author: Fuchsberg, J. (concurring).

text:
    Kleinschmidt Division of SCM Corporation, Respondent, v Futuronics Corporation, Appellant.
    Argued January 12, 1977;
    decided April 5, 1977

      Allan J. Kirschner and Herbert Robinson for appellant.

      Jacob Imberman and Jeffrey A. Mishkin for respondent.
   Memorandum. In this case, there is evidence from which the trial court could have inferred agreement with respect to Lots II and III. There were, of course, the various serious communications, arguably reading as if the parties had reached firm agreement on many things. Futuronics urged, especially on oral argument, that Kleinschmidt’s shipment, for "first unit testing”, of several units comprised in Lots II and III was "Conduct * * * which recognizes the existence of a contract” (Uniform Commercial Code, § 2-207, subd [3]). The trial court, however, found that no agreement had been reached. It could have found otherwise. But that is not the point. The point is that the trial court, with all of the evidence before it, determined that no agreement had been reached, and in making that determination, the court made no error of law.

Under the Uniform Commercial Code, if the parties have intended to contract, and if an appropriate remedy may be fashioned, a contract for sale does not fail for indefiniteness if terms, even important terms, are left open (§ 2-204, subd [3]). It is no longer true that dispute over material terms inevitably prevents formation of a binding contract. What is true, and decisive in this case, is that when a dispute over material terms manifests a lack of intention to contract, no contract results.

The basic philosophy of the sales article of the Uniform Commercial Code is simple. Practical business people cannot be expected to govern their actions with reference to nice legal formalisms. Thus, when there is basic agreement, however manifested and whether or not the precise moment of agreement may be determined, failure to articulate that agreement in the precise language of a lawyer, with every difficulty and contingency considered and resolved, will not prevent formation of a contract (see Uniform Commercial Code, § 2-204). But, of equal importance, if there be no basic agreement, the code will not imply one. In this case, it was found as a fact by the trial court, a finding supportable by the evidence and affirmed by the Appellate Division, that there was no basic agreement.

Without agreement there can be no contract, and, of course, without a contract there can be no breach. This principle, basic as it is to contract law, finds explicit recognition in the Uniform Commercial Code (§ 1-201, subds [3], [11]; § 2-204, subds [1], [2]). The principle should be dispositive of this case.

The court cannot subscribe to the concurring opinion for two reasons. First, that opinion engages in an extensive unwarranted evaluation of the facts, beyond mere description, an evaluation wholly inappropriate in light of the affirmed findings and this court’s limited jurisdiction. Second, the opinion misconstrues the innovative liberalizing provision of the Uniform Commercial Code, which does not require agreement on all material terms as a prerequisite to formation of an enforceable commercial agreement (§ 2-204). There are other matters with which the court cannot agree, as for one example, the discussion of so-called "precatory conditions”.

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

Fuchsberg, J. (concurring).

I respectfully suggest that the opinion of the majority represents too summary a disposition of this case. Here by our permission, both sides to this appeal have raised, and extensively briefed and argued to us, significant issues involving the construction and application of the Uniform Commercial Code to the factual findings made at Trial Term. In this great center of modern commerce, more business transactions undoubtedly are affected by the code than anywhere else in the world. When, therefore, leading authorities note that our State’s nisi prius decisions in this area are in disarray (Duesenberg, Sales, Bulk Transfers and Documents of Title, 31 Business Lawyer 1533, 1543-1544), it seems to me that a fuller exposition of a legal rationale is very much in order.

I start by noting that the outcome of this appeal centers on whether the plaintiff, Kleinschmidt Division of SCM Corporation (hereinafter SCM), and the defendant, Futuronics Corporation (hereinafter Futuronics), entered into a binding agreement for the sale of 4,436 teletypewriters for a total price of over $4,700,000.

The action was originally brought by SCM for breach of contract and fraudulent inducement. Futuronics also counterclaimed for breach of contract as well as for a variety of torts associated with the execution of the transaction, including malicious breach of contract, unfair competition, interference with contractual relations, prima facie tort and conversion. The trial court in an "opinion-decision” after a nonjury trial found as a fact that the parties had reached agreement only with respect to 604 of the teletypewriters, these being the ones denominated during the course of the negotiations as "Lot I”, and, since it also found that the agreement as to that lot had been fully performed, it dismissed SCM’s complaint.

Upon the basis of the factual findings, the trial court also dismissed all of Futuronics’ counterclaims. Futuronics appealed to the Appellate Division from so much of the judgment entered on the Trial Judge’s decision as was adverse to it; SCM did not appeal. The Appellate Division, in affirming, did so on the opinion at trial term. It is for the reasons which follow that I join in upholding its order.

Principles of law are not to be applied in the abstract. Therefore, though bearing in mind that we are bound by the now affirmed findings of the trial court (NY Const, art VI, § 3, subd a; Rudman v Cowles Communications, 30 NY2d 1, 10; Cohen and Karger, Powers of the New York Court of Appeals, §§ 109, 119), we nevertheless must proceed to search the record for the pertinent proof upon which they had to depend for their support.

SCM and Futuronics were manufactueres of teletypewriters. On three occasions between 1968 and 1970 each bid to supply teletypewriter requirements of the United States Department of Defense. Futuronics was the successful bidder on each occasion; the defense contracts provided for a total price of some $5,400,000. During the course of prior contractual relationships with the Government, SCM had accumulated a substantial stock of completed teletypewriters and parts. Out of a desire to make use of that inventory and keep its labor force going, in the fall of 1970 the then newly appointed president of SCM’s Kleinschmidt Division, Harry Gaples, informed Albert Blanck, the president of Futuronics, that it was interested in contracting to manufacture and sell to Futuronics the 4,436 teletypewriters needed to fill its three orders. That communication led to a meeting between Gaples and Blanck on October 6, 1970.

What transpired at that meeting was sharply disputed at trial. According to Blanck, there was a detailed discussion of the specifications of all the types of machines called for in Futuronics’ three contracts, following which the parties then and there agreed upon all the terms of a contract for their manufacture. On the other hand, Gaples, who had joined SCM only about a month earlier, testified that he was not sufficiently familiar with the specifications to discuss them at that time, so that, though he had agreed on the quantity and price per unit of the teletypewriters to be supplied, on the fact that they were to be packed "commercially” rather than "militarily” and that SCM would credit Futuronics with the book value of the latter’s work in progress "up to” $500,000, he had withheld any commitment on such patently vital matters, among others, as Futuronics’ demands for prompt initial deliveries and whether SCM would be willing to depart from its insistence that it would undertake the manufacture of the machines only according to the specifications which it had followed in the past rather than as provided by Futuronics’ military contracts.

Both agreed that though, at the conclusion of their meeting, Blanck prepared, signed and handed Gaples its "purchase order No. 6791”, Gaples did not sign it at that time; nor does it appear that Blanck asked him to do so, despite the fact that the order form included a place for the seller’s signature. The quantity of each of the kinds of teletypewriters required for each of the three lots and a uniform unit price of $1,076 did appear on the purchase order. But, under the heading "notes”, it contained the following typewritten statement: "1. Delivery to be established by mutual agreement. 2. Payment schedule to be established by mutual agreement. 3. Specifications to be established. 4. Credit of $500,000 for work in progress, as is, to be given by Kleinschmidt to Futuronics Corporation.”

Mr. Justice Helman, the Trial Judge, apparently crediting Gaples’ version of the meeting over that of Blanck, rejected Futuronics’ contention that the unilaterally signed purchase order was a confirmation of an oral agreement. In view of the language of the purchase order, he noted that "It is difficult to understand how sophisticated business people dealing with each other for the first time, in a transaction involving more than $5,000,000, could regard this document as a contract binding on each when so many important matters were left open.” It is, of course, a basic rule of law that a contemplated contract will not have reached a legally enforceable stage while one or more of its material provisions is still in dispute (Willmott v Giarrupto, 5 NY2d 250, 253 [Fuld, J.]), a general principle which survives the Uniform Commercial Code (see, e.g., Uniform Commercial Code, § 1-103; Olympic Jr. v David Crystal, Inc., 463 F2d 1141; ABC Trading Co. v Westinghouse Elec. Supply Co., 382 F Supp 600, 603-604; Viacom Int. v Tandem Prods., 368 F Supp 1264; Campbell v WABC Touring Corp., 78 Misc 2d 671, 673).

For, under the Uniform Commercial Code itself, "[i]n spite of the validity of open terms permitting the other party to the transaction to specify various terms or aspects of performance, and of the liberal treatment given to new or additional terms in acceptance or confirmation, it is still necessary that there be an agreement of the parties, and when it is clear that they disagree as to material terms, there is, as under pre-Code authority, no sale or contract to sell” (1 Anderson, Uniform Commercial Code [2d ed], § 2-204.9, p 316; see, also, White & Summers, Uniform Commercial Code, p 101).

To seek out the denouement of the parties’ negotiations, in the light of the finding that no agreement had been arrived at on October 6 it is then necessary to track the course of their ensuing conduct. Since no crucial role can be ascribed to SCM’s short telegram of October 9 in which it purported to do no more than advise Futuronics that it was prepared to ship a small quantity of teletypewriters to the Army for "testing”, the next item of significance, in chronological order, is a document entitled "Amendment #1 to Purchase Order No. 6791”. Consisting of a printed order form identical to the one Blanck used on October 6, it was sent to SCM by Futuronics on October 13, 1970.

"Amendment #1”, in contrast to the original purchase order, referred to the teletypewriters in terms of Lots I, II and III, each lot apparently corresponding to those embraced respectively by Futuronics’ 1968 Defense Contract and the two that followed in 1970. Under Lot II, "Attachment 1” had substituted 248 more expensive machines for a similar number of less expensive ones referred to as TT-985’s in the original purchase order; this change alone affected well over a quarter of a million dollars of merchandise. Amendment No. 1 also bore on its face the words, "This amendment established the terms and conditions of the subject purchase order as provided for in the basic document”; it contained too, as had the original purchase order, a request for a written acknowledgment of its terms and conditions. Attached to "Amendment #1” was a three-page, single-spaced document headed "attachment #1”, which detailed a host of terms and conditions regarding the manufacture and sale of the teletypewriters. In view of the affirmed factual findings with regard to the events of October 6, Purchase Order No. 6791 of that date and Amendment No. 1 of October 13 may, at most, be reasonably read together compositely as an offer from Futuronics as of the latter date and not as a later confirmation that there had been a meeting of the minds on October 6.

SCM responded on October 28, 1970. It did so by its return to Futuronics of acknowledgment copies of both Purchase Order No. 6791 and Amendment No. 1. However, on the line provided for its acknowledgment, on each one SCM stated that the terms and conditions of its acceptance were to be found in an accompanying letter of transmittal. That letter, also dated October 28, contained no less than nine pages of terms and conditions differing in at least 10 substantive respects from those set forth in Futuronics’ Amendment No. 1.

Understandably, the trial court found Futuronics’ insistence that SMC’s October 28 letter is to be treated as "an unconditional acceptance of Purchase Order No. 6791 and Amendment #1” completely unpersuasive since, on its face, it was almost a four-square rejection of the matters particularized in Amendment No. 1.

Appellant’s companion argument that SCM’s failure to object within 10 days to the terms and conditions contained in Amendment No. 1 constituted an acceptance under section 2-201 of the Uniform Commercial Code is no more meritorious. For that section is concerned with the enforceability, not the formation, of a contract and the sole consequence of a failure to object, in accordance with its subdivision (2), is to remove the Statute of Frauds as a defense (see, e.g., Rubin & Sons v Consolidated Pipe Co., 396 Pa 506; Cargill Inc. v Wilson, 166 Mont 346; see, also, 3 Duesenberg & King, Sales and Bulk Transfers Under the Uniform Commercial Code, § 2.204 [2] M).

Appellants further contend that, in the alternative, a statement in the October 28 letter that "we are pleased to accept your purchase order no. 6791 for various teletypewriter equipment” ■ constituted an acceptance. In doing so, however, it ignores the further language "[w]e request that the following conditions be made a part of this order”, which precedes the 10 particularizations to which we have already referred. Suffice it to say that, in the context of the negotiations up to that point, the trial court most certainly is not to be faulted as a matter of law for finding as a fact that the intent of the October 28 letter was that no contract would be effected unless its conditions were met. And it is evident that untoward reliance on the softness and civility of the words "please” and "request” as a reason to regard the "conditions” as precatory rather than firm would not only run counter to the Uniform Commercial Code’s policy to give recognition to the reality of dealings between people in the commercial world but be a return to a "highly formalistic era” characterized by "magic phrases” (Murray, Intention Over Terms:- An Exploration of UCC 2-207 And New Section 60, Restatement of Contracts, 37 Fordham L Rev 317, 322; see, also, 3 Duesenberg & King, Sales and Bulk Transfers Under the Uniform Commercial Code, p 3-52).

In short, as of October 28, there was found to be a material and hardening divergence of positions between the parties. SCM’s was crystallized by its letter of that date; Futuronics’ was to be found in its two purchase orders.

Events that unfolded from that point on are headed by a letter dispatched by Futuronics on November 9 in response to SCM’s of October 28. It did not come close to narrowing the gap between the parties; a comparison of the exchanged correspondence shows that at least eight areas of disagreement were still open. These were: (1) whether there would be an increase in unit cost for military packaging for all of the lots, (2) which party would do the testing, (3) who was to obtain the necessary waivers for all of the lots, (4) whether there would be an increase in unit price for the two disputed models in Lot II, (5) what the payment schedule was to be, (6) whether there would be a 6% price increase in the event Futuronics exercised its option for more production, (7) methods of packaging, (8) who was to retain the test data.

Even after subsequent meetings in December, 1970 and January through March, 1971, the passage of time only served to underline continuing differences as to who was to assume the costs that SCM would incur if it performed the various items on which Futuronics had been insisting. Indeed, the trial court found that Futuronics would not order production on Lots II and III unless SCM would agree to Futuronics’ remaining conditions. SCM remained equally adamant in its refusal to do so. In order to meet the requirements of the 1968 Army contract, the parties finally agreed upon a basis for delivery of the 604 teletypewriters comprising Lot I, but they never came to terms as to Lots II and III. Things finally came to a head at a meeting on April 28, 1972, at which Gaples offered a settlement of SCM’s demands by a sharing of costs; Blanck rejected it on behalf of Futuronics. It is clear that on the basis of this prolonged history of the unsuccessful efforts to reach agreement, there is no predicate on which it may be concluded that the trial court’s factual determination that the parties’ minds never met on essential terms with respect to Lots II and III was impermissible as a matter of law. To the contrary, there is an absence of "conduct by both parties which recognizes the existence of * * * a contract” as prescribed by subdivision (1) of section 2-204 of the Uniform Commercial Code.

However, notwithstanding the intractable differences between the parties and their failure to come to an agreement, as found by the trier of the facts, appellant asserts that the conditions set forth in Futuronics’ letter of November 9 must be regarded, under subdivision (2) of section 2-207 of the Uniform Commercial Code, merely as "proposals for addition to the contract”, whose acceptance or rejection, or materiality or immateriality, would not prevent it from operating as an acceptance as a matter of law. The short answer to that contention is that section 2-207 of the Uniform Commercial Code does not come into play unless, as a threshold matter, an enforceable commercial understanding has in fact been arrived at. Specifically, section 2-207 has no application to the present case where there is a factual finding of failure to reach agreement. That failure terminated the power of acceptance and was not to be vitiated ipse dixit by the unilateral dispatch of a letter of "acceptance” containing the very conditions by which the other party had previously indicated it did not intend to be bound.

These principles apply, of course, with equal force to SCM’s letter of October 28. Neither the letter of October 28 nor that of November 9 involved the kind of circumstance to which section 2-207 is appplicable, i.e., either (1) "minor suggestions or proposals such as 'ship by Tuesday’, 'rush’ * * * or the like”, or (2) more crucially, a situation in which "a deal has in fact been closed”. In the latter event, not the case here, a "deal” may survive the unsuccessful proffer of even material "proposals for addition to the contract” (Uniform Commercial Code, § 2-207; Official Comment 1, 2, McKinney’s Cons Laws of NY, Uniform Commercial Code, Book 62½, p 175).

As Duesenberg and King have so well put it, in language fully applicable here, "the concepts of mutual assent and intention to accept the terms of an offer are not jettisoned by the Code, and a variance of the type suggested is so great that, irrespective of the words used, there should not be held to have come into existence a binding [contract] * * * [for] only then should the presumptions of Section 2-207 as to additional terms become relevant. Basically, Section 2-204 controls as to when a contract is formed, and that section includes the requirement that the facts must 'show agreement’ ” (3 Duesenberg & King, Sales and Bulk Transfers Under the Uniform Commercial Code, § 3.03 [1] [a]; § 3.05; see, also, Duval & Co. v Malcom, 223 Ga 784; Euclid Eng. Co. v Illinois Power Co., 79 111 App 2d 145; Luis Hirsch y Cia. S. A. v Rosenblatt Casing Co., 418 F2d 1300; cf. Construction Aggregates Corp. v Hewitt-Robins, 404 F2d 505).

Turning next to the matter of the "work in progress”, it is undisputed that SCM took over the parts and materials which Futuronics had been assembling in contemplation of its own manufacture of the teletypewriters. As Purchase Order No. 6791 indicates, Futuronics was to receive a "credit of $500,-000” for these goods "as is”. Futuronics claimed the figure was a firm one; SCM claimed that it was but an "educated guess” which was to be adjusted on the basis of a subsequent determination of true book value. The record reveals that the trial developed a considerable amount of uncertainty as to value and an admission by Blanck that, if it had turned out that the estimate was erroneous, he would have regarded an adjustment as in order. It was agreed that the parties had been unable to arrive at such an adjustment on their own.

With all that before it, the trial court, apparently doing the best it could with evidence that was less than ideal for fact-finding purposes, found that the $500,000 figure was not intended to be immutable and that the actual value rested between $375,000 and $400,000; since SCM had allowed Futuronics a credit of $381,644.08 on Lot I, perhaps with just a dash of King Solomon the Trial Judge then found that the credit represented full payment for the "work in progress” and dismissed both SCM’s claim for a refund of part of that credit as well as Futuronics’ counterclaim for conversion. The Appellate Division, with its power to act on the facts (CPLR 5501, subd [c]) and "in the interests of justice” (Rivera v W. & R. Serv. Sta., 34 AD2d 115, 117), having unanimously affirmed these essentially factual determinations, they too must be regarded as beyond our reach.

Finally, having considered both the evidentiary errors which appellant has raised as well as appellant’s contentions with regard to the sufficiency of the evidence to support the findings for the respondent on those of appellant’s counterclaims which sound in tort, we find each of them to be without merit.

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

Chief Judge Breitel and Judges Jasen, Gabrielli, Jones and Wachtler concur in memorandum; Judge Fuchsberg concurs in result in a separate opinion in which Judge Cooke concurs.

Order affirmed, etc.

      . The 10 areas of disagreement consisted of (1) terms under which Futuronics would receive credit for its work in progress; (2) terms of payment; (3) the increased cost of supplying teletypewriter models UGC-4’s and- FGC-20X’s; (4) marking of parts; (5) painting of magnesium castings; (6) type of packing; (7) responsibility for testing the equipment; (8) responsibility for preparation of technical drawings; (9) responsibility for supplying gages and gage cases; (10) Futuronics’ options to increase the number of teletypewriters it might order and the price to be paid therefor. SCM’s Qctober 28 letter also contained additional terms relating to Futuronics’ responsibility to supply nameplates and manuals, provisioning documentation and other software, and payment to the Government for use of Government-owned tooling located at Kleinschmidt’s plant.

      . As earlier noted, Lot I was first referred to by Futuronics in Amendment No. 1. Thereafter the parties continued to refer to the machines covered by the 1968 contract as Lot I, and the machines covered by the two 1970 contracts as Lots II and III. Viewed in light of the surrounding circumstances, this clearly reflected the parties’ intent to treat Lot I as separate and distinct from Lots II and III (see Uniform Commercial Code, § 2-105, subd [5]; § 2-307; Rentaways, Inc. v O’Neill Milk & Cream Co., 308 NY 342, 348; Ripley v International Rys. of Cent. Amen, 8 NY2d 430, 437; 3A Corbin, Contracts, § 694; 6 Williston, Contracts [3d ed], § 862; Restatement, Contracts, § 351, subd [a]; § 487).


source: Caselaw Access Project

author: Jasen, J. (dissenting).

license: Public Domain

text:
    In the Matter of Consolidated Mutual Insurance Company, Appellant-Respondent, v Lawrence W. Keepnews, as Superintendent of Insurance of the State of New York, Respondent-Appellant.
    Argued February 16, 1977;
    decided April 5, 1977

      Robert J. Bertrand for appellant-respondent.

      Louis J. Lefkowitz, Attorney-General (David L. Birch, Samuel A. Hirshowitz and Harold Tompkins of counsel), for respondent-appellant.
   Memorandum. Judgment reversed, without costs, and the determination annulled.

The Insurance Law, in prohibiting a director of an insurer from receiving any compensation for negotiating or aiding in any "purchase or sale of property” made by the insurer, does not embrace the making of a lease by the insurer as lessor as the several applicable words are used, either in common parlance or in common legal usage.

The issue in the case is not whether a lease is property. Of course it is. The issue is whether, in common parlance or legal usage, the terms "purchase or sale” of property refer to the making of a lease either as to the lessor or the lessee. Subdivision 4 of section 78 of the Insurance Law in pertinent part provides "[n]o director or officer of an insurer doing business in this state shall receive * * * any money or valuable thing * * * for negotiating, procuring, recommending or aiding in any purchase or sale of property * * * made by such insurer”. For whatever significance it has, and it has considerable, the department for many years had construed the statute to exclude the making of leases. The contrary determination by the Superintendent of Insurance was a latter day event, and then some time after the leasing had occurred in this case.

It is fruitless to resort to contradictory canons of construction which call for a liberal or restrictive interpretation of language. Such resort, rather than progressing an analysis, only concludes one (see Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes are to be Construed, 3 Vand L Rev 395, 399-406). There is no doubt that the purpose of the statute would have been better served if it expressly included leases. There is also no doubt that the statute in its present form does not give adequate notice that the proposed activity is forbidden to those who would look meticulously to avoid the prohibitions of the statute. If neither layman nor lawyer could know whether leases came within the statute’s scope, as distinguished from speculating that the intended statutory prohibition was inadequately expressed, a violation of the statute has not been made out (see State of New York v Mobil Oil Corp., 38 NY2d 460, 466; People v Phyfe, 136 NY 554, 559).

On this view, it is not necessary or proper to reach the substantial question whether a separate fine could be imposed for each payment made to the director of petitioner.

Jasen, J. (dissenting).

Subdivision 4 of section 78 of the Insurance Law prohibits an insurer from paying special compensation to one of its directors in return for the negotiation by the director of a sale of company "property”. The only issue in this case is whether it was unreasonable for the Superintendent of Insurance to apply the statute where an insurer compensated a director for arranging a long-term lease of company property. I would sustain the superintendent’s determination since it is reasonable and is soundly supported by well-settled law. A tenant, by virtue of a lease, obtains an interest in property. True, the tenant’s interest is classified as an item of personal property, but it is property just the same. As the statute covers, quite broadly, all purchases and sales of property, not just those involving realty, the sale of an item of personal property is within the scope and intendment of the statute.

In August, 1968, petitioner insurance company engaged one of the members of its board of directors, namely one Abraham Lindenbaum, to obtain a tenant for space available at its office building in Brooklyn, New York. Director Lindenbaum, in behalf of the insurance company, entered into negotiations with representatives of the Civil Court of the City of New York which culminated in a long-term lease. For his services in securing the Civil Court as a tenant, petitioner agreed to pay Director Lindenbaum $5,000 for each of the 10 years of the term of the lease, a total of $50,000. In accordance with this agreement, petitioner already had made four annual payments of $5,000 each to Lindenbaum by the time an examiner for the Insurance Department informed it that this arrangement for compensation to a member of its board of directors was in violation of subdivision 4 of section 78 of the Insurance Law.

After a hearing, the Superintendent of Insurance on March 4, 1975 issued a determination which found the insurer in violation of subdivision 4 of section 78, imposed a penalty of $500 for each of the four $5,000 payments by petitioner to Lindenbaum, and directed that the insurance company take appropriate action to recover the four payments from Lindenbaum. The Appellate Division sustained the administrative determination that petitioner violated subdivision 4 of section 78 of the Insurance Law, but modified the penalty imposed from $'2,000 to $500. (51 AD2d 1016.)

I would uphold the determination of the Superintendent of Insurance. Subdivision 4 of section 78 of the Insurance Law prohibits special renumeration by any insurer to its officers and directors for negotiating or aiding in any "purchase or sale of property” made by the insurer. The superintendent ruled that the use of the word "property” in the statute, without qualification, includes both real and personal property. In my opinion, this determination has a reasonable basis in law. It is ancient law that the term "property” includes both real and personal property. (See Doe v Langlands, 14 East 370; Jackson v Housel, 17 Johns 281, 284; Wing v Disse, 15 Hun 190; Brooklyn City R. R. Co. v Kings County Trust Co., 214 App Div 506, affd 242 NY 531.) As stated in New York Jurisprudence (vol 47, Property, § 3, p 287) "[t]he word 'property,’ when used without qualification, can be construed to include obligations, rights, and other intangibles, as well as physical things. The use of property is property. A franchise and a lease are property.” A lease is personal property. (E.g., Matter of Grumman Aircraft Eng. Corp. v Board of Assessors of Town of Riverhead, 2 NY2d 500, 507; Despard v Churchill, 53 NY 192, 199; First Trust & Deposit Co. v Syrdelco, Inc., 249 App Div 285, 287; 33 NY Jur, Landlord & Tenant, § 3, pp 283-284; 2 Powell, Real Property, par 221, subd [2], p 187.)

It is also well-established law that the determination of an administrative agency which must initially determine the application of a broad statutory term should be accepted by the courts if it has a reasonable basis in law. (Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104, 108; Board v Hearst Pub., 322 US 111, 131.) " The judicial function is exhausted when there is found to be a rational basis for the conclusions approved by the administrative body.’ ” (Rochester Tel. Corp. v Umted States, 307 US 125, 146.) Since a leasehold is property, it follows, with the most apparent logic, that a statute which prohibits generally the payment of compensation for arranging a sale or purchase of property includes a ban on such payment to a director for arranging a purchase or sale of a lease. The statutory prohibition is not restricted to "real property”. Rather, the Legislature used the broad term —"property”—to include any transfer of an economic interest brought about by a director of an insurer. This would be consistent with the legislative intent to impose a code of ethical conduct and to eliminate even the appearance of impropriety by prohibiting an insurer from paying special compensation to one of its insiders. The determination, therefore, by the superintendent that a lease transaction is included in the statutory ban has a reasonable basis in law and should be sustained. This is particularly true when one considers that "[t]he Superintendent of Insurance is vested with broad power to interpret, clarify, and implement the legislative policy”. (See Breen v Cunard Lines S. S. Co., 33 NY2d 508, 511.)

The position taken by the majority, to judge from its memorandum, is quite paradoxical. The court concedes, as it must, that leases are property. Yet, it is held that the word "property”, as used in this statute, does not include leases. The inherent contradiction can be explained only by the majority’s reliance on the prior interpretation of the statute by the Superintendent of Insurance. Yet, it is well settled that an administrative officer or agency is not bound to cling tightly and forever to an erroneous or mistaken view of the statute to be administered. Even without the formality of a regulation, an agency may reasonably adjust its construction of relevant law if, as is the case here, experience matures its judgment. (E.g., Matter of Irish Int. Airlines [Levine], 48 AD2d 202, affd 41 NY2d 819; Matter of Cowan v Kern, 41 NY2d 591.) The appropriate focus is not what the superintendent has done in the past for what is past is but prologue. The issue is whether his present action is a reasonable interpretation of the statute which it is his task to administer. His original position may have been reasonable but so, I submit, is his present view, and it is this one upon which we must decide. Actually, it is much to the superintendent’s credit that he is willing to re-examine and reconsider his department’s viewpoints as the need warrants.

There is no due process difficulty at all with this case. Certainly, lawyers and insurance companies, for after all this is all the statute touches, are chargeable with the knowledge that leases are property. Most certain of all, this insurance company should have anticipated the likelihood that the Insurance Department would look askance at so blatant a transaction as the payment of additional compensation to one óf its directors for brokering a property transaction. The case nicely illustrates the dangers of inside dealing and such dealing is both ethically and legally reprehensible.

I would also sustain that part of the determination of the Superintendent of Insurance which imposed a penalty of $500 for each payment made to the director. Since there were four separate and distinct payments, I would hold that a fine may be levied for each separate payment.

Chief Judge Breitel and Judges Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur in memorandum; Judge Jasen dissents and votes to modify in a separate opinion.

Judgment reversed, etc.


text:
    In the Matter of Parkchester Apts. Co., Respondent, v Louis J. Lefkowitz, as Attorney-General of the State of New York, Appellant, and Mary Winfield et al., Intervenors-Appellants.
    Argued February 9, 1977;
    decided April 5, 1977

      Louis J. Lefkowitz, Attorney-General (Shirley Adelson Siegel and Samuel A. Hirshowitz of counsel), for appellant.

      Joseph P. Napoli for intervenors-appellants.

      Edward N. Costikyan and Jack Hassid for respondent.
   Order affirmed, with costs, on the Per Curiam opinion at the Appellate Division (51 AD2d 277).

Concur: Judges Gabrielli, Jones, Wachtler, Fuchsberg and Cooke. Judge Jasen dissents and votes to reverse in the following opinion in which Chief Judge Breitel concurs.

Jasen, J. (dissenting).

I would reverse the order of the Appellate Division and dismiss the motion to amend the judgment. This case presents important questions of law and policy regarding the application of legislation to pending plans for conversion of rental apartments to co-operative and condominium apartments.

Ever since the end of the Second World War, there has been an acute shortage of rental housing for middle-income families in New York City. It was early realized that landlords, in a landlord’s market, could easily exact exorbitant rents and charges from tenants with but limited incomes and no other suitable place to live. The legislative concern for the plight of the middle-income tenant has been evidenced by the enactment of various rent control and rent stabilization laws, both on a State and local level, all designed to protect the tenant from the full free-market pressure that landlords could, and did, assert. The underlying concern is for the economic survival of New York City itself. High city rentals precipitate the flight of the middle class from the city, leaving behind a weakened tax base, unused and deteriorating buildings, and a reduced population consisting only of the few very rich and the many very poor.

Early in this decade, the co-operative and condominium forms of real estate ownership were introduced into the New York City housing market. Landlords, stymied by stringent rent limitation statutes, perceived that they could, by converting their existing traditional ownership structures into these comparatively new forms, cast the burden of expense for maintenance and upkeep upon the tenant, while receiving substantial profits on their investment. The history of cooperative and condominium conversions in New York City, in the terms of the ancient adage, proves that the sum value of the parts can be much greater indeed than the value of the whole. The tenant, once again, was faced with an impossible choice. He could purchase his apartment, or the stock in the corporation that owned it, at whatever price the landlord would set. In most instances, this meant a mortgage, with monthly mortgage payments as well as monthly maintenance charges, not to mention continuing liability for assessments to cover special repairs. The resident, in short, would become his own tenant and his own landlord, bearing the costs and responsibilities of both. Alternatively, he could decline to purchase and, thereby, run the risk that someone else would buy his apartment and evict him, from a place he had resided in, peacefully, for many years. An uprooted tenant would have no assurance of again finding comparable housing at an affordable rent within the same neighborhood, or even within the city itself. These harsh consequences, too, were called to the attention of the Legislature, resulting in a statute, since amended, affording tenants significant procedural and substantive protections.

It is within this context, and with this knowledge, that the present appeal should be considered. The facts are starkly simple. The Parkchester Apartments are a large, pre-World War II, multistructure housing development in Bronx County. There are 12,200 rental units in the complex with a total population of 50,000, consisting, for the most part, of middle-income families. Ever since December 1972, the new owner of the development has endeavored to convert the project, in stages, from traditional apartment lease arrangements to condominiums. It filed a plan, which was accepted by the State Attorney-General, to convert Parkchester’s North Quadrant. A tenant challenged the plan and the Attorney-General’s acceptance of it, in an article 78 proceeding. In February 1975, we determined that the tenant had standing to make his challenge, but that applicable statute (General Business Law, § 352-e) required the Attorney-General to determine only whether the offering plan contained the requisite information and not whether the information was, in fact, true and accurate. (Matter of Whalen v Lefkowitz, 36 NY2d 75.)' While the Whalen case was on appeal, the landlord submitted a plan to convert the other three quadrants of the development. Contending that the standard of review depended upon the resolution of the Whalen case, the Attorney-General refused to consider this plan. This led to a second article 78 proceeding, this time instituted by the landlord. We ultimately held, on February 17, 1975, that the Attorney-General was required to decide the application, despite the existence of a related proceeding. (Matter of Parkchester Apts. Co. v Lefkowitz, 36 NY2d 688.) In the interval, on June 15, 1974, section 352-e of the General Business Law was amended to provide additional tenant protections within the offering plan filing requirements. (L 1974, ch 1021.) By this proceeding, the landlord seeks to have appended to the earlier Parkchester judgment a requirement that the Attorney-General decide its application under the law existing prior to the amendment. Special Term granted petitioner the substantive relief, but did so by converting the motion for an amended judgment into a separate article 78 proceeding. The Appellate Division agreed with Special Term on the merits, but held that conversion was not permissible or even necessary since relief, in its view, could be awarded by simply amending the earlier judgment. (51 AD2d 277.)

I would reverse the order of the Appellate Division and dismiss the motion. Procedurally, there is no authority for amending the earlier judgment to include substantive provisions arising from an issue explicitly not considered on appeal from the judgment. I find no warrant for the conversion of a motion to amend a judgment into a separate article 78 proceeding. Indeed, while such conversion was apparently contemplated by the draftsmen of the CPLR, the Legislature refused to adopt their view. In short, the actions of the courts below are not sustained by any known rule of procedure. Yet there is more here than procedural defects, however fundamental. The resolution of the merits turns solely on issues of fairness and equity. This much has been conceded by the Appellate Division. (51 AD2d, at p 281.) True, the landowner is within the technical letter of the law. But, as is sometimes the case, there is no equity in that. Rather, I submit that the equities lie with the Attorney-General and with the tenants in this development who are now exposed, by the force of the majority’s decision, to much unfairness and to much inequity. The Legislature enacted a remedial statute to protect all tenants from some of the hazards of conversions and stated that the statute should take effect "immediately”. I believe that public policy favors a construction of the statute which takes the Legislature at its word and implements its statute "immediately”. As for the landowner, there is no undue prejudice in having to comply with the law in effect at the time his application was considered and it certainly had no vested right to the law as it existed at the time he made his application.

At the threshold, there is no proper procedural basis to support the award of relief. This aspect of the extensive litigation was commenced by a motion to supplement the judgment directing the Attorney-General to review the landowner’s offering plan. That judgment simply required the Attorney-General "to determine if [the plan] contains the information and representations required by General Business Law § 352-e”. The Attorney-General took an appeal from the judgment and, pending disposition of the appeal, section 352-e of the General Business Law was amended. When the appeal reached our court, we specifically refused to pass on the applicability of the amendment to this case. Indeed, the issue had not even been briefed to our court. "We do not reach the issue tendered on oral argument as to the application in this case of chapter 1021 of the Laws of 1974.” (Matter of Parkchester Apts. Co. v Lefkowitz, 36 NY2d 688, 689, supra.) Nevertheless, the landowner sought, by its motion, to amend the judgment so as to render the statutory revisions inapplicable.

There was no basis for granting the motion. While the court has inherent authority to amend its own judgment to correct clerical mistakes or omissions, it cannot amend the judgment in any substantive respect. (Herpe v Herpe, 225 NY 323, 327-328.) In fact, it has been clearly stated that "the right to amend does not extend to new issues not embraced within the original action”. (9 Carmody-Wait 2d, NY Prac, § 63:158, p 99.) That the amendment requested by the landowner was substantive, there can be little doubt. By granting its motion, as the Appellate Division has done, the landowner’s rights under the original judgment have been greatly enlarged. The original judgment simply required the Attorney-General to review the plan under the provisions of the General Business Law, without specifying whether the law to be applied was fixed irreparably as of the date of the judgment. The Attorney-General was ordered to apply the law, but was not told which law, past or present, to apply. In reviewing the judgment, we refused to pass on this question. Under such circumstances, the landowner should not be permitted to amend the judgment to include new matters of substance not presented on appeal from the judgment. There is no contention that the original judgment was erroneous in any way. While subsequent events rendered its language "ambiguous” to say the least, the ambiguity goes to the very heart of the case. The landowner’s motion did not seek to correct a technical mistake; it sought a favorable resolution of a substantive dispute arising from the very language of the judgment. In my view, the proper procedure was to commence an article 78 proceeding to challenge the Attorney-General’s decision to review the plan under the amended statute. In this context, the landowner could have received judicial consideration for its contention that it was error to apply the amended law.

Nor can the procedural defect be cured simply by converting the landowner’s motion to amend the judgment into an article 78 proceeding. Conversion to a proper form is appropriate only where the court has jurisdiction of the parties and it is a "civil judicial proceeding” that was brought in an improper form. (CPLR 103, subd [c].) Only actions and special proceedings are "civil judicial proceedings”. (CPLR 103, subd [b].) Motions are not. A motion is simply an application for an order. (CPLR 2211.) A motion generally seeks incidental relief, while a special proceeding, though brought on with the same steps that bring on a motion, seeks to obtain full plenary relief, culminating in a judgment. (See Siegel, Practice Commentaries, McKinney’s Cons Laws of NY, Book 7B, CPLR 2211, C2211:3, pp 29-30.) The Advisory Committee on Practice and Procedure proposed a liberal conversion rule that would have authorized the court to convert to proper form any "application for relief’, including motions. (Third Preliminary Report of the Advisory Committee on Practice and Procedure, Legis Doc No. 17 [1959], p 47.) However, this was rejected by the Legislature as "too broad”. (Fifth Preliminary Report by the Senate Finance Committee, Legis Doc No. 15 [1961], p 20.) Hence, there is no warrant in procedural law to correct the fundamental procedural mistake committed in this case. Most important, it is bad practice to review an administrative determination upon mere motion.

While I am of the opinion that the underlying motion is not the proper vehicle for review of the merits, in view of the majority’s decision to affirm on the Appellate Division opinion, I am obligated to state also my disagreement with the Appellate Division’s view of the merits.

The general rule in our State has been that appellate courts must enforce the statutes as they exist on the date of decision. Thus, if the applicable statute is changed at any time prior to the final determination on appeal, the court must "give effect to” the amended version. (Matter of Broadwalk & Seashore Corp. v Murdock, 286 NY 494, 498; accord Strauss v University of State of N. Y., 2 NY2d 464, app dsmd 355 US 394.) However, a limited exception has been recognized for those situations where a governmental defendant unjustifiably creates the delay during which the statute was changed. Thus, a deliberate and unexplained refusal to act may warrant application of the statute in force at the start of the delay. (Matter of Dubow v Ross, 254 App Div 706.) Recently, we have extended this exception to include negligent, as opposed to willful, delay. In Matter of Our Lady of Good Counsel R. C. Church & School v Ball (45 AD2d 66, affd on opn at App Div 38 NY2d 780), the court observed that "[t]he rule that willful delay by a governmental agency or employee exempts the applicant from the onerous strictures of an amendment of a statute, or of a new statute, is one based on fairness and equity. It would be no less unfair to penalize an innocent and diligent license applicant because delay was due to negligent rather than willful nonfeasance.” (45 AD2d, at p 73 [emphasis added].) The basic question should be whether fairness and equity require a departure from the rule requiring the application of subsequent legislation. Not every delay will warrant such a departure. Most delays will not, else the exceptions would devour the rule. Indeed, in the general run of administrative determinations, a failure to reach the correct decision initially creates a delay not authorized by law.

The mere fact that we have previously ordered the Attorney-General to reach a decision on the present application does not necessarily mean that his delay was so unjustified as to require that his decision be based on repealed and inoperative provisions. Instead, I believe that the question remains whether, in light of the facts and the purposes of the new legislation, considerations of fairness and equity justify a departure from the present statutory standards.

In my view, fairness and equity do not warrant granting Parkchester an exemption from the Legislature’s remedial statute. The Attorney-General’s delay, in contrast to that of the licensing official in the Good Counsel case, was premised on a clearly articulable and reasonable policy determination. Shortly before Parkchester submitted an offering plan for the south, east and west quadrants, Special Term rejected the standard of review that the Attorney-General had applied to the north quadrant. While this conclusion was eventually reversed on appeal, the Attorney-General, in the interim, operated amidst the uncertainty that accompanied a direct challenge to his previously applied standard. His decision to delay acceptance of the offering plan for the other three quadrants reflected a desire to apply only that standard which the courts would ultimately deem to be proper. Nor do the facts establish any malicious intent toward the owner of the Parkchester complex. Indeed, the Attorney-General approved the filing for the conversion of the north quadrant, and successfully defended that approval from a tenant’s challenge in an article 78 proceeding.

One cannot deny that Parkchester was deprived of a timely determination of the acceptability of its offering plan. However, whatever equity supports application of the old law is more than counterbalanced by the remedial purposes underlying the new legislation. The 1974 amendment was designed to correct what the Legislature considered to be serious abuses associated with the conversion of rental units into condominiums. (Legislative Memorandum accompanying Bills Nos. S9090-B and A11196-B.) Indeed, the proposed conversion of the Parkchester Apartments typified the situation that the Legislature intended to correct. The Temporary State Commission on Living Costs and the Economy examined an alternative solution to the same problem. In its report of January 1974 to the Governor and the Legislature, the commission described the abuses that existed in marketing condominiums. It specified that "[t]he magnitude of the incentive to so market the property is exemplified by the financial arrangements surrounding Parkchester.” (Report on Housing and Rents of the Temporary State Commission on Living Costs and the Economy of the State of New York [1974], part VI, p 2.)

The Legislature responded to the problem by amending section 352-e of the General Business Law and directed that the amendments "take effect immediately”. (L 1974, ch 1021, § 3.) The legislative history indicates an intent that the amendments apply to any conversion plan that had not yet been fully implemented, even if the Attorney-General had already accepted the plan for filing. (See Governor’s Official Bill Jacket to L 1974, ch 1021, at p 7.) In contrast, the present dispute involves the application of the statute to a conversion plan not yet accepted for filing and, thus, is even further removed from final implementation. Certainly the legislation’s remedial purpose extends to the prevention of abuses associated with conversion plans that are merely proposed and pending.

The principles of equity and fairness which control Parkchester’s claim for the application of a repealed statute can only be assessed in light of all relevant facts and circumstances. On the one hand, the postponement of decision by the Attorney-General is explained by an articulable and reasonable policy. The Attorney-General has been neither neglectful nor slothful; rather, his actions with respect to Parkchester indicate his desire that the tenants, as well as the landlord, receive the protections provided by law. On the other hand, the Legislature considered the prior law on condominium conversions to be unfair and inequitable, and found that conversions raised pressing and troublesome difficulties requiring immediate resolution. In the present context, I believe that the public interest, as determined by the Legislature, outweighs Parkchester’s claim that it should have the repealed law applied. In short, I place a greater value on the remedial efforts of the Legislature to protect tenants from abuses than on the technical arguments of a real estate syndicator, whose activities have been viewed by the Legislature as abusive. Consequently, I would reverse the order of the Appellate Division and dismiss the motion to amend the judgment.

Ordered affirmed, etc.


text:
    Anthony A. Castellano et al., Appellants, v State of New York, Respondent.
    (Claim No. 54477.)
    Submitted February 14, 1977;
    decided April 5, 1977
   Motion to dismiss the appeal denied.


text:
    The People of the State of New York ex rel. Frederick Boutelle, Appellant, v Edward O’Mara, as Superintendent of Wallkill Correctional Facility, Respondent.
    Submitted February 28, 1977;
    decided April 5, 1977
    Reported below, 55 AD2d 804.
   Motion for leave to appeal dismissed upon the ground that relator has been released on parole and, therefore, his liberty is no longer restrained to such a decree as to entitle him to the extraordinary writ of habeas corpus (People ex rel. Wilder v Markley, 26 NY2d 648).


text:
    Cordial Greens Country Club, Inc., et al., Respondents, v Aetna Casualty and Surety Company, Appellant, et al., Defendants.
    Argued February 9, 1977;
    decided April 7, 1977

      Clayton T. Bardwell for appellant.

      Myron Komar for respondents.
   Memorandum. Whether the claim is within the coverage of either policy cannot, in this instance, be determined prior to the trial and appeals, if any, of the underlying personal injury action (see Post v Metropolitan Cas. Ins. Co., 227 App Div 156, affd 254 NY 541; see, also, Nationwide Mut. Ins. Co. v Dennis, 14 AD2d 188; Everlast Sporting Goods Mfg. Co. v Aetna Ins. Co., 23 AD2d 641). Each insurer argues that, based on the allegations in the complaint, the other is liable to pay any judgment rendered against the insured. On the other hand, based on the exclusions in each policy, an argument may be made that the occurrence is not within the coverage of either policy. Each policy, however, has a clause that requires the insurer to defend based on the allegation of an occurrence within the coverage, and it is well established that the duty to defend is much broader than the duty to pay (see, e.g., Sturgis Mfg. Co. v Utica Mut. Ins. Co., 37 NY2d 69, 72; International Paper Co. v Continental Cas. Co., 35 NY2d 322, 326; Goldberg v Lumber Mut. Cas. Ins. Co. of N. Y., 297 NY 148, 154). It is, therefore, appropriate in this case to hold that both insurers are obligated to provide a defense to the insured with respect to this suit. The question of whether the occurrence is within risks covered under either policy should be resolved based on the facts as determined in the underlying action. At such later time, any questions concerning waiver or estoppel should also be determined. Accordingly, the order of the Appellate Division should be modified, without costs, and judgment should be directed to be entered declaring that both insurers are obligated to provide a defense to the insured but that the liability to pay any judgment is to be determined after .the trial and appeals, if any, of the underlying personal injury action.

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

Order modified, without costs, in accordance with the memorandum herein and, as so modified, affirmed.


text:
    In the Matter of Civil Service Employees Association, Inc., et al., Appellants, v Richard J. Bartlett, as State Administrative Judge of the Administrative Board of the Judicial Conference of the State of New York, et al., Respondents.
    Argued February 10, 1977;
    decided April 7, 1977

      James T. Hancock for appellants.

      Michael Colodner and Michael R. Juviler for Richard J. Bartlett, as State Administrative Judge, respondent.

      Louis J. Lefkowitz, Attorney-General (John Q. Driscoll and Ruth Kessler Toch of counsel), for Arthur Levitt, as Comptroller, respondent.
   Memorandum. The order of the Appellate Division should be reversed and the judgment of Supreme Court, Albany County, reinstated. For the reasons stated in the dissenting opinion of Mr. Justice Louis M. Greenblott, we conclude that the petitioners are entitled under the provisions of section 219 of the Judiciary Law to salary increments which are reflective of all their respective years of service prior to the date of the allocation of their positions and not merely to the years subsequent to 1972. In view of this conclusion, it is not necessary for us to reach, nor do we reach, the issue as to whether defendants are bound by the same determination reached in the grievance proceedings. Thus we are not obliged to determine whether in this instance, because of considerations of public policy and the practical if not legal effect of the hearing officer’s determination on third persons, it was within the power of the parties to submit the interpretation of this statute to grievance proceedings (cf. Matter of Maye [Bluestein], 40 NY2d 113, 118, a case in which arbitration was authorized by statute).

Jasen, J. (dissenting).

I dissent and vote to affirm the order of the Appellate Division.

The sole issue on this appeal centers on the proper interpretation to be given section 219 of the Judiciary Law. In my view, the fact that petitioners were awarded relief pursuant to a grievance procedure, involving arbitration, is not dispositive here. The issue is solely one of law and is so intimately related with matters of public concern as to be nonarbitrable. The Judiciary Law section at the heart of this case establishes the rate of compensation to be paid to nonjudicial personnel in the unified court system. Generally, arbitrators may decide issues of law and their decisions, absent abuse of power or irrationality, will be sustained by the courts. (See Rochester City School Dist. v Rochester Teachers’ Assn., 41 NY2d 578.) However, an incorrect interpretation of controlling statute in this instance would do injustice, not only to the parties, but to all of the people of the State. More particularly, we should not permit an erroneous arbitration decision to stand where taxpayers of the State would ultimately have to bear the burden of salaries in excess of those provided by law. "Thus the issue which the arbitrators will be called upon to decide transcends the private interest of the parties. It is not simply that arbitrators can impose unnecessarily restrictive or lenient standards. The evil is that, if the enforcement of [salaries of court personnel] is left in the hands of arbitrators, erroneous decisions will have adverse consequences for the public in general, and the guardians of the public interest, the courts, will have no say in the results reached.” (Matter of Aimeee Wholesale Corp. [Tomar Prods.] 21 NY2d 621, 627.)

In reaching the merits of this case, I conclude that the interpretation given the statute by the Administrative Board of the Judicial Conference has a rational basis and should be sustained. We are concerned here with the application of a statute by those charged with administering its provisions. "It is well settled that the construction given statutes and regulations by the agency responsible for their administration, if not irrational or unreasonable, should be upheld.” (Matter of Howard v Wyman, 28 NY2d 434, 438; Matter of Mounting & Finishing Co. v McGoldrick, 294 NY 104, 108; see, also, Rochester Tel. Corp. v United States, 307 US 125, 146.)

In 1972, the Legislature adopted a uniform plan for the compensation of nonjudicial court personnel. All positions in the competitive, noncompetitive and labor classes in the unified court system had to be allocated to salary grades in conformity with the plan. The Legislature provided that all State-paid nonjudicial employees were to receive a salary increase of 4%. (L 1972, ch 283, § 59.) However, the Legislature also evinced an intention that new section 219 of the Judiciary Law, which provided for grading of positions in the future, should not have the effect of increasing present salaries beyond the 4% increase previously provided. (L 1972, ch 283, § 61.) Subdivision 6 of section 219 makes provision for reclassifying persons transferred into lower grade positions. "6. Appointments, transfers, reinstatements, demotions and displacements to lower grade positions. If an employee is demoted or displaced to a position in a lower grade, or is appointed, transferred or reinstated to a position in a lower grade, he shall, upon such demotion, appointment, displacement, transfer, or reinstatement, receive the rate of compensation which corresponds with the total number of his years of service in the positions from which and to which he is demoted, displaced, appointed, transferred or reinstated, as the case may be, and, for the purpose of computing future increments, he shall be credited with the number of years of service in such position which corresponds with such rate of compensation. If an employee is demoted to a position in a lower grade, he shall, upon such demotion, be paid the salary in such lower grade which corresponds with the number of his years of service in the grade from which he was demoted, or, in the discretion of the administrative board of the judicial conference, he may be paid a higher rate of compensation, not exceeding the maximum of the grade to which such position is allocated, and not exceeding the rate of compensation received prior to such demotion, and, for the purpose of computing future increments, he shall be credited with the number of years of service in such position which corresponds with such rate of compensation.”

Turning to the particular facts of this case, petitioners were employed, prior to 1972, as counselors in the State Conciliation Bureau. When the new salary plan went into effect, petitioners were placed in salary Grade 22. This grade represented their current salaries as increased by 4%. In June, 1973, the bureau was discontinued. Petitioners accepted appointments to the title of Mental Health Information Officer, a position allocated to Grade 19. Petitioner Pagano was placed in the third increment level of the grade as that was his increment level in his prior grade. Petitioner Philage was, for the same reason, placed in the second increment level of Grade 19. Petitioners now contend that their increment levels should have been higher based upon their service in the Conciliation Bureau prior to the 1972 change in plan.

In my view, the Administrative Board, and later the Appellate Division, properly rejected this contention. By its very terms, subdivision 6 of section 219 is applicable only to transfers from a higher grade to a lower grade. When such transfer occurs, the employee is entitled to "the rate of compensation which corresponds with the total number of his years of service in the positions from which and to which” he is transferred. Given the legislative history of the statute, it was reasonable for the board to construe the term "position” as meaning "position in grade”. The purpose of the 1972 statutes was to develop a uniform salary plan for the compensation of nonjudicial personnel in accordance with the grade of their position. Petitioners were slotted into grade with the benefit of a sizable salary increase. Since the statute was to have prospective effect, the board could, as it did, determine that prior ungraded service in the years before the amendment was not to be given additional credit. On its face, the statute is applicable only in instances of transfer from grade to grade.

This is not to say that petitioners have been denied all credit for their prior years of nongraded service. Such credit was previously granted in the 4% increase granted in 1972 and reflected in the allotment of positions to grades. Essentially, petitioners seek, and the majority grants them, a windfall for having been demoted. Persons who were originally slotted in Grade 19 in 1972 received only the 4% increase as the sole credit for their prior years of service in their positions. However, petitioners, by virtue of their demotion, will be credited twice for their prior nongraded service. It is manifestly unjust to interpret a statute so as to reward employees for being transferred to a lesser position while persons already in the lesser position are denied similar credit. The interpretation of the board avoids this sort of unjust enrichment and is in line with the legislative intent to start a new salary system afresh in 1972. I would sustain the board’s determination .

Judges Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur in memorandum; Judge Jasen dissents and votes to affirm in a separate opinion; Chief Judge Breitel taking no part.

Order reversed, etc.


text:
    Charles A. Totero et al., Appellants, v Arthur Levitt, as State Comptroller, et al., Respondents.
    Argued February 10, 1977;
    decided April 7, 1977

      Carroll J. Mealey and Thomas O. Kellogg for appellants.

      Michael Colodner and Michael R. Juviler for Richard J. Bartlett, as State Administrative Judge, respondent.

      Louis J. Lefkowitz, Attorney-General (John Q. Driscoll and Ruth Kessler Toch of counsel), for Arthur Levitt, as Comptroller, respondent.
   Order reversed, with costs, and the judgment of Supreme Court, Albany County, reinstated for the reasons stated in the dissenting opinion by Mr. Justice Louis M. Greenblott at the Appellate Division (51 AD2d 109, 112-114).

Concur: Judges Gabrielli, Jones, Wachtler, Fuchsberg and Cooke. Judge Jasen dissents and votes to affirm in the following opinion. Taking no part: Chief Judge Breitel.

Jasen, J. (dissenting).

I would affirm the order of the Appellate Division for the reasons stated in the well-reasoned majority opinion by Mr. Justice Walter B. Reynolds. I would add only a brief observation. The 1972 statutory plan for establishing uniform rates of compensation for nonjudicial court personnel manifests an intention to apply the rates therein established in a prospective manner. To that end, the Administrative Board of the Judicial Conference was given the discretion to allocate positions in the State-paid exempt class to particular salary grades. (Judiciary Law, § 219, subd 2.) The board, in the exercise of its discretionary authority, allocated the petitioners, law secretaries to Supreme Court Justices of the Ninth Judicial District, to salary Grade 31. Those whose current salaries were below the Grade 31 level received increases to that level; those whose salaries met or exceeded the grade level were slotted in an increment level of Grade 31 equivalent to their current salary. Petitioners contend that, pursuant to subdivisions 4 and 8 of section 219 of the Judiciary Law, they should receive credit for their prior years of service in their ungraded positions.

I am of the view that it was reasonable for the Administrative Board to interpret the statutory reference to years in service in position to mean years of service in a position allocated to grade. The statute, which provided a new and uniform system for establishing rates of compensation for nonjudicial personnel, manifests an intent to start afresh by computing all future increments and allocations on the basis of the new grading system. Due deference should be given the statutory construction adopted by those charged with the administration of a statute and, where such interpretation is reasonable, it should not be disturbed. This is particularly true where the agency interpretation is in line with the Legislature’s over-all remedial intent.

The majority’s holding grants petitioners an unearned windfall well over the salaries they received prior to their allocation to grade level. The base pay for Grade 31 is a substantial $26,515. Many of the petitioners were advanced to that grade at the time the position was allocated to grade despite the fact that their current salary was much less than the grade base. Nevertheless, the majority would grant most of them a salary of at least $30,131 and, in two instances, a salary of nearly $32,000. In effect, the largest number of positions will receive a double credit for years served out of grade of at least $3,500 per year. The award of so substantial an increase in compensation based allegedly on years of prior service for which credit was already granted and willingly accepted, is unseemly. Most certain, such a result is not within the remedial intent of the Legislature. The determination of the Administrative Board is reasonable and has the effect of withholding an unjust pay increase. Consequently, I would uphold the board’s determination.

Order reversed, etc.


text:
    In the Matter of William Friedman et al., Respondents, v Albert D’Antoni, as Chairman and Administrative Head of the Workmen’s Compensation Board of the State of New York, et al., Appellants.
    Argued March 29, 1977;
    decided April 7, 1977

      Louis J. Lefkowitz, Attorney-General (William J. Kogan and Ruth Kessler Toch of counsel), for appellants.

      John T. DeGraff, Algird F. White, Jr., and Robert H. Iseman for respondents.
   Order affirmed, with costs, on the opinion by then Presiding Justice J. Clarence Herlihy at the Appellate Division (50 AD2d 9; see, also, Ball v State of New York, 41 NY2d 617).

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    Jennie Chiseri, Respondent, v Common Council of the City of Peekskill, Appellant.
    Decided April 7, 1977
    Reported below, 54 AD2d 705.
   Appeal dismissed, without costs, by the Court of Appeals sua spon te, upon the ground that the question certified does not present a question of law decisive of the correctness of the determination of the Appellate Division (see Barclay’s Ice Cream Co. v Local No. 757 of Ice Cream Drivers & Employees Union, 41 NY2d 269, 273).


text:
    City of Buffalo, Appellant, v Willie Williams et al., Respondent.
    Submitted March 14, 1977;
    decided April 7, 1977
   Motion to dismiss the appeal herein granted to the extent that the appeal is transferred to the County Court, Erie County, without costs (UCCA, § 1701). A direct appeal does not lie where questions other than the constitutional validity of a statutory provision are involved. (NY Const, art VI, § 3, subd b, par [2]; § 5, subd b; CPLR 5601, subd [b], par 2; Matter of Bartsch v State of New York, 33 NY2d 938.)


text:
    Marilyn A. Marsden, Appellant, v Hugo Kajet et al., Respondents.
    Submitted February 22, 1977;
    decided April 7, 1977
   Motion, treated as one to vacate prior order of dismissal dated February 22, 1977, denied. The time to appeal from an order of the Appellate Division runs from the date of service of notice of entry of that order in the office of the clerk of that court (see Purchasing Assoc. v Weitz, 13 NY2d 267, 274-275). [See 41 NY2d 802.]


text:
    Norman Martin, Respondent, v Deborah L. M. Howell, Appellant.
    Submitted March 28, 1977;
    decided April 7, 1977
   Motion for a stay and for an order providing visitation rights denied in each respect.


text:
    In the Matter of Robert M. Morgenthau, as District Attorney óf New York County, Respondent, v Bobby 9X Hopes, Appellant. In the Matter of Robert M. Morgenthau, as District Attorney of New York County, Petitioner, v James J. Leff, as a Justice of the Supreme Court of the State of New York, Respondent.
    Submitted March 7, 1977;
    decided April 7, 1977
    Reported below, 55 AD2d 255.
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from was made in a criminal proceeding and no appeal lies therefrom under the Criminal Procedure Law.


text:
    The People of the State of New York, Respondent, v Bernard Bergman, Appellant. Ramsey Clark, Receiver.
    Submitted February 22, 1977;
    decided April 7, 1977
    Reported below, 55 AD2d 542.
   Motion to dismiss the appeal herein granted and the appeal dismissed, with costs and $20 costs of motion, upon the ground that the dissent at the Appellate Division is not on a question of law (CPLR 5601, subd [a], par [i]).


text:
    Joyce Watson, as Administratrix of the Estate of Albert K. Watson, Deceased, Appellant, v Jamaica Hospital et al., Respondents, et al., Defendants.
    Submitted February 22, 1977;
    decided April 7, 1977
    Reported below, 54 AD2d 695.
   Motions by respondents (a) Jamaica Hospital and (b) Marzulli and Smith to dismiss the appeal herein granted and the appeal dismissed, without costs, upon the ground that the order appealed from involves the ex;ercise of discretion of the type not reviewable by the Court of Appeals.


text:
    DFI Communications, Inc., Respondent, v Sanford Greenberg, Appellant.
    Submitted February 7, 1977;
    decided February 10, 1977
    Reported below 51 AD2d 403, 55 AD2d 887.

      Anthony L. Tersigni for motion.

      Michael E. Schoeman opposed.
   Motion for a stay denied as unnecessary (CPLR 5519, subd [e])-


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v Michael Rice, Appellant. The People of the State of New York, Respondent, v Charles Mehr, Appellant.
    Argued February 11 and March 30, 1977;
    decided April 26, 1977

      Anna M. Perry, John F. Middlemiss, Jr., and Leon J. Kesner for appellant in the first above-entitled action.

      E. Carrington Boggan, Alan J. Azzara and Bruce J. Ennis for appellant in the second above-entitled action.

      Henry F. O’Brien, District Attorney (Denis R. Hurley of counsel), for respondent in the first above-entitled action.

      Henry F. O’Brien, District Attorney (Kevin J. Crowley of counsel), for respondent in the second above-entitled action.
   Per Curiam.

In both of these cases novel and difficult constitutional questions in a field, largely unsettled, come to the court without a trial record and solely on the informations filed. Intermeshed are questions of conduct traditionally treated as criminal and yet, when committed privately and circumspectly, suggestive of an unwarranted interference by the State with the lately recognized and inchoate "penumbral” right of privacy (see, e.g., Griswold v Connecticut, 381 US 479, 484-485; Stanley v Georgia, 394 US 557, 564-568). The solution to these questions should not be determined in the bare outline of a criminal information, especially since divergencies of view, properly, may turn, among other things, on the different degrees of interference with privacy, or better, freedom of conduct, which may be tolerated in an organized society without infringing on a society’s right to require conformance to standards which it believes essential to its survival or character. Resolution of these issues may, conceivably, make irrelevant the contentions of defendants that equal protection of the laws is involved.

In one of the cases, there is no specification at all of the place where the acts occurred or whether the two actors were the only ones present. In the other, the information tells us only that the acts occurred in some portion of a public toilet, not otherwise described, and without suggestion whether any others were present before the police burst in. None of these distinctions may turn out to be material. On the other hand, great constitutional issues, and they are present in these cases, should not be determined on appeals from nonfinal orders on a fact complex as stark as one would expect in an abstract question on a bar examination.

Accordingly, the informations having been upheld, the court concludes that the orders should be affirmed, without prejudice, however, to a review or application for review of the issues on the merits when, as, and if defendants, or either of them, are convicted.

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

In each case: Order affirmed.


text:
    In the Matter of 160 Columbia Heights Corp., Respondent, v Daniel W. Joy, as Commissioner of the Department of Rent and Housing Maintenance, Appellant.
    Argued March 21, 1977;
    decided April 26, 1977

      Arthur Kass, Zebbia Friedman and Harry Michelson for appellant.

      Robert S. Fougner for respondent.

      Gary M. Rosenberg for Bronx Realty Advisory Board, Inc., amicus curiae.

   Order reversed, with costs, and the judgment of Supreme Court, New York County, reinstated on the opinion by Mr. Justice Charles G. Tierney at Special Term.

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    In the Matter of Yak Taxi, Inc., Appellant, v Muzaffer Teke, Respondent.
    Submitted March 22, 1977;
    decided April 26, 1977

      James R. Cohen for appellant.

      Jerome J. Remer for respondent.
   Memorandum. The order of the Appellate Division should be affirmed, with costs.

We hold that petitioner did not move properly for a stay of arbitration within the 20-day time limit required by CPLR 7503 (subd [c]). Petitioner’s attempted compliance by sending respondent a copy of an application to stay arbitration, within the required period, by ordinary mail does not satisfy the requirements of that provision, which states "[njotice of such application [to stay arbitration] shall be served in the same manner as a summons or by registered or certified mail, return receipt requested”. Petitioner urges that our holding in Matter of Knickerbocker Ins. Co. [Gilbert] (28 NY2d 57) is authority for the service attempted in the case before us. We do not agree. In that case, service of the notice to stay arbitration was effected by posting a certified letter, return receipt requested (as specifically required by law), the letter being addressed to claimant’s attorney. This court there held, inter alia, that the service was proper since the demand for arbitration was served by claimant’s attorney (whose name and address appeared thereon) on behalf of the claimant, in the first instance; and that there was, in effect, an appointment of claimant’s attorney as agent for service. Of interest, following the decision in Knickerbocker (supra), CPLR 7503 (subd [c]) was amended to statutorily permit service of an application to stay arbitration upon claimant’s attorney "if the attorney’s name appears on the demand for arbitration or the notice of intention to arbitrate”. At all times, however, and regardless of to whom the application to stay is addressed, service has been required to be made "in the same manner as a summons or by registered or certified mail, return receipt requested”. Since there was a lack of compliance, the present proceeding was jurisdictionally defective, and there must be an affirmance.

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

Order affirmed.


text:
    Roy C. Passantino, an Infant, by His Father and Natural Guardian, Robert C. Passantino, et al., Respondents, v Board of Education of the City of New York, Appellant, et al., Defendant.
    Argued March 21, 1977;
    decided April 26, 1977

      W. Bernard Richland, Corporation Counsel (Bernard Burstein and L. Kevin Sheridan of counsel), for appellant.

      Joseph P. Napoli and Sherman P. Rothman for respondent.
   Memorandum. The order of the Appellate Division should be reversed.

Upon our review of the facts in this record, as set forth in the dissenting opinion of Mr. Justice Cohalan at the Appellate Division, it is apparent that the plaintiff failed to establish a prima facie case at trial. There was no showing of negligence or lack of due care on the part of the defendant board of education. Therefore, the defendants’ motion to dismiss the complaint, made at the end of the entire case, should have been granted.

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

Order reversed, with costs, and the complaint dismissed in a memorandum.


text:
    In the Matter of Sandra Saur et al., Appellants, v Director of the Creedmoor Psychiatric Center et al., Respondents.
    Argued. March 22, 1977;
    decided April 26, 1977

      Theodore Ruthizer, Stanley Mailman and Neil B. Hirschfeld for appellants.

      Louis J. Lefkowitz, Attorney-General (A. Seth Greenwald and Samuel A. Hirshowitz of counsel), for respondents.
   Memorandum. The order of the Appellate Division should be affirmed.

It is an undisputed management prerogative of the State, as an employer, to abolish positions in the competitive class civil service in the interest of economy. While, in exercising that prerogative, the State is obligated to respect the seniority rights of its employees (Civil Service Law, § 80, subd 1), its utilization of a procedure for "horizontal displacement” for separating employees within the same job classification where the most senior employee displaces the most junior employee in the same layoff unit does not offend that obligation.

In the present case, in an obvious effort to carry out the letter and spirit of that statute, the agency offered the petitioners other available positions in the order of strict seniority within the same layoff unit, the Department of Mental Health Facilities within the City of New York. Only those who refused the offer were laid off and placed on a preferred list for reinstatement. However one may choose to differ about the wisdom of that procedure, it cannot be said that the agency was arbitrary or capricious in adopting and following it (cf. Matter of Howard v Wyman, 28 NY2d 434, 438).

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

Order affirmed, without costs, in a memorandum.


text:
    In the Matter of Roslyn Rubin, on Behalf of Herself and All Others Similarly Situated, Appellant, v Louis J. Levine, as Industrial Commissioner of the State of New York, et al., Respondents.
    Argued March 22, 1977;
    decided April 26, 1977

      Morton Povman for appellant.

      Louis J. Lefkowitz, Attorney-General (A. Seth Greenwald and Samuel A. Hirshowitz of counsel), for respondents.
   Memorandum. The order of the Appellate Division should be affirmed.

For the reasons expressed in Matter of Sauer v Director of Creedmoor Psychiatric Center (41 NY2d 1023), we hold that respondent’s policy of "horizontal displacement” does not offend seniority rights guaranteed by subdivision 1 of section 80 of the Civil Service Law.

In this case, however, petitioner further contends that even though she refused an offered reassignment, she is nonetheless entitled to a "vertical displacement” pursuant to subdivision 6 of section 80 of the Civil Service Law. "Vertical displacement” grants a higher titled employee the privilege of displacing a next lower titled employee in direct line of promotion in the same layoff unit.

The Department of Civil Service has interpreted the statute to mean that "An employee who declines such offer of reassignment [under Civil Service Law, § 80, subd 1] is identified as one to be laid off and placed on a preferred list. He is not, however, entitled to any displacement rights [under Civil Service Law, § 80, subd 6]” (Memorandum of Department of Civil Service, dated Sept. 28, 1972). Under that interpretation, the choice of whether an horizontal or vertical displacement procedure is to be employed rests with the employer rather than the employee.

According to the agency, its construction is motivated by a desire both to avoid a constant shifting of positions with attendant loss of efficiency to the public and to lessen the possibility of the need for reduction in job titles of employees. It is not necessary for us to agree with its rationale for us to conclude that the agency’s implementation of the statutory scheme was not arbitrary or capricious (cf. Matter of Howard v Wyman, 28 NY2d 434, 438).

We also note that petitioner’s rights were not violated by the form of notice of layoff. Nor is class action relief appropriate (Matter of Rivera v Trimarco, 36 NY2d 747).

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

Order affirmed, without costs, in a memorandum.


text:
    Auburn Urban Renewal Agency, Respondent, v Samuel Schwartz Sons, Inc., Appellant.
    Argued March 22, 1977;
    decided April 26, 1977

      David M. Levy and William Goldman for appellant.

      Michael A. Wineburg for respondent.
   Order affirmed, with costs, on the memorandum at the Appellate Division (53 AD2d 1051).

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    Ronald Turco et al., Respondents, v Gerald McCarthy, as President of Local Lodge No. 5, International Brotherhood of Boilermakers, Iron Ship Builders, Blacksmiths, Forgers and Helpers, AFL-CIO, et al., Appellants.
    Argued March 21, 1977;
    decided April 26, 1977

      Charles A. LaTorella, Jr., and Edward C. Clarke for appellants.

      Mortimer Sperling for respondents.
   Order affirmed, with costs, on the memorandum at the Appellate Division (53 AD2d 823), noting, however, that the determinations below were necessarily based on the very sparse record made by the parties.

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    In the Matter of Pleasant Valley Home Construction, Ltd., Respondent, v Alson Van Wagner et al., Constituting the Zoning Board of Appeals of the Town of Pleasant Valley, Appellants.
    Argued March 22, 1977;
    decided April 28, 1977

      Nathaniel Rubin for appellants.

      James V. Brands for respondent.
   Memorandum. Order affirmed, with costs.

Petitioner, would-be developer of a mobile home complex, who appeals by leave of the Appellate Division, seeks only a special use permit, not a variance. A showing of hardship is, therefore, unnecessary (see Matter of North Shore Steak House v Board of Appeals of Inc. Vil. of Thomaston, 30 NY2d 238, 243-244). Petitioner has established that under the town zoning ordinance, mobile home development is a contemplated and permitted use. This ordinance, of course, does not automatically entitle petitioner to a special permit, but it does estop the zoning board from denying the petition solely on the basis that more mobile homes in the area would be undesirable. The determination that a mobile home complex is an acceptable use for the land has already been made, legislatively, in the zoning ordinance (see id.; cf. Matter of Small v Moss, 279 NY 288, esp 299).

It is true that the ordinance does not deprive the zoning board of discretion to evaluate each application for a special permit. The zoning board has discretion to find, with proper support, that a particular development does not meet the criteria of the special use provisions of the zoning ordinance. A different record, one showing that a particular mobile home project is not desirable under the legislated criteria, or that it is not desirable at a particular place, would require that the administrative determination be upheld (see Matter of Lemir Realty Corp. v Larkin 11 NY2d 20, 25). On the entire record in this case, however, it is evident, despite the reasons assigned by the Board of Appeals, that petitioner’s application was denied not because of any objection peculiar to the proposed development, but because of community pressure directed against allowing any additional mobile home development in the area zoned for mobile homes. The denial was, therefore, impermissible, and must be annulled.

As noted in the detailed opinion by Mr. Justice W. Vincent Grady at Special Term, the board retains the power to impose such authentically reasonable conditions to granting the permit as will minimize any undesirable effects the new development might have on the surrounding community (see Matter of North Shore Steak House v Board of Appeals of Inc. Vil. of Thomaston, 30 NY2d 238, 246, supra).

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

Order affirmed.


text:
    In the Matter of Annie Adkin, on Behalf of Herself and All Others Similarly Situated, Appellant, v Stephen Berger, as Commissioner of the New York State Department of Social Services, et al., Respondents. (Proceeding No. 1.) In the Matter of Geraldine Ray et al., on Behalf of Themselves and All Others Similarly Situated, Appellants, v Stephen Berger, as Commissioner of the New York State Department of Social Services, et al., Respondents. (Proceeding No. 2.)
    Argued March 24, 1977;
    decided April 28, 1977

      Joel F. Spitzer for appellants.

      Louis J. Lefkowitz, Attorney-General (Clifford A. Royael and Jean M. Coon of counsel), for Stephen Berger, as Commissioner of the New York State Department of Social Services, respondent.

      Robert Lyman, County Attorney (Stanley G. Walker, Jr., and Philip R. Murray of counsel), for John Fahey, as Commissioner of the Albany County Department of Social Services, respondent.
   In each proceeding: Order affirmed, without costs. On the limited issues presented we affirm on the opinion by Mr. Justice Robert G. Main at the Appellate Division (50 AD2d 459).

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    In the Matter of Joan Dunn, Individually and on Behalf of Her Minor Dependent Child and on Behalf of Josephine Kuhl and All Others Similarly Situated, Respondent, v Charles Bates, as Commissioner of the Westchester County Department of Social Services, et al., Appellants.
    Argued March 24, 1977;
    decided April 28, 1977

      Gerald Harris, County Attorney (Jonathan Lovett of counsel), for Westchester County Commissioner of Social Services, appellant.

      Louis J. Lefkowitz, Attorney-General (Harold Henry, Samuel A. Hirshowitz and Herbert J. Wallenstein of counsel), for State Commissioner of Social Services, appellant.

      Martin A. Schwartz for respondent.
   Order reversed, without costs, and the matter remitted to Supreme Court, Westchester County, with directions to dismiss the proceeding for mootness.

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    United Equities Company, Appellant, v First National City Bank, Respondent.
    Submitted March 22, 1977;
    decided April 28, 1977

      Herman Cahn for appellant.

      Henry Harfield and Robert M. Rosenblith for respondent.
   Order affirmed, with costs, on the opinion by Mr. Justice Samuel J. Silverman at the Appellate Division (52 AD2d 154).

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    Kiwanis Club of Great Neck, Inc., et al., Appellants, v Board of Trustees of Kiwanis International et al., Respondents.
    Argued March 23, 1977;
    decided April 28, 1977

      Carol Eve Casher for appellants.

      Reid A. Curtis and Edward J. Hart for respondents.

      Cecelia Goetz, Margaret H McDowell and Mona D. Shapiro for Special Committee on Women’s Rights, amicus curiae.

   Memorandum. The order of the Appellate Division should be affirmed. Plaintiffs failed to establish the existence of triable issues of fact which would support their claim that Kiwanis International is not within the "private club” exception to the Federal and State Constitutions and Civil Rights Laws. Although the Kiwanis Clubs’ community-oriented activities may extend into the public sphere, the intrusion indicated on this record is not so extensive, or of the quality, as to permit governmental supervision of essentially private activity in the constitutional sense. Nor is it within the contemplation of our State’s Human Rights Law. Therefore, summary judgment was properly granted.

Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Fuchsberg and Cooke concur; Judge Wachtler taking no part.

Order affirmed, with costs, in a memorandum.


text:
    Fields Plastics & Chemicals, Inc., Respondent, v Collagen Corp. et al., Appellants.
    Argued March 28, 1977;
    decided April 28, 1977

      Emanuel Dannett and Jack Weinberg for appellants.

      Sidney A. Fine, David J. Rosen and Burton M. Fine for respondent.
   Memorandum. We would affirm the order of the Appellate Division. The sales contract provided that respondent would be entitled to $50,000 in the event appellants have "gross receipts from the commercial production” of appellants’ “Kroytan” product "at the end of the first year of * * * commercial production.” Appellants admit that they engaged in the manufacture and sale of the product being developed for the required period, but argue that this activity was limited to "trial runs of the product” and never reached "commercial production levels”. The sales agreement does not require that a certain level of production be reached, but merely provides for payment in the event appellant has "gross receipts from the commercial production” of the product. Although appellants did not produce to a full capacity, there is no dispute that they engaged in some sort of commercial production. Nothing in the conclusory statements contained in the affidavits raises a genuine triable issue of fact. Accordingly, summary judgment was properly granted.

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

Order affirmed, with costs, in a memorandum.


text:
    Essex Refining Corporation, Appellant, v Home Insurance Company, Respondent.
    Argued March 23, 1977;
    decided April 28, 1977

      Arthur Karger, Leon Wasserman and Samuel W. Sherman for appellant.

      John L. Conners and Paul H. Murphy for respondent.
   Order affirmed, with costs, on the opinion by Mr. Justice Richard S. Lane at Trial Term on the motion to reconsider and for a new trial.

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    Dormitory Authority of the State of New York, Respondent, v 59th St. & 10th Ave. Realty Corp. et al., Appellants.
    Argued March 23, 1977;
    decided April 28, 1977

      S. Hazard Gillespie, Bernard L. Bermant, James W. B. Benkard and Sheila T. McMeen for appellants.

      James J. Hagan, Michael V. Corrigan, Michael J. Dougherty and Margot A. Metzner for respondent.
   Order affirmed, with costs, on the memorandum at the Appellate Division (51 AD2d 953).

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    The People of the State of New York, Appellant, v Long Island Railroad, Respondent.
    Argued March 25, 1977;
    decided April 28, 1977

      Henry F. O’Brien, District Attorney (Simon Perchik of counsel), for appellant.

      Raymond B. Ritchel, Jr., George M. Onken and Brian J. Barrett for respondent.
   Order affirmed on the memorandum at the Appellate Term.

Concur: Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke.


text:
    Century Factors, Inc., Appellant, v New Plan Realty Corporation, Respondent.
    Argued March 21, 1977;
    decided April 28, 1977

      Samuel Gottlieb, Eugene H. Feldman, Milton Shalleck and Nathan Silverman for appellant.

      Bernard Gartlir, Joseph Halper and H. Bruce Allen for respondent.
   Memorandum. The order of the Appellate Division should be affirmed. We agree that "[t]he obligation of the defendant, though consisting of two promises, is in truth a single obligation requiring the plaintiff to assert its full claim in one action. Failure to do so results in the splitting of a cause of action which is prohibited (Roe v Smyth, 278 NY 364, 369; Columbia Corrugated Container Corp. v Skyway Container Corp., 37 AD2d 845, 846, affd 32 NY2d 818).”

Accordingly, inasmuch as plaintiff did not assert its claim for expenses of collection and reasonable counsel fees in the first action, it is precluded from asserting them in a second, independent action.

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

Order affirmed, with costs, in a memorandum.