author: Kaye, J. Bellacosa, J.

text:
    Rosalind S. Wells, Respondent, v Shearson Lehman/American Express, Inc., et al., Appellants.
    Argued April 20, 1988;
    decided June 7, 1988

      POINTS OF COUNSEL

      Leon P. Gold, Mark E. Davidson and Clifford Thau for appellants.
    I. The court should reverse the order of the court below and hold that Wells released all her claims against Bear, Stearns and Shearson in the stipulation of settlement. (Sellon v General Motors Corp., 521 F Supp 978; Oxford Commercial Corp. v Landau, 12 NY2d 362; Mangini v McClurg, 24 NY2d 556; West, Weir & Bartel v Carter Paint Co., 25 NY2d 535, 26 NY2d 969; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285; Spector v Sovereign Constr. Co., 45 AD2d 673; Zion v Kurtz, 50 NY2d 92; Matter of Knight-Ridder Broadcasting v Greenberg, 70 NY2d 151.) II. The plain terms of the Delaware final judgment must be enforced by the New York courts in accordance with the Full Faith and Credit Clause and the principle of third-party issue preclusion. (Schultz v Boy Scouts, 65 NY2d 189; Matter of Farmland Dairies v Barber, 65 NY2d 51; Wolfe v Wolfe, 64 AD2d 700; Miller v Miller, 109 Misc 2d 982; Matter of Marshall, 60 Misc 2d 433; Mallan v Samowich, 94 AD2d 249, 67 NY2d 871; Prudential Lines v Firemen’s Ins. Co., 91 AD2d 1; Cahill v Andersen & Co., 659 F Supp 1115, 822 F2d 14; Lawlor

      v National Screen Serv., 349 US 322; Nemaizer v Baker, 793 F2d 58.) III. The proper interpretation of the Delaware settlement documents is a question for the Delaware court which approved the settlement. (Eagle-Picher Indus. v American Employers Ins. Co., 557 F Supp 225; Van Gelder v Taylor, 621 F Supp 613; Vaughn v American Basketball Assn., 419 F Supp 1274; Leroy v Great W. United Corp., 443 US 173.) IV. This court should affirm the Supreme Court’s holding that the complaint failed to state a cause of action on the ground that plaintiff at no time relied on defendants’ opinions. (White v Guarente, 43 NY2d 356; Home Mut. Ins. Co. v Broadway Bank & Trust Co., 53 NY2d 568; CBS, Inc. v Ziff-Davis Publ. Co., 125 AD2d 1015, 69 NY2d 868; Arnold Constable Corp. v Chase Manhattan, 59 AD2d 666; Charid Props. v Berger, 37 AD2d 987, 32 NY2d 667.)

      Sidney B. Silverman, Joan T. Harnes, Harold B. Obstfeld and Nancy A. Lester for respondent.
    I. The court below properly held that defendants are not discharged from liability as a matter of law under the "anyone else” language of the release. (Sellon v General Motors Corp., 521 F Supp 978; Oxford Commercial Corp. v Landau, 12 NY2d 362; Sage v Hale, 75 Misc 2d 256.) II. Defendants were not "agents” or "representatives” of Metromedia or its directors. III. The Delaware judgment does not preclude plaintiff from bringing this action. (Blue Chip Stamps v Manor Drug Stores, 421 US 723; Schultz v Boys Scouts, 65 NY2d 189.) IV. Under universal equitable principles, defendants are barred from raising the defense of release or relying upon the Delaware judgment. (Riggs v Palmer, 115 NY 506; Glus v Brooklyn E. Term., 359 US 231; Imperator Realty Co. v Tull, 228 NY 447; Gray v Met Contr. Corp., 4 AD2d 495; Goldner v New York Prop. Ins. Underwriting Assn., 116 Misc 2d 168; Sam & Mary Hous. Corp. v Jo/Sal Mkt. Corp., 121 Misc 2d 434, 100 AD2d 901, 62 NY2d 941; Triple Cities Constr. Co. v Maryland Cas. Co., 4 NY2d 443; Glanzer v Shepard, 233 NY 236.) V. The court below properly held that Wells stated a cause of action for misrepresentation. (Callahan v Callahan, 127 AD2d 298; Arrington v New York Times Co., 55 NY2d 433, 459 US 1146; Rovello v Orofino Realty Co., 40 NY2d 633; Ressis v Herman, 122 AD2d 516, 69 NY2d 1017; Kaufman v International Business Machs. Corp., 97 AD2d 925, 61 NY2d 930; Paul v Hogan, 56 AD2d 723; Hotel Constructors v Seagrave Corp., 574 F Supp 384; Herz v Thornwood Acres ”D”, 86 Misc 2d 53, 91 Misc 2d 130; Kley v Healy, 127 NY 555; State St. Trust Co. v Ernst, 278 NY 104.) VI. The New York courts may interpret the effect of the Delaware settlement documents on plaintiff’s claims. (Schultz v Boy Scouts, 65 NY2d 189; Green v Santa Fe Indus., 70 NY2d 244; Eagle-Picher Indus. v American Employers Ins. Co., 557 F Supp 225; Leroy v Great W. United Corp., 443 US 173; Vaughn v American Basketball Assn., 419 F Supp 1274; Van Gelder v Taylor, 621 F Supp 613.)
   OPINION OF THE COURT

Kaye, J.

An action against financial advisors who rendered opinions on the financial fairness to shareholders of a proposed leveraged buyout is barred by a release in settlement of a prior Delaware class action challenging the buyout. While the financial advisors were not parties to the Delaware class action, we conclude that, applying the law of Delaware or the law of New York, the release discharging the named defendants, their "agents * * * representatives * * * or anyone else”, unambiguously precluded the pending action.

I.

Plaintiff, Rosalind Wells, brings this action against Shear-son Lehman/American Express, Inc. and Bear Stearns & Co., alleging that their opinions as to the financial fairness of the consideration offered Wells and other shareholders of Metromedia, Inc. in a management buyout were wrong and negligently or recklessly rendered. She contends that the consideration was grossly inadequate and that the board and shareholders approved the transaction in reliance on defendants’ opinions. The question whether these claims are precluded by the settlement of a prior class action is best considered against the background of the buyout and prior litigation.

On December 6, 1983, four senior officers of Metromedia proposed a leveraged buyout in which the company would be taken private through a merger with JWK Acquisition Corp. The officers would own approximately 96% of the stock of the merged company. The offer would have converted each share of Metromedia common stock into a combination of cash and subordinated debentures worth approximately $40. The total purchase price of $1.1 billion was to be obtained through loans secured by Metromedia’s assets.

The Delaware Class Action

Plaintiff and other Metromedia stockholders immediately began lawsuits in Delaware Chancery Court challenging the proposed transaction; by December 30, nine suits had been filed. An amended class action complaint, consolidating those separate actions, was served and filed naming as defendants Metromedia, its directors and Boston Ventures Ltd., and attacking the amount to be paid to public shareholders as grossly inadequate. The following extract from the complaint is illustrative: "The intrinsic value of Metromedia’s common stock is materially in excess of the value of the proposed consideration, taking into account Metromedia’s assets, the underlying strength of its business, and its earnings power. If the assets of Metromedia were sold, in whole or in part, the public shareholders could realize an amount substantially in excess of the proposed consideration under the going-private plan.”

Four Metromedia directors who, though named in the complaint, were not part of the buying group, were appointed to a special directors committee to represent the interests of the common stockholders. The directors committee retained defendant financial advisors to render opinions on the financial fairness of the buyout to public stockholders. On January 31, 1984, defendants informed the committee that, based on facts then known, the offered price per share was fair, and the transaction was thereafter approved. It is these opinions that plaintiff now challenges.

The accuracy of defendants’ opinions was the subject of significant attention in the Delaware class action.

Eleven law firms represented the plaintiff class. Discovery proceeded during the spring of 1984 — including the depositions of partners of both financial advisors — and negotiations culminated in settlement. Defendants increased the consideration offered to shareholders by $16,500,000 (or approximately 69 cents a share) and agreed to pay the plaintiffs’ attorneys’ fees of close to $1 million.

The Settlement and Release

A stipulation of settlement (the release) dated May 15, 1984 recited the underlying allegations of the complaint, and represented that plaintiffs’ attorneys had made a "thorough and intensive” investigation into those claims and determined that the proposed settlement was fair and reasonable. The release provided that: "all claims * * * that have been or could have been asserted by plaintiffs herein or any members of the Class against any defendant, or against any of the officers, directors, agents, attorneys, representatives, affiliates and general and limited partners of any defendant, or against anyone else in connection with or that arise now or hereafter out of the Action, the Settlement (except for compliance with the Settlement), or any matters, transactions or occurrences referred to in the complaint or the Stipulation, including the recitals herein (the 'Settled Claims’) shall be compromised, settled, released and dismissed with prejudice”. At two separate points, the release referred to the intention to put plaintiffs’ claims regarding the buyout finally to rest.

To obtain court approval, plaintiffs’ attorneys submitted a memorandum in support of the settlement and their fee application. In this memorandum, they represented that they had undertaken an extensive review of documents relating to Metromedia’s financial position and asset values, including confidential materials, and had conducted several depositions from which they derived a complete picture of all the parties’ positions. They discovered, and revealed, "facts that cast doubt on the 'independence’ of [Shearson]” (including the fee arrangement); the weaknesses in both opinions indicating that they had undervalued Metromedia’s assets; and the lender’s determination that Metromedia’s broadcast assets alone were sufficient to justify the loan for the buyout, indicating that the company’s other assets were undervalued. Counsel concluded, however, that there was a risk the future profitability might not materialize, and plaintiffs might not be able to meet their burden of proof if the suit continued to trial.

A notice of pendency dated May 21, 1984 was distributed to the class together with the proposed release and the statement prepared by Metromedia in connection with the required shareholder vote on the merger. The proxy statement, reviewed by plaintiffs’ counsel in draft and modified form, included the written opinions of both defendants that the price offered the shareholders "approximated the estimated per share value of Metromedia which might be realized from the sale of its various businesses as going concerns, including estimated costs and risks associated with such liquidation.” The proxy statement also outlined the relationships and financial arrangements between Metromedia and the financial advisors, including the fact that both would receive substantial fees if the merger went forward. The stockholders approved the merger and it became effective on June 21,1984.

On that same date the Delaware court entered final judgment approving the settlement as "fair, reasonable and adequate,” dismissing the action on the merits with prejudice, and providing: "All plaintiffs and all members of the certified class are hereby permanently barred and enjoined from instituting or prosecuting, either directly or representatively, or in any other capacity, any other action asserting claims against anyone which could have been asserted in the Action or which arise now or hereafter out of the Action, the Settlement * * * or any matters, transactions or occurrences referred to in the pleadings in the Action or the Stipulation”.

In May 1985, Metromedia made an agreement to sell seven of its television stations for $2 billion. The remaining businesses then were sold in accordance with a plan of liquidation adopted in February 1986 for an additional $2.5 billion, the total consideration far exceeding the $1.1 billion value established as fair by defendants.

The Present Action

Immediately, plaintiff instituted the present action seeking damages and other relief against the financial advisors on behalf of a class of Metromedia stockholders whose shares were exchanged in the merger. The complaint repeats the Delaware allegations, and charges that defendants violated their duty to the shareholders, knowing that the opinions would be relied on by the shareholders and that the merger would not otherwise proceed. In response to defendants’ motion to dismiss on several grounds, including the prior release and failure to state a cause of action, plaintiff submitted an affidavit stating: "It was never my intention to release [the financial advisors] from any liability for professional malpractice in the issuance of their opinions, nor did I even suspect that such malpractice had occurred or would occur.”

Supreme Court granted defendants’ motion to dismiss the complaint, holding that the action was barred by the release, which expressed the parties’ clear intention to foreclose any action arising out of the buyout. The court further held that the complaint failed to state a cause of action because plaintiff could not establish reliance on defendants’ opinions, and that any claim for losses arising out of reliance on the reports is an issue for the Delaware court that approved the settlement. The Appellate Division reversed, reasoning that under both Delaware and New York law the intent of the parties to a general release that purports to discharge "anyone else” must be examined to determine whether particular individuals were meant to be included. The court additionally held that, because the investment bankers were retained to advise the shareholders, allegations that the shareholders relied on their opinions to their detriment stated a cause of action. We now reverse.

II.

The effect of the release is central to this appeal. If language barring claims against the settling defendants’ "agents * * * representatives * * * or against anyone else” applies to the financial advisors, we need not consider any other issues raised by the parties. This central issue calls upon us to determine whether the applicable law requires that a release designate parties specifically, and whether a release containing the general language before us is inherently ambiguous, so that other evidence must be examined to determine whom the parties intended to release. We answer both questions in the negative.

Plaintiff contends that as a threshold matter we should determine whether Delaware or New York law governs the issue (see, Schultz v Boy Scouts, 65 NY2d 189; Babcock v Jackson, 12 NY2d 473). Because the same result is reached under both, we need not apply conflict of law principles to choose between them.

At common law, release of one joint tort-feasor automatically released all. In the eyes of the law, there was but one cause of action, and it was surrendered upon the discharge of one joint tort-feasor (see generally, Prosser and Keeton, Torts § 49, at 332 [5th ed]). That extreme rule was widely assailed as lacking historical justification, working great unfairness in particular cases, and impeding settlements in general, and as a result it has been largely abrogated. The Uniform Contribution Among Tortfeasors Act, for example — adopted in some form by 18 States — specifies that a release given to one joint tort-feasor does not discharge the others "unless its terms so provide” (12 ULA § 4 [Master ed]).

The issue before us poses another extreme: plaintiff urges that settling parties can never discharge persons unless they are specifically named or identified, that a general release of "anyone else” is necessarily ambiguous, requiring extrinsic evidence of intent. While we recognize that a few States have so held (see, e.g., Alsup v Firestone Tire & Rubber Co., 101 Ill 2d 196, 461 NE2d 361; Bjork v Chrysler Corp., 702 P2d 146 [Wyo]), we conclude that this is not the law of Delaware or New York.

Neither the Delaware statute (10 Del Code Annot § 6304 [a]) nor the New York statute (General Obligations Law § 15-108 [a]) says in so many words that a release must specifically name or identify the persons to be discharged; the Legislatures could easily have so provided if that was their intention. We conclude that such specificity is not required. As with contracts generally, the courts must look to the language of a release — the words used by the parties — to determine their intent, resorting to extrinsic evidence only when the court concludes as a matter of law that the contract is ambiguous (see, e.g., Van Wagner Adv. Corp. v S & M Enters., 67 NY2d 186, 191; West, Weir & Bartel v Carter Paint Co., 25 NY2d 535, 540, mod 26 NY2d 969; Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285, 291). Here, the release is clear, unambiguous, and obviously meant to include defendants.

The Delaware Statute

The Delaware statute (a version of the Uniform Contribution Among Tortfeasors Act, 10 Del Code Annot § 6304 [a]), provides: "A release by the injured person of one joint tortfeasor, whether before or after judgment, does not discharge the other tort-feasor unless the release so provides”.

We find instructive the only decision of the Delaware Supreme Court dealing with the issues before us. In Chakov v Outboard Mar. Corp. (429 A2d 984 [Del]), the Delaware Supreme Court concluded that a general release discharging "all other persons, firms or corporations liable or who might be claimed to be liable” was effective to discharge a nonparty manufacturer; specificity was not required. Nor did the court hold that the release necessarily was ambiguous.

Delaware Superior Court had found that the release clearly discharged the manufacturer, who was not a party to the release, and that parol evidence was inadmissible. The Supreme Court affirmed en banc, concluding that, even assuming ambiguity and examining the extrinsic evidence, there was no genuine issue of fact as to the parties’ intent. The court wrote: "we see no legal reason why an injured party cannot give a general release, including a release of third parties strangers to the contract, under circumstances shown here * * * As the Court below noted, our Courts proceed by looking to the language of the release”. (429 A2d, supra, at 985.) The court further noted the "potential for confusion in general releases referring to 'other persons, firms or corporations.’ Such releases might, in given circumstances, reasonably be read as referring only to third party entities related to the contracting party obtaining the release. This is especially true when the release purports to speak for such third parties by denying any liability to the claimant.” (Id., at 985-986.)

Instead of Chakov, the Appellate Division relied on Sellon v General Motors Corp. (521 F Supp 978 [Del]), a decision of the Federal District Court, for the proposition that Delaware requires inquiry into the intent of the parties to every release containing general language. That reliance is misplaced.

Without directly addressing the question whether the statute requires released parties to be named or specifically identified, the District Judge in Sellon considered the effect of language discharging third-party defendant and her "agents, servants, successors, heirs, executors, administrators and all other persons, firms, corporations, associations or partnerships.” As the opinion indicates, Delaware courts may be reluctant to apply the plain meaning rule to exclude evidence of intent when someone who was not a party to a release seeks the benefit of its general language, but only if the language of the release reveals confusion about which entities were being discharged will extrinsic evidence of the parties’ intent be admissible. (Sellon v General Motors Corp., 521 F Supp, at 983, supra.) Confusion justifying factual inquiry may exist when a release discharging "all other persons” includes a denial of liability on the part of "parties hereby released,” because such a denial could not be made on behalf of the unknown persons purportedly released. This ambiguity, "which might otherwise appear slight,” may justify admission of extrinsic evidence. (Sellon v General Motors Corp., 521 F Supp, at 984, supra.)

From the statute and cases, we conclude that Delaware neither requires absolute specificity nor deems every general, nonspecific release inherently ambiguous.

The New York Statute

We reach that same conclusion under New York law. The General Obligations Law § 15-108 (a) provides: "When a release or a covenant not to sue or not to enforce a judgment is given to one of two or more persons liable or claimed to be liable in tort for the same injury, or the same wrongful death, it does not discharge any of the other tortfeasors from liability for the injury or wrongful death unless its terms expressly so provide”.

While we have not previously considered the impact of this statute on nonspecific general releases, we did prior to its enactment hold in an analogous situation that extrinsic evidence of the intent of parties to a general release was inadmissible (Oxford Commercial Corp. v Landau, 12 NY2d 362).

Plaintiff corporation in Oxford discovered that a director had been siphoning off corporate assets for his own businesses. The director agreed to make payments to satisfy the claims against him and the corporation released him, agreeing not to bring "any suit, against any person whomsoever” except those specifically named. Oxford then commenced a suit against its accountants for aiding and abetting the director. The court upheld the award of summary judgment to the accountants, ruling that extrinsic evidence was inadmissible and that defendants were covered by the release: "[T]he plaintiff corporation’s promise, contained in an integrated agreement reached after lawyer-guided negotiations and containing provisions quite unlike the stereotyped verbiage found in the usual standard general release, permits no conclusion other than that the plaintiff intended to release every one who participated in the Carlin transactions except the parties expressly excluded.” (12 NY2d, at 366, supra.)

The case before us is like Oxford; the only question is whether General Obligations Law § 15-108 (a) compels a different result. Neither the language nor the legislative history of the statute supports plaintiff’s contention that a release of one joint tort-feasor cannot unambiguously discharge other parties unless named or specifically identified in it. The plain meaning of the statute is that a release must expressly indicate that it discharges parties in addition to those who contracted for the release. The reading urged by the plaintiff would make it impossible for a claimant conclusively to release all tortfeasors, and have an end to a dispute, if any of them remained unknown.

Our reading of the statute comports with the intent re-fleeted in the legislative history. The purpose of section 15-108 (a) was to abrogate the common-law rule that a release given one joint tort-feasor discharges all other joint tort-feasors (see, Attorney-General’s Mem to Governor, Bill Jacket, L 1972, ch 830). The bill was introduced on the recommendation of the Law Revision Commission, which submitted a report to the Legislature explaining the rationale and effect of the bill: "The [common-law] rule sets a trap for the average man, who quite reasonably assumes that settling his claim with one person does not have any effect on his rights against others with whom he did not deal. At present it is necessary for the claimant to make an express disclaimer in his release of any intent to release persons other than those named in it. It is more in accord with common understanding to provide that the release means just what it says; if it does not purport to release a party by its express terms, it should not affect his liability.” (1972 Report of NY Law Rev Commn, 1972 NY Legis Doc No 65 [K], 1972 McKinney’s Session Laws of NY, at 3237, 3239.)

The intended effect of the bill thus was to prevent the automatic release of unnamed parties by limiting the effect of a release to that of the language it contains; the bill placed no restraint on what that language could be. What it achieved was a requirement that a release not discharge "everyone” or "anyone” without saying so. In effect, "other tortfeasors are not to be beneficiaries of a general release or covenant not to sue unless the releasor indicates a clear intention to do so by the inclusion of an express term to that effect in the document.” (Association of Bar of City of NY, Committee on State Legislation, Approval Mem, Bill Jacket, L 1972, ch 830.)

We therefore conclude that neither Delaware nor New York unvaryingly demands that every discharged party be specifically named or identified. Nor is a release of "anyone else” in every instance necessarily ambiguous.

Application of the Law to the Release

The release before us facially satisfies the Delaware and New York statutes in that its terms do expressly provide for the release of persons other than the named defendants in the class action. The release expressly provides for the discharge of claims against all named defendants; against their officers, directors, agents, attorneys, representatives, affiliates and general and limited partners; as well as against anyone else in connection with the buyout. Plaintiff had to have known, from the face of this release, that she was discharging first, the named defendants; second, an identified group of persons related to them; and third, "anyone else” for claims connected to or arising out of the buyout. Plaintiff thus is plainly not in the position of the hapless common-law releasor, trapped by the operation of law into automatically discharging all the world upon the intended release of but one joint tort-feasor.

Inquiry does not end there, however, for we must determine, as a matter of law, whether there is any ambiguity in the contract that requires extrinsic evidence of intent regarding release of the financial advisors. Ambiguity has readily been found in broad general releases, particularly printed forms in personal injury actions; there can be no question that in all actions the better practice is to avoid such questions where possible, by specifically naming or identifying all parties to be discharged. In Chakov (supra) and Sellon (supra), for example, the Delaware courts identified as a possible ambiguity the fact that a release purports to discharge unknown persons yet also denies any fault on their behalf; if their fault is denied, obviously their identity must be known. Similarly, New York Supreme Court and Appellate Division cases — while incorrectly imposing a requirement of absolute specificity — have readily identified factual questions in the circumstances of the release (Sage v Hale, 75 Misc 2d 256), and in a reading of the general release language in the context of the entire document (Spector v K-Mart Corp., 99 AD2d 605).

Here, however, there are no such factual issues. The release does not purport to deny fault for unidentified persons; no deception is alleged in the circumstances of obtaining the release; no ambiguity is raised by reading the words "anyone else” in the context of the entire document. To the contrary, the words "anyone else” in this release clearly must have referred to persons unrelated to defendants (see, Spector v K-Mart Corp., 99 AD2d 605, supra), because the related persons were already specifically identified by category; "anyone else” necessarily meant additional, other persons. By the same token, "anyone else” in this release refers not to all the world generally but is limited to a class of persons "in connection with” the events at issue. The description of the discharged parties read in context of this release makes clear that the parties’ intention was to put an end to all of plaintiffs’ claims relating to the buyout. The release said exactly that. At two points, the release refers to a settlement objective as the desire to put plaintiffs’ claims "finally to rest.” In a transaction of this magnitude, it is difficult to imagine how this expressed intention could even have been accomplished without resort at some point to a catchall category.

The release in issue is a handmade document — not a standard form — that was independently negotiated as part of a complex commercial transaction in which plaintiff was represented by counsel. Indeed, 9 independent plaintiffs’ actions with 11 separate counsel joined forces, complaining that the participants had failed to disclose the true value of Metromedia assets and that the consideration to be paid public shareholders was grossly inadequate. From the facts and documents referred to in the release — particularly the complaint, depositions and the proxy statement — it was plain that the financial advisors had performed essential services, and were principal actors in the relevant events; they are not remote strangers to the parties or events at issue in Delaware. This case thus cannot be analogized to all-inclusive boilerplate language found in printed release forms terminating personal injury actions as to unknown third parties, where the result might well be different.

Finally, the Appellate Division identified no ambiguity in this release; despite lengthy submissions, neither plaintiff nor the dissent can identify any real ambiguity in this release. Plaintiff simply insists that her subjective intent not to release defendants creates an issue of fact that requires extrinsic evidence. But no manifestation of this alleged intent was made to anyone when the parties entered into the release. Uncommunicated subjective intent alone cannot create an issue of fact where otherwise there is none.

Affirmance here would be tantamount to the adoption of an inflexible rule that every release must invariably specify every party to be discharged or the transaction will be at risk of later unraveling; that however sophisticated the matter, however informed and counseled the plaintiff, and however plain the words and purport of the document, there could never be a release that truly put an end to a disputed commercial transaction. We do not believe that is what the Legislature of Delaware or New York intended, or the law requires. We do believe that our construction of the statutes implements the legislative will and carries forward the legislative purpose by remedying the evil of the harsh common-law rule; that it eliminates the potential unfairness of one unbending rule without substituting the potential unfairness of a new one; and that it thereby serves the interests of all members of the public by allowing them to put their disputes finally to rest when they so desire and so provide.

Accordingly, the order of the Appellate Division should be reversed, with costs, defendants’ motion to dismiss the complaint granted and the certified question answered in the negative.

Bellacosa, J.

(dissenting). I respectfully disagree with the majority’s analysis and conclusion that the release in a prior Delaware action discharges defendant financial advisors from liability for professional malpractice to plaintiff shareholder in this action. The defendants here were not "expressly” named or otherwise identified in any manner, even by functional category, in the release, and they were not parties to the prior action; yet, they were fully known to all parties as essential participants in the corporate transaction.

In my view, under either New York or Delaware law requiring specificity, a clause purporting to release "anyone else”, at the very least is facially ambiguous barring summary judgment and necessitating extrinsic evidence to establish whether unnamed or otherwise unidentified parties were intended to be discharged. Courts are not able on this record to resolve this ambiguity as a matter of law, and thus I dissent and vote to affirm the Appellate Division’s denial of the motion to dismiss and would answer the certified question in the affirmative. The contrary holding of the majority contradicts and undermines General Obligations Law § 15-108, enacted to protect unwary releasors from unintended legal traps. This release set a sophisticated corporate financial trap and the court now snaps it shut, despite the statute.

In 1983, the management of a publicly held corporation, Metromedia, Inc., proposed a buyout. JWK Acquisition Corp., a company the Metromedia management had organized, was to merge with Metromedia. The result was to be that Metromedia would be converted into a private corporation. A buy-out price of $40 per share was offered, based on an estimated $1.1 billion worth of the corporation’s assets. The proposal triggered a class action lawsuit in Delaware by common shareholders charging the management with a breach of fiduciary duty for using Metromedia’s assets to convert the company to their own interests. The suit charged that management had underestimated the worth of this publicly held corporation in setting the proposed purchase price at $40 per share.

Two investment banking firms, Shearson Lehman/American Express, Inc. and Bear, Stearns & Co., the defendants in the instant action, were retained by management to render specialized professional financial advice as to whether the proposed merger was fair to the common shareholders. The investment bankers agreed with management’s estimation that the company’s assets were worth $1.1 billion and, consequently, reported that the buy-out price was fair. The common shareholders were so advised. Armed with this advice and after some negotiation, the shareholders agreed to settle the Delaware action at an agreed-upon price of an additional 69 cents per share. As part of the stipulation of settlement, the plaintiff shareholders signed the release at issue here which discharged "all claims * * * that have been or could have been asserted by plaintiffs * * * against any defendant, or against any of the officers, directors, agents, attorneys, representatives, affiliates and general and limited partners of any defendant or against anyone else”. The Delaware court approved the settlement in June 1984, and shortly thereafter the shareholders approved the merger.

Over the next two years, the "new” privately held Metromedia sold off its assets, including seven television stations and several radio stations and other businesses. By July 1986 when the last business was sold, the aggregate consideration received for all of Metromedia’s businesses was not the $1.1 billion estimated by defendants and upon which the shareholders relied in settling their claims and in approving the merger. Rather, $4.5 billion was recouped for the new owners, reflecting a "miscalculation” by defendants of more than 300% or $3.4 billion. On the pure mathematical formula originally used to value the shares, that should have amounted to perhaps $84 per share more for the shareholders.

In the face of the enormous personal profits reaped by Metromedia’s management in the sale of the corporate assets at the expense of the shareholders, plaintiff Wells, a former shareholder and a plaintiff in the Delaware action, instituted this action in New York against Shearson Lehman/American Express, Inc. and Bear, Stearns & Co., charging professional malpractice in evaluating the worth of the corporation and in advising that the buy-out price of $40 per share was fair. Defendants essentially contend they fall within the "anyone else” clause and are thus shielded from any liability, arising out of the Metromedia buyout.

We are unanimous that under common law a release given by an injured party to one tort-feasor discharged all others unless the releasor specifically stated a clear intention not to release a certain party. The common-law rule was abrogated by statute in both New York and Delaware via adoption of the Uniform Contribution Among Tortfeasors Act (New York General Obligations Law § 15-108; Del Code Annot, tit 10, § 6304 [a]). The central protective purpose of the Uniform Act is to invert the common-law rule so that other tort-feasors are not released unless the releasor expresses a clear intention to do so by express reference rather than by operation of law or by legal implication or interpretation.

The issue for us is simply whether the general term "anyone else” is ambiguous so as to bar summary judgment and to necessitate extrinsic evidence, at least as to whether the parties’ intent in the subject release is sufficiently expressed in accordance with the protective letter and spirit of General Obligations Law § 15-108; and, if so, whether the record in this case supplies extrinsic evidence, as it did in Chakov v Outboard Mar. Corp. (429 A2d 984 [Del]).

In my view, the use of the term "anyone else” in this case renders the release ambiguous as to its application to unnamed persons and to functional classes under either New York or Delaware law. The record in this litigation is incomplete and insufficient on the issue of intent in direct contradistinction to the statutes and to the Chakov analysis (supra). This should bar summary judgment to defendants in this case.

The New York version of the statute (General Obligations Law § 15-108 [a]) provides, "a release * * * given to one of two or more persons liable * * * in tort * * * does not discharge any of the other tortfeasors from liability * * * unless its terms expressly so provide” (emphasis added).

The lean words of the statute are cogent and clear. They require the releasor to "expressly” designate by name or at least by some recognizable and specific description those other tort-feasors intended to be released. The majority’s strained construction of this remedial statute functionally nullifies the purpose of the statute and impermissibly excises the word "expressly” from the statute.

Support for the plain reading of the statute is readily available in the full legislative history of the statute. The Statutory Note to the 1972 amendment provides: Thé "purpose is to remove the uncertainty reflected in court decisions concerning the rule that a general release given to one joint tortfeasor discharges all others, and to eliminate the inequities of the present rule by providing that such a release will discharge only the persons and liabilities expressly referred to therein” (see, Historical Note of Commission, McKinney’s Cons Law of NY, Book 23A, General Obligations Law § 15-108, at 717 [emphasis added]). The majority’s construction of this statute reintroduces uncertainty and inequity.

Further support for this construction of the statute is supplied by the Law Revision Commission, the drafters of the very statutory language at issue and upon whose recommendation the legislation was adopted. "This bill simply provides that when a person signs a general release, he releases only the person or persons and the liabilities named therein,” (Mem of Assistant Executive Director of Law Revision Commission, Governor’s Bill Jacket, L 1972, ch 830 [emphasis added]). The nebulous and humongous "anyone else” in this case surely fails that test.

The New York County Lawyers’ Association also urged legislative and gubernatorial approval of the measure, noting, "This amendment makes it clear that only the tortfeasors that are named are released [emphasis added]”, and the Association of the Bar of the City of New York commented that under the proposed legislation "other tortfeasors are not to be the beneficiaries of a general release or covenant not to sue unless the releasor indicates a clear intention to do so by the inclusion of an express term to that effect in the document [emphasis added]” (see, Mem of New York County Lawyers’ Assn, Governor’s Bill Jacket, L 1972, ch 830; see also, Letter to Governor’s Counsel from Association of Bar of City of NY, Committee on State Legislation, Governor’s Bill Jacket, L 1972, ch 830).

In sum, the majority’s rendition of the statute in this case is interdicted by the statute, transports the law back to where it was before the statute was enacted, and unnecessarily imposes an unfairness on the more vulnerable participants.

This is demonstrated even by the majority’s reliance on Oxford Commercial Corp. v Landau (12 NY2d 362), a case which it acknowledges as predating the statute. In that case, the subject release contained an agreement not to sue "any person whomsoever” except those specifically named. The court, applying the harsh common-law rule, held that because the defendants were not specifically named, they were discharged under the release. The majority refers to and relies upon the case as though the statute had never happened. However, New York law has come a long way in attempting to protect the investing public from financial wizards and manipulators — at least it should have.

Likewise, the Delaware version of the Uniform Act provides: "A release by the injured person of one joint tort-feasor, whether before or after judgment, does not discharge the other tort-feasor unless the release so provides” (Del Code Annot, tit 10, § 6304 [a]).

The leading cases construing the Delaware statute and providing useful guideposts here are a Delaware Supreme Court case, Chakov v Outboard Mar. Corp. (429 A2d 984, supra) and a Federal District Court case, Sellon v General Motors Corp. (521 F Supp 978 [US Dist Ct, Del]), which relied on Chakov. In both, the courts were called upon to determine on summary judgment motions whether a release employing the general term "all other persons, firms or corporations” released the defendants who were not specifically named in the release. In both cases, the courts looked to the language of the release and the course of negotiations leading up to the respective releases to determine whether the parties had manifested a clear intent that the release embrace the tortfeasor then seeking its protection. The rules which emerged were that if upon review of the motion papers there was conclusive extrinsic evidence establishing a clear intent to release the unnamed parties, then summary judgment may be granted; if, on the other hand, no clear intent could be gleaned from the language of the release itself or coupled with consideration of the course of negotiations, then a genuine issue of fact exists and summary judgment should be denied (see, Sellon v General Motors Corp., 521 F Supp, supra, at 986; Chakov v Outboard Mar. Corp., 429 A2d, supra, at 985-986). The key distinction in result and analysis between Chakov and Sellon is that in Chakov, the extrinsic evidence relating to the "course of negotiations” clearly established the parties’ intent with respect to the release. Indeed, the parties in Chakov (supra, at 986) stipulated "that the record on the question of intention [was] complete”. In the instant case, we have no evidence and no idea what the plaintiffs’ intent was in respect to the nondefendants (defendants here) in the predicate Delaware class action who played a sophisticated fiduciary role in what turned out to be a bonanza for corporate management against the interests of the shareholders.

In Sellon, interestingly, the court, after examining the language of the release as well as the course of negotiations, found the record inadequate to support a ruling on the intended scope of the release and concluded that there was a genuine issue of material fact, thus precluding a grant of summary judgment. Yet, the Delaware statute does not even have the extra "kicker” of the New York statute calling for "express” references.

Applying this analysis and history to the instant case, and bearing in mind that plaintiff is entitled to the benefits of all reasonable inferences as to the pleadings, I conclude that the Appellate Division correctly reversed the trial court’s grant of relief to defendants. I would not summarily grant relief to plaintiff either, but would deny as to both as the Appellate Division did. The language of the release, when viewed in the context of what the record discloses of the negotiation process and the participation by defendants in this action, fails to establish as a matter of law plaintiff’s intent to release the financial advisors from potential professional malpractice liability. Their fiduciary role and conflicted allegiance is so suspect as to render the likelihood of such intent highly doubtful, but both sides should be afforded the opportunity to present proof at a trial. That is all I would decide and certainly would not erect either directly or by precedential implication some unsettling and unbending rule of law. It always lays in the hands of the participants to simply and clearly express their intentions in accordance with the remedial statute.

Moreover, an examination of the course of negotiations in this case does not clear up the ambiguity created by the language of the release itself. This record already contains significant extrinsic evidence in favor of plaintiff’s contention that she never intended the release to discharge these defendants. Notably, while the release itself fails to single out "experts” or "advisors” in its litany of those released as the statute requires, those categories were expressly identified and employed in a different part of the settlement agreement in which these very defendants sought to escape liability for certain fees and expenses. That contextual clash alone creates an ambiguity about this release instrument under this statute in this case.

The irony is startling. The statute requires an express listing and there is none. The release contains no express listing when names, active participants and functional categories of persons in the underlying financial transaction — all well known at the time the release was drawn — could have been easily inserted and even were in other parts of the release. Yet, those now escaping liability despite the important consumer, public protection statute, who were in the best position to protect themselves in the first instance and had excellent legal advisers available to draft a statutorily conforming instrument, instead are additionally rewarded with an overly generous statutory interpretation which, as to these parties and as to all others from now on, nullifies the whole purpose of the statute.

I vote to affirm.

Judges Simons, Alexander, Titone and Hancock, Jr., concur with Judge Kaye; Judge Bellacosa dissents and votes to affirm in a separate opinion; Chief Judge Wachtler taking no part.

Order reversed, etc.

       Both plaintiff and the dissent light on the same single alleged ambiguity in the release: as part of the release defendants agreed to bear certain of plaintiffs’ costs and except as provided, to bear no other costs incurred by any plaintiff, class member, their "attorneys, experts, advisers, agents or representatives.” No ambiguity is created by that reference to plaintiffs’ "experts” and "advisers.” It is clear from the face of the release that only the costs of the specified persons — and no one else — were to be paid by defendants. By the same token, it is clear from the face of the release that plaintiffs’ claims against the specified persons as well as "anyone else” in connection with the transaction were to be finally put to rest by the settlement.


source: Caselaw Access Project

author: Simons, J. Bellacosa, J.

license: Public Domain

text:
    The People of the State of New York, Appellant-Respondent, v Paul Davis, Respondent-Appellant.
    Argued April 20, 1988;
    decided June 9, 1988

      POINTS OF COUNSEL

      John J Santucci, District Attorney (Felix M. Hester of counsel), for appellant-respondent.
    I. The court below improperly reversed defendant’s judgment of conviction of reckless endangerment in the first degree. (People v Graham, 41 AD2d 226; People v Register, 60 NY2d 270, 466 US 953; People v Licitra, 47 NY2d 554; People v Menard, 113 AD2d 972; People v Schoonmaker, 103 AD2d 936.) II. The count of the indictment charging criminal possession of a weapon in the second degree was sufficiently drawn and was not duplicitous. (People v Branch, 73 AD2d 230; Matter of Johnson v Morgenthau, 69 NY2d 148; People v Rivera, 77 AD2d 538; People v Ward, 107 AD2d 892; People v Bosque, 78 AD2d 986, 451 US 992; People v Barlow, 88 AD2d 668; People v Kirk, 62 Misc 2d 1078; People v Taylor, 121 AD2d 581; People v Almodovar, 62 NY2d 126; People v Asher, 94 AD2d 704.)

      Richard Joselson and Philip L. Weinstein for respondent-appellant.
    I. Where the evidence adduced at trial established only that defendant had brandished an inoperable weapon at the police officer, the court below correctly reversed his conviction of first degree reckless endangerment. (People v Register, 60 NY2d 270, 466 US 953; People v Ramirez, 55 NY2d 708; People v Trepanier, 84 AD2d 374; People v Sallitto, 125 AD2d 345; People v Richardson, 97 AD2d 693; People v Wilkens, 97 AD2d 698.) II. Defendant was denied due process when he was forced to defend against a duplicitous indictment which charged him with a single count of second degree criminal possession of a weapon based upon his alleged participation in discrete episodes, which actually encompassed two separate offenses, involving wholly unrelated complaints and completely distinct evidence of his supposed unlawful intent. (People v Keindl, 68 NY2d 410; People v Klipfel, 160 NY 371; People v Rosado, 64 AD2d 172; People v Richlin, 74 Misc 2d 906; People v Branch, 73 AD2d 230; Brown v Ohio, 432 US 161; United States v Universal Corp., 344 US 218; Matter of Johnson v Morgenthau, 69 NY2d 148; Blockburger v United States, 284 US 299; People v Luongo, 47 NY2d 418.)
   OPINION OF THE COURT

Simons, J.

Defendant was convicted after trial of first degree reckless endangerment and second degree criminal possession of a weapon. The Appellate Division modified, finding insufficient evidence to support the conviction for reckless endangerment but affirming the conviction for criminal possession of a weapon. On these cross appeals, the People maintain the reckless endangerment charge was sufficiently proven and defendant contends the count in the indictment charging him with criminal possession of a weapon should have been dismissed because it was duplicitous.

I

The People’s evidence established that at approximately 6:15 a.m. on the morning of August 1, 1982, defendant and another man confronted Ian Shillingford as he was returning home and demanded money from him, apparently to satisfy a debt. When Shillingford refused to pay them, a scuffle developed and defendant produced a pistol. He dropped it during the fight, however, and when the gun hit the ground it fired. Shillingford got away from the men and tried to run and hide but defendant found him and repeatedly struck him with the weapon. Shillingford eventually was able to retreat to his apartment.

Police Officers Farley and Freeman were in the vicinity responding to another call when a bystander, who had witnessed the incident, pointed at defendant and shouted to the police, "that’s him”. Defendant ran and the police pursued him in their patrol car. When the car came within about 20 feet of defendant, he turned, assumed a "combat stance” and pointed the gun at the windshield of the police car. He pulled the trigger but the gun did not fire. Defendant then ran toward a nearby building with the police pursuing him on foot. As he ran he again pointed the pistol at the officers and, while he was doing so, Officer Farley shot and wounded him. When the officers recovered defendant’s gun they observed a spent shell in the chamber which had not been ejected when the gun was fired.

Defendant was charged with various offenses including first degree attempted robbery, two counts of first degree reckless endangerment and one count of second degree criminal possession of a weapon. At his bench trial he moved for dismissal of the count charging him with second degree possession of a weapon arguing that it was duplicitous because it was unclear whether the indictment charged him with possessing the weapon during his altercation with Shillingford or later during his confrontation with the police. The court denied the motion and convicted defendant of second degree possession of a weapon and of one count of reckless endangerment, first degree.

The Appellate Division modified the judgment by reversing the reckless endangerment conviction. One Justice dissented in part and voted to affirm. We now affirm.

II

To decide the People’s appeal we need only answer a narrow question: does pointing a gun at another and pulling the trigger constitute reckless endangerment when a jammed cartridge prevents the gun from firing? We conclude that such conduct does not, in the words of the statute, "create a grave risk of death to another.”

Reckless endangerment in the first degree is committed when a person, under circumstances evincing a depraved indifference to human life, recklessly creates a grave risk of death to another (Penal Law § 120.25). A person acts recklessly when he is aware of, but disregards, a substantial and unjustifiable risk to the degree that his behavior does not comport with the manner in which a reasonable person would have acted under the circumstances (Penal Law § 15.05 [3]). Reckless endangerment is the lowest of three levels of crimes prohibiting reckless conduct. The statutes defining it seek to prevent the risk created by the actor’s conduct, not a particular outcome. Thus, unlike reckless conduct which produces death (depraved mind murder; manslaughter) or physical injury (assault), no injury results from reckless endangerment. The risk of injury alone sustains prosecution.

Like higher crimes having recklessness as an element, reckless endangerment is not an intent crime. Instead, determining whether the crime was committed entails "an objective assessment of the degree of risk presented by defendant’s reckless conduct” (People v Register, 60 NY2d 270, 277, cert denied 466 US 953; see also, People v Poplis, 30 NY2d 85, 89; People v France, 57 AD2d 432, 435). Because the defendant’s subjective intent is irrelevant, prior versions of the statute were read as providing that reckless endangerment was only committed where the defendant’s indiscriminate conduct imperiled a group of persons, not where he targeted his actions toward a specific victim. It is now understood, however, that the crime may be committed even when the defendant’s actions are directed against a particular individual (see, People v Graham, 41 AD2d 226; see also, People v Poplis, supra).

Reckless endangerment frequently involves the use of firearms, but no case has been found which holds that the mere threatened use of a gun is sufficient to support a reckless endangerment conviction and there are decisions holding that it does not (see, e.g., People v Richardson, 97 AD2d 693, 694). The cases generally require that the weapon be fired, or at a minimum, capable of firing (see, People v Menard, 113 AD2d 972 [conviction upheld where slugs found in floor lVz feet from where complainant had been]; People v Schoonmaker, 103 AD2d 936 [firing gun at house known to be occupied where occupants’ location in dwelling is unknown constitutes reckless endangerment]; People v Graham, 41 AD2d 226, supra [defendant two feet from complainant guilty of reckless endangerment where he held gun eight inches from her and fired to the side of her head]). Moreover, even if a gun is fired, that standing alone, is not enough to constitute commission of the crime. The use of the gun must create a risk. Thus, it has been held that shooting a pistol into the air (People v Richard son, 97 AD2d 693, supra) or in the general direction of a roadway but considerably short of it (People v Sallitto, 125 AD2d 345) does not constitute reckless endangerment. In this case, the evidence established that although defendant pulled the trigger his gun did not fire and thus his conduct could not create a risk of death to Officers Freeman and Farley.

The People contend that defendant was guilty of the type of perilous conduct that the reckless endangerment statute seeks to punish and, therefore, his conviction should be affirmed. They maintain that even though the evidence in the record established that defendant’s weapon was jammed and there was no evidence establishing that it was capable of firing when jammed, the crime was committed because the gun had been fired before and after the incident and was generally operable. They ask, in effect, that the impossibility doctrine be invoked to hold defendant guilty of reckless endangerment because he tried to shoot the officers even though it was impossible for him to do so.

Legal or factual impossibility will not provide a defense to a prosecution for attempted intentional acts because the offense consists of deliberately performing a prohibited act and impossibility does not negate intent (see, Penal Law § 110.10; People v Deresky, 137 AD2d 704, lv denied 71 NY2d 1025). Reckless endangerment, however, is defined in terms of the risk produced by defendant’s conduct, not intent, and factual impossibility eliminates the risk essential to commission of the crime (see, People v Ramirez, 55 NY2d 708, 710; see also, People v Trepanier, 84 AD2d 374 [impossibility that defendant’s attempt to commit arson by hiring another would be successful where the person he hired was an undercover police officer required dismissal of count of indictment charging reckless endangerment]). Accordingly, the Appellate Division correctly dismissed the charge.

III

On the cross appeal, defendant contends that the count of the indictment charging him with second degree criminal possession of a weapon was duplicitous because it charged him with two crimes: possessing the weapon in his confrontation with Shillingford and possessing it when he attempted to use it against the police. His premise is that second degree possession of a weapon is not a continuing crime (cf., People v Okafore, 72 NY2d 81 [decided today]). We conclude, however, that the indictment, as supplemented by the bill of particulars, only charged defendant with commission of second degree possession at the time of his confrontation with the police.

An indictment must provide the accused with fair notice of the charges against him so that he can defend himself and establish the defense of double jeopardy if an attempt is made to reprosecute him after acquittal or conviction of those charges (see, CPL 200.50; People v Keindl, 68 NY2d 410, 416, rearg denied 69 NY2d 823; People v Morris, 61 NY2d 290, 293; People v Iannone, 45 NY2d 589, 594). If a count charges more than one offense, it fails to meet these requirements and is void for duplicity (see, CPL 200.30 [1]; People v Keindl, supra, at 417; People v Klipfel, 160 NY 371; People v Rosado, 64 AD2d 172). The proscription against duplicitous counts also seeks to prevent the possibility that "individual jurors might vote to convict a defendant of that count on the basis of different offenses”, in effect, permitting a conviction even though a unanimous verdict was not reached (People v Keindl, supra, at 418; People v MacAfee, 76 AD2d 157, 159-160). However, dismissal is not automatic if the number of offenses charged by a particular count is uncertain because the precise time of the commission of the crime is not clearly stated. The defect may be cured by reference to a bill of particulars supplementing the indictment (see, People v Morris, supra, at 293-294; see also, People v Iannone, supra, at 597-598; People v Fitzgerald, 45 NY2d 574, 579-580, rearg denied 46 NY2d 837).

In this case the second count of the indictment charged that defendant committed second degree criminal possession of a weapon on August 1, 1982 when he possessed a semiautomatic pistol with the intent to use it unlawfully against another. Defendant’s demand for a bill of particulars asked only "[t]he exact time, date and place it is alleged that the defendant committed the crimes charged in the indictment.” The People responded that "the incident occurred on or about August 1, 1982 at approximately 7:10 a.m. in the vicinity of 8-10 27th Avenue, County of Queens.” This response satisfied defendant’s inquiry and pinpointed the moment of the charged crimes to the time defendant was alleged to have confronted the police, not the time of his altercation with Shillingford almost an hour earlier. Thus, the second count of the indictment, as supplemented by the bill of particulars, charged defendant with a single offense and defendant’s motion to dismiss for duplicity was properly denied. We note also that because this was a bench trial there was no possibility that the verdict would not be unanimous and defense counsel could have reminded the court that the scope of the charge had been narrowed by the bill of particulars and thus ensure that the court consider only the evidence pertaining to defendant’s altercation with the police. Instead, he sought dismissal, relief to which he was not entitled.

Accordingly, the order of the Appellate Division should be affirmed

Bellacosa, J.

(concurring in part and dissenting in part). I concur in so much of Judge Simons’ opinion as relates to the affirmance of the conviction for criminal possession of a weapon in the second degree; I dissent, however, from the portion affirming the Appellate Division’s vacatur of the conviction for reckless endangerment in the first degree. I would reverse and reinstate that count of the conviction and remit to the Appellate Division as we are required to do (CPL 470.40 [2] [b]). I reach this result essentially for the reasons stated in the dissenting in part opinion by Justice Moses Weinstein at the Appellate Division, noting additionally that this case, in my view, is governed by the principle that the People are entitled to have the conviction sustained if " ’any rational trier of fact could have found the essential elements of the crime beyond a reasonable doubt’ ”, based on a view of the evidence most favorable to the People (People v Contes, 60 NY2d 620, 621; Jackson v Virginia, 443 US 307, 319). Thus, the majority at the intermediate appellate court applied an erroneous rule of law and standard of review in deciding this case. Respectfully, I conclude that the majority in this court likewise mistakenly analyzes the reckless endangerment aspect of this case.

The People had to prove beyond a reasonable doubt that the defendant’s conduct created a grave risk of death for the court in this bench trial to have rationally reached its verdict of guilt as to the reckless endangerment count. Under People v Contes (supra), the Appellate Division analysis and ours need go no further than to note that there was sufficient evidence as a matter of law, however conflicting it might be in some respects, to support that facet of the charge.

It is indisputable that the gun had just discharged in a struggle during a failed robbery attempt and that a few minutes later, and with no break in the action, defendant assumed a crouched combat stance, pointed the loaded weapon (a 9 millimeter semiautomatic with high velocity bullets) at the windshield of the pursuing police car 20 feet away and pulled the trigger. Fortuitously, at that particular instant of the confrontation, the just previously spent shell casing had lodged in the chamber and no bullet emerged. The unrebutted testimony of a police ballistics expert was that the gun showed evidence of recent discharge, that a spent round had been recovered, and that upon test-firing the weapon both the gun and the ammunition were found to be operable. Indeed, one of the responding policemen, Officer Farley, indicated in his testimony that he perceived the risk of death to be grave throughout the incident, including after defendant pulled the trigger of his gun the first time; thus, when defendant assumed the combat stance and prepared to fire a second time at Farley’s fellow officer as the two officers were chasing defendant all on foot, Farley shot defendant before he could repeat his act.

The majority’s interpretation of the statute and its application in this instance are thus flawed. Even if "operability” and "grave risk of death” were synonymous, and even if they are to be gauged by a flash-frozen moment in eternity, which is probably too inflexible an approach, still in this case the People’s direct and circumstantial evidence on grave risk of death is enough beyond a reasonable doubt. Surely, the test of reckless endangerment in the first degree cannot be that the perpetrator must succeed and that failure in accomplishing the intended act under the grave risk created by the perpetrator somehow nullifies the crime in these circumstances. The grave risk of death was unquestionably present and proven because another squeeze of the trigger, another jarring of the gun by the mere palm of a hand to dislodge the just spent shell, or any among many other intended or fortuitous instantaneous actions, could have brought death to the pursuing officers. The grave risk of death was present throughout, and the mere fact that one firing failed does not evaporate the risk intended to be punished by the statute.

There was enough evidence in this case to support every essential element of reckless endangerment in the first degree (Penal Law § 120.25), including the aggravating operability grave risk of death component, beyond a reasonable doubt under the governing evidentiary review test (People v Contes, 60 NY2d 620, 621, supra; People v Foster, 64 NY2d 1144, 1146). Under these ordinary appellate rules concerning evidentiary review, neither the Appellate Division nor this court should go any further into an interpretative analysis of Penal Law § 120.25. The verdict on the reckless endangerment count should simply be upheld.

Judges Kaye, Titone and Hancock, Jr., concur with Judge Simons; Judge Bellacosa concurs in part and dissents in part and votes to modify in a separate opinion in which Chief Judge Wachtler and Judge Alexander concur.

Order affirmed.

       The crime must be judged by the risk created at the time of the incident not, as the dissent does, by some speculation unsupported by evidence in the record that another "squeeze of the trigger”, "another jarring of the gun by the mere palm of a hand” could have subsequently brought death to the pursuing officers.


author: Alexander, J.

text:
    Matter of Francine Rosen, Appellant, v Public Employment Relations Board, Respondent.
    Argued April 19, 1988;
    decided June 9, 1988

      POINTS OF COUNSEL

      Richard B. Wolf for appellant.
    I. PERB’s construction of the Taylor Law provision at issue is unreasonable. (Matter of Town of Mamaroneck PBA v New York State Pub. Employment Relations Bd., 66 NY2d 722; Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of Capital Newspapers v Whalen, 69 NY2d 246; Price v Price, 69 NY2d 8; Matter of Civil Serv. Employees Assn. v Helsby, 31 AD2d 325; Local 456 Intl. Bhd. of Teamsters v Town of Cortlandt, 68 Misc 2d 645.) II. The teachers were forming an employee organization and were entitled to section 209-a (1) protections.

      Martin L. Barr for respondent.
    I. Appellant has not raised the substantial evidence question. The only issue presented to this court, therefore, is whether PERB’s interpretation and application of the Taylor Law is legally permissible given the facts found by PERB. (Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of City of Albany v Helsby, 29 NY2d 433; Matter of Grade Crossing [New York Cent. R. R. Co.], 255 NY 320; People ex rel. New York & Queens Gas Co. v McCall, 219 NY 84, 245 US 345; Matter of Town of Haverstraw v Newman, 75 AD2d 874; Matter of Pell v Board of Educ., 34 NY2d 222; Matter of Village of Wayland v Public Employment Relations Bd., 61 AD2d 674.) II. PERB’s interpretation and application of the statute it is charged with administering is rational and legally permissible and should be sustained. (Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of Fisher [Levine], 36 NY2d 146; Matter of Zuckerman v Board of Educ., 44 NY2d 336; Matter of Civil Serv. Employees Assn. v Helsby, 21 NY2d 541; Eastex, Inc. v NLRB, 437 US 556; Labor Bd. v Washington Aluminum Co., 370 US 9; Boeing Airplane Co. v National Labor Relations Bd., 238 F2d 188.)
   OPINION OF THE COURT

Alexander, J.

In interpreting the scope of a public employee’s right to organize without interference under the Public Employees’ Fair Employment Act (Civil Service Law, art 14, § 200 et seq., popularly known as the Taylor Law), the Public Employment Relations Board (PERB) has determined that activities engaged in by petitioner, a college French teacher — including intermittent, informal meetings with other unorganized faculty members and presenting to their employer, the college, grievances relating to their terms and conditions of employment — did not constitute "employee organization” within the meaning of section 201 (5) and was not activity protected by section 202. PERB thereby rejected an interpretation of the Taylor Law that would extend that statute’s protection to "concerted activity” which falls short of "employee organization”. For the following reasons, we agree with PERB’s interpretation of the applicable provisions of the Taylor Law and affirm the order of the Appellate Division.

I

Petitioner, Francine Rosen, is a teacher at Dutchess Community College and at the college’s affiliated French School in Poughkeepsie, New York. The faculty of the college proper is represented by the Dutchess United Teachers; the faculty of the French School, however, is not formally organized. During the fall semester of 1980, faculty members at the French School, including petitioner, began to meet informally to discuss their concerns about various aspects of their employment. On behalf of the group, and with the knowledge and consent of at least some of them, petitioner related their grievances to the associate dean at the main campus responsible for supervising the French School. Petitioner voiced the complaints of the group during meetings with the associate dean commencing in May 1981, and continuing through 1982. The record discloses meetings and correspondence between the two concerning salary, classroom size and course load. Additionally, petitioner attempted on several occasions to resolve an individual complaint regarding her own status as a part-time employee at the college.

In January 1983, the college administration reduced petitioner’s teaching schedule by a four-hour course, thereby reducing her semester income by $1,400. Petitioner subsequently filed with PERB an improper employer practice charge, alleging that the college had retaliated against her for having exercised her right to organize in violation of Civil Service Law § 209-a (1). The Administrative Law Judge dismissed the charge, finding that the college had shown that it would have reduced petitioner’s hours — regardless of her complaints about the terms and conditions of employment at the French School — because it did not wish to afford her full-time status. Upon administrative review, however, the Board concluded that the college had indeed reduced petitioner’s hours "at least in part because [she] complained about the terms and conditions of employment at the French School”. PERB found that although petitioner’s complaints were "made with the knowledge and consent of some of the teachers at the French School after they had discussed their concerns among themselves”, there was no indication in the record that these teachers were "seeking to form an employee organization or to be represented by such an organization”. Comparing the language of section 202 to the broader provisions found in the National Labor Relations Act (29 USC § 151 et seq. [NLRA]), PERB concluded that the breadth of employee activity protected by section 202 was more narrow than that embraced by the analogous provisions in the NLRA, which explicitly protect certain "concerted activity” such as that in which petitioner engaged. PERB determined that the college had therefore not committed an improper practice under section 209-a (1), which prohibits interference with the rights guaranteed to the public employee under section 202.

Petitioner thereafter instituted the instant proceeding pursuant to CPLR article 78 and Civil Service Law § 213. Supreme Court annulled PERB’s determination and ordered petitioner reinstated with back pay. The court concluded that PERB’s interpretation of section 202 was unduly narrow, that petitioner’s activities did fall within those protected by section 202, and that the college’s reduction of petitioner’s course load in part because of her representation of the group’s grievances constituted an improper practice in violation of section 209-a (1). After observing that the right to organize is illusory if employees "can be fired * * * upon rumblings that qualitatively fall short of PERB’s standard [of what constitutes an employee organization]”, the court noted that the agency’s interpretation would have a chilling effect upon others initiating concerted activity (128 Misc 2d 628, 633). The Appellate Division reversed and confirmed the determination of PERB, holding that differences between the provisions in the Taylor Law and the corresponding provisions of the NLRA provide a rational basis for according the Taylor Law a more narrow construction. The appeal is here pursuant to leave granted by this court.

Petitioner contends that the informal meeting of the faculty members at the French School to discuss complaints regarding the terms and conditions of their employment and her presentation, on their behalf, of these grievances, constitutes an assertion of public employee rights under section 202. Moreover, petitioner urges PERB’s restrictive interpretation undermines the purpose of the statute, chills initiatives to form organizations in the workplace, and encourages public employers to retaliate against employees before signs of formal organization have surfaced.

II

Initially, we note that no question is presented on this appeal as to whether there is substantial evidence in the record to support an administrative determination (see, CPLR 7803 [4]). Rather, the issue as framed by the parties below is whether, on the undisputed facts of this case, PERB has rationally interpreted the scope of a public employee’s right to organize under section 202 as not including "concerted activity” that falls short of "employee organization” (see, CPLR 7803 [3]). An administrative agency’s interpretation of the statute it is charged with implementing is entitled to varying degrees of judicial deference depending upon the extent to which the interpretation relies upon the special competence the agency is presumed to have developed in its administration of the statute. Where interpretation "involves knowledge and understanding of underlying operational practices or entails an evaluation of factual data” within the agency’s particular expertise (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459), great deference is accorded the agency’s judgment (see, Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398, 404 [prohibited subjects of bargaining]; Matter of West Irondequoit Teachers Assn. v Helsby, 35 NY2d 46, 50-51 [mandatory subjects of bargaining]). On the other hand, where as here, the question is one of pure statutory construction "dependent only on accurate apprehension of legislative intent [with] little basis to rely on any special competence” (Kurcsics v Merchants Mut. Ins. Co., supra, at 459), judicial review is less restricted as " 'statutory construction is the function of the courts’ ” (Matter of Howard v Wyman, 28 NY2d 434, 438, quoting Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104, 108; see, Matter of Town of Mamaroneck PBA v New York State Pub. Employment Relations Bd., 66 NY2d 722, 724).

Turning then to the provisions of the Taylor Law at issue, section 209-a (1) declares that certain conduct, when deliberately engaged in by a public employer, shall constitute an improper employer practice: "[i]t shall be an improper practice for a public employer or its agents deliberately (a) to interfere with, restrain or coerce public employees in the exercise of their rights guaranteed in [section 202] for the purpose of depriving them of such rights; (b) to dominate or interfere with the formation or administration of any employee organization for the purpose of depriving them of such rights; [or] (c) to discriminate against any employee for the purpose of encouraging or discouraging membership in, or participation in the activities of, any employee organization”. Any finding of an improper employer practice under section 209-a (1), however, must be supported by a finding that the employee was coerced, restrained, discriminated against, or punished for having engaged in activity that is protected under section 202 of the Taylor Law — i.e. as a consequence of having exercised rights guaranteed by section 202. Section 202 in turn provides that "[p]ublic employees shall have the right to form, join and participate in, or to refrain from forming, joining or participating in, any employee organization of their own choosing.”

In order to apprehend the breadth of activities the Legislature sought to protect by the right to "form, join and participate in * * * any employee organization”, we look to a Federal counterpart, the National Labor Relations Act, which governs the relationship between employers and employees in the private sector (29 USC § 152 [2]; NLRA § 2 [2]). Although "the differences between the statutes are marked and undoubtedly reflect the legal and economic differences between public and private employment”, our State Legislature, in drafting the Taylor Law some 20 years ago, "drew heavily” upon statutes regulating private employer-employee relations such as the NLRA, and it is particularly appropriate to examine and compare the language of each in order to discern an intent, if there be, that the Taylor Law have either a broader or more restrictive reach (Matter of Civil Serv. Employees Assn. v Helsby, 21 NY2d 541, 546).

The provision in the NLRA corresponding to section 202 of the Taylor Law states that "[e]mployees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection” (29 USC § 157; NLRA § 7 [emphasis added]). Conspicuously absent from the formulation of a public employee’s right to organize in section 202 is the additional right guaranteed in the NLRA "to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection”. We conclude from the otherwise parallel terminology in each provision that the Legislature, by omitting from section 202 of the Taylor Law the additional reference to "concerted activity”, intended to afford a public employee only the right to form, join or participate in an employee organization. Because the Legislature has by its definition restricted the reach of section 202, it must not have intended for section 202 to protect precisely the same broad range of employee activity as is protected under section 7 of the NLRA (see, e.g., Labor Bd. v Washington Aluminum Co., 370 US 9 [seven wholly unorganized employees engaged in protected concerted activity when they walked out of machine shop protesting about cold conditions]; see also, Eastex, Inc. v NLRB, 437 US 556, 565).

Nevertheless, petitioner argues, the term "employee organization” should be interpreted as including the concerted activity at issue here. The term "employee organization” is defined in section 201 (5) of the Taylor Law as "an organization of any kind having as its primary purpose the improvement of terms and conditions of employment of public employees”. The language is broad; section 201 (5) encompasses organizations of "any kind”. Yet, the provision bears comparing to its counterpart in the NLRA, which contains in its definition of "labor organization” the additional phrase: "or any agency or employee representation committee or plan” (29 USC § 152 [5]; NLRA § 2 [5]). Clearly, section 201 (5) contemplates a more limited range of what may permissibly constitute an employee organization than does the NLRA. Thus, we conclude, as did PERB, that the omission of additional language that would have expanded the definition of employee organization evinces a legislative desire that the Taylor Law protect the formal organization of employees, or efforts to form an actual organization, rather than activity, albeit concerted, that is an informal and infrequent airing of grievances without recognized representatives (see, e.g., Matter of Civil Serv. Employees Assn. v Newman, 90 AD2d 114, 117 [indicia of organization included selection of name for organization, election of officer, and discussion of proposed constitution]).

Unquestionable omissions from the Taylor Law of certain rights explicitly accorded in analogous provisions of the NLRA reflect an effort to advance concerns peculiar to the Taylor Law — such as the promotion of "harmonious and co-operative relationships between government and its employees” and the prevention of "interruptions of government operations” — that are inapplicable under the NLRA (Matter of Zuckerman v Board of Educ., 44 NY2d 336, 342; Civil Service Law § 200). Manifestly, the Legislature sought to exclude from a statutory scheme regulating public employment certain rights and advantages conferred upon those in the private sector (see, e.g., Civil Service Law § 200 [public employees have no right to strike]). Not only is the scope of the protected right to organize drawn more restrictively in section 202 of the Taylor Law than in section 7 of the NLRA, but a comparison of the corresponding definitions of the term employee organization reveals that the Taylor Law was not intended to protect unorganized — though concerted — activity. Having concluded that petitioner and the other teachers had not formed, or sought to form, an employee organization, and had not exercised any right guaranteed by section 202, PERB correctly determined that the college therefore did not commit an improper employer practice within the meaning of section 209-a (1).

Differences in language and definition notwithstanding, petitioner urges that exclusive reliance on the NLRA in reaching a narrower construction of the Taylor Law, contravenes section 209-a (3) of the Taylor Law, which provides that "[i]n applying this section [209-a], fundamental distinctions between private and public employment shall be recognized, and no body of federal or state law applicable wholly or in part to private employment, shall be regarded as binding or controlling precedent.” To be sure, this provision prohibits reliance on the NLRA itself, and case law interpreting that statute, as mandating a particular result. It does not, however, prohibit a comparison of the two statutes and the body of case law interpreting each in order to ascertain the meaning of provisions in the Taylor Law, and to discern our Legislature’s intent in drafting them. Finally, petitioner’s insistence that this interpretation chills concerted efforts preparatory to actual formation of an employee organization is misplaced here. As PERB found, there is no evidence in this record that the teachers — informally airing their grievances over a period of approximately two years — were seeking to form, or be represented by, an employee organization. Moreover, the Taylor Law makes it an improper employer practice to interfere with the formation of an employee organization (see, Civil Service Law § 209-a [1]).

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

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

Order affirmed, with costs.

      . In previous proceedings, PERB determined that petitioner is a public employee and that the college is a public employer within the meaning of Civil Service Law § 201 (6) (a); (7) (a).

      . The French School is operated by the college pursuant to a contract with IBM Corp. to provide elementary and secondary education to the dependent children of IBM France employees who have been assigned to work for IBM in Poughkeepsie, New York.

      . PERB rejected the college’s assertion that it cut petitioner’s teaching time in response to her continued requests for full-time status because that assertion was inconsistent with the fact that petitioner was permitted to teach well over the requisite number of hours for full-time status even after the cut.

      . The entire definition reads as follows: "The term 'labor organization’ means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work”.