text:
    The People of the State of New York, Respondent, v Marion Robinson, Appellant.
    Argued September 12, 1978;
    decided October 26, 1978

      POINTS OF COUNSEL

      Daniel Markewich and Maurice Frager for appellant.
    I. The verdict must be set aside and a new trial ordered for failure to comply with the mandate of CPL 310.50 (subd 2). (People v Salemmo, 45 AD2d 101, 38 NY2d 357; People v Lunsford, 81 Misc 2d 985; People v Flowers, 44 AD2d 842; People v Quilles, 48 AD2d 933; People v Williams, 49 AD2d 513; People v Hayes, 43 AD2d 99, 35 NY2d 907.) II. The prohibition against double jeopardy requires dismissal of the indictment upon a reversal of the judgment. (People v Williams, 49 AD2d 513.) III. The verdict must be set aside because the Grand Jury had no power to return a superseding indictment after "commencement of a trial” of the original indictment. (People v Harper, 37 NY2d 96; People ex rel. Bullock v Hayes, 215 NY 172; People ex rel. Eastman v La Valle, 12 AD2d 550, 366 US 966.) IV. A new trial must be ordered because the court erroneously charged the jury that appellant’s failure to testify must give rise to no "presumption” against him. (People v Carlton, 48 AD2d 775; Griffin v California, 380 US 609; Bruno v United States, 308 US 287.) V. A new trial must be ordered because under the circumstances the Allen charge to this deadlocked jury was coercive and otherwise improper. (People v Sharif, 45 AD2d 666, 38 NY2d 751; People v Graham, 48 AD2d 646, 39 NY2d 775; People v Hill, 44 AD2d 813.) VI. The verdict must be set aside because of the failure adequately to charge burden of proof.

      Robert M. Morgenthau, District Attorney (Charles H. Solomon and Robert M. Pitler of counsel) for respondent.
    I. Defendant’s guilt was proved beyond a reasonable doubt. (People v Morales, 37 NY2d 262; People v Rivera, 53 AD2d 819; People v Diaz, 53 AD2d 587; People v Discala, 45 NY2d 38; People v Asan, 22 NY2d 526; People v Henderson, 41 NY2d 233; People v Malave, 21 NY2d 26; People v Mussenden, 308 NY 558; People v Brown, 62 AD2d 715; People v Smoot, 59 AD2d 898; People v Hamlin, 58 AD2d 631.) II. The superseding indictment upon which defendant was tried was valid. (People v Rodriguez, 11 NY2d 279; People v Leyra, 1 NY2d 199; People v Groh, 57 AD2d 389; People v Potter, 50 AD2d 410; People v Puig, 85 Misc 2d 228.) III. Defendant was not prejudiced by the court’s failure to resubmit the case to the jury. (People v Britt, 43 NY2d 111; United States v Kahan, 479 F2d 290, 415 US 239; United States v Howard, 507 F2d 559; People v Pyles, 44 AD2d 784; People v Lee, 39 NY2d 388; People v Grier, 37 NY2d 847; People v Rivers, 59 AD2d 847; People v Dunbar, 59 AD2d 622; People v Daughtry, 86 Misc 2d 397, 38 NY2d 972; People v Flowers, 44 AD2d 842; People v Salemmo, 38 NY2d 357.) IV. The court’s instructions to the jury were in all respects proper. (People v Robinson, 36 NY2d 224; People v Kibbe, 35 NY2d 407; People v Barbato, 254 NY 170; People v Brown, 62 AD2d 715; People v Trombino, 238 App Div 61, 262 NY 689; People v Rabinowitz, 290 NY 386; People v Lee, 57 AD2d 905; People v Perez, 54 AD2d 742; People v Lee, 51 AD2d 557; People v Chestnut, 42 AD2d 594.)
   OPINION OF THE COURT

Jasen, J.

Appellant was arrested and charged in a six-count indictment with criminal sale of a controlled substance in the second (Penal Law, § 220.41, subd 1) and third (Penal Law, § 220.39, subd 1) degrees, two counts of criminal possession of a controlled substance with intent to sell in the third degree (Penal Law, § 220.16, subd 1), and criminal possession of a controlled substance in the fifth (Penal Law, § 220.09, subd 1) and seventh (Penal Law, § 220.03) degrees. Put simply, the indictment alleged appellant’s criminal participation in two separate drug transactions, for which appellant was charged duplicatively with criminal sale, criminal possession with intent to sell, and simple possession of a controlled substance.

Upon submission of the case to the jury, the trial court instructed the jury to consider, in the alternative only, the inclusory concurrent counts of criminal possession with intent to sell and simple possession charged in each of the two prongs of the indictment. The court further instructed the jury that although it could render a verdict of guilty on either of the inclusory concurrent counts charged for each of the two drug transactions, it could not return a verdict of guilty on more than one.

Notwithstanding these instructions, the jury returned a verdict acquitting appellant of the sale counts, but convicting appellant of both criminal possession with intent to sell and simple possession of a controlled substance for each drug transaction alleged in the indictment. After the recording of the verdict on the minutes, the trial court dismissed, sua sponte, the two counts of the indictment charging appellant with simple possession of a controlled substance. Appellant’s counsel objected to the court’s action, arguing that the jury had apparently misunderstood the court’s instructions resulting in a verdict which was both inconsistent and illegal. Counsel urged resubmission of the case to the jury to permit reconsideration of its verdict.

Upon polling the jury and confirming the jury’s intention to convict appellant of both possession with intent to sell and simple possession of a controlled substance, the trial court refused to resubmit the case to the jury, concluding that the verdict was neither - inconsistent nor illegal. On appeal, the Appellate Division affirmed, with two Justices dissenting. There should be an affirmance.

CPL 310.50 (subd 2) provides in pertinent part: "If the jury-renders a verdict which in form is not in accordance with the court’s instructions or which is otherwise legally defective, the court must explain the defect or error and must direct the jury to reconsider such verdict, to resume its deliberation for such purpose, and to render a proper verdict.” Citing this court’s decision in People v Salemmo (38 NY2d 357), appellant maintains that the jury’s failure to comply with the trial court’s instruction to consider the inclusory concurrent counts of the indictment in the alternative only and to render a verdict of guilty on no more than one of these counts, requires, by itself, resubmission of the case to the jury for reconsideration of its verdict. We reject appellant’s literal interpretation of subdivision 2 of section 310.50 and hold that absent the return of a verdict about which confusion exists as to the intention of the jury, the jury’s failure to comply with the court’s instructions does not, per se, require resubmission of the case to the jury for reconsideration of its verdict.

In so holding, we view appellant’s reliance on People v Salemmo (supra) as misplaced. In Salemmo, the defendant was charged in a three-count indictment with criminal sale of a dangerous drug, criminal possession of a dangerous drug with intent to sell, and criminal possession of a dangerous drug. The trial court instructed the jury to return a verdict either convicting the defendant of one of the counts or acquitting him of all three counts. The jury returned a verdict of guilty on the first two counts and not guilty on the count charging simple possession. Concluding that the verdict was not in accordance with its instructions, the trial court resubmitted the case to the jury, which upon reconsideration returned a verdict finding the defendant guilty solely of that count charging him with criminal possession of a dangerous drug. (Id., at p 359.)

On appeal to this court, the defendant in Salemmo argued that subdivision 2 of section 310.50 precluded the trial court’s resubmission of the third count charging the defendant with criminal possession of a dangerous drug. In support of this contention, the defendant directed our attention to additional language in subdivision 2 of section 310.50, which provides: "[I]f it is clear that the jury intended to find a defendant not guilty upon any particular count, the court must order that the verdict be recorded as an acquittal of such defendant upon such count.” In affirming the defendant’s conviction, we held the cited statutory exception precluding resubmission of an indictment count inapplicable because of our determination that it was not possible to conclude under the circumstances of Salemmo " 'that the jury had actually intended to find a defendant not guilty of the third count.’ ” (Id., at p 361.)

The posture in which Salemmo came before this court required our consideration of only one issue: whether CPL 310.50 (subd 2) precluded resubmission of the third count of the indictment. We had no occasion to address the issue whether, in the first instance, the jury’s failure to comply with the trial court’s instructions mandated resubmission of the case to the jury for reconsideration of its verdict. In addressing this point today, we are of the opinion that CPL 310.50 (subd 2) does not establish a per se rule requiring, in all situations, the resubmission of a case to the jury where the latter has failed to comply with the court’s instructions. On the contrary, we believe that resubmission is required only where the verdict returned by the jury exhibits a confusion on the part of the jury such that its intention with respect to individual counts of the indictment is uncertain.

In the instant case, it is abundantly clear that the jury intended to convict appellant of criminal possession of a controlled substance with intent to sell. Its additional finding that appellant was guilty of possession of a controlled substance was mere surplusage, in no way indicative of an inherent inconsistency. (United States v Howard, 507 F2d 559, 563.) In fact, to a jury unschooled in the doctrine of lesser included offense, a verdict of guilty on those counts of the indictment charging criminal possession with intent to sell as well as those charging criminal possession of a controlled substance must appear quite consistent. To be distinguished is the factual situation presented in Salemmo (supra), in which the jury returned a verdict convicting the defendant of criminal sale of a dangerous drug and possession of a dangerous drug with intent to sell, but acquitting him of simple possession. In such a case, the jury’s apparent confusion is evident in its return of an inherently inconsistent verdict.

In sustaining the action of the trial court in the present case, we note that appellate courts, including this court, have not infrequently reversed convictions and dismissed lesser inclusory concurrent counts of an indictment where, under no reasonable view of the facts, the defendant could have committed the greatest offense without having concomitantly committed the lesser included offenses. (See, e.g., People v Johnson, 39 NY2d 364; People v Lee, 39 NY2d 388; People v Grier, 37 NY2d 847; People v Rivers, 59 AD2d 847; People v Rodriguez, 54 AD2d 949; People v Lugo, 53 AD2d 650; People v Pyles, 44 AD2d 784.) Admittedly, these cases did not turn on the precise question at issue today, inasmuch as the trial court in those cases apparently did not instruct the jury to consider the lesser inclusory concurrent counts of the indictment only in the alternative. However, as we have previously stated, absent an indication of confusion clouding the jury’s intent in returning a verdict, we see no reason why the trial court cannot dismiss, as appellate courts have, lesser inclusory concurrent counts of an indictment upon the return of a verdict finding the defendant guilty of a greater count.

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

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

Order affirmed.


source: Caselaw Access Project

author: Gabrielli, J.

license: Public Domain

text:
    Louis Mandels, Appellant, v Liberty Mutual Insurance Company, Respondent, et al., Defendants.
    Submitted September 13,1978;
    decided October 26,1978

      POINTS OF COUNSEL

      Norman H. Dachs and Beth J. Goldmacher for appellant.
    I. Application of the amendment to the facts at bar is prospective in nature and in accord with the legislative intent. (State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587; Bender v Jamaica Hosp., 40 NY2d 560; Becker v Huss Co., 43 NY2d 527.) II. The issue herein raised should be resolved by the rules of construction applied in Becker v Huss Co. (Becker v Huss Co., 43 NY2d 527.)
    A. Paul Goldblum for respondent.
    I. The Legislature did not intend to enlarge the insurance companies’ obligation with respect to accidents occurring prior to August 1, 1976. (State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587; Becker v Huss Co., 43 NY2d 527.) II. Plaintiffs liability, although yet inchoate, arose before the effective date of the statute. (Martin v Dierck Equip. Co., 43 NY2d 583; Klinger v Dudley, 41 NY2d 362.) III. The contrary interpretation by the court below is unconstitutional.
   OPINION OF THE COURT

Gabrielli, J.

This case calls for our interpretation of subdivision 3 of section 167 of the Insurance Law as amended by chapters 616 and 617 of the Laws of 1976. Prior to the enactment of these amendments that section had excluded from automobile liability insurance coverage (unless the policy expressly provided otherwise) "liability of an insured because of death of or injuries to his or her spouse or because of injury to, or destruction of property of his or her spouse”. This provision applied both to direct suits between spouses and to actions where a third party, upon being sued by the injured spouse, impleaded the insured spouse under the principles of indemnification and contribution (State Farm Mut. Auto. Ins. Co. v Westlake, 35 NY2d 587).

In order to overcome the impact of Westlake upon inter-spousal suits and resulting satellite claims, and upon the recommendation of the Law Revision Commission, the Legislature amended the exclusion contained in subdivision 3 of section 167 to provide, by chapter 616 of the Laws of 1976, that the exclusion would "apply only where the injured spouse, to be entitled to recover, must prove the culpable conduct of the insured spouse”. It was then further provided that the act was to take effect immediately. However, by chapter 617 of the Laws of 1976, the Legislature promptly amended chapter 616 to provide that the amendment to subdivision 3 of section 167 of the Insurance Law was to take effect on August 1, 1976, and "apply to all causes of action arising on or after such date.” The issue presented here is whether the amendment affects third-party actions commenced after August 1, 1976, but involving accidents that occurred prior to that date.

The facts giving rise to the present controversy can be simply stated. Plaintiff Louis Mandéis was the owner-operator of an automobile involved in a collision on May 30, 1976. His wife, Sophie Mandéis, was a passenger and suffered injuries. In October, 1976, she commenced suit against the owner and operator of the other vehicle, and the defendants in that action impleaded Louis Mandéis by service of a third-party summons and complaint on or about November 17, 1976.

Plaintiff requested that his auto liability insurer, Liberty Mutual Insurance Company, defend and indemnify him in the third-party action. Liberty disclaimed, asserting that the recent amendments to subdivision 3 of section 167 apply only when the accident involved occurred after August 1, 1976. Plaintiff thereupon commenced this action for a declaration of his insurer’s obligation under the policy.

Plaintiff would have us interpret these amendments to require his insurer to defend any third-party action commenced after August 1, 1976, regardless of when the underlying accident occurred. Under this theory insurers would be responsible for defending third-party claims arising from accidents that occurred prior (and in some cases several years prior) to the amendments, at a time when such an insurer had no liability under the existing statutory scheme. This result would necessarily occur since the applicable Statute of Limitations for third-party actions does not begin to run until the judgment in the main action has been paid (see Bay Ridge Air Rights v State of New York, 44 NY2d 49).

The 1976 amendments do not specifically mention or refer to third-party claims; their focus is limited to direct suits between spouses. It is clear that the provision establishing the effective date also refers to this main cause of action, which arises immediately upon the occurrence of the accident; and it necessarily follows that the amendment by chapter 617, insofar as it affects an insurer’s obligation to respond to a third-party claim, is likewise limited to those situations where the main claim or cause of action arises on or after such date. Thus, the amendments to subdivision 3 of section 167 of the Insurance Law apply only where the accident giving rise to possible liability occurred on or after August 1, 1976; and for accidents occurring before that date the rule of Westlake excludes third-party suits from insurance coverage.

A contrary result would be an illogical interpretation of the legislative change and indeed would provide for inequitable results. To say that the Legislature addressed itself to the main tort cause of action in its substantive enactment but then spoke to the third-party cause of action in establishing the effective date is an interpretation that is both unrealistic and unreasonable, and will not be adopted. Where, as here, the Legislature clearly set the effective date, we are required to follow that mandate (cf. Becker v Huss Co., 43 NY2d 527).

It follows, therefore, that since the accident here involved occurred prior to August 1, 1976, the Appellate Division correctly determined that defendant Liberty Mutual Insurance Company had no obligation to defend or indemnify plaintiff.

Accordingly, the order appealed from should be affirmed, with costs.

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

Order affirmed.


author: Cooke, J.

text:
    In the Matter of Charles W. Bates, Individually and as the Westchester County Commissioner of Social Services, Respondent, v Philip L. Toia, Individually and as the New York State Commissioner of Social Services, Appellant.
    Argued September 14, 1978;
    decided October 26, 1978

      POINTS OF COUNSEL

      Louis J. Lefkowitz, Attorney-General (Diane L. De Furio and Jean M. Coon of counsel), for appellant.
    The Department of Social Services regulations which extend ADC benefits to unborn children are valid and have a reasonable basis in law. (Matter of Rankin v Lavine, 50 AD2d 1091, 41 NY2d 911; Burns v Alcala, 420 US 575; Wisdom v Norton, 507 F2d 750; Matter of Howard v Wyman, 28 NY2d 434; Rosado v Wyman, 397 US 397; Matter of Boines v Lavine, 71 Misc 2d 259, 44 AD2d 765, 34 NY2d 519; Matter of Catoe v Lavine, 51 AD2d 545, 39 NY2d 709.)

      Samuel S. Yasgur, County Attorney (Jonathan Lovett of counsel), for respondent.
    The New York State Social Services’ regulations which authorize the payment of aid to unborn children are unlawful. (Burns v Alcala, 420 US 575; King v Smith, 392 US 309; Matter of Derocha v Berger, 55 AD2d 1042; Shapiro v Thompson, 394 US 618; Matter of Corr v Westchester County Dept. of Social Servs., 33 NY2d 111; Matter of Marx v Bragalini, 6 NY2d 322; Matter of Howe, 207 Misc 972, 286 App Div 892, 309 NY 1013; Matter of Lazarus, 294 NY 613; People ex rel. Mosbacher v Graves, 254 App Div 438.)
   OPINION OF THE COURT

Cooke, J.

We deal here with the validity of State regulations entitling an indigent woman to public assistance on behalf of her unborn child.

Petitioner, in his capacity as Westchester County Commissioner of Social Services, commenced this article 78 proceeding, later converted into an action for a declaratory judgment (CPLR 103, subd [c]), to have declared invalid certain Department of Social Services regulations. Those regulations (18 NYCRR 352.30 [c], 360.5 [g], 369.2 [a] [1] [i]) permit eligible women to claim recurring Aid to Families with Dependent Children (AFDC) grants after the fourth month of a medically verified pregnancy.

Special Term held that respondent, the New York State Commissioner of Social Services, had not proceeded illegally in adopting the challenged regulations and, consequently, that the regulations were valid. A closely divided Appellate Division reversed (60 AD2d 459, 463). We now reverse that determination.

The AFDC program is one of the four major categorical assistance plans provided for by the Social Security Act of 1935 (US Code, tit 42, § 301 et seq.; see Rosado v Wyman, 397 US 397, 408, n 10). Fifty percent of the program is financed by the Federal Government, the remaining costs being divided equally between the State and the local public welfare district. Although State participation in the AFDC program is essentially voluntary, when a State does elect to participate it is required to submit an AFDC plan to the Department of Health, Education and Welfare (HEW) for approval by the Secretary (US Code, tit 42, §§ 601-604; see Hagans v Lavine, 415 US 528, 530; Social Services Law, § 358, subd 1). So long as its plan meets the requirements of the Federal act, a State is given considerable latitude in determining both the standard of need to be employed in ascertaining eligibility for benefits and the level of benefits to be paid to eligible recipients (Rosado v Wyman, supra, at p 408).

Recognizing that indigent women do not have the means to obtain adequate prenatal care, HEW, through its regulations, permits payment of AFDC benefits to expectant mothers "with respect to an unborn child when the fact of pregnancy has been determined by medical diagnosis” (45 CFR 233.90 [c] [2] [ii]). The commissioner has adopted this voluntary portion of the AFDC program. Thus, the commissioner has determined by regulation: "In determining the net available income of a family household in which there is a pregnant woman, such family household shall be considered as increased by one person from the fourth month of pregnancy which has been medically verified” (18 NYCRR 360.5 [g]). The import of the State regulations is manifest. After the fourth month of a medically verified pregnancy, an unborn child is treated as a dependent child and is entitled to the same assistance under the AFDC program as is afforded a dependent child after birth (18 NYCRR 352.2 [b], 369.1 [b], 369.2 [a] [1], [i] [4] [iv], 369.3 [a] [5]; see Matter of Rankin v Lavine, 50 AD2d 1091, 1092, affd 41 NY2d 911).

Petitioner mounts his assault against the challenged regulations on two fronts. First, he asserts that HEW is without authority to approve Federal participation and thus provide Federal funds to those States electing to grant AFDC benefits to the unborn. Reliance is placed principally upon Burns v Alcala (420 US 575), wherein the Supreme Court held that unborn children are not included within the definition of "dependent child” in the Social Security Act (US Code, tit 42, § 602) and that States are therefore not required to make AFDC benefits available to pregnant women (420 US, at pp 577-578, supra; see, also, Wisdom v Norton, 507 F2d 750, 755, reh den 520 F2d 938). Hence, petitioner contends that since State statutes and regulations pertaining to AFDC benefits must be interpreted in a manner consistent with Federal law (see Matter of Boines v Lavine, 44 AD2d 765, 766, mot for lv to app den 34 NY2d 519, cert den 419 US 1040) and since Federal law does not authorize such expenditures on behalf of unborn children, the challenged regulations are invalid.

There is, however, a fatal flaw in petitioner’s argument. The Burns court held only that States are not required to provide AFDC benefits to pregnant women for their unborn children. It left open the option afforded the States to make Federally funded AFDC benefits available for assistance to pregnant women on behalf of their unborn children (420 US, at pp 584-586, supra; see Matter of Rankin v Lavine, 41 NY2d 911, 912, supra; see, generally, Note, Eligibility of the Unborn for AFDC Benefits: The Statutory and Constitutional Issues, 54 Boston U L Rev 945). There being no conflict between the challenged regulations and Federal law, this argument must fail.

Petitioner’s second prong of attack lies in his assertion that respondent State commissioner is without authority under the Social Services Law to promulgate the challenged regulations. In this regard, we note initially that our scope of review is rather limited. So long as the construction given the relevant statutes by the commissioner in promulgating these regulations is not irrational or arbitrary, judicial inquiry is foreclosed (Matter of Ward v Nyquist, 43 NY2d 57, 63; Matter of Howard v Wyman, 28 NY2d 434, 438). But, while the scope of our review may be limited, it is not toothless, and administrative rules are not judicially approved in a pro forma manner. The Legislature may constitutionally delegate rule-making authority to an administrative agency only if it furnishes the agency with at least a broad outline within which to act (Matter of Levine v Whalen, 39 NY2d 510, 515-516). Certainly, the commissioner has no authority to create rules and regulations without a statutory predicate either express or implied. Such action would be tantamount to legislation by administrative fiat and, by definition, irrational (Matter of Harbolic v Berger, 43 NY2d 102, 109; Matter of Jones v Berman, 37 NY2d 42, 53).

Viewed from this perspective, there can be no question but that the regulations challenged here are valid. The commissioner is vested by statute with broad rule-making power to effectuate the duties of his office (Social Services Law, §§ 20, 34), and more specifically with respect to the administration of the State AFDC program is directed to "act for the state in any negotiations relative to the submission and approval of [an AFDC plan] and make any arrangement which may be necessary to obtain and retain such approval and to secure for the state the benefits of such federal act relating to aid to dependent children” (§ 358, subd 1). Thus, it is evident that the Legislature has given the commissioner broad authority to maximize the Federal AFDC reimbursement rate available to the State by conforming the State plan to the optional payment provisions of the Federal program.

By furnishing indigent women with AFDC benefits so that proper prenatal care so vital to physical and mental well-being of the unborn child can be provided, both the Legislature and commissioner have recognized and fulfilled their constitutional obligation (NY Const, art XVII, § 1) to aid the needy (see Matter of Catoe v Lavine, 51 AD2d 545, mot for lv to app den 39 NY2d 709). In effect, the challenged regulations do nothing more than breathe life into the guarantee of the provision of AFDC assistance immediately to post-partum children in conformance with both the State and Federal regulatory scheme (see Matter of Rankin v Lavine, 41 NY2d 911, supra; Matter of Boines v Lavine, 44 AD2d 765, mot for lv to app den 34 NY2d 519, cert den 419 US 1040, supra). Although the Legislature certainly could have provided otherwise and the commissioner could have chosen not to make these benefits available, the relevant statutes, as presently written, explicitly empower the commissioner to promulgate the challenged regulations. It cannot be said, therefore, that these regulations are anything but valid.

Accordingly, the order of the Appellate Division should be reversed, with costs, and judgment granted in favor of respondent declaring subdivision (c) of section 352.30, section 369.2 (subd [a], par 1, cl [i]) and subdivision (g) of section 360.5 of title 18 of the New York Codes, Rules and Regulations, to be valid (see Lanza v Wagner, 11 NY2d 317, 334).

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

Order reversed, with costs, and judgment granted in favor of the New York State Commissioner of Social Services in accordance with the opinion herein.


text:
    Gerald R. Hadden, Respondent, v Consolidated Edison Company of New York, Inc., Appellant.
    Argued September 20, 1978;
    decided October 26, 1978

      POINTS OF COUNSEL

      James M. Leonard for appellant.
    I. The decision of the court below distorts the mandate of the Court of Appeals, ignores its directive, and subverts its effect by professing to determine this case on issues already concluded otherwise by this court. (Ex Parte Sibbald v United States, 37 US 488; Rivara v Stewart & Co., 241 NY 259; Erbe v Lincoln Rochester Trust Co., 5 NY2d 886; Matter of Morton, 261 App Div 406; Matter of A. H. Du Grenier, Inc. v McGoldrick, 283 NY 685; Matter of Falanga, 36 AD2d 918, 30 NY2d 497; Matter of Orans, 24 AD2d 217; Hornstein v Podwitz, 229 App Div 167, 254 NY 443.) II. The decision of the court below seriously misconceives the effect of a fraudulent representation. (Angerosa v White Co., 248 App Div 425, 275 NY 524; State St. Trust Co. v Ernst, 278 NY 104; Continental Nat. Bank v National Bank of Commonwealth, 50 NY 575.) III. The court below impermissibly redetermined facts found by the trial court. (Fitzpatrick v

      International Ry. Co., 252 NY 127; Mansbacher v Prudential Ins. Co. of Amer., 273 NY 140, 274 NY 487; Foussadier v Bartolo, 13 Misc 2d 461.)

      Victor Josiah Herwitz for respondent.
    I. The order appealed from complies with the remand order issued by this court on the prior appeal (34 NY2d 88, 100). II. The evidence supports the order appealed from. III. The order of reversal and remand issued by this court on the prior appeal was obtained by false statements made in the affidavits submitted by defendant on the summary judgment motions.
   OPINION OF THE COURT

Cooke, J.

We face the question of whether plaintiffs misrepresentation as exerted upon defendant employer was of such a character as to vitiate a waiver of the latter’s right to discharge plaintiff before he retired on a pension.

Plaintiff Hadden, a former vice-president of defendant Consolidated Edison Company of New York, Inc. [Con Edison], instituted this action in which he seeks to recover damages and secure a declaration of entitlement to monthly retirement benefits under defendant’s pension plan. Defendant counterclaimed for a contrary pronouncement and for disgorgement by plaintiff of moneys and other things of value received from persons connected with certain construction firms doing business with defendant during a period when plaintiff was in charge of its construction. Upon appeal from a previous summary judgment determination, this court remanded for resolution of the issue of whether "Con Edison’s waiver of its right to discharge Hadden before his retirement [was] knowingly induced by Hadden through material misrepresentation” (34 NY2d 88, at p 100).

Trial Term, upon remand, entered judgment dismissing the complaint and declaring that the action of defendant rescinding the pension rights granted to plaintiff was approved and that said pension rights are and have been without force and effect since said rescission. A majority of the Appellate Division, viewing the matter differently, vacated the complaint’s dismissal and declared that plaintiff is entitled to pension payments in addition to those already received, that defendant’s rescission of those benefits was disapproved and that said rights are in full force and effect.

Based on testimony, the trial court found that Hadden had received, admittedly, a total of $16,000 in bribes from Fried, and a secret gift of $14,750 and approximately $1,000 in expenses from Benesch, all of which he had concealed and at trial conceded to be wrong. As a consequence of the affirmative misrepresentation that he had received no such gifts or payments, Con Edison forebore from discharging Hadden. The Appellate Division majority (58 AD2d 154, 158), in modifying, found: "Proof of concealment there was, but not of an agreement not to discharge”, and concluded: "It is a contradiction in terms to permit rescission of an agreement that never was.”

It was not necessary that the misrepresentation or concealment result in a discrete "agreement not to discharge” in order to be the pivot for legal redress. Generally and excepting instances where there would be transgressions of public policy, all rights and privileges to which one is legally entitled, ex contractu or ex debito justitiae, may be waived (Matter of Hills, 264 NY 349, 354; People ex rel. McLaughlin v Board of Police Comrs. of City of Yonkers, 174 NY 450, 456; Matter of Moore, 165 Misc 683, 685, affd 254 App Div 856, affd 280 NY 733). A waiver, the intentional relinquishment of a known right (Matter of Meachem v New York Cent. R. R. Co., 8 NY2d 293, 299), may be accomplished by express agreement or by such conduct or failure to act as to evince an intent not to claim the purported advantage (Matter of City of Rochester, 208 NY 188, 197; People ex rel. McLaughlin v Board of Police Comrs. of City of Yonkers, supra, at pp 456-457, 458-459).

The conceded acceptance of bribes and gifts by the servant, Hadden, from those doing business with his employer and in contravention of the master’s rules constituted such grave misconduct and dishonesty as to justify the servant’s discharge (Graves v Kaltenbach & Stephens, 205 App Div 110, 111, affd 237 NY 546; cf. Berg v Just Because, 205 App Div 31, 32-33; see Restatement, Agency 2d, §§ 380, 381). This general right to discharge was subject to waiver by words or conduct manifesting an election to forego the power or privilege to terminate (cf. Twentieth Century-Fox Film Corp. v Lardner, 216 F2d 844, 850, 852-854, cert den 348 US 944; 5 Williston, Contracts [3d ed], § 725); but any relinquishment of the option to dismiss induced by such deceit and device as to constitute fraud would be ineffective and not binding, as "fraud vitiates everything which it touches” (Angerosa v White Co., 248 App Div 425, 431, affd 275 NY 524).

Hadden as an officer and employee of defendant was bound at all times to exercise the utmost good faith in the performance of his duties for the principal (Jones Co. v Burke, 306 NY 172, 187-188). When his dealings with the suppliers and a political figure were called into question, his failure to disclose material facts to the employer, including his conceded statement that he had done nothing wrong, was calculated to induce a false belief and was the predicate for reliance. At this juncture, the distinction between concealment and affirmative misrepresentation faded into legal insignificance, both being fraudulent (cf. Donovan v Aeolian Co., 270 NY 267, 271; Matter of First Citizens Bank & Trust Co. of Utica v Estate of Sherman, 250 App Div 339, 345). The inaction or refraining from action on the part of the employer Con Edison effected by such purposeful concealment of material facts was as culpable and actionable as where fraud induces positive action (Stern Bros. v New York Edison Co., 251 App Div 379, 381; Continental Ins. Co. v Mercadante, 222 App Div 181, 186-187; Hillel v Motor Haulage Co., 140 NYS2d 51, 54, affd 1 AD2d 782; cf. Rothmiller v Stein, 143 NY 581, 586-588).

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

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

Order reversed, etc.

      . The Court of Appeals did not disturb that part of the order of Special Term which granted Con Edison’s motion for summary judgment on its second counterclaim to the extent of $16,000, plus interest, representing moneys and a gift certificate from Fried who was connected with two of the construction companies, which order was affirmed by the Appellate Division (34 NY2d, at pp 92-93). Neither did the Court of Appeals consider the previous finding of issues of fact requiring trial in respect to Con Edison’s claim for a balance of $15,750 under the second counterclaim, i.e., for $14,750 profit realized by Hadden as a result of stock dealings with and $1,000 in airline tickets and hotel accommodations from Benesch, the president of another construction company.

        . The Appellate Division affirmed that part of the judgment of Trial Term which adjudged that defendant recover of plaintiff $15,750, with interest, upon the remaining portion of the second counterclaim in respect to receipts from Benesch.

      . "Though the bribe be small, yet the fault is great” (Coke, The Third Part of the Institutes of the Laws of England [London: E and R Brooke, MDCCXCVII], p 147).


text:
    Finger Lakes Racing Association, Inc., et al., Appellants, v New York State Racing & Wagering Board, Respondent. Finger Lakes Racing Association, Inc., et al., Appellants, v Western Regional Off-Track Betting Corp., Respondent, and New York State Racing and Wagering Board et al., Intervenors-Respondents.
    Argued September 18, 1978;
    decided October 26, 1978

      POINTS OF COUNSEL

      John Van Voorhis for appellants in the first and second above-entitled actions.
    I. The statute amply sustains the recoveries for 1974 which were awarded to plaintiffs by Special Term. (Matter of Picone v Commissioner of Licenses of City of

      N. Y., 241 NY 157.) II. The court below erred in upholding the validity of rule 5211.3 (g) of Part 5211 of the Rules of the New York State Racing and Wagering Board purporting to determine the "distribution of tracks’ percentages of off-track betting pools”, and the other rules set forth at page three of the submission of controversy which derived from the pronouncement in rule 5211.3 (g) that Finger Lakes shall be deemed a regional track in the special betting district only, and not in counties in the Western Region outside the special betting district. The holding in the submission should be reversed. (Matter of Barry v O’Connell, 303 NY 46; City of New York v New York City Ry. Co., 193 NY 543; Grimmer v Tenement House Dept. of City of N. Y., 205 NY 549; Lawrence Constr. Corp. v State of New York, 293 NY 634; Matter of Rosenbluth v Finkelstein, 300 NY 402.)

      Louis J. Lefkowitz, Attorney-General (John M. Dailey, Ruth Kessler Toch and William J. Kogan of counsel), for New York State Racing and Wagering Board, respondent in the first above-entitled action and for intervenor-respondent in the second above-entitled action.
    I. The New York State Racing and Wagering Board is vested with broad authority and discretion to adopt rules and regulations to further the objectives of the Off-Track Pari-Mutuel Betting Law and such rules should be upheld unless demonstrably unreasonable or irrational. (Finger Lakes Racing Assn. v New York State OffTrack Pari-Mutuel Betting Comm., 30 NY2d 207; Matter of Sullivan County Harness Racing Assn. v Glasser, 30 NY2d 269; Sullivan County Harness Racing Assn. v City of Schenectady Off-Track Betting Comm., 76 Misc 2d 558, 47 AD2d 780, 36 NY2d 647; Matter of Bernstein v Toia, 43 NY2d 437; Matter of Ward v Nyquist, 43 NY2d 57; Matter of Harbolic v Berger, 43 NY2d 102; Matter of Howard v Wyman, 28 NY2d 434; New York Dept. of Social Servs. v Dublino, 413 US 405; Youakim v Miller, 425 US 231; Matter of Barie v Lavine, 40 NY2d 565; Grossman v Baumgartner, 17 NY2d 345.). II. The interpretive rules of the Board are neither irrational nor unreasonable and conform with and further the intent of the Legislature. III. The merit of the Board’s rules is demonstrated by the obvious errors in plaintiffs’ distribution formulae proposed to the Appellate Division as well as the errors in the order of the Supreme Court. IV. Plaintiffs’ several arguments in this court are inconsistent and not in accord with the statute and the legislative intent.

      John J. Gannon for respondent in the second above-entitled action.
    I. Defendant-respondent, WROTE, is a stakeholder in this action within the meaning of CPLR 1006. II. Defendant-respondent, WROTE, remains a nominal defendant only and has no substantive interest in this controversy.

      Stephen P. Morris for Genesee Monroe Racing Association, Inc., intervenor-respondent in the second above-entitled action.
    I. The Board has vested its sufficient authority and discretion to adopt rules and regulations within the objectives of the statute. II. The rules of the Board conform with the intent of the Legislature.
   OPINION OF THE COURT

Cooke, J.

Both of these actions, consolidated for purposes of appeal, involve the distribution of retained commissions from off-track pari-mutuel betting moneys to the Finger Lakes Racing Association, Inc. (FLRA).

In the first, a controversy submitted upon agreed facts pursuant to CPLR 3222, FLRA seeks a determination that certain rules and regulátions promulgated by the New York State Racing and Wagering Board (Board) are invalid in that they conflict with various sections of the Off-Track Pari-Mutuel Betting Law (L 1973, ch 346, as amd, hereinafter cited to the McKinney’s Unconsolidated Laws [Book 65]). The second action is one for an accounting brought by FLRA against the Western Regional Off-Track Betting Corp. (WROTBC) to collect certain moneys allegedly due FLRA in accordance with the distribution tables set forth in section 8071 of the Unconsolidated Laws.

Although generally prohibited in the State, gambling is constitutionally permitted with respect to betting on horse races in such manner as the Legislature may prescribe (NY Const, art I, § 9; see Finger Lakes Racing Assn. v New York State Off-Track Pari-Mutuel Betting Comm., 30 NY2d 207, 216, mot to amd remittitur granted 30 NY2d 946). Prior to 1970, pari-mutuel betting was restricted to the grounds of harness or thoroughbred racetracks (L 1940, ch 254). In that year, in an effort to combat illegal bookmaking and thereby enhance the revenues of State and local governments, the Legislature established off-track pari-mutuel betting. The new law provided for the reimbursement of moneys to the tracks for revenues lost on account of decreases in their "handle” and attendance caused by such betting (L 1970, ch 143). However, the newly enacted law was found to have taken too great a toll at the expense of racetracks in the State and the local breeding industry. Hence, corrective legislation was deemed necessary (see, generally, Report of the Governor’s Commission on the Future of Horse Racing in New York State, March, 1973).

Accordingly, in 1973 the Legislature revamped the OffTrack Pari-Mutuel Betting Law (L 1973, ch 346, as amd), establishing seven, later eight, horse racing regions throughout the State and creating regional off-track betting corporations to administer the off-track betting program. Unfortunately, the law itself is an imbroglio, being born out of the union of diverse racing industry interests and legislative compromise.

FLRA, the only thoroughbred racing association in the State, operates Finger Lakes Racetrack near Canandaigua in Ontario County. Although FLRA is thus situated within the Western Region (Unconsolidated Laws, § 8063, subd 1, par [8]), it also comprises part of the State’s only special betting district (Unconsolidated Laws, § 8067, subd 5). This special betting district was at the relevant time composed of counties located within the Central, Catskill and Western Regions and constitutes the geographic market from which FLRA draws its patrons. In effect, the law provides that while FLRA is conducting a meeting, all off-track betting offices within the special district are prohibited from accepting bets on nonprofit racing association (NYRA) races. However, outside the special betting district, off-track betting establishments are permitted to accept wagers on NYRA races regardless of whether FLRA is conducting a meeting. Thus, it is evident that the special betting district was created as a result of a legislative determination that FLRA would suffer a decrease in its handle and attendance if off-track bets on NYRA races were accepted within its geographic market while it was conducting a meeting. This conclusion is further buttressed by the fact that offtrack establishments located within the Western Region but outside the special betting district are entitled to take bets on NYRA races at all times, reflecting a legislative judgment that FLRA would not suffer as a result of such wagering.

FLRA contends that WROTBC has wrongfully withheld its statutory share of retained commissions due for off-track bets placed in 1974. Essentially, FLRA maintains that it is owed moneys on account of two categories of wagers. The first is regular and exotic bets placed on NYRA races within the Western Region but outside the special betting district during FLRA’s meeting. The second is regular and exotic bets placed on NYRA races within the special district when FLRA is not conducting a meeting.

Distribution of retained commissions is governed by section 8071 of the Unconsolidated Laws. The statute is rather complex, containing numerous permutations. The basic issue presented is whether FLRA has the status of a regional track for purposes of distribution of retained commissions on bets placed on NYRA races within the Western Region but outside the special district. We conclude that it does not.

A reading of section 8071 leads unmistakably to the conclusion that FLRA is a regional track only within the confines of the special betting district. In that statute the Legislature has made specific distinctions between FLRA and regional tracks in parts of the three regions in which the special betting district, and of course FLRA, is located. Thus, FLRA receives all retained commissions on off-track bets placed on its own races within the district, with no moneys going to the "regional track”. It also receives a smaller percentage of the retained commission on out-district bets placed on its own races than does the "regional track” (Unconsolidated Laws, § 8071, subd 1, par [a]). During the FLRA meeting, there simply would be no need to distinguish between FLRA and the "regional track” with respect to out-district races if the special betting district were not considered a separate region in this context.

The remaining paragraphs of section 8071 bring this distinction into even sharper focus. Thus, paragraph (d) of subdivision 1 provides that pools on out-of-State races are divided among the regional harness tracks and/or FLRA within that portion of the special betting district situated within the Western Region. In those counties outside the special betting district but within the Western Region, retained commissions are divided between in-region harness tracks and the NYRA, with FLRA receiving nothing. If FLRA was a track within the Western Region, the Legislature surely would have afforded it a portion of the commissions shared by other in-region tracks (see, also, Unconsolidated Laws, § 8071, subd 1, par [c]).

Indeed, the very reason for creation of the special betting district — to insulate FLRA’s attendance and handle from the effect of off-track bets on NYRA races — militates against the conclusion that FLRA is anything but a regional track only within its special betting district. Absent creation of the special betting district, there could be no bets on NYRA races placed anywhere within the entire Western Region while FLRA was conducting its meeting. Thus, the two harness tracks located within the region would see an appreciable decrease in their share of retained commissions since there would be no pool on NYRA races within the entire region. Hence, FLRA has received a benefit to the extent that its market within the special betting district is protected by the prohibition of placing bets on NYRA races. At the same time, because of the benefit afforded FLRA the regional harness tracks suffer a loss since there is no NYRA pool to divide arising from establishments within the special betting district. As a price for that benefit, however, the Legislature has prohibited FLRA from sharing in the out-district NYRA pools by treating it as a regional track within its district. While the Legislature has certainly voiced its wishes in muted strains, the over-all structure and plain language of the statute support no other rational conclusion.

Distribution of the retained commissions derived from regular and exotic bets placed within that portion of the special betting district situated within the Western Region on NYRA races when FLRA is not conducting a meeting is governed by paragraph (c) of subdivision 1 of section 8071 which provides:

"(c) For the portions of the Catskill, Central and Western regions included within a special betting district, when no thoroughbred race meeting is conducted by a racing association or corporation located within such special district, the distribution of the retained commission to 'regional tracks’ by such regional corporation derived from wagers placed within such special betting district shall be divided as follows:

"(i) when a harness corporation located in such district is conducting a meet the full amount to such harness corporation; and

"(ii) when no racing is being conducted, in the case of the affected portions of the Catskill and Central regions, fifty per centum to the thoroughbred racing association or corporation and fifty per cent to the harness track located within such region, and, in the case of the affected portion of the Western region, forty per cent to the thoroughbred racing association or corporation and the balance divided equally between the harness racing corporations located in such region.” (Emphasis added.)

Neither Batavia Downs nor FLRA, the only two Western Region tracks within the confines of the special betting district, conducted a meeting between December 3 to December 31, 1974. The only meeting then being conducted within the region during that period was at Buffalo Raceway. Thus, the plain and simple language of paragraph (c) would require that the commissions retained from wagers placed within the special betting district be distributed in accordance with clause (ii). However, the Board contends, and the Appellate Division so held, that use of the word "district” in clause (i) of the statute was legislative oversight and should be read as "region”. Accordingly, it awarded Buffalo Raceway, the only harness track in the region then conducting a meeting, all commissions retained from within the special betting district during that period (58 AD2d 285, 292-295).

Although undoubtedly well intentioned and its reasoning well articulated, the court below erred. While it is possible that the Legislature may have intended that "district” mean "region”, courts should be extremely hesitant in interpolating their notions of policy in the interstices of legislative provisions (Matter of Erie County Agrie. Soc. v Cluchey, 40 NY2d 194, 200; McCluskey v Cromwell, 11 NY 593, 601). Courts are constitutionally bound to give effect to the expressed will of the Legislature and the plain and obvious meaning of a statute is always preferred to any curious, narrow or hidden sense that nothing but a strained interpretation of legislative intent would discern (see Matter of Palmer v Spaulding, 299 NY 368, 371-372).

It is an elementary principle of statutory construction that courts may only look behind the words of a statute when the law itself is doubtful or ambiguous (Johnson v Hudson Riv. R. R. Co., 49 NY 455, 462). If, as here, the terms of a statute are plain and within the scope of legislative power, it declares itself and there is nothing left for interpretation. To permit a court to say that the law must mean something different than the common import of its language would make the judicial superior to the legislative branch of government and practically invest it with lawmaking power. True, the statute as written may work an unwarranted detriment to racetracks outside the special betting district in the Western, Central and Catskill Regions. But the remedy for a harsh law is not in strained interpretation by the judiciary, but rather its amendment or repeal by the Legislature.

There remains for our consideration FLRA’s challenge to the rules promulgated by the Board (9 NYCRR 5211.1 et seq., eff April 30, 1976). We reject FLRA’s contention that the Board was without power to promulgate rules and regulations concerning the distribution of retained commissions to racetracks throughout the State. An administrative agency is imbued with such powers as are conferred upon it by the Legislature by the specific terms of its enabling act or as may be necessarily implied therefrom (Matter of Peters v New York City Housing Auth., 307 NY 519, 531; Packer Coll. Inst. v University of State of N. Y, 298 NY 184, 190). The Legislature has delegated broad authority to the Board by virtue of subdivision 1 of section 8064 of the Unconsolidated Laws which empowers it to "issue rules and regulations in accordance with the provisions of [the Off-Track Pari-Mutuel Betting Law]”. This grant of authority to the Board necessarily includes the power to promulgate regulations concerning distribution of commissions retained from off-track pari-mutuel bets.

Of course, the Board is without power to promulgate rules in contravention of the will of the Legislature. "Administrative agencies can only promulgate rules to further the implementation of the law as it exists; they have no authority to create a rule out of harmony with the statute” (Matter of Jones v Berman, 37 NY2d 42, 53; see, also, Matter of Albano v Kirby, 36 NY2d 526, 532; Matter of Howard v Wyman, 28 NY2d 434, 438). Since we have already determined that FLEA is a regional track within the special betting district for purposes of division and distribution of retained commissions arising out of wagers placed on NYRA races within the out-district portion of the Western Region, 9 NYCRR 5211.3 (g), 5211.4 (a)-(d) and 5211.12 (a)-(d) are valid as consistent with the legislative scheme. However, since 9 NYCRR 5211.5 (a) and 5211.13 (a) are in direct conflict with the plain language of section 8071 (subd 1, par [c]) of the Unconsolidated Laws they are, by definition, invalid.

Accordingly, the orders of the Appellate Division should be modified in accordance with this opinion, without costs, and, except as so modified, affirmed.

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

In each case: Order modified, etc.

      . The "handle” is that sum deposited in the pari-mutuel pool (see Unconsolidated Laws, § 8071).

      . NYRA is the only nonprofit racing association within the State and operates Aqueduct, Saratoga and Belmont Park located in the New York City, Capital and Nassau District Regions. FLRA, which operates the only other thoroughbred racetrack in the State is, as noted, a racing association.

      . The retained commission is breakage plus that sum that is retained by the offtrack betting corporations after making payment on winning tickets (see Unconsolidated Laws, § 8071, subd 1).

      . An exotic bet is a single wager on three or more horses evidenced by a single ticket constituting an interest in a single betting pool (Unconsolidated Laws, § 8063, subd 2).

      . Buffalo Raceway and Batavia Downs. Batavia Downs is situated within the special betting district.


text:
    Town of Massena, Respondent, v Niagara Mohawk Power Corporation, Appellant.
    Argued September 20, 1978;
    decided October 31, 1978

      POINTS OF COUNSEL

      Milton S. Gould, Bryan J. Hughes and Lauman Martin for appellant.
    I. The condemnation proceeding should have been dismissed by reason of the change in the method of furnishing public utility service as fixed in the bond resolution. (Matter

      of Smathers, 309 NY 487; O’Flynn v Village of East Rochester, 292 NY 156; Matter of Village of Le Roy, 35 App Div 177; County of Jefferson v Horbiger, 229 App Div 381.) II. The condemnation proceeding should have been dismissed by reason of failure of the bond resolution to set forth "both the maximum and the estimated costs” of the project. III. The condemnation proceeding should have been dismissed by reason of respondent’s failure to negotiate in good faith to purchase the property sought to be condemned. (City of Long Beach v Long Beach Water Co., 209 App Div 902; Matter of Lockport & Buffalo R. R. Co., 77 NY 557; Matter of County of Erie v Lancaster Dev. Co., 232 App Div 331; New York State Elec. & Gas Corp. v Morrison, 44 Misc 2d 145; New York Tel. Co. v Wood, 145 Misc 481; Matter of Bronx Parkway Comm., 176 App Div 717.) IV. The condemnation proceeding should have been dismissed by reason of respondent’s failure to obtain contracts for power supply and transmission as was required by the bond resolution. (People v Fisher, 189 App Div 148, 233 NY 663; Matter of Citizens’ Water-Works Co. v Parry, 59 Hun 202, 128 NY 669.) V. The right to an order of temporary possession should not have been granted. (City of Glen Cove v Utilities & Inds. Corp., 24 AD2d 766, 17 NY2d 205; Central New England Ry. Co. v Whittley, 159 App Div 468; City of Utica v Damiano, 22 Misc 2d 804; Matter of Board of Educ. v Gorga, 13 Misc 2d 5; Home Gas Co. v Kuruc, 206 Misc 130; Matter of County of Nassau [William Cullen Bryant Park & Preserve], 87 Misc 2d 1004; Village of Spring Val. Urban Renewal Agency v K. G. R. Realty Co., 82 Misc 2d 1082; Matter of Town of Hempstead, 78 Misc 2d 1090; Long Is. Light. Co. v Lambert, 77 Misc 2d 511; Matter of City of New York [Spuyten Duyvil Shorefront Park], 71 Misc 2d 1019.)

      Frederick D. Palmer, Wallace L. Duncan and James D. Pembroke, of the Washington, D. C. Bar, admitted on motion pro hac vice, and Eugene L. Nicandri for respondent.
    I. This court lacks jurisdiction to hear and decide the issues purportedly raised by Niagara Mohawk. (Matter of Westerfield, 163 NY 209; Mrachek v Sunshine Biscuit, 308 NY 116; Donohue v First Trust Co. of Albany, 286 App Div 918; Hutter v Levitt & Sons, 36 AD2d 758; Matter of Burk, 298 NY 450; Matter of Davis, 91 Hun 53, 149 NY 539; Matter of Fahey v Whalen, 54 AD2d 1097; Costikyan v Keeffe, 54 AD2d 573; Antonetti v City of Syracuse, 52 AD2d 742.) II. The holding by the court below that Massena has complied with section 360 is correct both on the facts and the law. (O’Flynn v Village of East Rochester, 292 NY 156; Data Processing Serv. v Camp, 397 US 150; Barlow v Collins, 397 US 159; Blomquist v County of Orange, 69 Misc 2d 1077; Richardson v Bohemia Fire Dist., 75 Misc 2d 837.) III. Purported failure of bond resolution to set forth the maximum and estimated cost of the project. IV. Massena’s purported failure to negotiate in good faith. (City of Long Beach v Long Beach Water Co., 209 App Div 902; Otter Tail Power Co. v Federal Power Comm., 401 US 947; Matter of Mayor, Aldermen & Commonalty of City of N. Y., 135 NY 253; Dormitory Auth. of State of N. Y. v 59th St. & 10th Ave. Realty Corp., 62 Misc 2d 174; Matter of City of Syracuse [Eastman], 137 Misc 632.) V. The Power Authority of the State of New York power and transmission services. (People v Fisher, 189 App Div 148, 233 NY 663; Matter of Citizens’ Water-Works Co. v Parry, 59 Hun 202; County of Jefferson v Horbiger, 229 App Div 381.) VI. The right to an order of temporary possession was required by virtue of the reversal by the court below of the County Court. VII. The April 19, 1977 referendum provides Massena with additional authority to proceed with the project. (Bradford v County of Suffolk, 283 NY 503; Swanker v City of Amsterdam, 5 Misc 2d 932; Colorado Cent. Power Co. v Municipal Power Dev. Co., 1 F Supp 961; Mitchell v Town of Shelter Is., 3 Misc 2d 127.)
   OPINION OF THE COURT

Cooke, J.

This case is another episode in the controversy over the supply of public utility services as between a municipal corporation and a privately owned public utility. We voice no policy preference but determine the rights of these parties under article 14-A of the General Municipal Law.

The scenario is laid in the northern reaches of our State. The combatants are the Town of Massena in St. Lawrence County (Massena), a municipal corporation, and Niagara Mohawk Power Corporation (Niagara Mohawk), a stock corporation presently supplying electrical energy to the region. The encounter, officially initiated by the passage of certain town board resolutions in 1974, intensified in 1975 when Massena instituted this condemnation proceeding in the County Court of St. Lawrence County in respect to certain Niagara Mohawk property in the Town of Massena. The asserted purpose for the acquisition was to allow Massena to "own and operate its own electric distribution system and to supply electricity to the inhabitants” of the town. In opposition to this proceeding, Niagara Mohawk has unleashed a fusillade of legal objections.

After Massena filed its petition for condemnation on March 14, 1975 and an amended petition and motion for temporary possession on January 15, 1976, Niagara Mohawk moved for dismissal. County Court entered an order denying dismissal, directing Niagara Mohawk to serve and file its answer and denying temporary possession to Massena, without prejudice to renewal after service of an answer (see 87 Misc 2d 79). After service of an answer to the petition and amended petition on June 11, 1976, denying most of the allegations of the pleadings to which it responded and setting forth 10 affirmative defenses, and subsequent to Massena’s renewal of its motion for temporary possession on July 19, 1976, a nonjury trial was held spanning a period of over two weeks in County Court. That court delineated the issues into six categories and decided all favorably to plaintiff Massena except it concluded that "plaintiff has materially departed from both the authorized plan of acquisition (i.e. construction) and its formerly proposed method of furnishing service to customers of the municipal utility.” Because of this ascribed digression, it was deemed that dismissal of the petition must ensue and, consequently, temporary possession was denied.

In turn, a four-Justice majority in the Appellate Division viewed the determination that there had been a material deviation as being without support in the record and held that there had been substantial compliance by Massena with section 360 of the General Municipal Law (60 AD2d 139). By virtue of an order and amended order, the judgment of County Court was reversed on the law alone and the matter remitted with directions to grant the petition for condemnation by entry of an appropriate judgment together with the right of temporary possession. A single dissenter agreed that there had not been a material departure from the plan approved by referendum, but voted for affirmance on the base of noncompliance with subdivision 3 of section 360 which required that "the resolution submitted to the townspeople set forth 'both the maximum and the estimated costs’ of the proposed enterprise” (60 AD2d, at p 147).

In this court, Niagara Mohawk’s array of reasons for dismissal can be distilled into four categories: first, that Massena’s method for furnishing public utility service varies from that described in the resolution of the town board and in the referendum submitted to the electors; second, that the resolution did not set forth "both the maximum and the estimated costs” of the project; third, that Massena failed to negotiate in good faith for the purchase of the property, a condition precedent to condemnation; and fourth, that Massena failed to obtain contracts for power supply and transmission, another such condition. Additionally, it is contended that the right of temporary possession should not have been granted. Massena counters with plethoric argumentation.

First off, note must be taken of certain jurisdictional contentions raised by Massena. It is urged that Niagara Mohawk’s third and fourth hypotheses, the asserted failure to negotiate in good faith and to obtain contracts for power supply and transmission, may not be considered by this court. Massena’s reasoning is that Niagara Mohawk raised these points before County Court which specifically rejected them, and that Niagara Mohawk failed to cross-appeal to the Appellate Division from these findings; ergo, Niagara Mohawk, as appellant, has not preserved these objections. We reject this position. At trial level, Niagara Mohawk was the prevailing party and it secured the relief it sought, the dismissal of the petition. Although County Court rejected these arguments, the adjudicative provisions of the judgment made no mention of them and instead merely rendered a determination in favor of Niagara Mohawk. Thus, Niagara Mohawk was not aggrieved by the judgment and could not cross-appeal to the Appellate Division (CPLR 5511; see Cohen and Karger, Powers of the New York Court of Appeals, p 395). However; since Niagara Mohawk was entitled to raise these two points in the Appellate Division as alternative grounds for sustaining the County Court judgment, they were properly before the Appellate Division and are now before this court on the question certified (see Logan v Guggenheim, 230 NY 19, 21-22; 10 CarmodyWait 2d, NY Prac, § 70:423, pp 693-695). Secondly, Massena’s assertion that all points raised by its adversary involve questions of fact, upon analysis, is only partially correct.

The resolution adopted by the town board on April 16, 1974, as subsequently approved by the qualified electors of the Town of Massena at the mandatory referendum held on May 30, 1974, provided in part: "Section 3. The proposed method of providing such public utility service system is by the acquisition thereof from the Niagara Mohawk Power Corporation pursuant to condemnation proceedings to be instituted in conformance with law and the proposed method of constructing additions to such system, once it has been acquired, consists of the construction of a sub-station and transmission line, together with other related facilities incidental thereto, pursuant to contracts to be let in conformance with provisions of the General Municipal Law” (emphasis added). Unmistakably, the resolution "proposed” the "construction of a substation and transmission line”, but just as definitely, as appears from a filing by Massena with the Federal Power Commission (now the Federal Energy Regulatory Commission), it appears that Massena has abandoned this construction for the present and has decided to use existing Niagara Mohawk transmission and subtransmission facilities for the wheeling of power. Hence, we are obliged to analyze this "change” to ascertain whether it is such as to vitiate the entire project — a novel question under the statute of our State.

Section 360 of the General Municipal Law, which confers powers upon municipal corporations to establish, own and operate certain public utility services, is the point from which our inquiry starts. Since subdivision 6 grants to such corporations the power to "acquire the public utility service of any public utility company * * * by condemnation in the manner provided by law for condemnation by such municipal corporation of private property for a public use”, it follows that compliance with 360 is a condition precedent to the right to condemn. The section does not expressly proscribe such a change in plan; neither does it manifest permission. In any event, the town board was required to "fix” by resolution "[t]he proposed method of constructing, leasing, purchasing, acquiring, the plant and facilities for such service together with both the maximum and the estimated costs thereof, and the method of furnishing such service” (subd 3).

Although Niagara Mohawk’s contention that the section must be construed literally, thus requiring that the method as ultimately executed be identical with that detailed in the resolution, is perhaps tenable, very sound reasons dictate otherwise. In any instance when a municipal corporation endeavors to enter into the public utility field, necessarily a time gap occurs between drafting the initial outline and actual completion of the project. During this interval, usually not of short duration, several contingencies may suggest or even necessitate a change of direction: e.g., spiraling costs may render the undertaking economically unfeasible; technical developments may make the plans obsolete; and demographic shifts may require a revamping of the system. In view of these and other pragmatic considerations, flexibility in implementation of a section 360 project is obviously necessary. To adopt a narrow interpretation, therefore, might well destroy for practical purposes the very statutory scheme which the Legislature has seen fit to enact. Furthermore, since a project once implemented may be altered freely without referendum submission (see 2 Opns St Comp, 1946, p 582; 2 Opns St Comp, 1946, p 556; Illinois Power Co. v City of Jacksonville, 18 111 2d 618), it would be absurd to insist on such strict adherence to the approved method.

Niagara Mohawk now, but never previously, poses the proposition that the town board resolution, authorizing acquisition and construction "at a maximum estimated cost of $4,500,000”, was defective in not complying with the section 360 directive that "both the maximum and the estimated costs thereof’ be fixed (subd 3). The statute prescribes that the town’s power be exercised by resolution (see Meredith v Connally, 68 Misc 2d 956, 961 [Casey, J.], affd 38 AD2d 385; see, also, Matter of Jewett v Luau-Nyack Corp., 31 NY2d 298, 303, 305-306). Such a resolution is clothed with a presumption of validity (cf. Lighthouse Shores v Town of Islip, 41 NY2d 7, 11-12; Matter of Magnotta v Gerlach, 301 NY 143, 149; O’Connor v Greene, 174 Misc 597, 598-599). Words employed in the resolution will be construed according to their ordinary and plain meaning in the absence of a clear intent to the contrary expressed in the enactment (cf. Fifth Ave. Coach Co. v City of New York, 194 NY 19, 26-27, affd 221 US 467; 62 CJS, Municipal Corporations, § 442, pp 843, 846), and we should make an effort to interpret the language so as to give effect to the resolution rather than destroy it (see Greenwood Volunteer Fire Co. v Dearden, 64 RI 368). The plain and ordinary significance of the words "maximum estimated cost” followed by a single monetary figure is that the maximum and estimated costs are the same. The noun "cost” is modified by two adjectives, which separately qualify the subject which in turn relates to the object, a single sum. Neither modifier conflicts; in fact they coincide. It is the spirit rather than the letter of the resolution which determines its construction (cf. Effell Realty Corp. v City of New York, 165 Misc 176, 179, affd 256 App Div 972, affd 282 NY 541) and we should not exalt form over substance by holding that the town board was obliged to employ two separate sentences, one in respect to maximum costs and the other specifying the estimated, particularly when they can be united in a single statement with complete signification.

The claim that Massena did not negotiate in good faith to purchase the property sought to be condemned, in substance a condition precedent to condemnation by virtue of subdivision 5 of section 4 of the Condemnation Law, was resolved against Niagara Mohawk by the County Court and the Appellate Division. The issue was essentially one of fact, involving Massena’s statements, conduct and intentions considered in the context of the property owner’s reactions. The Court of Appeals is the State’s highest tribunal to settle the law; it sits in an appellate capacity primarily to review every question of law properly before it (Siegel, New York Practice [1978], p 13; Cohen and Karger, Powers of the New York Court of Appeals, pp 7, 29). "In civil cases, the court is empowered to review the facts only when (1) the Appellate Division has reversed or modified (2) a final or interlocutory determination and (3) made new findings of fact and (4) a final determination 'pursuant thereto’ has been entered” (7 Weinstein-Korn-Miller, NY Civ Prac, par 5501.14; see NY Const, art VI, § 3, subd a; CPLR 5501, subd [b]). Since the reversal effected by the amended order of the Appellate Division was expressly "on the law alone”, with "no issue of fact * * * considered” by said court, it is obvious that new findings of fact were not made and it follows as a definite legal consequence that the basically factual question as to Massena’s inability to agree with the property owner for purchase may not be determined by or even advanced before this body.

The contention, put forward without actual authority, that Massena has not satisfied a further condition precedent, in that it has not compacted for power supply, is without merit. In effect, it is maintained that Massena must arrange for its power supply before it can acquire title to the specified parts of Niagara Mohawk’s utility system. For this proposition, section 4 of the Condemnation Law is cited. However, the only possibly relevant portion of that section is subdivision 7 which provides that the petition set forth "[a] statement that it is the intention of the plaintiff, in good faith, to complete the work or improvement * * * and that all the preliminary steps required by law have been taken”. In this instance section 360 of the General Municipal Law traces "the preliminary steps required by law” and nowhere therein can be gleaned a requirement that Massena adduce evidence of commitments for power supply or any other such item. As County Court held, the proof that the Power Authority of the State of New York will provide very substantial amounts of power is sufficient to negate dismissal of the petition in this respect.

Section 24 of the Condemnation Law recites that a court "may direct” that a plaintiff be permitted to enter upon the real property to be taken "[w]hen it appears to the satisfaction of the court * * * that the public interests will be prejudiced by delay”. By reason of its dismissal of the petition after trial, County Court denied such possession. Previously it had declared on motion that Massena had shown that the public interest will be served best by a grant. It was noted that prolongation might necessitate submission of another bond proposition due to inflationary factors and added value resulting from improvements made by Niagara Mohawk, to the extent "that any substantial delay may ultimately result in a loss of that which the plaintiff seeks — a municipally owned electric utility.” On appeal, the Appellate Division observed that the record revealed no basis for refusing possession. The direction that temporary possession be granted here was an "exercise of discretion”, obviously without abuse since it was buttressed by obvious and substantial justifications (Condemnation Law, § 24; City of Glen Cove v Utilities & Inds. Corp., 17 NY2d 205, 208). As such, the directive grant by the Appellate Division should not be disturbed.

The order of the Appellate Division should be affirmed, with costs, and the question certified answered in the negative.

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

Order affirmed, etc.


text:
    Scarlet Cohen et al., Appellants, v Hallmark Cards, Inc., Defendant-Respondent, and Third-Party Plaintiff. Ken Heyman, Third-Party Defendant.
    Argued September 11, 1978;
    decided October 31, 1978

      POINTS OF COUNSEL

      Joel T. Camche for appellants.
    I. The jury’s award of exemplary damages against Hallmark was expressly authorized under section 51 of the Civil Rights Law and amply warranted by the evidence. The majority below erred. (Time, Inc. v Hill, 385 US 374.) II. The jury’s awards herein were not excessive. (Walker v Sheldon, 10 NY2d 401; Binns v Vitagraph Co. of Amer., 147 App Div 783, 210 NY 51; Kern v News Syndicate Co., 20 AD2d 528; Faulk v Aware, Inc., 19 AD2d 464, 14 NY2d 899, 380 US 916; Goldwater v Ginzburg, 414 F2d 324, 396 US 1049; Morrissey v National Mar. Union of Amer., 397 F Supp 659, 544 F2d 19; Telex Corp. v International Business Machs. Corp., 510 F2d 894, 423 US 802; Metzger v Dell Pub. Co., 207 Misc 182; Myers v U. S. Camera Pub. Corp., 9 Misc 2d 765; Rosenberg v Lee’s Carpet & Furniture Warehouse Outlet, 80 Misc 2d 479.)

      Joseph Arthur Cohen and Sidney A. Schwartz for respondent.
    I. The court below did not err in holding that under the circumstances of this case there was no basis for a finding that Hallmark knowingly used photographs without written consent within the intendment of section 51 of the Civil Rights Law. (Gautier v Pro-Football, 304 NY 354; McGraw v Watkins, 49 AD2d 958; Fisher v Murray M. Rosenberg, Inc., 175 Misc 370; Grant v Esquire, Inc., 367 F Supp 876; Big Seven Music Corp. v Lennon, 554 F2d 504; Roberts v Conde Nast Pub., 286 App Div 729; Roginsky v Richardson-Merrell, 378 F2d 832; Gordon v Nationwide Mut. Ins. Co., 37 AD2d 265; James v Powell, 19 NY2d 249; Roy v Hartogs, 85 Misc 2d 891.) II. The 1972 publications upon which plaintiffs predicate their claim for punitive damages were no proper part of this case and should not even have been allowed into evidence by the trial court. III. Appellants’ argument on the quantum of damages is inappropriate.
   OPINION OF THE COURT

Gabrielli, J.

The question presented on this appeal is whether the Appellate Division was correct in concluding as a matter of law that the jury verdict awarding punitive damages to plaintiffs was based on insufficient evidence. For the reasons discussed below, we disagree with the conclusion reached by the Appellate Division, and thus the order appealed from must be reversed.

The plaintiffs in this action are a professional model and her daughter. In October, 1966, several pictures of the mother holding her then infant child were taken by one Ken Heyman, a professional photographer. On June 1, 1971, Heyman sold those pictures to defendant Hallmark Cards, Inc. (Hallmark), for publication in a collection of photographs entitled "Love Is Now” which was to be sold to the public by Hallmark for its profit. At that time, Heyman orally assured Hallmark that he had obtained written releases from plaintiffs. Additionally, Heyman represented in writing that use of the photographs by Hallmark would not infringe on the rights of others. Hallmark made no request for a copy of the written consents, and instead began printing the pictures and selling them in its publication.

In November, 1971, Heyman sent plaintiffs a letter advising them of the sale of their pictures, and asking them to sign written releases. He also sent them a copy of the Hallmark publication including their pictures. On December 8, 1971, plaintiffs’ counsel informed Hallmark in writing that plaintiffs had never consented to the use of their pictures by Hallmark, and requested Hallmark to stop using the pictures. Hallmark made no reply to that letter. Instead, on December 21, 1971, Hallmark wrote to Heyman, asking if he had written releases from plaintiffs. On advice of his counsel, Heyman did not respond. Hallmark made no other attempts to learn if indeed there existed written consents to the use of plaintiffs’ pictures. In late December, 1971, not having received any reply to their letter, plaintiffs commenced this action by service of a summons. On December 27, 1971, Hallmark ordered a new printing of the publication containing plaintiffs’ pictures; and on February 10, 1972, without any further inquiry, Hallmark ordered yet another printing. Finally, on or about February 23, plaintiffs served a complaint, seeking injunctive relief as well as both compensatory and punitive damages. During the following few months, Hallmark ordered additional printings of the publication containing plaintiffs’ pictures.

This action was commenced pursuant to section 51 of the Civil Rights Law, which provides for enforcement of New York’s statutory right of privacy. In pertinent part, section 51 reads as follows: "Any person whose name, portrait or picture is used within this state for advertising purposes or for the purposes of trade without the written consent first obtained as above provided may maintain an equitable action in the supreme court of this state against the person, firm or corporation so using his name, portrait or picture, to prevent and restrain the use thereof; and may also sue and recover damages for any injuries sustained by reason of such use and if the defendant shall have knowingly used such person’s name, portrait or picture in such manner as is forbidden or declared to be unlawful by the last section, the jury, in its discretion, may award exemplary damages.”

Following a trial, the jury found in favor of plaintiffs, awarding them nominal compensatory damages as well as a total of $50,000 in punitive damages. Hallmark appealed solely from the award of punitive damages. It should be noted that Hallmark has not challenged the award of compensatory damages, nor does it contest the factual determination necessary to support such damages, namely, that it used plaintiffs’ pictures "for advertising purposes or for the purposes of trade without the written consent” of plaintiffs. Rather, Hallmark contends that the factual conclusion that it acted knowingly, without which no award of punitive damages is available under the statute, was not founded on evidence sufficient to support such a conclusion. After reviewing the evidence presented at trial, the Appellate Division concluded that "there was insufficient evidence submitted to the jury to warrant a finding of knowing use of a photograph without written consent” (58 AD2d 770, 771). Accordingly, that court deleted the award of punitive damages as a matter of law. That decision cannot stand.

The Appellate Division decision did not turn on the factual question whether the jury determination was against the weight of the evidence. Rather, it was based on the legal issue whether there was sufficient evidence to support the factual finding that Hallmark acted knowingly. Although these two inquiries may appear somewhat related, they actually involve very different standards and may well lead to disparate results. Whether a particular factual determination is against the weight of the evidence is itself a factual question. In reviewing a judgment of Supreme Court, the Appellate Division has the power to determine whether a particular factual question was correctly resolved by the trier of facts. If the original fact determination was made by a jury, as in this case, and the Appellate Division concludes that the jury has made erroneous factual findings, the court is required to order a new trial, since it does not have the power to make new findings of fact in a jury case (see Middleton v Whitridge, 213 NY 499, 506-508). The result is, of course, different in cases not involving the right to a jury trial, since then the Appellate Division does have the power to make new findings of fact (see Bernardine v City of New York, 294 NY 361, 366-367; York Mtge. Corp. v Clotar Constr. Corp., 254 NY 128, 134; Bonnette v Molloy, 209 NY 167). In either situation, the determination that a factual finding was against the preponderance of the evidence is itself a factual determination based on the reviewing court’s conclusion that the original trier of fact has incorrectly assessed the evidence (see Middleton v Whitridge, supra, pp 505-508, 514).

In this case, however, the Appellate Division has not merely determined that the jury incorrectly decided the factual question whether Hallmark acted knowingly. In fact, the Appellate Division has not reviewed the factual conclusions reached by the jury. Rather, the Appellate Division has held that plaintiffs failed to present sufficient evidence to support the conclusion that Hallmark acted knowingly. In a jury case, the result of such an inquiry is of considerably greater significance than is a determination that a factual conclusion is against the weight of the evidence, for in the former case the result is a final judgment, while in the latter the result must be merely a- new trial (see Middleton v Whitridge, supra, pp 507-508; see, also, Siegel, New York Practice, §§ 405-406). Thus, the question whether a verdict is against the weight of the evidence involves what is in large part a discretionary balancing of many factors (see Mann v Hunt, 283 App Div 140). For a court to conclude as a matter of law that a jury verdict is not supported by sufficient evidence, however, requires a harsher and more basic assessment of the jury verdict. It is necessary to first conclude that there is simply no valid line of reasoning and permissible inferences which could possibly lead rational men to the conclusion reached by the jury on the basis of the evidence presented at trial. The criteria to be applied in making this assessment are essentially those required of a Trial Judge asked to direct a verdict. It is a basic principle of our law that "it cannot be correctly said in any case where the right of trial by jury exists and the evidence presents an actual issue of fact, that the court may properly direct a verdict” (McDonald v Metropolitan St. Ry., 167 NY 66, 69-70; accord Loewinthan v Le Vine, 299 NY 372; Wessel v Krop, 30 AD2d 764). Similarly, in any case in which it can be said that the evidence is such that it would not be utterly irrational for a jury to reach the result it has determined upon, and thus a valid question of fact does exist, the court may not conclude that the verdict is as a matter of law not supported by the evidence (see Middleton v Whitridge, supra, pp 507-508).

Applying these principles to the present case, we conclude that the Appellate Division erred in finding the evidence insufficient as a matter of law to support the factual conclusion that Hallmark acted knowingly. While there is, of course, no evidence that Hallmark knew prior to December, 1971 that it did not have written consent to use plaintiffs’ pictures, the same cannot be said of the period subsequent to December 8, 1971, the date on which plaintiffs first notified Hallmark that they had not given their consent to the commercial use of their pictures. Even assuming, arguendo, that this express notification itself did not suffice to inform Hallmark that the plaintiffs had not consented to the use of their pictures, it was not irrational for the jury to conclude on the basis of this plus the evidence that Hallmark continued to print the pictures even after Heyman had failed to reply to its query, that by the time the complaint in this action was served in February, 1972, Hallmark was acting either with actual knowledge, or at the very least with a reckless disregard for the truth of plaintiffs’ assertions (cf. Time, Inc. v Hill, 385 US 374). Since there did exist a question of fact which was properly submitted to the jury, it was error for the Appellate Division to conclude that there was insufficient evidence to sustain the factual determination of that jury.

This is not to say, however, that the factual determination at issue was correctly made. As was noted above, the Appellate Division has authority to review findings of fact made by the jury, and to decide whether such determinations are in* accord with the weight of the evidence. Since the Appellate Division has not yet reviewed the facts in this case, we must remit to that court for exercise of its power to review the facts (CPLR 5613). In light of the procedural posture of the case and our limited jurisdiction to review questions of fact (NY Const, art VI, § 3), we express no opinion as to whether the determination that Hallmark acted knowingly is in accord with the weight of the evidence. The question of imputation of knowledge is a question of fact which must be resolved in light of all the circumstances of the case. We would note, however, that in many instances the imputation of knowledge, and its concomitant responsibility, may not be avoided by the simple expedient of closing one’s eyes, covering one’s ears, and holding one’s breath.

Accordingly, the order appealed from should be reversed, with costs, and the case remitted to the Appellate Division for further proceedings in accord with this opinion.

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

Order reversed, etc.

      . Hallmark contends that the trial court should have excluded all evidence of Hallmark’s activities subsequent to the commencement of this action, apparently on the theory that such actions would serve as separate breaches of plaintiffs’ right to privacy, which are not pleaded in plaintiffs’ complaint. Without expressing any view as to whether subsequent publications would serve as the basis for separate actions (cf. Gregoire v Putnam’s Sons, 298 NY 119), it suffices to say that in the present case proof of continuing violations after commencement of this suit was certainly relevant to the question of punitive damages.

      . In New York, there exists no so-called common-law right to privacy (see Wojtowicz v Delacorte Press, 43 NY2d 858). Thus, plaintiffs’ claim was founded on a violation of section 50 of the Civil Rights Law which provides as follows: "A person, firm or corporation that uses for advertising purposes, or for the purposes of trade, the name, portrait or picture of any living person without having first obtained the written consent of such person, or if a minor of his or her parent or guardian, is guilty of a misdemeanor.”

      . We would note that Hallmark does not now contend, nor has it ever argued that the term "knowingly” as used in section 51 of the Civil Rights Law does not encompass the concept of imputed knowledge arising from reckless disregard for the truth. Accordingly, we do not reach or consider that issue. Indeed, Hallmark could not raise it due to its failure to object at trial to the court’s charge to the jury (CPLR 4110-b).

      . Should the Appellate Division conclude that the factual determination that Hallmark acted knowingly was in accord with the weight of the evidence, it may then exercise its discretionary jurisdiction to review the amount of exemplary damages awarded by the jury (see Nardelli v Stamberg, 44 NY2d 500, 503-504).