author: Kaye, J.

text:
    Sumitomo Marine & Fire Insurance Co., Ltd.—U.S. Branch, Respondent, v Cologne Reinsurance Company of America et al., Defendants, and Buffalo Reinsurance Company et al., Appellants.
    Argued January 3, 1990;
    decided February 13, 1990

      POINTS OF COUNSEL

      Thomas R. Newman and Barry Bassis for appellants.

      John H. Haley for respondent.
   OPINION OF THE COURT

Kaye, J.

This appeal calls upon us to resolve a question of reinsurance law — a field in which differences have often been settled by handshakes and umpires, and pertinent precedents of this court are few in number.

Plaintiff (Sumitomo Marine & Fire Insurance Company), an insurer, underwrote a one-year commercial property insurance policy for Auburn Steel Company, a steel mill located in upstate New York. The policy became effective on February 1, 1983, and provided "all-risks” coverage against loss of or damage to property from any hazard save those specifically excluded. Like steel mills generally, Auburn used a small quantity of cesium, a radioactive material, in the device that measured the factory’s output. Loss resulting from radioactive contamination had been covered by Auburn’s prior all-risks policy.

Sumitomo had not previously provided insurance to a steel mill, but agreed to provide Auburn the same coverage as had its predecessor, Factory Mutual Company. In issuing the insurance, Sumitomo therefore supplemented a Chubb policy form it was using, which listed "nuclear” among the loss or damage exclusions, by "Amendment No. 3,” providing coverage for "Sudden and accidental Radioactive Contamination, including resultant radiation damage * * * from material used or stored or from processes conducted on the described premises.”

Sumitomo then sought to reinsure the Auburn policy. Sumitomo’s offer to purchase reinsurance was made by telex to various potential reinsurers through its agent, Thomas A. Greene & Company. The offering telex noted that Auburn was a steel mill, that its prior insurer was Factory Mutual, and that an inspection report was available, but the telex contained no explicit reference to radioactive contamination coverage. On February 9, 1983, defendant Philadelphia Reinsurance Corporation telexed its acceptance of a percentage of the Auburn insurance risk, and on February 10, defendant Buffalo Reinsurance Company telephoned its acceptance. Seven other facultative reinsurers accepted as well. (The other reinsurers are not parties to this appeal.)

Barely two weeks later, on February 21, 1983, scrap metal at the Auburn plant was contaminated with cobalt-60, a radioactive material, causing a shutdown of the facility and a business interruption loss covered by the Sumitomo policy. Defendant Buffalo was notified of the loss during February 1983; and while the precise date was not fixed, Philadelphia undisputedly received notification by October 1983. Meanwhile, Greene had sent a cover note to the reinsurers confirming their acceptance. After notice of Auburn’s loss, defendants signed the note — without question or reservation — signifying acceptance.

Finally, in late 1983 copies of the actual policy that Sumitomo had issued to Auburn — including Amendment No. 3, covering radioactive contamination — were delivered to all the reinsurers. As is apparently customary, only after receiving the original policy did defendants issue their formal certificates of reinsurance. Philadelphia’s certificate is dated December 28, 1983, and Buffalo’s February 1, 1984. Each certificate obliged the reinsurer to "follow the fortunes” of its reinsured, except as coverage was expressly excluded, and each contained or referred to a nuclear incident exclusion clause.

Sumitomo settled with Auburn, and requested payment from its reinsurers. After defendants refused, Sumitomo commenced this action. As in the letter refusing payment, in their answer to the complaint defendants contended only that the loss was excluded by virtue of the nuclear incident exclusion clause contained in the reinsurance certificates. However, in their summary judgment motion, made in October 1987 upon the completion of extensive discovery, defendants raised the additional contention — pressed on this appeal — that they would not have entered into a reinsurance agreement had Sumitomo disclosed that the primary policy covered incidental radioactive contamination. Defendants argue that because of Sumitomo’s alleged failure to disclose what defendants contend was a material risk, they are now entitled to rescission of the reinsurance agreement. In connection with this claim, defendants assert that the agreement was complete on February 9 or 10, 1983 when they accepted Sumitomo’s telexed offer, and that later issuance of formal certificates was merely "ministerial” and without legal significance. Alternatively, defendants argue that their exclusion clause precluded coverage of the Auburn accident.

Reversing the trial court’s award of summary judgment to defendants, the Appellate Division unanimously rejected defendants’ first claim, and held that in the circumstances defendants were obliged to determine the actual scope of coverage before issuing their formal certificates of reinsurance. A divided court went on to hold that the reinsurance certificate covered an incidental radioactive loss, and it remanded for a factual determination as to whether the risk here was considered primary or incidental. While we agree with the Appellate Division’s reading of the exclusion clause and affirm that court’s order, we do so on somewhat different grounds.

We begin our analysis with certain fundamental propositions in the law of reinsurance.

Reinsurance is a means by which insurers reallocate their risk. In general terms, it is "the insurance of one insurer (the 'reinsured’) by another insurer (the 'reinsurer’) by means of which the reinsured is indemnified for loss under insurance policies issued by the reinsured to the public.” (Kramer, Nature of Reinsurance, reprinted in Reinsurance, at 5 [Strain ed 1980].) The agreement at issue in this case is "facultative” reinsurance. As contrasted with "treaty” reinsurance, which involves an ongoing agreement between two insurance companies binding one in advance to cede and the other to accept certain reinsurance business pursuant to its provisions, facultative reinsurance involves the offer of a portion of a particular risk to one or more potential reinsurers, who are then free to accept or reject the risk in whole or part (see generally, Thompson, Reinsurance, at 75 [4th ed 1966]).

Typically, the details of the risk proposed to be ceded by the reinsured are circulated to possible reinsurers, who in turn indicate their willingness to accept some portion of the risk, and to be bound by their agreement to do so. In the London market — the Mecca of the reinsurance world — this was traditionally accomplished by the ceding company or its broker preparing a slip with brief details of the risk to be placed; the slip was then taken to prospective reinsurers who, if prepared to accept, initialed it, indicating the proportion of the risk they wanted. Under normal circumstances, the initialing of the slip constituted a binding agreement. With electronic advances, the slip has been replaced by an exchange of telephone calls or telexes, as in this case. Delivery of the original insurance policy to the reinsurer and issuance by the latter of a formal certificate of reinsurance may not occur until much later, and indeed are technically unnecessary for a binding agreement (Butler & Merkin, Reinsurance Law, at A5.1-02).

It is this swift, seemingly almost casual process of contract formation that has given rise to the controversy before us. Defendants claim that at the time of the binder they were never informed of the allegedly unusual radiation coverage Sumitomo provided Auburn; Sumitomo as vehemently asserts that defendants knew or should have known that such coverage would be provided to Auburn, as it generally was to steel mills (who necessarily use cesium) and as it actually had been by Factory Mutual.

While that factual difference remains unresolved, it is unnecessary to the disposition of this appeal. What instead becomes determinative are defendants’ acts subsequent to the binder, including their issuance of the reinsurance certificates.

Turning first to the question of contract interpretation, we agree with the Appellate Division majority’s reading of defendants’ clause. Unlike paragraphs 3 and 4 of the exclusion —both of which refer back to prior paragraphs — paragraph 5 unqualifiedly declares that the entire exclusion is inoperative "where the nuclear exposure is not considered by the Reassured to be the primary hazard.” Here, the parties are now in accord that the use of radioactive isotopes was not considered by Sumitomo to be the primary hazard. Thus, the nuclear exclusion clause, on a straightforward reading, would not preclude coverage in this case.

Contrary to defendants’ claim, the natural reading of this clause is neither unusual nor absurd. Exclusion clauses commonly specify that they do not apply where the excluded operations are considered incidental, with the determination left to the reinsured (see, Salm, Reinsurance Contract Wording, reprinted in Reinsurance, at 79, 82 [Strain ed 1980]). Indeed, defendants’ suggestion that paragraph 5 can apply only where the direct policy does not name radioactive contamination as a covered hazard — in other words, that the reinsurance includes this risk only when the original policy does not — seems the more strained construction. We therefore conclude that the plain language of defendants’ own clause should prevail.

Accordingly, by the terms of their reinsurance certificates, defendants agreed to indemnify Sumitomo for the very type of damage at issue in this case. It remains only to address defendants’ contention that — even though their clause permits the same coverage that Sumitomo extended to Auburn — they never would have agreed to the contract in the first instance had they known that Sumitomo had provided coverage for incidental nuclear damage.

The premise underlying defendants’ contention that their agreement to reinsure the Sumitomo policy is voidable is that at the outset Sumitomo was required to disclose to the reinsurers its extension of coverage to incidental nuclear damage. A reinsured is obliged to disclose to potential reinsurers all "material facts” concerning the original risk, and failure to do so generally entitles the reinsurer to rescission of its contract (see, Royal Indemn. Co. v Preferred Acc. Ins. Co., 243 App Div 297, 301, affd 268 NY 566). But the reinsured ordinarily has no obligation to disclose the terms upon which insurance has been granted where those terms are generally to be found in policies of that nature, for the reinsurer ought to be aware of such standard terms (Butler & Merkin, Reinsurance Law, at A6.4-04 [1988]; see also, Carter, Reinsurance, at 125-126 [1979]). Where the reinsured has offered extended coverage or an unusual term, however, that is a material fact which, if not disclosed, would render a reinsurance agreement voidable. (Id.) Sumitomo asserts that coverage of incidental nuclear damage is routine in insurance of steel mills; defendants claim that the coverage is highly unusual.

Whether or not such coverage is in fact standard for steel mills generally, defendants in effect waived any claim that they would not have entered into this reinsurance agreement had they been aware of Amendment No. 3.

While defendants’ claim may be doubted on its merits (even their own clause does not exclude the coverage), the crucial point is that defendants were fully aware of Auburn’s loss before signing the cover note, and fully aware of Amendment No. 3 before they issued their certificates of reinsurance. Nonetheless, during the entire duration of the policy and for a considerable time thereafter — even well after they had denied payment and answered the complaint in this litigation — defendants failed to seek to void the agreement but treated it as fully valid.

Defendants correctly argue that issuance of a formal certificate of reinsurance is in a sense a technical or "ministerial” act. However, defendants not only failed to take steps to assert their alleged right to rescission within a reasonable time, as they were required to do (Carter, Reinsurance ch 4, at 128, [1979]), but also affirmatively treated the agreement as a valid one well beyond the point where they had the most complete possible notice of the coverage undertaken by Sumitomo. Under these circumstances, they have waived that claim (see, 16C Appelman, Insurance Law and Practice § 9254, at 348; Zeldman v Mutual Life Ins. Co., 269 App Div 53).

Having so concluded, we need not and do not decide the broader issue of a reinsured’s duty of disclosure where the reinsurer’s independent limitations on its exposure coincide with an allegedly unusual liability undertaken by the reinsured (see, Butler & Merkin, Reinsurance Law, at A6.4-05— A6.4-06, [1988] [citing British cases]).

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

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

Order affirmed, etc.

      . The clause, apparently a standard one, provides as follows:
      "1. This Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any Pool of Insurers or Reinsurers formed for the purpose of covering Atomic or Nuclear Energy risks.
      "2. Without in any way restricting the operation of paragraph (1). of this Clause, this Reinsurance does not cover any loss or liability accruing to the Reassured, directly or indirectly and whether as Insurer or Reinsurer, from any insurance against Physical Damage (including business interruption or consequential loss arising out of such Physical Damage) to:
      "I. Nuclear reactor power plants including all auxiliary property on the site, or
      "II. Any other nuclear reactor installation, including laboratories handling radioactive materials in connection with reactor installations, and 'critical facilities’ as such, or
      "HI. Installations for fabricating complete fuel elements or for processing substantial quantities of 'special nuclear material,’ and for reprocessing, salvaging, chemically separating, storing or disposing of 'spent’ nuclear fuel or waste materials, or
      'TV. Installations other than those listed in paragraph (2) III above using substantial quantities of radioactive isotopes or other products of nuclear fission.
      "3. Without in any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, from any insurance on property which is on the same site as a nuclear reactor power plant or other nuclear installation and which normally would be insured therewith except that this paragraph (3) shall not operate
      "(a) where Reassured does not have knowledge of such nuclear reactor power plant or nuclear installation, or
      "(b) where said insurance contains a provision excluding coverage for damage to property caused by or resulting from radioactive contamination, however caused. However on or after 1st January 1960 this sub-paragraph (b) shall only apply provided the said radioactive contamination exclusion provision has been approved by the Governmental Authority having jurisdiction thereof.
      "4. Without in any way restricting the operations of paragraphs (1), (2) and (3) hereof, this Reinsurance does not cover any loss or liability by radioactive contamination accruing to the Reassured, directly or indirectly, and whether as Insurer or Reinsurer, when such radioactive contamination is a named hazard specifically insured against.
      "5. It is understood and agreed that this Clause shall not extend to risks using radioactive isotopes in any form where the nuclear exposure is not considered by the Reassured to be the primary hazard.”

      . The trial court had granted defendants summary judgment on the ground that Amendment No. 3 modified the "original contract” of direct insurance, and that the reinsurers could not be bound by that modification absent their agreement in writing. However — despite a record as complete (in defendants’ words) "as it would be after trial” — defendants raise no issue of fact regarding Sumitomo’s proof that from the outset the parties’ intention was to continue Auburn’s coverage and that the agreement took the form it did because Sumitomo did not have its own policy forms that would have been suitable.

      . For purposes of this discussion, we need not determine which is technically the "offer” and which the "acceptance,” in classical contract terms — a subject that appears to have generated disagreement (see, Butler & Merkin, Reinsurance Law, at A5.1-01 [1988]).

      . The Appellate Division unanimously concluded that issuance of the reinsurance certificates alone barred defendants’ claim: "Under these circumstances, it was incumbent upon respondents to determine the scope of the coverage in the direct insurance policy before issuing their formal contract underwriting the risk of such coverage.” (149 AD2d, at 378; see also, id., at 380 [Wallach, J., dissenting].)

      .  Defendants’ concession before us that the nuclear coverage was considered incidental, not primary, resolves the open factual issue identified by the Appellate Division. However, this court is without jurisdiction to take the logical next step and grant summary judgment to Sumitomo, a nonappealing party (see, Hecht v City of New York, 60 NY2d 57; see also, Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106).


source: Caselaw Access Project

license: Public Domain

text:
    The People of the State of New York, Appellant, v Shimkon Batashure, Also Known as Shimkon Batoshvili, Respondent.
    Argued January 5, 1990;
    decided February 20, 1990

      POINTS OF COUNSEL

      Robert M. Morgenthau, District Attorney (Mark Dwyer and Ellyn Polshek of counsel), for appellant.

      Leonard I. Ressler for respondent.
   OPINION OF THE COURT

Kaye, J.

CPL 190.65 (1) sets out standards for when a Grand Jury is authorized to indict a person for an offense, but the statute does not specify who is to determine whether those standards are satisfied — the Grand Jury itself, or the District Attorney (its legal advisor). This appeal, centering on the statutory standard of legal sufficiency, calls upon us to resolve that open question.

This case is before us on the People’s appeal from an order affirming the dismissal of an indictment charging defendant with second degree grand larceny. The indictment was dismissed on the ground that certain instructions given by the Assistant District Attorney concerning the grand jurors’ role in evaluating the sufficiency of the evidence were erroneous, and so tainted the integrity of the proceeding that dismissal was required.

The substance of the critical instructions (set out in full in the footnote) was that determining the legal sufficiency of the evidence was for the Assistant District Attorney, not the concern of the grand jurors, and that the Assistant District Attorney deemed the evidence here to be legally sufficient. These instructions, given in response to two questions from grand jurors about the standard for voting an indictment and the elements of the crime, were repeated by the prosecutor several times in slightly varied form.

For the reasons that follow, we agree with the trial court and Appellate Division that the instructions were erroneous and require dismissal of the indictment.

CPL 190.65 (1) provides that "a grand jury may indict a person for an offense when (a) the evidence before it is legally sufficient to establish such person committed such offense provided, however, such evidence is not legally sufficient when corroboration that would be required, as a matter of law, to sustain a conviction for such offense is absent, and (b) competent and admissible evidence before it provides reasonable cause to believe that such person committed such offense.” (Emphasis added.) Although the statute authorizes the Grand Jury to indict only when both requirements are met, it does not state who is to determine that each standard has been satisfied.

A definition of "legally sufficient evidence” and "reasonable cause” is found in CPL 70.10:

"1. 'Legally sufficient evidence’ means competent evidence which, if accepted as true, would establish every element of an offense charged and the defendant’s commission thereof; except that such evidence is not legally sufficient when corroboration required by law is absent.
"2. 'Reasonable cause to believe that a person has committed an offense’ exists when evidence or information which appears reliable discloses facts or circumstances which are collectively of such weight and persuasiveness as to convince a person of ordinary intelligence, judgment and experience that it is reasonably likely that such offense was committed and that such person committed it. Except as otherwise provided in this chapter, such apparently reliable evidence may include or consist of hearsay.”

As is apparent from these definitions, legal sufficiency and reasonable cause are analytically distinct concepts. Evidence can satisfy either standard without necessarily satisfying the other (see, Bellacosa, Practice Commentary, McKinney’s Cons Laws of NY, Book 11A, CPL 70.10, at 705, for examples).

Seizing on this distinction, the People urge that sufficiency is a "legal” question committed exclusively to the prosecutor as the legal advisor to the Grand Jury (CPL 190.30 [7]), and reasonable cause a "factual” question for the jurors as the triers of fact. The People analogize the role played by the prosecutor to that of a Trial Judge ruling on a motion for a trial order of dismissal: the Trial Judge determines whether the People have presented a prima facie case without submitting the question to the jury. The only question before the trial court is the legal sufficiency of the evidence, with the quality and weight of the proof reserved for the trier of fact (People v Sabella, 35 NY2d 158).

The People are, of course, correct in asserting that in ruling on a motion for a trial order of dismissal, the Trial Judge alone determines the legal sufficiency of the evidence. But even assuming that the Trial Judge’s role as arbiter of the law is equivalent to the prosecutor’s function as the Grand Jury’s legal advisor, the People’s analysis fails, as is particularly evident in their efforts to sustain the instructions given in this case.

If a motion for a trial order of dismissal has been denied, the trial court may not then instruct jurors that it has found legally sufficient evidence against defendant, and that they are not to consider the legal sufficiency of the evidence. To the contrary, petit jurors are instructed that in order to convict, they must find that the People’s evidence proves every element of the charged crime, which is the gravamen of the CPL 70.10 definition of legal sufficiency.

The instructions given in this case — as any instruction to the effect that the question of the legal sufficiency of the evidence has already been resolved adversely to the defendant —are so central and prejudicial as to require dismissal. It is simply not permissible for a District Attorney to inform grand jurors, who by statute and Constitution, have the unique responsibility to decide whether to vote an indictment, that as a matter of law the prosecutor has already determined that there is enough evidence to warrant that action. At the very least, such an instruction delivered to laypersons carries an unacceptably high risk that they might misconstrue or undervalue their own role in reviewing the evidence, or even assume that the defendant should be indicted.

Nor does it follow from the fact that sufficiency of the evidence is addressed as a matter of law at various points in a prosecution that it is not also a factual question which, under CPL 190.65 (1), is to be determined by the Grand Jury not by the prosecutor. We do not agree with the People that "factual” and "legal” questions can be divided with surgical precision into discrete spheres — the first solely for the jurors, the second solely for their legal advisor. While it is difficult to posit a pure law question in an ongoing prosecution — where virtually every law question involves some factual predicate— there are certain issues that more readily fall into one category or the other. The admissibility of evidence, for example, may involve threshold factual determinations (see, People v Nieves, 67 NY2d 125, 135) but is largely a legal question, not suitable for resolution by lay jurors (see also, CPL 190.30 [6]). At the opposite end of the spectrum, credibility questions have traditionally been viewed as reserved for the trier of fact (but see, People v Foster, 64 NY2d 1144, 1147-1148 [witness too "irresponsible” to be credited, as a matter of law, citing People v Ledwon, 153 NY 10, 21]).

Here, the People would have us separate the question whether evidence exists which, if true, would establish every element of the crime (reserving that exclusively for the prosecutor) from the question whether such evidence was sufficiently persuasive to warrant belief that the defendant committed the crime (reserving that exclusively for the grand jurors [see, People v Jennings, 69 NY2d 103, 115]). Although such line-drawing may theoretically be possible, it impermissibly removes from the Grand Jury’s exclusive province the fundamental, primarily factual question whether there was evidence establishing each element of the crime.

Taking the People’s contention to its logical conclusion, grand jurors need not even consider whether all the elements of a crime had been established before voting to indict, for that is not necessary to a finding of reasonable cause. Indeed, the prosecutor’s response to“ a juror’s question about the elements suggested as much in this case. Yet that is an essential component of a valid indictment, which should not be decided by prosecutorial fiat. Such a procedure would significantly infringe upon a defendant’s right not to be held to answer for a felony charge except upon a Grand Jury’s indictment. Nor is this protection merely a theoretical one. Even when the People’s witnesses are credited, the grand jurors and the prosecutor will not invariably see eye to eye about what the evidence establishes, particularly when more inchoate questions such as intent and inferences to be drawn from circumstantial evidence are critical (see, e.g., People v Sullivan, 68 NY2d 495, 501). Instructions such as those given in this case, however, would predispose the grand jurors against concluding that, on their own evaluation of the evidence, there is simply nothing to establish one or more elements of a crime.

It is axiomatic that "a Grand Jury need not be instructed with the same degree of precision that is required when a petit jury is instructed on the law.” (People v Calbud, Inc., 49 NY2d 389, 394.) We also recognize that many "legal” questions with a factual component are appropriately determined by the District Attorney and need not be submitted to the Grand Jury (see, People v Darby, 75 NY2d 449 [decided today]; CPL 190.30 [6]). However, the question whether there is sufficient evidence of each element of a crime lies at the very heart of the decision to vote an indictment. Consequently, we agree with the courts below that the instructions given in this case impaired the integrity of the Grand Jury proceeding, and require dismissal of the indictment (CPL 210.35 [5]).

Finally, while we conclude that it is for the Grand Jury to scrutinize the prosecutor’s evidence and match it against the elements of the crime, we note that it is of course proper for the District Attorney to evaluate a matter for legal sufficiency before commencing, or continuing, a prosecution.

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

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

Order affirmed.

       "assistant district attorney: A member of the Grand Jury has a question about the legal charge regarding the standard for voting an indictment in this particular case.
      "Some of you may have sat as jurors in what’s called a petit jury, one that you see on television where there’s a trial. The burden of proof in a criminal case is beyond a reasonable doubt. Burden for indictment is a lower one, it’s not beyond a reasonable doubt, as I noted to you earlier.
      "And a member of the Grand Jury has a question regarding specifically what the elements are. It states a grand juror can vote an indictment when the evidence is legally sufficient to establish that such person committed such offense and competent and admissible evidence before it provides reasonable cause to believe that such person committed the offense. Now, that may sound like a bunch of legal gobble-de-goop. The question of whether evidence is legally sufficient is a question of law, not fact. So it is a question that must be determined by me, legal advisor, whether evidence is legally sufficient, okay. This case, I’m your legal advisor. That province of the law lies with an Assistant District Attorney. You are the judges of the facts whether a crime occurred or didn’t occur. It is a question that must be determined by me, your legal advisor. The fact that I or another Assistant District Attorney gives you a case to deliberate and vote on, without any recommendation, mounts to my determination that the evidence is legally sufficient, which means, that if you believe the evidence, it would be legally permissible to indict, okay. All right. I present the evidence in this case, I deemed it to be legally sufficient. Question for you is — as the judges of the facts — do you reasonably believe — do you have reasonable cause to believe that such person, in this case the defendant, committed the offense that is brought before you, okay.
      "Does that clarify at all? It’s very difficult.”


author: Titone, J.

text:
    The People of the State of New York, Appellant, v Montey Harper, Respondent.
    Argued January 5, 1990;
    decided February 20, 1990

      POINTS OF COUNSEL

      Kevin M. Dillon, District Attorney (J. Michael Marion, Lisa Bloch Rodwin and John J. DeFranks of counsel), for appellant.

      Timothy L. Foley for respondent.
   OPINION OF THE COURT

Titone, J.

The People appeal from an order of the Appellate Division which reversed a judgment entered on a jury verdict finding defendant guilty of bribe receiving by a witness (Penal Law § 215.05). The issue before us is whether an unlawful agreement to alter one’s testimony or avoid appearing at an action or proceeding may fairly be inferred from a "release” agreement in which one party agrees to "drop” criminal and civil charges in exchange for money and other valuable consideration. We agree with the Appellate Division that such a purported "release” is, without more, legally insufficient to establish the elements of the crime.

This appeal revolves around a feud between the Harper and Johnson families. The imbroglio began during the spring of 1981 when defendant, Montey Harper, became romantically involved with Mabel Betty Gladden, who was at that time married to James Johnson. Although. Gladden jilted Harper near the end of 1981, during the next few years Harper persistently pursued the relationship by following her around, apparently hoping that she would change her mind and resume the affair. This behavior infuriated Gladden’s children, especially James Johnson, Jr., also known as Rick James, and his brother Carmen Johnson. During the late evening of June 1, 1984, Harper was assaulted at the 2001 Club in Amherst, New York. Harper alleged that Rick James and Carmen Johnson were his assailants. On June 4, Harper sought legal advice in drafting a criminal misdemeanor complaint against Rick James and Carmen Johnson, and exploring the possibility of instituting a civil action. On June 5, Harper filed assault charges in the Amherst Town Court against Rick James and Carmen Johnson.

A few days later, Harper approached Betty Gladden, informed her about the assault and threatened to bring a civil suit and pursue the criminal charges, unless she paid Harper $10,000. Gladden acceded to Harper’s demands. Prior to giving Harper any money, however, Gladden had Harper execute a general release agreement. This agreement, drawn up on law firm stationery, and signed by Harper and Gladden in the presence of a notary, provided that:

"I, Montey Harper, promise to drop charges against James A. Johnson, Jr. also known as Rick James for a cash reimbursement in the sum of $5000.00 (five thousand and no/100 dollars).
"This sum represents my reimbursement for medical expenses that concurred [sic] due to a scuffle at the 2001 Night Club in Amherst, New York on June 1, 1984.
"Upon receipt of the $5000.00, I promise not harass or molest Mr. James, either verbally or in any other way.
"In return, I would like him to also not harass or harm me either verbally or in any other way.
"I, also promise to drop all Criminal or Civil Suits against Mr. James also Carmen Sims.”

The agreement further provided a time schedule by which an additional $5,000 would be paid to Harper.

After the initial $5,000 was delivered to Harper, Gladden drove Harper directly to the Amherst Town Court so that Harper could perform his end of the bargain by having the criminal charges dismissed. Harper met with Assistant District Attorney Joel Kurtzhalts, and informed him that he wanted to have the charges dismissed since he had worked out "some restitution.” Since Kurtzhalts had not been assigned to the case and did not have access to the case file, he refused to dismiss the charges. Nevertheless, the charges against Rick James were dismissed on October 1, 1984, without the assistance of Harper, due to facial insufficiency.

On October 3, 1984, Harper retained a new attorney who refiléd the assault charges in criminal court because Gladden had failed to make some of the scheduled payments, and James was purportedly violating the nonharassment clause of the release. At this time, Harper informed Assistant District Attorney Graff that he no longer wanted to drop the charges against James, since he had not received ail of the money that he was supposed to have received under the release agreement. Thereafter, Harper proceeded to make himself available to the prosecution and attended each court appearance made by James. Ultimately, the assault charges were again dismissed on March 19, 1985, upon the court’s own motion, because of its view that the matter was better handled in alternate dispute resolution or in a civil action.

Meanwhile, Betty Gladden, having paid a total of $6,400, became financially unable to fulfill the remainder of her side of the bargain. Concerned that Harper would continue to harass her family, Gladden spoke with an attorney, who brought this entire matter to the attention of the District Attorney.

Harper was charged with bribe receiving by a witness in contravention of Penal Law § 215.05, and, after a jury trial, was found guilty as charged. On appeal, the Appellate Division reversed Harper’s conviction and dismissed the indictment, concluding the evidence presented was legally insufficient since "the record contains no evidence that defendant would alter his testimony if the criminal prosecution against the son were continued or that defendant sought to absent himself or otherwise avoid appearing as required by the People.” (145 AD2d 933.)

As a threshold matter, in reviewing legal sufficiency we are required to view the evidence in the light most favorable to the prosecution and decide whether a rational trier of fact could have found the elements of the crime proven beyond a reasonable doubt (People v Contes, 60 NY2d 620, 621; Jackson v Virginia, 443 US 307, 319). Applying this standard to the evidence presented at trial, the Appellate Division correctly concluded that the jury verdict was not supported by sufficient evidence to establish that defendant committed the crime.

Penal Law § 215.05 provides that: "A witness * * * is guilty of bribe receiving by a witness when he solicits, accepts or agrees to accept any benefit from another person upon an agreement or understanding that (a) his testimony will be influenced, or (b) he will absent himself from, or otherwise avoid or seek to avoid appearing or testifying at, such action or proceeding.”

The gist of the crime is not the payment of money, but rather the "agreement or understanding” under which a witness accepts or agrees to accept a benefit (see, People v Arcadi, 79 AD2d 845, 846, affd 54 NY2d 981; see also, Penal Law § 10.00 [17]). Consequently, all that is required for the completed crime is that a witness solicit, accept or agree to accept a benefit in exchange for a promise either that his testimony will be affected or that he will absent himself from or otherwise avoid appearing at the action or proceeding. There is no requirement that the benefit actually be conferred, that the testimony actually be influenced, or that the witness actually absent himself (see, People v Shaffer, 130 AD2d 431, 432-433).

Our inquiry in this case focuses upon the meaning of the word "drop” as that term appears in the general release agreement executed by defendant and was used by him in his conversations with A.D.A.’s Kurtzhalts and Graff. Indeed, defendant’s signed agreement to "drop” civil and criminal charges in exchange for the payment of money constitutes the heart of the People’s case.

The People argue that although defendant’s signed promise to "drop the charges” does not explicitly state that he would avoid testifying or absent himself from the criminal proceedings, the expectation that he would not appear is implicit in the agreement. Further, the People maintain, the phrase "drop the charges” can be interpreted as a promise to attempt in some manner to halt the criminal proceedings or hinder the prosecution. In the People’s view, the solicitation or acceptance of a benefit in exchange for a refusal to cooperate with the prosecutor or an attempt to have a criminal complaint dismissed is a violation of Penal Law § 215.05. Under the circumstances of this case, the People’s arguments cannot be sustained.

As common sense and experience suggest, agreeing to "drop” charges is certainly not the same as agreeing to alter testimony or absent oneself entirely from a proceeding. Consequently, evidence that someone has agreed to do the former cannot alone be used as a basis to infer the existence of an agreement to do the latter. To the contrary, an agreement to "drop” criminal charges says nothing about the promisor’s intention to appear and testify truthfully in the event that the prosecutor decides to proceed despite the promisor’s wishes to the contrary. At worst, it suggests a fundamental misunderstanding by one or both parties of the power that private citizen-complainants have over the conduct of criminal proceedings.

Thus, the decision to drop charges cannot provide a sufficient basis from which a rational jury could infer that defendant had entered into the kind of agreement prohibited by Penal Law § 215.05. Since the record is devoid of any additional evidence establishing such an agreement, the jury verdict could only have been based upon sheer speculation that defendant, in addition to agreeing to drop the criminal and civil charges, also agreed to either perjure or absent himself if the assault case had gone to trial. This is especially so where, as here, the terms of the agreement itself reveal a far less sinister purpose.

Finally, the People’s argument, that the statute should be construed to encompass agreements to hinder a prosecution or attempt improperly to remove a case from the criminal justice system, would, if accepted, violate the general principle that penal statutes are to be interpreted according to the fair import of their terms so that penal responsibility is not extended beyond the fair scope of the statutory mandate (see, People v Ditta, 52 NY2d 657; People v Sansanese, 17 NY2d 302, 306; Penal Law § 5.00). While the People correctly point out that it is improper to use the threat of criminal prosecution as a means of extracting money in a civil suit (see, e.g., Penal Law § 155.05 [2] [e] [iv]; Code of Professional Responsibility DR 7-105, EC 7-21), and that the determination as to whether and how to prosecute a criminal case belongs to the District Attorney and not the complainant (see, Matter of Schumer v Holtzman, 60 NY2d 46, 52; People v Zimmer, 51 NY2d 390, 394), the actions undertaken by defendant Harper do not constitute the crime of bribe receiving by a witness within the meaning of Penal Law § 215.05.

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

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

Order affirmed.


author: Per Curiam.

text:
    Solomon Kaplan et al., Respondents, v Heinz J. Lippman et al., Appellants. (Action No. 1.) Heinz J. Lippman et al., Appellants, v Solomon Kaplan et al., Respondents. (Action No. 2.)
    Argued January 9, 1990;
    decided February 22, 1990

      POINTS OF COUNSEL

      Irving Serota for appellants.

      Irving Heisler for respondents.
   OPINION OF THE COURT

Per Curiam.

In this case, the issue is whether the sublessee of a cooperative apartment validly exercised an option to purchase contained in the sublease agreement. Appellants Heinz J. Lippman and Gertrude Wengraf sublet a cooperative apartment on Park Avenue in New York City to Solomon Kaplan, M.D., William J. Shapiro, M.D., Martin Goldstein, M.D., P. C. in 1976. The name of this corporation was changed by certificate of amendment to Solomon Kaplan, M.D., William J. Shapiro, M.D., Martin Goldstein, M.D., Elliott Gellman, M.D., P. C., and it is this corporation that is the respondent in this appeal. Paragraph 18 of the sublease agreement gave the sublessee corporation and/or its shareholders the option to purchase the sublessors’ shares in the cooperative apartment for $30,000, provided the option was exercised "by written notice delivered to the Lessors not later than six (6) months prior to the termination of the option term hereunder.”

By letter dated July 24, 1984, Stanley Stern, attorney for the sublessee corporation, notified Henry H. Sternberg, the attorney who had previously represented the appellant sublessors in this matter, of the corporation’s intent to exercise the option to purchase pursuant to the sublease agreement. Three additional letters were sent to Sternberg, but there was no response to any of the four letters. On April 9, 1986, Joel Shoobe, another attorney for the sublessee corporation, wrote directly to appellant Lippman and referred to the earlier series of letters that had been sent to Lippman’s attorney in an effort to exercise the option.

There is no real dispute here as to whether Lippman and Wengraf had actual notice that the subtenant was seeking to exercise the purchase option. It appears that the sublessors chose to ignore the subtenant’s efforts to exercise the option. The sublessors attempt to shift the burden of responsibility by arguing that exercise of the option failed to comply with the Statute of Frauds (General Obligations Law § 5-703). They claim that the exercise of the option violated the Statute of Frauds because the attorney for the subtenant did not have the written authority from his client to exercise the option on its behalf. They argue that because the actual exercise of an option to purchase an estate or interest in real property must comply with the Statute of Frauds, any effort by an agent on behalf of the principal to exercise such an option must be accompanied by a separate written authorization from the principal.

We disagree, and in so doing, agree with the Appellate Division holding in Stark v Fry (129 AD2d 237) and reject an earlier Appellate Division case, Ochoa v Estate of Sarria (97 AD2d 538). It is the execution of the option agreement, and not the exercise of the option, that is controlling with respect to the application of the Statute of Frauds.

"An option contract is an agreement to hold an offer open; it confers upon the optionee, for consideration paid, the right to purchase at a later date” (Leonard v Ickovic, 79 AD2d 603, affd 55 NY2d 727; see also, 1 Williston, Contracts § 61B [3d ed 1957]; Restatement [Second] of Contracts §25). The most striking feature of the contractual arrangement known as an "option” is that while the optionor cannot act in derogation of the terms of the option agreement, the optionee is not bound until the option is actually exercised (Williston, op. cit.). Thus, until the optionee gives notice of his intent to exercise the option, the optionee is free to accept or reject the terms of the option (id.).

Because an option to purchase an interest in real property is in effect a conditional contract for a future conveyance of land, a contract that creates such an option is within the Statute of Frauds (see, 2 Corbin, Contracts §§ 417, 418 [1950]). This sort of an agreement constitutes the creation and grant of an interest in real property, and must be in writing to be valid under the Statute (see, Casolo v Nardella, 275 App Div 502, 504).

In the case now before us, the Statute of Frauds was satisfied because the option agreement was contained in a written sublease agreement that was signed by the party to be charged, here, the sublessors (see, Crocker v Page, 210 App Div 735, 736). Since the option agreement was contained in a validly executed sublease agreement, the terms of the option control the manner in which it is to be exercised. The optionee must exercise the option "in accordance with its terms within the time and in the manner specified in the option” (Williston, op. cit., at § 61B). Once the optionee gives notice of his intent to exercise the option in accordance with the agreement, the unilateral option agreement ripens into a fully enforceable bilateral contract (see, Cochran v Taylor, 273 NY 172, 183; Bullock v Cutting, 155 App Div 825, 828).

In this case, the option agreement required that the subtenant give the sublessors written notice not later than six months prior to the expiration of the option term. Thus, the real issue in this case is whether the sublessors must convey their interest in the cooperative shares pursuant to the sublease agreement where the written notice required by the agreement was sent not to them, but to the attorney who had represented them in this matter. We hold that under the facts of this case, where the sublessors had actual notice within the specified time period that the subtenant intended to exercise the purchase option contained in the agreement, that the sublessors will be held to their agreement.

We have considered appellants’ other arguments, and conclude they are without merit. Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion.

Order affirmed, with costs.

       We would further note that the sublessors’ Statute of Frauds argument was doomed from the outset because it demonstrates an essential misunderstanding of the way in which the statute operates. The Statute of Frauds requires that a contract for the sale or long-term lease of property be signed by the party to be charged, i.e., the party against whom enforcement of the contract is sought. The absence of a signature by the party seeking to enforce the agreement is without legal significance. In this case, the sublessors are the party to be charged, and the obligation that they are seeking to avoid is the purchase option contained in the sublease agreement. Because the sublessors signed the sublease agreement, the Statute of Frauds has been fully satisfied. Whether the subtenant’s exercise of the option complied with the Statute of Frauds is thus irrelevant under the facts of this case because the subtenant is not the party against whom enforcement of the agreement is sought.


author: Alexander, J. Kaye, J.

text:
    The People of the State of New York, Respondent, v Jerome Chipp, Appellant.
    Argued January 10, 1990;
    decided February 15, 1990

      POINTS OF COUNSEL

      Miriam J. Hibel and Philip L. Weinstein for appellant.

      Robert M. Morgenthau, District Attorney (Paul Harnisch, Mark Dwyer and James M. McGuire of counsel), for respondent.
   OPINION OF THE COURT

Alexander, J.

Having been convicted after a jury trial of first degree sexual abuse, first degree attempted sodomy, endangering the welfare of a child and fourth degree criminal possession of a weapon, defendant appeals by leave of an Associate Judge of this court, from the Appellate Division order unanimously affirming, without opinion, the judgment of conviction.

The principal issues presented are whether the hearing court’s refusal to allow defendant to call the complaining witness to testify at a combined Huntley and Wade hearing (People v Huntley, 15 NY2d 72; United States v Wade, 388 US 218) denied him a constitutional or statutory right to present relevant evidence on the issue of the suggestiveness of a pretrial lineup identification procedure, whether the lineup was unduly suggestive, and whether the lineup identification should have been suppressed in any event because it was the fruit of an unlawful arrest.

I

While on her way to school on April 7, 1986, Shanica F., who was then 10 years old, stopped in front of a building on West 131st Street in Manhattan to tie her shoe. A man, whom she later identified as the defendant, grabbed her from behind, threatened her with a knife and compelled her to accompany him to the roof where he sexually abused her and attempted to sodomize her.

Shanica pushed the defendant and, as he stumbled, she managed to escape by running past him and down the stairs. As she ran down the stairs she cried for help and pounded on apartment doors. Defendant fled down the stairs also. One of the tenants, Shermain Thompson, hearing the screams and the commotion, came out of her apartment, saw Shanica with her clothes in disarray and assisted her while a friend called the police. As Shanica described her attacker to the police who responded, Ms. Thompson realized that Shanica was describing the defendant, whom Ms. Thompson knew to be a friend of her brother, Sherman Thompson, and whom she had encountered in the building a scant half-hour earlier.

Detective Bruno Francisci was assigned to the case. He interviewed Shanica at the hospital where she had been taken. Shanica told him what had happened and gave him a description of her attacker and his knife. She described her attacker as a light-skinned Black male, with short black hair, wearing a black baseball cap with white writing on the front and black-framed glasses. The assailant had told Shanica that his name was "Oscar.” Francisci also interviewed Shermain and Sherman Thompson. Shermain indicated that based on the description she heard Shanica give the police, she recognized the assailant as an acquaintance of her brother and as the person she had seen in the building that morning. Sherman Thompson, interviewed separately, indicated that he knew the person described by his sister as "Apache” and gave Francisci a description similar to that given by Shanica and Shermain.

Francisci gave his card to the Thompsons and to Larry Washington, another friend who also knew "Apache”, and instructed them that if the man known as "Apache” should again "come into the area” they were to call 911, describe him and "present themselves” and tell the police that "the guy— was in the building at the time of the incident.”

Two days later, police officers responding to a radio run directing them to the 131st Street building, found a number of civilians holding the defendant. The officers were told that defendant was the man who had "raped” a 10-year-old girl two days before. One of the male civilians gave the officers Detective Francisci’s business card and said that Francisci was handling the case. The officers summoned their supervisor, the sergeant on patrol, who shortly arrived at the scene. The officers informed the sergeant that the people holding defendant had given them Francisci’s business card and had said that defendant had raped a little girl. The sergeant was familiar with the case; he remembered the original police report which indicated that both Shermain Thompson and the victim could identify the perpetrator. He determined that defendant should be taken to the precinct house. Defendant did not resist his detention and transportation, but protested that he had done nothing.

Later that afternoon, after administering Miranda warnings (Miranda v Arizona, 384 US 436) to defendant, Francisci took a statement in which defendant denied any complicity in the events of April 7 and explained his presence at the 131st Street building on April 9. Francisci arranged for Shanica and her father to attend a lineup at the 20th Precinct where defendant was being detained. Defendant was isolated in a room where neither Shanica nor her father could see him. Four fill-ins were secured and placed in the lineup with defendant who chose the number 2. Viewing the lineup with only Detective Francisci present, Shanica identified defendant as her attacker within 10 seconds.

At the combined Huntley-Wade hearing, defense counsel requested that the People be required to produce Shanica to sustain their burden of going forward to establish the propriety of the pretrial identification. Counsel argued that because he had not been present at the prearraignment lineup and because his attempts to interview Shanica had been prevented by Francisci he had not been able to "discover what exactly, what police procedures were used”. He contended that under existing precedent the People had "the burden of producing the complainant, the identifying witness for the purpose of sustaining the[ir] legality of the misarranged [sic] confrontation.”

The People argued, however, that a bifurcated hearing should be held to determine, initially, whether the lineup procedures were unduly suggestive and, if so, to then proceed to determine whether the complaining witness’s identification was grounded upon an independent basis, free of the taint of the suggestive lineup procedures. The court agreed with the People’s position and ordered a bifurcated hearing.

As the hearing was about to proceed, defense counsel was furnished with a color photograph of the lineup together with a lineup form describing the ages, heights and weights of the stand-ins, who, respectively, were: number 1: 22 years old, 5 feet 8 inches, 140 pounds; number 3: 29, 5 feet 7 inches, 140 pounds; number 4: 17, 5 feet 7 inches, 140 pounds; and number 5: 21, 5 feet 7 inches, 130 pounds. The photograph and lineup form were received in evidence.

Counsel argued that because three of the fill-ins had "significantly darker” complexions than defendant, who had been described as a "light-skinned Black male wearing dark clothes” and because the only fill-in arguably of a hue similar to defendant’s complexion was Hispanic and was dressed in light clothes, the lineup was prima facie suggestive, thus necessitating the People having to call Shanica to sustain their burden. The application was summarily denied and the hearing proceeded.

Detective Francisci and Officers Burns and Dibisceglio, the two officers who had responded on April 9, testified to the facts as outlined above. Defense counsel renewed his application to call Shanica, this time as a defense witness, "for the purpose of determining whether there was any such activity [of suggestiveness] regarding the police arranged confrontation between [defendant] and Shanica F[]”. He again remarked upon the fact that he had not been present at the lineup and that Shanica was the only person having information about the lineup other than the police officers. He also renewed his argument that the photograph of the lineup demonstrated, prima facie, undue suggestiveness. The court denied the application, finding that no undue suggestiveness had been shown and concluding that there had been no showing of a need to call the complaining witness to establish an independent basis for an in-court identification.

Defense counsel then proffered two additional bases upon which he claimed to be entitled to call Shanica as a witness: that defendant had been deprived of his right to counsel at the lineup by virtue of an unreasonable 40-hour delay between arrest and arraignment and that the police lacked probable cause for defendant’s arrest. He argued that the lineup identification should be suppressed based on either ground and that Shanica should be called to determine whether an independent basis existed for her in-court identification.

In a written decision the court denied suppression of defendant’s statements and the lineup identification, concluding that no undue suggestiveness had been demonstrated, and thus there was no need to produce the complaining witness at the hearing.

The Appellate Division affirmed defendant’s conviction, without opinion. We now also affirm.

II

Recognizing that he has no right to compel the People to produce the complaining witness at the Wade hearing (People v Blue, 31 NY2d 1002, affg 37 AD2d 581), defendant asserts an unqualified right to call the complainant as his witness to present relevant evidence and that because he was denied this right he is entitled to a new hearing. He argues the complainant had relevant evidence because she viewed the lineup and was "the only means by which the defense [could] meaningfully supplement or challenge the People’s case.” Defendant urges that this right derives from the Compulsory Process Clause of the Federal Constitution and CPL 60.15 (1) and further argues that, in any event, he should have this right as a matter of fairness because he had the ultimate burden of showing that the lineup was suggestive. As a separate basis for reversal, defendant contends that the lineup should have been suppressed as the fruit of an unlawful arrest and, as the People failed to demonstrate an independent source for the witness’s in-court identification, "it should have been suppressed as well.

Contrary to defendant’s assertions, suppression was not required on any of the grounds advanced.

A

We note at the outset that, since this was a prearraignment lineup occurring before the filing of an accusatory instrument, defendant’s right to counsel had not attached (People v Hawkins, 55 NY2d 474, 482-488) and the fact that counsel was not present at the lineup is of no legal consequence.

It is firmly established in our jurisprudence that unduly suggestive pretrial identification procedures violate due process and therefore are not admissible to determine the guilt or innocence of an accused (United States v Wade, 388 US 218, supra; People v Blake, 35 NY2d 331; People v Riley, 70 NY2d 523; People v Adams, 53 NY2d 241). We have held that "[s]howup identifications, by their nature [are] suggestive [and] are strongly disfavored” (People v Riley, supra, at 529). By contrast corporeal lineups, properly conducted, generally provide a reliable pretrial identification procedure and are properly admitted unless it is shown that some undue suggestiveness attached to the procedure. While the People have the initial burden of going forward to establish the reasonableness of the police conduct and the lack of any undue suggestiveness in a pretrial identification procedure, it is the defendant who bears the ultimate burden of proving that the procedure was unduly suggestive (People v Berrios, 28 NY2d 361). Where suggestiveness is shown, it is the People’s burden to demonstrate the existence of an independent source by clear and convincing evidence (People v Rahming, 26 NY2d 411, 417). Absent some showing of impermissible suggestiveness, however, there is no burden upon the People, nor is there any need, to demonstrate that a source independent of the pretrial identification procedure exists for the witness’s in-court identification (People v Rahming, 26 NY2d 411, supra; People v Berrios, supra).

Here, the hearing court determined that the People had satisfied their initial burden and that the lineup procedure employed was not unduly suggestive. That determination, undisturbed by the Appellate Division, if supported by the record is beyond our review unless there is an alleged error of law. (People v Wilson, 64 NY2d 634; People v Dickerson, 50 NY2d 937, affg 67 AD2d 122; see also, People v Rodriguez, 64 NY2d 738, 740-741.)

Contrary to defendant’s contention, the hearing evidence does not establish, prima facie, that the lineup was unduly suggestive as a matter of law. Defendant premises his argument solely upon the fact that three of the fill-ins had complexions "considerably darker” than that of the defendant, who had been described as a "light-skinned Black male”, and that only one of the fill-ins, whom defendant contends was Hispanic, had a complexion reasonably close to his own. There is no requirement, however, that a defendant in a lineup be surrounded by people nearly identical in appearance (People v Mason, 138 AD2d 411, 412; People v Collins, 136 AD2d 720, 721). Here the implicit finding of the hearing court was that the difference in skin tone of three of the fill-ins, when considered together with the similarity of age, height and body type of all the fill-ins was not sufficient to create a substantial likelihood that the defendant would be singled out for identification. We cannot say on this record that this determination was erroneous as a matter of law.

B

Defendant argues that the lineup identification must be suppressed in any event because the court erred in precluding him from calling the 10-year-old complainant as his witness and therefore denied him a constitutional and statutory right to present relevant evidence. This argument must be rejected.

The right of compulsory process is essentially a trial right, enabling an accused to present his own version of the facts to the trial jury (Chambers v Mississippi, 410 US 284; Webb v Texas, 409 US 95; Washington v Texas, 388 US 14). Where the determination at issue is the guilt or innocence of an accused, due process requires that an accused be able to present witnesses in his own defense "to the jury so it may decide where the truth lies.” (Washington v Texas, 388 US, at 19, supra.) Although this right has been characterized as "fundamental” (Chambers v Mississippi, 410 US, at 302, supra), even at trial it is not absolute and may yield to policy considerations such as the State’s interest in the orderly conduct of trials (Taylor v Illinois, 484 US 400, 414-416 [defense denied compulsory process as a discovery sanction]).

Similarly, while CPL 60.15 (1) affords defendant, as well as the prosecution, a right to call witnesses at a criminal proceeding, that right is not absolute, and nothing in the language of the statute warrants construing it, in the circumstances of this case, as conferring on defendant a right of compulsory process broader than that accorded by the Federal Constitution.

Here, defendant does not assert a trial right of compulsory process, but rather an unqualified right to present relevant evidence at a Wade hearing which, although properly characterized as a criminal proceeding, concededly does not involve a determination of his guilt or innocence (see People v Berzups, 49 NY2d 417,421; People v Ayala, 75 NY2d 422,428-429). Rather, the purpose and function of the Wade hearing is to determine whether a police-arranged pretrial identification procedure such as a lineup, was unduly suggestive (Stovall v Denno, 388 US 293). To be contrasted is a preliminary hearing, which has been acknowledged as being a critical stage of the criminal process (see, Coleman v Alabama, 399 US 1, 9) that "conceptually and pragmatically may serve as a virtual minitrial of the prima facie case” (People v Hodge, 53 NY2d 313, 318).

Defendant offers no persuasive authority for the proposition that an absolute right to compulsory process attaches to a Wade hearing. Rather, as at trial, any right of compulsory process at a Wade hearing may be outweighed by countervailing policy concerns, properly within the discretion and control of the hearing Judge. To hold otherwise would, in our view, only encourage the misuse of Wade hearings. To accord every defendant an absolute right to call an identifying witness at a Wade hearing would enable defendants to harass identifying witnesses and to transform the hearing into a discovery proceeding neither authorized nor contemplated by the Legislature (see, People v Hodge, 53 NY2d 313, 318, supra).

Indeed we have held in respect to pretrial hearings more directly addressing the guilt or innocence of an accused that a defendant’s right to require the production of a witness with relevant testimony could be outweighed by countervailing policy considerations (People v Petralia, 62 NY2d 47, 52-53). There, at a suppression hearing addressing the issue of probable cause to arrest for the sale of narcotics, we held that the defendant could not require the testimony of an undercover police officer who allegedly purchased the drugs unless evidence at the hearing demonstrated a substantial issue as to the legality of the arrest. Even though the undercover had relevant testimony to offer — he obviously was present at and participated in the sale — we noted that as long as other evidence at the hearing sufficiently established probable cause, policy considerations militated against requiring the officer to appear at the hearing (id.). These considerations included, inter alia, preventing suppression hearings from being used as tools to pressure the prosecution into accepting a plea more favorable to the defendant in order to avoid compromising the undercover’s safety or the integrity of pending investigations (id., at 53).

Similar policy considerations, as already noted, militate against a rule that would render the identifying witness subject to compulsory process at the behest of the defendant absent some indication that the pretrial identification procedure was suggestive. This is not to say, however, that an identification witness’s testimony may never be required. Such a witness’s testimony might become necessary if the hearing evidence raises substantial issues as to the constitutionality of the lineup, the resolution of which could not be properly resolved without testimony from the identification witness. Thus, in People v Ocasio (134 AD2d 293, 294) the court held that testimony from the identifying witnesses was needed when a detective’s testimony about showing a photo array to several witnesses left open the possibility that a witness who had already viewed the array influenced or suggested another witness’s identification of defendant.

The dissent’s concern that defendant was unfairly precluded from questioning the complainant about the possibility of suggestiveness at the Wade hearing (dissenting opn, at 341) overlooks the fact that defendant will be able to examine the witness and explore issues relevant to identification at trial. Due process does not require that in every case a hearing be conducted outside the presence of the jury to determine the admissibility of identification evidence (Watkins v Sowders, 449 US 341, 347-349). Any improprieties in pretrial identification procedures can be investigated under the "time-honored process of cross-examination” (id., at 349). " 'Counsel can both cross-examine the identification witnesses and argue in summation as to factors causing doubts as to the accuracy of the identification — including reference to both any suggestibility in the identification procedure and any countervailing testimony such as alibi.’ ” (Manson v Brathwaite, 432 US 98, 114, n 14, quoting Clemons v United States, 408 F2d 1230, 1251 [concurring opn] [n omitted].)

Here, no indicia of suggestiveness was presented to the hearing court, nor indeed even at trial. Defendant’s primary contention was that the complainant might offer testimony that the varied complexions of the subjects of the lineup rendered the procedure unduly suggestive. As the court already had a photograph of the lineup before it, the complainant’s testimony on this point could only have been cumulative and it was therefore within the discretion of the hearing Judge to exclude it. Defendant’s additional contentions that the complainant might have revealed that something improper was said to her during the procedure are, on the record before the hearing Judge, purely speculative. Thus, in the circumstances of this case, the court did not abuse its discretion in denying defendant’s request to call the complainant at the Wade hearing.

C

Defendant’s contention that the lineup identification was erroneously admitted because the police lacked probable cause to arrest him must also be rejected. A finding that probable cause existed for defendant’s arrest is implicit in the court’s ruling inasmuch as the court held the lineup identification admissible despite defendant’s argument that the arresting officers lacked probable cause. That implicit finding, affirmed by the Appellate Division, is entitled to no less deference than an express finding (People v Bell, 63 NY2d 796, 797-798; People v Alfinito, 16 NY2d 181, 186), and perforce limits our review to the question whether there is sufficient evidence in the record to support a finding of probable cause (see, People v Bigelow, 66 NY2d 417, 420-421).

On a careful review of this record, we cannot say that the evidence before the court was insufficient as a matter of law to support the finding of probable cause. That the hearing testimony did not establish conclusively that the arresting officers knew the basis of Shermain Thompson’s knowledge is not fatal to a determination of probable cause. She was an average citizen who by happenstance was a witness able to identify the alleged perpetrator of the crime, as indicated by the original police report in the case, and could relate what she knew to police as a matter of civic duty. As such, her information was properly accorded a high level of reliability, especially in view of the criminal sanctions attendant upon falsely reporting such information to the authorities (see, People v Moore, 32 NY2d 67, 71).

Defendant’s contention that the court’s charge regarding his failure to testify tended to ^undermine his privilege against self-incrimination is unpreserved for our review (see, People v Autry, 75 NY2d 836). Finally, defendant’s claim that the court curtailed, excessively, both at the hearing and at the trial, his direct and cross-examination of witnesses is without merit as are such of his remaining contentions as are preserved.

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

Kaye, J.

(dissenting). The court today holds that it was permissible summarily to deny defendant the opportunity to call the complainant — the only civilian witness, and the witness who picked defendant out of a lineup — as a defense witness at the hearing on defendant’s Wade motion. In reaching this result, the court does not deny that the complainant had relevant testimony to present, or that defendant had a right to call witnesses at this adversarial hearing (see, CPL 60.15 [1]), but relies on "policy concerns,” and ultimately on defendant’s inability to make a concrete offer of proof concerning the complainant’s testimony. Inasmuch as defendant could hardly be expected to make a concrete offer of proof about the testimony of a witness who had refused, allegedly under police instructions, to speak with defense counsel, and inasmuch as the policy considerations advanced by the majority do not in my view warrant the blanket denial of defense access to relevant, potentially crucial testimony, I respectfully dissent.

As the United States Supreme Court noted in determining that the presence of counsel was required at a postarraignment lineup, "the confrontation compelled by the State between the accused and the victim or witnesses to a crime to elicit identification evidence is peculiarly riddled with innumerable dangers and variable factors which might seriously, even crucially, derogate from a fair trial.” (United States v Wade, 388 US 218, 228.) The great danger of suggestiveness was there held to mandate the right to have counsel attend the lineup, both to prevent taint in the first instance and to record or reconstruct it in later proceedings, as the defendant personally was often unable to do. Notwithstanding that the same potential for improper suggestion, and the same difficulty in reconstructing any unfairness at trial inheres in all lineups, we have chosen not to extend the right to counsel to prearraignment lineups (People v Hawkins, 55 NY2d 474, 482-488).

Now the majority goes a step further, and declares in sweeping terms that not only was defendant not entitled to have his attorney present, but also there was no impropriety and no unfairness in an "adversarial” hearing at which defendant was effectively forced to take his chances that any defect in the identification proceedings would be revealed based solely on the testimony of the police officers who had arranged and conducted the lineup.

To be sure, there is no due process right to a separate pretrial hearing to determine the admissibility of identification evidence. But denial of a motion to suppress " 'may often spell the difference between conviction or acquittal’ ” (see, People v Anderson, 16 NY2d 282, 287), and where the State has provided for an adversarial pretrial hearing, it cannot simultaneously render that hearing a formality by denying defendant access to testimony to establish impropriety unless he first shows impropriety. The Legislature itself has recognized that anomaly by recently eliminating any requirement that defendant make a factual showing when asserting that an identification was tainted by an improper procedure (L 1986, ch 776). "[T]he rationale for the amendment most probably stems from the fact that in many cases the defendant is not in a position to know whether challengeable identification techniques were employed.” (Preiser, 1986 Supplementary Practice Commentaries, McKinney’s Cons Law of NY, Book 11 A, CPL 710.60 [3] [b], 1990 Cum Ann Pocket Part, at 92.)

I do not dispute that there may be sound policy reasons for limiting a defendant’s statutory right to call witnesses, and specifically the complainant, in particular cases. On this record, however, none have been established, and I cannot concur in the majority’s willingness to establish a presumption against the defendant’s right to call the complainant. Relegating the defendant to uncover Wade hearing improprieties during cross-examination of the complainant at trial is by no means the equivalent of a fair pretrial hearing on these issues.

The policy reasons identified by the majority do not warrant this result. First, the discussion of People v Petralia (62 NY2d 47) is wholly inapposite; there is no concern here for an undercover officer’s safety or for the integrity of an ongoing investigation. Second, while harassment of victims and witnesses and abuse of hearings for discovery purposes are surely valid concerns, I cannot agree that preemptive denial of defendant’s right is the proper course of action. Those concerns, as well as a concern for procedural fairness, are better served in particular cases by measures tailored to address the abuses. Here, for example, if the trial court were indeed concerned about a fishing expedition by defendant, or harassment of the victim — no such concern was evidenced by the prosecutor in the colloquy concerning the hearing — it might have permitted defense counsel simply to interview the victim, or limited her testimony at the hearing. What the court could not do was to flatly deny defendant all access to the only civilian witness present at the lineup, while at the same time requiring him to make a prima facie showing of impropriety before requiring her testimony.

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

Order affirmed.

      . Defendant who had selected number 2, was 24 years old, 5 feet 7 inches tall and weighed 130 pounds. All lineup participants were Black males with short black hair, similar to defendant’s.

      . This argument has been abandoned and is not before us on this appeal.

      . The People had stipulated that they would not introduce the defendant’s statements at trial.


author: Alexander, J.

text:
    The People of the State of New York, Respondent, v William H. Keyes, Appellant.
    Argued January 9, 1990;
    decided February 20, 1990

      POINTS OF COUNSEL

      Terence L. Kindlon for appellant.

      Sol Greenberg, District Attorney (George H. Barber of counsel), for respondent.

      Gregory A. Loken for Covenant House, amicus curiae.

   OPINION OF THE COURT

Alexander, J.

The primary question presented on this appeal is whether the procurement of child pornography for personal use falls within the ambit of Penal Law § 263.15, which criminalizes the promotion of a sexual performance by a child. We conclude that it does and affirm the order of the Appellate Division reinstating the indictment.

I

Defendant was charged in a five-count indictment with promoting a sexual performance by a child in violation of Penal Law § 263.15. Four counts alleged that, knowing the contents thereof, defendant procured child pornography through the mail and the fifth count alleged that, knowing the contents thereof, defendant procured child pornography in his home from an undercover officer. Defendant was arrested and indicted following the seizure, pursuant to a search warrant, of various items of child pornography at his home. The search warrant application alleged that magazines and videotapes portraying child pornography in various forms had been purchased by defendant from an undercover officer, who after an investigation, had contacted defendant first by telephone and later in person. According to the warrant application, defendant expressed an interest in receiving pictures of young boys, age 13-18, in sexually explicit poses. Defendant gave the officer his name and mailing address and suggested that the materials be sent in an envelope with no return address so that in the event defendant was caught, he could deny knowledge of the material. Defendant paid for child pornography in the form of magazines and videotapes which he received from the officer both through the mail and, on one occasion, by personal delivery to defendant at his home.

County Court granted defendant’s motion to dismiss the indictment, reasoning that Penal Law § 263.15 was directed at the distribution of child pornography and did not prohibit the acquisition of such materials for personal use (135 Misc 2d 993). The Appellate Division rejected County Court’s narrow construction of the statute, concluding that the term "procure”, as used in the statutory definition of "promote” in Penal Law § 263.00 (5) included the acquisition of child pornography whether for one’s own personal use or for distribution to others, reversed County Court’s order and reinstated the indictment (141 AD2d 227). An Associate Judge of this court granted leave to appeal.

On this appeal defendant argues that County Court correctly applied the rule of noscitur a sociis, which means "it is known from its associates”, to construe the term "procure” in Penal Law § 263.00 (5) by reference to the other listed terms in the statutory definition of "promote”. That court concluded that the Legislature intended to limit the term "procure” to the acquisition of child pornography for the purpose of distributing the material to others. Thus, absent an allegation that he intended to distribute the child pornography to others, the indictment- fails to state a crime within the meaning of the statute and should be dismissed. Alternatively, defendant contends that the indictment must be dismissed because the charge against him is merely the possession of child pornography, an activity which is constitutionally protected under the rationale of Stanley v Georgia (394 US 557). The People respond that the term "procure” as used in Penal Law § 263.00 (5) should be construed in accordance with its plain and natural meaning "to obtain”, thus rendering the procurement of child pornography illegal, whether it is obtained for personal use or for distribution. They further argue that this broader definition is consistent with and gives effect to the Legislature’s expressed intention to eradicate child pornography. As to defendant’s constitutional challenge to the application of the statute, the People point out that the indictment does not charge defendant with the possession of child pornography and further argue that the procurement and possession of such material may be constitutionally proscribed.

We now affirm.

II

In an effort to eradicate child pornography and thereby combat the sexual exploitation of children, the Legislature enacted Penal Law article 263 which makes criminal the use of a child in a sexual performance (Penal Law § 263.05), the promotion of an obscene sexual performance by a child (Penal Law § 263.10), and the promotion of a sexual performance by a child (Penal Law § 263.15). In a legislative declaration enacted with this article, the Legislature found a "proliferation of exploitation of children as subjects in sexual performances” and declared that "[t]he public policy of the state demands the protection of children from exploitation through sexual performances” (L 1977, ch 910, § 1). The Legislature further urged law enforcement officers to vigorously enforce the provisions of the article.

Defendant is charged with promoting a sexual performance by a child in violation of Penal Law § 263.15. That crime is committed when "knowing the character and content thereof, [one] produces, directs or promotes any performance which includes sexual conduct by a child less than sixteen years of age.” "Promote” is defined by Penal Law § 263.00 (5) as follows: "to procure, manufacture, issue, sell, give, provide, lend, mail, deliver, transfer, transmute, publish, distribute, circulate, disseminate, present, exhibit or advertise, or to offer or agree to do the same” (emphasis added). A "performance” is "any play, motion picture, photograph or dance” (Penal Law § 263.00 [4]).

Characterizing the conduct with which he is charged as merely the possession of child pornography, defendant argues that such possession is insufficient to constitute a crime under Penal Law § 263.15 absent any allegation that he intended to distribute the materials to others. The indictment, however, tracks the statutory language — defendant is charged with "procuring” specific items of child pornography both through the mails and at his home. The issue, then, is whether, by using the term "procure” in Penal Law § 263.00 (5), the Legislature intended to limit the reach of Penal Law § 263.15 by criminalizing the acquisition of child pornography only when that acquisition is accompanied by an intention to distribute the material to others. County Court concluded that the statute was so limited because, in its view, the Legislature did not intend Penal Law § 263.15 to encompass the conduct of consumers in the child pornography market. That court concluded that consistent with the other terms listed in the statutory definition of "promote” which relate to the manufacture or distribution of child pornography to others (see, Penal Law § 263.00 [5]), the term "procure” should be construed as meaning only to obtain or acquire child pornography with the intent of distributing it to others. We reject this cramped construction as inconsistent with both the language and the spirit of the statute.

It is settled that penal statutes are no longer strictly construed and that conduct falling within the plain and natural meaning of a statute may be punished as criminal (People v Ditta, 52 NY2d 657, 660). Although the term "procure” is not defined in the Penal Law, the leading definition commonly assigned to the term is "to get possession of: obtain, acquire * * * esp: to get possession of by particular care or effort” (Webster’s Third New International Dictionary 1809 [unabridged 1986]; see also, 8 Oxford English Dictionary 1418; Black’s Law Dictionary 1087 [rev 5th ed]). Understood in this sense, the term "procure” as used in Penal Law § 263.00 (5) defines "promote” for the purposes of Penal Law § 263.15 as simply the acquisition of child pornography, whether for personal consumption or for distribution to others.

Moreover, the legislative history of article 263 indicates that the Legislature intended to employ broad measures to eradicate child pornography in all its forms — that history contains no suggestion that the consumers of such material were to be excluded from the reach of those measures. Indeed, the Legislature expressly declared that law enforcement officers were to vigorously prosecute both the "peddlers of children” and the "promoters” of child pornography, suggesting that "promoters” are not limited to those who profit from the manufacture and distribution of child pornography (L 1977, ch 910, § 1). The legislative history of article 263 is replete with references to the enormity of the problem of child pornography and the inadequacy of the previously enacted obscenity laws (Penal Law art 235) in addressing the problem (see, e.g., Letter of Senator Ralph J. Marino, Governor’s Bill Jacket, L 1977, ch 910; Mem of Assemblyman Howard Lasher, Governor’s Bill Jacket; News Release of Assemblyman James W. McCabe, Sr., Governor’s Bill Jacket). Significantly, in Penal Law § 263.00 (5), the Legislature has more broadly defined the term "promote” for the purposes of article 263 than for the purposes of article 235. In Penal Law § 263.00 (5), the Legislature adopted the exact language of the definition of "promote” contained in Penal Law § 235.00 (4) but added the word "procure”. Thus we conclude that consistent with its efforts to eradicate the social evil of child pornography, Penal Law § 263.15 is directed at the consumers of child pornography as well as at its manufacturers and distributors. The Legislature used the term "procure” as that term is commonly understood —meaning to obtain or acquire — hence the purpose for which the child pornography is acquired is irrelevant to the conduct proscribed by the statute.

Alternatively, defendant argues that Penal Law § 263.15 is unconstitutional as applied to him because he has been charged only with the possession of child pornography. In support of this argument, defendant cites Stanley v Georgia (394 US 557, 564-565, supra), in which the Supreme Court held that although obscenity was not speech protected by the First Amendment, its possession could not constitutionally be proscribed because individuals retained a constitutional right of privacy which encompassed the right to possess such materials in their homes. Thus defendant acknowledges that child pornography is not protected speech under either the Federal (New York v Ferber, 458 US 747) or State (People v Ferber, 57 NY2d 256) Constitution but maintains nevertheless that he has a constitutional right to possess it in his home. We need not decide whether such a constitutional right exists, however, because as the People point out, defendant has not been charged with the criminal possession of child pornography. All five counts of the indictment charge defendant with violating Penal Law § 263.15 by procuring child pornography and thereby promoting a sexual performance by a child. Defendant makes no argument that procuring child pornography may not be constitutionally proscribed and thus we have no need to address the issue.

Accordingly the order of the Appellate Division should be affirmed.

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

Order affirmed.

       The facial validity of Penal Law article 263 is not open to question because child pornography is not protected speech under either the Federal or State Constitution (see, New York v Ferber, 458 US 747; People v Ferber, 57 NY2d 256).