Corp. v Interbanca-Banca Per Finanziamenti A Medio Termine, 405 F Supp 1118; Bankers Trust Co. v Kline, 52 AD2d 775; Kazlow & Kazlow v Goodman & Co., 92 Misc 2d 1084; du Pont & Co. v Chelednik, 69 Misc 2d 362.) III. Plaintiffs choice of forum should not be disturbed. (Silver v Great Amer. Ins. Co., 29 NY2d 356; Lazarow, Rettig & Sundel v Castle Capital Corp., 63 AD2d 277; ABKCO Inds. v Lennon, 52 AD2d 435; Olympic Corp. v Societe Generale, 462 F2d 376; Auten v Auten, 308 NY 155; Rubin v Irving Trust Co., 305 NY 288; Hormel Int. Corp. v Andersen & Co., 55 AD2d 905; Bankers Trust Co. v Kline, 52 AD2d 775; Income Fund of Boston v Vahlsing, Inc., 49 AD2d 724.)

      Daniel A. Pollack and Martin I. Kaminsky for respondent.
    I. The courts below correctly held that the University of Houston is immune from suit in New York. (State Univ. of N. Y. v Syracuse Univ., 206 Misc 1003, 285 App Div 59; Westgate North v State Univ. of N. Y., 77 Misc 2d 611, 47 AD2d 1004; George R. Whitten, Jr., Inc. v State Univ. Constr. Fund, 493 F2d 177; Simkin & Sons v State Univ. Constr. Fund, 352 F Supp 177, 486 F2d 1393; State Univ. of N. Y. v Patterson, 42 AD2d 328; People v Branham, 53 Misc 2d 346; Fylipoy v Gulf Stevedore Corp., 257 F Supp 166; Breen v Mortgage Comm. of State of N. Y., 285 NY 425; Benz v New York State Thruway Auth., 9 NY2d 486, 369 US 147.) II. Special Term did not abuse its discretion in dismissing this action under CPLR 327. (Silver v Great Amer. Ins. Co., 29 NY2d 356; Irrigation & Ind. Dev. Corp. v Indag, S. A., 37 NY2d 522; Gulf Oil Corp. v Gilbert, 330 US 501; ABKCO Inds. v Lennon, 52 AD2d 435.) III. Special Term correctly held that personal jurisdiction is lacking. (Simmons v Gripple, 36 AD2d 590; Fontanetta v American Bd. of Internal Medicine, 421 F2d 355; Columbia Pictures Inds. v Schneider, 435 F Supp 742; McKee Elec. Co. v Rauland-Borg Corp., 20 NY2d 377; Ford v Unity Hosp., 32 NY2d 464; Haar v Armendaris Corp., 31 NY2d 1040; Lavie v Marketscope Research Co., 71 Misc 2d 373; Presidential Realty Corp. v Michael Sq. West, 44 NY2d 672; Concrete Detailing Servs. v Thomsson Steel Co., 411 F Supp 1021; Schenin v Micro Copper Corp., 272 F Supp 523.)
   OPINION OF THE COURT

Wachtler, J.

On this appeal an agency of the State of Texas claims immunity to suit in the New York courts because Texas law limits the jurisdictions in which it may be sued. The issue for our consideration is whether New York should observe that limitation as a matter of comity.

The plaintiff, Ehrlich-Bober & Co., Inc., is a dealer in municipal and government securities. It has its principal office in New York City. The defendant University of Houston is a public institution of higher education in the State of Texas. It is governed by a Board of Regents appointed by the Governor with the advice and consent of the State Senate, and is considered an agency of the State government. In this action the plaintiff securities dealer seeks damages arising out of alleged breaches of two "reverse repurchase” agreements it made with the defendant university.

A "reverse repurchase” agreement is, in essence, a loan transaction in which securities are sold under an agreement to repurchase them at the original purchase price, plus interest, on a specified date. Thus the securities themselves serve as collateral for the loan.

During the period from November, 1976 through March, 1977, the plaintiff and the defendant university engaged in 22 separate transactions involving the sale or purchase of securities with an aggregate value of approximately $44 million. Most of those transactions arose out of telephone calls made to the plaintiff’s New York office, although on several occasions an employee of the defendant university, Samuel Harwell, visited the plaintiff’s office in New York. On one of those occasions Harwell actually placed an order for government securities while present in the plaintiff’s office.

The two transactions at issue on this appeal began with a phone call by Harwell to the plaintiff asking if it would enter a reverse repurchase agreement for securities issued by the Government National Mortgage Association ("Ginnie Maes”). On April 18, 1977 the plaintiff bought from the defendant Ginnie Maes valued at approximately $4.6 million. This purchase was confirmed by an agreement dated April 26, 1977 on the university’s letterhead and signed by Harwell. The plaintiff approved the agreement and returned it to the defendant.

The plaintiff and the defendant university entered into another reverse repurchase agreement on May 23, 1977 for securities valued at approximately $7.9 million; this agreement also provided for certain additional payments by the defendant to the plaintiff. For each such transaction the plaintiff delivered the purchase price to Manufacturer’s Hanover in New York, and Manufacturer’s Hanover delivered the securities to the plaintiff.

On three occasions the repurchase date for the securities involved in the April 18 transaction was extended by agreement between the parties, but on the ultimate due date the defendant refused to repurchase. The plaintiff incurred a loss of approximately $462,000 when it sold the Ginnie Maes as permitted by the April 26 agreement. The plaintiff also alleges that the defendant failed to make the additional payments required under the May 23 agreement.

Harwell is now incarcerated in Texas on fraud charges in connection with matters apparently unrelated to this action. The defendant university alleges that it was unaware of Harwell’s activities in connection with the reverse repurchase agreements and did not consent to them. The defendant also alleges that it had no bank account in New York and that the role of Manufacturer’s Hanover in the transactions was that of correspondent for a Texas bank only, and not as agent for the defendant.

Section 111.33 of the Texas Education Code provides that a suit against the University of Houston may be brought only in two specified counties in Texas. Special Term granted the defendant’s motion to dismiss, concluding that (1) New York should as a matter of comity recognize the sovereign immunity of the Texas university; (2) the plaintiff had not met the requirements of CPLR 302 (subd [a]) for the exercise of long-arm jurisdiction over the defendant; and (3) the action should be dismissed as a matter of forum non conveniens pursuant to CPLR 327. Special Term also denied the plaintiff's cross motion for injunctive relief against the defendant to prevent it from proceeding with a declaratory judgment action in Texas.

The Appellate Division affirmed the order of dismissal for lack of jurisdiction on sovereign immunity grounds, but concluded that dismissal would not obtain on forum non conveniens grounds. Inasmuch as the doctrine has no application unless the court has obtained in personam jurisdiction of the parties, the Appellate Division necessarily found that the requirements for the exercise of long-arm jurisdiction had been met.

Preliminary to our consideration of the comity issue, we note our agreement with the conclusions reached by the Appellate Division that there was a proper basis for the exercise of long-arm jurisdiction and that the doctrine of forum non conveniens is inapplicable here. Although "standing by itself, a correspondent bank relationship, without any other indicia or evidence to explain its essence, may not form the basis for long-arm jurisdiction under CPLR 302 (subd [a], par 1)” (Amigo Foods Corp. v Marine Midland Bank-New York, 39 NY2d 391, 396), the facts alleged here, which we accept as true for this purpose, show substantially more (cf. Longines-Wittnauer Co. v Barnes & Reinecke, 15 NY2d 443). Nor may it be said in this case that the Appellate Division in its conclusion that forum non conveniens would not obtain in this case abused its discretion as a matter of law (Epstein v Sirivejkul, 48 NY2d 738).

We begin our analysis of the principal jurisdictional question by noting that it was long thought that a State could not be sued by the citizens of a sister State except in its own courts. The United States Supreme Court, however, recently held that no such stricture inheres in the Federal Constitution (Nevada v Hall, 440 US 410). New York is therefore under no compulsion to observe Texas’ limitation on venue of suit against its agencies as a matter of Federal law. We turn now to the question of whether, as a matter of comity alone, our courts should relinquish the jurisdiction already obtained over the parties.

The doctrine of comity "is not a rule of law, but one of practice, convenience and expediency” (Mast, Foos & Co. v Stover Mfg. Co., 177 US 485, 488). It does not of its own force compel a particular course of action. Rather, it is an expression of one State’s entirely voluntary decision to defer to the policy of another (Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, cert den 423 US 866). Such a decision may be perceived as promoting uniformity of decision, as encouraging harmony among participants in a system of co-operative federalism, or as merely an expression of hope for reciprocal advantage in some future case in which the interests of the forum are more critical.

Whatever the New York rule may once have been (see, e.g., Loucks v Standard Oil Co., 224 NY 99; and Mertz v Mertz, 271 NY 466), it is abundantly clear that the rule has undergone a substantial evolution over six decades. It is properly said that the law must be stable yet it cannot stand still. (Pound, Interpretations of Legal History, pi.) Today in New York the determination of whether effect is to be given foreign legislation is made by comparing it to our own public policy; and our policy prevails in case of conflict (Zeevi, supra, at p 227).

In search of the public policy of the State, courts of course are not free to indulge in mere individual notions of expediency and fairness but must look to the law as expressed in statute and judicial decision and to the prevailing attitudes of the community (see Loucks v Standard Oil Co., supra, at p 111; and Intercontinental Hotels Corp. [Puerto Rico] v Golden, 15 NY2d 9, 14).

Nor, of course, may it be said that in case of conflict New York’s policy will invariably prevail, no matter how insubstantial it may be, in the face of a strong assertion of interest by the other jurisdiction. Without deciding the point, we might, for example, choose to defer to the assertion of interest by another jurisdiction where the interest in question goes to the very heart of the governmental function. This is not such a case.

Examination of the Texas statute, as interpreted by the courts of that State, indicates that it is as the dissent notes, "a limited legislative consent to actions against a branch of the State in the county or counties specified and only in those counties” (at p 583), i.e., it is a restrictive venue provision put in place to serve the administrative convenience of the State. It is not, by sharp contrast with the statute which was sought to be applied in Nevada v Hall (supra), an attempt to limit the liability of the State so as to safeguard the public fisc, a limitation which, conceivably might be found essential to the governmental function.

Arrayed against that policy which essentially serves administrative convenience, is New York’s recognized interest in maintaining and fostering its undisputed status as the preeminent commercial and financial nerve center of the Nation and the world (International Planning v Daystrom, Inc., 24 NY2d 372; see, also, Bache & Co. v International Controls Corp., 339 F Supp 341). That interest naturally embraces a very strong policy of assuring ready access to a forum for redress of injuries arising out of transactions spawned here. Indeed, access to a convenient forum which dispassionately administers a known, stable, and commercially sophisticated body of law may be considered as much an attraction to conducting business in New York as its unique financial and communications resources.

New York’s interest in providing a convenient forum is least subject to challenge when a transaction is centered here (see Rubin v Irving Trust Co., 305 NY 288, 305; and Auten v Auten, 308 NY 155, 160), and particularly when it is wholly commercial in character (see Et Ve Balik Kurumu v B.N.S. Int. Sales Corp., 25 Misc 2d 299, affd 17 AD2d 927; Tiernan v Missouri New World’s Fair Comm., 48 Misc 2d 376; cf. Dunhill of London v Cuba, 425 US 682). In those circumstances, a State entering this jurisdiction specifically to take advantage of its unique commercial resources may be considered to have given up any claim of jurisdictional immunity by virtue of governmental capacity. Conversely, this State’s interest in providing a forum may be less where the issue is one which goes to the heart of a governmental function (cf. Nevada v Hall, 440 US 410, 424, supra).

In the instant case the transactions in question, judged by any indicator, must be considered to have been centered here. They were initiated by an employee of the defendant university in a phone call to the plaintiffs New York offices. They were accepted in New York by the plaintiff. The money was paid in New York. The securities were delivered in New York. And finally, the repurchases were to have been accomplished in New York. It must also be concluded that these were ordinary commercial transactions having no more than an indirect relation to the fulfillment of the defendant university’s governmental responsibilities.

The dissent mistakenly concludes that we confuse "constitutional authority to entertain actions with forum restrictions incident to limited waiver of sovereign immunity” (at p 585). In fact, there is absolutely no question of constitutional authority, as we note above. More serious is the dissent’s notion that we confuse the requirements for obtaining long-arm jurisdiction, upon which our court is unanimous, with considerations of comity. Although the two are analytically distinct, there is no reason in law or logic why they may not overlap, or even coincide. In this instance some, but not all, of the factors which permit our courts to take jurisdiction at the same time compel its exercise.

We conclude, therefore, that where an action concerns a wholly commercial transaction centered in New York, and it is one of which the New York courts would otherwise properly have jurisdiction, they are not precluded from the exercise of that jurisdiction by an assertion of governmental immunity as a matter of comity. Any other rule would impose an intolerable burden on the major financial institutions which make their homes in New York and which provide services to State and local governments nationwide as well as to many foreign countries. As every State may establish for itself and its agencies and municipalities the conditions under which they may be sued, recognition of a rule of jurisdictional immunity as a matter of comity in this case would require New York financial institutions in the future to review the laws of every jurisdiction before consenting to do business with any agency, institution, or facility of that jurisdiction.

It is more logical, surely, to assume when a governmental entity seeks financing in the New York market that it will be amenable to suit here than to presume that the financial institution to which it comes must seek a remedy in Austin, Texas. On these facts, for our courts to relinquish jurisdiction as a matter of comity would be a perverse application of the rule.

The order of the Appellate Division should be reversed and defendant’s motion to dismiss the complaint denied.

Jones, J.

(dissenting). Because I am persuaded that the Appellate Division correctly disposed of this case, and because I think the analysis of the majority in our court is based on fundamental jurisprudential error and sows the seeds of potential mischief, I am obliged to dissent.

The critical issue is whether the courts in our State should recognize and give effect to the law of the State of Texas which specifically limits any possible suit against the University of Houston. to an action in the Texas courts in Harris County where the university is located or in Travis County where the State government’s offices are located (Texas Education Code, § 111.33). The appellate courts of the State of Texas have held that a statute like section 111.33 is not a procedural venue statute but constitutes a limited legislative consent to actions against a branch of the State in the county or counties specified and only in those counties. (State v Isbell, 127 Tex 399; Hardt v Texas Dept. of Corrections, 530 SW2d 897, 898 [Tex]; Martin v State, 75 SW2d 950, 952 [Tex]; cf. Fylipoy v Gulf Stevedore Corp., 257 F Supp 166, 169, in which the Federal court in Texas held that it had no jurisdiction in an action against a political subdivision of that State.) It is for the State of Texas to classify its own statute.

Whether the courts of New York should give determinative effect to the Texas statute in this instance depends on the proper application of principles of comity; no one asserts that we are not free, should we choose to do so, to ignore the strictures of Texas law. In the application of the doctrine of interstate comity, after ascertaining the applicable law declared by our sister State, we are called upon to examine our own public policy, for "[t]he principle which determines whether we shall give effect to foreign legislation is that of public policy and, where there is a conflict between our public policy and application of comity, our own sense of justice and equity as embodied in our public policy must prevail” (Zeevi & Sons v Grindlays Bank [Uganda], 37 NY2d 220, 228, cert den 423 US 886). Even the existence in our jurisdiction of a statute different from that of the other jurisdiction however "does not require or authorize our courts to ignore foreign law affecting substantive rights where such law merely differs from our own. To render the foreign law unenforceable here as contrary to our public policy under such circumstances, it must additionally violate 'some fundamental principle of justice, some prevalent conception of good morals, some deep-rooted tradition of the common weal.’ (Loucks v. Standard Oil Co., supra [224 NY 99], p. 111; Mertz v. Mertz, supra [271 NY 466].) The acceptance of that doctrine is general. (Howard v. Howard, 200 N. C. 574, 579; Buckeye v. Buckeye, 203 Wis. 248; 38 Cyc. 546-549.)” (Coster v Coster, 289 NY 438, 442-443.)

If however the foreign law does not entail any such violation, and, a fortiori, if it parallels an articulated statutory policy of our own State, even though different in detail, full effect should be given to the law of our sister State (Shannon v Irving Trust Co., 275 NY 95; Cross v United States Trust Co. of N. Y., 131 NY 330, 341). In this instance there is a readily identifiable analogue in New York State — a closely similar forum limitation. We, as does Texas, recognize the principle of sovereign immunity and hold that it extends to units of the State University of New York as a component of State government. (Westgate North v State Univ. of N. Y., 77 Misc 2d 611, affd 47 AD2d 1004; State Univ. of N. Y. v Syracuse Univ., 206 Misc 1003, 1004, affd 285 App Div 59, 61-62; cf. George R. Whitten, Jr., Inc. v State Univ. Constr. Fund, 493 F2d 177, 181-182; Simkin & Sons v State Univ. Constr. Fund, 352 F Supp 177, 179, affd 486 F2d 1393; People v Branham, 53 Misc 2d 346-348.) In our case the detail of our forum restriction incorporated in the waiver of sovereign immunity with respect to the State University is slightly different — i.e., actions against the units of our State University may be maintained only in the Court of Claims — but the concept of a categorical limitation of the court in which claims against the university may be instituted is precisely the same. There is thus applicable the language in King v Sarria (69 NY 24), in which the court, speaking of a foreign statute to which it was about to accord recognition under the principle of comity, said: "It much resembles our own statute * * * and, with some difference in detail, it aims at the same beneficial result, which ours has in view; nor may we say, with our statute before us, that the law is opposed to good morals or abstract justice” (p 31). Inasmuch as our New York conceptually identical policy analogue parallels that of the State of Texas, we should recognize and give effect to the legislatively declared policy of that State. This is precisely what the Appellate Division did.

To hold that the disposition of the claim advanced in this case against the University of Texas is governed by our jurisdictional policy reflected in our long-arm statutes, is inappropriately to jump from one level of policy to another and to mingle and confuse policy categories. Texas, too, has a long-arm jurisdictional statute (Vernon’s Ann Civ Stat, art 2031b). Its policy with respect to the authority of its courts to exercise in personam jurisdiction over corporations engaged in commercial activities within the State of Texas is comparable to ours. There is no question on this record, and having regard for the law of Texas with respect to long-arm jurisdiction, that our courts have jurisdiction over the University of Houston within that context, as the Appellate Division and all the members of our court agree. But the critical question is not whether our courts have long-arm jurisdiction; it is whether, under principles of comity, our courts should exercise that jurisdiction in light of section 111.33 of the Texas Education Code. The strong policy considerations undergirding the jurisdictional stance on which the majority relies should not be confused with or permitted to obscure the strong policy considerations which dictate that, under principles of sovereign immunity, units of State government should not be exposed to claims in all courts which might otherwise have authority constitutionally to entertain suits against such units.

I can only conclude that in confusing constitutional authority to entertain actions with forum restrictions incident to limited waiver of sovereign immunity the majority in our court commits serious jurisprudential error. I am also disturbed over what appear to me to be the adverse practical implications of the position adopted by the majority. In view of the decision in this case, I am obliged to suggest that should one of the units of our State government, whether of our State University or otherwise, engage in activities in the State of Texas (or in any of our sister States for that matter) sufficient to permit the constitutional assertion of in personam jurisdiction, an action could be maintained against such governmental unit in that State, despite our demonstrated legislative intent that any such action shall lie only in the New York Court of Claims. Objections to the exercise of such jurisdiction based on considerations of sovereign immunity could then be properly rejected on the ground that the highest court of our State has rejected precisely such a contention in the present case. I view such a prospect as more than mischievous.

For the reasons stated, I would affirm the order of the Appellate Division.

Chief Judge Cooke and Judges Gabbielli, Fuchsberg and Meyer concur with Judge Wachtler; Judge Jones dissents and votes to affirm in a separate opinion in which Judge Jasen concurs.

Order reversed, with costs, and defendant’s motion to dismiss the complaint denied.

      . The appellant’s notice of appeal to this court was from every part of the order of the Appellate Division, including the denial of the cross motion for injunctive relief. However, as its brief and argument in this court asked only reversal of the dismissal of the complaint we do not consider the denial of the cross motion.

      . The action in Hall arose out of a collision in California involving an employee of the State of Nevada, driving a State-owned vehicle on official business. Nevada required suits against the State to be brought in Nevada, and limited a tort recovery against the State to $25,000. The California Supreme Court held that Nevada was nonetheless amenable to suit in California. Its pithy conclusion was that "state sovereignty ends at the state boundary” (Hall v University ofNev., 8 Cal 3d 522, 525). The United States Supreme Court affirmed, although it cautioned that a suit which posed a threat to a State’s "capacity to fulfill its own sovereign responsibilities * * * might require a different * * * result” (440 US 410, 424, n 24, supra). The defendant here does not attempt to distinguish this case so as to bring it outside the rule of Hall (supra).

      . Section 111.33 provides: "The board [of regents of the university] has the power to sue and be sued in the name of the University of Houston. Venue shall be in either Harris County or Travis County. The university shall be impleaded by service of citation on the president or any of its vice presidents.”

      . In this "jurisdictional” sense, all the courts of Texas may be said to have "jurisdiction” over the University of Houston and all the courts of the State of New York may be said to have "jurisdiction” over units of the State University of New York. Both States, however, have imposed restrictions on- the exercise of such "jurisdiction”.


author: Per Curiam.

text:
    Rule Resources, Ltd., Appellant, v Reliance Group, Incorporated, Respondent.
    Argued March 21, 1980;
    decided April 24, 1980

      POINTS OF COUNSEL

      Leon B. Lipkin for appellant.
    I. Summary judgment must be denied where issues of fact exist. (Wanger v Zeh, 45 Misc 2d 93; Moskowitz v Garlock, 23 AD2d 943; Esteve v Abad, 271 App Div 725; Callanan Rd. Improvement Co. v Ter-Mel Constr. Corp., 30 AD2d 591; Weiss v Garfield, 21 AD2d 156.) II. The three to two majority’s decision of the court below erred in finding no questions of fact. III. There is a sufficient memorandum to satisfy the Statute of Frauds. (Karlin v Avis, 457 F2d 57; Denny v American Tobacco Co., 308 F Supp 219.) IV. Where a contract is ambiguous and must be construed, a motion for summary judgment will be denied. (Piedmont Hotel Co. v Nettleton Co., 263 NY 25; Stulsaft v Mercer Tube & Mfg. Co., 288 NY 255; Bassett v Bassett, 20 Misc 2d 135; Utica Carting, Stor. & Contr. Co. v World Fire & Mar. Ins. Co., 277 App Div 483; Dowdle v Richards, 2 AD2d 486.) V. All ambiguities should be resolved against defendant. (Todem Homes v Freidus, 84 Misc 2d 1023; Aron v Gillman, 309 NY 157; Ditmars-31’ St. Dev. Corp. v Punia, 17 AD2d 357; Theiler v Trinity Adv. Corp., 241 App Div 34, 265 NY 668.) VI. Summary judgment is improper where intent is an issue. (Rottkamp v Eger, 74 Misc 2d 858; Tobin v Union News Co., 18 AD2d 243, 13 NY2d 1155; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285.) VII. No failure to obtain prior written consent before approaching a third party would bar recovery. (Simon v Electro Space Corp., 32 AD2d 62; Minichiello v Royal Business Funds Corp., 18 NY2d 521; Boro Motors Corp. v Century Motor Sales Corp., 18 Misc 2d 1009, 9 AD2d 894.) VIII. Plaintiff substanially performed its duties under the agreement. (Jacob & Youngs v Kent, 230 NY 239; Homecraft Alterations Corp. v Brill, 10 AD2d 732, 9 NY2d 978; Cramer v Esswein, 220 App Div 10.) IX. Defendant’s motion for summary judgment was made on the eve of trial and should not be entertained by the court. (Jordan v Levy, 16 AD2d 64; Klee v Erie County Water Auth., 72 Misc 2d 31; Ecker v Muzysh, 259 App Div 206; Gunter v Gunter, 28 AD2d 666; Julien J. Studley, Inc. v Lefrak, 50 AD2d 162; Geller v Mahsons Realty Corp., 82 Misc 2d 599; Pollak v Lake Tibet Estates, 19 AD2d 747.)

      J. Kelley Nevling, Jr., and Seth A. Davis for respondent.
    I. Plaintiff Rule’s admitted failure to obtain "written consent” to approach Synder Hixon, as required by the agreement sued on, mandates summary judgment for defendant. (Intercontinental Planning v Daystrom, Inc., 24 NY2d 372; Minichiello v Royal Business Funds Corp., 18 NY2d 521; Munson v Tilley, 45 AD2d 806; Simonson v First Nat. Bank of Rockville Centre, 231 App Div 868; Boyd v Improved Prop. Holding Co., 135 App Div 623; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285; Musman v Modern Deb, 56 AD2d 752; Bethlehem Steel Co. v Turner Constr. Co., 2 NY2d 456; Apache-Beals Corp. v International Adjusters, 59 AD2d 1032, 46 NY2d 888.) II. The undisputed failure of plaintiff Rule to furnish the necessary "Smith Barney release letter” requires summary judgment for defendant. (Laba v Carey, 29 NY2d 302; Hicks v Bush, 10 NY2d 488; Evans Prods. Co. v Decker, 52 AD2d 991; Lane Constr. Corp. v Winona Constr. Corp., 49 AD2d 142.) III. Plaintiff Rule never performed its duty to "procure” a purchaser for disclosure. (Axelrad v 77 Park Ave. Corp., 225 App Div 557.) IV. Plaintiff’s interpretation of the law regarding summary judgment is not supported by the decisions of this court. (Di Sabato v Soffes, 9 AD2d 297; Capelin Assoc. v Globe Mfg. Corp., 34 NY2d 338; Hamilton Mut. Realty Fund v Band Realty Co., 41 NY2d 936; Long Is. R. R. Co. v Northville Inds. Corp., 41 NY2d 455; Intercontinental Planning v Daystrom, Inc., 24 NY2d 372; Spector v Sovereign Constr. Co., 45 AD2d 673; Mobil Oil Corp. v Fraser, 55 AD2d 824.) V. Reliance’s motion for summary judgment, made immediately upon the completion of discovery, was timely and deserved to be considered on its merits. (Jordan v Levy, 16 AD2d 64; Pollak v Lake Tibet Estates, 19 AD2d 747; Klee v Erie County Water Auth., 72 Misc 2d 31; Geller v Mahsons Realty Corp., 82 Misc 2d 599.)
   OPINION OF THE COURT

Per Curiam.

That a motion for summary judgment is made on the eve of trial is not of itself a sufficient reason for denying the motion. Special Term may properly deny such a motion when its merit is not evident and it appears to be made as a dilatory tactic.

When the reason for delay is to complete depositions (cf. CPLR 3212, subd [f]), which as the Appellate Division found was essential to the making of the motion, denial of the motion as untimely is error. Especially is this so when the motion is clearly meritorious, as is the instant motion, for doing so wastes judicial resources which, through ever increasing demands, daily become more precious.

Plaintiffs claim is for a finder’s fee. Defendant argues from the use of the word "procured” in several places in its letter agreement with plaintiff, that plaintiffs employment was as broker to negotiate the sale of defendant’s subsidiary company, Disclosure Incorporated, rather than simply as a finder, but the references are to a sale to a third party procured by plaintiff rather than to a sale procured by plaintiff or of which plaintiff was the procuring cause (cf. 2 NY PJI 934-935). Use of the word "procured” alone would not, therefore, be a sufficient basis for summary judgment (cf. Bradkin v Leverton, 26 NY2d 192, 197).

Here, however, the agreement also contains the provision that "Resources agrees to obtain the prior written consent of Reliance before approaching third parties with respect to a proposed Disclosure Sale. Reliance may withhold its consent in its sole discretion.” Plaintiff claims that it gave defendant the name of the company to which Disclosure was sold before the agreement was entered into and admits that defendant’s consent was then withheld and was never thereafter given. Plaintiff argues, nevertheless, that the agreement cannot be construed to make such consent a condition precedent to liability for a finder’s fee because otherwise defendant, by arbitrarily withholding consent, could avoid paying any commission. Its dilemma is that the quoted provision, signed by it after it knew that consent as to the company which ultimately purchased had been withheld, shows that something other than merely furnishing defendant a name was required before defendant incurred liability, i.e., that plaintiff was required after the date of the agreement to contact the potential purchaser and introduce the parties, if not assist in the negotiations.

When to that provision is added the additional wording of the agreement on which plaintiff also bases its claim — that the commission provided for was to be paid "in complete satisfaction of and as payment for any and all services rendered by Resources on behalf of any and all parties to the Disclosure Sale, whether as finder, broker, originator, consultant or otherwise” — it becomes crystal clear that, whatever the rights and obligations of a finder under the law generally (see Simon v Electrospace Corp., 28 NY2d 136, 141; Knauss v Gottfried Krueger Brewing Co., 142 NY 70; Ames v Ideal Cement Co., 37 Misc 2d 883, 886; Radiation Dynamics v Goldmuntz, 464 F2d 876, 883; Hale v Wolfsen, 276 Cal App 2d 285; Modern Tackle Co. v Bradley Inds., 11 111 App 3d 502; Baldwin v Grymes, 232 Md 470; Davidson v Robie, 345 Mass 333; Equity Benefit Life Ins. Co. v Trent, 566 P2d 449, 453 [Okla]; Amerofina v United States Inds., 232 Pa Super Ct 394, 399-401; 13A Fox and Fox, Business Organizations, Corporate Acquisitions and Mergers, § 30.02; Ann., 24 ALR3d 1160), plaintiff’s obligation under this agreement was to do something more than just give defendant a name.

The lack of merit in plaintiff’s interpretation of the agreement is emphasized by its suggestions that by not requiring consent as to two potential purchasers discussed prior to the date of the letter agreement defendant waived the necessity for consent and that in any event plaintiff has substantially performed. While it may be possible to waive a contract requirement contemporaneously with entry into the contract, the concept of prior waiver is legally anomalous. Indeed, it is plaintiff who must be said by accepting an agreement with the quoted provision in it to have waived whatever rights it may have acquired by simply revealing the name prior to (or at the time of) entry into the agreement.

Of no greater avail to plaintiff is its substantial performance contention. It was to make clear that just such an argument could not be advanced to avoid the Statute of Frauds that paragraph 10 of subdivision a of section 5-701 of the General Obligations Law was amended in 1964 (Bradkin v Leverton, 26 NY2d 192, supra; Minichiello v Royal Business Funds Corp., 18 NY2d 521, 525-527, cert den 389 US 820). But that fact aside, plaintiff’s claim according to its motion papers is only that prior to or at the time it entered into the agreement it mentioned the ultimate purchaser’s name. How that can constitute substantial performance of the consent requirement is not suggested, nor can the court rewrite the agreement of the parties to say that the consent requirement imposed no obligation at all and, therefore, that the agreement was substantially performed by plaintiffs doing nothing after it was entered into.

There being no issue to be decided by a trier of fact, the motion for summary judgment was properly granted. The order of the Appellate Division should, therefore, be affirmed, with costs.

Chief Judge Cooke and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur in Per Curiam opinion.

Order affirmed.


author: Gabrielli, J.

text:
    Lynne Barasch et al., Respondents, v Theresa Micucci et al., Defendants, and Welbilt, Inc., Appellant.
    Argued February 5, 1980;
    decided March 25, 1980

      POINTS OF COUNSEL

      Walter Williamson and David S. Ratner for appellant.
    I. On a motion to dismiss for failure to serve a complaint, the courts below have established that it is beyond the discretion of the court to permit the action to continue against the moving defendant unless plaintiff demonstrates both (1) that the claim against that defendant is meritorious and (2) that the delay in prosecuting it was justifiable. (Coons v After Dark in Rochester, 56 AD2d 738; Ferreri v Winston Mall, 54 AD2d 970; Rabetoy v Atkinson, 49 AD2d 691, 37 NY2d 803; Johnson v Johnson, 45 AD2d 899; Boardman v Glissando Enterprises of N. J., 41 AD2d 523; Beckham v Lefferts Gen. Hosp., 36 AD2d 726; Callahan v International Term. Operating Co., 36 AD2d 531; Sortino v Fisher, 20 AD2d 25.) II. Since plaintiffs submitted no affidavit of an evidentiary nature, by anyone competent to testify, based on which any inference could be drawn that defendant Welbilt was in any way liable for the accident, there was no demonstration whatever that the action has any merit as against Welbilt. (Coons v After Dark in Rochester, 56 AD2d 738; Ferreri v Winston Mall, 54 AD2d 970; Boardman v Glissando Enterprises of N. J., 41 AD2d 523; Stubblebine v Fratto, 37 AD2d 666, 29 NY2d 954; Beckham v Lefferts Gen.

      Hosp., 36 AD2d 726; Callahan v International Term. Operating Co., 36 AD2d 531; Sortino v Fisher, 20 AD2d 25.) III. Since plaintiffs’ excuses for delay amounted solely to "law office failure,” their excuses should not be considered justifiable. (Coons v After Dark in Rochester, 56 AD2d 738; Rabetoy v Atkinson, 49 AD2d 691, 37 NY2d 803; Johnson v Johnson, 45 AD2d 899; Boardman v Glissando Enterprises of N. J., 41 AD2d 523; Callahan v International Term. Operating Co., 36 AD2d 531; Sortino v Fisher, 20 AD2d 25.) IV. Van Ness v Aetna Cas. & Sur. Co., the sole authority relied on by the courts below, is not apposite since plaintiffs in that action presented a proper affidavit of merits. (Van Ness v Aetna Cas. & Sur. Co., 57 AD2d 832.) V. Since plaintiffs failed to show that the action has any merit as against Welbilt, or an acceptable excuse for the delay in the prosecution, it is irrelevant whether Welbilt was prejudiced by the delay or whether plaintiffs’ loss was substantial. (Hellner v Mannow, 41 AD2d 525; Sortino v Fisher, 20 AD2d 25.)

      Jonathan R. Kopald for respondents.
    I. Plaintiffs demonstrated that their delay in serving the complaint was excusable. II. The affidavit submitted in support of plaintiffs’ motion and in opposition to the motion to dismiss constitutes an affidavit of merits as is required by statute. III. Defendant-appellant, Welbilt, Inc.’s, attempt to categorize the delay "solely to law office failure” is unsupported by the record and facts. IV. A proper exercise of discretion by the court in considering a motion to dismiss requires a balance consideration of all of the relevant factors. (Moran v Rynar, 39 AD2d 718; Dahlem v Universal School Bus Leasing, 35 AD2d 992.) V. The affidavit submitted by plaintiff including the affidavit of Jonathan R. Kopald met the requirement of proving a meritorious cause of action. (Sortino v Fisher, 20 AD2d 25.)
   OPINION OF THE COURT

Gabrielli, J.

In this action for personal injuries resulting from an explosion of a gas stove, defendant manufacturer seeks to have the cause of action dismissed on the grounds specified in CPLR 3012 (subd [b]). That provision authorizes a defendant to serve a demand for a complaint upon the plaintiff where the action has been commenced by service of summons alone and to move for dismissal if the complaint is not furnished within 20 days following service of the demand. Special Term denied the dismissal motion, primarily because it found that the defendant in this case had not been prejudiced by the plaintiff’s delay in serving the complaint. The Appellate Division affirmed, without opinion, and certified the following question of law for consideration by this court: "Did the order of the Supreme Court, as affirmed by this Court, constitute an abuse of discretion as a matter of law?” (See CPLR 5602, subd [b], par 1; 5713.)

Preliminarily, we note that the issue thus certified by the Appellate Division does pose a question of law "decisive of the correctness of its determination” (CPLR 5713; see Patrician Plastic Corp. v Bernadel Realty Corp., 25 NY2d 599). While it is true that this court has no power to review an exercise of discretion by the courts below in the ordinary case (see Cohen and Karger, Powers of the New York Court of Appeals, pp 368-369), the possibility that the lower court’s discretion was abused does give rise to a question of law that is cognizable in this court. Hence, this court could conclude in the present appeal that Special Term abused its discretion by denying defendant’s request for relief and, if we so held, our resolution of the certified question would be "decisive”, since it would mandate a reversal of the result reached below (Bata v Bata, 304 NY 51; Cohen and Karger, Powers of the New York Court of Appeals, p 377; 7 Weinstein-Korn-Miller, NY Civ Prac, par 5602.12, n 38; par 5602.13; cf. Silver v Great Amer. Ins. Co., 29 NY2d 356; New York Post Corp. v Kelley, 296 NY 178).

Turning to the merits, we find that, as a matter of law, there was such an abuse of discretion in this case. Although the lower courts enjoy considerable latitude in determining whether to dismiss an action pursuant to CPLR 3012 (subd [b]) (see Sortino v Fisher, 20 AD2d 25, 27-28), the cases suggest that their decisions must be based upon a genuine consideration of several specific factors.

First, in order to avoid dismissal for failure timely to serve a complaint, the plaintiff must demonstrate a reasonable excuse for the delay (e.g., Odess v Medical Center, Teamster Local 1034, 67 AD2d 941; Hellner v Mannow, 41 AD2d 525, app dsmd 32 NY2d 897; Graziano v Albanese, 24 AD2d 712; cf. Di Russo v Kravitz, 27 AD2d 926, affd 21 NY2d 1008). While the decision as to what constitutes a reasonable excuse ordinarily lies within the sound discretion of the trial court, we would stress that those excuses which may be roughly categorized under the heading of "law office failures” cannot properly serve as a basis for defeating a motion to dismiss under CPLR 3012 (subd [b]) (e.g., Ferrentino v Farragut Gardens No. 5, 35 AD2d 815, app dsmd 28 NY2d 579; Kriegsman v Rosenfeld, 35 AD2d 693; Wade v Miele, 34 AD2d 656; 3 Weinstein-Korn-Miller, NY Civ Prac, par 3012.15).

Second, in addition to showing an adequate justification for delay in serving the complaint, the plaintiff must also demonstrate to the court that the claim against the defendant has legal merit (e.g., De Stefano v Nash, 40 AD2d 1010; Beckham v Lefferts Gen. Hosp., 36 AD2d 726; see Siegel, Practice Commentaries, McKinneys Cons Laws of NY, Book 7B, CPLR 3012, pp 590-591). This requirement may be satisfied by the filing of one or more "affidavits of merit” containing evidentiary facts and attested to by individuals with personal knowledge of those facts (cf. Andreano v Testa, 64 AD2d 1019; Ferreri v Winston Mall, 54 AD2d 970; Sortino v Fisher, supra, at pp 31-32). As a general rule, these affidavits must be sufficient to establish prima facie that the plaintiff has a good cause of action. We note, however, that there can be no rigid standards in this context and that, consequently, decisions concerning the sufficiency of a plaintiff’s affidavits of merit should ordinarily be left to the discretion of the lower courts.

Finally, we recognize that a variety of other factors such as the length of the delay, the complexity of the facts underlying the plaintiff’s claim and the existence of prior settlement negotiations may have a bearing upon a court’s decision to grant or deny relief under CPLR 3012 (subd [b]) (see Sortino v Fisher, 20 AD2d 25, supra). Because the circumstances which may cause a plaintiff to postpone service of his complaint are too numerous and varied to be categorized in any systematic fashion, we are reluctant to adopt an inflexible set of rules to govern the lower courts’ decisions in this area. Rather, we prefer to confine the scope of our review in these cases to instances in which the lower court has abused its discretionary authority by ignoring the significant factors, or by granting or denying relief on the basis of plainly impermissible considerations.

The decision of Special Term in this case is illustrative. The court based its decision, in large measure, upon its conclusion that defendant had not been prejudiced by the plaintiff’s five and one-half month delay in serving a complaint. Yet, as we have recently noted, the absence of prejudice to the defendant cannot serve as a basis for withholding relief under CPLR 3012 (subd [b]) (Verre v Rosas, 47 NY2d 795; see 3 Weinstein-Korn-Miller, NY Civ Prac, par 3012.15). Moreover, although Special Term found that plaintiff had a meritorious cause of action, its finding is without support, since it was based solely upon the affidavit of plaintiff’s attorney, who had no personal knowledge of the facts (cf. Rotuba Extruders v Ceppos, 46 NY2d 223, 229, n 4). Finally, plaintiff failed to present any credible justification for the protracted delay in serving the complaint. The explanations that were offered amounted to nothing more than "law office failures”, which, as a matter of law, are insufficient to defeat a motion for dismissal under CPLR 3012 (subd. [b]). Under these circumstances, the denial of defendant’s motion to dismiss in this case must be regarded as an abuse of discretion. In the absence of either a showing of merits or a reasonable excuse for the delay, it was error for Special Term to permit plaintiff to proceed against defendant solely on the ground that defendant had not demonstrated any prejudice resulting from the delay. Indeed, although we stress that the decision to grant or deny relief under CPLR 3012 (subd [b]) is ordinarily a matter of the lower courts’ discretion, we conclude that this case represents one of those rare instances in which the defendant is entitled to dismissal as a matter of law.

Accordingly, the order of the Appellate Division should be reversed, without costs, the defendant’s motion to dismiss the action granted, and the certified question answered in the affirmative.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Fuchsberg and Meyer concur.

Order reversed, etc.

      .  To be distinguished are those cases in which a discretionary remedy is denied by the lower court both in the exercise of its discretion and upon the legal ground that the court was without power to grant the requested relief (e.g., Bata v Bata, 302 NY 213; Parkas v Parkas, 285 NY 155; Braunworth v Braunworth, 285 NY 151). In such cases, the lower court’s legal conclusion cannot be presented to this court in the form of a "certified question” for the simple reason that our disposition of the question would not be "decisive” of the outcome. Even if we were to hold that the lower court erred in concluding that it was without power to grant the requested relief, our holding could have no effect upon the result in the case, since the lower court would nonetheless withhold the remedy in the exercise of its nonreviewable discretion. It is these cases that form the basis of the oft-cited principle that the denial of discretionary relief does not ordinarily give rise to a certifiable question of law (see Cohen and Karger, Powers of the New York Court of Appeals, pp 375-378; 7 Weinstein-Korn-Miller, NY Civ Prac, par 5602.12; cf. Barclay’s Ice Cream Co. v Local No. 757, 41 NY2d 269). That principle is of limited utility, however, where the certified question demands that the court consider whether the denial of otherwise discretionary relief constitutes an abuse of discretion in a particular case.

      . Plaintiff stated that the delay in serving the complaint had been caused by the complexity of the litigation and by the difficulties that were encountered in investigating the facts in the case. The validity of these explanations may well be belied, however, by the fact that plaintiff managed to serve a complaint in an earlier companion wrongful death action against this defendant, which complaint was virtually identical to the "proposed complaint” offered in this personal injury suit.


author: Chief Judge Cooke.

text:
    John B. Vanneck, Appellant, v Isabelle K. Vanneck, Respondent.
    Argued February 11, 1980;
    decided March 27, 1980

      POINTS OF COUNSEL

      Julia Perles and Sheila Riesel for appellant.
    I. The Uniform Child Custody Jurisdiction Act, upon which the court below relied, establishes that New York, as the home State which maintained the most significant contacts with the children, is the only proper forum to adjudicate the custody issue. Connecticut, the State where the parties maintained only a weekend and vacation home and where the itinerant spouse fled 11 days prior to commencing suit, does not have jurisdiction to hear the issue. The court below erred in reversing the order enjoining the prosecution of the Connecticut proceeding. II. Assuming, arguendo, New York were to relinquish jurisdiction of the custody issue, the remaining matrimonial issues should be retained by New York. It was error to reverse the order enjoining the prosecution of the Connecticut divorce proceeding as New York, the domiciliary State, maintains all significant contacts with the parties and the marriage, the Connecticut proceeding having been commenced a scant 10 days after respondent abandoned appellant and precipitously moved to that State for the purpose of circumventing New York law. (Browne v Browne, 53 AD2d 134; Williams v North Carolina, 317 US 287; Garvin v Garvin, 302 NY 96; Hammer v Hammer, 303 NY 481; Gersten v Gersten, 61 AD2d 745; Pereira v Pereira, 272 App Div 281; Palmer v Palmer, 268 App Div 1010; Birnkrant v Birnkrant, 77 Misc 2d 353; Martin v Martin, 62 Misc 2d 703; Faulk v Faulk, 21 AD2d 967.) III. The best interests of the parties’ children are served by permitting them to reside near the New York City schools they were attending and thus the order of the Supreme Court requiring that they be returned to New York for the school week was proper and should be reinstated. (Matter of Ebert v Ebert, 38 NY2d 700; Braiman v Braiman, 44 NY2d 584; Matter of Nehra v Uhlar, 43 NY2d 242.)

      William G. Mulligan, Sandra W. Jacobson, Hadassah R. Shapiro, Howard J. Pobiner and Arthur H. McGuire for respondent.
    I. The dissenting opinion in the court below proceeds upon the assumption that in commencing the Connecticut action, respondent wife and mother was forum shopping in a custody case, which is contrary to the fact. (Gersten v Gersten, 61 AD2d 745.) II. The provisions of the Uniform Child Custody Jurisdiction Act required a stay of the New York proceeding and an exchange of information with the Connecticut courts in order to determine the more appropriate forum. (Matter of Nehra v Uhlar, 43 NY2d 242; Appelblom v Appelblom, 66 AD2d 188; Matter of Bennett v Jeffreys, 40 NY2d 543; Obey v Degling, 37 NY2d 768.) III. The time has come to end the misuse of New York’s judicial processes by this absconding husband. IV. The reversal of the order enjoining prosecution of the Connecticut action should be affirmed. (Rosenstiel v Rosenstiel, 15 AD2d 880; Faulk v Faulk, 21 AD2d 967; Frichner v Frichner, 55 AD2d 523; Garvin v Garvin, 302 NY 96; Hammer v Hammer, 303 NY 481.)
   OPINION OF THE COURT

Chief Judge Cooke.

John and Isabelle Vanneck were married in New York in 1965 and lived together with their three children in this State until December, 1978. On the 19th of that month, during the children’s winter school recess, Isabelle Vanneck took the children to the family’s home in North Stamford, Connecticut, and decided to remain. Alleging the irretrievable breakdown of the marriage, Isabelle, defendant here, commenced an action in Connecticut on December 30, 1978 by personal service upon plaintiff in that State, seeking dissolution of the marriage, alimony and custody of the children. Two weeks later, on January 13, 1979, plaintiff commenced this New York action for divorce on the ground of cruelty or, in the alternative, for separation on the ground of abandonment. He too sought custody of the parties’ three children.

Plaintiff moved in the New York court to enjoin defendant from prosecuting the divorce action in Connecticut, contending that defendant’s move was undertaken to establish divorce jurisdiction in that State to enable her to exploit its equitable distribution laws. Plaintiff also sought temporary custody of the children, urging that daily transportation to New York schools was not in the children’s best interest. In opposition, defendant asserted the bona ñdes of her residence in Connecticut, as well as that of the children, and, in support of her custody of the children, that they had been enrolled in Connecticut schools for the spring 1979 term.

In light of the custody issue present in both the New York and Connecticut actions, Special Term put aside consideration of the traditional criteria for restraining prosecution of a foreign divorce action and applied article 5-A of the Domestic Relations Law, which codifies the Uniform Child Custody Jurisdiction Act (UCCJA) (L 1978, ch 493, eff Sept. 1, 1978). Considering such factors as the family’s residence in New York of long duration, the children’s attendance at schools here, and the secondary nature of the Connecticut home prior to the separation, the court concluded that New York had a substantial interest in the family unit. The court further determined that irrespective of defendant’s contacts, residence or domicile in Connecticut, New York bore the closest connection to the children and the family and provided access to evidence concerning the children’s care, protection, training and personal relationships. The court therefore granted the injunction against prosecuting the Connecticut action pending a final determination of the New York action for divorce and other relief.

A divided Appellate Division modified the order at Special Term; it agreed that article 5-A of the Domestic Relations Law was applicable, but ruled that Special Term had given inadequate consideration to the pendency of the proceeding in Connecticut and to whether the court there was exercising jurisdiction substantially in conformity with article 5-A. The court found sufficient contacts between the family and Connecticut, at least as a threshold matter, to support jurisdiction in that State under the act. In the majority’s view, the act required the New York court to defer the exercise of jurisdiction at least until the communication and co-operation mechanisms statutorily available had been utilized by both courts to determine the most appropriate forum for the litigation. Special Term’s failure to follow the act’s mandate required reversal of the portion of the order enjoining prosecution of the Connecticut action.

The appeal is before this court on a certified question of law. There should be an affirmance and that question should be answered in the affirmative.

Traditionally, an injunction against prosecution of a foreign divorce would be granted when the rights of a resident spouse were threatened (see Garvin v Garvin, 302 NY 96). The grant of such relief involves the exercise of discretion after consideration of such factors as the bona ñdes of the domicile established in the other State, the motivation for commencing an action there and the substantiality of contacts with that forum (see, e.g., Gersten v Gersten, 61 AD2d 745; Browne v Browne, 53 AD2d 134). When the parties to a divorce proceeding seek as ancillary relief a child custody determination, however, the UCCJA is applicable (Domestic Relations Law, § 75-c, subd 3). A separate inquiry, with proper weight accorded to the provisions of the act, is required for determining whether the custody phase of the litigation may proceed in the foreign court. To assure that the best interests of the child and salutary provisions of the act are not subordinated to the parents’ interest in obtaining the best terms of the divorce, the court should determine whether to enjoin prosecution of the divorce only after the inquiry concerning the custody issues has been undertaken. Of course, the decision whether to exercise custody jurisdiction is a factor in determining the propriety of injunctive relief against the divorce phase, and the weight to be accorded this factor may vary depending on the circumstances of the particular case. The preliminary decision concerning New York’s exercise of jurisdiction over the custody issues, however, must have as its foundation the proper application of the UCCJA.

The UCCJA represents a considered effort to give stability to child custody decrees, minimize jurisdictional competition between sister States, promote co-operation and communication between the courts of different States, all to the end of resolving custody disputes in the best interests of the child (see Domestic Relations Law, § 75-b; Prefatory Note of Commissioners on Uniform State Laws, 9 ULA [Master Ed], pp 111-114; see, generally, Governor’s Memorandum approving L 1977, ch 493; 1977 McKinney’s Session Laws of New York, pp 2514-2515; 96 ALR3d 968). The act offers a standard for determining in the first instance whether the necessary predicate for jurisdiction exists. Custody may be determined in the child’s "home state” (Domestic Relations Law, § 75-d, subd 1, par [a]), defined as "the state in which the child at the time of the commencement of the custody proceeding, has resided with his parents, a parent, or a person acting as parent, for at least six consecutive months” (Domestic Relations Law, § 75-c, subd 5), or in the State that had been the child’s home State within six months before commencement of the proceeding where the child is absent from the State through removal by a person claiming custody and a parent lives in the State (Domestic Relations Law, § 75-d, subd 1, par [a], cl [ii]). A jurisdictional predicate also exists in New York when "it is in the best interest of the child that a court of this state assume jurisdiction because (i) the child and his parents, or the child and at least one contestant, have a significant connection with this state, and (ii) there is within the jurisdiction of the court substantial evidence concerning the child’s present or future care, protection, training, and personal relationships” (Domestic Relations Law, § 75-d, subd 1, par [b]).

The inquiry is not completed merely by a determination that a jurisdictional predicate exists in the forum State, for then the court must determine whether to exercise its jurisdiction. There, too, the act guides the determination, commanding the court to consider whether it is an inconvenient forum (Domestic Relations Law, § 75-h) or whether the conduct of the parties militates against an exercise of jurisdiction (Domestic Relations Law, § 75-i; see, also, Matter of Settle, 276 Ore 759). Notwithstanding that this State has jurisdiction, a court "shall not exercise its jurisdiction under this article if at the time of filing the petition a proceeding concerning the custody of the child was pending in a court of another state exercising jurisdiction substantially in conformity with this article” (Domestic Relations Law, § 75-g, subd 1; see, e.g., Paltrow v Paltrow, 37 Md App 191). Once a court of this State learns of the pendency of another proceeding, the court "shall stay [its own] proceeding and communicate with the court in which the other proceeding is pending to the end that the issue may be litigated in the more appropriate forum and that information be exchanged in accordance with sections seventy-five-s through seventy-five-v of this article” (Domestic Relations Law, § 75-g, subd 3).

The express statutory command of section 75-g was all but ignored by Special Term. Given the pendency of the Connecticut action, the question with which the court should have been concerned was not whether New York had jurisdiction to determine the custody dispute, nor whether New York was the most appropriate forum. Rather, at that stage of the proceeding, the focus of inquiry should have been whether Connecticut was "exercising jurisdiction substantially in conformity” with article 5-A.

The instant case calls into play the jurisdictional predicate of section 75-d (subd 1, par [b]), which provides that a State may exercise jurisdiction when it serves the best interests of the child because there is a significant connection to the forum and there is available substantial evidence concerning the child’s present or future welfare. Particularly relevant to the' jurisdictional determination is whether the forum in which the litigation is to proceed has "optimum access to relevant evidence” (Prefatory Note of Commissioners on Uniform State Laws, 9 ULA [Master Ed], § 3, p 124). Maximum rather than minimum contacts with the State are required (id.). The general language of this subdivision permits a flexible approach to various fact patterns. This imprecision, however, must not destroy the legislative design "to limit jurisdiction rather than to proliferate it” (id.).

We need not decide whether the pendency of a proceeding in a forum totally lacking a jurisdictional predicate would mandate that a New York court suspend its action for purposes of communicating with the other court (compare Domestic Relations Law, § 75-g, subd 1, with § 75-g, subd 3; cf. Prefatory Note of Commissioners on Uniform State Laws, 9 ULA [Master Ed], § 6, p 135 [even absent a jurisdictional basis in the other forum, "the policy against simultaneous custody proceedings is so strong that it might * * * be appropriate to leave the case to the other court”]; but see Sharp v Aarons, 101 Misc 2d 323). But, at least where the claim of sister State jurisdiction is colorable, a New York court must heed the statutory command to defer adjudicating the dispute and communicate with the foreign court. Such a claim exists here, as defendant has alleged that she and the children have significant ties to Connecticut developed prior to the commencement of the proceeding there.

Thus, defendant’s assertions here, at least as a threshold matter, support an exercise of jurisdiction by the Connecticut court (cf. Prefatory Note of Commissioners on Uniform State Laws, 9 ULA [Master Ed], § 3, p 124 [suggesting that a parent’s return to a State of former residence in which the children each year spent several months might provide the requisite connection to the State]), and required Special Term to open channels of communication with the Connecticut court before enjoining prosecution of the action there. The New York court’s unilateral decision to exercise jurisdiction and prevent Connecticut’s exercise of jurisdiction is contrary to the avowed purposes of the legislation adopted by both States. Rather than promote co-operation between courts, it fosters the very jurisdictional competition sought to be avoided.

The Appellate Division therefore properly determined that the injunction against prosecuting the action in Connecticut was inappropriate. The Appellate Division, in the exercise of discretion, could have enjoined only the divorce phase of the litigation, for, as noted above, that question is separate from the question whether jurisdiction exists to entertain a custody dispute. Indeed, plaintiff argues that such relief is proper here, pointing to defendant’s recent search for a New York residence and continuing contacts with this State and asserting that defendant’s decision to remain in Connecticut and her commencement of the action there represents forum shopping for a more favorable disposition. While such discretionary relief might be appropriate to protect the rights of a resident spouse in some circumstances, there was no abuse of discretion in the Appellate Division’s failure to bifurcate the proceeding given defendant’s assertion of a bona fide domicile in Connecticut, the family’s previous contacts with that State, and the pendency of the custody issues there. Finally, we have examined plaintiffs remaining contentions and find them to be without merit.

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

Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Meyer concur.

Order affirmed, with costs. Question certified answered in the affirmative.

      . Section 75-d further provides for jurisdiction when:
      “(c) the child is physically present in this state and (i) the child has been abandoned or (ii) it is necessary in an emergency to protect the child; or
      "(d) (i) it appears that no other state would have jurisdiction under prerequisites substantially in accordance with paragraph (a), (b), or (c), or another state has declined to exercise jurisdiction on the ground that this state is the more appropriate forum to determine the custody of the child, and (ii) it is in the best interest of the child that this court assume jurisdiction” (Domestic Relations Law, § 75-d, subd 1, pars [c], [d]).

      . We are not unmindful of the possibility that a court in another State might exercise jurisdiction and decide the issues during a stay effected by a New York court for purposes of communicating with the other court (see, e.g., Irene R. v Inez H., 96 Misc 2d 947). But we cannot adopt a defensive posture and, acting on an assumption that a sister court will ignore its obligation under the UCCJA, effectively nullify the laudable goals of that legislation.


text:
    Karlene Clark, Appellant, v Dorlan McGee, Respondent.
    Argued February 4, 1980;
    decided March 27, 1980

      POINTS OF COUNSEL

      Lois McS. Webb and J. Byron O’Connell for appellant.
    I. There is no absolute privilege for false charges of criminal behavior. II. A town supervisor is not entitled to absolute privilege for statements made privately from his home to a newscaster. (Duffy v Kipers, 26 AD2d 127; Toker v Pollak, 44 NY2d 211; Cheatum v Wehle, 5 NY2d 585; Lombardo v Stoke, 18 NY2d 394.) III. Sufficient malice was alleged in the complaint to make the existence of qualified privilege a jury question; it was, therefore, error to grant the cross motion for summary judgment dismissing the complaint. (Egan Real Estate v McGraw, 40 AD2d 299; Trails West v Wolff, 32 NY2d 207.)

      Richard B. Meyer for respondent.
    I. The absolute privilege and immunity afforded public officials is based upon public policy considerations and is not founded upon the First Amendment of the United States Constitution. (Cheatum v Wehle, 5 NY2d 585.) II. Respondent town supervisor’s statement from his home, concerning the salary of a public official and unauthorized alteration of the town budget, was absolutely privileged. (Toker v Pollak, 44 NY2d 211; Sheridan v Crisona, 14 NY2d 108.) III. The immunity afforded to respondent by absolute privilege is a complete bar to the action of appellant. IV. Point III of appellant’s brief has no bearing on this appeal. (Kolmer-Marcus, Inc. v Winer, 32 AD2d 763.)
   OPINION OF THE COURT

Gabrielli, J.

We are called upon to determine whether a town supervisor is absolutely immune from liability for allegedly defamatory statements made concerning a town employee during the course of an interview with a representative of a local radio station. For the reasons discussed below, we conclude that, in the circumstance here presented, no absolute privilege attaches to such statements.

This is an action seeking to recover damages for allegedly defamatory statements made by defendant, who had assumed the office of Town Supervisor of the Town of Peru in January, 1978. Plaintiff was the town clerk, and had also served as secretary to the previous town board. At the first meeting of the town board in 1978, plaintiff was not reappointed to the position of secretary, although she of course retained her elective position as town clerk. Instead, defendant’s wife was appointed secretary to the town board. At the next meeting of the board, a resolution proposed by defendant was adopted fixing the salary of the secretary at $3,000 a year. It is alleged that during that meeting defendant made several comments suggesting that plaintiff had been involved in a scheme to improperly and illegally raise the secretary’s salary from $3,000 to $3,500 in the fall of 1977. The next morning, defendant was contacted by a local radio station reporter, and in discussing the increase in the secretary’s salary in 1977, defendant is alleged to have declared: "The work is done in Mrs. Clark’s [the plaintiff] hand, and I would assume that the changes were made by her as they are in her hand. She also gave me a payroll book which listed her name by the position of secretary, with the figure of $3,500, which she was aware to my knowledge, was aware that the figure was only $3,000”. Plaintiff subsequently commenced this action, alleging that this statement was false and defamatory and was made with actual malice in that defendant was aware that the statement was false.

In his answer, defendant denied most of the allegations of the complaint. In addition, defendant pleaded an assortment of defenses and affirmative defenses, including the absolute immunity at issue on this appeal, a qualified privilege supported by the absence of actual malice, and the truth of the allegedly defamatory statement. Plaintiff then moved to dismiss all defenses, and defendant cross-moved for summary judgment on the basis of "each and every defense” pleaded in the answer. Special Term dismissed the claim of absolute privilege and all other pleaded defenses except those of qualified privilege and truth, and denied defendant’s cross motion for summary judgment on the ground that there existed questions of fact concerning the applicability of the remaining two defenses in this case. On appeal by defendant, the Appellate Division reversed and granted summary judgment to defendant, concluding that defendant was entitled to an absolute immunity. Plaintiff now appeals as of right to this court, pursuant to CPLR 5601 (subd [a], par [ii]). There must be a reversal, because no absolute privilege attached to defendant’s statements.

Initially, we note that the absolute privilege which defendant claims is that complete immunity from liability for defamation which is afforded "an official [who] is a principal executive of State or local government or is entrusted by law with administrative or executive policy-making responsibilities of considerable dimension” (Stukuls v State of New York, 42 NY2d 272, 278), with respect to statements made during the discharge of those responsibilities about matters which come within the ambit of those duties (see Sheridan v Crisona, 14 NY2d 108, 113; Lombardo v Stoke, 18 NY2d 394). This privilege is similar to that traditionally associated with legislative and judicial proceedings (see Stukuls v State of New York, 42 NY2d, at pp 275-276, supra; Toker v Pollak, 44 NY2d 211; Prosser, Torts [4th ed], § 114) in that it is premised upon "considerations of public policy and to secure the unembarrassed and efficient administration of justice and public affairs” (Hemmens v Nelson, 138 NY 517, 523). It serves to ensure that public officials will be free to speak their minds openly and bluntly as is required for the proper performance of their duties, without subjecting themselves to the possibility of vexatious and burdensome lawsuits. Absent such protection, an official might hesitate to engage in that frank and sometimes sharp debate which is so necessary for the development of public policy and the sound management of public affairs. This privilege is of particular importance today, in light of the growing movement towards open government (see, e.g., Public Officers Law, art 6 [Freedom of Information Law]; Public Officers Law, art 7 [Open Meetings Law]). In the same vein, the privilege is intended to protect important public servants from "suits which would consume time and energies which would otherwise be devoted to governmental service” (Barr v Matteo, 360 US 564, 571). In sum, "[t]he privilege exists to protect those who bear the greatest burdens of government or those to whose official functioning it is essential that they be insulated from the harassment and financial hazards that may accompany suits for damages by the victims of even malicious libels or slanders” (Stukuls v State of New York, 42 NY2d, at p 278, supra).

While the absolute privilege is thus a creature of strong public policies (see Cheatum v Wehle, 5 NY2d 585), there do exist powerful countervailing considerations which preclude broad application or expansion of this privilege. Public office does not carry with it a license to defame at will, for even the highest officers exist to serve the public, not to denigrate its members. Although the needs of effective government mandate that certain important officials be absolutely privileged with respect to statements made in the course of and concerning their public responsibilities, it is yet true that "a balance must be struck between this objective and the right of an individual to defend himself against attacks upon his character” (Toker v Pollak, 44 NY2d, at pp 222-223, supra). For these reasons, the privilege is not to be extended liberally, and instead must be carefully confined to that type of situation in which the protection provided by the privilege will serve a necessary societal function (see Toker v Pollak, 44 NY2d 211, supra; Stukuls v State of New York, 42 NY2d 272, supra; Cheatum v Wehle, 5 NY2d 585, supra). Thus, even a public official who is otherwise entitled to immunity "may still be sued if the subject of the communication is unrelated to any matters within his competence * * * or if the form of the communication — e.g., a public statement — is totally unwarranted” (Lombardo v Stoke, 18 NY2d 394, 401, supra).

Applying these principles to the instant case, the first question is whether a town supervisor may ever be entitled to this type of privilege. As is noted above, the nonjudicial, nonlegislative absolute privilege involved in this dispute extends only to high officials of the executive branch of State and local government (compare Stukuls v State of New York, 42 NY2d 272, supra, with Sheridan v Crisona, 14 NY2d 108, supra). Although this court has not previously had occasion to determine whether a town supervisor is such an officer, it appears evident that the chief executive officer of a local governmental unit such as a town (see Town Law, § 29) is in need of such protection if he is to properly perform his public duties (see Duffy v Kipers, 26 AD2d 127). Hence, we conclude that a town supervisor is absolutely immune from liability for allegedly defamatory remarks related to his responsibilities and made during the course of the performance of his duties.

This does not mean, however, that absolute immunity attaches to every statement made by a town supervisor. Both the subject of the statement and the circumstances in which it is made are of importance in determining whether a particular statement was privileged. Obviously, to illustrate one extreme, a statement about the suitability of a potential appointee to a position of trust in town government, made during a meeting with other officials participating in that appointment process, would be absolutely immune. On the other hand, a statement impugning the integrity of a mechanic who had just completed repair work on the supervisor’s private automobile, made at a social gathering, would not be entitled to the benefit of an absolute privilege. More difficult are cases such as this, which fall somewhere between the two extremes. Here, it is clear that the subject matter of the allegedly defamatory comments made by defendant are related to his public duties. As town supervisor, defendant is concerned with the expenditure of public funds and the possibility that a fraud had been committed upon the town by a public official. This alone, however, is not necessarily sufficient justification for assertion of absolute immunity, for the particular forum in which the remarks are made also plays a part in determining the availability of the privilege. For example, in Cheatum v Wehle (5 NY2d 585, supra), this court refused to extend an absolute privilege to a State Conservation Commissioner who had allegedly made defamatory comments about the ability and integrity of a member of his staff during the course of an after-dinner speech. While recognizing that the commissioner would have been entitled to an absolute privilege had he made the same comments in another context, such as a report to the Governor or an internal investigation, the court concluded that an after-dinner speech simply lacked the requisite connection with the performance of his public duties. Absent such a connection, application of an absolute privilege would effectuate no fundamental public interest.

In the instant case, defendant seeks immunity with respect to a statement he made about another public servant during the course of a news conference. Certainly, such circumstances immediately suggest the significance of a free press and free speech in our society, and the importance of free and open debate on matters of public interest. These concerns, however, are protected by an assortment of qualified privileges either arising from the common law or stemming from the First Amendment to our Federal Constitution (see New York Times Co. v Sullivan, 376 US 254; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Chapadeau v Utica Observer-Dispatch, 38 NY2d 196; Prosser, Torts [4th ed], §§ 115, 118). The absolute immunity with which we are here concerned, in contrast, is posited upon other considerations, and is aimed more directly at the protection of that speech which is necessary to the efficient operation of the government. In short, this type of immunity is designed in large part to foster forthright discussions within the apparatus of the government, and not as an additional protection for our treasured freedom of speech. Thus, the guiding principle in determining the availability of this privilege must be the relationship between the speaker’s fulfillment of his public duties and the circumstances of his speech.

So viewed, defendant’s comments are not entitled to an absolute privilege, for the simple reason that they were not made during his performance of an essential part of his public duties. In short, a public accusation of this nature is not a central part of defendant’s public responsibilities. Although there do exist strong reasons for protecting such speech, the absolute immunity at issue on this appeal was not intended to serve such a function, and there exists no reason to stretch it out of shape in order to accommodate such situations, for the qualified privileges mentioned above are available to protect any such comment not made with actual malice.

This is not to suggest that no public statement may ever be covered by the absolute privilege. Surely, there exist a number of situations in which a high public official might well be required to make a public statement as a part of his public obligations. For example, a direct attack upon the integrity of a governmental unit might impel a public response by the head or governing body of that entity (see, e.g., Lombardo v Stoke, 18 NY2d 394, supra). We would also emphasize that the release to the public of official reports containing allegedly defamatory remarks that are otherwise privileged because the preparation of the report was a necessary part of the official’s duties, is also privileged if such disclosure is required by law (see Sheridan v Crisona, 14 NY2d 108, 113, supra). In such cases, the privilege attaches to the public statement because making such a statement is a part of the official’s duties. Here, in contrast, the alleged communication was not a part of the performance of defendant’s public duties. Hence, he is not entitled to an absolute privilege.

Accordingly, the order appealed from should be reversed, with costs, and the case remitted to Supreme Court, Clinton County, for further proceedings not inconsistent with this opinion.

Chief Judge Cooke and Judges Jasen, Jones, Wachtler, Fuchsberg and Meyer concur.

Order reversed, etc.

      . It should be noted that this action is premised upon the statement to the press, and does not involve the comments made during the meeting of the town board. Hence, we are not called upon to determine whether the absolute privilege extended to legislative proceedings is applicable to the meetings of a town board (see Prosser, Torts [4th ed], § 114, at p 782; Libel and Slander, Ann., 40 ALR2d 941).

      . Although defendant did not specify the nature of the qualified privilege he claimed in his answer and motion papers, we presume he was referring to the constitutionally mandated privilege protecting commentary concerning public officials (see New York Times Co. v Sullivan, 376 US 254; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369). That privilege is not absolute, and may be defeated by proof of actual malice. Plaintiff has contended that defendant was aware that the statement was false, which, if proven, would certainly suffice to defeat the qualified privilege. As is noted above, defendant’s motion for summary judgment on this ground was denied by Supreme Court, because of the perceived existence of questions of fact. Defendant’s claim for summary judgment on the grounds of qualified privilege appears not to have been asserted before the Appellate Division, and defendant has not raised it defensively before this court as an alternative ground for affirming the order granting summary judgment to defendant. Since it is not our policy to pursue claims not asserted before this court, we do not reach that issue.