author: Jasen, J.

text:
    Edward C. Ryan et al., Respondents, v New York Telephone Company et al., Appellant.
    Argued May 1, 1984;
    decided June 14, 1984

      POINTS OF COUNSEL

      Saul Scheier, John M. Clark and Michael J. Toolan for appellants.
    I. Plaintiff-respondent had a full and fair opportunity to litigate the issues in the unemployment insurance proceedings which are determinative of the first, second, third, sixth and seventh causes of action and summary judgment should have been granted to defendant. {Schwartz v Public Administrator, 24 NY2d 65; Vavolizza v Krieger, 39 AD2d 446; Read v Sacco, 49 AD2d 471; Bernstein v Birch Wathen School, 71 AD2d 129, 51 NY2d 932; Drier v Randforce Amusement Corp., 14 Mise 2d 362, 14 AD2d 772; Matter of Evans v Monaghan, 306 NY 312; Ogino v Black, 304 NY 872; Gilberg v Barbieri, 53 NY2d 285; 300 Gramatan Ave. Assn, v State Div. of Human Rights, 45 NY2d 176.) II. The issues heard and decided in the prior administrative proceedings are decisive of the claims made in the first, second, third, sixth and seventh causes of action in the complaint under the principles of collateral estoppel or res judicata. {Broughton v State of New York, 37 NY2d 451; White v Barry, 288 NY 37; Brandt v Winchell, 283 App Div 338, 286 App Div 249, 3 NY2d 628; Cartwright v Golub Corp., 51 AD2d 407; Advance Music Corp. v American Tobacco Co., 296 NY 79.)

      John J. Janiec for respondents.
    Special Term was correct in its determination that the principles of res judicata and collateral estoppel should not apply in this case since the totality of the situation dictates that it would be unfair to deny plaintiff his day in court. {Bernstein v Birch Wathen School, 71 AD2d 129, 51 NY2d 932; Gilberg v Barbieri, 53 NY2d 285; Schwartz v Public Administrator, 24 NY2d 65; People v Berkowitz, 50 NY2d 333; Read v Sacco, 49 AD2d 471; Ordway v White, 14 AD2d 498; Royal Business Funds Corp. v Ehrlich, 78 Mise 2d 305, 45 AD2d 823; Howard v City of New York, 38 AD2d 89; Hunt v OSR Chems., 85 AD2d 681; Parklane Hosiery Co. v Shore, 439 US 22.)
   OPINION OF THE COURT

Jasen, J.

We are asked to decide whether the doctrine of collateral estoppel precludes this action by reason of a prior administrative determination rendered after a full hearing. While this court has previously outlined the requirements of collateral estoppel on recent , occasions, this case presents us with some aspects we have not fully addressed before.

Plaintiff, Edward Ryan, was discharged from his employ with defendant New York Telephone Company for theft of company property. Defendants Lauriano and Perrino, company security investigators, had observed Ryan removing what appeared to be company property from the workplace. They stopped him and called the police who arrested Ryan and charged him with petit larceny and criminal possession of stolen property.

Following his discharge from work, Ryan applied for unemployment insurance benefits, but his application was rejected by a claims examiner of the Department of Labor on the ground that the discharge was the result of his own misconduct. Ryan filed an appeal from that initial determination and a hearing, transferred upon his request from a location near his home in New Jersey to New York, was held before an Unemployment Insurance Administrative Law Judge. Ryan was advised that he was entitled to have an attorney represent him at the hearing but, despite his having already retained counsel for the criminal proceedings on the afore-mentioned charges, he chose instead to appear with a union representative who was familiar with such administrative hearings. After considering the testimony of witnesses, including Ryan, who were examined and cross-examined extensively, the Administrative Law Judge sustained the ruling of the claims examiner and disallowed benefits, finding, inter alia, that “claimant was seen * * * removing company property from the company premises” and holding that “[t]he evidence * * * establishes that claimant lost his employment for [possessing] company property without authorization [and therefore] he lost his employment due to misconduct in connection therewith.” This determination was subsequently affirmed by the Unemployment Insurance Appeal Board whose decision was, in turn, upheld by the Appellate Division.

During the pendency of the foregoing administrative proceedings and judicial review, the criminal action in which Ryan was represented by counsel resulted in an adjournment in contemplation of dismissal. Ultimately, it was restored to the Trial Calendar on the motion of the defendant and, on the People’s motion, the charges were dismissed “in the interest of justice.” (See CPL 210.40, subd 2; cf. CPL 170.55, subd 2.)

Between the conclusion of the criminal proceedings and the Appellate Division’s affirmance of the administrative determination thereafter, plaintiffs commenced this action asserting claims for false arrest, malicious prosecution, slander and wrongful discharge, and an additional claim for the resultant injuries to Ryan’s wife. Defendants pleaded an affirmative defense of res judicata and collateral estoppel on the basis of the prior administrative determination denying Ryan’s claim for unemployment benefits. When plaintiffs moved to dismiss the affirmative defense, defendants cross-moved to dismiss the first, second, third, sixth and seventh causes of action comprising claims for false arrest, malicious prosecution, slander and two claims for wrongful discharge, respectively. Special Term granted plaintiffs’ motion and dismissed the affirmative defense, finding that the “totality of the situation”, including the prior forum, Ryan’s lack of counsel and the availability of “new evidence”, “dictates that it would be unfair to deny the plaintiff his day in court.” A divided Appellate Division affirmed for the reasons stated at Special Term and granted leave to appeal to this court, certifying the following question: “Was the order of the Supreme Court, as affirmed by this Court, properly made?” We now reverse, grant defendants’ cross motion to dismiss, and answer the certified question in the negative.

At the outset, it should be made clear that the doctrines of res judicata and collateral estoppel are applicable to give conclusive effect to the quasi-judicial determinations of administrative agencies (Matter of Evans v Monaghan, 306 NY 312, 323-324; Parklane Hosiery Co. v Shore, 439 US 322; see, also, Restatement, Judgments 2d, § 83), when rendered pursuant to the adjudicatory authority of an agency to decide cases brought before its tribunals employing procedures substantially similar to those used in a court of law. (Matter of Venes v Community School Bd., 43 NY2d 520, 524; United States v Utah Constr. Co., 384 US 394, 422; see, also, 2 Davis, Administrative Law [3d ed], §§ 18.03, 18.08, 18.10; Restatement, Judgments 2d, § 83, subd [2], and Comment b.) “[S]uch determinations, when final, become conclusive and binding on the courts.” (Bernstein v Birch Wathen School, 71 AD2d 129, 132, affd 51 NY2d 932; see, also, Matter of Newsday, Inc. v Ross, 80 AD2d 1, 5.)

To be sure, it is a fundamental principle that “a judgment rendered jurisdictionally and unimpeached for fraud shall be conclusive, as to the questions litigated and decided, upon the parties thereto and their privies, whom the judgment, when used as evidence, relieves from the burden of otherwise proving, and bars from disproving, the facts therein determined.” (Fulton County Gas & Elec. Co. v Hudson Riv. Tel. Co., 200 NY 287, 296-297; see, also, Hinchey v Sellers, 7 NY2d 287; Matter of New York State Labor Relations Bd. v Holland Laundry, 294 NY 480; 46 Am Jur 2d, Judgments, § 415.) This rule of res judicata is founded upon the belief that “ ‘it is for the interest of the community that a limit should be prescribed to litigation, and that the same cause of action ought not to be brought twice to a final determination. Justice requires that every cause be once fairly and impartially tried; but the public tranquillity demands that, having been once so tried, all litigation of that question, and between those parties, should be closed forever.’ ” v Vanderlip, 218 NY 29, 36-37, quoting Greenleaf’s Evidence, §§ 522, 523; see, also, Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304; Hendrick v Biggar, 209 NY 440.)

The doctrine of collateral estoppel, a narrower species of res judicata, precludes a party from relitigating in a subsequent action or proceeding an issue clearly raised in a prior action or proceeding and decided against that party or those in privity, whether or not the tribunals or causes of action are the same. (Ripley v Storer, 309 NY 506, 517; see, also, Restatement, Judgments 2d, §27; 46 Am Jur 2d, Judgments, § 415; 9 Carmody-Wait 2d, NY Prac, Judgments, § 63:205.) We have recently reaffirmed that collateral estoppel allows “the determination of an issue of fact or law raised in a subsequent action by reference to a previous judgment on a different cause of action in which the same issue was necessarily raised and decided.” (Gramatan Home Investors Corp. v Lopez, 46 NY2d 481, 485.) What is controlling is the identity of the issue which has necessarily been decided in the prior action or proceeding.

Of course, the issue must have been material to the first action or proceeding and essential to the decision rendered therein (Silberstein v Silberstein, 218 NY 525, 528; see, also, Hinchey v Sellers, supra; Ripley v Storer, supra; Ward v Boyce, 152 NY 191), and it must be the point actually to be determined in the second action or proceeding such that “a different judgment in the second would destroy or impair rights or interests established by the first” (Schuylkill Fuel Corp. v Nieberg Realty Corp., supra, at p 307 [Cardozo, Ch. J.]; see, also, S.T. Grand, Inc. v City of New York, 32 NY2d 300, 304-305).

In addition, where the party against whom collateral estoppel is asserted claims that he was not afforded a full and fair opportunity in the prior administrative proceeding to contest the decision now said to be controlling, he must be allowed to do so. A determination whether the first action or proceeding genuinely provided a full and fair opportunity requires consideration of “the ‘realities of the [prior] litigation’, including the context and other circumstances which * * * may have had the practical effect of discouraging or deterring a party from fully litigating the determination which is now asserted against him”. (People v Plevy, 52 NY2d 58, 65.) Among the specific factors to be considered are the nature of the forum and the importance of the claim in the prior litigation, the incentive and initiative to litigate and the actual extent of litigation, the competence and expertise of counsel, the availability of new evidence, the differences in the applicable law and the foreseeability of future litigation. (Gilberg v Barbieri, 53 NY2d 285, 292; Schwartz v Public Administrator, 24 NY2d 65, 72.)

In the application of collateral estoppel with respect to administrative determinations, the burden rests upon the proponent of collateral estoppel to demonstrate the identically and decisiveness of the issue, while the burden rests upon the opponent to establish the absence of a full and fair opportunity to litigate the issue in prior action or proceeding. (Cf. Schwartz v Public Administrator, supra, at p 73; see, also, B.R. DeWitt, Inc. v Hall, 19 NY2d 141; compare Gramatan Home Investors Corp. v Lopez, supra, at p 485.) As we said in Schwartz, “[t]his apportionment of the burdens is both fair and necessary. Otherwise much of the value of collateral estoppel will be lost.” {Id., at p 73.) Indeed, this apportionment accords, on the one hand, with the burden generally imposed on the moving party to make a prima facie demonstration of entitlement to summary judgment (see, e.g., Friends of Animals v Associated Fur Mfrs., 46 NY2d 1065,. 1067), and, on the other hand, with the burden placed on the opposing party to establish the necessity for a trial (Zuckerman v City of New York, 49 NY2d 557, 562) or on any party attempting to rebut the presumptive regularity of prior judicial and administrative proceedings (see 21 NY Jur, Evidence, §§ 106, 108; 10 Carmody-Wait 2d, NY Prac, §§ 70:346, 70:347; cf. People v Harris, 61 NY2d 9, 16.)

Applying the foregoing rules of law to this case demonstrates clearly that collateral estoppel bars plaintiffs from litigating the subject claims. A comparison of the material issues raised in this action with those resolved by the prior administrative determination, and an examination of the prior proceeding itself show that both requisite criteria, the identicality and decisiveness of the issues and the opportunity for a full and fair hearing have been satisfied.

The critical issue in the prior administrative proceeding was whether Ryan was discharged by reason of misconduct and, therefore, not entitled to unemployment benefits. The Administrative Law Judge’s specific findings, essential to the disallowance of benefits to Ryan, was that the latter was guilty of unauthorized removal and possession of company property, and that he was discharged for that reason. That determination, affirmed by the Unemployment Insurance Appeal Board and ultimately by the Appellate Division, is conclusive between the parties in this action, and it is dispositive of the subject claims asserted by plaintiffs.

The first cause of action alleges false arrest resulting from the defendants’ complaints against Ryan to the police. The lack of legal justification is an essential element of the tort of false arrest (Broughton v State of New York, 37 NY2d 451, 458; Prosser, Torts [4th ed], False Imprisonment, § 11; Restatement, Torts 2d, § 35), but the administrative determination of criminally chargeable misconduct is dispositive of the presence of such justification and, consequently, grounds for dismissal of the cause of action. Likewise, the second cause of action alleging malicious prosecution requires a lack of probable cause for instituting the criminal proceeding (Broughton v State of New York, supra, at p 457; Prosser, op. cit., Malicious Prosecution, § 119; Restatement, Torts 2d, Malicious Prosecution, § 653), but the prior determination is decisive that defendants’ investigators actually witnessed Ryan removing the property and, therefore, had probable cause to bring charges against him. The third cause of action asserts a slanderous remark against Ryan to the effect that he “stole something” from his workplace. The Administrative Law Judge’s findings that Ryan was seen “removing company property from the company premises” and that his taking was “without authorization” were the essential predicate to the determination rendered that he was discharged for misconduct. Those findings, therefore, are entitled to the same conclusive effect as the determination itself and, inasmuch as they establish the truth of the remarks alleged to be slanderous, they constitute a complete defense. (See Crane v New York World Tel. Corp., 308 NY 470; 34 NY Jur, Libel and Slander, § 80; cf. Gertz v Robert Welch, Inc., 418 US 323, 339-340.) The sixth and seventh causes of action are grounded on allegations of wrongful discharge, but, again, the prior determination is dispositive of the fact that Ryan’s termination from employment resulted from and was justified by his misconduct. Consequently, justification being a defense to the tort of wrongful discharge (see Brandt v Winchell, 3 NY2d 628, 633), the determination constitutes a basis for dismissal of those causes of action as well. It is clear, then, that the criterion of issue identicality and decisiveness is satisfied for each of the subject causes of action.

Additionally, the record shows that Ryan had a full and fair opportunity at the prior administrative proceeding to litigate the question of his misconduct, and plaintiffs have failed to demonstrate otherwise. Ryan did, in fact, litigate the issue, testifying himself and cross-examining defendants’ witness through his union representative. The “realities of the prior litigation” are that it was a sufficiently extensive and fully adversarial hearing presided over by an Administrative Law Judge; that the hearing was initiated by Ryan himself to demonstrate his entitlement to unemployment benefits (cf. Gilberg v Barbieri, 53 NY2d, at p 293); and that he freely and knowingly chose not to appear with legal counsel but to be represented instead by a union official who was an experienced advocate in such hearings and whose competence and efforts on Ryan’s behalf is demonstrated in the minutes of the proceedings. The record shows that the hearing was fair and that Ryan had a full opportunity to litigate the issue of his misconduct. The fact that the Administrative Law Judge ruled against Ryan is certainly not evidence of the contrary.

Further, the assertion that there is new evidence in the form of “receipts” showing that Ryan had actually purchased some of the equipment he has been accused of taking without authorization and, therefore, that the prior determination is not deserving of collateral estoppel effect is without merit. This allegedly new evidence was, as plaintiffs concede, in fact available to Ryan and his legal counsel during the pendency of the criminal proceedings, and plaintiffs provide no explanation why they were neither presented nor even alluded to at the administrative hearing or at any proceeding in review or reconsideration thereof. Plaintiffs merely argue in their complaint that “no one asked for them”. As the dissenting Justice at the Appellate Division aptly observed, that assertion is “unimpressive” and, in any event, does not constitute a legally cognizable excuse. Having been afforded a full opportunity at the administrative hearing to present the “receipts”, the failure to do so — not only at that hearing but also at every related proceeding, both precedent and subsequent thereto — does not somehow transform them into “new evidence” and is certainly not a basis for defeating the application of collateral estoppel. It is enough that the receipts were available.

Finally, the eventual dismissal of the criminal charges on the motion of the prosecutor “in the interest of justice” does not constitute an adjudication of the veracity of the receipts or of Ryan’s innocence of the charges. Consequently, it in no way undermines the force and effect of the administrative determination. A dismissal “in the interest of justice” is neither an acquittal of the charges nor any determination of the merits. Rather, it leaves the question of guilt or innocence unanswered. (See People v Clayton, 41 AD2d 204, 206; cf. Hollender v Trump Vil. Coop., 58 NY2d 420, 425; People v Rickert, 58 NY2d 122, 126.)

Thus, in view of plaintiffs’ failure to demonstrate Ryan’s lack of a full and fair opportunity to litigate his claim at the prior administrative hearing, and inasmuch as the issues in that proceeding and the causes of action here in question are identical and dispositive, the doctrine of collateral estoppel applies and precludes relitigation of the prior determination.

Accordingly, the order of the Appellate Division should be reversed, without costs, defendants’ cross motion for partial summary judgment should be granted, and plaintiffs’ motion to strike the affirmative defense of res judicata and collateral estoppel denied. The certified question should be answered in the negative.

Chief Judge Cooke and Judges Jones, Wachtler, Meyer, Simons and Kaye concur.

Order reversed, etc.


source: Caselaw Access Project

author: Chief Judge Cooke. Kaye, J.

license: Public Domain

text:
    Madelyn Miller, Appellant, v State of New York, Respondent.
    Argued May 9, 1984;
    decided June 14, 1984

      POINTS OF COUNSEL

      Joseph Kelner and Martin Rubenstein for appellant.
    I. The State of New York has the same proprietary liability as a private landlord for injuries sustained by its negligence in operation, management and control of its building. (Preston v State of New York, 59 NY2d 997; Curry v

      New York City Housing Auth., 77 AD2d 534; Rhabb vNew York City Housing Auth., 41 NY2d 200; Duren v City of Binghamton, 172 Mise 580, 258 App Div 694, 283 NY 467; Geigel v New York City Housing Auth., 17 AD2d 838; Sherman v Concourse Realty Corp., 47 AD2d 134; Cohen v New York City Housing Auth., 44 AD2d 817; Cosgrove v State of New York, 277 App Div 596; Da Rocha v New York City Housing Auth., 282 App Div 728; Caldwell v Village of Is. Park, 304 NY 268; Santangelo v City of New York, 66 AD2d 880.) II. Where more than one theory of liability is presented, judgment for claimant should be affirmed if any one theory of liability is supported by the evidence. {Bass v City of New York, 38 AD2d 407, 32 NY2d 894; Singer v Walker, 39 AD2d 90, 32 NY2d 786; Passafaro v Board of Educ., 43 AD2d 918; Durham v Metropolitan Elec. Protective Assn., 27 AD2d 818; O’Connor v 595 Realty Assoc., 23 AD2d 69; Greggo v City of Albany, 58 AD2d 678.)

      Robert Abrams, Attorney-General {Julie S. Mereson and Peter H. Schiff of counsel), for respondent.
    The court below was correct in holding that the cause of action alleged by claimant is founded upon the theory that the State failed to provide her with proper police protection and that since she failed to establish that respondent had any special duty owing to her to provide police protection, she failed to prove a cause of action for damages occasioned by a rape. {Vitale v City of New York, 60 NY2d 861; Riss v City of New York, 22 NY2d 579; Motyka v City of Amsterdam, 15 NY2d 134; Steitz v City of Beacon, 295 NY 51; Florence v Goldberg, 44 NY2d 189; Schuster v City of New York, 5 NY2d 75; Baker v City of New York, 25 AD2d 770; De Long v County of Erie, 60 NY2d 296; Dutton v City of Olean, 60 AD2d 335, 47 NY2d 756; Zibbon v Town of Cheektowaga, 51 AD2d 448, 39 NY2d 1056.)
   OPINION OF THE COURT

Chief Judge Cooke.

When the State operates housing, it is held to the same duty as private landlords in the maintenance of physical security devices in the building itself. Thus, a student who is injured in á criminal assault in a State-operated college dormitory may recover damages against the State in its capacity as a landlord upon a showing that there was a reasonably foreseeable likelihood of criminal intrusion into the building, that the State negligently failed to keep the outer doors locked, and that the failure was a proximate cause of the injury.

The claimant, Madelyn Miller, a 19-year-old junior at the State University of New York (SUNY) at Stony Brook, was confronted in the laundry room of her dormitory at approximately 6:00 a.m. on March 9, 1975, by a man wielding a large butcher knife. She was blindfolded and prodded out of the room, through an unlocked outer door from the basement, back in another unlocked entrance to the dormitory, up some stairs to the third floor and into a dormitory room, where she was raped twice at knifepoint and threatened with mutilation or death if she made any noise. Finally, her assailant led her out to the parking lot, where he abandoned her. The assailant was never identified, and the trial court found that he was an intruder in the dormitory with no right or privilege to be present there. Strangers were not uncommon in the hallways, and there had been reports to campus security of men being present in the women’s bathroom. Claimant herself had complained twice to the Assistant Quad Manager of her dormitory area about nonresidents loitering in the dormitory lounges and hallways when they were not accompanied by resident students. The school newspaper had published accounts of numerous crimes in the dormitories such as armed robbery, burglaries, criminal trespass, and a rape by a nonstudent. Notwithstanding these reports, the doors at all of the approximately 10 entrances to the dormitory building were concededly kept unlocked at all hours, although the doors each contained a locking mechanism.

Claimant sued the State for her damages. The Court of Claims construed the claim as asserting two theories of liability for negligence. One, based upon defendant’s negligent failure to provide adequate police protection, was held to be a governmental activity subject to sovereign immunity under the circumstances of this case because the plaintiff had not established any special relationship with defendant. Liability was imposed upon the State, however, upon the other theory that it was acting in a proprietary capacity as a landlord. The court found that by failing to lock the outer doors of the dormitory, the State had breached its duty to protect its tenants from reasonably foreseeable criminal assaults by outsiders. In particular, the failure to lock the outer doors was found to be a proximate cause of the rape. Claimant was found not to be contributorily negligent for being in the laundry room after sunrise on a Sunday morning (see CPLR 1411 [which did not become effective until Sept. 1, 1975]). Claimant’s evidence as to her extensive emotional- injuries was credited by the trial court, which awarded her $25,000 in damages.

Claimant appealed on the ground of inadequacy of damages and the State cross-appealed on the question of liability. The Appellate Division reversed, on the law, and dismissed the claim, reasoning that although claimant sought to recover based upon the State’s liability as a landlord, “in actuality, the claim was based upon the State’s failure to provide adequate police protection.” Because claimant never established a special relationship between the State and herself, the court found that the State owed no duty to claimant in particular and, thus, could not be responsible for any failure of campus police security measures. This court now reverses.

Public entities remain immune from negligence claims arising out of the performance of their governmental functions, including police protection, unless the injured person establishes a special relationship with the entity, which would create a specific duty to protect that individual, and the individual relied on the performance of that duty (see De Long v County of Erie, 60 NY2d 296, 304; Florence v Goldberg, 44 NY2d 189, 195; Riss v City of New York, 22 NY2d 579, 583; Motyka v City of Amsterdam, 15 NY2d 134, 139; Bass v City of New York, 38 AD2d 407, 413, affd no opn 32 NY2d 894). Claimant does not now urge recovery on this theory. Rather, claimant contends that she presented an enforceable claim under her other pleaded theory, that the State failed as a landlord to properly maintain the dormitory, specifically, by failing to lock the outer entrances.

In addition to allegations of inadequate police protection, the claim also embraced a charge against the State in its capacity as a landlord, alleging that the State was “vested by such law with the ownership, care, custody, control and maintenance of * * * school properties of SUNY at Stony Brook, with their buildings * * * and in particular [claimant’s] dormitory,” and that the injuries suffered were caused by the State’s negligence in its “failure to maintain reasonable security * * * in particular in the dormitory known as Horace Greeley College.” The bill of particulars alleged specific acts of negligence by the State in its landlord capacity, averring that defendant was “careless, reckless and negligent in failing to provide adequate security devices; * * * [and] in failing to provide locks on the outer doors of the dormitories”. Thus, the Appellate Division erred in characterizing the claim as sounding solely in inadequate police protection.

Defendant asserts that there was insufficient evidence as a matter of law to support a finding of liability against the State for negligence in its landlord capacity. It reasons that the decision whether to keep the outer doors locked was made by defendant in its police capacity and, as such, constituted part of an executive decision as to how security resources for the entire campus were to be allocated in general, which is a governmental function for which the State is immune from liability.

It is not disputed that when the State acts in a proprietary capacity as a landlord, it is subject to the same principles of tort law as is a private landlord (see Court of Claims Act, § 8; Preston v State of New York, 59 NY2d 997, 998; Bass v City of New York, 38 AD2d 407, 411, affd no opn 32 NY2d 894, supra; Duren v City of Binghamton, 172 Misc 580, affd 258 App Div 694, affd 283 NY 467). The difficulty here arises from defendant’s dual role, where it has acted in a proprietary capacity as a landlord by its ownership and control of the SUNY campus, and also in a governmental capacity by providing police protection through the appointment of campus security officers “to preserve law and order on the campus” (see Education Law, § 355, subd 2, par m). A governmental entity’s conduct may fall along a continuum of responsibility to individuals and society deriving from its governmental and proprietary functions. This begins with the simplest matters directly concerning a piece of property for which the entity acting as landlord has a certain duty of care, for example, the repair of steps or the maintenance of doors in an apartment building. The spectrum extends gradually out to more complex measures of safety and security for a greater area and populace, whereupon the actions increasingly, and at a certain point only, involve governmental functions, for example, the maintenance of general police and fire protection. Consequently, any issue relating to the safety or security of an individual claimant must be carefully scrutinized to determine the point along the continuum that the State’s alleged negligent action falls into, either a proprietary or governmental category.

“[I]n determining the extent and scope of the [State’s] duties as a landlord, we must ‘distinguish those liabilities attendant upon governmental activities which have displaced or supplemented traditionally private enterprises’ (Riss v. City of New York, 22 NY2d 579, 581) and are performed in a proprietary capacity from those which are and have always been considered governmental in nature” (Bass v City of New York, 38 407, 411, affd no opn 32 NY2d 894, supra). In Bass, the City was the landlord of the public housing complex where the plaintiff’s decedent was murdered. The negligent act complained of was inadequate police protection because only one policeman was assigned to the complex and he was at lunch instead of patrolling when decedent was raped and murdered on the roof of one of the buildings. The police at the complex were members of the New York City Housing Authority Police, the maintenance of which was a governmental operation comparable in scope to the police force of the municipality itself, and was subsidized by the City so that it could continue to provide police protection to areas, under its domain (id., at pp 412-413). Thus, the City was held immune from liability, notwithstanding that it was the landlord of the complex, because the furnishing of police protection was so clearly a governmental function for which immunity attached in the absence of a showing of special duty, that the negligent act was removed from its landlord capacity and was attributed to its governmental function (see id., at p 413). In this way, a governmental entity which is a landlord is distinguishable from a private landlord, which would remain liable for the negligent performance of a security force it retained for the safety of its tenants.

When the liability of a governmental entity is at issue, “[i]t is the specific act or omission out of which the injury is claimed to have arisen and the capacity in which that act or failure to act occurred which governs liability, not whether the agency involved is engaged generally in proprietary activity or is in control of the location in which the injury occurred” (Weiner v Metropolitan Transp. Auth., 55 NY2d 175, 182). Here, the act complained of under the landlord theory of liability was the failure to lock the outer doors of the dormitory. Ownership and care relating to buildings with tenants has traditionally been carried on through private enterprise, specifically by landlords and thus constitutes a proprietary function when performed by the State (see Bass v City of New York, 38 AD2d 407, 411, affd no opn 32 NY2d 894, supra).

“As a landowner, the State ‘ “must act as a reasonable [person] in maintaining his property in a reasonably safe condition in view of all the circumstances, including the likelihood of injury to others, the seriousness of the injury, and the burden of avoiding the risk” ’ ” (Preston v State of New York, 59 NY2d 997, 998, supra, quoting Basso v Miller, 40 NY2d 233, 241). Under this standard, a landlord has a duty to maintain minimal security measures, related to a specific building itself, in the face of foreseeable criminal intrusion upon tenants (see Nallan v Helmsley-Spear, Inc., 50 NY2d 507 [prima facie negligence asserted by plaintiff shot by an unknown assailant as he leaned over guest register in defendant’s office building where sign-in attendant was absent and building door unlocked]; Loeser v Nathan Hale Gardens, 73 AD2d 187 [landlord liable when tenant assaulted in parking lot of apartment when large fluorescent light was negligently not turned on]; Sherman v Concourse Realty Corp., 47 AD2d 134 [landlord who had lock cylinder out for repairs so that buzzer system was inoperable was liable when tenant was robbed by criminal intruder]; Skaria v State of New York, 110 Misc 2d 711 [landlord liable for tenant’s rape when security measures of landlord were inoperable that day]). Thus, defendant here had a duty to take the rather minimal security measure of keeping the dormitory doors locked when it had notice of the likelihood of criminal intrusions.

As a relatively restricted action, having locked doors falls within the scope of the State’s proprietary function as a landlord. This is not to say that further security measures relating to a particular dormitory or the entire campus might not be located so far along the continuum as to be beyond the scope of the State’s duty as a landlord and constitute actions undertaken in its police protection capacity.

This court further determines that there was sufficient evidence on the record to support the Trial Judge’s conclusion that the State’s failure to lock the outer doors was a breach of the State’s duty and a proximate cause of the rape.

Accordingly, the order of the Appellate Division should be reversed, and the case remitted to the Appellate Division, Second Department, for determination of the facts and issues not reached on the appeals to that court.

Kaye, J.

(concurring). While concurring in result, I write to emphasize my understanding that the imposition of liability upon the State in the circumstances presented is not a departure from Bass v City of New York (32 NY2d 894) or Weiner v Metropolitan Transp. Auth. (55 NY2d 175). The allocation of police resources remains a legislative executive decision. Although a commercial entity engaged in a particular activity may be required to furnish security guards, a governmental agency performing that same activity does not have the same obligation to assign police. (Weiner v Metropolitan Transp. Auth., 55 NY2d 175, 182, supra.)

But governmental agencies acting as landlords are not exonerated from responsibility to furnish any security to their tenants. Liability is properly imposed in this case because of the policy adopted by the State, as landlord, of having all entrances to the dormitory unlocked at all times, despite an open campus and reported criminal incidents. We do not decide whether the State similarly would be liable for a failure to keep all dormitory doors locked at all times. With several thousand students living in 27 dormitories at Stony Brook alone, each dormitory presumably having several entrances, that would be a truly onerous — if not impossible — obligation for any security force, involving the allocation of police resources.

Judges Jasen, Jones, Wachtler, Meyer and Simons concur with Chief Judge Cooke; Judge Kaye concurs in result in a separate opinion.

Order reversed, with costs, and case remitted to the Appellate Division, Second Department, for further proceedings in accordance with the opinion herein.


author: Kaye, J.

text:
    The People of the State of New York, Appellant, v Nathaniel Kelly and Angel Marrero, Respondents.
    Argued June 7, 1984;
    decided June 29, 1984

      POINTS OF COUNSEL

      Robert M. Morgenthau, District Attorney (<Jeanne E. Zunich and Mark Dwyer of counsel), for appellant.
    The court below erred in dismissing the information before trial, since it had no basis for finding that the loss of the People’s evidence was prejudicial to defendants. (United States v Augenblick, 393 US 348; United States v Morrison, 449 US 361; United States v Agurs, 427 US 97; People v Cwikla, 46 NY2d 434; People v Simmons, 36 NY2d 126; United States v Kincaid, 712 F2d 1; United States v Bufal-ino, 576 F2d 446, 439 US 928; People v Watkins, 67 AD2d 741; People v Emmons, 99 Mise 2d 941; People v Aviles, 89 Mise 2d 1.)

      Betrand J. Kahn and William E. Hellerstein for Nathaniel Kelly, respondent.
    The Criminal Court correctly dismissed the accusatory instruments against respondents where the police, acting pursuant to an acknowledged policy of systematic disregard of statutory mandate, failed to preserve crucial evidence which the defense sought to discover and without which respondents’ ability to present a defense would have been effectively nullified. (Chambers v Mississippi, 410 US 284; Jenkins v McKeithen, 395 US 411; United States v Bryant, 439 F2d 642; United States v Augenblick, 393 US 348; People v Churba, 76 Mise 2d 1028; People v Fleishman, 92 Mise 2d 156; People v Angelo, 93 AD2d 264; United States v Doty, 714 F2d 761; United States v Nabors, 707 F2d 1294; United States v Miranne, 688 F2d 980.)

      Richard Ware Levitt for Angel Marrero, respondent.
    Dismissal of the complaint was required both to remedy the prejudice resulting from the People’s destruction of favorable, discoverable evidence, and to deter future systematic violation of State law. (People v Churba, 76 Mise 2d 1028; People v Davis, 105 Mise 2u 409, 109 Mise 2d 230; People v Fleishman, 92 Mise 2d 156; United States v Morrison, 449 US 361; People v Szychulda, 57 NY2d 719; People v Wingard, 33 NY2d 192; People v Douglass, 60 NY2d 194; People v Dory, 59 NY2d 121.)
   OPINION OF THE COURT

Kaye, J.

The question presented on this appeal is whether dismissal of two informations was an appropriate response to the prosecution’s wrongful failure to preserve discoverable evidence. Because less drastic sanctions would have cured any prejudice to defendants, we hold that the court abused its discretion in dismissing the charges.

On the evening of March 21,1981 defendants, Nathaniel Kelly and Angel Marrero, acting together, allegedly approached an undercover police officer, struck him, reached into his shoulder bag and removed a wallet containing several bills. Police apprehended defendants and charged each of them by information with criminal possession of stolen property in the third degree and petit larceny. In response to counsel’s motion to discover any property taken from defendants, the prosecutor said that the police had obtained a brown wallet and $22 in cash, consisting of one $20 bill and two $1 bills. When the Assistant District Attorney met counsel at the property clerk’s office to display the evidence, it could not be found. Subsequently, the prosecutor learned that the wallet and cash had been vouchered but, pursuant to police practice in decoy pickpocket cases, was immediately returned to the decoy officer. The evidence is irretrievably lost.

Defendants moved to dismiss the charges because of the lost evidence. They claimed that the failure to preserve the property violated section 450.10 of the Penal Law, which prohibited the return of such property without court order, and effectively precluded assertion of an entrapment defense. According to the defense, the alleged $20 bill in fact was a $1 bill, doctored to resemble a 20. This evidence would demonstrate, defendants argued, that the police intended to use the money as an inducement and positioned it in the wallet to be visible to passersby. The prosecutor sought to justify the practice of returning the property and contended that the evidence did not further an entrapment defense because it would not in any event have shown the positioning of the wallet or bills. Criminal Court granted defendants’ motion, concluding that the evidence was discoverable and that the People violated their duty to preserve it. As to the appropriate sanction, the court dismissed the charges because the “absence of the missing evidence herein totally destroys defendants’ ability to cross-examine the People’s witnesses or to otherwise establish the affirmative defense of entrapment.” The Appellate Term affirmed, without opinion. We now reverse.

A necessary corollary of the duty to disclose is the obligation to preserve evidence until a request for disclosure is made (United States v Bryant, 439 F2d 642; People v Saddy, 84 AD2d 175). Any other rule would facilitate evasion of the disclosure requirements (United States v Bryant, 439 F2d 642, 651, supra). Accordingly, where discoverable evidence gathered by the prosecution or its agent is lost, the People have a heavy burden of establishing that diligent, good-faith efforts were made to prevent the loss. (id.; see, also, United States v Augenblick, 393 US 348, 355-356). Otherwise, sanctions will be imposed.

The People readily admit that the wallet and currency were discoverable as “property obtained from the defendant” (CPL 240.20, subd 1, par [e]). The government was statutorily obligated to retain possession of this evidence until a court ordered it released (Penal Law, § 450.10), and the intentional relinquishment here was inexcusable. Though the police practice of giving back the property whenever decoy officers are involved may, as the People argue, demonstrate the absence of any intent to harm these defendants, it falls far short of satisfying the People’s burden of establishing that they are not accountable for the loss. The only question, then, is what sanctions were necessary.

In fashioning an “appropriate” response to the prosecution’s wrongful failure to preserve evidence (see CPL 240.70, subd 1), the degree of prosecutorial fault surely may be considered, but the overriding concern must be to eliminate any prejudice to the defendant while protecting the interests of society. Courts have devised a number of methods to reach this goal. For illustration only, and without approving or disapproving the sanctions imposed, we note that where tape recordings of an alleged drug sale were erased, thereby hindering the defendants’ agency defense, courts have reduced convictions of criminal sale of a controlled substance to possession (People v Saddy, 84 AD2d 175, supra); where minutes of prior testimony of prosecution witnesses were lost, courts have precluded the witness from testifying (People v Lunney, 84 Misc 2d 1090), ordered a reconstruction hearing (People v Hicks, 85 Misc 2d 649), and directed the People to turn over all remaining minutes and records of the witness’ statements (People v Aviles, 89 Misc 2d 1). Where the prosecution’s failure to preserve a door allegedly undermined the defendant’s justification defense, the court has instructed the prosecutor to turn over all the Grand Jury testimony concerning the forcible entry and reserved the right to impose additional sanctions at trial, including an unfavorable inference charge (People v Emmons, 99 Misc 2d 941). In other instances, charges have been dismissed. In People v Churba (76 Misc 2d 1028), for instance, the “blatantly careless” manner in which the prosecution agents unsuccessfully attempted to preserve a television set led the court to dismiss because the defense would be greatly disadvantaged in attempting to show that the repairs for which the defendant billed the owners were actually accomplished. (See, also, People v Szychulda, 57 NY2d 719; People v Davis, 105 Misc 2d 409, affd 109 Misc 2d 230; and People v Fleishman, 92 Misc 2d 156.)

Although the choice of “appropriate” action is committed to the sound discretion of the trial court, as a general matter the drastic remedy of dismissal should not be invoked where less severe measures can rectify the harm done by the loss of evidence. Since such measures were clearly available here, the court abused its discretion in dismissing the charges.

Defendants advance two reasons why dismissal was necessary. First, they argue that the evidence was indispensable to an entrapment defense. They claim that use of the doctored bill evinced an intent to make the money highly visible and accessible. Such intent, in turn, would tend to show that the bill was protruding from the wallet, a fact which allegedly bore on the dubious entrapment defense. But there is no indication that the People at trial would dispute that the money was intentionally placed in a highly visible position; even if they did, the court could instruct the jury that the money was doctored in the manner claimed by the defense, thereby providing support for defendants’ argument that the money was visible, or charge the jury that an adverse inference should be drawn against the prosecution on account of the missing evidence. Defendants’ second argument is that the doctored bill could have been used to impeach the credibility of the police officers who allegedly had previously stated that the bill was genuine. If the officers did make these statements, defendants’ interest in impeaching their credibility could have been protected by an instruction as to the bogus nature of the bill used.

Accordingly, the order of the Appellate Term should be reversed, the informations reinstated, and the case remitted to the Criminal Court of the City of New York for the fashioning of an appropriate sanction for the prosecutor’s failure to preserve evidence, in accordance with this opinion, and for further proceedings on the informations.

Chief Judge Cooke and Judges Jasen, Jones, Wacht-ler, Meyer and Simons concur.

Order reversed, informations reinstated and case remitted to the Criminal Court of the City of New York, New York County, for further proceedings in accordance with the opinion herein.

      . When the events in this case took place, section 450.10 of the Penal Law provided:
      “1. When property, alleged to have been stolen, comes into the custody of a peace officer, he must hold it, subject to the order of the court authorized by subdivision two to direct the disposal thereof.
      “2. On satisfactory proof of the title of the owner of the property, the court in which the criminal action is pending may order it to be delivered to the owner, unless its temporary retention be deemed necessary in furtherance of justice, on his paying the reasonable and necessary expenses incurred in its preservation, to be certified by said court. The order entitles the owner to demand and receive the property.”

      . Since the evidence here was by statute discoverable and required to be retained, we need not consider whether the government was under a duty to preserve it pursuant to the Constitution (see California v Trombetta, 467 US _, 52 USLW 4744).


text:
    Cynthia Johnson et al., Respondents, v Jamaica Hospital, Appellant.
    Submitted May 1, 1984;
    decided July 3, 1984

      POINTS OF COUNSEL

      Howard S. Davis and Barry M. Hoffman for appellant.
    An alleged failure of hospital security which causes the unexplained disappearance of an infant from a hospital nursery does not create a direct duty on the part of the hospital to the parents of the infant so as to allow the parents to recover for their mental distress. (Palsgraf v LongIs.R.R. Co., 248 NY 339; Pulka v Edelman, 40 NY2d 781; Tobin v Grossman, 24 NY2d 609; Lafferty v Manhasset Med. Center Hosp., 54 NY2d 277; Rainnie v Community Mem. Hosp., 87 AD2d 707\Aquilio v Nelson, 78 AD2d 195; Howard v Lecher, 53 AD2d 420; Becker v Schwartz, 46 NY2d 401; Vaccaro v Squibb Corp., 52 NY2d 809; Kennedy v McKesson Co., 58 NY2d 500.)

      Jacob Firester for respondents.
    I. Defendant hospital cannot assert that it owes no duty to the parents of a nine-day-old infant entrusted to its care for medical treatment. (Pickle v Page, 252 NY 474.) II. Appellant’s contention that the law does not afford a remedy for mental pain and anguish and the line of cases it cites in support of its contention, is not applicable to the facts of the case at bar. (,Johnson v State of New York, 37 NY2d 378; Becker v Schwartz, 46 NY2d 401; Tobin u Grossman, 24 NY2d 609.)
   OPINION OF THE COURT

Kaye, J.

The parents of a newborn infant abducted from a hospital nursery may not recover damages from the hospital for their own emotional distress resulting from the hospital’s negligence in its care of their child or in the management of its nursery. Plaintiffs’ complaint for such damages should have been dismissed for failure to state a cause of action.

Plaintiffs, Cynthia Johnson and Percy Williams, are the parents of a daughter, Kawana, born June 8, 1981 in defendant Jamaica Hospital. After Cynthia’s discharge, the infant remained in the hospital nursery for further treatment. When Cynthia visited on June 16,1981 — a day on which defendant had received two bomb threats — it was discovered that Kawana was missing. She apparently had been abducted from the nursery that day. She was recovered by the police and returned to her parents approximately four and one-half months later. A separate action for damages has been commenced against defendant on her behalf, which is not a part of this appeal.

Prior to Kawana’s recovery, plaintiffs instituted the present action. In their first cause of action, plaintiffs allege that they are Kawana’s parents, that she was in defendant’s care and custody for treatment, that she disappeared during that time and defendant had been unable to account for her disappearance, and that they have suffered grief, mental torment, pain and anguish as a result of defendant’s negligence in failing “to exercise due and proper care and caution in its custody, care and treatment of * * * Kawana.” Plaintiffs’ second cause of action, based upon the doctrine of res ipsa loquitur, repeats these aver-ments and concludes that “the occurrence alleged would not have taken place in the ordinary course of things if the defendant had not negligently failed to use proper care in the direction, control, management and maintenance of said hospital nursery, which was under the exclusive control, direction, management and maintenance of the defendant.”

After interposing an answer, defendant moved to dismiss the complaint for failure to state a cause of action. Special Term denied defendant’s motion, and the Appellate Division affirmed by a divided court. Defendant was granted leave to appeal to this court by the Appellate Division, which certified the question whether its order affirming the denial of defendant’s motion was properly made. We now reverse.

Assuming the allegations of plaintiffs’ complaint to be true (Cohn v Lionel Corp., 21 NY2d 559, 562), no cause of action is stated. Plaintiff parents may not recover damages from defendant hospital for any mental distress or emotional disturbances they may have suffered as a result of the direct injury inflicted upon their daughter by defendant’s breach of its duty of care to her. (Howard v Lecher, 42 NY2d 109, 113; Becker v Schwartz, 46 NY2d 401, 413; Vaccaro v Squibb Corp., 52 NY2d 809, 810.) Although in Bovsun v Sanperi (61 NY2d 219) we recently decided that damages may be recovered for such indirect “psychic injuries” in limited circumstances, plaintiffs have stated no basis for recovering under the standard set forth in Bovsun in that they have not alleged that they were within the zone of danger and that their injuries resulted from contemporaneous observation of serious physical injury or death caused by defendant’s negligence.

Plaintiffs contend, and the courts below concluded, that their complaint states a cause of action because the defendant hospital owed a duty directly to them, as parents, to care properly for their child, and that it was or should have been foreseeable to defendant that any injury to Kawana, such as abduction, would cause them mental distress. There is no basis for establishing such a direct duty. This court has refused to recognize such a duty on the part of a hospital to the parents of hospitalized children (Kalina v General Hosp., 13 NY2d 1023), and there is no reason to depart from that rule here.

In Kalina, the plaintiffs, an observant Jewish couple, gave express instructions to the defendant hospital that their newborn son was to be ritualistically circumcised on his eighth day by a mohel in accordance with the tenets of their religion. Instead, due to the alleged negligence and malpractice of the hospital, the baby was circumcised on his fourth day by a physician. The plaintiff parents sought recovery for their mental pain and suffering caused by the assault and battery upon their son. Special Term granted defendants’ motion to dismiss the complaint (31 Misc 2d 18) and we ultimately affirmed on Special Term’s opinion. In that opinion, the parents of the hospitalized child were held to be “interested bystanders” to whom no direct duty was owed.

“Both of the pleadings are insufficient because the plaintiffs as individuals, apart from their status as representatives of their son, do not have a legally protected interest under these circumstances (Palsgraf v. Long Is. R.R. Co., 248 N. Y. 339). To paraphrase the language of Palsgraf, at page 341 — the conduct of the defendants, if a wrong in relation to the son, was not a wrong in its relation to the plaintiffs, remote from the event. Rights are not abstractions but exist only correlatively with duties. Everyone who has been damaged by an interruption in the expected tenor of his life does not have a cause of action. The law demands that the equation be balanced; that the damaged plaintiff be able to point the finger of responsibility at a defendant owing, not a general duty to society, but a specific duty to him.

“The defendants here in accepting a relationship with the son assumed the risk of liability for a tortious performance to him. They did not assume any risk of liability that their acts might violate the personal sensibilities of others, be they the son’s parents, his coreligionists or the community at large.” (Kalina v General Hosp., 31 Misc 2d 18, 19, affd 18 AD2d 757, affd 13 NY2d 1023.)

Jamaica Hospital owed no more of a direct duty to the plaintiff parents to refrain from causing them psychic injury than did the defendants in Kalina, Howard, Becker and Vaccaro. The direct injury allegedly caused by defendant’s negligence — abduction — was sustained by the infant, and plaintiffs’ grief and mental torment which resulted from her disappearance are not actionable. The foreseeability that such psychic injuries would result from the injury to Kawana does not serve to establish a duty running from defendant to plaintiffs (Albala v City of New York, 54 NY2d 269, 273; Pulka v Edelman, 40 NY2d 781, 785), and in the absence of such a duty, as a matter of law there can be no liability (De Angelis v Lutheran Med. Center, 58 NY2d 1053, 1055). That sound policy reasons support these decisions is evident here, for to permit recovery by the infant’s parents for emotional distress would be to invite open-ended liability for indirect emotional injury suffered by families in every instance where the very young, or very elderly, or incapacitated persons experience negligent care or treatment.

There is, similarly, no basis for establishing such a duty in the contractual relationship between plaintiffs and defendant, or in the assertion that defendant was standing in loco parentis, or in our prior decisions in Johnson v State of New York (37 NY2d 378) and Lando v State of New York (39 NY2d 803).

There is no foundation for the alleged duty in the contractual relationship between plaintiffs and defendant, wherein plaintiffs agreed to compensate defendant for services rendered to their daughter. The general rule in contract cases is that “absent a duty upon which liability can be based, there is no right of recovery for mental distress resulting from the breach of a contract-related duty.” (Wehringer v Standard Security Life Ins. Co., 57 NY2d 757, 759.) Although some exceptions to this rule have been recognized, such as wrongful and abusive ejection by a hotel or innkeeper (Boyce v Greely Sq. Hotel Co., 228 NY 106; DeWolf v Ford, 193 NY 397), indignant expulsion or removal from a public facility (Aaron v Ward, 203 NY 351; Smith v Leo, 92 Hun 242), or ejection by a common carrier (Gillespie v Brooklyn Hgts. R.R. Co., 178 NY 347; Hamilton v Third Ave. R.R. Co., 53 NY 25), they are not applicable here.

“In nearly every case where such damages have been awarded, the breach has been wilful; and in many of them the ejection of the plaintiff was accompanied by wanton conduct, such as foul language, abuse of the plaintiff, accusations of immorality, and special circumstances of humiliation and indignity. Where there were no such accompanying facts, damages for mental suffering have usually been refused.” (5 Corbin, Contracts, § 1076, p 432; see, also, 36 NY Jur 2d, Damages, § 102; Restatement, Contracts 2d, § 353.)

A similar contractual duty was suggested by the Appellate Division dissenter in Kalina v General Hosp. (18 AD2d 757, 758, supra), but was not adopted by this court.

Nor can a duty to refrain from causing plaintiffs emotional distress be predicated on any notion that defendant stood in loco parentis while caring for the infant. First, there is no basis for a finding that defendant stood in loco parentis. That status requires more than mere temporary care and custody; an intent to support and care for the child on a permanent basis must be shown. (Rutkowski v Wasko, 286 App Div 327, 331-332; 15 NY Jur [rev 1972], Domestic Relations, § 336.) A finding that one stands in loco parentis cannot be based solely upon a relationship where, as here, one is compensated for providing services to a child. (See Miller v Davis, 49 Misc 2d 764 [Jasen, J.].) There are no allegations in plaintiffs’ complaint to support the conclusion that defendant, at the time of the abduction, stood in loco parentis. Second, one in loco parentis assumes duties to the child, not to the child’s parents. Third, it is doubtful that even the child involved would have a cause of action against one in loco parentis for action that, as alleged here, amounted to negligent supervision. (See Holodook v Spencer, 36 NY2d 35.) In short, the contention that defendant Jamaica Hospital stood in loco parentis to Kawana — not even asserted by plaintiffs in their complaint, but made by the Appellate Division — adds nothing to plaintiffs’ claims.

Finally, our prior holdings in Johnson v State of New York (37 NY2d 378, and Lando v State of New York (39 NY2d 803, supra) provide no basis for recovery. In neither case was liability based upon a hospital’s breach of care to its patient causing direct injury to the patient resulting in emotional injury to relatives of the patient. In Johnson the defendant hospital negligently sent a telegram to plaintiff notifying her of her mother’s death when in fact her mother had not died, and in Lando the defendant hospital negligently failed to locate a deceased patient’s body for 11 days, when it was found in an advanced state of decomposition. Each case presented exceptional circumstances in which courts long ago recognized liability for resultant emotional injuries: a duty to transmit truthfully information concerning a relative’s death or funeral (Johnson v State of New York, 37 NY2d 378, 381-382, supra), which the hospital assumed by sending the message (Lafferty v Manhasset Med. Center Hosp., 54 NY2d 277, 280), and the mishandling of or failure to deliver a dead body with the consequent denial of access to the family (Finley v Atlantic Transp. Co., 220 NY 249; Darcy v Presbyterian Hosp., 202 NY 259). Neither exception is applicable here.

In summary, Jamaica Hospital, even if negligent in caring for Kawana and directly liable to her, is not liable for emotional distress suffered by plaintiffs as a consequence of the abduction. This is in accord with the majority rule in this country. (Recovery for Mental or Emotional Distress Resulting From Injury to, or Death of, Member of Plaintiff’s Family Arising From Physician’s or Hospital’s Wrongful Conduct, Ann., 77 ALR3d 447.) There is no duty owing from defendant to plaintiffs to refrain from negligently causing such injury. To hold otherwise would be to invite the very sort of boundless liability for indirect emotional injury that we have consistently rejected.

The dissent would reach the opposite result, based on its own policy determination that defendant rather than plaintiffs should be required to bear the burden of plaintiffs’ psychic injury. The dissent argues that our prior decisions have recognized that an action should lie for any infringement of parents’ right to custody “if liability could but be circumscribed”, and that this case presents such an opportunity, as this is not a common occurrence and the class of persons permitted to recover is sufficiently limited (dissent, at pp 533, 534). While disagreeing with the dissent’s policy determination, we additionally point out that the cited authorities do not support the proffered result.

The suggestion that liability would be severely limited is also without foundation. Just as it is now suggested that Bovsun v Sanperi (61 NY2d 219, supra) marks the beginning of a rationale (dissent, at p 532), any right to recover for emotional injury sustained by plaintiffs because of defendant’s negligence in the “care, custody and management” of their child cannot rationally be refused to other parents, relatives or custodians of persons to whom caretakers of various types, such as schools and day care centers, are alleged to have breached a similar duty. In considering a new duty, the court’s concern for its ramifying consequences should hardly be disparaged (dissent, at p 532). Not every injury can be compensated, and “[t]he problem for the law is to limit the legal consequences of wrongs to a controllable degree.” (Tobin v Grossman, 24 NY2d 609, 619, supra.)

Accordingly, the order of the Appellate Division should be reversed, the certified question answered in the negative, and the complaint dismissed.

The zone of danger concept rejected by Tobin (id., at p 616) was accepted by Bovsun, in part because it limited recovery not only to those within the zone of danger, but also to members of the immediate family of the person injured or killed (61 NY2d, at pp 229, 230, 231, 232) who had themselves suffered a serious and verifiable emotional disturbance (id., at p 231). But Bovsun’s adoption of the zone of danger concept need not, and should not, be read as barring recovery by parents who suffer serious and verifiable emotional injury as the result of the negligent infringement by a hospital of the parents’ right to custody of their child, even though the parents are not within the zone of danger when the infringement occurs. In my view the parental right to custody is sufficiently distinct from physical injury to or death of a child, the class of persons permitted to recover sufficiently limited, and the psychological trauma to the parents resulting from infringement of their custodial rights is direct rather than consequential and sufficiently probable in human experience that they should be permitted to recover upon proof of a serious and verifiable emotional disturbance. I, therefore, respectfully dissent.

The question to be decided on a motion to dismiss for failure to state a cause of action is whether any valid cause of action can fairly be gathered from the allegations of the complaint (Condon v Associated Hosp. Serv., 287 NY 411, 414). The “sole criterion is whether the pleading states a cause of action, and if from its four corners factual allegations are discerned which taken together manifest any cause of action cognizable at law a motion for dismissal will fail” (Guggenheimer v Ginzburg, 43 NY2d 268, 275; accord 219 Broadway Corp. v Alexanders, Inc., 46 NY2d 506, 509). It is, therefore, irrelevant that the complaint is framed in terms of negligence rather than negligent infringement of the parents’ right to custody.

The majority finds no direct duty on the part of the hospital to plaintiffs to refrain from causing them psychic injury. But, as Professor Prosser pointed out (and as we in De Angelis v Lutheran Med. Center, 58 NY2d 1053, 1055, agreed), duty “is a shorthand statement of a conclusion, rather than an aid to analysis itself. It * * * is not sacrosanct in itself, but only an expression of the sum total of those considerations of policy which lead the law to say that the particular plaintiff is entitled to protection” (Prosser, Torts [4th ed], pp 325-326). The policy determination to be made may be stated as whether the interests of plaintiffs and defendant and the relationship between them are such that defendant rather than plaintiffs should be required to bear the burden of plaintiffs’ psychic injury.

The parents’ interest in the care, custody and management of their child is recognized as not only a constitutional fundamental (Santosky v Kramer, 455 US 745, 753) and as a statutory imperative (Social Services Law, § 384-b, subd 1, par [a], cl [ii]), but also by our prior decisions as a real and genuine interest deserving of protection if liability could but be circumscribed in a manner consistent with reason and practicality (Howard v Lecher, 42 NY2d 109, 112; Tobin v Grossman, 24 NY2d 609, 615, supra; see De Angelis v Lutheran Med. Center, 58 NY2d 1053, 1055, supra; Johnson v State of New York, 37 NY2d 378, 382-383; Pickle v Page, 252 NY 474, 477).

The hospital’s interest is in not being burdened with unwarranted controls in order to avoid liability and not having to pay damages for what may be a feigned injury or to so large a group of plaintiffs as to impose upon it a burden disproportionate to its negligent act. Because the matter arises on a motion to dismiss for failure to state a cause of action, plaintiffs’ allegations of negligence on defendant’s part must be accepted as true. There is, therefore, nothing before the court to indicate what, if any, change in hospital procedures would be required were there imposed upon it a duty to exercise reasonable care not to permit a newborn baby to be removed from the hospital by someone other than the parents or a person having the parents’ permission to do so, or how great a burden in time or cost such a duty would impose. Clearly, however, it cannot simply be presumed that the burden would be so great as to foreclose imposition of liability, the more particularly so in view of the fact that it is a matter of common knowledge that hospitals already have a checkout procedure.

From the hospital’s side, then, the policy considerations are reduced to the amorphous character of mental distress and the limitation of the class of plaintiffs. The first is, however, answered by Bovsun’s requirement of serious and verifiable emotional disturbance, and the second by the limitation of the right of recovery to the parents, the only persons with whom the hospital has a relationship from which springs the duty of reasonable care.

With respect to the relationship between plaintiffs and defendant hospital, the majority acknowledges the contract relationship between the parties but concludes that it provides no foundation for recovery for mental distress. Yet there is ample authority that interference by third persons with the parents’ custody of their child is an actionable tort for which damages for mental distress may be recovered (Pickle v Page, 252 NY 474, supra; Lisker v City of New York, 72 Misc 2d 85; see McGrady v Rosenbaum, 62 Misc 2d 182, affd 37 AD2d 917). Recovery by parents for mental distress has also been sanctioned when a hospital entrusted with the care of a child refuses to deliver to the parents the body of the child after its death (Darcy v Presbyterian Hosp., 202 NY 259; Hassard v Lehane, 143 App Div 424; Lubin v Sydenham Hosp., 181 Misc 870), for the hospital’s method of informing the parents of the death of their baby and its failure to locate the baby’s body or confirm its death for a period of three weeks (Muniz v United Hosps. Med. Center Presbyt. Hosp., 153 NJ Super 79), for the hospital’s refusal to release a child to the parents until the hospital’s bill had been paid (Bedard v Notre Dame Hosp., 89 RI 195), and for the loss by a cemetery association of the body of a still-born baby entrusted to it for burial (Klumbach v Silver Mount Cemetery Assn., 242 App Div 843, affd 268 NY 525).

It is not a sufficient answer to suggest that such holdings can be differentiated on the basis that the conduct involved was intentional rather than negligent, for that is but a result-oriented distinction. Prosser (Torts [4th ed], pp 329-330) notes that the older cases required “circumstances of aggravation” in addition to negligence but that the majority of modern cases allow recovery without such circumstances and concludes that “What all of these cases appear to have in common is an especial likelihood of genuine and serious mental distress, arising from the special circumstances, which serves as a guarantee that the claim is not spurious. There may perhaps be other such cases. Where the guarantee can be found, and the mental distress is undoubtedly real and serious, there is no essential reason to deny recovery.” There is no difference in plaintiffs’ injury whether defendant’s act be negligent or intentional (Schultz v Barberton Glass Co., 4 Ohio St 3d 131, 135-136; Rodrigues v State of Hawaii, 52 Hawaii 156,171; Goodrich, Emotional Disturbance as Legal Damage, 20 Mich L Rev 497, 504-505; McNiece, Psychic Injury and Tort Liability In New York, 24 St John’s L Rev 1, 63; Note 21 Cornell L Q 166, 170).

Furthermore, the purpose of awarding compensatory damages for a tort is not to punish the wrongdoer but to compensate the person injured. “Punitive damages and damages for wounded feelings, though similar, are not the same” (Gostkowski v Roman Catholic Church, 262 NY 320, 324, supra; see, also, Pickle v Page, 252 NY, at p 475), and moral culpability has nothing to do with the policy considerations which formed the basis of Tobin’s denial of recovery for emotional disturbance (“foreseeability of the injury, proliferation of claims, fraudulent claims, inconsistency of the zone of danger rule, unlimited liability, unduly burdensome liability, and the difficulty of circumscribing the area of liability” [24 NY2d, at p 615]) and, therefore, should have nothing to do with the right of the present plaintiffs to compensatory damages for their mental distress. Particularly is this so when, as here, the injury results not intermediately from physical injury to the child but immediately to the parents from the interference with their right to custody and, therefore, rather than being consequential, as the majority suggests (majority opn, at pp 526, 530) has resulted not from injury inflicted upon Kawana but directly to plaintiffs themselves (Pickle v Page, 252 NY, at p 482; compare Kennedy v McKesson Co., 58 NY2d 500, 506-507).

No more persuasive is the distinction drawn by the majority with respect to mental distress resulting from breach of a contract-related duty. Although the exceptions to which it refers concerned willful or abusive actions of the defendant, the present day concept, as stated in section 353 of the Restatement of Contracts, Second, is that “Recovery for emotional disturbance will be excluded unless the breach also caused bodily harm or the contract or the breach is of such a kind that serious emotional disturbance was a particularly likely result.” Breach of a contract to return to parents the custody of a child entrusted to a hospital for medical care by negligently failing to prevent abduction of the child is, as Tobin and other cases cited in the beginning of this opinion agree, of such a kind that mental distress is a particularly likely result (see Burrus v Nevada-California-Oregon Ry., 38 Nev 156, app dsmd 244 US 103 [breach of contract to transport gravely ill son to hospital]; Sullivan v O’Connor, 363 Mass 579 [disfigurement by plastic surgery necessitating a further operation]).

It is only necessary to note, finally, that Kalina v General Hosp. (13 NY2d 1023) is distinguishable, as is evident from the portion of the Special Term opinion quoted by the majority. No duty was found in Kalina because the hospital had not assumed “any risk of liability that their acts might violate the personal sensibilities of others” (31 Misc 2d 18, at p 19, adopted by this court 13 NY2d, at p 1025), Here, however, the hospital in accepting custody of plaintiffs’ daughter for medical treatment assumed the obligation to return custody to the parents at the end of that treatment and, it is alleged, by negligently failing to protect against the abduction of the child from the hospital, interfered with the custodial rights of the parents.

We have recently recognized in relation to mental distress “that the drawing of any line necessarily differentiates between close cases” (Kennedy v McKesson Co., 58 NY2d, at p 507). But the line should not be arbitrarily or artificially drawn. Where, as here, parents have been subjected by the hospital’s failure to protect their right to custody of their child to the anguish of not knowing for a period of four months where the child was, or whether she was alive or dead, there is a sufficient guarantee of genuineness and seriousness of their claim to warrant its submission to a trier of fact. To hold under such circumstances that there is no duty “is a pitiful confession of incompetence on the part of courts of justice” (Simone v Rhode Is. Co., 28 RI 186, 195).

Chief Judge Cooke and Judges Jones, Wachtler and Simons concur with Judge Kaye; Judge Meyer dissents and votes to affirm in a separate opinion in which Judge Jasen concurs.

Order reversed, with costs, complaint dismissed and question certified answered in the negative.

      . The effect on the courts of recognition of such a right is not considered, it being “the business of the law to remedy wrongs that deserve it, even at the expense of a ‘flood of litigation’ ” (Prosser, Torts [4th ed], p 51; Battalla v State of New York, 10 NY2d 237, 241, 242). But the burden should not be great, interference with the right to custody not being a common occurrence (cf. Bovsun, 61 NY2d 219, at p 229), possible plaintiffs being limited to parents and it being required under Bovsun’s rule that there have been serious and verifiable emotional injury.

      . (Bovsun does not speak to the presentation of that standard to a jury; but see Rodrigues v State of Hawaii, 52 Hawaii 156, 173; Damages In Tort Actions [Matthew Bender, 1982], § 5.12[1], p 5-18; Nolan & Ursin, Negligent Infliction of Emotional Distress: Coherence Emerging From Chaos, 33 Hastings LJ 583,616; Brody, Negligently Inflicted Psychic Injuries: A Return to Reason, 7 Villanova L Rev 232, 260.)

      . Thus, the fear, so many times expressed in Tobin, that the class of plaintiffs was limitless, or at least could not be reasonably contained, is not present in the situation of the instant case. It is, moreover, worth noting that in Gostkowski v Roman Catholic Church (262 NY 320, 325) we upheld a husband’s cause of action against a cemetery for mental distress resulting from removal of his wife’s body from its place of burial, but held the son of decedent to have no cause of action, simply because “In the multitude of such actions there is injustice.”

      . Bedard recognized the cause of action but held plaintiff’s complaint insufficient to permit recovery for mental anguish because it did not allege that physical ills followed and that the mental anguish was caused by defendant’s willful and wrongful action.


text:
    In the Matter of the Trump-Equitable Fifth Avenue Company, Appellant, v Anthony B. Gliedman, Individually and as Commissioner of the Department of Housing Preservation and Development of the City of New York, Respondent.
    Argued June 6, 1984;
    decided July 5, 1984

      POINTS OP COUNSEL

      Roy M. Cohn, Milton S. Gould, Louis Biancone and Arthur D. Felsenfeld for appellant.
    I. The court below erred in upholding HPD’s interpretation and application of the statutory requirement of under-utilization in an unlawfully restrictive manner. (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Matter of Harbolic v Berger, 43 NY2d 102; Matter ofRosenbluthvFinkelstein, 300 NY 402; People v Marrero, 71 AD2d 346.) II. The lower court’s determination that the Bonwit Teller site was under-utilized was supported by all of the evidence in the record, in accordance with this court’s prior opinion, and should be affirmed.

      Frederick A. O. Schwarz, Jr., Corporation Counsel (Edith

   OPINION OF THE COURT

Kaye, J.

This appeal calls upon us to review, once again, applicability of section 421-a of the Real Property Tax Law, providing a partial exemption from local real property taxes for new multiple dwellings constructed on underutilized land, to Trump Tower, a 59-story structure in Manhattan consisting of commercial space and 38 floors of luxury residential condominium units. Application of the statute hinges on the term “under-utilized land”: only if, on October 1,1971, the land formerly occupied by the Bonwit Teller & Company department store was under-utilized is appellant, successor to that space, eligible for the tax benefit on its residential units.

Respondent, Commissioner of the Department of Housing Preservation and Development (HPD), has twice denied the exemption, concluding for different reasons that the land was not under-utilized; twice Special Term has set aside that determination; and twice the Appellate Division has reversed Special Term and upheld respondent. Respondent initially denied Trump’s application, in March, 1981, on the ground that “on the operative date, the site was [not] occupied by a functionally obsolete non-residential or residential building.” This court in Matter of Trump-Equitable Fifth Ave. Co. v Gliedman (57 NY2d 588) reversed the order of the Appellate Division upholding that determination, because respondent by requiring functional obsoleteness of the building had established a precondition to the exemption not found in the statute, and we directed that the matter be remitted to HPD for reconsideration and, if deemed appropriate, new regulations defining under-utilized land. Respondent, in April, 1983, a second time denied the exemption on the ground that the land was not under-utilized, first pursuant to interpretation of the statute and, alternatively, pursuant to new regulations. Because we conclude that the agency again has impermis-sibly erected a barrier to the benefit provided by the Legislature, we reverse the order of the Appellate Division and reinstate the order and judgment of Supreme Court, New York County, allowing the exemption.

When appellant initially filed its application in December, 1980, section 421-a of the Real Property Tax Law provided a partial exemption from local taxes for newly constructed multiple dwellings as follows: “To be eligible for exemption under this section such construction shall take place on vacant, predominantly vacant or underutilized land, or on land improved with a non-conforming use * * * where construction is commenced after December thirty-first, nineteen hundred seventy-two, eligibility shall be determined on the basis of the condition of the land on the first day of October, nineteen hundred seventy-one.”

As revealed in the Memorandum of the Legislative Representative of the City of New York, the only official legislative history of this section, the purpose of the statute, passed in 1971, was to spur new construction of multiple dwellings to meet a housing shortage afflicting the municipalities of the State. (McKinney’s Session Laws of NY, 1971, at p 2551.) “No efforts should be spared to increase the number of safe and decent dwelling units in our cities.” (Id.) While inducing construction of residences through the tax incentive, the statute was drafted to assure that municipalities would not actually lose tax revenues during the 10-year abatement period. As the New York City Legislative Representative explained: “Under this bill, the City would not actually lose tax revenues since the owner would continue to pay during the period of the exemption the amount of prior taxes on the property, and future tax yields would be greatly enhanced by the improvements.” (McKinney’s Session Laws of NY, 1971, at p 2551.) The Legislature did not choose to restrict availability of this exemption to construction of low- and middle-income housing. Thus, it is immaterial that luxury housing is in issue. (Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 596, supra.)

No definition of the key phrase “under-utilized land” is set forth in the statute. HPD initially defined “underutilized land” in its regulations by a standard of functional obsoleteness of the building occupying the site in question. Under-utilized land was said to be “land or space which was substantially under-utilized by virtue of the fact that * * * [fit is occupied by functionally obsolete non-residential or residential buildings.” The 12-story structure housing Bonwit’s, which continued to function until 1978, generating millions of dollars in annual revenues from the operation of a department store, was not functionally obsolete, and the exemption was therefore denied. In reversing the denial of the exemption, this court held that by a requirement of functional obsoleteness of the building HPD had improperly limited availability of the exemption to one category of under-utilized land, in direct contravention of the plain words of the statute. While we left for HPD the proper ascertainment of the meaning of “under-utilized,” we noted disapproval of appellant’s contention that it is property not developed to the most productive state or maximum potential permitted under applicable zoning regulations. “More appropriate perhaps is Special Term’s formulation of the statutory concept as property ‘used in such manner that substantially less beneficial use was made of the land than was possible under the circumstances’”. (57 NY2d 588, 595, n 4.) Although cited by respondent, this suggested concept has not been actually incorporated in the result reached upon reconsideration.

On remittal, respondent has again reached his earlier conclusion, but on different grounds. First, respondent interpreted the statute “as guided by the decisions of the courts and the legislative history” and second, respondent applied standards contained in regulations issued in November, 1982.

Respondent concluded that the 12-story department store building was not out of character with the area, where the average height of department stores was 9.1 stories, that the structure used approximately 66% of its potential floor area ratio, and that the actual square foot usage of the building was equal to 93% of the maximum potential residential use of the site (although no residential use was made of the site). While economic considerations, such as the submission that Bonwit’s was losing money, were not “ultimately conclusive,” HPD took into account that the building produced revenues of $30 million. That the assessed value of the building was roughly half that of the land, and was subsequently even further reduced in a certiorari proceeding, might indicate that the land was not developed to its highest and best use but did not, in respondent’s view, establish under-utilization, and in any event would be matched in ratio by virtually every department store in the Fifth Avenue area. Finally, regarding the condition of the building, respondent concluded that the data did not demonstrate it could not be used as a department store. Appellant’s two equitable arguments were rejected: that it had been induced by city officials to make Trump Tower partially residential instead of solely commercial by availability of the exemption, and that other similar sites in the area had received the 421-a exemption, none being denied on grounds that the land was not under-utilized.

Interpretation given a statute by the agency charged with its enforcement is, as a general matter, given great weight and judicial deference, so long as the interpretation is neither irrational, unreasonable nor inconsistent with the governing statute. (Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 597, supra.) Nevertheless, where as in the instant case “the words of the statute are clear and the question simply involves the proper application of the provision ‘there is little basis to rely on any special competence or expertise of the administrative agency and its interpretative regulations’, especially when the interpretation, as embodied in a regulation, directly contravenes the plain words of the statute (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459).” (Id.)

Section 421-a requires only “under-utilization” of the land. As we have previously held, the statute does not require “substantial” under-utilization (Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 594, supra). Both in respondent’s abstract interpretation of the statute and in HPD’s regulation, substantial under-utilization has been imposed as a precondition to the statutory benefit. This respondent cannot do.

Three objective criteria were central to respondent’s analysis of the utilization of the site under the circumstances: the actual-built floor area ratio against the permissible floor area ratio under the zoning regulation as of October, 1971; the actual square footage developed by the non-residential structure against the maximum square footage allowable; and the assessed value of the building against that of the land. On October 1, 1971, only 66% of the permissible floor area ratio, and only 60-62% of the square footage available to the store, for non-residential usage, were actually employed by Bon wit’s. The conclusion that 60-66% usage of the land was not under-utilization could only be reached by a standard of substantial under-uti'lization, not required by the statute or its legislative history. Similarly, in 1971, the assessed value of the building was reduced to $1,800,000 as against $4,400,000 for the land, and the land assessment multiplied to $13,000,000 after demolition of the building. While respondent observed that the land-to-building ratio was not atypical along Fifth Avenue, the fact that it might also be available to others would not be a proper basis on which to withhold an exemption as fashioned by the Legislature.

HPD’s regulations suffer from the same infirmity: they improperly add a requirement not found in the statute. (See Matter of Cady [Aetna Life & Cas. Co. Lewis], 61 NY2d 594; Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 597, supra; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471, 480-481; Matter of Harbolic v Berger, 43 NY2d 102; Ostrer v Schenck, 41 NY2d 782.) The regulations are premised on the statement that under-utilized land is “land or space which was substantially under-utilized.” While respondent notes that the actual analysis does not rely on the word “substantial” in the regulations, it is clear from a reading of the regulations that they in fact embody a concept of substantial under-utilization. Eligibility is dependent on location in a zoning district where the maximum floor area ratio for non-residential buildings is 20% or less of the maximum for residential buildings, or assessed building valuation of 20% or less of assessed land valuation, or obsolescence of the building by reason of design or structural defects. Such stringent eligibility requirements are difficult to reconcile with a statute that requires only that the land be “under-utilized.”

Respondent’s interpretation, by imposing a requirement of substantial under-utilization, thus is inconsistent with the governing statute. Whatever definition respondent may for the future give “under-utilized land,” short of more detailed definition of the term by the Legislature, on the extensive record accumulated by the parties before us the objective criteria establish that the Bonwit’s site was under-utilized, and that appellant is entitled to the exemption. We therefore reverse the order of the Appellate Division, with costs, and reinstate the order and judgment of Supreme Court, New York County.

Chief Judge Cooke and Judges Jasen, Jones, Wacht-ler, Meyer and Simons concur.

Order reversed, etc.

      . In pertinent part the regulations provide:

        “Section 2.5 Site Requirement
      “(3) For the purpose of this section the following definitions are applicable: * * *
      “(c) ‘Under-utilized’ land is land or space which was substantially under-utilized by virtue of the fact that: * * *
      “(iii) It was improved with a non-residential building or buildings (a) each of which contained no more than (i) the permissible floor area ratio for non-residential buildings in the zoning district in question and (ii) was located in a zoning district where the maximum FAR for non-residential buildings is 20% or less of the maximum FAR for residential buildings, or (b) each of which had an assessed valuation equal to or less than twenty percent of the assessed valuation of the land on which the building or buildings were situated, or (c) which, by reason of the building’s configuration, or substantial structural defects not brought about by deferred maintenance practices or intentional conduct, could no longer be functionally or economically utilized, on the operative date, in the capacity in which it was formerly utilized.”

      . While, as we have previously held, eligibility for the exemption requires only under-utilization in the actual use of land (57 NY2d, at p 594), one suggested measure of under-utilization would be whether substantially less beneficial use was made of the land than was possible under the circumstances. (57 NY2d, at p 594, n 4.)

      . Appellant claims that both figures are overstated — that only about 52% of the maximum floor area was in use, and that the site could have supported a structure with square footage many times that of the square footage actually used.