author: Chief Judge Wachtler.

text:
    The People of the State of New York, Respondent, v Roy Coleman, Appellant.
    Argued September 8, 1989;
    decided October 17, 1989

      POINTS OF COUNSEL

      Kerry Elgarten and Philip L. Weinstein for appellant.
    Attempted promoting prostitution in the second degree, the alleged crime of which appellant was convicted, is a nonexistent crime, because the substantive crime of promoting prostitution in the second degree is itself an attempt crime and because pursuant to Penal Law § 15.20 (3) the substantive crime requires no intent to cause the proscribed result. (People v Campbell, 72 NY2d 602; People v Foster, 19 NY2d 150; People v Hassin, 48 AD2d 705; People v Lynn, 115 Misc 2d 76; People v Schmidt, 76 Misc 2d 976; People v Jelke, 1 NY2d 321; People v Kramer, 208 App Div 258; People v Williams, 124 AD2d 993; People v Pasini, 112 AD2d 1013; People v Bracey, 41 NY2d 296.)

      Robert M. Morgenthau, District Attorney (Alan Gadlin and Norman Barclay of counsel), for respondent.
    By promoting the prostitution of a decoy officer whom defendant believed was less than 16 years old, defendant committed the crime of attempted promoting prostitution in the second degree. (People v Dekle, 56 NY2d 835; People v Thomas, 53 NY2d 338; People v Ford, 62 NY2d 275; People v Foster, 19 NY2d 150; People v Lynn, 115 Misc 2d 76; People v Bracey, 41 NY2d 296; People v O’Connell, 60 Hun 109; People v Campbell, 72 NY2d 602; People v Dlugash, 41 NY2d 725; People v Trepanier, 84 AD2d 374.)
   OPINION OF THE COURT

Chief Judge Wachtler.

The defendant was convicted, after a jury trial, of attempted promoting prostitution in the second degree (Penal Law §§ 110.00, 230.30 [2]) and grand larceny in the third degree (Penal Law former § 155.30 [5]). The evidence presented at trial established that the defendant had approached a 24-year-old undercover police officer whom he believed to be a 15-year-old runaway, encouraged her to engage in prostitution and proposed to act as her pimp. The defendant also asked the decoy to give him the gold chain she was wearing, and when she refused, he snatched it from around her neck and later sold it for $30. The defendant’s conviction was affirmed by the Appellate Division.

The issue presented by this appeal is the propriety of the defendant’s conviction for attempted promoting prostitution in the second degree. Section 230.30 (2) of the Penal Law provides that a person is guilty of promoting prostitution in the second degree, a class C felony, "when he knowingly * * * [ajdvances or profits from prostitution of a person less than sixteen years old” (emphasis added). According to section 230.15 (1) of the Penal Law, "advancing prostitution” includes the situation where an actor "knowingly causes or aids a person to commit or engage in prostitution * * * or engages in any other conduct designed to institute, aid or facilitate an act or enterprise of prostitution.” In the case now before us, although there is ample evidence that the defendant believed the officer to be 15 when he encouraged her to become a prostitute, it was nonetheless impossible for him to have been convicted of the completed crime of promoting prostitution in the second degree since the officer was in fact 24. The defendant concedes that he could properly have been convicted of promoting prostitution in the fourth degree, a class A misdemeanor where age is not an element of the crime at all.

Section 110.00 of the Penal Law states that "[a] person is guilty of an attempt to commit a crime when, with intent to commit a crime, he engages in conduct which tends to effect the commission of such crime.” In other words, an attempt is an act done with an intent to commit some other crime. As we noted in People v Bracey (41 NY2d 296, 299), the theory is that although the defendant may have failed in the purpose, the conduct can be treated as a crime in itself if carried far enough to cause a sufficient risk of harm. In order to prove an attempt, it is necessary to establish (1) that the defendant had the intent to commit a specific offense; and (2) that the defendant engaged in some affirmative act to carry out that intent (id., at 300; see also, People v Moran, 123 NY 254, 257).

In this case, it was reasonable for the jury to conclude that the defendant had intended to encourage the officer to engage in prostitution. The only remaining question is whether the defendant’s mistake as to the true age of the officer should negate his culpability where, but for her age, his conduct would otherwise constitute the completed offense of promoting prostitution in the second degree. We conclude that it does not.

In reaching this conclusion, we are guided by the clear language of section 110.10 of the Penal Law, that where a person engages in conduct that otherwise constitutes an attempt, "it is no defense to a prosecution for such attempt that the crime charged to have been attempted was, under the attendant circumstances, factually or legally impossible of commission, if such crime could have been committed had the attendant circumstances been as such person believed them to be.” The defendant did all that was necessary to complete the crime of promoting prostitution in the second degree and would have been guilty of the completed crime if the attendant circumstances had been as he believed them to be, that is, if the officer had been 15 instead of 24. The defendant’s mistake in that respect should not block his conviction for the attempt where it is the sole obstacle to his conviction for the completed crime.

Defendant contends, however, that attempted promoting of prostitution in the second degree is a nonexistent crime because it makes criminal the causing of an unintended result in violation of this court’s recent holding in People v Campbell (72 NY2d 602). The defendant cites Penal Law § 15.20 (3), which provides that with respect to any statute involving an offense in which the age of a child is an element, "knowledge by the defendant of the age of such child is not an element of any such offense and it is not * * * a defense to a prosecution therefor that the defendant did not know the age of the child or believed such age to be the same as or greater than that specified in the statute.” The defendant argues that his belief as to the victim’s age should not have been a factor in considering his liability for the attempt because section 15.20 (3) has made knowledge of the victim’s age irrelevant when considering liability for the completed crime. He maintains that to allow the knowledge factor to enter into a determination of his liability for a mere attempt would result in an impermissible "engrafting” of a knowledge element onto the attempt crime where no such element is contained in the completed crime. Defendant maintains that this would violate the clear language of Penal Law § 15.20 (3) and would run contrary to this court’s reasoning in Campbell.

We do not agree. In Campbell, this court reversed a defendant’s conviction for attempted assault in the second degree, holding that because Penal Law § 120.05 imposed strict liability for an unintended injury, the defendant could not be convicted of attempting this offense. "Because the very essence of a criminal attempt is the defendant’s intention to cause the proscribed result, it follows that there can be no attempt to commit a crime which makes the causing of a certain result criminal even though wholly unintended” (People v Campbell, supra, at 605). The difference between this case and Campbell, however, is that in Campbell, there was a congruence between the strict liability element and the proscribed result of the actor’s criminal conduct. Penal Law § 120.05 punishes behavior that leads to a specific category of injury, namely, injury to a peace officer, police officer, fireman, paramedic or emergency medical technician, regardless of whether the actor actually intends to cause that injury (People v Campbell, supra, at 606). Section 120.05 looks to a certain result and attaches strict liability whenever that result is produced.

This case, on the other hand, requires us to consider a statute the strict liability element of which attaches not to the proscribed result of the criminal conduct, the promoting of prostitution, but to an aggravating circumstance that makes the actor’s conduct felonious, namely, the age of the victim. Penal Law § 230.30 requires that a person act knowingly to promote prostitution before liability will be imposed. In this case, the defendant’s belief that his intended victim was 15 instead of 24 in no way negated his knowledge that he was acting to promote prostitution, which is the core conduct prohibited by the statute. Thus, under the facts of this case, where a defendant’s mistake relates to an aggravating element of the offense, and not to the core conduct that is proscribed by the statute, such mistake does not affect the defendant’s ability to act with the mental culpability required to complete the underlying offense and thus is no obstacle to his conviction for an attempt of that offense.

We have considered the remainder of the defendant’s arguments and find them to be unpreserved. Accordingly, the order of the Appellate Division should be affirmed.

Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur.

Order affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    Arnold B. Glenn, as Trustee, and Herbert S. Kulik, Individually as a Director and on Behalf of Himself and All Other Shareholders Similarly Situated and on Behalf of Ketek Electric Corp., Appellants-Respondents, v Hoteltron Systems, Inc., et al., Respondents-Appellants, et al., Defendant. Arnold B. Glenn, as Trustee, and Herbert S. Kulik, Individually as a Director and on Behalf of Himself and All Other Shareholders Similarly Situated and on Behalf of Ketek Electric Corp., Appellants-Respondents, v Jacob Schachter, Respondent-Appellant, et al., Defendant. Jacob Schachter, Individually and as an Officer and Director and on Behalf of Himself and All Other Shareholders Similarly Situated and on Behalf of Ketek Electric Corporation, Respondent-Appellant, v Herbert S. Kulik, Appellant-Respondent, et al., Defendant.
    Argued September 6, 1989;
    decided October 19, 1989

      POINTS OF COUNSEL

      Charles T. Matthews for appellants-respondents.
    I. A court of equity in a stockholders’ derivative action can allow recovery by individual plaintiff in lieu of a corporate recovery. (Gordon v Elliman, 306 NY 456; Alexander v Donohoe, 143 NY 203; Geltman v Levy, 11 AD2d 411; DiTomasso v Loverro, 250 App Div 206, 276 NY 551; Schur v Salzman, 50 AD2d 784, 38 NY2d 1007; General Elec. Co. v Bucyrus-Erie Co., 563 F Supp 970; Fischer v CF & I Steel Corp., 614 F Supp 450.) II. The lower court properly required restitution from defendant who the court below found breached his fiduciary duty to the Ketek Corporation. (Diamond v Oreamuno, 24 NY2d 494; Dutton v Willner, 52 NY 312; Sandfield v Goldstein, 33 AD2d 376; Holland v Presley, 255 App Div 667; Robertson v Schoonmaker, 158 Misc 627; Baker v Cohn, 266 App Div 715, 292 NY 570; Miglietta v Kennecott Copper Corp., 25 AD2d 57.) III. The trial court in its discretion in a stockholders’ derivative action may award the successful plaintiff reasonable expenses and reasonable attorneys’ fees. (Matter of Edelman v Goodman, 47 Misc 2d 8; Neuberger v Barrett, 180 Misc 2d 222; New York Cent. R. R. Co. v New York & Harlem R. R. Co., 193 Misc 795, 275 App Div 604, 301 NY 567; Napoli v Carrano, 109 AD2d 828; Martin Found, v Phillips-Jones Corp., 283 App Div 729, 306 NY 972.) IV. The court below correctly held that "the evidence in the record indicates that Schachter, in complete disregard of his fiduciary duty to the Ketek corporation, seized all the corporate assets of Ketek, entered into a unilateral royalty agreement with Hoteltron, a corporation wholly owned by himself, to manufacture and sell the products to which Ketek had patent and trademark rights, and then proceeded to carry on the business for which Ketek was formed under the Hoteltron name. Such conduct cannot be countenanced.” (Cris-Craft Indus. v Piper Aircraft Corp., 480 F2d 341, 414 US 910; Shorell Labs. v H. Allen Lightman, Inc., 24 AD2d 856, 17 NY2d 870; Matter of Vogel v Lewis, 25 AD2d 212, 19 NY2d 589; Berzin v Litton Indus., 24 AD2d 740; MacEwen v Star-Kist Foods, 251 F Supp 33; In re Brunner Air Compressor Corp., 287 F Supp 256; Foley v D’Agostino, 21 AD2d 60; Everett v Phillips, 288 NY 227, 289 NY 675; Winter v Anderson, 242 App Div 430.)

      David S. J. Neufeld and Denis P. O’Leary for respondents-appellants.
    I. The court below erred in overruling the trial court and imposing liability upon an officer and director of a closely held corporation after the other person involved in the corporation had abandoned the corporation’s activities to obtain gainful employment elsewhere, and had breached his fiduciary obligations. (Foley v D’Agostino, 21 AD2d 60; Barr v Wackman, 36 NY2d 371.) II. An award of damages must be predicated upon the corporation’s estimated net profits during a reasonable period of time. (Santa’s Workshop v Sterling, 2 AD2d 262, 3 NY2d 757; American Elecs. v Neptune Meter Co., 30 AD2d 117; McRoberts Protective Agency v Landsdell Protective Agency, 61 AD2d 652; Maritime Fish Prods. v World-Wide Fish Prods., 100 AD2d 81.) III. An award of attorneys’ fees made in a derivative action must be paid from the proceeds of the recovery. (Jones v Uris Sales Corp., 373 F2d 644; Lewis v S. L. & E., Inc., 629 F2d 764; Ripley v International Rys., 16 AD2d 260, 12 NY2d 814.) IV. A judgment granted to a plaintiff in a shareholders’ derivative action must be awarded to the corporation. (Wolff v Wolff, 67 NY2d 638.)
   OPINION OF THE COURT

Chief Judge Wachtler.

These appeals involve three consolidated shareholders’ derivative actions brought pursuant to sections 626 and 720 of the Business Corporation Law on behalf of Ketek Electric Corporation. The primary issues concern the proper allocation of damages, legal expenses and attorneys’ fees in derivative suits, particularly where the injured corporation is closely held and damages awarded to the corporation ultimately would be shared by the corporate officer/shareholder responsible for the injury.

We conclude that, in accord with the general rule governing such actions, the damages should be awarded to the injured corporation, not directly to the innocent shareholder. The mere fact that the wrongdoer, as a substantial shareholder, will indirectly benefit from the award to the corporation does not require an exception to this rule for actions involving closely held corporations.

In addition, we agree with the Appellate Division that the award of legal expenses and attorneys’ fees to the innocent shareholder who brought the actions is payable out of the award to the corporation.

FACTS AND PRIOR PROCEEDINGS

The dispute here is between Jacob Schachter and Herbert Kulik, the founders of Ketek Electric Corporation. Schachter and Kulik each own 50% of the corporation’s shares and serve as the corporation’s only officers. The circumstances underlying the dispute are set forth in detail in the Appellate Division memorandum in an earlier appeal in this matter (Schachter v Kulik, 96 AD2d 1038, appeal dismissed 61 NY2d 758) and need not be repeated here. It is sufficient to note that, although Supreme Court initially determined after trial that neither Schachter nor Kulik had proved a breach of duty by the other, the Appellate Division, on the prior appeal, found Schachter liable for diverting Ketek assets and opportunities to Hoteltron Systems, Inc., a corporation wholly owned by Schachter.

Following the trial on damages, Supreme Court concluded that Hoteltron had earned profits of $362,242.84 from Schachter’s usurpation of Ketek assets and opportunities. Of this total, $5,000 was used by Schachter to pay legal expenses in connection with this litigation and the balance was withdrawn from the corporation for his personal use. The court awarded additional damages in the amount of $72,000, representing the minimum royalties that Kulik alleged could have been earned by Ketek, but for Schachter’s refusal to assent to a proposal concerning overseas manufacturing rights for certain Ketek products. Supreme Court ordered that these principal sums, together with nearly $54,000 in legal expenses and attorneys’ fees incurred by Kulik, be paid by Schachter and that the entire award, after payment of attorneys’ fees, should be paid to Kulik.

On Schachter’s appeal, the Appellate Division modified the judgment in several respects. The award of $72,000 for lost royalties was disallowed on the ground that those damages were too speculative. In addition, the court concluded that the Hoteltron profits should be awarded to the injured corporation, Ketek, rather than the innocent shareholder Kulik, and that legal expenses and attorneys’ fees should be paid by Ketek Corp. out of this award, rather than by Schachter (Glenn v Hoteltron Sys., 138 AD2d 568).

The parties cross-appeal, pursuant to leave granted by this court (73 NY2d 706). We affirm.

LIABILITY

Initially, we note that, pursuant to CPLR 5501 (a) (1), Schachter’s appeal brings up for review the prior nonfinal order of the Appellate Division, which granted judgment to Kulik on the issue of liability. In modifying the trial court’s judgment dismissing all three actions, the Appellate Division "expressly or impliedly found new facts” (CPLR 5501 [b]). On an appeal from a final judgment entered pursuant to such an order, this court may review questions of fact to determine which court’s findings more nearly comport with the weight of the evidence (id.; Suria v Shiffman, 67 NY2d 87, 97-98).

Having reviewed the testimony at the first trial, we conclude that the weight of the evidence favors the Appellate Division’s finding that "Schachter, in complete disregard of his fiduciary duty to the Ketek corporation, seized all of the corporate assets of Ketek, entered into a unilateral royalty agreement with Hoteltron * * * to manufacture and sell the products to which Ketek had patent and trademark rights, and then proceeded to carry on the business for which Ketek was formed under the Hoteltron name” (Schachter v Kulik, 96 AD2d 1038, 1039, supra).

We also agree with the Appellate Division’s resolution of the issues raised on the appeal following the trial on damages.

DAMAGES

It is the general rule that, because a shareholders’ derivative suit seeks to vindicate a wrong done to the corporation through enforcement of a corporate cause of action, any recovery obtained is for the benefit of the injured corporation (see, Business Corporation Law § 626 [e]; Wolff v Wolff, 67 NY2d 638; Carruthers v Waite Min. Co., 306 NY 136, 140; Clarke v Greenberg, 296 NY 146, 149). Where, however, the plaintiff sues in an individual capacity to recover damages resulting in harm, not to the corporation, but to individual shareholders, the suit is personal, not derivative, and it is appropriate for damages to be awarded directly to those shareholders (see, Sautter v Fulmer, 258 NY 107; Geltman v Levy, 11 AD2d 411; Norte & Co. v Huffines, 416 F2d 1189 [explaining Perlman v Feldmann, 219 F2d 173]; cf., Schur v Salzman, 50 AD2d 784).

In this case, the diversion of Ketek’s corporate assets by Schachter for his own profit resulted in a corporate injury because it deprived Ketek of those profits (see, Abrams v Donati, 66 NY2d 951). Kulik, the innocent shareholder, was injured only to the extent that he was entitled to share in those profits. His injury was real, but it was derivative, not direct. Thus, the Appellate Division properly ruled that those profits should be returned to Ketek Corp.

Kulik argues that this result is inequitable because Schachter, as a shareholder of Ketek, will ultimately share in the proceeds of the damage award. But that prospect exists in any successful derivative action in which the wrongdoer is a shareholder of the injured corporation. An exception based on that fact alone would effectively nullify the general rule that damages for a corporate injury should be awarded to the corporation.

It is true that this anomaly is magnified in cases involving closely held corporations, because the errant fiduciary is likely to own a large share of the corporation — as Schachter owns 50% of Ketek — and will share proportionately in the restitution to the corporation generated by a successful suit against him. Thus, it may be argued that in such circumstances an award of damages to the corporation does not provide a sufficient deterrent to the potential wrongdoer. We conclude, however, that this consideration does not require a different damage rule for close corporations.

While awarding damages directly to the innocent shareholder may seem equitable with respect to the parties before the court, other interests, particularly those of the corporation’s creditors, should not be overlooked. The fruits of a diverted corporate opportunity are properly a corporate asset. Awarding that asset directly to a shareholder could impair the rights of creditors whose claims may be superior to that of the innocent shareholder (see, Niles v New York Cent. & Hudson Riv. R. R. Co., 176 NY 119, 123; Matter of Maki v Estate of Ziehm, 55 AD2d 454; Note, Individual Pro Rata Recovery in Stockholders’ Derivative Suits, 69 Harv L Rev 1314, 1318).

Thus, while we do not rule out the possibility that an award to innocent shareholders rather than to the corporation would be appropriate in some circumstances, we find no need to invoke such an exception here.

ATTORNEYS’ FEES

The rule in New York remains that "attorneys’ fees and disbursements are incidents of litigation and the prevailing party may not collect them from the loser unless an award is authorized by agreement between the parties or by statute or court rule” (Matter of A. G. Ship Maintenance Corp. v Lezak, 69 NY2d 1, 5). Although Business Corporation Law § 626 (e) provides that a successful plaintiff in a shareholders’ derivative action may recoup legal expenses and attorneys’ fees from the proceeds of a judgment, compromise or settlement in favor of the corporation, it does not authorize the imposition of such expenses on the losing party.

The basis for an award of attorneys’ fees in a shareholders’ derivative suit is to reimburse the plaintiff for expenses incurred on the corporation’s behalf (see, Jones v Uris Sales Corp., 373 F2d 644, 648). Those costs should be paid by the corporation, which has benefited from the plaintiff’s efforts and which would have borne the costs had it sued in its own right. Thus, the Appellate Division was correct in modifying Supreme Court’s judgment to provide for the payment of Kulik’s legal expenses out of the award to Ketek Corp. rather than by Schachter.

OTHER ISSUES

Finally, on this record, there is no support for defendant Schachter’s contention that Supreme Court calculated damages on the basis of Hoteltron’s gross profits, rather than net profits. Supreme Court’s use of Schachter’s withdrawals from Hoteltron was, under the circumstances, a reasonable means of calculating the net profits diverted from Ketek. In any event, the record does not reflect that Schachter objected to this measure of damages or suggested an alternative measure.

We therefore find no legal error in Supreme Court’s calculation of the amount of Hoteltron’s profits to which Ketek is entitled. However, we note our agreement with the Appellate Division’s conclusion that there was inadequate support in the record for Supreme Court’s award of $72,000 for lost royalties.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur.

Order affirmed, without costs.


author: Hancock, Jr., J. Bellacosa, J.

text:
    In the Matter of City School District of City of Elmira, Respondent, v New York State Public Employment Relations Board et al., Appellants.
    Argued September 12, 1989;
    decided October 24, 1989

      POINTS OF COUNSEL

      Ivor R. Moskowitz, Bernard F. Ashe and Rocco A. Solimando for Elmira Teachers Association, appellant.
    I. It is well settled that under the Taylor Law PERB has exclusive, nondelegable jurisdiction to consider and determine improper practice charges. (Matter of West Irondequoit Teachers Assn. v Helsby, 35 NY2d 46; Matter of City of Albany v Helsby, 29 NY2d 433; Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of Public Employees Fedn. v Public Employment Relations Bd., 93 AD2d 910; Matter of Syracuse Hancock Professional Firefighters Assn. v Newman, 110 AD2d 256.) II. PERB’s application of the Taylor Law to Education Law § 3602 (27) was rational and in accord with its statutory authority. (Matter of West Irondequoit Teachers Assn. v Helsby, 35 NY2d 46; Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of Howard v Wyman, 28 NY2d 434.) III. The arguments raised by the district to reverse PERB’s decision and order are misplaced. (Matter of Young v Board of Educ., 35 NY2d 31; Board of Educ. v Associated Teachers of Huntington, 30 NY2d 122; Syracuse Teachers Assn. v Board of Educ., 35 NY2d 743; Matter of Susquehanna Val. Cent. School Dist. [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614; Matter of Port Jefferson Sta. Teachers Assn. v Brookhaven-Comsewogue Union Free School Dist., 45 NY2d 898; Matter of Board of Educ. v Merrick Faculty Assn., 65 AD2d 136; Matter of Union Free School Dist. v Nyquist, 38 NY2d 137; Matter of Auburn Police Local 195 v Helsby, 62 AD2d 12, 46 NY2d 1034.)

      John Crotty, Martin L. Barr and Jerome Thier for New York State Public Employment Relations Board, appellant.
    I. PERB properly construed Education Law § 3602 (27) (a). (Matter of Auburn Police Local 195 v Helsby, 91 MisC 2d 909, 62 AD2d 12, 46 NY2d 1034; Board of Educ. v Associated Teachers of Huntington, 30 NY2d 122; Syracuse Teachers Assn. v Board of Educ., 35 NY2d 743; Matter of Susquehanna Val. Cent. School Dist. [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614; Matter of Union Free School Dist. v Nyquist, 38 NY2d 137; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 40 NY2d 268; Matter of Cohoes City School Dist. v Cohoes Teachers Assn., 40 NY2d 774; Board of Educ. v Areman, 41 NY2d 527.) II. PERB’s determination is a reasonable construction of the Taylor Law. (Matter of West Irondequoit Teachers Assn. v Helsby, 35 NY2d 46; Matter of Incorporated Vil. of Lynbrook v New York State Pub. Employment Relations Bd., 48 NY2d 398; Matter of City of Albany v Helsby, 48 AD2d 998, 38 NY2d 778; Matter of Subway-Surface Supervisors Assn. v New York City Tr. Auth., 44 NY2d 101.) III. PERB’s counterclaim for enforcement should be granted. (Matter of City of Albany v Helsby, 29 NY2d 433; Matter of New York State Pub. Employment Relations Bd. v Board of Educ., 39 NY2d 86; Matter of Saratoga Springs City School Dist. [New York State Pub. Employment Relations Bd.], 68 AD2d 202, 47 NY2d 711; Matter of County of Onondaga v New York State Pub. Employment Relations Bd., 77 AD2d 783.)

      Edward B. Hoffman and Cynthia S. Hutchinson for respondent.
    I. The plain and clear language of section 3602 of the Education Law removes the application for excellence in teaching appropriation from collective bargaining. (Matter of Town of Mamaroneck PBA v New York State Pub. Employment Relations Bd., 55 NY2d 772; Schneider v Arnbach, 135 AD2d 284; Wilson Co. v United States Postal Serv., 580 F2d 33.) II. Public policy requires that a school district have sole authority to determine whether to apply for State aid. (Board of Educ. v Areman, 41 NY2d 527; Matter of Cohoes City School Dist. v Cohoes Teachers Assn., 40 NY2d 774; Matter of Bennett v City School Dist. of New Rochelle, 114 AD2d 58; Matter of Board of Educ. v Yonkers Fedn. of Teachers, 49 AD2d 753; Board of Educ. v Nyquist, 83 AD2d 217, 57 NY2d 27; Matter of Harbolic v Berger, 43 NY2d 102.) III. Respondent should not be required to renegotiate salaries which already have been contractually agreed upon.

      Norman H. Gross and Henry F. Sobota for the New York State School Boards Association, amicus curiae.

    I. Civil Service Law § 201 (12) and § 204-a preclude PERB from finding that a legislative body’s decision to apply or not apply for intergovernmental financial aid is a mandatory subject of negotiations. II. In enacting the Excellence in Teaching (EIT) law, the Legislature intended to preserve the school board’s legislative prerogative to apply or not apply for State aid. (Matter of Town of Mamaroneck PBA v New York State Pub. Employment Relations Bd., 66 NY2d 722; Matter of John P. v Whalen, 54 NY2d 89; Eaton v New York City Conciliation & Appeals Bd., 56 NY2d 340; Matter of Auburn Police Local 195 v Helsby, 62 AD2d 12, 46 NY2d 1034.) III. PERB’s decision is affected by an error of law because it is based upon the inaccurate assumption that only members of the teachers’ bargaining unit may be eligible for EIT aid. (Matter of Schneider v Ambach, 135 AD2d 284.)
   OPINION OF THE COURT

Hancock, Jr., J.

Under Education Law § 3602 (27), a school district may, upon application, become eligible to receive an apportionment of Excellence in Teaching (EIT) aid, to be used solely to improve teachers’ salaries. The question in this appeal is whether a school district may be compelled pursuant to the Taylor Law (Civil Service Law art 14) to bargain with the teachers’ union over its decision whether to make such application. Stated another way, is a school district’s decision whether to apply for EIT funds a proper subject for mandatory bargaining so as to make the refusal to bargain the proper basis for an improper practice charge under Civil Service Law § 209-a (1) (d)? We agree with the Appellate Division that the answer to this question is "No”. Accordingly, there should be an affirmance.

I

In April 1986, the Legislature enacted the Excellence in Teaching program as part of the aid to localities budget bill, thereby providing State funds to supplement the salaries of eligible employees of local school districts (Education Law § 1950 [15] [a]; § 3602 [27]; L 1986, ch 53, §§ 20, 49). Under regulations adopted by the Commissioner to implement the EIT program, as directed by the Legislature (§ 3602 [27] [f]), a school district may become eligible for EIT funds upon making an application through its board of education (8 NYCRR 175.35). The regulations specify that any EIT salary increases must be added to the teachers’ regular salaries for the purpose of computing their fringe benefits (8 NYCRR 175.35 [e] [4]). But the regulations expressly forbid any expenditure of the EIT moneys for these additional fringe costs (8 NYCRR 175.35 [e] [5]), thus making it necessary for the board to fund the additional fringe costs from other sources.

On September 9, 1986, the Board of Education of petitioner Elmira City School District (the district) voted not to apply for EIT funds. It is undisputed that the Board’s decision rested on the fact that acceptance of EIT funds would result in the district having to pay, over a two-year period, approximately $100,000 for additional Social Security taxes, retirement system assessment and other attendant "fringe benefits”, which would be in addition to any benefits provided for in the parties’ existing collective bargaining agreement effective July 1, 1985 through June 30, 1990. On September 10, respondent teachers’ association (the association) demanded that the district negotiate its decision. On September 17, the district refused and the association filed an improper practice charge with respondent Public Employment Relations Board (PERB) based upon the refusal.

After the parties waived a hearing before PERB, the matter was submitted on a stipulated record to an Administrative Law Judge who held that the district had violated Civil Service Law § 209-a (1) (d) by refusing to negotiate. PERB affirmed the ALJ’s decision and ordered that the district "forthwith negotiate [its decision] in good faith” whether to apply for EIT funds for the 1986-1987 school year, and for subsequent school - years, as well, upon the association’s demand.

The district commenced this CPLR article 78 proceeding seeking to annul PERB’S determination. Upon transfer from Supreme Court pursuant to CPLR 7804 (g), the Appellate Division, with two Justices dissenting, annulled the determination and granted the petition. Both the majority and dissent noted that Education Law § 3602 (27) expressly provides that a school district must separately negotiate decisions concerning the distribution of EIT funds, but makes no provision concerning a school district’s duty to negotiate a decision to apply for EIT funds. From the omission of such direction in the statute, the majority concluded that a duty to negotiate the application decision "should not [be] read into” Education Law § 3602 (27) because "when the Legislature was considering the extent to which negotiations over EIT funds would be required, it could have extended the duty to negotiate to the application decision if it had so intended” (144 AD2d 35, 39). The dissenters took the position that PERB’s determination that the application decision was subject to mandatory bargaining was rational because such a decision affects the terms and conditions of employment. Finding nothing in the statute directly prohibiting mandatory bargaining, the dissenters concluded that the determination should be upheld. We agree with the Appellate Division majority that the EIT application decision is not a subject of mandatory bargaining.

II

The question before us is this: did the Legislature intend that a district’s decision over whether to apply for EIT funds should be subject to mandatory bargaining? We hold that it did not. From our analysis of Education Law § 3602 (27), we conclude that a school district’s decision on whether to make such application is one which the Legislature intended should be left to the school board’s discretion. Nothing in subdivision (27) purports to make it mandatory for a school district to apply for EIT funds. On the contrary, subdivision (27) provides that "upon application a school district shall be eligible for an excellence in teaching apportionment” (emphasis added).

That the Legislature intended to establish a program where the application decision would not be subject to mandatory negotiation is reflected in the statutorily required implementing regulations (8 NYCRR 175.35; see, Education Law § 3602 [27] [f]) which specifically provide that the application is to be made by the board of education (see, 8 NYCRR 175.35 [b]), the legislative body, whose approval would be required to make any agreement binding (see, Civil Service Law § 201 [12]; § 204-a [1]; see generally, 8 NYCRR 175.35 [c]).

PERB and the association, however, purport to find in Education Law § 3602 (27) a legislative intent that collective negotiations be required over the EIT application decision as well as the decision on distribution of EIT funds which have been sought and obtained. They rely on the last sentence in subdivision 27 (a) which states: "In school districts where the teachers are represented by certified or recognized employee organizations, all salary increases funded pursuant to this subdivision shall be determined by separate collective negotiations conducted pursuant to the provisions and procedures of article fourteen of the civil service law, notwithstanding the existence of a negotiated agreement between a school district and a certified or recognized employee organization.” (Emphasis added.) The language of this provision, however, does not support their position.

The evident purpose of this provision in paragraph (a) is not only to mandate collective negotiations over the distribution of EIT funds, but to remove any impediment to such negotiations which might otherwise result where, as here, an ongoing collective bargaining agreement between the district and the union exists. By providing that the EIT negotiations be separate, the provision obviates any possible conflict between the EIT salary distribution negotiations and an existing collective bargaining agreement. Moreover, because the statute specifically provides for collective negotiations only over EIT salary distribution decisions, the inference may be drawn from the failure to require negotiations over EIT application decisions that the Legislature intended that such negotiations not be required (see generally, McKinney’s Cons Laws of NY, Book 1, Statutes § 240).

To adopt the position urged by PERB and the association— that because the EIT program implicates teachers’ salaries application decisions are necessarily a subject for bargaining— would frustrate the intent of this statute and its implementing regulations that the board of education be the decision-making body and that negotiations over its application decisions not be mandatory. We do not suggest that the district may not voluntarily bargain over EIT funding, subject, of course, to the board’s right to disapprove any agreement reached from the process (see, Civil Service Law § 201 [12]; § 204-a [1]). We simply hold that the legislative intent is that the district not be compelled to bargain over the board’s application decision. PERB’s contrary construction of Education Law § 3602 (27) does not support a different result. Where " 'the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent’, [PERB’s] interpretations need not be accorded * * * deference” (Matter of Town of Mamaroneck PBA v New York State Pub. Employment Relations Bd., 66 NY2d 722, 724 [quoting Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459]).

Accordingly, because the decision whether to apply for EIT funds cannot be the subject of mandatory bargaining, the Appellate Division judgment should be affirmed, with costs.

Bellacosa, J.

(dissenting). I would reverse the order of the Appellate Division essentially for the reasons stated in the dissent by Justice Howard A. Levine and would thus confirm the determination by PERB that the Elmira City School District’s application for Excellence in Teaching Apportionment Program funds under Education Law § 3602 (27) is a mandatory subject of collective bargaining.

The court is unanimous that the Taylor Law imposes a broad obligation upon public employers to bargain with employees over the terms and conditions of their employment. The majority, as I understand it, also agrees that once a school district applies for Excellence in Teaching funds, the distribution is a term and condition of teachers’ employment —salaries. Our difference of view relates to the threshold decision to apply for Excellence in Teaching funds at all, the majority concluding that it is not subject to collective bargaining, because the Legislature has manifested the requisite "plain and clear” intention to exclude this decision from the ambit of the Taylor Law (Syracuse Teachers Assn. v Board of Educ., 35 NY2d 743, 744).

Our view is that the purpose of the Excellence in Teaching legislation is to improve the quality of teaching and education throughout the State by affecting the terms and conditions of teachers’ employment with the financial inducement of additional compensation. Inasmuch as this compensation matter directly and inherently affects the terms and conditions of employment, a subject of mandatory collective bargaining (Civil Service Law § 208 [2]), it is unavailing that the pertinent Excellence in Teaching statute does not itself explicitly mandate collective bargaining for the "application” phase of all school boards participating in and acquiring the State’s grants of money. The statute, after all, does not explicitly exclude mandatory collective bargaining as to the "application” phase. Indeed, it expressly mandates separate collective bargaining as to the "distribution” among teachers of the funds so received. Thus, the interpretation reposing in the school boards the unilateral power to apply for Excellence in Teaching funds saps of all its juice the mandatory collective bargaining enactment on "distribution” of such funds to qualified teachers. Depriving a statute of its meaning in this way — where the exclusion from the operation of the Taylor Law is not "plain and clear” (Syracuse Teachers Assn. v Board of Educ., 35 NY2d 743, supra) — is not sound statutory construction and would frustrate the central legislative intent of the Excellence in Teaching program. "[A] statutory construction which results 'in the nullification of one part [of the statute] by another, is not permissible’ ” (People v Kates, 77 AD2d 417, 418, affd 53 NY2d 591, citing Matter of Albano v Kirby, 36 NY2d 526, 530).

Appellant teachers’ association invites the court to take judicial notice of an uncontradicted public statistical compilation that 683 out of 698 (98%) of the school boards throughout the State are now participating in the Excellence in Teaching program. Thus, the Legislature may wish to consider making explicit the mandatory and, thus, uniform, application and participation in this significant public policy program — if that was its intention.

Accordingly, I respectfully dissent and vote to reverse.

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

Judgment affirmed, with costs.

      . Indeed, any expenditure of an EIT grant-in-aid made in contravention of this mandate may be disallowed and deducted from the district’s next State aid payment (8 NYCRR 175.35 [e] [5]).

      . It is undisputed that EIT funds which have been obtained for increased teachers’ salaries under Education Law § 3602 (27) must be the subject of collective bargaining. Indeed, the statute specifically provides that "all salary increases funded pursuant to [subd 27] shall be determined by separate collective negotiations conducted pursuant to the provisions and procedures of article fourteen of the civil service law” (Education Law § 3602 [27]).

      . Indeed, both the ALJ and PERB, in affirming the AU’s decision, acknowledged that the EIT "legislation vests districts with discretion to apply for the funds” (ALJ decision, at 9; see, PERB decision, at 7-8). Neither the association nor PERB contends that a school district could be compelled either by an arbitrator or by a court to make an application for EIT funding under this statute.

      . Civil Service Law § 201 (11) provides that "the term 'legislative body of the government,’ in the case of school districts, means the board of education, board of trustees or sole trustee, as the case may be.”


text:
    In the Matter of Hedvig Zellweger, on Behalf of Robert Zellweger, Appellant, v New York State Department of Social Services et al., Respondents.
    Argued October 11, 1989;
    decided October 26, 1989

      POINTS OF COUNSEL

      Norma E. Hogan for appellant.
    I. The order of the court below, reversing and annulling Supreme Court’s judgment directing that respondent State render a decision after hearing held and denying appellant’s right to a final decision after hearing, violates appellant’s due process rights to adequate notice of discontinuance of government assistance. (Matter of Mas v Lavine, 76 Misc 2d 344; Almenares v Wyman, 334 F Supp 512; Matter of Bryant v D’Elia, 77 AD2d 590; Wright v D’Elia, 81 AD2d 865; Matter of Ritzel v Blum, 81 AD2d 1029; Brown v Weinberger, 382 F Supp 1092; Mathews v Eldridge, 424 US 319; Ingraham v Wright, 430 US 651.) II. Respondents’ refusal to provide a hearing decision to appellant violates Medicaid law requiring respondents to apply SSI methodology relating to opportunity to appeal. III. Appellant is entitled to an award of counsel fees in this appeal. (Calkins v Blum, 511 F Supp 1073; Maine v Thiboutot, 448 US 1; Matter of Haussman v Kirby, 96 AD2d 244; Matter of Viglietta v Blum, 108 Misc 2d 516; Matter of Johnson v Blum, 58 NY2d 454; Department of Health Servs. v Secretary of Health & Human Servs., 823 F2d 323.)

      Robert Abrams, Attorney-General (Clifford A. Royael, O. Peter Sherwood and Wayne L. Benjamin of counsel), for New York State Department of Social Services, respondent.
    I. The State Department was without jurisdiction to consider petitioner’s fair hearing requests on the merits since they had not been received within the 60-day limitation period prescribed by Social Services Law § 22. (Matter of Piasecki v Blum, 78 AD3d 950; Matter of Samperi v Kramer, 49 AD2d 979; Matter of Bates v Blum, 86 AD2d 563; Matter of Summers v D’Elia, 95 AD2d 184; Matter of Bryant v D’Elia, 77 AD2d 590; Matter of Hopkins v Blum, 58 NY2d 1011; Atkins v Rivera, All US 154; DeJesus v Perales, 770 F2d 316, 478 US 1007.) II. Petitioner is not, in any event, entitled to an award of attorney’s fees pursuant to 42 USC § 1988.
   OPINION OF THE COURT

Chief Judge Wachtler.

Robert Zellweger, the appellant here, is 91 years of age and has suffered from Alzheimer’s disease for the past 20 years. He has resided in a Lake Placid nursing home since 1979. His illness has rendered him incompetent, and he is represented in this appeal by his wife Hedvig, who is 86 years of age. His wife suffers from asthma and was hospitalized for extreme respiratory distress during much of the period that is at issue in this appeal.

The Zellwegers have spent more than $127,000 of their savings to meet Mr. Zellweger’s expenses at the nursing home. As their life savings dwindled, Mrs. Zellweger became increasingly concerned about her ability to support herself and her husband. In December of 1983, at the urging of a hospital social worker, she applied for Medicaid benefits for her husband. At that time, less than $20,000 of the Zellweger’s savings remained and their combined monthly income was approximately $800.

Mrs. Zellweger’s application for medical assistance on her husband’s behalf was granted on February 24, 1984, when she was informed by letter that her husband would be eligible to receive benefits effective October 1, 1983. On March 31, 1984, however, her husband’s benefits were discontinued because of "excess resources.” The respondent Franklin County Department of Social Services (County) apparently concluded from a disclosure form submitted by Mrs. Zellweger in connection with her husband’s Medicaid application that funds being held in trust for her husband, but not accessible to him, were in fact owned by him and were available for his support. On June 24, 1986, Mrs. Zellweger requested a fair hearing regarding the discontinuance of her husband’s benefits in March of 1984 and subsequent denials of medical assistance by the County in March, June and November of 1985 and January of 1986.

The Commissioner of the Department of Social Services (Commissioner) determined that he was without subject matter jurisdiction to consider the merits of any of the denial notices at issue because Mrs. Zellweger had not requested a fair hearing within the 60-day limitation period (Social Services Law § 22 [4]; see, 18 NYCRR 358.5 [a]). She commenced an article 78 proceeding seeking a review of the Commissioner’s determination. The trial court, "in light of the circumstances of this particular case, including the obvious incompetency of Robert [and] the advanced age and frailty of Hedvig,” decided that the 60-day statutory period should be tolled, and remitted the matter to the Commissioner for further proceedings. The Appellate Division reversed, concluding that Mrs. Zellweger’s "failure to timely request a hearing at each stage effectively deprived [the Commissioner] of jurisdiction to review her present claims” (148 AD2d 865, 868).

We disagree. To be sure, Mrs. Zellweger did not meet the County’s 60-day deadline for requesting a hearing on her husband’s behalf. But the indignation of the Social Services Department (Department) and the County over her failure to meet the 60-day deadline rings hollow in light of their own failure to comply with the law and regulations that govern the conduct of fair hearings. While holding a 91-year-old Alzheimer’s patient and his 86-year-old wife to strict compliance with the statute, the respondents have in this case failed to follow the clear language of their own regulations.

It is uncontested that the County sent the March 1984 notice of discontinuance directly to Mr. Zellweger, who was completely unable to evaluate the information contained in it, and not to his wife, who had actually applied for the benefits on his behalf. Social Services Law § 22 (12) requires that notice of any action "affecting [the] receipt of assistance or care” be sent in writing to both the recipient and the applicant (see also, 18 NYCRR 358.3). Mr. Zellweger’s right to a fair hearing on the merits was most certainly prejudiced by the County’s failure to send the notice of discontinuance directly to his wife. We conclude, therefore, that the County’s failure to comply with the clear language of section 22 (12) of the Social Services Law effectively tolled the 60-day limitations period (see, Matter of Angelo v Toia, 61 AD2d 1121, 1122; Matter of Pratt v Blum, 111 Misc 2d 228, 229). As a result, Mr. Zellweger is entitled to a fair hearing regarding both the initial discontinuance of benefits and the subsequent notices of denial for the period in question, since the later applications for medical assistance were necessitated by the decision in March of 1984 to discontinue benefits previously awarded. As noted by the trial court, the November 1985 notice of denial was later rescinded and any review of that denial is therefore moot.

Additionally, it would appear that the Department did not comply with 18 NYCRR 358.18, which states that a fair hearing decision "shall be issued as promptly as feasible and within 90 days from the date the request for a fair hearing is received by the department” (see also, 42 CFR 431.244 [f]). Mrs. Zellweger first requested a fair hearing in connection with the notices of denial in June of 1986. A second hearing concerning a July 16, 1986 notice was requested on July 18, 1986. A fair hearing was conducted in two parts, on August 14, 1986 and September 26, 1986. Yet the Department did not issue its decision until March of 1987, nearly nine months from the initial fair hearing request.

Finally, we would note that the March 1984 notice of discontinuance was defective because it did not alert Mrs. Zellweger to the fact that she needed to request a fair hearing within 60 days. Social Services Law § 22 (12) requires that notice of agency actions affecting the receipt of medical assistance specify hearing rights and procedures. We conclude from the language of this section that any such notice should contain information relating to the time limit for hearing requests. Lower courts have determined that a failure to specify the 60-day period for requesting a hearing tolls the time limit and permits a determination on the merits (see, Matter of Melgar v D'Elia, 96 AD2d 1101, 1102; Matter of Piasecki v Blum, 78 AD2d 950).

Inasmuch as the record does not indicate a violation of 42 USC § 1983, we find the appellant’s claim for attorneys’ fees to be without merit.

Accordingly, the order of the Appellate Division should be reversed, with costs, and this matter remitted to the Commissioner of the Department of Social Services for further proceedings and a review on the merits of all determinations denying appellant medical assistance from March 21, 1984 through May 31, 1986.

Judges Simons, Kaye, Alexander, Titone, Hancock, Jr., and Bellacosa concur.

Order reversed, with costs, and matter remitted to Supreme Court, Franklin County, with directions to remand to the Commissioner of the State Department of Social Services for further proceedings in accordance with the opinion herein.


author: Simons, J. Kaye, Alexander and Titone, JJ.

text:
    The People of the State of New York, Appellant, v Mark Cade, Respondent.
    Argued September 12, 1989;
    decided October 24, 1989

      POINTS OF COUNSEL

      John J. Santucci, District Attorney, Queens County (Andrew Zwerling of counsel), for appellant.
    I. The indictment was erroneously dismissed. (People v Rodriguez, 11 NY2d 279; Matter of De Canzio v Kennedy, 67 AD2d 111; People v Potter, 50 AD2d 410; People v Nicholas, 35 AD2d 18; Matter of Grand Jury of County of Nassau, 129 Misc 2d 770; People v Williams, 129 Misc 2d 501; People v Westbrook, 79 Misc 2d 902; People v Lenoci, 13 Misc 2d 789; People v Benson, 208 Misc 138; People v Wilkins, 68 NY2d 269.) II. The court below lacked jurisdiction to reach the quorum issue; in any event the quorum requirement of CPL article 190 was satisfied in the instant case. (People v Reed, 276 NY 5; People v De Jesus, 54 NY2d 447; People v Gersewitz, 294 NY 163, 326 US 687; People v Goodfriend, 64 NY2d 695; People v Colon, 65 NY2d 888; People v Vallone, 140 AD2d 729; People v Heizman, 127 AD2d 609, 69 NY2d 950; People v Gibbs, 21 AD2d 980; People v Collier, 72 NY2d 298; People v Infante, 124 AD2d 86.)

      Kenneth A. Reiver for respondent.
    I. The indictment was properly dismissed by the court below. (People v Wilkins, 68 NY2d 269; People v Di Falco, 44 NY2d 482; Matter of Reports of Grand Jury of County of Montgomery, 108 AD2d 482; Matter of Grand Jury of Supreme Ct. of Rensselaer County, 98 AD2d 284; People v Herrmans, 69 Misc 303; People v Oishei, 20 Misc 163; People v Blake, 121 App Div 613.) II. Actual prejudice to defendant is not required to render a Grand Jury proceeding defective. (People v De Ruggiero, 96 Misc 2d 458; People v Di Falco, 44 NY2d 482; People v Hargrove, 80 Misc 2d 317.) III. Absent evidence that a proper quorum was present an indictment is deemed to be fatally flawed.

      Elizabeth Holtzman, District Attorney, Kings County (Ann Bordley and Barbara D. Underwood of counsel), amicus curiae pro se.

    I. The decision of the court below is wrong as a matter of law and has needlessly caused the dismissal of indictments. (Matter of Holtzman v Goldman, 71 NY2d 564; People v Douglass, 60 NY2d 194; People v Wilkins, 68 NY2d 269, 996; People v Williams, 73 NY2d 84; Dawson v People, 25 NY 399; People v Hulett, 53 Misc 2d 1034; People v Thompson, 116 AD2d 377; People v Baez, 118 AD2d 863; People v Grillo, 15 AD2d 502, 11 NY2d 841; People v Ansare, 96 AD2d 96.) II. The Cade rule should not apply retroactively. (Daniel v Louisiana, 420 US 31; Williams v United States, 401 US 646; Desist v United States, 394 US 244; Fuller v Alaska, 393 US 80;
      DeStefano v Woods, 392 US 631; Stovall v Denno, 388 US 293; Johnson v New Jersey, 384 US 719; People v Buia, 34 NY2d 529; People v Bush, 33 NY2d 921, 34 NY2d 537, 419 US 848; People v Feinlowitz, 29 NY2d 176, 695, 749, 405 US 963.)

      Abigail Everett, Philip L. Weinstein and Arnold S. Cohen for The Legal Aid Society, amicus curiae.

    Once the Grand Jury votes to indict, the prosecutor may not ask it to void its vote and deliberate anew. (People v Williams, 73 NY2d 84; Matter of Additional Jan. 1979 Grand Jury v Doe, 50 NY2d 14; People v Di Falco, 44 NY2d 482; People v Wilkins, 68 NY2d 269; Matter of Grand Jury of Supreme Ct. of Rensselaer County, 98 AD2d 284; People v Settles, 46 NY2d 154; People v Calbud, Inc., 49 NY2d 389; People v Marine, 142 Misc 2d 449; People ex rel. Suddith v Sheriff of Ulster County, 93 AD2d 954; People v Avant, 33 NY2d 265.)
   OPINION OF THE COURT

Simons, J.

In this matter the Grand Jury voted a true bill charging defendant with murder, second degree, and criminal possession of a weapon, second degree, and then, at the prosecutor’s request, vacated the true bill to hear additional evidence. After hearing the additional evidence it voted a new true bill and an indictment was filed charging defendant with the same two crimes. Defendant contends that the second submission was improper because not authorized by the court pursuant to CPL 190.75, and that the indictment which followed it is void. The trial court agreed and dismissed the indictment with leave to the District Attorney to resubmit the charges to another Grand Jury and the Appellate Division affirmed. A Judge of this court granted the People leave to appeal and we now reverse.

The legal question arises from these facts.

On April 1 and April 3, 1987, a Queens County Grand Jury heard evidence of the July 7, 1985 murder of Darrell Richardson and defendant’s responsibility for it. At the conclusion of the April 3 presentation the Assistant District Attorney instructed the Grand Jury on the law and it voted a true bill charging defendant with murder, second degree, and criminal possession of a weapon, second degree. The Grand Jury did not immediately file the indictment with the court, however, and on April 9, 1987, at the request of the Assistant District Attorney, it vacated its earlier vote and considered new testimony that the shotgun which had been used to kill Richardson, and which had been recovered from defendant on July 10, had been in his exclusive possession on the day of the murder. After the Grand Jury had heard this evidence, the Assistant District Attorney instructed it again and the Grand Jury voted a second true bill containing the same two counts. Defendant maintains that this indictment, subsequently filed with the court, is void.

At common law there was no limit to the power of the prosecutor to resubmit charges to the same or different Grand Juries (see, People v Wilkins, 68 NY2d 269, 273; People ex rel. Flinn v Barr, 259 NY 104; People v Rosenthal, 197 NY 394, 401, affd 226 US 260). The only protection from repeated prosecution available to an individual was the constitutional protection against double jeopardy and that could not be invoked until the time of trial (see, People v Rosenthal, supra). The breadth of this power invited abuse by prosecutors who could resubmit to a more compliant Grand Jury charges previously dismissed by another (People v Wilkins, supra; see also, People ex rel. Flinn v Barr, supra, at 108 [quoting from the notes to the predecessor of the present section contained in the draft Code of Criminal Procedure]). Accordingly, the Legislature, over the years, enacted several provisions in the Criminal Procedure Law, and its predecessors, to check such abuses. We are concerned here with CPL 190.60 (4) and 190.75 (1), (3) (derived in part from former Code of Criminal Procedure §§269, 270). Although the statutes neither prohibit nor authorize the procedure followed here explicitly, defendant maintains that the District Attorney’s powers are limited by them.

By their terms, the sections apply only to prior "dismissals” and require judicial permission to resubmit charges when the first Grand Jury hearing the evidence has rejected it as insufficient (CPL 190.75 [1], [3]; see, People v Wilkins, 68 NY2d 269, 273, supra; Bellacosa Practice Commentary, McKinney’s Cons Laws of NY, Book 11 A, CPL 190.75, at 342). Thus, we consistently held in the past, when applying the Code of Criminal Procedure, that a court order was not necessary for resubmission unless there was an initial refusal by a Grand Jury to indict or a prior court dismissal of the indictment (People v Rodriguez, 11 NY2d 279, 286; People ex rel. Flinn v Barr, supra; People v Rosenthal, supra; see, Code Crim Pro § 292-a). Nothing in the Criminal Procedure Law was intended to change that rule; under the present statute a superseding indictment may also be obtained without court authorization (Matter of De Canzio v Kennedy, 67 AD2d 111, 119-120; and see, CPL 200.80). If the Grand Jury has voted favorably on the charges, the District Attorney is at liberty to resubmit the matter to the same Grand Jury, without the necessity of recalling witnesses who have previously testified and rehearsing the evidence (see, People v Salerno, 3 NY2d 175, 177; People v Puig, 85 Misc 2d 228; People v Falasco, 121 Misc 538), or to an entirely new Grand Jury without court approval and obtain a superseding indictment. As long as the action does not impair the integrity of the Grand Jury proceedings or risk prejudice to the defendant (CPL 210.35 [5]), and we perceive no danger of either in this case, the indictment against defendant may stand.

The action of this Grand Jury was not unlike the procedure followed in People v Young (138 AD2d 764) and People v Skrine (125 AD2d 507). In those cases the Appellate Division approved the Grand Jury’s action of reopening the proceedings after a true bill had been voted, notwithstanding the lack of any statutory authority for doing so, upon applications by a defendant seeking to exercise his statutory right to appear. A similar ruling is appropriate under the circumstances presented in this case.

The trial court and the Appellate Division believed dismissal was mandated by our recent decision in People v Wilkins (68 NY2d 269, supra). In Wilkins we held that when the prosecutor unilaterally withdrew a case from the grand jurors before they had an opportunity to vote, he could not resubmit the matter without court authorization. Noting that the purpose of CPL 190.75 (3) was to check the practice of resubmitting a matter to a new Grand Jury once the evidence had been rejected, we concluded that under the circumstances of that case the Grand Jury’s failure to vote a true bill was a rejection of the People’s evidence and therefore the equivalent of a dismissal. That being so, court approval was required before the District Attorney could submit the matter to another Grand Jury. Notwithstanding the good faith of the District Attorney in Wilkins, approval of his conduct could have lead to precisely the abuse the Legislature sought to avoid by CPL 190.75 (3) and its predecessors: the prosecutor, apprehensive of dismissal, could have withdrawn the case after the Grand Jury had considered the evidence but before it had voted and resubmitted the charges to another Grand Jury, and he could have done so repeatedly until a favorable result was obtained (see, id,., at 275).

The circumstances of this case differ significantly. On April 3 the Grand Jury voted to indict. Once it had accepted the People’s evidence as sufficient to support the charges, the District Attorney had no need to forum shop for a more compliant Grand Jury. The potential for undermining the statute no longer existed and judicial intervention wets no longer required.

Defendant also contends that because CPL 190.65 (3) provides that upon voting an indictment the Grand Jury "must” file it with the court, the failure to file the April 3 indictment immediately was a jurisdictional defect. The provision is only directory, however, and imposes no time limits on filing (see, Dawson v People, 25 NY 399, 405-406). Its requirements were met when the indictment voted April 9 encompassing all the proceedings on the charges was filed with the court.

Nor is there any reason to interpret either the failure to file the original indictment or its vacatur as a dismissal of the charges, as defendant and the amicus curiae brief of Legal Aid Society urge. The Grand Jury voted to vacate and reopen, without filing the indictment, so that it could receive additional evidence supporting charges it had already approved. Its actions cannot be treated as a dismissal because they were not the equivalent of a rejection of the People’s evidence. Quite the contrary, they signify acceptance, not rejection. Manifestly, the Grand Jury found the evidence sufficient on April 3 and again, after supplementation, on April 9.

As a practical matter, the District Attorney could have accomplished precisely the same result here by obtaining a superseding indictment without court approval; he needed only to file the original indictment endorsed by the Grand Jury and then re-present the matter to the same or another Grand Jury. Indeed, the prosecutor could have obtained a superseding indictment even if the existing one was subject to a pending motion to dismiss and the motion was subsequently granted by the court (see, People v Leyra, 1 NY2d 199, 202-203).

In view of these available alternatives, and the results to be expected from pursuing them, the procedure urged by defendant would only consume limited prosecutorial and judicial resources needlessly. The prosecutor, having already presented enough evidence to convince the Grand Jury to indict and choosing only to supplement the proof, had little reason to obtain a superseding indictment and there was nothing improper in his failure to do so. Unless the proceedings have been flawed or the District Attorney’s actions have risked some prejudice on defendant within the meaning of CPL 210.35 (5), and we see none, he was free to act as he did.

In conclusion, several points raised by the dissenters must be addressed. They find only two possible explanations for the procedure used here: (1) that the prosecutor asked the Grand Jury to void the true bill and resubmitted out of fear the Grand Jury would expire and new Grand Jury would look less favorably on the evidence or (2) the prosecutor did not wish to expose the case to a motion to dismiss for legal insufficiency (dissenting mem, at 421). There is nothing in the record, however, to suggest that the prosecutor here acted as he did out of any conviction that the evidence before the Grand Jury was inadequate or that dismissal was likely. Moreover, there are other reasons why a prosecutor or a Grand Jury would choose to reopen the evidence. The prosecutor might, for example, supplement the evidence to bring additional or higher charges, to introduce exculpatory material (see, People v Valles, 62 NY2d 36, 38-39), or to allow a defendant the opportunity to testify (see, CPL 190.50; People v Young, supra; People v Skrine, supra). Although the dissenters presumably would not accept as legitimate these reasons for following the procedure used here, we find no fault with the actions of the Grand Jury and no reason to invalidate the indictment in the absence of grounds for dismissal under CPL 210.35 (5).

The dissenters also contend that the procedure evades the statutory requirements of CPL 200.80 concerning superseding indictments and the holding provisions of CPL 180.80. Contrary to the statement in the dissent, CPL 200.80 does not authorize, nor do we concede that it authorizes, re-presentment of a case only by means of a superseding indictment. The section is silent on the procedure used here (see, dissenting mem, at 419). Thus, the dissent’s observation that there was an authorized solution to the problem, derived from our opinion in People v Wilkins (68 NY2d 269, supra), is based on an incorrect premise.

Nor is there anything in the record to support the dissenters’ contention that, in the absence of filing, the procedure was used to evade the requirements of CPL 180.80. There was nothing to be gained here by obtaining a superseding indictment and, inasmuch as the statutes did not require the prosecutor to do so, the requirement of filing under the circumstances, was a formality which would not more adequately protect the defendant’s rights.

Finally, it should be emphasized that the statutory limitation upon resubmitting a case only once applies to cases in which the Grand Jury or court has rejected the People’s evidence. The purpose of the limitation is to prevent harassment of a potential defendant. If the Grand Jury has not rejected the People’s evidence but rather accepted it, the reason to invoke the limitation no longer exists.

In conclusion, we are obliged to comment on observations made by the trial court and the Appellate Division concerning quorum requirements (see generally, CPL 190.25 [1]). Defendant did not question the quorum in his omnibus motion and the parties did not address that subject in the trial court. Moreover, the issue was not raised in the Appellate Division and that court should not have considered it on the People’s appeal (see, People v Goodfriend, 64 NY2d 695).

Accordingly, the order of the Appellate Division should be reversed and the indictment reinstated.

Kaye, Alexander and Titone, JJ.

(dissenting). The Criminal Procedure Law enumerates only five permissible dispositions for cases presented to a Grand Jury: the Grand Jury may indict, direct the filing of a prosecutor’s information, request a removal to Family Court, dismiss the charges, or submit a Grand Jury report (CPL 190.60 [l]-[5]). By adding a sixth — which is unauthorized by the Legislature — the majority allows prosecutors to evade the clear directives of the governing statutes and undermines the integrity of the Grand Jury process. We cannot accede to this judicial enlargement of prosecutorial power, and therefore dissent.

At the outset, it is important to emphasize what is conspicuously absent from the majority’s opinion but conceded by the People. The procedure employed here is not one that is used rarely, only in an isolated instance. To the contrary, this unauthorized procedure has been used in countless cases and, given the court’s imprimatur, will doubtless now become even more routine. In People v Wilkins (68 NY2d 269), despite the lack of any bad faith on the part of the prosecutor, we refused to countenance use of an unauthorized procedure because of the effect that permitting the practice might have on the prosecutor’s use of the Grand Jury in future cases. The same result should obtain here.

The majority relies on two points for its approval of the prosecutor’s practice: first, the identical result can be accomplished simply by filing a superseding indictment, and second, the Grand Jury initially voted a true bill. These two factors purportedly demonstrate that no potential for abuse of the indictment process inheres in the practice. We disagree.

That the prosecutor could readily have obtained a superseding indictment without court approval or resubmission to a new Grand Jury does not justify an unauthorized procedure, and indeed militates even more strongly against it. As the majority recognizes, the Criminal Procedure Law authorizes the prosecution to re-present a case to the Grand Jury, without court approval, only by obtaining a superseding indictment (see, CPL 200.80), which requires that the prosecutor "file the original indictment endorsed by the Grand Jury and then re-present the matter to the same or another Grand Jury.” (Majority opn, at 416.) That the Legislature provided the prosecutor a lawful way of accomplishing the same end is all the more reason why strict compliance with the statutory scheme should be required. As we concluded in People v Wilkins (68 NY2d 269, 276, supra), if there is an authorized solution for the prosecutor’s dilemma, the prosecutor, as legal advisor to the Grand Jury, should be required to follow it.

Moreover, the filing of the original indictment triggers the defendant’s right to judicial review of the indictment’s sufficiency, a protection unnecessarily discounted by the majority. Because a court has discretion to deny a prosecutor’s request to resubmit a case to the Grand Jury (CPL 190.75 [3]), it is by no means guaranteed that in any given case the court will authorize resubmission if the indictment is dismissed for legal insufficiency.

In cases such as this one where the new evidence allegedly merely lends additional support to the counts on which the Grand Jury has already voted to indict, the only practical explanation for "voiding” the existing indictment is that the prosecutor has doubts, well founded or otherwise, about the ability of the original evidence to survive a motion to dismiss for legal insufficiency. Rather than risking dismissal and an unfavorable outcome on a request for judicial permission to resubmit (see, CPL 190.75 [3]), a prosecutor might well prefer to keep control of the process by treating the prior Grand Jury action as though it had never occurred and obtaining a second indictment fortified by new evidence.

Furthermore, a court may grant one resubmission only (CPL 190.75 [3]). Unapproved withdrawals before filing effectively emasculate this statutory limitation.

What is perhaps most disturbing about the practice of "voiding” is the People’s admission that its primary purpose is to avoid the consequences of the time constraints imposed by CPL 180.80.

CPL 180.80 requires the release of a defendant who has been held in custody on a felony complaint for more than 120 hours (or 144 hours if the detention period includes a Saturday, Sunday or legal holiday), unless one of several conditions are met. Included among these conditions is the filing of an indictment or a written certificate that an indictment has been voted before the defendant’s application for release was made (CPL 180.80 [2]).

According to the People’s brief: "One cannot overstate the frequency with which cases throughout this State were reopened by prosecutors after the vote of a true bill and prior to the filing of an indictment. It was (prior to [the Appellate Division decision in this case]) not uncommon for a prosecutor to present a legally sufficient case as to certain charges in order to comply with the time constraints of CPL 180.80, and to reopen the case when previously unavailable information was forthcoming. This was true, for example, in narcotics cases where sales charges based upon police observations were presented and voted upon, while the submission of possession charges were delayed until the receipt of laboratory reports; in multiple sex victim cases in which only one victim was available within the time period delineated by CPL 180.80, and others came forward afterwards; or, in armed robbery cases where the weapon possession charges could not immediately be presented due to the unavailability of ballistic reports.”

This litany of the circumstances in which the challenged practice has been used suggests no legitimate prosecutorial need for resorting to an extra-statutory procedure. While it is true that the CPL 180.80 time constraints may provide good reason to make a premature Grand Jury presentation in particular cases, that circumstance does not explain why existing, authorized procedures are inadequate to cure the resulting problems.

In cases where the weapon or drug possession charges associated with a criminal incident must await the completion of a technician’s report, the statute allows the People to obtain a superseding indictment without prior court approval (CPL 200.80). In cases where additional victims or evidence are expected to come to light after the CPL 180.80 deadline has passed, the statute allows the People either to delay the initial presentment and oppose the release of the defendant on the basis of asserted "good cause” (see, CPL 180.80 [3]) or, again, make an initial Grand Jury presentation and then seek a superseding indictment. Finally, where, as here, there exists new and useful evidence pertaining to the original counts voted by the Grand Jury, the People may — consistent with the statute — either supersede or leave in place the existing indictment, which is presumably supported by legally sufficient evidence, and use the new evidence to enhance their presentation at trial.

The availability of these options strongly suggests two explanations for a prosecutor’s resort to a practice not specified by statute. If there is a chance that the term of the original Grand Jury — the one that has already acted favorably — may expire before filing is complete, the prosecutor may prefer not to risk resubmitting the case to a different Grand Jury, which could well take a different view of the facts. Or the prosecutor simply may not wish to expose the case to a motion to dismiss for legal insufficiency. Both reasons are indicative of an effort on the part of the People to chart their own course so as to avoid the risk of the defendant’s early release under CPL 180.80 on the one hand while, at the same time, avoiding the pitfalls of a hasty Grand Jury presentation. Plainly, this course was not contemplated by the Legislature when it adopted articles 180 and 190 of the Criminal Procedure Law.

As the People readily admit, the Grand Jury indictment process is being used in these cases not for its intended purpose of subjecting the available evidence to independent review, but rather for the purpose of obtaining a Grand Jury vote so that a formal certificate may be filed and the technical requirements of CPL 180.80 deemed satisfied. Furthermore, the People’s rush to obtain a Grand Jury indictment before the CPL 180.80 deadline expires is, in many instances, motivated by their desire to avoid exposing their case to an adversarial preliminary hearing (see, CPL 180.60, 180.80), in which the defendant has an opportunity both to preview their evidence and to cross-examine their witnesses (see, People v Hodge, 53 NY2d 313, 318-319). While the People’s strategic preference for the Grand Jury is understandable, we do not believe that this court should sanction an extra-statutory procedure that is calculated to advance it. The practice of routinely making Grand Jury presentations to satisfy CPL 180.80, with the idea that shortcomings or defects can be cured within the relatively risk-free environment of the same Grand Jury, distorts the legislatively specified system for preliminary review and, in that sense, impairs the integrity of the Grand Jury.

Accordingly, we would hold that when a prosecutor successfully asks the Grand Jury to "void” its prior vote to indict, the resulting Grand Jury action is, as in Wilkins, the functional equivalent of a dismissal. We would therefore affirm the Appellate Division order.

Chief Judge Wachtler and Judges Hancock, Jr., and Bellacosa concur with Judge Simons; Judges Kaye, Alexander and Titone dissent and vote to affirm in a memorandum.

Order reversed, etc.

       CPL 190.75 (1), (3) provides: "When a charge has been so dismissed, it may not again be submitted to a grand jury unless the court in its discretion authorizes or directs the people to resubmit such charge to the same or another grand jury. If in such case the charge is again dismissed, it may not again be submitted to a grand jury.”

       Reopening the proceedings to permit a defendant to exercise his or her statutory right to appear before the Grand Jury up until filing of an indictment (CPL 190.50 [5] [a]) involves quite different considerations, and the majority’s reliance on Appellate Division decisions upholding such action (see, e.g., People v Young, 138 AD2d 764; majority opn, at 415) is entirely misplaced.