author: Gabrielli, J.

text:
    In the Matter of Jack Zuckerman, as President of the Council of Supervisors and Administrators of the City of New York, Local 1, American Federation of School Administrators, AFL-CIO, et al., Appellants, v Board of Education of the City School District of the City of New York et al., Respondents.
    Argued March 27, 1978;
    decided May 4, 1978

      POINTS OF COUNSEL

      Leonard Greenwald, Everett E. Lewis and Gretchen White Oberman for appellants.
    I. Respondent board has grossly exceeded its authority to fill vacancies on the basis of certificates of competence. (Matter of Council of Supervisory Assns. of Public Schools of N. Y. City v Board of Educ., 23 NY2d 458; Matter of Jaffee v Board of Educ., 265 NY 160; Matter of Frankle v Board of Educ., 173 Misc 1050, 259 App Div 1006, 285 NY 541; Matter of Davis v Board of Educ., 263 App Div 369.) II. PERB has no power to adjudicate, much less exclusive jurisdiction of, the subject matter of the petition herein. (Matter of Susquehanna Val. Cent. School Dist. at Conklin

      [Susquehanna Val. Teachers’ Assn.], 37 NY2d 614; Syracuse Teachers Assn. v Board of Educ., 35 NY2d 743; Board of Educ. v Associated Teachers of Huntington, 30 NY2d 122; Board of Educ. v Areman, 41 NY2d 527.) III. The licensed supervisors threatened with layoff would be irreparably damaged thereby. (United States v Hayes Int. Corp., 415 F2d 1038; Commonwealth of Pennsylvania v O’Neill, 348 F Supp 1084, 473 F2d 1029; United States v Central Motor Lines, 325 F Supp 478.)

      Allen G. Schwartz, Corporation Counsel (Francis F. Caputo and Leonard Koerner of counsel), for respondents.
    I. The petition was properly dismissed because a proceeding dealing with the same subject matter and filed by these same petitioners is pending before PERB. (People v Carcel, 3 NY2d 327; Headley v City of Rochester, 272 NY 197; Domanick v Triboro Coach Corp., 259 App Div 657; Herald Co. v Irving, 35 AD2d 905; Marony v Applegate, 266 App Div 412.) II. Even if petitioners state a cause of action for some relief, no basis exists for interfering with layoffs in petitioners’ tenure area. (Matter of Chironna v Watson, 304 NY 255; Matter of Berger v Walsh, 291 NY 220; Matter of Council of Supervisory Assns. of Public Schools of N. Y. City v Board of Educ., 23 NY2d 458.)
   OPINION OF THE COURT

Gabrielli, J.

Petitioners are employed by respondent Board of Education in certain supervisory positions and are members of the Council of Supervisors and Administrators of the City of New York (Council), an unincorporated labor organization recognized by the Board of Education of the City School District of the City of New York as the bargaining representative for approximately 4,500 supervisory and pedagogical employees of the Board of Education. On August 15, 1977 the board announced that due to fiscal restraints approximately 180 supervisory employees would be laid off effective September 1, 1977. On August 22, 1977 the Council requested the board to bargain over the impending discharges, pursuant to their collective bargaining agreement. When the board refused the Council filed an improper practice charge with the Public Employment Relations Board (PERB) alleging that the school board had engaged in an improper practice within the meaning of section 209-a of the Civil Service Law by refusing to bargain. The proceeding before PERB is still pending.

On September 27, 1977 the Council commenced the instant article 78 proceeding by service of petition and affidavits on the Board, of Education and the Chancellor of the City School District. The petition alleged that, although section 6 of article V of the New York State Constitution and sections 2569, 2590-j (subd 4, par [b]) and 2573 (subd 2) of the Education Law require that appointments to supervisory positions in the New York City school system be made from eligible lists compiled on the basis of merit and fitness after competitive examinations, respondents are circumventing that requirement by issuing certificates of competence to persons not on appropriate eligible lists established by the mandated salutary provisions of the Education Law, and then appointing such persons to supervisory positions while abolishing similar positions and discharging the qualified, licensed personnel in those positions. The petition further alleged that respondents lacked the legal authority to issue these certificates of competence or to use them to support the appointment of unlicensed personnel. In addition the petition charged that holders of certificates of competence are being continued in their positions at the pleasure of the nominating agency and are improperly deemed by respondents to be exempt from the lay-off procedures set forth in section 2588 of the Education Law. The petitioners sought an order, inter alia, prohibiting the respondents from circumventing the requirement that appointments be made on the basis of merit and fitness, prohibiting the improper use of certificates of competence and, specifically, restraining the pending layoff of 180 supervisors.

In essence the petition alleged that the respondents have engaged in a series of illegal activities calculated to circumvent the requirement that these positions be filled from certified eligible lists. It is asserted that respondents have issued certificates of competence when there is no legal authority for their issuance; then supervisory positions have been abolished, ostensibly due to financial constraints, followed by appointment of holders of certificates of competence to positions similar to the ones abolished. The petition alleged that this policy of discharging personnel selected from eligible lists and replacing them with holders of certificates of competence is in derogation of the State Constitution and the Education Law requiring appointment on the basis of merit and fitness. At this point there has been no trial and the allegations remain unproven.

The respondents denied these allegations and asserted, inter alia, that since an improper practice charge had been filed with PERB, PERB had exclusive nondelegable jurisdiction (Civil Service Law, § 205, subd • 5, par [d]) and the petition should be dismissed. Special Term adopted the position that PERB has exclusive jurisdiction and dismissed the petition. The Appellate Division affirmed, without opinion. In our court, however, respondents have abandoned their argument that PERB has exclusive jurisdiction, recognizing, as they must, that the issue before that agency is one of labor relations whereas the issue pressed in this petition involves the legality of the appointment procedure which utilizes the certificates of competence. Respondents now urge that this proceeding be deferred pending the final resolution of PERB’s administrative proceeding.

In view of the determination of the lower courts, we first address the issue of the exclusivity of PERB’s jurisdiction. Section 205 (subd 5, par [d]) of the Civil Service Law provides that "[t]he board shall exercise exclusive nondelegable jurisdiction of the powers granted to it by this paragraph”, which in turn grants PERB the power to "establish procedures for the prevention of improper employer and employee organization practices as provided in section two hundred nine-a of this article * * * and to take such affirmative action as will effectuate the policies of this article [article 14 of the Civil Service Law, the Taylor Law].” The policies of the article are to promote harmonious and co-operative relationships between government and its employees and to protect against interruptions of government operations (Civil Service Law, § 200). These policies are effectuated by the prevention of improper labor practices, which are defined, in part, as interference with the right of public employees to organize, interference with the formation of an employee organization, discrimination against an employee for the purpose of discouraging the activities of an employee organization, or refusal to negotiate in good faith with the duly recognized representatives of public employees (Civil Service Law, § 209-a). Thus an improper labor practice, as delineated above, is within the exclusive jurisdiction of PERB. Although PERB has exclusive jurisdiction of labor disputes between public employers and public employees involving the right to organize and the right to negotiate in good faith, this jurisdiction does not mean that any and all disputes between such parties fall exclusively to PERB. PERB’s jurisdiction encompasses only those matters specifically covered by the Taylor Law.

Aside from the prohibitions against unfair labor practices, nowhere in the Taylor Law, nor in its underlying policies, is PERB vested with the general power to prohibit governmental officials from violating express statutory provisions. The present petition asserts that respondents acted in derogation of the State Constitution and the Education Law when they discharged personnel selected from eligible lists and replaced them with holders of certificates of competence. While these allegations charge the violation of statutory and constitutional directives, they fail to state an unfair labor practice within the meaning of the Taylor Law (see Civil Service Law, § 209-a), and thus, as respondents now recognize, the issue in this proceeding is unquestionably outside the "exclusive nondelegable jurisdiction” of PERB. Indeed, PERB itself has suggested that where the explicit terms of a statute govern the actions of an employer the matter may be without the Taylor Law (see City of Binghamton & Binghamton Firefighters, Local 729, I.A.F.F., AFL-CIO, 9 PERB 3026).

The question whether respondents improperly refused to bargain with respect to the discharges is now pending before PERB. That matter is entirely separate and distinct from the present proceeding in which the legality of respondents’ employment policies is challenged. As demonstrated above, the exclusivity of PERB’s jurisdiction does not restrict this proceeding since that jurisdiction does not extend to the issues raised by the petition. Respondents, however, now contend that this matter should be deferred pending PERB’s determination, alleging that a favorable ruling for petitioners would moot this case. We reject this argument. The matter before this court, involving a challenge to the employment policies of the respondents, is far broader than the issue before PERB and even a favorable ruling by PERB on the right to negotiate the discharges would leave unsettled the challenge to respondents’ policies.

The order of the Appellate Division affirming the judgment of Supreme Court, New York County, should be reversed and the petition reinstated. The critical issue created and the allegations of petitioners have not yet been determined and thus the matter should be remitted to Supreme Court for a full trial to develop the facts and the law. Although petitioners seek relief pursuant to CPLR article 78, in this instance article 78 relief could well be inadequate and thus inappropriate. Petitioners seek more than just a review of a single determination of the respondents; they seek review of the continuing policy of discharging personnel selected from eligible lists and replacing them with holders of certificates of competence, and they seek review of the legality of the issuance of these certificates of competence. Since they seek more than may be permitted under an article 78 proceeding (CPLR 7803), this proceeding should be and is thus converted to an action for a declaratory judgment (CPLR 103, subd [c]) and remitted to Supreme Court to determine the correctness of the allegations in the petition, including the propriety of the issuance and use of the certificates of competence, and to consider the appropriate relief.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court for further proceedings consistent with this opinion. The stay issued by this court shall remain in effect until the declaratory judgment action is resolved in Supreme Court.

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

Order reversed, with costs, proceeding pursuant to CPLR article 78 converted into a declaratory judgment action, the matter remitted to the Supreme Court, New York County, for further proceedings and the stay issued by this court continued in accordance with the opinion herein.

      . Section 6 of article V of the New York State Constitution provides, in part: "Appointments and promotions in the civil service of the state and all of the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, as far as practicable, by examination which, as far as practicable, shall be competitive”.

      . Section 2569 of the Education Law provides, in part: "It shall be the duty of the board [of examiners] to hold examinations whenever necessary, to examine all applicants who are required to be licensed or to have their names placed upon eligible lists for appointment in the schools in such city, except examiners, and to prepare all necessary eligible lists, subject to the responsibilities among the members of the board of examiners hereinafter set forth. The board shall periodically review the validity and reliability of examinations as well as examination procedures.”
      Section 2590-j (subd 4, par [b]) provides: "The chancellor shall appoint and assign all supervisory personnel for all schools and programs under the jurisdiction of the city board from persons on qualifying eligible lists.”
      Section 2573 (subd 2) provides: "The superintendent of schools shall require the board of examiners, in anticipation of the reasonable needs of the school system, to conduct examinations so that eligible lists may be ready for promulgation as soon as vacancies come into existence. Where vacancies already exist, and cannot be filled because eligible lists have been exhausted, the superintendent of schools shall require the board of examiners to hold examinations forthwith and to have lists available for promulgation within one year from the date of the written or first test of the examinations. Appointments shall be made from appropriate eligible lists to fill all existing vacancies not later than six months from the date of the existence of such vacancy, except that the board of education may defer such appointments until the opening of school following the expiration of such six month period.”

      . Section 2588 of the Education Law provides, in part:
      "2. If a position within a tenure area is abolished and another position is created in such area for the performance of duties similar to those performed in the abolished position, the person filling such office or position at the time of its abolition shall be appointed to the position thus created without reduction in salary or increment, provided the record of such person has been one of faithful, competent service in the office or position he has filled.
      * * *
      "3. (b) Whenever a supervisory position is abolished under this chapter, the services of the member of the supervisory staff, except associate, assistant and other superintendents, and principals serving in schools or programs under the jurisdiction of a community school board, having the least seniority within the tenure area of the position abolished in the city school district, shall be discontinued.
      * * *
      "4. (a) A member of the teaching or supervisory staff who has been regularly appointed whose services are terminated pursuant to this section, shall be entitled to be placed, upon his application, in a vacancy within the tenure area of a position where such individual shall have previously served under regular appointment, and if no such vacancies exist he shall be entitled to displace the person with least seniority serving in the tenure area of such other position”.

      . Although this proceeding involves 180 supervisory personnel who had been appointed pursuant to the provisions of the Education Law, it appears that there are over 1,000 other full-time positions which have been filled by the device of issuing certificates of competence without the imprimatur of the provisions of the Education Law, with all its safeguards.


source: Caselaw Access Project

author: Wachtler, J.

license: Public Domain

text:
    State of New York, Appellant, v Unique Ideas, Inc., et al., Respondents.
    Argued March 30, 1978;
    decided May 11, 1978

      POINTS OF COUNSEL

      Louis J. Lefkowitz, Attorney-General (Earl Roberts, Samuel A. Hirshowitz and Daniel M. Cohen of counsel), for appellant.
    Each separate mailing of the fraudulent material constituted a separate act of contempt and is subject to a separate fine. The fine imposed by Special Term was fair, reasonable and fully justified by the character and extent of the contemptuous conduct. It should not have been modified by the court below. (United States v Anderson, 466 F2d 1360; United States v Eskow, 422 F2d 1060, 398 US 959; Badders v United States, 240 US 391; United States v Wilson Chem. Co., 319 F2d 133; Goodman v State of New York, 31 NY2d 381; State of New York v Koscot Interplanetary, 69 Misc 2d 421, 39 AD2d 844.)

      H. Miles Jaffe, Grier H. Raggio, Jr., and Kenneth P. Nor-wick for respondents.
    Where a party orders a mass mailing of identical brochures which is subsequently found to constitute civil contempt, the statutory sanction therefor is restitution or a maximum fine of $250. (Moffat v Herman, 116 NY 131; Socialistic Co-op. Pub. Assoc. v Kuhn, 164 NY 473; Geller v Flamount Realty Corp., 260 NY 346; Riedel Glass Works v Kurtz & Co., 260 App Div 163; Levine v 97 Realty Corp., 21 AD2d 655; McDonnell v Frawley, 23 AD2d 729; Berman v Loremady Realty Corp., 31 AD2d 899; United States v Eskow, 422 F2d 1060, 398 US 959; United States v Anderson, 466 F2d 1360; Badders v United States, 240 US 391.)
   OPINION OF THE COURT

Wachtler, J.

In this consumer fraud action initially brought by the Attorney-General under article 22-A of the General Business Law, a consent judgment was entered in December, 1974 against Unique Ideas, Inc., and its principal, Ernie Tucker. But the terms of that injunction were blatantly violated when the defendants waited less than one month before offering the same "get rich quick” scheme condemned in the consent judgment to some 2 Vi million potential new customers. Liability for restitution and for civil contempt has been clearly established by the Attorney-General acting on behalf of defrauded members of the public. The extent of that liability is alone at issue on this appeal.

Originally the defendants used the mails and magazine advertisements to promote sales of a $10 booklet containing Ernie Tucker’s "proven easy money secret”. Subscribers were supplied with instructions and mailing lists for home sales of the defendants’ ornamental mink novelty items. The lists were usually stale, however, and actual home sales were apparently minimal.

Instead of achieving the promised 10% sales order response or even approaching Tucker’s purported example of making "$35,000 in just one day at home in bed with the flu through the use of the plan”, most subscribers in fact merely contributed to the defendants’ wealth by initially paying $10 for the booklet and then advancing between $53 and $695 for mail order materials. Some of those customers sustained their losses in advance of the 1974 consent judgment, others as a result of the postjudgment mailings.

In December, 1975 Special Term granted the Attorney-General’s motion to hold the defendants in contempt, finding that within five days from the entry of the consent judgment they had ordered four million envelopes for new bulk mailings of identically deceptive promotional materials. Proof was adduced from four commercial mailing companies that 2,438,648 individual solicitations were mailed to prospective customers. The number of actual subscribers and the extent of their losses, however, were not ascertained.

What was clearly established was that immediately after the postjudgment mailings were made, cash receipts flowing into the defendants’ accounts began to swell appreciably. Having traced these receipts to the contemptuous mailings, Special Term permitted the Attorney-General to attach a balance of some $209,000 remaining in the accounts. This was to serve as a fund primarily for reimbursing defrauded subscribers.

Aside from restitution, the Attorney-General also sought to impose a civil fine of $250 for each and every one of the admitted 2Vi million postjudgment mailings. The trial court found this to be theoretically within its powers since each fraudulent solicitation in its view "constituted a separate and wilful contempt in violation of the consent judgment, each being an independent misrepresentation which was completed upon the mailing of the false material after the entry of judgment.”

Under this formula a fine of some $600 million could have been imposed above and beyond sums due in restitution. But Special Term found this "implausible” as well as "harsh and excessive” even under the outrageous circumstances of this case. The court therefore set a compromise figure by reducing the fine to $500,000 and further suspending all but $209,000 less reimbursement claims and expenses, but only on the condition that the defendants comply with the consent judgment in the future.

The Appellate Division affirmed the major factual findings of Special Term but concluded that the maximum fine available under section 773 of the Judiciary Law was $250 multiplied by the number of bulk mailings, which that court found to constitute the number of separate contempts for purposes of gauging the maximum amount of a civil fine. Finding but four bulk mailings, the court reduced the fine to $1,000. Writing for the court but speaking for himself alone, however, Mr. Justice Kupferman would have treated "each separate reply and the servicing thereof, of several thousand, to be a separate contempt”. Given this difference of opinion the Appellate Division granted the Attorney-General permission to appeal and certified the question whether its modification was properly made.

Our reading of the statute governing the amount of the fine that may be imposed for civil contempt requires a negative response to the certified question. By its unambiguous terms the statute distinguishes between the amount of the fine assessable in two separate types of civil contempt cases, one where actual damage has resulted from the defendants’ contemptuous acts and one where there may be prejudice to a complainant’s rights but "it is not shown that such an actual loss or injury has been caused” (Judiciary Law, § 773, as amd by L 1977, ch 437, § 8). In the first type of case the fine must be "sufficient to indemnify the aggrieved party”; in the latter the fine may not exceed the amount of the complainant’s costs and expenses plus $250 (§ 773; see Moffat v Herman, 116 NY 131).

In either case, unlike fines for criminal contempt where deterrence is the aim and the State is the aggrieved party entitled to the award (e.g., Matter of Katz v Murtagh, 28 NY2d 234; cf. Nye v United States, 313 US 33, 42-43), civil contempt fines must be remedial in nature and effect (Gompers v Bucks Stove & Range Co., 221 US 418). The award should be formulated not to punish an offender, but solely to compensate or indemnify private complainants (Geller v Flamount Realty Corp., 260 NY 346; Socialistic Co-op. Pub. Assn. v Kuhn, 164 NY 473), here represented but not displaced by the Attorney-General (see United States v Mine Workers, 330 US 258).

In keeping with this compensatory policy, where there is actual loss or injury the statute does not provide for a general $250 fine, single or multiple. It calls instead for an assessment that will indemnify aggrieved parties, in this case the persons who sent money to the defendants in response to the deceptive postjudgment solicitations. Although it has yet to be established exactly how many persons suffered losses, the existence of a substantial injury itself is not disputed. And the extent of that injury could not possibly be less than the $209,000 balance traced to receipts from the contemptuous solicitations and found by Special Term to represent "but the residue of a larger amount of which consumers were defrauded.”

Because these losses were shown to be actual and reasonably ascertainable though not yet fully ascertained, any civil fine based on separate acts of contempt multiplied by the statutory maximum for unprovable damages would be inappropriate in this case. Even if we were dealing with a case of mere prejudice rather than actual injury, that construction would be no less problematic, for it could be indiscriminately applied to achieve "extortion beyond the requirements of just compensation or indemnity, and to reward the omission of exact proof by multiplying the maximum award by the number of the offenders” or divisible offenses (Socialistic Co-op. Pub. Assn. v Kuhn, 164 NY 473, 476, supra). But we are in fact dealing with actual, provable losses and we therefore decline to adopt a construction which would substitute what would amount to exemplary damages for a reasonably certain compensatory fine.

In view of the statutory distinction based on the compensatory policy for imposing fines for civil contempt, we need not concern ourselves or speculate about the number of con-tempts, for we are dealing with a single enterprise. Although many deceptive solicitations were mailed and many people were injured, it is the extent of their compensable losses and not their potential strength in numbers which should define the appropriate limits of any civil fine imposed on their behalf. Only a fine properly related to the scope of the injury rather than the potential scope of the offense will serve the compensatory purposes of the civil contempt fine.

To that end and to avoid any enrichment of the defendants at the expense of their victims, the Attorney-General should exhaust all available means of implementing the claims procedure outlined by Special Term. Only after all reasonable avenues for locating and reimbursing claimants have" been fully explored will the ultimate fine, including all related costs and expenses, be subject to confirmation upon further hearings.

Despite practical limitations on the State’s ability to achieve full restitution and indemnification, aggravated by the defendants’ predictable failure to maintain proper records, the final assessment against the defendants is not likely to fall short of the preserved $209,000 fund representing the residue of payments bilked from postjudgment subscribers. But in the unlikely event that ordinary claims procedures fail to exhaust this fund, the balance may be retained by the Attorney-General for a further suitable period to cover the discovery, submission and satisfaction of yet unknown claims.

Accordingly, the order of the Appellate Division should be modified; a compensatory fine of $209,000 should be provisionally assessed against the defendants to indemnify postjudgment subscribers for their losses and the Attorney-General’s office for all related costs and expenses, subject to exhaustion of the fund; and the question certified should be answered in the negative. However, in view of the fact that no appeal has been taken by the defendants in this case, this court does not act with respect to the imposition of the $1,000 fine by the Appellate Division.

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

Order modified, with costs to the State of New York, in accordance with the opinion herein and, as so modified, affirmed. Question certified answered in the negative.

       A fine imposed for civil contempt is payable to the "aggrieved party” (Judiciary Law, § 773). Here the Attorney-General is acting solely as a nominal party on behalf of defrauded subscribers who are the real parties in interest within the intendment of this statutory provision. It is their actual loss or injury which makes them "aggrieved” for purposes of the statutory fine, and it is that aggregate injury for which the statute affords indemnification.


author: Wachtler, J. Chief Judge Breitel

text:
    Bernard F. Mundy et al., Individually and on Behalf of All Other Employees of the Nassau County Department of Probation Similarly Situated, Respondents, v Nassau County Civil Service Commission et al., Appellants, and Probation Officers Benevolent Association, Intervenor-Appellant.
    Argued March 29, 1978;
    decided May 11, 1978

      POINTS OF COUNSEL

      William Gitelman, County Attorney (William S. Norden and Natale C. Tedone of counsel), for Nassau County Civil Service Commission and others, appellants.
    I. Respondents’ appeal dated September 23, 1976 from the order of the Supreme Court, Nassau County dated September 17, 1976 was properly dismissed. (Lincoln First Bank of Rochester v Grabowski, 50 AD2d 1074, 40 NY2d 801; Ecco High Frequency Corp. v Amtorg Trading Corp., 274 App Div 982; Liberty Nat. Bank & Trust Co. v Bero Constr. Corp., 29 AD2d 627.) II. The four-month Statute of Limitations (CPLR 217) in this article 78 proceeding constitutes a complete bar to the instant action. (Matter of Nelson v Kelly, 4 AD2d 596; Matter of Mark v Lang, 49 Misc 2d 736, 26 AD2d 621; Matter of Loon Lake Estates v Adirondack Park Agency, 83 Misc 2d 686, 85 Misc 2d 929; Matter of Queensborough Community Coll, of City Univ. of N. Y. v State Human Rights Appeal Bd., 41 NY2d 926; Matter of Castaways Motel v Schuyler, 24 NY2d 120; Matter of Munice v Board of Examiners of Bd. of Educ., 31 NY2d 683; Matter of Pollak v Conway, 276 App Div 435, 301 NY 816; Matter of Geyer v Nassau County Civ. Serv. Comm., 51 AD2d 571; Schuylkill Fuel Corp. v Nieberg Realty Corp., 250 NY 304.) III. Respondents’ alleged reliance upon the judicial stay of termination granted January 14, 1975 as authority for respondents’ assertion that their aggrievement did not arise until June or August, 1975 is without merit. (Rinzler v Citizens Sav. Bank, 271 NY 176; Lowenstein v Reikes, 258 NY 444.) IV. Respondents’ declaratory judgment action is not the proper form of proceeding to review the administrative determinations involved in the preparation of examinations and to review the eligible list. (Elkort v 490 West End Ave. Co., 38 AD2d 1; Board of Educ. v Allen, 25 AD2d 659; Industrial Group Serv. v Cantor, 24 AD2d 1032; Matter of McCanless v Brieant, 19 AD2d 736; Lutheran Church in Amer. v City of New York, 35 NY2d 121; Matter of Andresen v Rice, 277 NY 271; Dun & Bradstreet v City of New York, 276 NY 198.) V. The collateral challenges of the county appellants are further and additional legal grounds for dismissal of the complaint. (Koso v Greene, 260 NY 491; Suppus v Bradley, 278 App Div 337; Matter of Bianchi v McCoy, 32 AD2d 871, 26 NY2d 770; Elkort v 490 West End Ave. Co., 38 AD2d 1.)

      Louis J. Lefkowitz, Attorney-General (Lillian Z. Cohen and Samuel A. Hirshowitz of counsel), for the State of New York and another, appellants.
    Plaintiffs’ article 78 proceeding is barred by CPLR 217 since it was commenced more than four months after the promulgation of eligible lists based upon the examinations being challenged. (Matter of Queensborough Community Coll. of City Univ. of N. Y. v State Human Rights Appeal Bd., 41 NY2d 926; Matter of Munice v Board of Examiners of Bd. of Educ., 31 NY2d 683; Matter of Nelson v Kelly, 4 AD2d 596; Matter of Geyer v Nassau County Civ. Serv. Comm., 51 AD2d 571; Matter of Martin v Ronan, 57 AD2d 514; Matter of Bowne v County of Nassau, 45 AD2d 304; Rinzler v Citizens Sav. Bank, 271 NY 176.)

      Hartman & Alpert for intervenor-appellant.
    The instant proceeding was time-barred and the court below properly dismissed the complaint.

      Robert M. Calica and Bernard S. Meyer for respondents.
    I. The complaint for a declaratory judgment and related injunctive relief, predicated upon a claim of continuing illegal and unconstitutional action by defendants, is not governed by the four-month Statute of Limitations applicable to article 78 proceedings generally. (Matter of Fink v Finegan, 270 NY 356; Matter of Pollak v Conway, 276 App Div 435, 301 NY 816; Matter of Acosta v Lang, 13 NY2d 1079; Matter of Davis v Wiener, 260 App Div 127, 285 NY 537.) II. By virtue of: (1) the declaration of the court below of the unconstitutionality of section 256 of the Executive Law in another action; (2) the judicial stay of termination; and (3) the consequent withdrawal by defendant, Nassau County Civil Service Commission, of certification of names from the eligible lists, plaintiffs did not become aggrieved until June or August 1975. Even if CPLR 217 be assumed applicable, the action was timely commenced. (Matter of Bowne v County of Nassau, 45 AD2d 304; Verbanic v Nyquist, 41 AD2d 466; Matter of Gates v Walkley, 41 AD2d 319; Matter of Castaways Motel v Schuyler, 24 NY2d 120; City of New York v State of New York, 40 NY2d 659; Rinzler v Citizens Sav. Bank, 271 NY 176; Lowenstein v

      Reikes, 258 NY 444.) III. The collateral challenges raised by the county defendants upon the motion to dismiss lack merit. (Spadanuta v Incorporated Vil. of Rockville Centre, 38 Misc 2d 999, 20 AD2d 799, 15 NY2d 755; Prouty v Drake, 208 Misc 540; Halpern v Lomenzo, 35 AD2d 41; Matter of O’Connor v Emerson, 196 App Div 807, 232 NY 561; Matter of Cohn v Board of Educ., 58 AD2d 977; Mark v Department of Civ. Serv. of State of N. Y., 91 Misc 2d 523; Bascome v Gold, 33 AD2d 922; Psaroudis v Psaroudis, 30 AD2d 841, 27 NY2d 527; Petito v Diesel, 12 AD2d 792.)
   OPINION OF THE COURT

Wachtler, J.

In this proceeding, originally commenced as an action for a declaratory judgment, 24 provisional employees of the Nassau County Probation Department, who failed or received low grades on civil service tests for permanent appointment, claim that the exams are illegal and invalid because they are not sufficiently job-related. Special Term treated the complaint as a petition in an article 78 proceeding and then dismissed for untimeliness. The Appellate Division modified by reinstating the complaint. On this appeal, by leave of our court, the county and the State claim that the proceeding was not commenced within four months after the determination to be reviewed became final and binding upon the petitioners (CPLR 217).

In 1971 the Legislature transferred supervision and control of the Probation Department from the judiciary to the County Executive (Executive Law, § 256, 1971, ch 387). In 1974 the petitioners, who were provisional employees of the Nassau County Probation Department, took civil service tests for permanent employment with the department. As a result of the exams an eligible list was promulgated on January 2, 1975. On that same date each of the petitioners was notified that he had failed or received a low grade on the exams. On January 7, 1975 the Nassau County Civil Service Commission certified the list and sent it to the Nassau County Probation Department.

On January 10, 1975, in an unrelated suit challenging the constitutionality of section 256 of the Executive Law, a Supreme Court Justice temporarily enjoined the county from making any appointments from the list. On January 14, 1975 the Executive Director of the Nassau County Civil Service Commission formally withdrew certification of the list and notified all eligibles that "certification of names from the list will be withdrawn and held in abeyance until a final determination is made by the court.” Subsequently on June 9, 1975 this court held that section 256 of the Executive Law was constitutional (Matter of Bowne v County of Nassau, 37 NY2d 75).

On July 24, 1975 the Nassau County Civil Service Commission recertified the list. In August the order enjoining the commission from discharging any employees on the affected lists was vacated, and in September each of the petitioners was either demoted or discharged based on their examination grades and position on the certified list.

This suit was commenced on September 3, 1975 by service of a summons. The complaint seeks a declaration that the examinations are, "invalid, illegal, and violative of Civil Service Law Section 50(6) in that they were neither practical in their character, nor did they relate to those matters which would fairly test the relative capacity and fitness of the persons examined to discharge the duties [of the positions] * * * to which they sought appointment.”

We agree with Special Term and the Appellate Division that the complaint should be considered a petition commencing an article 78 proceeding (see, e.g., Matter of Acosta v Lang, 13 NY2d 1079). The question is whether the four-month Statute of Limitations applicable to such proceedings (CPLR 217) began to run when the list was originally certified in January, 1975 or when it was recertified in July, 1975, after the initial certification had been withdrawn. In our view the determination which the petitioners seek to review did not become "final and binding upon the petitioner[s]” (CPLR 217) until the list was recertified on July 24, 1975.

Ordinarily, these employees should have become aggrieved when eligibility lists based on grades from the contested examinations were established and first certified early in January, 1975. This is usually the type of "final and binding determination” from which the four-month limitations period is measured, for this is the point when the challenged action has its impact (Matter of Queensborough Community Coll. v State Human Rights Appeal Bd., 41 NY2d 926; Matter of Munice v Board of Examiners of Bd. of Educ., 31 NY2d 683; see CPLR 217).

In this case, however, within a few days of the initial certification, certification was withdrawn and specifically "held in abeyance” pending a "final determination” of the constitutional challenge to section 256 of the Executive Law. Thus the withdrawn list could have no impact on the petitioners’ rights until it was recertified after we finally resolved the dispute regarding the constitutionality of the statute (see Matter of Bowne v County of Nassau, 37 NY2d 75, supra). And, as noted, the present suit was commenced within a month and one half of the recertification.

To be sure, public employees aggrieved by the questionable propriety of a civil service examination should not be allowed to press stale claims or disrupt the appointments of those otherwise secure in their tenure merely by framing a lawsuit as a declaratory judgment action or casting their grievance as a continuing wrong (compare Matter of McDermott v Johnson, 2 NY2d 608, with Lutheran Church in Amer. v City of New York, 35 NY2d 121). Only a short Statute of Limitations can effectively contain this type of challenge within fair as well as feasible bounds.

On the other hand, when an administrative body itself creates ambiguity and uncertainty by declaring that "certification * * * will be withdrawn and held in abeyance”, affected employees and their counsel should not have to risk dismissal for prematurity or untimeliness by necessarily guessing when a final and binding determination has or has not been made. Under these circumstances, "the courts should resolve any ambiguity created by the public body against it in order to reach a determination on the merits and not deny a party his day in court” (Matter of Castaways Motel v Schuyler, 24 NY2d 120, 126-127; cf. City of New York v State of New York, 40 NY2d 659, 670).

Having created the ambiguity and impression of nonfinality, it was up to the defendant commission to either "make it clear what was or what was not its [final] determination” (Matter of Castaways Motel v Schuyler, supra, p 126) or, failing that showing, to abide by reasonable delays which it alone had engendered (see Matter of O’Neill v Schechter, 5 NY2d 548).

On this basis, the Appellate Division below properly concluded that the plaintiffs did not become aggrieved and the Statute of Limitations did not begin to run against them until the challenged lists were recertified in July, 1975. Accordingly, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Breitel

(dissenting). I would reverse and dismiss the proceedings for untimeliness.

In governmental matters, for the correction of unlawful conduct by officials under the summary procedure allowed by CPLR article 78, the Statute of Limitations is four months (CPLR 217). The reason for the short statute is the strong policy, vital to the conduct of certain kinds of governmental affairs, that the operation of government not be trammeled by stale litigation and stale determinations. In civil service matters the reason for expedition is as great as any. Challenges to the filling of civil service positions must be promptly asserted, not only to smooth the operation of the public services but to assure that selections are made from contemporary eligible lists of qualified people. These principles have been reiterated for decades in the leading cases in this court (see, e.g., Hurley v Board of Educ., 270 NY 275, 280; Ciaccia v Board of Educ., 271 NY 336, 339-340).

The gravamen of the claims by petitioners in this proceeding has always been the impropriety and unfairness of the questions on the competitive examination by which they were tested. That gravamen from the giving and taking of the examination gave rise to a justiciable cause of action, never interrupted by the events involved in the certification of the eligible list. Petitioners would not know they were aggrieved, it may be argued, until the first promulgation of the eligible list disclosed their ratings. The court need not accept or reject the argument that the four-month statute does not begin to run until the first promulgation of the eligible list; it is enough to recognize that whether the statute runs from the examination or from the promulgation, this proceeding is untimely.

Matter of Queensborough Community Coll. v State Human Rights Appeal Bd. (41 NY2d 926) and Matter of Munice v Board of Examiners of Bd. of Educ. (31 NY2d 683), cited in the majority opinion, are not relevant. The Queensborough case involved a determination by a public college not to reappoint complainant, and the grievance procedure was referred to as alternative and ineffective to toll the Statute of Limitations. The Munice case held that a denial of an appeal was final and binding even though subsequent advice giving the reasons for the denial was provided. Indeed, the holdings are supportive of the general principles set forth in this opinion.

Certification, as distinguished from promulgation, of the list simply gives the appointing authority the names of eligible persons among whom competitive appointments must be made (see Rules of the Nassau County Civil Service Commission, rules XV, XVI; see, also, for comparison, the Rules and Regulations of the State Department of Civil Service, 4 NYCRR 3.6, 4.1; see, generally, 67 CJS, Officers, § 34, subds g, h). Withdrawal of the certification did not change the quality of the examination attacked, or the effect, aspect, or content of the eligible list as promulgated, and hence that withdrawal was irrelevant to the running of the Statute of Limitations. The statute began to run at the very latest from the promulgation of the list, if not, as may be true in some cases, from the taking of the examination. The grievances remained and continued to be justiciable. The recertification of the list after this court decided Matter of Bowne v County of Nassau (37 NY2d 75) removed the bar on the appointing authority, but created no new grievances for petitioners. Certification never having been a condition to beginning this attack on the validity of the examination, the fact or time of recertification is of no significance. The promulgated list had never been undone; only the direction to the appointing authority had been stayed.

Distortion and expansion of the function of certification or recertification of the list to the appointing authority would leave a list based on a 1974 competitive examination still to be litigated. More years may pass before competitively qualified persons are determined to fill the positions in the probation service in Nassau County.

Moreover, this case does not involve any ambiguities in the finality and binding quality of an administrative determination (see Matter of Castaways Motel v Schuyler, 24 NY2d 120, 126-127). The questioned examination was always good or bad depending upon the view of the adversary parties here. Neither certification of the list, withdrawal of certification, nor recertification ever changed the validity of the examination on which the list was based.

The worst is that the holding in this case will mark another departure from the salutary time limitations now circumscribing summary proceedings under article 78 on a novel analysis in contradiction of the rules and principles which have obtained for so long (see dissenting opn in Matter of Mena v D’Ambrose, 44 NY2d 428, decided simultaneously with this appeal).

Accordingly, I dissent and vote to reverse and dismiss the proceedings.

Judges Gabrielli, Fuchsberg and Cooke concur with Judge Wachtler; Chief Judge Breitel dissents and votes to reverse and dismiss in a separate opinion in which Judges Jasen and Jones concur.

Order affirmed.

Rule XV of the Nassau County Civil Service Commission

NASSAU COUNTY CIVIL SERVICE COMMISSION

Rule XV

Eligible Lists

1. Every candidate who attains a passing mark in an examination as a whole and who meets the standards prescribed, if any, for separate subjects or parts of subjects of the examination, shall be eligible for appointment to the position for which he was examined and his name shall be entered on the eligible list in the order of his final rating; but if two or more eligibles receive the same final rating in the examination, they shall be ranked in accordance with such uniform, impartial procedure as may be prescribed therefor by the Commission.

2. The date of the establishment of a list shall be the date fixed therefor by Commission resolution, and shall be entered on such list. The term of eligibility of all lists shall be fixed by the Commission at not less than one nor more than four years.

3. The date of establishment of an eligible list and its duration shall be given to all successful candidates at the time when notice of standing on the eligible list is given to such candidates. Where the duration of an eligible list is fixed at less than four years, the Commission may, by resolution, prior to the expiration date of such list extend the duration of the list up to the maximum limitation of four years or in the case of a police officer eligible list up on to the maximum limit of two years, an'd in the case of a police promotion list up to a maximum of three years.

4. Eligible lists shall be open to public inspection at the office of the Commission. The names of persons who failed to receive a passing grade on the examination shall not be disclosed to the public.

5. An eligible list may be established subject to the conduct of such medical, physical, or other appropriate non-competitive qualifying tests, investigations and conditions as may be deemed appropriate by the Commission.

6. An eligible list that has been in existence for one year or more shall terminate upon the establishment of a new list unless otherwise prescribed by the Commission. Where an eligible list is established by means of continuous recruitment, the names of the new eligibles shall be added to any existing list for such position in accordance with the ratings achieved by the eligibles. Such names shall remain on the eligible list for one year from the date of

June 1977

notification of examination results.

7. When an eligible list has been in existence for less than one year and contains the names of less than three eligibles willing to accept appointment, and a new list for the same position or group of positions is established, the names of the eligibles remaining on the old list shall have preference in certification over the new list until such old list is one year old, and during such period such names shall be certified along with enough names from the new list to provide the appointing officer with a sufficient number of eligibles from which selection may be made. Where an old list which has been in existence for one year or more is continued upon the establishment of a new list which contains less than three names, the Commission may certify the names on the old list along with enough names from the new list to provide the appointing officer with a sufficient number of eligibles from which selection may be made.

8. The appointing body of a town, village, special district, school district or school district library may, by resolution, request the Commission to certify first for appointment from open competitive lists, residents of the particular town, village, special district, or school district, provided, however, no such preference shall be given on appointments from the promotion lists. Upon exhaustion of the list of such resident eligibles, certification shall be made from the whole eligible list.

9. The Commission shall have power in its discretion to correct any error and amend any eligible list where it appears that an error has been made or an injustice done. The Commission shall have the power to revoke any eligible list where the provisions of these rules were not properly or sufficiently carried out; provided, however, that an eligible list shall not be revoked except after notice and an opportunity to be heard has been given to all persons whose names appear thereon. The reasons for such action shall be recorded in the minutes of the Commission and reported to the State Civil Service Commission.

December 1972

Rule XVI

Certifications and Appointments

1. The Commission shall determine the eligible list most nearly appropriate for the position to be filled, and shall certify to the appointing authority a sufficient number of eligibles from which selection for appointment may be made. When the name of an eligible is included in a certification for appointment, the names of all other eligibles on the list having the same final rating as such eligible shall likewise be included in such certification. The application of an eligible who is being considered for appointment may be shown to the appointing officer, providing it does not violate the laws against discrimination.

2. A Certification issued by the Commission to an appointing officer shall be valid for a period of 30 days from the date of its issuance. After the expiration of such 30 day period no appointment shall be made except from a new certification.

3. When an eligible is canvassed for appointment or is offered appointment in writing and fails to state his willingness to accept such appointment within seven working days after the mailing of such canvass or offer, or before the end of the next succeeding working day if such canvass or offer is sent to him by telegram, he may be considered ineligible for purposes of making selection for such particular appointment.

4. The name of the person declining appointment shall be eliminated from further certification from the eligible list unless declination is for one or more of the following reasons:

(a) Insufficiency of compensation offered when below minimum of grade of the position for which the examination was held;

(b) Location of employment;

(c) Temporary inability, physical or otherwise, which must be satisfactorily explained by the eligible in writing. The Commission shall enter upon the eligible list the reasons for its action in such cases.

October 1975

5. Except as otherwise provided herein, appointment or promotion to a position in the competitive class shall be made by the selection of a person on the most nearly appropriate eligible list who is willing to accept such appointment and whose final rating in the examination is equal to or higher than the rating of the third highest ranking eligible on the list indicating willingness to accept such appointment. The term "ranking” as used herein refers to the order in which the names of eligibles appear on the eligible list as provided in Rule XV.

6. Whenever a vacancy exists in a position in the competitive class and an open competitive examination duly advertised results in three or fewer approved applicants for the examination, the appointing officer may nominate to the Commission one of the applicants who may be certified for appointment to fill the vacancy without further examination, provided that he has already qualified in an examination of equivalent character within the last four years from the date of nomination.

7. Wherever one or more eligibles shall have declined any appointment offered and an eligible, whose relative standing is lower and who was reachable on the certification only because of the aforesaid declination, shall have been appointed to the position, the salary, or compensation of such appointee shall not be increased, except by a service or a class wide increase, within a period of six months after his appointment beyond that offered to the persons so declining.

August 1968

         Although the county also urges that the period began to run when the test was administered, we have rejected this contention in the case of Matter of Martin v Ronan (44 NY2d 374, decided herewith).

       The cited Nassau County Rules are attached as an appendix.


author: Jones, J.

text:
    Ryder Truck Lines, Inc., Appellant, v Antonio Maiorano, Respondent.
    Argued March 31, 1978;
    decided May 11, 1978

      POINTS OF COUNSEL

      William F. O’Connor and Kathryn Deborah Nealon for appellant.
    I. In affirming Special Term, the court below failed to take into account the constitutional basis of workmen’s compensation. (Matter of Rheinwald v Builders’ Brick & Supply Co., 168 App Div 425; Williams v Hartshorn, 296 NY 49.) II. In affirming Special Term, the court below has sanctioned the unconstitutional application of section 671 of the Insurance Law of the State of New York. III. It is error to leave the preliminary constitutional question to an arbitrator to decide. (Matter of Green Bus Lines [Bailey], 80 Misc 2d 483; Matter of Nyack Bd. of Educ. [Nyack Teachers Assn.], 77 Misc 2d 116; Durst v Abrash, 22 AD2d 39.) IV. Both Special Term and the court below placed undue emphasis on the fact that petitioner-appellant is self-insured.

      Jason Harnick for respondent.
    I. An employee is entitled to first-party benefits from the "insurer” as defined in the "no-fault” law, article 18 of the Insurance Law of the State of New York, and receipt of said benefits is not in constitutional conflict with any benefits received by said employee under the Workmen’s Compensation Law of the State of New York. II. All matters at issue must be left to an arbitrator to decide. (Matter of Green Bus Lines [Bailey], 80 Misc 2d 483.

      Louis J. Lefkowitz, Attorney-General (Rosalind S. Fink and Samuel A. Hirshowitz of counsel), in his statutory capacity under section 71 of the Executive Law.
    I. Section 671 (subd 2, par [b]) of the Insurance Law, insofar as it permits an employee injured in a no-fault accident while in the course of his employment to collect "first-party benefits” from his self-insured employer, is not contrary to section 18 of article I of the New York State Constitution. (Montgomery v Daniels, 38 NY2d 41; Country-Wide Ins. Co. v Harnett, 426 F Supp 1030; Matter of Gormeley v New York Daily News, 30 AD2d 16; Matter of Toomey v New York State Legislature [Assembly], 2 NY2d 446; Powers v Porcelain Insulator Corp., 285 NY 54; Brooklyn Union Gas Co. v New York State Human Rights Appeal Bd., 41 NY2d 84; Ives v South Buffalo Ry. Co., 201 NY 271.) II. Petitioner’s constitutional claim is within the power of an arbitrator to decide. (Matter of Nassau Ins. Co. v McMorris, 53 AD2d 694; Matter of Jamaica Buses, 54 AD2d 934; Country-Wide Ins. Co. v Harnett, 426 F Supp 1030.) III. Petitioner may not raise arguments against the validity of section 671 (subd 2, par [b]) not raised below, but in any event, these arguments are without merit. (Boryszewski v Brydges, 37 NY2d 361; Dandridge v Williams, 397 US 471; Village of Belle Terre v Boraas, 416 US 1; Gleason v Gleason, 26 NY2d 28; Matter of Bauch v City of New York, 21 NY2d 599, 393 US 834; Bucho Holding Co. v Temporary State Housing Rent Comm., 11 NY2d 469.)
   OPINION OF THE COURT

Jones, J.

We hold that there is neither constitutional nor statutory bar to submission to arbitration by an employee of his claim against his employer for first-party benefits under the no-fault insurance law with respect to injuries suffered by the employee in the course of his employment while operating a motor vehicle owned by the employer.

On December 1, 1975 respondent Maiorano, an employee of Ryder Truck Lines, Inc., while operating a Ryder motor vehicle in the course of his employment was injured in a one-vehicle accident. Ryder, a self-insurer as to its obligations under the Workmen’s Compensation Law, commenced payment of workmen’s compensation benefits to its employee. Maiorano, however, also requested payment from Ryder, in its capacity as owner of the motor vehicle, of first-party benefits under article 18 of the Insurance Law (the so-called "no-fault” law), as to which liability Ryder was also a self-insurer. When the employer refused to pay first-party benefits, the employee sought arbitration of his claim therefor, pursuant to the provisions of section 675 of the Insurance Law. The employer then instituted the present proceedings to stay such arbitration. Supreme Court denied the stay and directed the parties to proceed to arbitration, the Appellate Division affirmed, and the employer has appealed to our court as of right on constitutional grounds. We now affirm the dispositions below.

A preliminary procedural issue calls for our attention. Respondent employee would have us sustain the denial of the stay of arbitration on the ground that consideration of the merits of the controversy between the parties, in accordance with recognized doctrine, is not subject to judicial resolution but must be left to determination by the arbitrator. The disposition of this contention hinges on the scope of the parties’ obligation to arbitrate. The employee correctly states the law — if the parties be deemed to have agreed to refer their dispute to arbitration, then, unless barred by considerations of public policy, disposition of their differences on the merits must be left to the arbitrator (CPLR 7501). The commitment to arbitrate in this instance is to be found in the statute rather than in any writing signed by the parties. Subdivision 2 of section 675 of the Insurance Law contains the relevant provision — "Every insurer shall provide a claimant with the option of submitting any dispute involving the insurer’s liability to pay first party benefits * * * to binding arbitration pursuant to simplified procedures to be promulgated or approved by the superintendent.” In our view this is a broad arbitration clause embracing all disputes with respect to entitlement to first-party benefits arising under the statute.

The employer counters, however, with the argument that there is nothing to submit to arbitration inasmuch as the employee has no claim whatsoever against his employer under the no-fault statute. The present controversy therefore is as to the scope of the agreement to arbitrate, not as to the merits of this employee’s particular asserted entitlement to first-party benefits. We turn then to consideration of the employer’s arguments.

Ryder’s principal contention is that, pursuant to the provisions of section 18 of article I of the New York State Constitution, the exclusive remedy of an employee for injuries arising out of the operation of his employer’s motor vehicle in the course of his employment is under the Workmen’s Compensation Law. As a corollary the employer argues that to interpret section 671 of the Insurance Law as extending first-party benefits to employees would be to violate the constitutional proscription. By way of a fallback position, the employer argues that even if liability for first-party benefits is not barred by the Constitution, it nevertheless is foreclosed by the explicit provision of section 11 of the Workmen’s Compensation Law. We reject these contentions, as have the courts below, and conclude that the entitlement of the employee to first-party no-fault benefits is to be determined in arbitration.

Section 18 of article I of the Constitution, as originally adopted in 1913 and renumbered November 8, 1938, effective January 1, 1939, provides: "Nothing contained in this constitution shall be construed to limit the power of the legislature to enact laws for the protection of the lives, health, or safety of employees; or for the payment, either by employers, or by employers and employees or otherwise, either directly or through a state or other system of insurance or otherwise, of compensation for injuries to employees or for death of employees resulting from such injuries without regard to fault as a cause thereof, except where the injury is occasioned by the wilful intention of the injured employee to bring about the injury or death of himself or of another, or where the injury results solely from the intoxication of the injured employee while on duty; or for the adjustment, determination and settlement, with or without trial by jury, of issues which may arise under such legislation; or to provide that the right of such compensation, and the remedy therefor shall be exclusive of all other rights and remedies for injuries to employees or for death resulting from such injuries; or to provide that the amount of such compensation for death shall not exceed a fixed or determinable sum; provided that all moneys paid by an employer to his employees or their legal representatives, by reason of the enactment of any of the laws herein authorized, shall be held to be a proper charge in the cost of operating the business of the employer.” Manifestly this provision is one of enabling authorization rather than of adoption of a workmen’s compensation program. Section 18 does not itself enact any such program as an exclusive employee remedy; it merely removes all constitutional constraints on the enactment of such a program by the Legislature. Accordingly the Constitution cannot be construed as prohibiting the adoption of the present or any other legislative provision.

The issue then is whether the Legislature, notwithstanding its earlier adoption of the Workmen’s Compensation Law with its explicit exclusive remedy provision, created another remedy in favor of employees, separate and distinct from and in addition to workmen’s compensation, when it enacted article 18 of the Insurance Law in 1973. We find nothing in the no-fault insurance law itself, or in the legislative circumstances surrounding its adoption, which suggests that with the general replacement of former tort liability by first-party benefits (to the extent of basic economic loss as defined by the new statute) it was intended that the benefits of the new program should not be available to employees injured in the course of their employment. Indeed it is argued that the implications of the no-fault law are to the contrary; basic economic loss is expressly defined to exclude (and thus to be in addition to) workmen’s compensation benefits (Insurance Law, § 671, subd 2, par [b]).

Two different factual employer-employee situations must be examined: in the first a third-party tort-feasor is involved; in the second, as here, there is no third-party tort-feasor. In the former situation, with the substitution under the no-fault law of first-party benefits for former tort liability, the employer as owner of the motor vehicle being operated by the employee would become liable for payment of the substituted first-party benefits. It defies credulity to think that the Legislature did not expect this new, substituted right to survive the restriction of section 11 of the Workmen’s Compensation Law purporting to limit all liability of the employer to workmen’s compensation benefits. To hold otherwise would in effect have been to deprive the employee of his former right to recover from the third-party in tort and to provide no substitute protection. Nothing suggests that any such deprivation was intended or foreseen. Indeed appellant does not seriously argue for such a result where a third-party tort-feasor is involved.

Appellant does argue, however, that the second situation— that with which we are here confronted — is quite different. In the one-vehicle accident in which there was no third-party tort-feasor, prior to the enactment of the no-fault law the employee had only a claim against his employer under the Workmen’s Compensation Law, subject to all the restrictions and limitations of that law. Thus, it is said that to accord an employee the right to first-party benefits from his employer in a one-vehicle accident in which no third-party tort-feasor is involved would be to create a new benefit for which there had been no prior analogue, in direct contravention of the provisions of section 11 of the Workmen’s Compensation Law.

This argument has an analytical plausibility and accurately describes, in a literal sense, the consequence of the determinations below, viewed in the narrow perspective of this particular case. We reject it, however. It is based on a differentiation between discrete factual situations for which we find no predicate in legislative enactment or consideration. Nothing suggests that the legislators consciously addressed the employer-employee relationship, much less perceived or sought to provide for a different consequence under the no-fault law depending on whether a third-party tort-feasor was a participant in the events out of which the employee’s claim arose. We judge the adoption of article 18 of the Insurance Law to have been intended to effect a major modification of former liability for negligence. It worked, pro tanto, a replacement of the former system of liability based on fault by a new no-fault liability. In the broad substitution of one system for another, we do not find evidence of legislative intention to effect a refined integration of the new no-fault program with the existing workmen’s compensation program. (Cf., e.g., Matter of Granger v Urda, 44 NY2d 91.) Rather the evidence is that both programs are self-standing, with no consciously intended harmonization between them. It may well be that the Legislature will now wish to or should consider integration of the two programs; it suffices for the disposition of the present appeal to conclude that it has not yet done so. Thus, the benefits under each program are at present independently available, except as expressly otherwise provided in section 671 (subd 2, par [b]) of the Insurance Law.

The employer contends that the determinations below result in differentiation of treatment between employees injured in the course of their employment in motor vehicle accidents and those injured from other causes, and thus constitute a denial of equal protection of the laws. We find no merit in this contention (cf. Montgomery v Daniels, 38 NY2d 41, 59-66).

With respect to the availability to employees of claims to first-party benefits under the no-fault law we attach no legal significance to whether the employer is self-insured or carries insurance coverage. In both instances, the no-fault law places financial responsibility on the employer. The employer, subject to some constraints, may then choose one method or the other to make economic provision to assure discharge of its financial obligations. Its liability, however, is unaffected by the implementing mechanism it selects.

We hold that there is nothing in Constitution or statute mandating exclusion of employee claims against employers for first-party benefits under article 18 of the Insurance Law and therefore conclude that the present controversy between the parties falls within the scope of the applicable arbitration provision. We see no bar to the determination in that forum of this employee’s claim to entitlement to first-party benefits from his employer.

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

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

Order affirmed.

      . Section 11 of the Workmen’s Compensation Law provides in pertinent part: "The liability of an employer [for workmen’s compensation benefits] shall be exclusive and in place of any other liability whatsoever, to such employee * * * at common law or otherwise on account of such injury”.

      . Although there are recognizable similarities, we are not here confronted with "skew-line” statutes (cf. Brooklyn Union Gas Co. v New York State Human Rights Appeal Bd., 41 NY2d 84, 88). It is true that benefits are available under the earlier Workmen’s Compensation Law which are separate and distinct from and do not parallel or intersect with the benefits under the later no-fault insurance law. There was no provision of the Disability Benefits Law, however, which purported expressly to limit benefits available to those under the Disability Benefits Law: "it contained no prohibition against granting disability benefits in excess of those mandated by the DBL” (op. cit., p 87). By contrast, section 11 of the Workmen’s Compensation Law provides that liability thereunder shall be exclusive of all other liability whatsoever to the employee. Thus, while benefits do not collide, the subsequent extension of no-fault benefits may be said to collide with the restrictive provision of section 11 of the Workmen’s Compensation Law.


author: Gabrielli, J. Chief Judge Breitel

text:
    In the Matter of Harold W. Martin et al., Appellants, v William J. Ronan, as Chairman of the Manhattan and Bronx Surface Transit Operating Authority, et al., Respondents, and Leon J. Robinson et al., Intervenors-Respondents.
    Argued March 29, 1978;
    decided May 11,1978

      POINTS OF COUNSEL

      Ronald H. Shechtman and Murray A. Gordon for appellants.
    I. The petition was timely instituted within four months from petitioners’ notice that they were aggrieved by a final and binding determination of respondents. (Matter of Abramson v Commissioner of Educ. of State of N. Y., 1 AD2d 366; Matter of O’Neill v Schechter, 5 NY2d 548; Matter of Wininger v Williamson, 46 AD2d 689; Matter of Gates v Walkley, 41 AD2d 319; Matter of Fryer v Broome County Bd. of

      Supervisors, 37 AD2d 755; Matter of Sikora v Board of Educ., 51 AD2d 135; Scherman v Board of Educ., 44 AD2d 831; Matter of Galuppi v New York State Liq. Auth., 12 AD2d 987; Matter of Kurtz v Krone, 43 Misc 2d 573, 22 AD2d 988.) II. Special Term properly ruled that the examination was unfair and noncompetitive in confirming the referee’s report. (Matter of Fink v Finegan, 270 NY 356; Matter of Cohen v Fields, 298 NY 235; Matter of Nelson v Board of Examiners of Bd. of Educ., 21 NY2d 408; Matter of Meyer v Kaplan, 22 AD2d 449, 16 NY2d 693; Matter of Abo v Krone, 55 Misc 2d 884; Matter of Bucalo v Kaplan, 19 AD2d 478; Matter of Donohue v Cornelius, 45 Misc 2d 42, 22 AD2d 1000; Matter of Fitzgerald v Conway, 195 Misc 397, 275 App Div 205; Matter of Katz v Hoberman, 28 NY2d 530, 970; Matter of Elliott v Hoberman, 61 Misc 2d 411.) III. Special Term properly denied intervenors’ motion to renew, reargue and vacate. (Matter of Lezette v Board of Educ., 35 NY2d 272; Matter of Skliar v Board of Educ., 45 AD2d 1012; Kirkland v Board of Educ., 49 AD2d 693; Matter of Spinney Hill Collision v Caso, 56 AD2d 655; Kirkland v New York State Dept. of Correctional Servs., 520 F2d 420; Bridgeport Guardians v Members of Bridgeport Civ. Serv. Comm., 482 F2d 1333; Aquavella v Harvey, 40 AD2d 940.)

      Jerome Tauber and I. Philip Sipser for intervenors-respondents.
    I. The proceeding was not commenced within the four-month limitation period contained in CPLR 217. (Matter of Davier v Reavy, 179 Misc 425; Matter of Rumack v McNamara, 195 Misc 84, 275 App Div 805, 903; Matter of Twomey v McNamara, 195 Misc 285; Matter of Kennedy v McGinnis, 45 AD2d 786; Matter of Greenbaum v Ingraham, 48 AD2d 969; Matter of Marcus v Kaplan, 20 AD2d 841; Matter of Furman v Marsh, 185 Misc 209; Rodriquez v City of New York, 55 AD2d 532.) II. Intervenors’ appointments may not be vacated without specific findings of fact that petitioners were prejudiced and that intervenors were unfairly advantaged by any alleged unfairness in the conduct of the oral examination. (Matter of Bruns v Suffolk County Civ. Serv. Comm., 56 Misc 2d 925; Matter of Mitchell v Poston, 41 AD2d 886.) III. The oral examination was fair and competitive. (People ex rel. Moriarty v Creelman, 206 NY 570; Matter of Metzger v Nassau County Civ. Serv. Comm., 54 AD2d 565; Mills v Bahou, 55 AD2d 57; Matter of Maurizio v Hoberman, 39 AD2d 524; Matter of Objectant No. 37801 v New York State Dept. of Civ.

      Serv., 33 AD2d 811; Matter of Bobrowich v Poston, 52 AD2d 976; Matter of Cowan v Reavy, 283 NY 232; Matter of Jochnowitz v Poston, 55 Misc 2d 898; Matter of Sloat v Board of Examiners of Bd. of Educ., 274 NY 367.) IV. Intervenors’ motion to vacate and renew should have been granted as intervenors were indispensable parties in the proceeding before the Supreme Court. (Matter of Skliar v Board of Educ., 45 AD2d 1012; Matter of Marcus v Kaplan, 20 AD2d 841; Matter of Cichy v Town of Cheektowaga, 61 Misc 2d 88; Matter of Kelleher v Poston, 33 AD2d 535; Schroeder v City of New York, 371 US 208.)

      Alphose E. DAmbrose for respondents who join in points I, II and III with intervenors-respondents.
   OPINION OF THE COURT

Gabrielli, J.

Petitioners seek judicial review of a competitive examination administered by the Manhattan and Bronx Surface Transit Operating Authority (MABSTOA) to determine examinee’s eligibility for promotion from dispatcher to senior dispatcher. The basic issue before us is whether this proceeding was commenced within the four-month Statute of Limitations (CPLR 217).

Although MABSTOA is not covered by the Civil Service Law, it has adopted rules and regulations requiring that promotions be from eligible lists promulgated on the basis of merit and fitness ascertained by competitive and fair examinations, just as in regular civil service examinations; and the same rules and procedures apply. By notice dated November 6, 1972 MABSTOA announced that it would conduct an examination to establish an eligible list for the position of senior dispatcher. The announcement described the responsibilities of the job, eligibility requirements, and the components of the test, which consisted of a written exam to be weighted at 40% and an oral exam to be weighted at 50% with the final 10% to be based on seniority credit. The written examination was held on December 16, 1972 and the candidates were notified whether they passed or failed that examination on February 1, 1973. Petitioners and the others were informed of the date and time of their oral test appointment. The oral tests were held on two separate dates: February 17, 1973 for those whose last names begin with the letters A-M and February 24, 1973 for the others. On April 18, 1973 a tentative eligible list, based on the test results, was published, and simultaneously each candidate was notified of his right to appeal. The candidates also received a "Notice of Results” dated April 23, 1973 which indicated their test score for each part and a final average. By letter dated August 31, 1973 the petitioners and all other persons who took appeals, were notified individually of the results of their appeals. Finally on October 10, 1973 the final revised eligible list was published indicating adjustments made necessary by the appeal determinations.

On February 8, 1974 the petitioners commenced this article 78 proceeding alleging that the oral examination was improperly administered due to, inter alia, a lack of sufficiently objective standards in the rating of the oral test, the dissemination of questions and answers on the oral test in the intervening week between the first and second sessions of that test and the use of improper personal data on the background of the candidates in rating the exam. The petition alleged that certain candidates were asked questions about their religious and social background, and other activities which were irrelevant and inappropriate for an evaluation of their qualifications. The petitioners also charged that the examiners used the same questions during both sessions of the oral examination and that in the intervening week between sessions the questions asked on February 17 were widely disseminated within MABSTOA to those who would take the examination a week later to the detriment of the candidates who first took the test. In addition it is alleged that a review class was held in the intervening week for those who were about to take the examination, in which questions and suggested answers were discussed.

The respondents moved in Special Term to dismiss the petition on Statute of Limitations grounds, urging that when a challenge is made to the conduct of an examination rather than the specific results, the challenger must commence his action within four months of the completion of the exam. Respondents contended, in part, that the time period commenced on February 24, 1973, the last day of the oral examination and since the action was not begun until February 8, 1974 the four-month Statute of Limitations had run. Special Term denied the motion, holding that the time bar is not applicable to a proceeding which complains of the continuing wrong of promulgation and utilization of an unlawful eligible list and that, in any event, the four-month period had not run from the time of the final and binding determination, apparently meaning October 10, 1973 when the revised eligible list was published, and the time when petitioners learned of their aggrievement. The court then referred the issue whether the exam was fair and competitive to a special referee to hear and report.

The special referee found, on the basis of evidence presented, that the prior knowledge by some competitors of the questions which might be used on the exam so impaired the competitiveness of the examination as to invalidate the test on general grounds of fairness. Aside from the intervening study session, the referee found that the use of the same questions in two separate weeks raised questions as to its fairness and the fact of the study session only furthered the conclusion that some candidates had an unfair advantage. Special Term confirmed the referee’s report and granted judgment accordingly.

The Appellate Division reversed the judgment on the Statute of Limitations grounds without reaching the merits of the action. That court ruled that the critical date for purposes of the four-month period was August 31, 1973, the point when most petitioners were informed of the result of their administrative appeals. On the issue of the Statute of Limitations, the dissenters at the Appellate Division held that the action was not time-barred since it was not until petitioners received notice of their final rating and standing on the eligible list that they were properly aggrieved. Mr. Justice Samuel J. Silverman, dissenting on this issue, noted that "it is unrealistic to expect a civil service employee to institute an article 78 proceeding attacking an examination until he knows his standing on the eligible list as finally promulgated” (57 AD2d 514, 515).

The question now before us is when does the Statute of Limitations begin to run. Several dates are proffered for consideration: February 24, 1973, the last day of the oral examination; August 31, 1973, the date when most petitioners were informed of the result of their administrative appeals; or October 10, 1973, the date when the final revised eligible list was published. CPLR 217 provides, in pertinent part, that "a proceeding against a body or officer must be commenced within four months after the determination to be reviewed becomes final and binding upon the petitioner”. In analyzing the Statute of Limitations issue we must first ascertain what is the determination sought to be reviewed. Petitioners seek to review the agency’s determination as to their eligibility for promotion. The mere administration of the test is not the agency action subject to review but rather it is the promulgation of the eligible list based on the allegedly unfair exam which constitutes the reviewable administrative determination. The test, standing by itself, gives rise to no cause of action. It is only when final and binding action is taken on the basis of the test that the action accrues. Clearly then it cannot be said that the time period began to run on February 24, 1973 when the final testing was completed for no determination had yet been made on the basis of the exam.

On April 18, 1973 there was an initial, tentative, eligible list promulgated. But this determination was certainly far from final and binding since each candidate, at this point, properly expected that the list would be subject to administrative adjustments and revisions based on the disposition of the anticipated potential appeals. This list was not a final and binding determination within the meaning of CPLR 217 (cf. Matter of Castaways Motel v Schuyler, 24 NY2d 120, 126).

On August 31, most candidates received separate notification of the disposition of their individual appeals, if appropriate. Although at this point they had knowledge concerning their own adjusted scores, they still remained ignorant as to their revised status in relation with the other candidates and, of course, their positions on the list. For a determination to be final "upon the petitioner” it must be clear that the petitioner seeking review has been aggrieved by it (Matter of O’Neill v Schechter, 5 NY2d 548). As we said in Matter of O’Neill (supra, p 554), and significantly apt here, "[i]t is axiomatic that 'Administrative procedure will be reviewed only at the instance of a person allegedly aggrieved thereby’ (Lederman v. Board of Educ., 276 App. Div. 527, 531, affd. 301 N. Y. 476, 493). As the court pointed out in Matter of Abramson v. Commissioner of Educ. (1 A D 2d 366, 371), petitioners 'had no reason to institute a judicial proceeding to challenge [respondents’] decision until they knew that they were aggrieved by it’ ”, It was not until the final revised eligible list was promulgated on October 10, 1973 that petitioners had a final determination from which to ascertain the possible consequences, as to them, of the allegedly improper examination (see Mundy v Nassau County Civ. Serv. Comm., 44 NY2d 352, decided herewith). None of the petitioners was able to know whether the results of all of the appeals submitted, as well as his own, would reshape the list or alter his rating as to substantially affect his interests.

In order for the Statute of Limitations to start running there must be a determination "final and binding upon the petitioner” (CPLR 217) and it must be one by which petitioner is aggrieved. Since such a determination was not made until October 10, 1973 when the final, revised eligible list was published, the limitation period did not begin to run until that date. This proceeding, commenced on February 8, 1974, is not time-barred, and the order of the Appellate Division should be reversed.

Since the Appellate Division decided this case on the Statute of Limitations issue only, this matter should be remitted to that court for review of the merits of the application (CPLR 5613). In view of our reversal of the determination of the Appellate Division and remand to that court, we need not reach the contentions of the intervenors which remain for consideration by that court.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to that court for a consideration of the merits.

Chief Judge Breitel

(dissenting). I dissent. I cannot agree that the four-month Statute of Limitations did not begin to run until the final revised eligible list was published.

Normally, when the fairness of an examination is challeged, the statute should begin to run, at the very latest, at the time a list is first promulgated (see discussion in dissenting opn in Mundy v Nassau County Civ. Serv. Comm., 44 NY2d 352, decided simultaneously with this appeal). Assuming, without deciding, that the statute would in this case run from the initial promulgation, it undoubtedly would be tolled while the administrative appeals were under consideration. But when those appeals were denied, on August 31, 1973, the statute, at the very latest, began to run once again. Subsequent publication of the final revised eligible list could have no effect on the validity or fairness of the examination (see analysis in memorandum at App Div in this case 57 AD2d 514). Hence, since the proceedings were not brought until more than five months after the administrative appeals were denied, they are time-barred.

Indeed, on an alternative view, independent of the promulgation of the eligible list, the determinations on the timely administrative appeals were final and definite, and therefore were binding on the issue tendered, namely, the validity of the oral examinations. A justiciable issue, call it a cause of action if one wishes, arose from those determinations. A cause of action, even if its consequences persist or arise in the future, is nonetheless a cause of action. A tortious wrong, for example, occurs when the tortious act is committed; generally the Statute of Limitations is neither extended nor tolled nor does it run anew because consequences of the tort become choate thereafter. The running of a Statute of Limitations is not determined by when a suitor decides that the wrong committed against him requires or merits a remedy, but by when the wrong was committed.

When the validity of the examination is attacked, as distinguished from improper questions or incorrect ratings, the wrong is the invalid examination, not the consequences of that wrong. So, too, the grievance is subjection to an improper or invalid examination. There was no continuing wrong, as Special Term held, because the "wrong” had been completed once the examination had been taken and the eligible list based on it promulgated.

Accordingly, I dissent and vote to affirm.

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

Order reversed, etc.

       Petitioner Bryne was notified of the denial of his appeal by letter dated July 26, 1973 because of the special nature of that appeal, but all others were notified by letter dated August 31, 1973. In view of our determination in this matter, this difference in date is of no consequence.