author: Simons, J.

text:
    The People of the State of New York, Respondent, v Lushington Lewis, Appellant.
    Argued February 9, 1987;
    decided March 26, 1987

      POINTS OF COUNSEL

      B. Kay Huff and Philip L. Weinstein for appellant.

      Mario Merola, District Attorney (Kevin D. McLoone and Peter D. Coddington of counsel), for respondent.
   OPINION OF THE COURT

Simons, J.

Defendant has been convicted of committing incest with his 14-year-old daughter and sentenced to 116 to 4 years in prison. He is now on parole pursuant to that sentence. He contends on appeal that the judgment must be reversed, first, because the People failed to produce sufficient evidence that the victim was his daughter and that he knew she was, and second, because the trial court erroneously permitted the victim to testify to prior uncharged incestuous acts he allegedly committed with her. There is sufficient evidence in the record to support the conviction but there should be a new trial because the testimony of prior uncharged crimes, not relevant to establish any element of the charged crime, was erroneously received.

I

The People introduced testimony by the victim and her mother to establish defendant’s relationship and knowledge and testimony of the victim and her aunt to establish the intercourse.

Joyce Lewis, the victim’s mother, testified that her daughter, Ceciel, was born out of wedlock in Kingston, Jamaica, on March 11, 1968 and that defendant was Ceciel’s father. She stated that during 1967 she had a sexual relationship with defendant, that she had "no other friends and men” during that time and that her last menstrual period before Ceciel’s birth occurred about nine months earlier, in June 1967, when she was seeing defendant. Defendant eventually married Mrs. Lewis, in Jamaica, 10 years later. At the time of the marriage she had three children, Ceciel, who used defendant’s surname, and two others, who did not. Shortly after the marriage, Mrs. Lewis left Ceciel and one other child in Jamaica in defendant’s care and came to New York. In 1979, a year and a half later, defendant brought the children to New York and the family resided together in The Bronx until defendant’s incarceration for this crime. In addition to this evidence of relationship and knowledge, Ceciel was also properly permitted to testify that defendant was her father (see, 2 Wharton’s Criminal Evidence § 273, at 178-179 [Torcía 14th ed]; Richardson, Evidence § 329, at 299-300 [Prince 10th ed]; cf., Ferro v Bersani, 78 AD2d 1010, affd 59 NY2d 899).

Ceciel also testified to intercourse with her father and this evidence was corroborated by defendant’s admissions to her aunt.

Viewed in the light most favorable to the People (People v Contes, 60 NY2d 620, 621), this evidence was sufficient to support the jury’s finding that defendant was the victim’s father and that, knowing he was, he had sexual intercourse with her.

II

The evidence of uncharged crimes was received when Ceciel, after describing the act charged in the indictment, testified that on more than 10 prior occasions, her father had overpowered her and forced her to engage in sexual intercourse. She explained that although she had resisted some of defendant’s previous sexual advances she no longer did by the time of the incident charged in the indictment because she had grown "used to” his behavior. Receipt of this evidence is assigned as error.

All relevant evidence is admissible unless its admission violates some exclusionary rule (Ando v Woodberry, 8 NY2d 165, 167). Evidence is relevant if it has any " 'tendency in reason to prove any material fact’ ” (see, Richardson, Evidence § 4, at 2, op. cit., quoting Uniform Rules of Evidence, rule 1 [2]). Evidence of a defendant’s prior uncharged crimes may have some probative value; indeed, Wigmore contends that such evidence is objectionable because juries attribute too much significance to it (1 Wigmore, Evidence § 194, at 646 [3d ed]). For that reason it is usually excluded because it may (1) require defendant to meet a charge of which he had no notice; (2) raise collateral issues and direct the attention of the jury away from the crime charged; or (3) result in the proof of the prior offenses being taken by the jury as justifying a condemnation of the defendant irrespective of his guilt of the offenses charged (see generally, People v Robinson, 68 NY2d 541, 547; People v Ventimiglia, 52 NY2d 350, 359-360; People v Allweiss, 48 NY2d 40, 46-47). The general rule is that evidence of prior uncharged crimes may not be offered to show defendant’s bad character or his propensity towards crime but may be admitted only if the acts help establish some element of the crime under consideration or are relevant because of some recognized exception to the general rule (People v Beam, 57 NY2d 241, 250; People v Allweiss, supra; People v Carmack, 44 NY2d 706, affg 52 AD2d 264, 265-266, 53 AD2d 1017). In People v Molineux (168 NY 264, 293), we listed some of the matters on which evidence of uncharged crimes may be relevant — for example, to show (1) intent, (2) motive, (3) knowledge, (4) common scheme or plan, or (5) identity of the defendant. Even when admissible for such purposes, however, the evidence may not be received unless its probative value exceeds the potential for prejudice resulting to the defendant (People v Ely, 68 NY2d 520, 529; People v McKinney, 24 NY2d 180, 184). In this case the court permitted the victim’s testimony of prior incestuous acts to prove defendant’s "amorous design”. That ruling constituted reversible error.

Although the "amorous design” exception has been widely accepted (see generally, Annotation, Evidence — Other Sexual Offenses, 167 ALR 565), the courts applying it have not made entirely clear the rationale on which they do so and it has been the subject of considerable criticism (see, e.g., Gregg, Other Acts of Sexual Misbehavior and Perversion as Evidence in Prosecutions for Sexual Offenses, 6 Ariz L Rev 212 [1965]; Slough, Relevancy Unraveled, 6 U Kan L Rev 38, 51-52 [1957]; Note, Evidence of Defendant’s Other Crimes: Admissibility in Minnesota, 37 Minn L Rev 608, 614 [1953]). Apparently the exception "grew up in the context of prosecutions for sexual crimes that were consensual” (Gregg, Other Acts of Sexual Misbehavior and Perversion as Evidence in Prosecutions for Sexual Offenses, op. cit., at 219; see also, People v Bradley, 8 AD2d 982). It was also deemed particularly fitting to receive such evidence in cases where corroboration of the victim’s testimony was required by statute and was difficult to obtain because the crime took place in private surroundings (Gregg, op. cit, at 219-220). We recognized the "amorous design” exception in People v Thompson (212 NY 249) because the evidence of uncharged crimes had "a natural tendency to corroborate or supplement” the direct evidence (id., at 251). We also approved the exception, without comment, in People v Fuller (50 NY2d 628).

People v Thompson (supra) involved a prosecution for statutory rape in which the complainant was permitted to testify to other acts of intercourse she committed with the defendant subsequent to the charged crime. Although the court recognized the general rule that such evidence may not be admitted it found no error in defendant’s trial. Going far beyond the facts of the case, the Thompson court stated the broad rule that "in prosecutions for adultery, seduction, statutory rape upon one under the age of consent and incest, acts of sexual intercourse between the parties prior to the offense charged in the indictment may be given in evidence” to prove the act charged (id., at 251-252). In support of this statement, the court relied principally on an English incest case, Director of Pub. Prosecutions v Ball (6 Crim App 31 [1908-1910], All ER Rep 111) but extended the exception applied there well beyond the holding of the case. It also cited two out-of-State statutory rape cases (see, Boyd v State, 81 Ohio St 239, 90 NE 355; State v Schueller, 120 Minn 26, 138 NW 937), which have since been questioned (Note, Evidence of Defendant’s Other Crimes: Admissibility in Minnesota, 37 Minn L Rev 608, 614).

In Ball, a brother and sister who shared the same bedroom and bed were prosecuted for incest. Because the evidence was circumstantial and ambiguous, the court applied the familiar rule that where evidence is subject to an interpretation favoring either innocence or guilt, evidence which rebuts the innocent interpretation is relevant to prove the charged crime. Accordingly, the court found no error in the admission of testimony from third parties that on prior occasions the two defendants had engaged in intercourse and that, in fact, the woman had borne a child as a result of their previous conduct. The evidence of prior uncharged acts of intercourse was relevant to show the mutual disposition of the defendants to engage in incest on the date charged. The situation was similar, the House of Lords noted, to the rule which permits evidence in a divorce case of the opportunity and inclination of a defendant and corespondent to commit adultery to resolve ambiguous circumstantial evidence (see also, Pollock v Pollock, 71 NY 137). The testimony is admissible not to establish the defendant’s attitude toward his victim but to establish the attitude of codefendants toward each other. A leading treatise on New York evidence similarly has stated the exception as one permitting evidence of prior uncharged acts to show mutual disposition (see, Richardson, Evidence, § 182, at 151, op. cit). Our affirmance in People v Johnson (30 NY2d 776, affg 37 AD2d 218, 881) confirms that mutual disposition is the basis for the amorous design exception to the general rule. In that case we affirmed a holding that, notwithstanding the Thompson exception, evidence of uncharged crimes was not relevant in a prosecution for both forcible and statutory rape in which the defendants had not contended that the victims had consented to intercourse.

The reasoning of those decisions requires reversal. Unlike Ball (supra), here the evidence of prior uncharged acts was not necessary to resolve an ambiguity (see also, People v Young, 99 AD2d 373). Nor was the evidence admissible for any of the other reasons generally relied upon for receiving it. Incest requires no specific intent, only the general intention to perform the prohibited act; thus, whether defendant entertained an "amorous design” toward the victim and was predisposed to engage in sexual intercourse with her, or whether the victim consented to sexual intercourse with him, was irrelevant (People v Johnson, supra; People v Bradley, 8 AD2d 982, supra). Furthermore, corroboration of the victim’s testimony was not necessary (see, Penal Law §§ 130.16, 255.30 [2]; People v Facey, 69 NY2d 836, affg 115 AD2d 11; People v Ahlers, 98 AD2d 821) but even if corroboration was required, the testimony did not, in the language of People v Thompson (212 NY 249, 251, supra), "corroborate or supplement” the victim’s testimony in any proper sense. The primary duty of the fact finder in this case was to determine whether the victim’s statements describing the incestuous act charged in the indictment were credible. Her allegations concerning defendant’s prior actions did not render her testimony pertaining to the charged crime more trustworthy because a witness cannot buttress her own testimony by making further unsubstantiated accusations. The victim’s statements regarding the prior uncharged crimes therefore carried no probative weight (see, People v Stanley, 67 Cal 2d 812, 819, 433 P2d 913). Apparently the evidence was offered to explain why Ceciel did not resist her father’s advances, but the presence or absence of resistance was irrelevant to whether defendant committed incest. It could do no more than permit the jury to speculate that if defendant committed incest before, he must have done so again.

We cannot say that the error was harmless. The victim’s testimony was the principal evidence of the crime and, undoubtedly, her cumulation of defendant’s criminal acts seriously prejudiced defendant in the eyes of the jury.

Accordingly, the order of the Appellate Division should be reversed and a new trial ordered.

Chief Judge Wachtler and Judges Kaye, Titone, Hancock, Jr., and Bellacosa concur; Judge Alexander taking no part.

Order reversed, etc.

      Penal Law former § 255.25 provided: "A person is guilty of incest when he marries or engages in sexual intercourse with a person whom he knows to be related to him, either legitimately or illegitimately, as an ancestor, descendant, brother or sister of either the whole or the half blood, uncle, aunt, nephew or niece.”


source: Caselaw Access Project

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

license: Public Domain

text:
    Alexander Sabetay, Appellant, v Sterling Drug, Inc., Respondent.
    Argued February 11, 1987;
    decided March 26, 1987

      POINTS OF COUNSEL

      Wayne N. Outten for appellant.

      Alan M. Koral and Loraine M. Córtese for respondent.
   OPINION OF THE COURT

Bellacosa, J.

Plaintiff asserts he was wrongfully discharged from employment because he refused to participate in certain improper, unethical and illegal activities, and because he "blew the whistle” on these alleged activities. He was employed by a division of the defendant corporation without a written contract, and alleges that his dismissal was in violation of two contractual obligations: the first arising from the "Corporate Employee Relations Policy” manual and the second arising from Sterling’s Code of Corporate Conduct and Internal Control Guide (together referred to as the "Accounting Code”).

The issue is whether plaintiff stated a cause of action by alleging that a statement in a corporate personnel policy manual created an enforceable contractual promise not to terminate him on any ground not mentioned in the manual, or by alleging that various corporate accounting policies constituted an employment agreement precluding plaintiff’s termination for refusing to participate in allegedly improper activities.

From June 1972 to December 1984 plaintiff, a director of financial projects, was employed by Sterling International Group, a division of Sterling Drug. He had been administering the dissolution of Sterling’s Greek manufacturing facility. The liquidation was completed in June 1983. In February 1984, plaintiff was recalled to New York and was notified of his discharge in July, when no job within Sterling or any of its subsidiaries could be found for him.

Plaintiff alleges that he was discharged because he refused to participate in certain illegal activities (i.e., tax avoidance schemes and maintenance of slush funds) arising out of the liquidation of Sterling’s Greek manufacturing facility, and because he disclosed these activities to his supervisor in compliance with what plaintiff believed to be corporate policy. His complaint alleges four contract and three tort causes of action, all based on wrongful discharge from employment.

Defendant Sterling moved, pursuant to CPLR 3211 (a) (7), to dismiss the complaint on the ground that none of the seven causes of action stated a cognizable claim. Supreme Court dismissed the tort actions but denied the motion as to the four contract causes of action. The Appellate Division affirmed the dismissal of the causes of action sounding in tort and also dismissed the four claims based on a breach of an implied contract of employment. Although the complaint was dismissed in its entirety, plaintiff, on appeal to this court, challenges only the dismissal of the four contract causes of action. We agree with the Appellate Division that plaintiff has failed to state a cognizable cause of action for breach of any implied contract rights.

As the basis for the first breach of contract claim, Sabetay contends that Sterling’s personnel manual, which enumerates seven grounds for termination, establishes an implied promise that those are the only grounds for termination and that plaintiff’s termination without cause amounted to a breach of that implied contractual agreement.

The three remaining contract claims (plaintiff’s second, fourth and sixth causes of action) are based on Sterling’s written policies, which plaintiff contends require an employee to refrain from certain illegal or unethical activities and impose a duty on the employee to report such activities to senior management officials. Sabetay argues that these policies, coupled with a statement on the employment application that all Sterling employees are to comply with company rules and regulations, create an implied agreement not to dismiss an employee for activity in accordance with these very policies.

It is still settled law in New York that, absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party (Martin v New York Life Ins. Co., 148 NY 117, 121). The original purposes of the employment at-will doctrine were to afford employees the freedom to contract to suit their needs and to allow employers to exercise their best judgment with regard to employment matters.

In recent years, however, the unfettered power of employers to dismiss employees without cause has come under sharp scrutiny (see, Blades, Employment At Will vs. Individual Freedom on Limiting the Abusive Exercise of Employer Power, 67 Colum L Rev 1404 [1967]; and see generally, Note, Protecting Employees At Will Against Wrongful Discharge: The Public Policy Exception, 96 Harv L Rev 1931 [1983]). To offset the harsh effect of the at-will doctrine and to afford workers a measure of job security, other courts have carved out exceptions to the common-law employment at-will doctrine (see, Peterman v International Bhd. of Teamsters, 174 Cal App 2d 184, 344 P2d 25; Trombetta v Detroit, Toledo & Ironton R. R. Co., 81 Mich App 489, 265 NW2d 489; Novosel v Nationwide Ins. Co., 721 F2d 894 [3d Cir]; Sheets v Teddy’s Frosted Foods, 179 Conn 471, 427 A2d 385 [recognizing claims of wrongful discharge based on dismissal for refusing to commit an unlawful act, or for performing a public obligation or for exercising a legal right]; see also, Toussaint v Blue Cross & Blue Shield, 408 Mich 579, 292 NW2d 880 [recognizing an implied-in-fact agreement limiting the employer’s right to dismiss an at-will employee]; see also, Monge v Beebe Rubber Co., 114 NH 130, 316 A2d 549; Cleary v American Airlines, 111 Cal App 3d 443, 168 Cal Rptr 722 [recognizing an implied-in-law covenant of good faith and fair dealing in employment contracts which limits the right to discharge without just cause]).

In Weiner v McGraw-Hill, Inc. (57 NY2d 458), this court dealt with its long-standing acceptance of the common-law rule. The plaintiff, who had begun his career with another publishing house, was invited to join the staff of McGraw-Hill. As part of its recruitment effort, McGraw-Hill’s representative assured the plaintiff that it was company policy not to terminate employees without just cause, and that employment at McGraw-Hill would bring the advantage of job security. Moreover, the application form Weiner signed specified that his employment would be subject to the provisions of the Mc-Graw-Hill handbook on personnel policies. The handbook stated that "[t]he company will resort to dismissal for just and sufficient cause only, and only after all practical steps toward rehabilitation or salvage of the employee had been taken and failed. However, if the welfare of the company indicates that dismissal is necessary, then that decision is arrived at and is carried out forthrightly” (id., at 460-461). Weiner alleged that he had relied on these assurances when he left his former employer, forfeiting accrued fringe benefits and a proffered salary increase.

After eight years of employment, Weiner was advised that he was discharged for "lack of application” (id., at 461). He sued, alleging a breach of contract. McGraw-Hill countered that there was no contract of employment and that its promises of job security were not binding. While we found for Weiner, we adhered to our view that an employer has the right to terminate an at-will employee at any time for any reason or for no reason, except where that right has been limited by express agreement. The language in the McGrawHill handbook, coupled with the reference to the handbook in the employment application, amounted to an express agreement between those parties limiting the employer’s otherwise unfettered right to terminate its employees. We also noted that to support his breach of contract claim, Weiner had alleged the following significant factors: "[F]irst, plaintiff was induced to leave Prentice-Hall with the assurance that Mc-Graw-Hill would not discharge him without cause. Second, this assurance was incorporated into the employment application. Third, plaintiff rejected other offers of employment in reliance on the assurance. Fourth, appellant alleged that, on several occasions when he had recommended that certain of his subordinates be dismissed, he was instructed by his supervisors to proceed in strict compliance with the handbook and policy manuals because employees could be discharged only for just cause. He also claims that he was told that, if he did not proceed in accordance with the strict procedures set forth in the handbook, McGraw-Hill would be liable for legal action.” (Id., at 465-466.)

Not surprisingly, because of the explicit and difficult pleading burden, post- Weiner plaintiffs alleging wrongful discharge have not fared well (see, O’Connor v Eastman Kodak Co., 65 NY2d 724; Murphy v American Home Prods. Corp., 58 NY2d 293; Collins v Hoselton Datsun, 120 AD2d 952; Citera v Chemical Bank, 105 AD2d 636; Patrowich v Chemical Bank, 98 AD2d 318 [claim dismissed because the language relied on was not sufficient to establish an express agreement]; Rizzo v International Bhd. of Teamsters, 109 AD2d 639 [claim dismissed because employee failed to establish detrimental reliance on the assurance of job security]).

In Murphy v American Home Prods. Corp. (58 NY2d 293, supra), we not only refused to recognize a common-law tort theory of liability based on abusive or wrongful discharge but, more important and relevant to the instant case, we refused to adopt the implied covenant of good-faith analysis recognized in some jurisdictions.

Murphy had alleged that he had been discharged for internally reporting to top management certain alleged accounting improprieties. He contended that his company’s internal regulation required him to refrain from engaging in such illegal activities and also compelled the reporting of such activities. On Murphy’s breach of contract claim he urged that, although his employment was of indefinite duration, there was an implied obligation in all employment contracts to deal fairly and in good faith, and that a termination in violation of that obligation exposes the employer to liability.

We rejected plaintiff’s invitation to find an implied covenant of good faith in the employment contract. In so ruling, we distinguished an employment contract from other types of contract where the implied-in-law theory has been adopted. Noting that a covenant of good faith can be implied only where the implied term is consistent with other mutually agreed upon terms in the contract, we stated: "New York does recognize that in appropriate circumstances an obligation of good faith and fair dealing on the part of the party to a contract may be implied and, if implied, will be enforced (e.g., Wood v Duff-Gordon, 222 NY 88; Pernet v Peabody Eng. Corp., 20 AD2d 781). In such instances the implied obligation is in aid and furtherance of other terms of the agreement of the parties. No obligation can be implied, however, which would be inconsistent with other terms of the contractual relationship * * * in which the law accords the employer an unfettered right to terminate employment at any time. In the context of such an employment it would be incongruous to say that an inference may be drawn that the employer impliedly agreed to a provision which would be destructive of his right of termination * * * to imply such a limitation from the existence of an unrestricted right would be internally inconsistent.” (Id., at 304-305.) Lastly, we concluded that Murphy had failed to establish an express limitation on the employer’s right of discharge under the strict guidelines established in Weiner (id., at 305).

Dispositive in Murphy was plaintiffs failure to establish an express limitation on his employer’s right of discharge (id., at 305; accord, O’Connor v Eastman Kodak Co., 65 NY2d 724, supra). Although plaintiff had made general references to an employer’s manual, he cited no provisions pertinent to the right to termination — certainly none rising to the explicit restriction that, in the circumstances of Weiner, was found to be actionable (Murphy v American Home Prods. Corp., 58 NY2d 293, 305, supra).

As in Murphy, plaintiff Sabetay has failed to demonstrate a limitation by express agreement on his employer’s unfettered right to terminate at will, and all four of the breach of contract causes of action must be dismissed. To the contrary, the language in Sterling’s personnel handbook, "Accounting Code” and employment application refutes any possible claim of an express limitation. The personnel manual was circulated to an extremely limited number of Sterling managerial employees solely for the purpose of determining posttermination benefits, and plaintiff was not one of those few employees authorized to receive a copy. Similarly, the "Accounting Code” and statement on the employment application requiring Sterling employees to abide by company rules do not, taken together, rise to an express agreement that Sterling would not dismiss an employee for following its policies of full disclosure of business improprieties. Rather, these two documents merely suggest standards set by Sterling for its employees’ performance of their duties that, without more, cannot be actionable.

We have noted that significant alteration of employment relationships, such as the plaintiff urges, is best left to the Legislature (see, Murphy v American Home Prods. Corp., 58 NY2d 293, 301-302, supra), because stability and predictability in contractual affairs is a highly desirable jurisprudential value.

Indeed, the Legislature has responded to this appropriate sensitivity by enacting numerous protections against abusive discharge and by prohibiting employers from discharging at-will employees for reasons contrary to public policy (see, Judiciary Law § 519; Executive Law § 296 [1] [e]; Labor Law §§ 215, 740; Civil Service Law § 75-b).

In sum, to sustain the plaintiff’s complaint in this case, the court would have to relax the Weiner requirements, to expand the Weiner holding into the implied contract category, and to overrule the recently resolved Murphy rejection of implied covenants in employment relationships. Based on stare decisis principles and sound contractual and policy reasons, we do not believe we should do any of those things, no less all of them.

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

Hancock, Jr., J.

(concurring). Like the concurring Justice at the Appellate Division, I cannot disagree with the majority’s conclusion that dismissal of the complaint is compelled by our decisions in Murphy v American Home Prods. Corp. (58 NY2d 293) and Weiner v McGraw-Hill, Inc. (57 NY2d 458). Because the majority bases its decision on stare decisis and shows no inclination to relax the strict Murphy-Weiner employment at-will rule, I am constrained to concur in its result.

I add only that the effect of applying the Murphy-Weiner rule to require dismissal of plaintiff’s second, fourth, and sixth causes of action seems particularly unfortunate. The thrust of these causes of action is that plaintiff was fired for doing precisely what he was compelled to do by defendant’s written "Accounting Code”. This code states, among other things, "[i]t is corporate policy to prohibit illegal or improper payments from company funds or assets * * * It is the responsibility of every employee promptly to report to General Counsel any knowledge of infractions of this policy. Any employee who fails to follow these policies will incur a penalty. Such penalty will range from lack of promotion (censure), to demotion or dismissal”. Plaintiff alleges he was fired for reporting improper activities pursuant to this policy. Under the MurphyWeiner rule as applied, defendant is precluded from claiming that the law, under the circumstances he alleges, imposes an obligation on the employer not to fire him for doing what he may be fired for failing to do. Relaxing the Murphy-Weiner rule to recognize an implied duty under these circumstances would not require an abandonment of the Murphy rule that a good-faith obligation will not be read into all employment at-will contracts. Such limited exception — "that in every contract there is an implied undertaking on the part of each party that he will not intentionally and purposely do anything to prevent the other party from carrying out the agreement on his part” (Grad v Roberts, 14 NY2d 70, 75) — is consistent with basic rules of contract law and has ample support in precedent and other recognized authority (see, e.g., Murphy v American Home Prods. Corp., supra, at 310-311 [Meyer, J., dissenting]; Grad v Roberts, supra, at 75; Wood v Duff-Gordon, 222 NY 88, 91; Wakefield v Northern Telecom, 769 F2d 109, 112; 22 NY Jur 2d, Contracts, § 201 [1982]; Restatement [Second] of Contracts § 205 [1979]).

Chief Judge Wachtler and Judges Simons and Titone concur with Judge Bellacosa; Judge Hancock, Jr., concurs in result in a separate opinion; Judges Kaye and Alexander taking no part.

Order affirmed, with costs.

      Justice Ellerin concurred in the result on constraint of Murphy v American Home Prods. Corp. (58 NY2d 293).


author: Per Curiam.

text:
    The People of the State of New York, Respondent, v Samuel Bice Johnson, Appellant.
    Argued March 20, 1987;
    decided March 24, 1987

      POINTS OF COUNSEL

      Laurence T. Sorkin and Anthony Paduano for appellant.

      Howard R. Relin, District Attorney (Melvin Bressler of counsel), for respondent.
   OPINION OF THE COURT

Per Curiam.

Defendant was convicted of murder in the State of Mississippi and presently awaits execution of a death sentence, which has been temporarily stayed pending decision on his petition for postconviction relief. To advance his efforts to obtain such relief, defendant now seeks reversal of a 1963 New York assault conviction, which was used as an aggravating factor at the sentencing phase of the Mississippi trial.

We construe the Appellate Division order as one affirming the judgment of resentence and determining that review of the underlying 1963 conviction was not available. This order is appealable to this court (CPL 450.90).

We agree that, as the defendant argues and the People concede, the passage of time does not bar appeal in the unusual circumstances of this case, which include the possible use of the conviction as an aggravating factor leading to a death sentence. It is undisputed that defendant was never advised of his right to appeal from the assault conviction and that, upon discovering that right, he made several timely and diligent pro se attempts to obtain review of the judgment through the avenues available to him at the time. Further, it is undisputed that the actions of this State prevented defendant from ever obtaining the review of the conviction to which he was entitled.

The appeal is not barred by CPL 450.30 (3), which provides, in essence, that the time for taking an appeal from the original judgment is not revived by a resentencing that occurs more than 30 days after the original sentence was imposed. Nor is appeal barred by CPL 460.30, which limits the time for seeking an extension of the 30-day period for taking an appeal to one year from the date that the statutory 30-day period expired. Both of these statutes became effective after the period between 1967 and 1971, when defendant’s timely efforts to appeal were being thwarted by the State (see, People v Montgomery, 24 NY2d 130). In these special circumstances, the People, as they correctly concede, cannot rely upon a subsequently imposed time limitation to prevent a defendant from obtaining appellate review of his conviction (People v Thomas, 47 NY2d 37). People v Corso (40 NY2d 578), which held CPL 460.30 applicable to appeals from judgments of conviction entered prior to that statute’s enactment, does not require a different conclusion, since that decision did not concern a situation in which the defendant had made timely efforts to raise an appealable issue before the statute was adopted.

Finally, the People concede that the records of defendant’s trial have been lost, that neither reconstruction nor a new trial is possible and that defendant has raised appealable issues with possible merit. Thus, the only available remedy at this point is vacatur of the conviction and dismissal of the indictment (see, People v Rivera, 39 NY2d 519).

Accordingly, the order of the Appellate Division should be reversed, the conviction vacated and the indictment dismissed.

Chief Judge Wachtler and Judges Simons, Kaye, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion; Judge Alexander taking no part.

Order reversed, etc.


author: Titone, J. Bellacosa, J.

text:
    Ronald T. Golan, Respondent, v Louise Wise Services, Appellant.
    Submitted January 7, 1987;
    decided March 26, 1987

      POINTS OF COUNSEL

      Richard Zalk and Stephen Wise Tulin for appellant.

      Ronald T. Golan, respondent pro se.

   OPINION OF THE COURT

Titone, J.

When an adopted person seeks to discover, for allegedly good cause (Domestic Relations Law § 114), confidential information concerning the circumstances of his birth, the interests of the adopted person, the adoptive parents, the biological parents and society must be balanced. In such a case, therefore, both notice to the biological parents, if possible, or a guardian appointed to represent their interests, and a hearing, where necessary, at which interested parties may appear in person or through counsel, are required before a finding of good cause may be made and the adopted person granted the relief requested.

Plaintiff was adopted in 1932 through the defendant adoption agency when he was less than 15 months old. Pursuant to plaintiff’s 1983 request, defendant supplied him with all the medical and historical information it possessed concerning his biological parents, except the name of his biological father, his hometown, and the name of the college the biological father allegedly attended.

Plaintiff commenced this action with a verified complaint in November 1984, seeking permission to examine and reproduce any records or reports relating to plaintiff’s biological parents. At approximately the same time, he moved by order to show cause for the same relief, essentially a summary judgment motion (CPLR 3212). Apparently owing to defendant’s agreement to conduct a search for plaintiff’s biological mother, with the ultimate purpose of securing her permission to disclose her present whereabouts, plaintiff did not pursue the application to the court.

Upon being informed that defendant was unable to locate either of plaintiff’s biological parents, plaintiff made a second motion requesting the same relief. This motion was dismissed because it was not calendared. Finally, relying on the same set of papers contained in the original November 1984 motion, plaintiff made the instant application in June or July 1985.

Plaintiff’s moving papers contained affidavits executed by his attending physicians and himself. In short, the affidavits established that plaintiff was suffering from a heart condition and that genetic information would be useful in his treatment and significant in evaluating the severity of his condition. In addition, the affidavits stated that plaintiff could not be certified to continue his commercial flying career without more family medical history because of the unknown nature of the risk posed by plaintiff’s condition. Finally, plaintiff’s affidavit stated that his adoptive parents were dead. After executing these affidavits, plaintiff suffered a heart attack and informed the court that if he was ever to be recertified as a pilot, some history on his biological parents would have to be supplied.

On these papers, Special Term found that good cause existed to grant the relief requested, in effect summary judgment, stating "the disclosure of plaintiff’s [biological] father’s identity would permit a search for medical records that would be relevant and important to the physical well-being and possibly the survival of the plaintiff.” The Appellate Division, First Department, affirmed, without opinion. This court granted leave to appeal and stayed further proceedings pending the outcome of the appeal.

Access to confidential adoption information may be inimical to the interests of the adoptive parents, the biological parents and society. All have the strongest interest in the maintenance of anonymity. The adopted person may allege "good cause” for disclosure as opposed to mere curiosity (e.g., with affidavits "which substantiate that medical and/or psychological necessity require the opening of an adoption record for the health and well-being of the petitioning adoptive child” [Matter of Hayden, 106 Misc 2d 849, 852; see, Matter of Linda F. M., 52 NY2d 236, 240, appeal dismissed sub nom. Mason v Abrams, 454 US 806]), but the wishes and needs of the adopted person must be balanced against the needs of the other parties and society. The adoptive parents need to be shielded from interference with the adoptive relationship by biological parents. Biological parents also must be assured that their privacy will not be disturbed (Matter of Walker, 64 NY2d 354, 361; Matter of Linda F. M., 52 NY2d 236, 239, supra). Finally, society’s interest in providing children with substitute families through the adoption process (Matter of Linda F. M., supra, at 239; Matter of "Anonymous", 92 Misc 2d 224, 225), which may be damaged by disclosure, is of importance. It is these last two considerations that have received inadequate attention in this case.

The success of the adoptive process in New York clearly depends upon the privacy of that process for those men and women who are confronted with the circumstance of an unwanted pregnancy or inability to provide the necessary care for their children (Matter of Best, 66 NY2d 151, 155, cert denied — US —, 106 S Ct 1463; Matter of Walker, supra, at 360-361). Some of these biological parents, in the wake of their difficult decision to surrender their children for adoption, might be interested to learn of the continuing welfare of the children or be anxious to correspond with the children when they become adults. It is equally probable, however, that biological parents, forced by circumstance to make the painful choice to give up their children, would find the sudden reappearance of a child a devastating intrusion into the lives and families they have constructed since that difficult period (Matter of Linda F. M., supra, at 239). We have even noted that it could lead to blackmail of the biological parents by the child or others (ibid.). As a result of biological parents’ fears for their anonymity, society’s interest in the adoptive process would be thwarted by rules of ready access to confidential adoption documents (see, Matter of Louis F., 42 NY2d 260, 265). Similarly, the confidentiality principle generally serves the interests of the child who is placed in an adoptive home, since it assures that the integrity of the new family unit will not be disrupted by unwanted contact with the biological parents.

It is for these reasons that an application for access to confidential adoption records may be granted only after the utmost care and attention. The proper level of scrutiny essential in these cases cannot be assured without notice to all necessary parties and, in most cases, a hearing, after an initial determination that "good cause” (Domestic Relations Law § 114; see, Matter of Linda F. M., supra, at 240; Matter of Hayden, supra, at 852) is alleged in the adopted person’s moving papers. Certainly, the conflict among the compelling interests of each of the parties and society and the strong public policy against access (see, People ex rel. Scarpetta v Spence-Chapin Adoption Serv., 28 NY2d 185, 195, cert denied sub nom. De Martino v Scarpetta, 404 US 805; Domestic Relations Law § 114; Social Services Law § 372 [4]) is susceptible to resolution only upon the articulation of each interest and the court’s observation and examination of witnesses. The court should fully explore the particular circumstances involved in the case. Factors to be weighed include, but should not be limited to, the degree of the adopted person’s need for disclosure, the present wishes of the adoptive and biological parents, and the potential effects upon both sets of parents and their families. These are matters which raise, at least in part, factual disputes difficult to resolve on papers alone. Thus, in cases in which a preliminary showing of "good cause” has been made on the papers, the court may hold a hearing to determine the effect of disclosure on other interested parties (see, People v Gruden, 42 NY2d 214, 215; CPLR 2218). Even in the face of consent by all parties, the court must independently satisfy itself that "good cause” for disclosure has been shown and possible limitations on the use of the information have been explored before allowing access (Domestic Relations Law § 114). This process ensures that society’s separate interest in the maintenance of the secrecy of adoption proceedings will not be discarded lightly. The lack of such a balanced review in this case, after the preliminary finding of "good cause”, prevented the interests in retaining anonymity from being fully explored.

A court proceeding would be meaningless, however, if both sets of parents were given no opportunity to articulate their interests in maintaining their anonymity (ibid.; Matter of "Anonymous”, 92 Misc 2d 224, 225, supra). Here, service was attempted neither on the adoptive parents (allegedly deceased) nor the biological parents. Domestic Relations Law § 114 allows the release of adoption records only upon notice to both the adoptive parents and such additional persons as the court may direct and a showing of "good cause”. In Matter of Linda F. M. (supra), we indicated that the interests of the biological parents dictated that notice to them be provided if the court finds that the petitioner has made a preliminary showing of entitlement (id., at 241). The act of providing such notice will often prove to be self-defeating, however. In such cases, where the court finds that the provision of notice will reveal the identities of the biological parents to parties from whom they should remain anonymous, it would be appropriate for the court to appoint a guardian ad litem charged with making a serious attempt to inform his wards of the pending motion. If the court finds, upon the guardian’s representation, that a biological parent cannot be located by reasonable efforts, or that the very act of the guardian’s contact would be so peculiarly distressing to the particular biological parent because of severe and documented psychiatric problems arising from the adopted person’s birth, the guardian must protect that parent’s potential continuing interest in anonymity at the court proceeding (Matter of Linda F. M., supra, at 241; Matter of "Anonymous”, 92 Misc 2d 224, 225, supra; see, Sam v Sanders, 55 NY2d 1008, 1010). A failure to locate the biological parents after many years should not give rise to the conclusion that they no longer have an active interest in confidentiality or that they are deceased. On the contrary, it is often difficult, if not impossible, to locate people after a 50 year hiatus, especially when those people may wish to forget or to avoid pursuit by those who would remind them of a difficult or unhappy past. Plaintiff’s biological parents, who would be, respectively, 75 and 80 years old today, may yet be pursuing active family lives which would be irreparably harmed by the unexpected disclosure of their identities, a circumstance ignored by the dissent (dissenting opn, at 352-353).

We are not unmindful of the medical danger in which adopted children may be placed in the absence of their genetic histories. It is also evident, however, that as virtually any adopted person advances in age, his or her genetic history will be desirable for treatment of a variety of ailments including, for example, heart disease, diabetes and cancer. A rule which automatically gave full disclosure to any adopted person confronted with a medical problem with some genetic implications would swallow New York’s strong policy against disclosure as soon as adopted people approached middle age. In such cases as this, the not unusual predicament of the adopted person which would support a preliminary finding of "good cause” for disclosure must be weighed against articulated potential interests in continued secrecy. The Legislature has addressed the issue of the competing interests of these children and the interests of other parties in anonymity by providing that agencies may release medical information with all identifying information redacted (Social Services Law § 373-a). Where, as here, later medical information concerning the biological parents may be required, correspondence through a guardian ad litem may often prove a solution (see, Matter of Louis F., 42 NY2d 260, 264, supra).

For the foregoing reasons, the order of the Appellate Division should be reversed, with costs, and plaintiffs motion denied.

Bellacosa, J.

(dissenting). I dissent and vote to affirm the orders of the courts below compelling the appellant adoption agency, Louise Wise Services (LWS), to turn over the adoption records in its possession to the plaintiff.

Mr. Golan, born on November 4, 1930, was 54 years old when he initiated this action to discover medical information stemming from his biological family tree. In 1984 Golan, who was a licensed commercial pilot, developed certain medical abnormalities which prompted a denial of medical certification to exercise his pilot’s privileges. The F.A.A. medical examiner stated in an affidavit that, absent medical information on Mr. Golan’s biological family background, the examiner would not recertify him to exercise those privileges.

Thereafter, on September 9, 1984, Golan suffered a heart attack. His treating physician advised the court below that family history is significant in evaluating the risk factors of heart disease patients and, if Golan was ever going to be recertified as a pilot, some history on his natural parents would have to be obtained. The record also shows Golan’s son, an instructor pilot for the United States Air Force, would benefit from medical data concerning his biological ancestors.

When this proceeding was initiated, Golan possessed a copy of his adoption decree, knew the full name of his natural mother, the name given him at birth, and additional data concerning his natural parents including their respective ages at the time of his birth; father 24 and mother 19. Some data had been provided to Mr. Golan by LWS. In fact, LWS represented that through Golan’s own investigative efforts and its disclosure, he had all the information in the agency’s possession, other than the name of his father, his father’s college, names of his maternal grandparents, and the names of collateral relatives on his mother’s side. Among the data disclosed by LWS was the key fact that respondent’s maternal grandfather had died of heart disease in his late 50’s.

Both of respondent’s adoptive parents are deceased and his biological mother and father, if still alive, would be 75 and 80 years of age respectively. If the biological parents are still alive, LWS has indicated that a search of the city of respondent’s birth, neighboring counties, areas in adjoining States, other major metropolitan areas and the father’s college were "totally unsuccessful” in leading to information about their whereabouts.

With the above facts before it, the Supreme Court ordered that Mr. Golan be permitted to examine and reproduce records relating to his adoption which are in the appellant agency’s custody, since they would "permit a search for medical records that would be relevant and important to the physical well-being and possibly to the survival of the plaintiff.” The Appellate Division affirmed, without opinion, and I would reach the same result as the two lower courts.

The two central issues are the necessity in this case for an evidentiary hearing on good cause and for notice to the biological parents.

Although I agree with the majority view that, after a preliminary showing of good cause, hearings may assist the fact finder in determining the effect on other interested parties of permitting access to confidential adoption records, I do not agree that such a hearing would be necessary in this case. Neither do I agree with the apparent restriction that adoption-records-access issues can only be resolved upon the articulation of each interest, together with the court’s observation and examination of witnesses. Finally, I believe the majority view is wrong that notice must be given to all parties, in all cases, or guardians ad litem be appointed to represent their interests.

In Matter of Linda F. M. (52 NY2d 236), we directed that the natural parents of an adopted party be given notice of efforts to seek confidential information in adoption files "if the court finds that the petitioner has made a showing of entitlement” (id., at 241). The threshold requirement of good cause, triggering this entitlement, must be satisfied pursuant to the requirements of Domestic Relations Law § 114. The notice was conditioned, however, by the proviso that the natural parents could be "located with reasonable effort” (id., at 241). There are no explicit authorities which I could find, nor are any pointed to by the majority, that erect a legal impediment to a court making a good cause finding without the knowledge of or notice to persons other than the adoptive parents. Notably, in the Matter of Linda F. M. (supra, at 241), where this court reasoned that the interests of the natural parents dictate that they be afforded the same notice which Domestic Relations Law § 114 provides for adoptive parents, provision was made for case-by-case exceptions. We noted that it is not always practical to give notice, especially when, as was the situation there, the record reveals that it would be all but impossible to locate the natural parents.

I acknowledge and accept the reasons for confidentiality of adoption records noted in Matter of Linda F. M. (supra, at 239), reiterated in Matter of Walker (64 NY2d 354, 361), and again reconfirmed by the majority in this case. They constitute substantial interests in favor of carefully protecting the confidentiality of adoption records, but they must be applied to individual facts of specific cases and not be given abstract obeisance. Domestic Relations Law § 114 itself contemplates that, within the framework of these important confidentiality concerns, access to records should be permitted upon good cause shown. To require notice to all parties or the appointment of a guardian ad litem, the articulation of all parties’ interests and the observation and examination of witnesses, as in Matter of "Anonymous” (92 Misc 2d 224), is neither wise, nor necessary, nor fair. In Matter of "Anonymous” (supra), the adoptive parents defaulted in appearance and the natural parents consented to the disclosure sought by . the petitioner adoptee. Despite the default, the concession to the desired disclosure and the court’s preliminary finding of good cause, the court nevertheless appointed a guardian ad litem on behalf of the natural parents and required the taking of testimony to confirm the existence of good cause. Under such circumstances, both the appointment of the representative and the routine taking of testimony were pointless, as they would be in this case.

By no means do I suggest that the careful examination of all affected persons’ interests and the court’s observation and examination of witnesses should be dispensed with in every instance. In fact, I am satisfied with the majority view that a hearing is the preferred route, subject to dispensation where the good cause factors warrant entitlement to the records and on papers alone. In appropriate cases, Judges can direct that in addition to notice to the adoptive parents (Domestic Relations Law § 114) and notice to the natural parents or the appointment of a guardian (Matter of Linda F. M., 52 NY2d 236, 241, supra), an in-person hearing should be held. This is not one of those cases.

Here, Mr. Golan has established good cause for the disclosure of the identity of his natural parents to the satisfaction of both courts below. Unlike the merely curious adoptee in Matter of Linda F. M. (supra, at 240), Mr. Golan has established substantial and uncontroverted medical and professional reasons authorizing disclosure. Moreover, on the separate issue of notice, it is fair to conclude that both courts below were satisfied that notice to the natural and adoptive parents would be impractical if not impossible and that all reasonable efforts, indeed extraordinary and persistent efforts, to locate the natural parents had been pursued. In Matter of Linda F. M. (supra, at 240-241), this court fashioned a- reasonable construction of the provisions of Domestic Relations Law § 114 by providing that the natural parents have a right to notice provided that they can be located with reasonable effort. That test has been satisfied in this case where the record reveals that LWS had, after substantial and extended effort, been unable to locate or contact the natural parents. In light of the efforts of LWS, the relatively advanced age of the natural parents, and the fact that the adoptive parents were deceased, there was good and sufficient reason for the courts below to proceed expeditiously and without additional, unnecessary procedural safeguards.

Despite what I would regard as the obvious result after applying the majority reasoning to the record, they would require notice and hearing which, in my respectfully proffered view, would be perfunctory proceduralisms. Indeed, I can think of few better cases for the application of the majority’s exception to hearing than this one, if the exception is to have real meaning. As predicates for its conclusion to require the hearing here, the majority properly expresses a desire to encourage adoptions, to protect the adoption process and to preserve the legitimate confidentiality objectives of the participants and society in general. I share those salutary objectives. Disclosure in this case on the strong papers presented and based on the manifest good cause found by two lower courts, not mere curiosity as in Matter of Linda F. M. (supra), would not undermine any of those objectives. Indeed, in spite of the balance the majority tries to strike in its rationale, its application under these facts will unnecessarily and harshly foster governmental and bureaucratic red tape against the legitimate interests of individuals.

In sum, the public policy of New York is that the confidentiality of the participants in an adoption proceeding be reasonably protected. It is my view that the courts can be trusted to act rationally and flexibly when disclosure is warranted without a hearing, as they have done here. I would affirm.

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

Order reversed, etc.

      .Plaintiff was already in possession of the Cook County, Illinois, adoption decree naming his biological mother and referring to his biological father by surname only.

      .Domestic Relations Law § 114 provides that adoption records shall be "sealed and secret,” and that no order for disclosure or access may be granted "except on good cause shown and on due notice to the adoptive parents and to such additional persons as the court may direct.” By its terms, the statute applies only to the records of a New York adoption proceeding. In Matter of Walker, however, we held that section 114 expresses this State’s public policy of confidentiality, and that this policy applies to records of foreign adoption proceedings as well, even when the foreign proceeding did not require confidentiality at the time of adoption (64 NY2d 354 [majority opn, at 360-361, dissenting opn, at 362, n]).


author: Alexander, J.

text:
    Robert F. Flacke, as Commissioner of Environmental Conservation of the State of New York, Respondent, and Town of Onondaga, Intervenor, v Onondaga Landfill Systems, Inc., Appellant.
    Argued January 7, 1987;
    decided March 31, 1987

      POINTS OF COUNSEL

      Alan S. Burstein and William J. Leberman for appellant.

      Robert Abrams, Attorney-General (Douglas H. Ward, O. Peter Sherwood, Peter H. Schiff, James A. Sevinsky and Lawrence A. Rappoport of counsel), for respondent.

      Robert E. Wildridge, receiver pro se.

   OPINION OF THE COURT

Alexander, J.

The Commissioner of the Department of Environmental Conservation commenced this action to enforce his order requiring defendant Onondaga Landfill Systems, Inc. to prepare a plan containing certain conditions for the closure of, and to then permanently close according to the plan, a sanitary landfill operated in the Town of Onondaga. The plan was to include, among other conditions, the establishment of a fund to provide for the possible replacement of a polyvinyl-chloride membrane to be placed over the site to seal it and to prevent water from seeping through the landfill, picking up contaminants, and thus polluting the groundwater. Supreme Court deleted that requirement from the closure plan, but the Appellate Division modified by reinstating the condition, finding it consistent with the Department’s regulations, supported by evidence in the record and reasonable under the circumstances. For the reasons that follow, we affirm the order of the Appellate Division.

In 1977, Onondaga Landfill Systems, Inc. (OLSI) began to operate a sanitary landfill and applied to the Department of Environmental Conservation (DEC) for permits to operate as a solid waste management facility. The DEC denied OLSI’s applications because the landfill failed to comply with DEC requirements set forth in 6 NYCRR part 360 and because the site’s natural characteristics were unsuited for solid waste disposal, its bedrock consisting of porous limestone through which rain and other surface water, after saturating the solid waste, would seep and contaminate the groundwater. Accordingly, the Commissioner ordered OLSI to submit a plan for closure of the landfill within 30 days and to terminate operations within 90 days from the date of the order. The Commissioner’s determination was confirmed (Onondaga Landfill Sys. v Flacke, 81 AD2d 1024). No closure plan was submitted, however; instead, OLSI continued to operate the landfill without a permit in defiance of the closure order.

The Commissioner thereafter commenced this action to compel OLSI to comply with the closure order (see, ECL 71-2727 [2]). Upon the Commissioner’s application, Supreme Court appointed a temporary receiver (see, CPLR 6401) who was directed to supervise the landfill operation and to submit to the court and the Commissioner a plan for closing down the landfill in compliance with DEC regulations (6 NYCRR part 360). The receiver was further authorized to monitor OLSI’s finances to insure that funds and assets were not diverted in an attempt to avoid the financial burden of effecting a proper closure, and to hire an engineering firm to assist in the preparation of a closure plan.

In June 1983, the engineering firm retained by the receiver submitted a preliminary plan to DEC, that, as pertinent here, provided for the capping of the landfill with a 20-mil polyvinylchloride membrane (PVC) sandwiched between two 12-inch layers of soil to prevent the penetration of surface water through the refuse pile and the ultimate contamination of the groundwater. Although expressing a preference for a considerably thicker PVC, one of 30-mil, DEC found the closure plan generally acceptable. Nevertheless, DEC indicated that it would approve the plan only if it provided for a program to monitor the integrity of the cap over its guaranteed life of 20 years, and the creation of an interest-bearing sinking fund to finance postclosure monitoring and a new PVC cap should a replacement become necessary after expiration of the guaranteed life. In response, the engineering firm incorporated in the proposed plan a provision for the establishment of such an account in the amount of $710,000.

The receiver sought Supreme Court approval of the revised plan although, in doing so, he expressed the view that the initial 20-mil PVC cap would provide greater impermeability and protection of the site than required by DEC regulations, that the need for replacement of the cap was not demonstrated and that substantial doubt existed as to OLSI’s financial ability to comply with the sinking fund requirement. Moreover, the receiver, as did OLSI, questioned DEC’s authority to impose conditions on the closure plan after having invoked the court’s equity jurisdiction to effect closure.

Supreme Court determined that to the extent necessary to review DEC’s determination, it would consider the receiver’s motion as seeking article 78 review. Supreme Court rejected DEC’s contention that, based upon its expertise, because of the marginal thickness and limited design life of the PVC membrane, the unsuitable nature of the site as a landfill and the substantial danger of groundwater contamination, the replacement cap and sinking fund requirements were reasonable and necessary. The court found the perceived necessity for a replacement of the PVC membrane unsupported by the record, "predicated upon speculation or, at best, a guess” and in excess of DEC’s own minimum standards (see, 6 NYCRR 360.8). The court further found that OLSI lacked sufficient assets to finance a sinking fund, and that imposition of such a requirement not only would force premature and unsafe termination of the landfill, but under the circumstances, failed to accord "due regard to the economic and technological feasibility” of compliance by the owner, citing ECL 27-0703 (1). Thus, the court concluded that imposition of the provisions for a replacement cap and sinking fund were arbitrary and capricious and therefore deleted them from the closure plan. Finally, Supreme Court determined that although DEC commenced this action originally to enforce its closure order, enforcement of that order in accordance with its terms was no longer possible because of the lapse of time. Thus, DEC’s action of requesting that the landfill be placed under receivership and that the court maintain "continuing jurisdiction” until closure was interpreted as having invoked the equity jurisdiction of the court. Supreme Court concluded that, under these circumstances, DEC had relinquished its authority over the closure of OLSI and therefore could not impose conditions upon the court’s approval of the closure plan.

The Appellate Division modified the order of the Supreme Court by reimposing the condition that a fund be established to finance replacement of the PVC cap. The Appellate Division concluded that the DEC determination that a replacement for the PVC cap might be necessary and that the closure plan should contain a provision for such a replacement cap to be financed through creation of a sinking fund was fully supported by the record and was not arbitrary and capricious. Moreover, the court found that the regulations relating to closure set forth only minimal standards and expressly empowered the DEC to impose additional requirements (see, 6 NYCRR 360.8 [b] [1] [xxi]). Additionally, the Appellate Division found no support in the record for the lower court’s conclusion that OLSI lacked funds to finance a replacement cap, and that that court, in any event, incorrectly interpreted the provisions of ECL 27-0703. The Appellate Division also concluded that DEC had not relinquished jurisdiction over the final closure plan by acceding to the order by which Supreme Court assumed continuing jurisdiction and appointed a receiver. The Appellate Division was of the view, however, that even if Supreme Court had acquired concurrent jurisdiction with DEC, the doctrine of primary jurisdiction would have required that court to accede to the decision of the Commissioner and "stay its hand” in deference to the agency’s expertise.

We agree with the Appellate Division that DEC did not relinquish its jurisdiction over closure of the landfill by invoking the court’s jurisdiction. The doctrine of primary jurisdiction, however, is inapplicable here. The doctrine of primary jurisdiction provides that "[wjhere the courts and an administrative agency have concurrent jurisdiction over a dispute involving issues 'beyond the conventional experience of judges,’ * * * the court will 'stay its hand until the agency has, applied its expertise to the salient questions’ ” (Engelhardt v Consolidated Rail Corp., 756 F2d 1368, 1369, citing Far East Conference v United States 342 US 570, 574; and Hansen v Norfolk & W. Ry. Co., 689 F2d 707, 710; Capital Tel. Co. v Pattersonville Tel. Co., 56 NY2d 11, 22; see, Davis, Administrative Law, at 81-121). Application of the doctrine is intended to "co-ordinate the relationship between courts and administrative agencies to the end that divergence of opinion between them not render ineffective the statutes with which both are concerned, and to the extent that the matter before the court is within the agency’s specialized field, to make available to the court in reaching its judgment the agency’s view concerning not only the factual and technical issues involved but also the scope and meaning of the statute administered by the agency” (Capital Tel. Co. v Pattersonville Tel. Co., 56 NY2d 11, 22, supra).

Notwithstanding the plenary jurisdiction of the Supreme Court under our State Constitution (NY Const, art VI, § 7), the Supreme Court and the DEC do not have concurrent jurisdiction with respect to determining the conditions of closing down solid waste management facilities, and thus the doctrine of primary jurisdiction is inapplicable. The licensing and regulation of solid waste management facilities is a legislative function delegated to the DEC by statute (ECL 27-0103). ECL 27-0703 empowers the DEC to promulgate rules regulating the operation of such facilities pursuant to which the DEC has expressly provided, with respect to closure, that the owner or operator of a facility: "shall, upon permanent termination of use, properly close and maintain such facility so as to prevent adverse environmental or health impacts” (see, 6 NYCRR 360.8 [a] [21). The Commissioner of the DEC is further empowered to issue orders, such as the one sought to be enforced in this action, prohibiting violations of ECL article 27 and regulations promulgated pursuant thereto. Indeed, ECL 71-2727 (1) specifically provides that the Commissioner may take "such remedial measures as may be necessary or appropriate” and expressly authorizes initiation of any appropriate action or proceeding to enforce the provisions of article 27, any rule or regulation promulgated pursuant thereto and any order -issued or penalty assessed thereunder (ECL 71-2727 [2]).

Certainly the Supreme Court is vested with jurisdiction to hear such actions (NY Const, art VI, § 7). Nevertheless, that DEC sought the aid of the court in enforcing its closure order by instituting an action under ECL 71-2727, as it is plainly authorized to do, did not divest the agency of its jurisdiction to carry out the legislative function entrusted to it of prescribing and approving specific measures for implementing closure of the landfill. Nor was Supreme Court, by virtue of having exercised its equity jurisdiction in appointing a receiver, empowered to substitute its judgment for that of the agency with respect to the conditions of the closure order. To hold otherwise would impermissibly restrain the DEC from performing its statutory duty in violation of fundamental principles of separation of powers (see, Matter of Public Serv. Commn. v Norton, 304 NY 522, 530).

Although Supreme Court correctly viewed this proceeding as a CPLR article 78 review of the Commissioner’s determination that certain conditions be imposed on OLSI’s closure plan, it nevertheless proceeded to substitute its judgment for that of DEC with respect to those conditions. Yet, it is settled that in a proceeding seeking judicial review of administrative action, the court may not substitute its judgment for that of the agency responsible for making the determination, but must ascertain only whether there is a rational basis for the decision or whether it is arbitrary and capricious (Matter of Warder v Board of Regents, 53 NY2d 186, 194). Moreover, where, as here, the judgment of the agency involves factual evaluations in the área of the agency’s expertise and is supported by the record, such judgment must be accorded great weight and judicial deference (Matter of Eastern Milk Producers Coop. Assn. v State Dept. of Agric. & Mkts., 58 NY2d 1097, 1101; Matter of Warder v Board of Regents, 53 NY2d 186, 194, supra; Matter of Burger King v State Tax Commn., 51 NY2d 614, 621; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459).

The record in this case demonstrates that OLSI had operated its sanitary landfill without a license for seven years at a site determined to be unsuited for solid waste disposal and continuously in violation of DEC regulations governing operation of such facilities. Thus, DEC appropriately determined that the risk of contamination from the OLSI facility was great and reasonably concluded that the PVC cap, which the record demonstrates would be the only reliable protection against contamination of the groundwater following closure of the landfill, must be highly impermeable and durable. There is support in the record for DEC’s determination, and it therefore cannot be said that the determination lacks a rational basis or is arbitrary and capricious. The Appellate Division so concluded, and therefore the order of that court must be affirmed.

Finally, we reject OLSI’s argument that ECL 27-0703 (1), which enjoins the DEC to "[a]dopt and promulgate * * * rules and regulations governing the operation of solid waste management facilities [with] due regard to the economic and technological feasibility of compliance therewith”, evinces a legislative intent not to impose undue economic hardship on landfill operators. The required "due regard to the economic and technological feasibility” applies only in respect to the promulgation of regulations governing the operation of all such facilities and may not be interpreted as requiring the DEC to take into account the financial ability of an individual operator in approving that operator’s closure plan. Such an interpretation would impermissibly limit the DEC’s authority to impose conditions upon a closure plan that will achieve the statutory purpose of "prevent(ing) adverse environmental or health impacts” (6 NYCRR 360.8 [a] [21]). Indeed, DEC is authorized to require that the operator of a solid waste management facility post a bond, in an amount to be set by the DEC, to ensure the financial responsibility of the facility before it is accorded a license to operate, (see, 6 NYCRR 360.6).

For the foregoing reasons, the order of the Appellate Division should be affirmed, with costs.

Chief Judge Wachtler and Judges Simons, Kaye, Titone, Hancock, Jr., and Bellacosa concur.

Order affirmed, with costs.

      Although it approved the 20-year postclosure monitoring provision of the closure plan and struck only the cap replacement requirements, Supreme Court deleted the provision for the entire $710,000 sinking fund. As reported by the Appellate Division, however, the parties subsequently agreed upon financing for the 20-year monitoring program, thus removing that issue from contention.


text:
    In the Matter of Niagara Mohawk Power Corporation, Respondent, v Public Service Commission of the State of New York, Appellant.
    Argued February 10, 1987;
    decided April 2, 1987

      POINTS OF COUNSEL

      Lawrence G. Malone, David E. Blabey and Timothy P. Sheehan for appellant.

      Leon A. Allen, Jr., John H. Terry, John W. Dax and Cathleen A. Moore for respondent.
   OPINION OF THE COURT

Simons, J.

This is an article 78 proceeding in which petitioner Niagara Mohawk Power Corporation challenges an order of respondent Public Service Commission. The order directed Niagara Mohawk to refund to its ratepayers moneys collected during 1977-1981 for charges imposed pursuant to the fuel adjustment clause in the Niagara Mohawk rate tariff. The Commission’s action followed its determination that a portion of the company’s expenses for fuel during those years had been imprudently incurred. The Appellate Division annulled the order, finding the refund illegal because there was no statutory authority for the Commission’s action. The court ruled that the power to direct a refund must be granted by the Legislature and that, before the 1981 amendment to Public Service Law § 66 (12), the Commission had neither express nor implied authority to order a utility to refund imprudent fuel expenditures previously passed through to ratepayers by means of fuel adjustment clauses. We granted the Commission leave to appeal and now reverse. The power to order refunds of imprudent charges collected under fuel adjustment clauses may be implied from the Commission’s general rate-making powers and from its authority over fuel adjustment allowances under former section 66 (12) of the Public Service Law (L 1974, ch 863, §§ 1, 2).

I

In 1984, after Public Service Commission hearings, an administrative determination was made that certain fuel expenses, charged to Niagara Mohawk’s ratepayers through fuel adjustment clauses, resulted from imprudent decisions by Niagara Mohawk relating to prolonged power outages at its Dunkirk Unit No. 3 in 1980 and 1981. A decision was issued recommending that $1,013 million in excessive fuel charges be refunded to the ratepayers. After review, the Public Service Commission modified this determination, concluding that the utility had been imprudent in its practices concerning its coal-fired generating units not only at the Dunkirk facility in 1980 and 1981 but also at Oswego, Huntley and Dunkirk during the years 1977 through 1981. The Commission therefore ordered Niagara Mohawk to refund to ratepayers $31.9 million in incurred fuel expenses which the utility had collected through its fuel adjustment clauses. Niagara Mohawk challenged the order in this article 78 proceeding.

II

The Public Service Commission possesses only those powers expressly delegated to it by the Legislature, or incidental to its expressed powers, together with those required by necessary implication to enable the Commission to fulfill its statutory mandate (see, Matter of Consolidated Edison Co. v Public Serv. Commn., 47 NY2d 94, 102, revd on other grounds 447 US 530, revd on remand on other grounds 51 NY2d 816; Matter of Rochester Tel. Corp. v Public Serv. Commn., 87 AD2d 672, 673, affd 58 NY2d 874; see also, Public Service Law § 4 [1]). Among the powers delegated to the Commission is the authority to establish the rates charged by a utility for gas and electric service (see, Public Service Law § 66 [12]; see generally, Comment, Utility Rates, Consumers, and the New York State Public Service Commission, 39 Alb L Rev 707 [1975]). Indeed, it has been recognized that when it comes to setting rates for such service the Commission has been granted "the very broadest of powers” (see, Matter of Campo Corp. v Feinberg, 279 App Div 302, 305, affd 303 NY 995), the Legislature mandating only that the rates fixed be "just and reasonable” (see, Matter of Abrams v Public Serv. Commn., 67 NY2d 205, 211-212 [construing Public Service Law § 72]).

In the exercise of its rate-making power, the Public Service Commission may not deny a utility a reasonable rate of return on its investment (see, Matter of New Rochelle Water Co. v Public Serv. Commn., 31 NY2d 397, 407). The opportunity to earn a fair return does not mean, however, that a utility will be permitted to include negligent or wasteful expenditures in its operating expenses (see, West Ohio Gas Co. v Public Util. Commn., 294 US 63, 68-70). The protection of a utility’s treasury and the preservation of its financial integrity is a proper object of Public Service Commission regulation, but the specific function of the rate-making power is to protect the utility’s ratepayers (see, Matter of General Tel. Co. v Lundy, 17 NY2d 373, 380). Thus, "[t]here can be no doubt that a regulatory body, such as the Public Service Commission, may review the operating expenses of a utility and thereby prevent unreasonable costs for materials and services from being passed on to rate payers” (id., at 378 [citing Chicago & Grand Trunk Ry. Co. v Wellman, 143 US 339]; compare, Matter of Abrams v Public Serv. Commn., 67 NY2d 205, supra [use of "prudent investment” test in regulatory treatment of abandoned plants approved]).

Normally, rates set by the Commission are prospective, and reflect a determination as to what the utility’s allowed revenue requirement should be, based upon an estimation for the upcoming rate year of the utility’s rate base (working capital and net valuation of tangible property), historical operating expenses, and rate of return on capital assets (see generally, Comment, op. cit., 39 Alb L Rev, at 719-724). Once the Commission has projected the utility’s revenue requirements for the rate year, it determines the maximum rates the utility can charge to meet its requirements. Thus, the rate-making process is a forum for determining, among other things, whether the utility’s operating expenses were prudently and reasonably incurred in the past such that they may properly be used as a basis for projection of operating expenses in the upcoming rate year.

One of the difficulties with prospective ratesetting, however, is the problem of reconciling fixed rates to the pressures and demands of a fluctuating economy. The failure to make such a reconciliation may result in unreasonably high rates in periods of economic recession and hardship to the utility during inflationary cycles (see generally, Trigg, Escalator Clauses in Public Utility Rate Schedules, 106 U Pa L Rev 964 [1958]). A widely used regulatory solution to this problem is the use of automatic rate adjustments, such as the fuel adjustments at issue here, whereby the rate charged for service varies automatically with changes in operating costs (see, id.; and see, Warren, Regulated Industries’ Automatic Cost of Service Adjustment Clauses: Do They Increase or Decrease Cost to the Consumer?, 55 Notre Dame Law 333 [1980]). New York utilities have used such automatic rate adjustment provisions since 1917 (see, Matter of Consumer Protection Bd. v Public Serv. Commn., 85 AD2d 321, 322, appeal dismissed 57 NY2d 673).

The fuel adjustment clauses presently before us provide a method for the rapid adjustment of rates, thus enabling utilities to contend with unpredictable increases in volatile fuel prices and to avoid both the 11-month delay and the forecasting procedures inherent in New York’s prospective rate-making process. By including such a clause in their rate tariff, utilities may automatically, and very rapidly, adjust rates to recover actual fuel expenses as they are incurred. In this way, serious cash flow and earnings shortfalls, which can result from the cost of producing fuel-generated energy, are avoided and the financial integrity of utilities is protected (see, Matter of Consumer Protection Bd. v Public Serv. Commn., 85 AD2d 321, 323, supra; see also, Note, Due Process and the Automatic Fuel Adjustment Clause, 52 Ind LJ 637, 645 [1977]).

The mechanics of each utility’s fuel adjustment clause are set forth in company tariffs and are thus subject to approval by the Commission. Niagara Mohawk’s tariffs provided that when its monthly fuel costs were higher than the "base level” of fuel costs reflected in its current rates, the company was authorized to make a filing with the Commission to recover these increased costs from its customers through fuel adjustment charges shown on their bills. Niagara Mohawk was permitted to automatically increase its rates, as requested, through such charges imposed on its customers three days after the filing. This method permitted Niagara Mohawk, like other electric utilities in New York, to increase its charges to customers by millions of dollars on short notice without the Commission’s prior approval. The only review of their reasonableness was performed by the Commission retrospectively (see generally, Public Service Law § 66 [12]; § 72-a).

The use of automatic fuel adjustment clauses by the Public Service Commission over the years, and its authority to do so, has been recognized by the courts (see, Matter of Consumer Protection Bd. v Public Serv. Commn., 85 AD2d 321, 323-324, supra) and by the Legislature. The Legislature recognized such authority in 1974, when it added section 72-a to the Public Service Law requiring monthly reporting of fuel costs, and amended section 66 (12) to direct the Commission to review all filings for increases in the rate charged for fuel costs; again in 1977, when it added section 66 (12-a) to the Public Service Law; and in 1981 when it amended section 66 (12) once more to formalize the power of the Commission to order refunds of improper fuel adjustment charges. Although some of these statutes do not expressly refer to fuel adjustment clauses, Niagara Mohawk concedes that the legislative action was addressed to rate increases implemented by fuel adjustment clauses, and both recognized their lawfulness and authorized the Commission to review them. The utility now asserts, however, that even if this authorized retrospective review of the charges establishes that they were improper, the Commission may not order corrective action in the form of refunds to customers for rate increases in 1977-1981 because, prior to 1981, there was no statutory authority for it to do so.

ra

In the past when determining whether the Public Service Commission has acted outside the scope of its legitimate power, we have engaged in "a realistic appraisal of the particular situation to determine whether the administrative action reasonably promotes or transgresses the pronounced legislative judgment” (Matter of Consolidated Edison Co. v Public Serv. Commn., 47 NY2d 94, 102, supra; see generally, Fitzpatrick, Toward a Broad Reading of Implied Powers of State Public Utility Commissions: Combatting a Legacy of Laissez Faire, 90 Dick L Rev 415 [1985]). When the Commission acts pursuant to its statutory authority to set utility rates, the "pronounced legislative judgment” is that the rate set should be "just and reasonable” (Public Service Law § 72). If the rate-setting process results in a rate tariff reflecting "a just and reasonable balancing of consumer and investor interests”, the legislative intent, as well as constitutional and decisional mandates, is satisfied (see, Matter of Abrams v Public Serv. Commn., 67 NY2d 205, 215, supra).

The use of adjustment allowances by regulatory commissions has been criticized because it is said they result in "an abdication of the state’s regulatory function” and provide "a disincentive to the economical operation and purchase of fuel supplies by the utility since it may fully recover any cost it incurs”, thus encouraging the promulgation of rates which are neither just nor reasonable to the ratepayer (Note, op. cit, 52 Ind LJ, at 639 [nn omitted]; see generally, Kendrick, Efficiency Incentives and Cost Factors in Public Utility Automatic Revenue Adjustment Clauses, 6 Bell J Econ 299 [1975]). The usefulness of the mechanism is maintained, and these criticisms met, however, when the regulatory body reviews charges recouped by a utility through a fuel adjustment clause and determines that such charges were "just and reasonable” because prudently incurred. A necessary corollary to such review is the power to take corrective action and order refunds of those charges which were not prudently incurred. Given the Public Service Commission’s conceded power to approve fuel adjustment clauses and to review charges imposed pursuant to them — as evidenced by their historical use and the recognition of them by the courts, the Legislature and the regulated utilities themselves — and given the broad power of the Commission to establish just and reasonable rates generally, the power to order refunds must be implied, for there is little purpose in reviewing fuel adjustment charges, and the consumer’s interests are ignored, if corrective action is not authorized for imprudent expenditures automatically passed through to the ratepayers. Manifestly, a refund is justified when the charges passed through to ratepayers result not from marketplace conditions, which the adjustment allowances are intended to ameliorate, but from the utility’s own inefficiency and mismanagement. In such circumstances, none of the perceived salutary consequences of a fuel adjustment clause are furthered (see, Note, op. cit., at 639).

Thus, a "realistic appraisal of the situation” requires a determination that a Public Service Commission order, directing the utility to refund to ratepayers charges based on imprudently incurred fuel expenses collected pursuant to a fuel adjustment clause in the rate tariff, reasonably promotes the legislative intention that the Commission establish just and reasonable rates (see, Matter of Consolidated Edison Co. v Public Serv. Commn., 47 NY2d 94, 102, supra; and see, Fitzpatrick, op. cit., at 436-438).

IV

Niagara Mohawk relies principally on prior decisions which, it claims, demonstrate that the courts consistently have rejected the Commission’s past efforts to claim an asserted power, necessarily implied from its general rate-making power, to order refunds paid to ratepayers (see, Matter of Rochester Tel. Corp. v Public Serv. Commn., 87 AD2d 672, supra; Matter of Long Is. Light. Co. v Public Serv. Commn., 80 AD2d 977, Iv denied 54 NY2d 601; Matter of Niagara Mohawk Power Corp. v Public Serv. Commn., 54 AD2d 255). None of these cases presented the issue now before us, namely, whether the Commission has the power to order the refund or moneys collected under an automatic adjustment clause, and each is distinguishable on its facts. The Rochester Telephone case held that the Commission could not order the utility to flow through to ratepayers the tax deduction associated with a Federal tax refund which itself was passed through to ratepayers pursuant to Public Service Law § 113 (2) (see, Matter of Rochester Tel. Corp. v Public Serv. Commn., 87 AD2d 672, 673, supra). In Long Is. Light., the court held that the Public Service Commission had no power to order a refund to 279 customers who had been charged in excess of the approved rate where the proper rate classification of the particular customer was dependent upon the Commission’s broad interpretation of Public Service Law § 76, an interpretation promulgated after the excessive rates had been charged and collected (see, Matter of Long Is. Light. Co. v Public Serv. Commn., 80 AD2d 977, 978, supra). In the earlier Niagara Mohawk decision, the Appellate Division determined that the Commission was without authority to order a utility to flow through to its ratepayers Federal income tax refunds received after the tax years to which the refunds related (see, Matter of Niagara Mohawk Power Corp. v Public Serv. Commn., 54 AD2d 255, 256-257, supra).

Niagara Mohawk also contends that the Legislature has granted the Public Service Commission express refund powers from time to time to meet perceived needs (citing Public Service Law § 66 [20]; § 113 [1], [2]; § 118 [3]), and that, in 1981 after ascertaining the need to expressly provide for a Commission power to order refunds of fuel adjustment clause charges, the Legislature amended Public Service Law § 66 (12) to add such a provision (see, L 1981, ch 304). It argues that in the face of consistent treatment by courts and the Legislature concerning the need for express refund authority, the Commission is wrong in claiming that a power to refund excessive charges for fuel has always existed. The utility maintains that the 1981 amendment to section 66 (12) did not merely codify an existing implied power but, rather, established a new refund power.

The legislative history is at best inconclusive: it certainly does not support Niagara Mohawk’s contention. The bill which eventually amended Public Service Law § 66 (12) was part of the Attorney-General’s legislative program for 1981 and was apparently prompted by concern engendered by the Appellate Division’s decision in Matter of Niagara Mohawk Power Corp. v Public Serv. Commn. (54 AD2d 255, supra [Commission has no implied power to order a refund to ratepayers of Federal income tax refund]). Correspondence in the bill jacket from the Attorney-General and the sponsors of the legislation suggest that it was introduced either to clarify a power previously exercised by the Public Service Commission to refund imprudent adjustment charges or to authorize it to do so (see, Bill Jacket, L 1981, ch 304, mem of June 23, 1981, Robert Abrams, Attorney-General; mem re S.6233, Senator Dale M. Volker; cf, mem re A.5902-B, Assemblyman Joseph Ferris). A lobbyist for New York power companies— the Energy Association of New York State — along with certain utilities, indicated that the bill was unnecessary because the Public Service Commission already had such a refund power which it "freely uses” (see, id.). The New York State Energy Office agreed with this interpretation observing that the amendment merely codified the Commission’s authority "in more specific language” (id., mem of June 18, 1981, Stanley B. Klimberg, General Counsel, New York State Energy Office).

Moreover, none of the statutes Niagara Mohawk cites are indicative of a legislative intent to allow refunds only when expressly authorized by statute. Each is concerned with rate formula or rate design items prospectively reviewed and approved by the Commission in a rate proceeding and, hence, presumed to have been prudently incurred (see, Public Service Law § 66 [20] [refund of revenues, in aggregate, in excess of authorized rate of return]; § 113 [1] [refund of unjustified temporary rates]; § 113 [2] [refund of moneys refunded to utility from any source]; § 118 [3] [refund of overpayment by individual consumer]). Nothing in these provisions suggests that the Legislature meant to prohibit the Commission from ordering the refund of automatically recovered fuel expenses when such expenses had not been subjected to a Commission review for reasonableness in a regular rate proceeding.

Finally, Niagara Mohawk’s contention that excessive fuel expenses collected from ratepayers through fuel adjustment clauses could be refunded only if the Public Service Commission had invoked the temporary rate procedure of Public Service Law § 114 prior to approving the fuel adjustment clause formula is also without merit. The courts have previously recognized that this provision "was plainly designed to permit the Commission to prescribe temporary rates during the period that permanent rates are under consideration by the Commission or the courts and until a permanent rate by the Commission is finally established and actually placed in effect” (County Transp. Co. v Maltbie, 273 App Div 437, 440). The section has no applicability to a fuel adjustment clause contained in a rate tariff setting permanent rates.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the determination and order of the Public Service Commission reinstated.

Chief Judge Wachtler and Judges Kaye, Titone and Bellacosa concur; Judges Alexander and Hancock, Jr., taking no part.

Order reversed, etc.

      In 1981 the Legislature amended Public Service Law § 66 (12) to grant the Commission express authority to order refunds to ratepayers of fuel adjustment charges imprudently imposed (see, L 1981, ch 304).


text:
    Rose Quain et al., Respondents, v Buzzetta Construction Corp., Appellant, and City of New York, Respondent.
    Argued March 19, 1987;
    decided April 2, 1987

      POINTS OF COUNSEL

      Kevin J. Kelly and William, F. Larkin for appellant.

      Peter L. Zimroth, Corporation Counsel (Fred Kolikoff and Larry Sonnenshein of counsel), for City of New York, respondent.

      Lewis Rosenberg, Alexander J. Wulwick and Marianne M. Acito for Rose Quain and others, respondents.
   OPINION OF THE COURT

Per Curiam.

Although a grant of leave to appeal to this court ordinarily brings every reviewable issue before the court we hold that under rule 500.11 of the Rules of the Court of Appeals (22 NYCRR 500.11), if a party in its application for leave to appeal specifically limits the issues it seeks to have reviewed, it is bound by such limitation and may not raise additional issues on the appeal. Here, because of the express limitation in the application of defendant Buzzetta Construction Corp., plaintiffs’ motions to strike portions of Buzzetta’s jurisdictional statement and brief should be granted.

Plaintiffs sued the City and its general contractor, Buzzetta, after plaintiff Rose Quain sustained injuries when she fell into a hole at an unfinished New York City sewer project. A jury awarded plaintiffs damages and apportioned responsibility 75% to Buzzetta and 25% to the City. After trial the court granted the City’s motion for summary judgment on its cross claim against Buzzetta for full recovery over based on the indemnification clause in the sewer project contract. The Appellate Division affirmed with respect to the issues of liability and the claim over, but modified by directing a new trial on damages unless plaintiffs stipulated to a reduction in the award. Plaintiffs so stipulated.

In moving papers accompanying its motion for leave to appeal, Buzzetta stated: "[I]t is requested that this Honorable Court review that limited issue on this motion for leave to appeal of whether the Appellate Division was in error to the extreme prejudice of this appellant in holding that the applicable amended Section 5-322.1 of the General Obligations Law did not make void, unlawful and against public policy the recovery by the City of indemnification from Buzzetta for the City’s 25% adjudicated negligence by virtue of the City’s contractual indemnification provision in its contract.” In its jurisdictional statement (Rules of Court of Appeals, 22 NYCRR 500.2 [c]) and in its brief, however, Buzzetta raised the issue of its liability to plaintiffs. Thereafter, plaintiffs moved to resettle our order granting leave and to strike those portions of Buzzetta’s jurisdictional statement and brief pertaining to the question of liability to plaintiffs. We denied those motions without prejudice to their renewal during the appeal. We consider plaintiffs’ motions to strike to have been renewed and conclude that they should be granted.

Ordinarily when the court grants a motion for leave to appeal all issues of which the court may take cognizance may be addressed by the parties. Where, however, the party seeking leave specifically limits the issues to be raised, it is bound thereby and may not thereafter raise other questions. To permit otherwise necessarily disadvantages the opposing parties, who might have joined issue or even cross-moved for leave to appeal as to additional issues had adequate notice been given. Having limited itself to the issue of indemnification, Buzzetta may not now raise the question of liability as to plaintiffs.

Buzzetta contends, and the City now concedes, that General Obligations Law § 5-322.1 prohibits enforcement of the indemnification clause on which the City’s full recovery over against Buzzetta is predicated. Recovery over based on this clause cannot stand. The City’s alternative argument supporting full recovery over, based on breach of contract, was not raised in the pleadings or in its motions before the trial court and is, thus, not properly before this court.

Plaintiffs’ motions to strike should be granted. There should be a reversal of the order of the Appellate Division, insofar as appealed from, and the apportionment of damages between the defendants should be reinstated.

Chief Judge Wachtler and Judges Simons, Kaye, Titone, Hancock, Jr., and Bellacosa concur in Per Curiam opinion; Judge Alexander taking no part.

Plaintiffs’ motions to strike portions of appellant’s jurisdictional statement and brief granted. Order, insofar as appealed from, reversed and the apportionment of damages between defendants reinstated, with costs to appellant against the City of New York and to plaintiffs against appellant.