text:
    In the Matter of 860 West Tower, Inc., Respondent, v Norman A. Levy et al., Constituting the Tax Commission of the City of New York, et al., Appellants.
    Argued June 12, 1981;
    decided July 6, 1981

      POINTS OF COUNSEL

      Allen G. Schwartz, Corporation Counsel (Renee Modry and Leonard Olarsch of counsel), for appellants.
    Since subdivision 3 of section 726 of the Real Property Tax Law does not define an application for a tax refund in a tax certiorari proceeding, but requires as a condition for such a refund that an application for audit and payment be made to the proper fiscal officer or body within three years of the entry of an order reducing the assessment, the meaning given such an application by the proper fiscal officer or body administering tax refunds is controlling and must be satisfied within the limitations period. (Matter of Johnson v Joy, 48 NY2d 689; Matter of Howard v Wyman, 28 NY2d 434; Matter of Incorporated Vil. of Lynbrook v New York State Public Employment Relations Bd., 48 NY2d 398; Matter of Bates v Toia, 45 NY2d 460; Matter of Di Marsico v Ambach, 48 NY2d 576; Matter of Fineway Supermarkets v State Liq. Auth., 48 NY2d 464; Matter of Lumpkin v Department of Social Servs. of State of N. Y., 45 NY2d 351; Matter of Ward v Nyquist, 43 NY2d 57; Ostrer v Schenck, 41 NY2d 782; Matter of Barie v Lavine, 40 NY2d 565.)

      Edward T. Post for respondent.
    I. The decisions below warrant an affirmance of the order of the court below. (Matter of Wells v Board of Assessors of County of Nassau, 67 Misc 2d 804; Acorn Employment Serv. v Moss, 292 NY 147; Matter of Natelson v Portfolio, 291 NY 290; People ex rel. New York City Omnibus Corp. v Miller, 282 NY 5; Matter of Great Eastern Mall v Condon, 36 NY2d 544; People ex rel. Ottley Estate Corp. v Lilly, 302 NY 278; People ex rel. 270 Park Ave. Corp. v Sexton, 295 NY 589; Matter of Valhalla Corp. v McGoldrick, 259 App Div 812, 284 NY 580.) II. The statutory language of subdivision 3 bf section 726 of the Real Property Tax Law is composed of words of ordinary import which should be accorded their usual and commonly understood meaning. Said language requires no special interpretation. (Matter of Meit v P. S. & M. Catering Corp., 285 App Div 506.)
   OPINION OF THE COURT

Jones, J.

Under the pertinent regulation promulgated by the city an application for audit and refund of New York City real property taxes determined on final order to be erroneous is deemed made when a certified copy of the final order is served on the proper fiscal officer, notwithstanding that necessary supporting receipted bills and canceled checks are not submitted until a later date.

An order was entered in Supreme Court, New York County, on September 22, 1975 embodying a stipulation of settlement between petitioner as property owner and the City of New York effecting a reduction in real property assessments for the years 1967 through 1973. On September 13, 1978 petitioner in applying for a refund of the excess taxes paid served a certified copy of that order on the city and thereafter on December 5, 1978 submitted copies of the relevant receipted tax bills accompanied by photocopies of the associated canceled checks. Acceptance of the receipted tax bills and canceled checks was refused as untimely, and petitioner’s application for audit and payment of the tax refund was denied as time-barred.

Thereupon petitioner instituted the present action to recover the taxes to which it was entitled under the order of September 22, 1975. Supreme Court granted the relief sought and directed refund of the taxes in question. The Appellate Division affirmed, and granted leave to the city to appeal to this court. In our turn we affirm the dispositions below.

Subdivision 3 of section 726 of the Real Property Tax Law, on which the city predicates its assertion of time bar, provides: “3. Application for the audit and payment of a tax or other levy paid upon an assessment determined upon final order to be illegal, erroneous or unequal must be made to the proper fiscal officer or body by the petitioner or other person paying such taxes within three years after the entry of such order; provided, however, that the time of the pendency of any appeal in any such proceeding or from any such order shall not be deemed any part of such three years.” The statute contains no definition or description as to what shall be required to constitute an “application for audit and payment”.

The City of New York, however, had promulgated the following pertinent regulation:

DEPARTMENT OF FINANCE RULES AND REGULATIONS FOR OBTAINING REFUND OF ERRONEOUS OR EXCESS PAYMENTS OF TAXES, ASSESSMENTS, WATER CHARGES AND SEWER RENTS

Certiorari Proceedings Or Settlements Correcting Assessed Valuations
Refunds of overpayments resulting from correction of assessed valuations by certiorari proceedings or tri-departmental settlements may be obtained only by filing formal application with the Bureau of City Collections in the borough where property is located.
The following steps are to be taken in applying for a refund or transfer:
I. Service:
(a) Serve the Comptroller with a certified and conformed copy of each Court Order if costs are involved.
(b) Serve the Treasurer of the City of New York with a certified copy of the Court Order if no costs are involved.
II. Submit to the Borough Office the following evidence:
(a) All original receipted bills, for tax periods for which such receipted bills were issued, covering payments of the taxes involved. Where receipted bills so issued are missing, photostatic copies of both sides of the checks used in payment thereof must be presented together with affidavit setting forth efforts made to locate bills.

We agree with the city that in the absence of statutory prescription the city was empowered to provide by reasonable regulation what would be required to constitute the necessary application. This it undertook to do in the quoted regulation. Accordingly, it is not necessary for us to indulge in the logomachy to which we are invited over the word “application”.

We conclude, however, although the city mounts a unitary argument to the contrary, that the city’s regulation is reasonably to be interpreted as prescribing a two-step process: service on the appropriate fiscal officer of a certified copy of the court order on which the claim for tax refund is premised, and thereafter submission to another municipal unit of receipted tax bills or substitute photocopies of canceled checks with an accompanying explanatory affidavit. The service is the application for the tax refund; the submission, the proof of entitlement to the refund for which application has been made. Accordingly, we agree with the courts below that the application for refund in this case was made within the three-year period mandated by statute.

We do not say that, in the absence of clarifying statutory provision, the city by appropriate regulation could not have provided that an “application” would comprise both a certified copy of the court order and the receipted tax bills, or canceled checks. If it is so to provide, however, it must do so with abundant clarity so that the taxpayer seeking refund will be sufficiently alerted to the requirements on which the city will insist. The quoted regulation, applicable to this case, did not serve that purpose.

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

Chief tludge Cooke and Judges Jasen, Gabrielli, Waohtler, Fuchsberg and Meyer concur.

Order affirmed.


source: Caselaw Access Project

author: Jones, J. Fuchsberg, J.

license: Public Domain

text:
    S.E.S. Importers, Inc., Appellant, v Frank Pappalardo, Defendant Third-Party Plaintiff-Respondent. Anna Klores, as Executrix of Benjamin C. Klores, Deceased, Third-Party Defendant-Respondent.
    Argued June 9, 1981;
    decided July 7, 1981

      POINTS OF COUNSEL

      Joseph A. D’Addario, Victor Gartenstein and Sanford Silver for appellant.
    I. Defendant’s letter of September 21, 1978 made time of the essence. (Taylor v Goelet, 208 NY 253; Ballon v Potter, 251 NY 224; Rhodes v Astro-Pac, Inc., 51 AD2d 656, 41 NY2d 919; Kotcher v Edelblute, 250 NY 178.) II. On the closing date fixed by the seller he could not deliver a marketable title in accordance with the contract of sale and the objections raised by plaintiff were valid objections to closing title. (Kirkwall Corp. v Sessa, 60 AD2d 563; Boecher v Borth, 51 AD2d 598; Chesebro v Moers, 233 NY 75; Moore v Williams, 115 NY 586; Grace v Nappa, 46 NY2d 560.) III. The exculpatory or liquidated damage clause in the contract of sale did not relieve the seller of his obligation to convey a marketable title. (Muzak Corp. v Hotel Taft Corp., 1 NY2d 42: Burwell v Jackson, 9 NY 535; Smith v Browning, 225 NY 358; Hotel Credit Card Corp. v American Express Co., 13 AD2d 189; Mokar Props. Corp. v Hall, 6 AD2d 536; Handelsman v New York Assoc., 31 AD2d 906; Sibbald v Bethlehem Iron Co., 83 NY 378; Vandergrift v Cowles Eng. Co., 161 NY 435.) IV. Since the defect in title was cured at the time of trial, a court of equity should have decreed specific performance. (Saperstein v Mechanics & Farmers Sav. Bank, 228 NY 257; Haffey v Lynch, 143 NY 241; Kahn v Chapin, 152 NY 305; Krasnow v Topp, 128 App Div 156; Rosenberg v Haggerty, 189 NY 481.) V. The decision of the trial court contains gross errors of law. (Taylor v Goelet, 208 NY 253; Grace v Nappa, 46 NY2d 560; Loblaw, Inc. v Wylie, 50 AD2d 4; Lucenti v Cayuga Apts., 48 NY2d 530; Feldman v Lisansky, 239 NY 81; Bostwick v Beach, 103 NY 414; Wainwright & Page v Burr & McAuley, 272 NY 130.)

      Thomas G. Sherwood and Vincent M. Albanese for defendant and third-party plaintiff-respondent.
    I. The Moscatiello tenancy and lease had been terminated of record prior to the contract signing and the landlord’s pending action for rent did not impair seller’s title or purchaser’s prospective possession or enjoyment of the premises. (Meinwald v Meinwald, 56 AD2d 565; Cornwell v Sanford, 222 NY 248; Hoffman Brewing Co. v Wuttge, 234 NY 469; International Pub. v Matchabelli, 260 NY 451; Swerdlaw v Harrow, 213 App Div 521; Matter of Cullen v Holz, 2 Misc 2d 486; King v Commercial Ins. Co. of Newark, N. J., 27 AD2d 620; Hotel Martha Washington v Swinick, 71 Misc 2d 982; Regan v Lanze, 40 NY2d 475; Norwegian Evangelical Free Church v Milhauser, 252 NY 186.) II. Purchaser was required to make an election at the September 29, 1978 closing, whether or not the pending litigation constituted a material defect in the seller’s title. (Muzak Corp. v Hotel Taft Corp., 1 NY2d 42; Taylor v Goelet, 208 NY 253; Sloan v Pinafore Homes, 34 AD2d 681: Grace v Nappa, 46 NY2d 560; Isse Realty Corp. v Trona Realty Corp., 24 AD2d 1000, 17 NY2d 763; Estate of Canale v Binghamton Amusement Co., 37 NY2d 875; Matter of Infant D., 34 NY2d 806; Artstrong Homes v Vasa, 23 Misc 2d 608; Mokar Props. Co. v Hall, 6 AD2d 536.) III. The courts below properly refused to require seller to tender at trial the same title rejected by purchaser at the closing. (Panner Woodworking Co. v Adair, 75 AD2d 553; Matter of Lipschutz v Gutwirth, 304 NY 58; Scheinberg v Scheinberg, 249 NY 277; Patron v Patron, 40 NY2d 582.)
   OPINION OF THE COURT

Jones, J.

Notwithstanding that at the time of closing the seller was unable to convey good title in consequence of a defect in his own title, the buyer is entitled to specific performance where the defect has disappeared at the time of trial and the court can then give an effective judgment for the equitable relief demanded. The buyer’s right to specific performance in this circumstance is not lost because the parties expressly agreed in the contract of sale as to the remedies to which the buyer would be entitled in the event the seller was unable to convey good title.

This litigation arises out of a contract executed on March 27, 1978 for the sale to the corporate plaintiff by defendant Pappalardo of real property described as 158-01 Cross Bay Boulevard, Howard Beach, New York, improved with residential and commercial facilities. The seller agreed to convey the fee simple of the premises, free and clear of all encumbrances except as otherwise stated in the contract of sale. Closing was set for July 17, 1978 and the purchase price agreed to was $215,000 with the buyer depositing $21,500 in escrow with the seller’s attorney, third-party defendant Klores.

Handwritten on an initialed rider attached to the printed form was a provision that “Purchaser will not be obligated to close title herein until: (a) the below action is determined in favor of the landlord and no appeals will be pending, (b) the tenancy below is terminated, (c) the lease referred to below is terminated and cancelled.” The references in this provision were to litigation and a lease described thereafter as a lease on a second floor apartment of the premises to tenants Simonetti and Moscatiello as to which a summary proceeding had been instituted in Civil Court, Queens County, resulting in a final order of eviction and warrant, which was subsequently vacated on application of one of the tenants, but from which vacatur an appeal by the seller was pending in the Appellate Term, Second Department.

The typewritten provisions inserted in the printed form of agreement also included one which stated: “That the purchaser, at least ten (10) days prior to the closing of title/ as hereinafter provided for, shall furnish to seller’s attorney, a written statement and notice of objections to title, if any, and the parties agree that the seller shall have a reasonable adjournment of the closing of title for the purpose of removing any such objections which they are required to remove under the terms of this contract. If, for any reason not the fault of the seller hereunder, seller cannot convey title in accordance with the terms of this contract, the purchaser shall, at its own election, have the right to accept such title as the seller is able to convey, without any claim on the part of the purchaser for abatement of defects or objections, or the purchaser shall have the right to rescind this contract, upon which rescission, pursuant to this paragraph, purchaser will be entitled to the return of the amount paid at the time of signing of this contract, plus the net cost of title examination, if incurred, in an amount not exceeding the net rates established by title companies operating in the City of New York, and upon such repayment this contract shall be null and void.”

No discussion as to a date for closing having previously taken place after execution of the contract for sale, on September 21, 1978 counsel engaged by the seller to replace attorney ¿lores sent a letter to the buyer’s attorney scheduling the closing for September 29, 1978 and advising that delivery of the deed would then be tendered and that failure of the buyer to close title would constitute a default such that the seller would consider the contract terminated. The buyer’s attorney responded promptly, referring to the contract provision that the buyer need not close until the Simonetti-Moscatiello tenancy was terminated and requesting that there be furnished to him no later than the day before closing either a judgment determining the Civil Court action in favor of the seller or a written surrender of the lease by the tenants.

Although neither of the requested documents had been delivered as requested, the buyer’s attorney nonetheless appeared at the time and place designated for the closing, exhibiting a check with which he was prepared to make payment of the amount due and to accept title if the seller could deliver title in accordance with the terms of the contract. When it appeared that the seller was unable to dispose of the Simonetti-Moscatiello tenancy title criticism, the buyer refused to complete the transaction stating a formal objection that the tenants were still in possession under the lease and the premises were therefore not legally vacant.

Within two weeks thereafter, on October 12, 1978 plaintiff commenced this specific performance action seeking a judgment directing that defendant convey a good and marketable title in accordance with the terms of the agreement or, in the event the seller could not deliver such title, delivery of such title as possible with an abatement of the purchase price on account of the seller’s deficiency together with punitive damages. Defendant’s answer denied that it had failed to tender good title in accordance with the purchase contract on September 29, 1978, alleged that the Simonetti-Moscatiello lease had been terminated prior to the closing date and asserted a counterclaim for damages occasioned by the buyer’s refusal to consummate the sale on October 20, 1978 (alleged to have been later fixed by the seller for closing), as well as for punitive damages.

On the trial of the specific performance action in October, 1979 the file of the Civil Court litigation involving the Simonetti-Moscatiello lease was received in evidence; it disclosed that although the landlord had secured reargument of the vacatur of the eviction order, on reargument the disposition had been adhered to, and the appeal taken by him to the Appellate Term had been dismised for nonprosecution. Trial counsel for plaintiff, however, aware that, subsequent to the dates set for closing, the tenants had executed a surrender of lease to defendant, requested the court to direct defendant to produce the surrender instrument. The application for the order to produce was grounded on the theory that if defendant had good title at the time of trial specific performance should be ordered, plaintiff’s counsel asserting that “the court of equity decides the case as of the time the case is before it”. In response to the court’s direction, defendant produced a surrender of lease dated April 15,1979, executed by the tenants, Simonetti and Moscatiello, surrendering all rights under the lease to defendant. This surrender of lease was thereupon introduced and received in evidence.

The Justice before whom the present action was tried found that, by reason of the fact that the Simonetti-Moscatiello lease was outstanding at the time of the closing, the buyer, by the terms of the contract, was under no obligation to accept the title tendered. The court further concluded that, because the seller’s inability to convey good title was not the result of bad faith, the buyer was entitled only to a return of his down payment and reimbursement for title and examination costs, holding that by instituting a suit seeking abatement of price in contravention of the terms of the contract of sale the buyer had deprived itself of the right to compel the seller specifically to perform. The counterclaims pleaded in the answer were dismissed. The disposition as to the substantive rights between the buyer and seller was affirmed by the Appellate Division which modified the judgment only to the extent of ordering that the return of the buyer’s down payment be made directly to it, rather than through the seller, by the executrix of the estate of the escrowee Klores, who had been joined by the seller as a third-party defendant in the action. Because plaintiff is entitled to conveyance of the subject property in accordance with the terms of the agreement between the parties, and defendant is presently able to make such conveyance, the order appealed from must be reversed and specific performance decreed.

The seller’s argument, pressed so vigorously on the appeal in our court, that the Simonetti-Moscatiello lease had been terminated and that the still unresolved Civil Court eviction action did not impair the title which he could convey on September 29, 1978, the date set for closing, is foreclosed by the factual findings of the trial court, now affirmed at the Appellate Division, that the lease was then outstanding and that the condition specified in the contract of sale had not been satisfied. The seller’s claim that the tenants had physically departed the premises in December, 1977 and abandoned the lease months before the execution of the contract was inadequate, as the courts below impliedly found, to establish termination of the tenancy and compliance with the contract. That the parties themselves did not regard the tenants’ prior conduct, assuming it was as defendant claimed, as already having effected a cancellation of the lease is apparent from the fact that termination of the tenancy was nonetheless expressly made a condition precedent to plaintiff’s obligation to purchase the premises. On the day the contract was executed there was then in effect the Civil Court order granted at the behest of one of the tenants vacating the prior eviction order; that after the date of execution of the contract of sale the seller still regarded that order of vacatur as significant is demonstrated by his subsequent application for reargument made to Civil Court.

The conclusion that the title tendered by the seller on September 29, 1978 was not in conformity with the terms of the contract of sale was only the beginning of the adjudication of the rights of the parties. The courts below erred in their completion of that adjudication. It was first necessary to adjudge the entitlement of the buyer to performance of the agreement and to a conveyance by the seller of title to the premises, and then to determine whether the specific provision as to available remedies in the event the seller was unable to convey good title operated in this particular case to deprive the buyer of what would otherwise have been the relief to which it would be entitled.

The seller contracted to convey title in fee simple except as otherwise stated in the contract. It was this obligation which the buyer sought to enforce, offering, of course, in the event of performance by the seller fully to discharge the obligations on its part to be performed under the terms of the contract of sale, i.e., payment of the purchase price in full. The buyer’s right to judicial relief for the enforcement of his rights under the contract of sale of March 27, 1978 accrued when on September 29, 1978 the seller failed to perform his obligations under the contract. The seller’s inability then to have cleared the objection to title based on the outstanding Simonetti-Moscatiello tenancy was in no way attributable to the buyer, and that outstanding tenancy had not been excepted in the description of the title which the seller agreed to convey. On the other hand, and consistently, its removal had expressly been made a condition precedent to the buyer’s obligation to purchase the premises.

Although it is proper to say that the buyer’s right to judicial enforcement of its rights under the contract had accrued when it commenced the present action, its entitlement to the particular remedy sought for breach of the contract — specific performance — could not be determined until such time as the buyer’s substantive rights had been resolved and the occasion arose for the court to fashion the appropriate remedy for their enforcement.

Notwithstanding that a buyer may have established his substantive right to enforcement of a contract for the sale of real property, where the remedy sought is specific performance rather than damages, the courts will not grant the equitable remedy unless it appears that it would lie within the capability of the seller to comply with the court’s direction for such affirmative relief. The court will not make what may prove to be a futile order. Hence, if it appears that the seller does not have the title that he agreed to convey, the court will not direct that he convey such title unless the court is satisfied that it lies within his power (or within his power as supplemented by that of the court) to enable himself to do so. That the seller may not have been able to convey good title when the action was commenced is irrelevant if he is able to do so when the court makes its order. So here, that this seller could not have conveyed good title in September, 1978 in no way operated to foreclose a direction for specific performance when at the time the court order was actually to be made it had been established that the infirmity of the Simonetti-Moscatiello tenancy had been removed, the seller could convey good title, and the court could make an effective order.

The principle and its rationale are well stated in the authoritative text, Warren’s Weed New York Real Property: “It is a general rule in equity that the specific performance of a contract to convey real estate will not be granted where the vendor in consequence of a defect in his title is unable to perform. However, the rule has no application to a case where the defect has disappeared at the time of the trial and the court can then give an effective judgment for the equitable relief demanded. A plaintiff in an equity action should not lose his day in court because of any defense interposed to his action, if at the time of the trial, the facts are such that if he then commenced his action, he would be entitled to the equitable relief sought. If a vendor has no title or a defective title to land which he contracts to sell, and subsequently obtains a perfect title, he can be compelled by his vendee to perform his contract.

“There is no reason why the vendor should not be compelled to perform if he perfects his title while the action for specific performance is pending. A perfect title by the vendor is not necessary to the vendee’s cause of action, and he is just as much entitled to the equitable relief, and the equity court is just as competent to give it, whether the title of the vendor was perfected before or after the commencement of the action. Furthermore, where objections to title are cured prior to determination on the trial, a party may be required to specifically perform his contract.” (Vol 5 [4th ed], Specific Performance, § 9.05.)

The principles enunciated by the text writer were stated and applied by this court long ago in Haffey v Lynch (143 NY 241) in which the affirmance of a denial of a buyer’s request for specific performance was reversed and plaintiff was adjudged to be entitled to the relief requested where the defect in title had been cured by the time the action came to trial. This was precisely the legal premise on which plaintiff’s counsel in the case now before us sought and obtained production of the surrender of lease from defendant’s files and its introduction in evidence at trial.

To the seller’s claim that allowing specific enforcement of a contract, full performance of which cannot be rendered at the time for closing but which subseqeuntly becomes possible, permits a purchaser by delaying commencement of his action unjustly to speculate to the seller’s disadvantage, to tie up the property by the filing of a notice of pendency and to exploit rising property values, the response in the present case is obvious. Here there was neither delay nor unjust advantage taken of defendant. The buyer’s action was instituted within two weeks of the aborted closing, and the seller can scarcely complain of unwarranted disadvantage to him when the judgment of specific performance required nothing more than that he carry out the bargain to which he had agreed.

It remains then only to consider whether the express provision included by the parties in this particular contract of sale prescribing the buyer’s remedies in the event the seller should be unable to convey good title operated to deprive this buyer of the relief to which it would otherwise be entitled. The provision served only to define and limit the relief available to the buyer in the circumstance there described — when “for any reason not the fault of the seller hereunder, seller cannot convey title in accordance with the terms of this contract”. In that contingency the buyer was to be restricted either to acceptance of the title tendered without abatement in the purchase price for defects or objections or to rescission of the contract with recovery of its down payment together with the net cost of title examination. The buyer thereby relinquished a substantial remedy frequently available to a buyer when something less than the title contracted for is all that the seller can convey — i.e., transfer of the defective title with a reduction in the price agreed on to compensate for the deficiency.

This provision, however, related only to procedural remedies and not to substantive rights. Thus, nothing therein operated to deprive this buyer of its right to go to court for a judicial resolution of the critical substantive issue— whether the seller could give good title — and in that action to seek specific performance by way of remedy should the court conclude that the seller could do so. If when the substantive rights of the parties had thus been determined, it was then established that “for any reason not the fault of the seller hereunder, seller cannot convey title in accordance with the terms of this contract”, the court would have been constrained by the agreement of the parties in fashioning the relief then to be granted. That contingency, however, never arose. At the time of trial the objection to title existing at the time of closing — the outstanding Simonetti-Moscatiello tenancy — had been cured in consequence of the execution, six months after the closing date but six months before the trial began, by the tenants of a surrender of their rights in the premises. Thus, at the time it became critical the seller was able to convey title in accordance with the contract terms.

To suggest, as does the dissenter, that the provision limiting the buyer’s remedies (to acceptance of defective title without abatement or to refund of down payment and reimbursement of title examination costs) in the event that good title could not be conveyed required a preclusive election of one or the other of those remedies by the buyer on the date of closing “or within a reasonable time thereafter” finds no support in the clause itself and would be wholly impracticable as this case itself reveals. This was not a case in which both parties acknowledged on the date of closing that the seller was unable to give good title — the prerequisite for invoking the restricted remedies clause. On the day of closing here the parties were in sharp disagreement as to whether the seller could convey good title. It was the seller’s position then, as it continues to be on this appeal, that there was no defect in title in consequence of the former Simonetti-Moscatiello tenancy. The buyer then took the opposite view. The resolution of their differences, and thus the determination of the critical prerequisite, occurs only on the disposition of this appeal. In this instance, as in many others in which there are substantive differences between the parties, it was necessary to obtain a determination of those differences by resort to a judicial proceeding. To suggest, as did the trial court, that by instituting a judicial proceeding seeking in one alternative conveyance of the defective title with abatement in the purchase price (a remedy seemingly foreclosed by provisions of this contract of sale), the buyer somehow deprived itself of its right to seek specific performance, is unsound. (This is not to say, of course, that a buyer could not by explicit provision agree to relinquish his right to the remedy of specific performance in all contingencies. No such explicit provision, however, is to be found in the present contract.)

The trial court made an error of law when it concluded that plaintiff by instituting the present suit had deprived itself of the right to specific performance. As a result of that error, we must reverse the order appealed from insofar as it affirmed the lower court’s denial of that relief. Because specific performance is a discretionary remedy, in most cases such as this, in which the denial was predicated on an error of law, it might be appropriate on reversal to remit the matter to permit the Appellate Division to determine whether, in the exercise of its discretion under the correct rule of law, an award of such relief would be deemed appropriate (CPLR 5613). However, “while the form of relief may rest in the discretion of the court, in order that that discretion, when exercised, shall appear to be sound and not arbitrary, it must find its justification in the circumstances of the case. Broad as is the jurisdiction of a court of equity in such cases, it, nevertheless, is governed in the administration of relief by settled principles and the action of the court is dependent not upon its pleasure, but upon the facts of the case and the condition of the parties” (Rosenberg v Haggerty, 189 NY 481, 484). On the record in the present case, in which plaintiff has done nothing other than pursue the remedies available to it in aid of requiring defendant to abide by his agreement and the defendant has been shown to be fully able to perform, the denial of specific performance would be an abuse of discretion. In this circumstance remittal to the Appellate Division would be a purposeless procedure.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the case remitted to Supreme Court, Queens County, for entry of judgment directing specific performance by defendant of the contract of sale dated March 27,1978.

Fuchsberg, J.

(dissenting). I am compelled to dissent in this case because, in my view, the effect of the majority’s holding is, without good rhyme or reason, to vitiate a contract clause of a kind whose reflection of sound law, good policy, common sense and fair dealing have for long caused lawyers and those of their clients who are engaged in such transactions to adopt it as a standard termination provision of a contract to sell realty (see, e.g., New York Forms, Legal and Business, Form 1:152).

The purpose of the clause is to limit the rights and obligations of each party in the event the seller is unable to convey title in accordance with the contract (see Scerbo v Robinson, 63 AD2d 1096; Artstrong Homes v Vasa, 23 Misc 2d 608 [Meyer, J.]; Lanna v Greene, 175 Conn 453). To say the least, it serves to obviate disputes and to minimize the risks of litigation.

The language of the clause, as employed here, bears repeating : “If, for any reason not the fault of the seller hereunder, seller cannot convey title in accordance with the terms of this contract, the purchaser shall, at its own election, have the right to accept such title as the seller is able to convey, without any claim on the part of the purchaser for abatement of defects or objections, or the purchaser shall have the right to rescind this contract, upon which rescission, pursuant to this paragraph, purchaser will be entitled to the return of the amount paid at the time of signing of this contract, plus the net cost of title examination, if incurred, * * * and upon such repayment this contract shall be null and void”.

Clearly foreseen is the contingency that the seller may be unable to deliver the contemplated title. In that event, in phrases which are not only unambiguous but also well understood in the world of real estate, it is stipulated that the purchaser shall at its election choose between two options. This language is mandatory and places the burden on the purchaser to decide at the closing (or within a reasonable time thereafter, assuming time is not of the essence) in which of the two designated ways the transaction is then to be brought to an end: either by accepting such title as the seller can convey (but without any abatement in price for title deficiencies), or by rescinding the contract and obtaining a refund of the down payment and title costs. When either of these options is fulfilled, the affair is at an end (Friedman, Contracts and Conveyances of Real Property [3d ed], Conditional Contracts of Sale, § 1.5, p 113).

While, of course, had the seller refused to convey or refund, or deliberately created a defect in title, the buyer could seek recourse in law or equity, it is beyond cavil that this is not such a case. For, as the product of the judicial ministrations of Special Term and a unanimous Appellate Division, it is now conclusively established, by way of an affirmed finding of fact (NY Const, art VI, § 3, subd a; CPLR 5501, subd [b]; see Caprara v Chrysler Corp., 52 NY2d 114, 118), that the seller at all times acted in good faith. Moreover, as the parties both agree, time was of the essence.

The difficulty arose when the seller, for reasons beyond his control, found himself unable to provide the title for which the agreement called. The nub of the defect was inability to comply with an undertaking to deliver the premises free of a tenancy in one of the residential apartments. As Supreme Court Justice Edwin Kassoff, who presided over the trial in this case, was later to find, and as the Appellate Division again was to affirm, the buyer not only refused to accept title on the scheduled closing date, but, insisting on declaring a default, commenced the suit here within the additional three-week period the seller requested for a final opportunity within which to effect a cure. More importantly, the buyer refused to choose either of the options to which it expressly had been limited in these circumstances. In the suit it instituted, and the lis pendens it filed, it ignored the exculpatory termination clause. Instead, the vendee sought conveyance of either clear title which, according to its own lights, the seller was not then in a position to deliver, or such lesser title as the seller did have power to convey, but with an unbargained abatement in the purchase price.

Needless to say, by requesting remedies which were contractually excluded, the purchaser was, in effect, asking the court to redraft the parties’ contract of sale. It is elementary that equity enforces contracts; it neither reviews nor rewrites them (see Grace v Nappa, 46 NY2d 560, 565).

Haffey v Lynch (143 NY 241), the case on which the majority places such heavy reliance and which doubles as the basis for its Warren Weed’s New York Real Property quotation, is not to the contrary. In Haffey, there simply was no agreement to limit the remedies of the purchaser. The court, therefore, merely held that specific performance could be ordered if, at trial, the seller had good title, even though it had been encumbered at the time of the closing. It nowhere suggests that, had the contract between the parties delineated conditions and terms akin to those contained in the termination clause in the present agreement, the result would not have been entirely different.

Nor is this a case of a buyer, who, having elected to take the property as is for the full purchase price, was confronted by a seller who refused to make the conveyance even on those terms. Surely, in such circumstances, suit would lie, and if, by the time of trial, the title were clear, it seems only right that, having agreed to take the title, flawed or unflawed, he would get the unimpaired one if that be its state when the day of reckoning arrived. For that situation would then be no different from one in which, having accepted the property originally, a purchaser became the beneficiary of the boon of an evaporation of the encumbrance at a later time.

But this is not what happened in the case before us now.

The buyer refused to make the election to which it was committed. By its unmerited suit — seeking a choice to which it had no right — ipso facto, it indefinitely delayed the termination for which the seller had contracted as a means of protection for himself.

The net result of the majority’s ruling, as I see it, is to put one who defies obligations in a position where, to use the vernacular, with impunity it may follow a course of “heads I win, tails you lose”. If, by the time it has finished carrying on its litigation, the rising condition of the real estate market and the course of inflation has appreciated the value of the property (as was the prevailing course of economics in the interval here), the buyer will have succeeded in extending its time to take title, good or bad. If, on the other hand, a downward trend of values has made the property less attractive, any title imperfection presumably would allow it to fully recoup the limited funds it had advanced. And, while the buyer is enjoying these unilateral choices, the seller, as a practical matter, his property clouded by the lis pendens, and though he would not have entered into the contract save for the termination clause, will have had to forego any opportunity that might have come along to sell his property, imperfect as the title might be.

The majority’s claim, that there is no unjust advantage to the seller here because the “action was instituted within two weeks of the aborted closing”, I respectfully suggest, misses the point. The delay which unwarrantedly favored the purchaser is that which occurred between the closing and the actual adjudication. Here it was over a year.

' The overriding irony, all the more so in an equity context, rests in the fact that the purpose of the termination clause was to implicitly provide that the existence of an encumbrance of the title would not constitute a breach. In these circumstances, a title defect could not be the basis for a suit for specific performance to compel the conveyance of an unencumbered title. Rather, only if title were perfect and the seller refused to convey, would specific performance be a proper remedy. Nonetheless, after rejecting title expressly because of its insistence that it was defective, the vendee instituted a suit seeking unencumbered title.

The majority’s refrain that, as a “prerequisite for invoking the restricted remedies clause” on the day of closing, both parties must acknowledge that the seller was unable to give good title is, to say the least, puzzling. First of all, the clause says no such thing; its application is triggered by the objective fact that there is a defect in title and not whether one party or the other thinks so. Secondly, such an interpretation proceeds on the unfounded premise that the buyer, somehow, would have less options if, at closing, the seller disputed the defectiveness of the title. However, as the majority has had to concede, if the title was indisputably bad, the buyer’s only choices were to take the property without abatement or demand its money back. But, even if it were disputed, the buyer would still have precisely the same options for, though the seller did not guarantee that the title would be good, the buyer could choose to take it whether it was encumbered or not.

Therefore, by refusing to take the property at the time of the closing, the buyer elected the refund and his rights became fixed accordingly. The only thing that could have altered this result would have been an ultimate judicial determination that, at the time the buyer made its choice, some act of bad faith on the part of the seller had relegated the buyer to a choice between a bad title and the deposit instead of a choice between a good title and the deposit. In that event, it is conceivable that a court of equity might have sought to right the wrong as of the time of trial when the bad faith was first established. But here, since the irrefragable finding is that of the seller’s good faith, the choice made at the time of the closing must remain fixed.

To summarize, there are only three sets of circumstances in which plaintiff could succeed: (1) It requests its money back and sues for it if it is withheld. (2) It offers to pay the full purchase price for the title as is and sues for it if it is withheld. (3) It sues for specific performance of the unencumbered property, or, in the alternative, for specific performance of the encumbered property with an abatement to compensate for the encumbrance, but only if the seller had been guilty of bad faith. The plaintiff’s suit fell within none of these categories.

All these considerations in mind, it seems impossible to find that the courts below abused their discretion as a matter of law in denying specific performance and limiting the buyer’s remedy to a refund of its down payment. Accordingly, I would affirm.

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

Order reversed, etc.

      . Four other objections also raised by the buyer are not relevant to our consideration of the appeal. Defendant's answer alleged compliance or readiness to comply with respect to each of these objections and none is now urged as impairing the title that defendant is able to convey.

      . The buyer exercised its procedural right to demand alternative relief, namely, conveyance of title by the seller with abatement in the purchase price to be paid by the buyer (CPLR 3017, subd [a]).

      . Following the reversal and remittal for a new trial by our court an interlocutory decree was granted awarding specific performance to the purchaser and sending to a referee the issue of the amount of the unpaid purchase price due to the seller. Eventually a final judgment was granted directing specific performance in favor of the buyer and fixing the amount to be paid to the seller (Haffey v Lynch, 193 NY 67).

      . This fact refutes the seller’s further assertion that he should not now be required to tender the same title rejected by the buyer at the closing. In a very significant aspect the titles were not the same.

       While the contract of sale, which was entered into on March 27, 1978, set the date for closing of title as July 17, 1978, a handwritten rider provided that the purchaser would not be obliged to close until a landlord-tenant nonpayment dispossess proceeding the seller had brought against his tenant had been resolved in favor of the landlord and the tenancy at issue terminated. In fact, by September 29, 1978, when the seller had advised the buyer that the closing would take place, and again on October 20, 1978, to which the seller asked that it be rescheduled, an order of eviction had issued, the tenant had stipulated to vacate, removing his belongings from the premises and canceling his utilities. Furthermore, the buyer’s own inspection had revealed that the apartment was vacant. Still pending, however, was an appeal by the seller from an order of a Judge in the landlord-tenant court staying the formal final order and warrant.


author:
Fuchsberg, J.
      Gabrielli, Jones and Wachtler, JJ.

text:
    Lucille Gager, as Administratrix of the Estate of Linda Gager, Deceased, Appellant, v Ronald L. White, Respondent. Mei Yuet Chin, as Administratrix of the Estate of Yu Chin, Deceased, et al., Appellants, v Peter W. Cray, Respondent, et al., Defendant. Adrea Cachat, an Infant by Her Father and Natural Guardian Marc Cachat, et al., Respondents, v J. E. Guertin Co. et al., Appellants; John Scheuer et al., Respondents. Debra Carbone, Appellant, v Gail W. Ericson, Respondent, et al., Defendants. Sallie Hill, Appellant v Clarence Elliott, Respondent.
    Argued June 10, 1981;
    decided July 7, 1981

      POINTS OF COUNSEL

      Stanley Bryer for appellant in the first above-entitled action.
    I. Plaintiff’s reliance on Seider v Roth was justified. (Shaffer v Heitner, 433 US 186; Rush v Savchuk, 444 US 320; Linkletter v Walker, 381 US 618.) II. There is no procedural vehicle available to defendant whereby he can raise jurisdictional objections.

      Louis G. Adolf sen, Thomas R. Newman and L. Kevin Sheridan for respondent in the first above-entitled action.
    I. Since the continued exercise of jurisdiction would violate defendant’s due process rights, this action was properly dismissed. (Firestone Tire & Rubber Co. v. Risjord, 449 US 368; Shaffer v Heitner, 433 US 186; Menna v New York, 423 US 61; People v Michael, 48 NY2d 1; Linkletter v Walker, 381 US 618; Johnson v New Jersey, 384 US 719; Desist v United States, 394 US 244; People v Morales, 37 NY2d 262; United States v Peltier, 422 US 531; Handing v United States, 418 US 87.) II. Since the limited appearance by defendant pursuant to the constitutionally defective order of attachment did not confer personal jurisdiction over him under the CPLR and he timely objected to quasi in rem jurisdiction in his answer, he did not waive any objection to jurisdiction. (Simonson v International Bank, 14 NY2d 281; Benadon v Antonio, 10 AD2d 40; Simpson v Loehmann, 21 NY2d 305; Matter of Zivkovic v Zivkovic, 36 NY2d 216; Matter of Hoggard v Hoggard, 45 AD2d 38; International Shoe Co. v Washington, 326 US 310; Rush v Savchuk, 444 US 320; Curtis Pub. Co. v Butts, 388 US 130; Johnson v Zerbst, 304 US 458; Menna v New York, 423 US 61; People v Michael, 48 NY2d 1.)

      Emilio Nunez, Pamela Anagnos Liapakis and Cheryl R. Eisberg for appellants in the second above-entitled action.
    I. This court need not apply the United States Supreme Court decision of Rush v Savchuk retroactively where a party reasonably relied on prior law and would suffer manifest injustice and hardship. (Linkletter v Walker, 381 US 618; Great Northern Ry. v Sunburst Co., 287 US 358; Desist v United States, 394 US 244; Stovall v Denno, 388 US 293; Lyons v Westinghouse Elec. Corp., 235 F Supp 526; Chevron Oil Co. v Huson, 404 US 97; Cipriano v City of Houma, 395 US 701; Allen v State Bd. of Elections, 393 US 544; Hanover Shoe v United States Shoe Mach., 392 US 481; Gelpcke v City of Dubuque, 1 Wall [68 US] 175.) II. Rush v Savchuk should not be applied retroactively to this action since plaintiff justifiably relied on the Seider doctrine and would be denied her day in court by a holding of retro-activity. (Harris v Jex, 55 NY 421; People ex rel. Rice v Graves, 242 App Div 128, 270 NY 498, 298 US 683; New York Public Interest Research Group v Steingut, 40 NY2d 250; Incorporated Vil. of Northport v Guardian Fed. Sav. & Loan Assn., 87 Misc 2d 344, 54 AD2d 893; Baden v Staples, 45 NY2d 889; Donawitz v Danek, 42 NY2d 138; Neuman v Dunham, 39 NY2d 999; Simpson v Loehmann,
      21 NY2d 305, 990; Minichiello v Rosenberg, 410 F2d 106, 396 US 844; O’Connor v Lee-Hy Paving Corp., 579 F2d 194, 439 US 1034.) III. Gager v White neither mandates blanket retroactivity nor is considered the controlling authority on the issue of retroactive application of Rush v Savchuk. (Holzsager v Valley Hosp., 493 F Supp 120; Erneta v Princeton Hosp., 49 NY2d 829; Kalman v Neuman, 102 Misc 2d 662; Harris v Balk, 198 US 215; Tomaszewski v Cleveland, 103 Misc 2d 355.) IV. Should this court decide that Rush must be applied retroactively, it should, in the interests of justice, condition dismissal upon the waiver of the defense of the Statute of Limitations in New Jersey. (Barry v American Home Assur. Co., 31 NY2d 684.)

      William Paul Last and Joseph Arthur Cohen for respondent in the second above-entitled action.
    I. Shaffer v Heitner should be applied retroactively to pending litigation as it was in Rush v Savchuk. (Shaffer v Heitner, 433 US 186; Rush v Savchuk, 444 US 320; People v Morales, 37 NY2d 262; Schwartz v Public Administrator of County of Bronx, 24 NY2d 65; Garlock v Penn Cent. Transp. Co., 53 AD2d 1006; Hain v Hewlett Arcade, 40 AD2d 991; Sanchez v Hertz Rental Corp., 70 Misc 2d 449; Gelbman v Gelbman, 23 NY2d 434; Woods v Lancet, 303 NY 349; Rumsey v New York & New England R. R. Co., 133 NY 79.) II. The United States Supreme Court in Shaffer v Heitner and Rush v Savchuk applied the due process test for the benefit of defendant. (Simpson v Loehmann, 21 NY2d 305, 990; Minichiello v Rosenberg, 410 F2d 106, 398 US 844; Kirchman v Mikula, 443 F2d 816; Robinson v Shearer & Sons, 429 F2d 83; Kulko v California Superior Ct., 436 US 84; Hanson v Denckla, 357 US 235; Arnold v Mayal Realty Co., 299 NY 57; Gregoire v Putnam’s Sons, 298 NY 119; Ratka v St. Francis Hosp., 44 NY2d 604.) III. Appellants’ reliance on Seider v Roth was patently misplaced. (Reynolds v Snow, 10 AD2d 101, 8 NY2d 899; Shaffer v Heitner, 433 US 186; O’Connor v Lee-Hy Paving Corp., 579 F2d 194, 439 US 1034.) IV. The decision in Gager v White represents the prevailing appellate judgment on the issue of retroactive application of Rush v Savchuk. (International Shoe Co. v Washington, 326 US 310; Morehouse v Volkswagen AG., 74 AD2d 164; Tomaszewski v Cleveland, 103 Misc 2d 355.) V. The conditional granting of dismissal as suggested by appellants has no jurisdictional basis and patently violates the United States Constitution. (Epstein v Sirivejkul, 64 AD2d 216, 48 NY2d 738.)

      James A. Magee for appellants in the third above-entitled action.
    The Supreme Court of the United States has stated that jurisdiction over a nonresident defendant obtained through a Seider attachment is unconstitutional. Therefore, such an assertion of jurisdiction is void. (Donawitz v Danek, 42 NY2d 138; Erneta v Princeton Hosp., 49 NY2d 829; Harris v Balk, 198 US 215; International Shoe Co. v Washington, 326 US 310; Rush v Savchuk, 444 US 320; Seider v Roth, 17 NY2d 111; Shaffer v Heitner, 433 US 186; Torres v Towmotor Div. of Caterpillar, 457 F Supp 460.)

      Norman Bard for respondents in the third above-entitled action.
    I. Appellants have waived their right to object to lack of jurisdiction by failing to interpose the defense in their answer. (Donawitz v Danek, 42 NY2d 138; Seider v Roth, 17 NY2d 111; Harris v Balk, 198 US 215; Shaffer v Heitner, 433, US 186; Baden v Staples, 45 NY2d 889; Competello v Giordano, 51 NY2d 904; Smith Co. v Jet Dr. Gen. Mar. Contr. Co., 72 AD2d 576; Dutchess Bank & Trust Co. v Holden Constr. Co., 49 AD2d 901; Erneta v Princeton Hosp., 49 NY2d 829; Morehouse v Volkswagen AG., 74 AD2d 164; Uman v Timpane, 77 AD2d 620; Gager v White, 78 AD2d 617.) II. Even if the court finds that there was no waiver by defendant and Rush should be applied retroactively, it should not be so applied to this case. (Desist v United States, 394 US 244; Johnson v New Jersey, 384 US 719; People v Morales, 37 NY2d 262; People v Lynch, 23 NY2d 262; People v Heller, 33 NY2d 314; People v Dargan, 27 NY2d 100; Matter of D. [Daniel], 27 NY2d 90; People v Baker, 23 NY2d 307; Holzsager v Valley Hosp., 493 F Supp 120; Donawitz v Danek, 42 NY2d 138; Simpson v Loehmann, 21 NY2d 305.)

      Elliott J. Roberts for appellant in the fourth above-entitled action.
    I. Rush v Savchuk does not require a retroactive application of its holding. (Rush v Savchuk, 444 US 320; Linkletter v Walker, 381 US 618; Seider v Roth, 17 NY2d 111; Tehan v Shott, 382 US 406; Hanover Shoe v

      United Shoe Mach., 392 US 481; Gelpcke v City of Dubuque, 1 Wall [68 US] 175; United States ex rel. Angelet v Fay, 333 F2d 12; Chevron Oil Co. v Huson, 404 US 97; Lyons v Westinghouse Elec. Corp., 235 F Supp 526; Baden v Staples, 45 NY2d 889.) II. Erneta v Princeton Hosp. (49 NY2d 829) does not require retroactive application of Rush v Savchuk. (Danowitz v Danek, 42 NY2d 138.) III. Defendant-respondent submitted to the quasi in rem jurisdiction of the court and should, therefore, be estopped from seeking dismissal of this action. (Morehouse v Volkswagen AG., 74 AD2d 164; Leutloff v Leutloff, 47 Misc 2d 458; Ciunci v Wella Corp., 23 AD2d 754; La Bate v Meyerbank Elec. Co., 23 AD2d 503; Strauss v Douglas Aircraft Co., 404 F2d 1152.)

      Joseph W. Conklin and Raymond J. Pezzoli for respondent in the fourth above-entitled action.
    I. Rush v Savchuk does require a retroactive application of its holding. (Rush v Savchuk, 444 US 320; Seider v Roth, 17 NY2d 111; Erneta v Princeton Hosp., 66 AD2d 669, 49 NY2d 829; Morehouse v Volkswagen AG., 74 AD2d 164; Chicot County Dist. v Bank, 308 US 371.) II. The New York State Court of Appeals has already determined that Rush v Savchuk should be applied retroactively. (Erneta v Princeton Hosp., 49 NY2d 829; Donawitz v Danek, 42 NY2d 138; Morehouse v Volkswagen AG., 74 AD2d 164.) III. Defendant-respondent herein preserved its objection to jurisdiction under Seider v Roth.

      Donald B. Knight for appellant in the fifth above-entitled action.
    I. Appellant justifiably relied upon the attachment procedure to secure quasi in rem jurisdiction and will be put to unfair hardship if the subsequent declaration that this procedure is unconstitutional, is applied and her complaint dismissed. (Seider v Roth, 17 NY2d 111; Linkletter v Walker, 381 US 618; Mapp v Ohio, 367 US 643; Tehan v Shott, 382 US 406; Stovall v Denno, 388 US 293; Chevron Oil Co. v Huson, 404 US 97; Harris v Jex, 55 NY 421; People v Kaiser, 21 NY2d 86; Rosenstiel v Rosenstiel, 16 NY2d 64; People v McQueen, 18 NY2d 337.) II. This is the first occasion this court has had to rule on the retroactive application of Rush to residents of New York at the time of the accident. (Erneta v Princeton Hosp., 49 NY2d 829.)

      Louis G. Adolfsen, Thomas R. Newman and L. Kevin Shieridan for respondent in the fifth above-entitled action.
    Since the continued exercise of jurisdiction would violate defendant’s due process rights, this action was properly dismissed. (Firestone Tire & Rubber Co. v Risjord, 449 US 368; Shaffer v Heitner, 433 US 186; Menna v New York, 423 US 61; People v Michael, 48 NY2d 1; Linkletter v Walker, 381 US 618; Johnson v New Jersey, 384 US 719; Desist v United States, 394 US 244; People v Morales, 37 NY2d 262; United States v Peltier, 422 US 531; Hamling v United States, 418 US 87.)
   OPINION OF THE COURT

Fuchsberg, J.

These five appeals are part of the aftermath of the Supreme Court’s recent decision in Rush v Savchuk (444 US 320), the effect of which was to vitiate the predicate for quasi in rem jurisdiction pioneered in 1966 by Seider v Roth (17 NY2d 111). In essence, Seider held that a liability insurance contract issued by a carrier authorized to do business in this State, contingent as its obligations may be, partakes of the character of a “debt” which by its attachment may be made to serve as the foundation for jurisdiction over its nonresident insured defendants. After this holding had survived 14 years of doctrinal dispute, Rush was to declare it violative of due process. The issue now is whether this ruling is to be applied prospectively alone or retrospectively as well.

The cases on which we are to act present typical Seider fact patterns. In each, a New York domiciliary seeks damages for injuries or death sustained in an automobile accident outside the State as a result of the alleged negligence of a nonresident operator or owner of a motor vehicle. Save for the plaintiff’s residence, in all, for all practical purposes, the sole connection with this State was the policy’s availability for attachment.

Because in every instance the cases before us were pendente lite when the Supreme Court administered its coup de grace, they all became the subject of motions to dismiss. These initially were all denied, "nisi prius declining to apply Rush to ongoing cases whose plaintiffs, in choosing this forum and foregoing others, had, as these courts saw it, placed justifiable reliance on New York’s previously consistent, if vigorously contested, course of decisional support for Seider’s jurisdictional analysis (see Baden v Staples, 45 NY2d 889; Donawitz v Danek, 42 NY2d 138; Neuman v Dunham, 39 NY2d 999; Simpson v Loehmann, 21 NY2d 305, mot for rearg den 21 NY2d 990; see, also, O’Connor v Lee-Hy Paving Corp., 579 F2d 194, cert den 439 US 1034 ; Minichiello v Rosenberg, 410 F2d 106, affd en banc 410 F2d 117, cert den 396 US 844, reh den 396 US 949).

The story in the intermediate appellate courts, however, was different. In Cachat v Guertin Co., there was an affirmance, but only because no jurisdictional defense had been interposed. On the other hand, because some type of jurisdictional objection had been raised in the other four, each brought a reversal and dismissal. For the reasons that follow, we now hold that Rush must be applied only when a specific objection to the assertion of jurisdiction founded on the attachment of the out-of-State defendant’s liability insurance policy was preserved by appropriate motion or affirmative defense (CPLR 3211, subd [e]).

Especially since almost every party touches on the matter, our discussion may well start with the reminder that, consonant with the common law’s policy-laden assumptions, a change in decisional law usually will be applied retrospectively to all cases still in the normal litigating process (People v Pepper, 53 NY2d 213, citing People v Morales, 37 NY2d 262, 267-268; Kelly v Long Is. Light. Co., 31 NY2d 25, 29, n 3). By way of departure from this generality, however, where there has been such a sharp break in the continuity of law that its impact will “wreak more havoc in society than society’s interest in stability will tolerate” (Fairchild, Limitation of New Judge-Made Law to Prospective Effect Only: “Prospective Overruling” or “Sun-bursting”, 51 Marq L Rev 254), it is now recognized that, when adherence to the traditional course is strongly contraindicated by powerful factors, including strong elements of reliance on law superseded by the new pronouncement, a court may direct that it operate prospectively alone (Chevron Oil Co. v Huson, 404 US 97; Great Northern Ry. v Sunburst Co., 287 US 358).

All the plaintiffs, stressing that the Statute of Limitations now may have foreclosed an action in a forum where jurisdiction would be constitutionally unassailable, argue that theirs are precisely the kind of cases in which retroactive application should be eschewed. But this is by no means a one-sided argument. As the defendants contend, that Seider might turn out to have not been the only possible “true rule” was not without forewarning (see, e.g., Siegel, New York Practice [1978], § 105, p 127; Stein, Jurisdiction by Attachment of Liability Insurance, 43 NYU L Rev 1075; Reese, Expanding Scope of Jurisdiction Over Non-Residents — New York Goes Wild, 35 Ins Counsel J 118). Moreover, even if the balance on the issue of prejudice had to be struck in favor of those who preferred to rely on the authoritative pronouncements of the New York courts rather than those of its now clairvoyant critics, the fundamental nature of the jurisdictional determinations in Rush renders conventional criteria for fixing an appropriate line of demarcation for overruling academic. For, a constitutional due process limitation on the power of a State’s exercise of its jurisdiction under our Federal system of government, as distinguished, for instance, from one founded in due process considerations bearing on less fundamental substantive and procedural concerns, is an absolute abnegation of the offending State’s ability to continue to act beyond the boundaries the determination defines.

This observation almost inevitably flows from a review of the conceptual building blocks on which Rush stands. They reflect deviation from what for long had come to be the accepted standards for identifying the bounds of State court basis jurisdiction.

Epitomized by Pennoyer v Neff (95 US 714), these were readily divisible into in personam, in which the fulcrum was the person; in rem, which, applicable to designated property, was designed to affect the interests of all persons; or quasi in rem which bore on the interests of particular persons in designated property. The last was of two types. One, like actions to partition land or foreclose a mortgage, was invocable to establish or extinguish claims to or in particular property. The second, the kind involved in the present cases, provided a basis for obtaining a judgment to the satisfaction of which the property on which the jurisdiction was based could be applied though it was not related to the controversy between the parties. (See Restatement, Judgments, §§5-9; Silberman, Shaffer v Heitner: The End of an Era, 53 NYU L Rev 33, 39.)

Background too was the requirement for “minimum contacts”, integral to “fair play and substantial justice” (see International Shoe Co. v Washington, 326 US 310, 316), which, at the time Seider came on the legal horizon, had been established as essential to in personam jurisdiction, yet was not requisite for quasi in rem jurisdiction, for which the presence of property alone sufficed (Harris v Balk, 198 US 215; Pennoyer v Neff, supra).

But Shaffer v Heitner (433 US 186) was to eliminate this dichotomy. Noting that “the law of state-court jurisdiction no longer stands securely on the foundation established in Pennoyer” and that “ ‘ “judicial jurisdiction over a thing,” is a customary elliptical way of referring to jurisdiction over the interests of persons in a thing’ Restatement (Second) of Conflict of Laws § 56, Introductory Note (1971)”, it held that “although the presence of the defendant’s property in a State might suggest the existence of other ties among the defendant, the State, and the litigation, the presence of the property alone would not support the State’s jurisdiction” (Shaffer v Heitner, supra, pp 206-207, 209). This, of course, still left open the question as to whether the presence in the forum of the defendant’s policy and the fact that its carrier was doing business there were enough in the Seider-type case to meet these concerns (see Lowenfeld, In Search of the Intangible: A Comment on Shaffer v Heitner, 53 NYU L Rev 102).

In Rush, however, the Supreme Court was to dissipate any differences on this subject. It specifically held that cognizable legal fictions, first that, as a form of property, a debt partakes of 'the situs of the debtor, and, second, that a corporation is to be found wherever it does business, both of which Seider entertained, fell short when no more was present in the forum than the liability insurer and its obligation to defend and indemnify. Furthermore, in defining a forum relationship that would meet The required standards, the court made clear that it is not the relation of the plaintiff who seeks the advantage of its forum of choice that carries weight, but rather that of the defendant against whom.the litigation is targeted. From there it proceeded to arrive at the evaluation that, in a Seider factual framework, “the defendant has no contacts with the forum” (emphasis in original). It was on these foundations, which whatever otherwise has been or can be said on the subject, we have no choice but to accept for the nonce that the Supreme Court concluded that the forum State could impose no binding judgment against a Seider defendant (Rush v Savchuk, 444 US 320, 328-333, supra).

The searching nature of Rush’s reach for the roots of State judicial jurisdictional power is but a reiteration of the basic principle that “[a] court must have jurisdiction in rem or in personam in order to enter a valid judgment of any kind” (4 Carmody-Wait 2d, NY Prac, § 25:3, p 4; accord Hanson v Denckla, 357 US 235, 250). So, with significant contemporaneousness, in World-Wide Volkswagen Corp. v Woodson (444 US 286, 291), a companion case to Rush itself, the court took the occasion to remind us, once again, that “[a] judgment rendered in violation of due process is void in the rendering State and is not entitled to full faith and credit elsewhere” (emphasis added). Thus, as Dean McLaughlin has noted, “if it violates due process to commence an action with jurisdiction resting on the attachment of the defendant’s insurance policy, it is difficult to comprehend why it does not also violate due process to continue such an action” (1980 Supplementary Practice Commentary, McKinney’s Cons Laws of NY, Book 7B, C314:4, 1980-1981 Supp, pp 137, 138-139; emphasis in text)

And, since as we have seen, basis jurisdiction now focuses on a defendant’s rights (World-Wide Volkswagen Corp. v Woodson, supra; Kulko v California Superior Ct., 436 US 84, 91), any reliance by plaintiffs is irrelevant. Indeed, inasmuch as lack of such jurisdiction can be asserted even after a defense on the merits has been presented (see Fourth Prelim Rep of Adv Comm on Practice & Procedure, p 187 [1960] ; Harkness v Hyde, 98 US 476), it surely must be given effect here.

That, however, is not the end of the matter. Unlike subject matter jurisdiction, which limits the power of a particular court rather than the judicial jurisdiction of the State en gros, a defect in basis jurisdiction is waivable (CPLR 3211, subd [e]). Under the CPLR, the objection may be raised either by a preanswer motion or by pleading it as an affirmative defense, whichever comes first (see Siegel, New York Practice, § 111, p 137; 4 Weinstein-KornMiller, NY Civ Prac, pars 3211.03-3211.05). Absent the pursuit of either course, a defendant’s voluntary participation in litigation in which the point can be raised, in and of itself, constitutes a submission to the jurisdiction of the courts of our State and, as such, acts as a predicate for basis jurisdiction (see Restatement, Conflict of Laws 2d, § 33; Siegel, op. cit., § 111, p 139; cf. York v Texas, 137 US 15; Henderson v Henderson, 247 NY 428).

Examining the cases before us to determine whether quasi in rem jurisdiction has been appropriately controverted, we note that specific objections on that score were made in the answers filed in Gager v White and Hill v Elliott. In these cases, the Appellate Division’s dismissal of the complaints being mandatory, there should be an affirmance.

In contrast, no jurisdictional protest having been lodged in Cachat v Guertin Co., the Appellate Division also was correct when it there found that dismissal was not in order (CPLR 3211, subd [e]).

Lastly, in Mei Yuet Chin v Cray and Carbone v Ericson, the answers raised objection to in personam jurisdiction only. Since, as explained earlier, a defect in the categorically distinct concept of quasi in rem jurisdiction requires a sufficiently particularized pleading to apprise the plaintiff of its nature with sufficient clarity to avoid prejudice by inducing quiescence (compare CPLR 3211, subd [a], par 8, with par 9; see 4 Weinstein-Korn-Miller, NY Civ Prac, par 3211.15, p 32-66), it follows that the in rem issue must be deemed waived and the Appellate Division orders, which held to the contrary, reversed.

In sum, the orders in Gager v White, Cachat v Guertin Co., and Hill v Elliott should be affirmed, while those in Chin v Cray, and Carbone v Ericson should be reversed and the orders at Special Term in these cases should be reinstated.

Gabrielli, Jones and Wachtler, JJ.

(concurring). We concur in result in each of these cases, but cannot accept what appears to us to be the overbreadth of the majority opinion, addressing matters which are not necessary for the resolution of these appeals.

In Erneta v Princeton Hosp. (49 NY2d 829) our court acknowledged the mandate of the Supreme Court of the United States in Rush v Savchuk (444 US 320). In there according retroactivity to the new rule of Rush, the court eschewed the opportunity to indulge in an “institutional reassessment of Seider v Roth” (49 NY2d, p 830). It suffices for present purposes to cite Erneta, and to emphasize that in as much as the decision in Rush is predicated on the nonexistence of jurisdiction, that inhibition extends to judicial action of any sort thereby precluding any of the ameliorative remedies which are pressed on us by plaintiffs who may now be foreclosed from all judicial relief. As the Supreme Court, through Justice Marshall, wrote with respect to an absence of subject matter jurisdiction: “A court lacks discretion to consider the merits of a case over which it is without jurisdiction, and thus, by definition, a jurisdictional ruling may never be made prospective only” (Firestone Tire & Rubber Co. v Risjord, 449 US 368, 379).

The only new issue presented in these cases relates to questions of waiver of the right to challenge jurisdiction predicated on a Seider attachment under the Rush decision. We understand the majority to be holding that Rush is to be applied retroactively unless in the individual case, there has been such a waiver by the defendant (in whatever form or by whatever means effectually manifested). We agree with that principle and concur in its application to the five cases now before us. We are in accord as well that in preserving the Rush claim, the defendant must be explicit, by a “sufficiently particularized pleading” or otherwise, to leave no doubt that it is the jurisdictional challenge under what is now the Rush doctrine which is being raised. It will not do to raise challenges to personal jurisdiction over the defendant. Accordingly, as the majority correctly concludes, the defendants in Gager and Hill did not waive their challenges to Seider jurisdiction; the defendants in Mei Yuet Chin, Cachat and Carbone must be held, in consequence of failure to raise the Rush defense, now to have waived it.

Chief Judge Cooke and Judges Jasen and Meyer concur with Judge Fuchsberg; Judges Gabrielli, Jones and Wachtler concur in result in a concurring opinion.

In Gager v White: Order affirmed, with costs.

In Mei Yuet Chin v Cray: Order reversed, with costs, and the order of Supreme Court, Bronx County, reinstated.

In Cachat v Guertin Co.: Order affirmed, with costs. Question certified answered in the affirmative.

In Carbone v Ericson: Order reversed, with costs, and the order of Supreme Court, New York County, reinstated.

In Hill v Elliott: Order affirmed, with costs.

      . Although this exceptional technique is usually employed in the criminal law area (see, e.g., People v Pepper, 53 NY2d 213, supra; People v Morales, 37 NY2d 262, supra), as the cited cases illustrate, it finds application in the civil sphere as well (see, also, Overruling Decision — Application, Ann., 10 ALR3d 1371).
      It is settled that judgments where the normal appellate process has been exhausted may not be collaterally attacked (Chicot County Dist. v Baxter State Bank, 308 US 371, 376; cf. Vander v Casperson, 12 NY2d 56).

      . Basis jurisdiction, sometimes known as “judicial jurisdiction” (Restatement, Conflict of Laws 2d, §§ 24, 68), is to be distinguished from subject matter jurisdiction, which embraces the competence of a court to entertain a particular kind of litigation (Green, Civil Procedure [2d ed], p 13).

      . Our court (Baden v Staples, 45 NY2d 889, supra) and the United States Court of Appeals for the Second Circuit (O’Connor v Lee-Hy Paving Corp., 579 F2d 194, supra) were of the view that it did.

      . Although some post-Seider decisions theorized that the Seider formulation was tantamount to a direct action statute under which a tort plaintiff in essence was proceeding directly against the coverage so that the carrier’s and not the tort-feasor’s was the interest at stake (see Donnwitz v Danek, 42 NY2d 138, 142, supra; Miniehiello v Rosenberg, 410 F2d 106, 109, supra), in Rush, the court found the analogy inappropriate (Rush v Savchuk, 444 US 320, 330-331, supra).

      . (See World-Wide Volkswagen Corp. v Woodson, 444 US 286, 299 [Brennan, J., dissenting.] The cited dissent was applied to Rush v Savchuk as well.

      . Though a State may interpret its own statute or State constitutional provision more strictly than the Supreme Court interprets the corresponding provision of the Federal Constitution, it may not do so more broadly (Erlanger Mills v Cohoes Fibre Mills, 239 F2d 502 [SOBELOFF, J.] [North Carolina statute authorizing jurisdiction on a basis broader than the “minimum contacts” of International Shoe Co. v Washington, supra, held invalid]).

      . We have found no case in which a holding that the assertion of basis jurisdiction would violate due process was limited to prospective effect. Whatever signpost there is, it goes the other way. So the Supreme Court, though only in dictum in a case concerned with subject matter jurisdiction, recently observed that a jurisdictional ruling by definition can never be so limited (Firestone Tire & Rubber Co. v Risjord, 449 US 368). While there is a Third Circuit opinion limiting a holding concerning subject matter jurisdiction (Mc-Sparran v Weist, 402 F2d 867, 876-877 [en banc], cert den 395 US 903), the vitality of that decision would appear to have been sapped by the language in Firestone.

      . For these reasons, we are constrained to reject the provisional contentions of some of the plaintiffs, that, if we hold that their actions do not survive jurisdictionally, their dismissal be conditioned on the defendants’ willingness to stipulate that they will not plead the Statute of Limitations if the suit is pursued in an appropriate forum. Unlike resort to that device in cases of forum non conveniens, which presumes the fact of jurisdiction, where basis jurisdiction is lacking there just is no power to condition the dismissal (Kalman v Neuman, 80 AD2d 116, 126, n 2 [Lazer, J.]; Foley v Roche, 68 AD2d 558, 565-566 [Fein, J.]).

      . Of course, if a defendant has not appeared at all, there is nothing to preclude essaying a collateral attack on jurisdiction (Restatement, Judgments, §11; see, generally, Chief Judge Desmond’s opn in Vander v Casperson, 12 NY2d 56, 59, supra).

      . Historically, where the initial jurisdiction was in rem or quasi in rem, an appearance, followed by a defense upon the merits, automatically transformed the jurisdictional basis to one that was in personam (see Homburger & Laufer, Appearance and Jurisdictional Motions in New York, 14 Buf L Rev 374, 386-388, 406-408; Frummer, Jurisdiction and Limited Appearance in New York: Dilemma of the Nonresident Defendant, 18 Ford L Rev 73; cf. Restatement, Judgments, §§ 38-40). Later, this practice was replaced by CPLR 320 (subd [c]), which provides that when jurisdiction is quasi in rem, the appearance remains a limited one. Under these circumstances, the defendant is now permitted to defend without submitting to in personam jurisdiction (Siegel, op. cit., § 113, p 140).

      . The nearest thing to a jurisdictional defense in Cachat was a much different claim, that of defective service.

      .. In Chin, in his “Sixth Separate and Complete Affirmative Defense”, the answer pleaded that “the court lacks jurisdiction over the person of the defendant”.
      In Carbone, by way of its “Second Defense”, the answer pleaded that “this Court does not have jurisdiction over the person of the defendant” and, as a “Third Defense”, by way of a limited appearance, pleads that “any judgment * ** * may be satisfied only out of the res allegedly attached”.

      . Finally, the concurrers’ comments- are quickly met:

        First, Erneta v Princeton Hosp. (49 NY2d 829), a memoless entry, which, following Rush by days and here on briefs which had no time to treat with Rush or its retroactivity, as Judge Jasen’s Erneta concurrence so correctly implied, did not scratch the surface.

        Secondly, Erneta was a case involving an infant whose time to bring suit in another jurisdiction was still alive because of the toll of the Statute of Limitations for such plaintiffs.

        Thirdly, it therefore comes as no surprise that the most current post -Rush comment, emphasizing the need for explication of the issues with which today’s opinion treats and specifically referring to the attention both sides of Rush’s retroactivity issue merit, concludes on the following note: “The magnitude of the impact that [-RmsTi’s] retroactivity will have on tort victims, who walked the red carpet of Seider, thus remains unspoken. And that red carpet was laid down not by legislators, but by judges. Are they really going to pull it in while so many stand on it?” (Siegel, Seider-Overruling Update, New York State Bar Law Digest, No. 257, May, 1981). This more than adequately disposes of the concurring opinion’s predeliction for more summary treatment of this case.


author: Fuchsberg, J. Jasen, J.

text:
    Lorraine Cullen, Complainant, v Nassau County Civil Service Commission et al., Respondents, and New York State Division of Human Rights, Appellant.
    Argued June 12, 1981;
    decided July 7, 1981

      POINTS OF COUNSEL

      Elaine Berger and Ann Thacker Anderson for appellant.
    The commissioner was correct in awarding compensatory damages to complainant. (Batavia Lodge No. 196, Loyal Order of Moose v New York State Div. of Human Rights, 35 NY2d 143; State Div. of Human Rights v Clarence Precision Mach. & Tool, Div. of Willick Inds., 60 AD2d 977; State Div. of Human Rights v Great Atlantic & Pacific Tea Co., 46 AD2d 1001, 36 NY2d 641; Matter of Mize v State

      Div. of Human Rights, 33 NY2d 53; Washington v Davis, 426 US 229; Albemarle Paper Co. v Moody, 422 US 405; Matter of Genesee Hosp. v State Div. of Human Rights [Rappaport], 50 NY2d 917.)

      Edward G. McCabe, County Attorney (Robert 0. Boyhan of counsel), for respondents.
    The court below properly granted the petition and annulled the award of compensatory damages. (State Div. of Human Rights v New Star Homes Dev. Corp., 39 AD2d 598; Batavia Lodge No. 196, Loyal Order of Moose v New York State Div. of Human Rights, 43 AD2d 807, 35 NY2d 143; Matter of State Div. of Human Rights v Luppino, 35 AD2d 107, 29 NY2d 558; State Div. of Human Rights v Janica, 37 AD2d 444; Matter of Moskal v State of New York, Executive Dept., Div. of Human Rights, 36 AD2d 46.)
   OPINION OF THE COURT

Fuchsberg, J.

This case of sex discrimination presents questions concerning both the nature of the proof of damages and the role of intent in an award by the State Division of Human Rights for personal humiliation and mental anguish allegedly suffered by a complainant at the hands of a discriminator.

This issues are presented in the following factual and procedural context:

It is undisputed that complainant Lorraine Cullen successfully passed a civil service examination for the position of investigator in Nassau County’s Department of Probation and subsequently was appointed to and served satisfactorily in this capacity. It is also unquestioned that when, at a later time, she filed an application to take an open competitive test for a similar post in the Department of Civil Service of the same county, she was denied permission to do so because she had not accumulated six years of criminal investigative experience as a member of either a police force or the staff of a District Attorney’s office, a qualification specified in the announcement of the examination.

The complaint, which followed promptly after the advice that she was ineligible, charged the Department of Civil Service with sex discrimination (Executive Law, § 296, subd 1, par [a]). In due course, following a hearing before an Administrative Law Judge, the Commissioner of Human Rights found that the six-year criminal investigative experience requirement was not job-related and that, because the interposition of irrelevant physical standards, especially one relating to height, historically had precluded female applicants from proportionate opportunities to gain experience as police officers in Nassau County, the over-all effect was to discriminate against members of that sex. In his order, the commissioner went on to direct that the Department of Civil Service cease and desist from such discrimination, that it permit the complainant to take a substitute examination, and, thereafter, to grade, evaluate and consider her for appointment to the position for which she had applied, all on the merits. In addition, although Ms. Cullen had not adduced any affirmative proof of mental anguish or humiliation or other personal or monetary damage, the order awarded her “compensatory damages” in the sum of $1,000 for the discriminatory practice’s “effect upon her”. This disposition was affirmed by the State Human Rights Appeal Board in all respects.

However, in the present proceeding, brought pursuant to section 298 of the Executive Law, the Appellate Division unanimously modified the appeal board’s order by deleting the award of compensatory damages. It grounded its holding on the fact that it had not been demonstrated that the Civil Service Commission’s discrimination was intentional. Albeit on a different rationale, we now uphold the Appellate Division’s order. Our analysis follows.

In enacting the Human Rights Law, our State Legislature, in a preamble, minced no words in declaring that the discriminatory practices it was interdicting violated the fundamental principles underlying a free society and threatened the peace and tranquility of the State (Executive Law, § 290; see City of Schenectady v State Div. of Human Rights, 37 NY2d 421, 423-424). Among the variety of sanctions it therefore authorized the division to employ to combat the pernicious effects of the outlawed evils was a civil remedy for the benefit of those who are the target of such offenses. So, specifically included was the “awarding of compensatory damages to the person aggrieved by such practice”, “as in the judgment of the division will effectuate the purposes of this article” (Executive Law, § 297, subd 4, par c, cl [iii]; see 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 183).

Conscious that this broadly stated, policy-laden discretion is not confied to physical or out-of-pocket losses alone, we have held that the compensatory damages which it may fix can include an award for such less tangible injuries as humiliation and mental anguish (Batavia Lodge No. 196, Loyal Order of Moose v New York State Div. of Human Rights, 35 NY2d 143, 145-146; State Comm. for Human Rights v Speer, 29 NY2d 555, revg on dissent at 35 AD2d 107, 112-113; see, also, Sex Discrimination — Emotional Distress, Ann., 61 ALK3d 944; Civil Rights — Damages— Emotional Distress, Ann., 40 ALR3d 1290).

But the fact that compensation may be allowed for emotional trauma does not depend on a showing that the discrimination which produced it was intentional. The overriding concern of the Legislature in pursuing the goals it enunciated had to have been the pragmatics of the consequences of challenged practices rather than their motivations. Beyond that, it would be unrealistic to demand proof of intention. By definition, under a facially neutral policy, no per se intent to discriminate can be expected to exist. To require such proof as a prelude to the fashioning of an appropriate remedy in such circumstances would be to put instances of discrimination whose subtlety may but add to their pervasiveness beyond its reach.

Batavia Lodge was not to the contrary. While, in expressing our disagreement with the intermediate appellate holding that proof of out-of-pocket expenses was necessary to a compensation award, we noted that “particularly * * * where * * * the discriminatory act is intentionally committed” (35 NY2d, at p 147), a lesser standard of proof may suffice, we did not suggest that such intention was a sine qua non. Moreover, since our.court there confronted discrimination willfully directed at specific individuals, it had no occasion to deal with the issue in a context of discriminatory impact alone, as in the present case (cf. Teamsters v United States, 431 US 324, 335-336, n 15; Cannon v University of Chicago, 648 F2d 1104).

Turning then to the damages award here, the inescapable fact is that there is simply no proof of the mental anguish and humiliation over which the parties here have so vigorously debated. The record must contain proof that the complainant in fact suffered mental anguish or humiliation (see School Dist. No. 1, Multnomah County v Nilsen, 271 Ore 461, 485-486 [sex discrimination]), which may be established through the testimony of the complainant alone (121-129 Broadway Realty Corp. v New York State Div. of Human Rights, 49 AD2d 422, 423 [sex discrimination]; cf. Zahorian v Russell Fitt Real Estate Agency, 62 NJ 399, 404, 416 [sex discrimination]), with, of course, the usual deference to be accorded the inferences drawn by an administrative agency from the evidence (300 Or amatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, supra).

Nonetheless, though Ms. Cullen did not testify that it did, the division argues that the discrimination “must have diminished [her] self-esteem, and with it [her] incentive for self-improvement’’. The easy answer to that position is that sensitivity or stoicism, as the case may be, is as variable and individualistic in its existence and in its degree as are human beings.

This is not to say that, because emotional injuries cannot be measured with precision, they are not real (see 9 NY Damages Law, § 42, p 36). It is familiar learning that a wrongdoer may not shield himself from liability because the damages caused are uncertain (Kaval Constr. Corp. v State Div. of Human Rights, 39 AD2d 347, 350; see 9 NY Damages Law, § 3).

But the commissioner may not award damages solely upon a finding that a discriminatory act occurred for that would be punitive (Batavia Lodge No. 196, Loyal Order of Moose v New York State Div. of Human Rights, 35 NY2d 143, 146, supra; Matter of State Div. of Human Rights v Luppino, 35 AD2d 107, affd 29 NY2d 558; see 9 NY Damages Law, § 42, p 36 [damages for mental anguish or humiliation “are strictly compensatory as distinguished from exemplary”]). Needless to say, the Legislature is not chary about granting power to award punitive damages to an administrative agency when it so intends (see, e.g., Labor Law, §§ 197, 216, 218; Workers’ Compensation Law, § 14-a). Here it just has not done so. The statute speaks clearly of compensatory damages alone.

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

Jasen, J.

(concurring). I agree with the result reached by the majority, but do so on the narrow ground that there is no proof in the record which supports the award of compensatory damages to claimant. Inasmuch as the sole relief sought was an opportunity to take a competitive examination and claimant did not request any compensation for physical or emotional injury occasioned by the alleged discriminatory practices of the Department of Civil Service, there was no need for her to offer proof in support of a claim for compensatory damages. In the absence of such proof and regardless of any showing by claimant as to a specific intent to discriminate, the damage award properly was annulled by the Appellate Division. Therefore, the broader issue whether proof of a specific intent to discriminate is an essential predicate to an award of compensatory damages under the Human Rights Law need not and should not be decided. In my view, resolution of this most important question should await a case in which the issue properly is presented for our consideration. (Cf. Memphis v Greene, 451 US 100.)

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

Order affirmed, with costs.

      . The form complaint promulgated by the State Division of Human Rights, pursuant to the authorization of subdivision 1 of section 297 of the Executive Law requires that the facts underlying the charged discrimination be set forth but does not provide for a request for particularized relief (9 NYCRR 465.3 [b], [c]; see New York Consolidated Laws Service, Annotated Statutes with Forms, Book 14, Executive Law, p 177, for an illustrative form complaint). Ms. Cullen’s complaint comported with these regulations and therefore did not specify the particular forms of damage on which the division has chosen to rationalize its award and the evidentiary and legal support which the briefs of both sides now contest on the merits.