author: Chief Judge Breitel. Cooke, J. (dissenting).

text:
    The People of the State of New York, Appellant, v Felix Almestica, Respondent. The People of the State of New York, Appellant, v George Calderon, Also Known as Pedro Calderon, Respondent.
    Submitted June 3, 1977;
    decided July 5, 1977

      Mario Merola, District Attorney (Richard M. Joel of counsel), for appellant.

      Jac M. Wolff for Felix Almestica, respondent.
   Chief Judge Breitel.

The People appeal from orders of the Appellate Division which reversed, on the law alone, defendants’ joint convictions, after trial without jury, of robbery in the first degree and burglary in the first degree, and remanded the cases for new trials.

The issue is one of harmless error. At trial, evidence obtained during an unlawful search was improperly admitted. But, also at trial, defendants, and two others also convicted but not before this court, were implicated by the victim’s compelling and convincing testimony, testimony completely independent of and not tainted by the unlawful search. The question is whether the trial court’s error, concededly of constitutional dimension, required reversal as a matter of law of convictions so supported by admissible, reliable, eyewitness testimony that the addition of the tainted evidence would be, at best, of negligible significance.

The order of the Appellate Division should be reversed, and the matters remitted to the Appellate Division for a review of the facts. Even constitutional error may be harmless when, as in this case, it is clear, beyond a reasonable doubt, that the error did not contribute to defendants’ conviction (Chapman v California, 386 US 18, 23-24).

The material facts were not contradicted. On December 3, 1973, at about 8:30 p.m., defendants Almestica and Calderon, along with two codefendants, entered the apartment of the victim, Harry Edwards. Defendants were armed with a pistol, a rifle, and a machete. They threatened Edwards, and even made a small cut on his throat with the machete. The cut left a scar visible at the trial more than one year later. After tieing him to a chair, the culprits asked the victim where he kept his money, and assured him that if he co-operated, he would not be hurt. Then, after rummaging through the apartment, they took what they wanted, gagged the victim, and left.

Edwards testified in detail and his testimony was uncontradicted. The fact of robbery was, to some degree, corroborated by the testimony of George Maisonave, who found Edwards bound in his apartment a short while later.

Moreover, Edwards positively identified all four defendants on trial as the perpetrators. Indeed, he knew two of the four culprits, including defendant Almestica, before the crime had been committed. None of the four defendants at the trial testified. The case was, therefore, all but conclusive.

Two questions concerning Edwards’ testimony, neither of them significant, are raised. The first involves defendants’ method of entry. Edwards testified to a forcible entry. On his cross-examination defense counsel, however, sought to establish that the entry was consensual, emphasizing the victim’s prior acquaintance with two of the culprits on trial. Although Edwards never retreated from his direct testimony, the mode of entry is immaterial, as the Trial Judge noted, because all of the elements of the crimes charged, however the entry, were satisfied by the robbers’ subsequent behavior.

The second question raised involves the victim’s inability, on cross-examination, to identify positively which robber performed particular acts during the ordeal. Edwards, in admitting his present difficulty, steadfastly maintained the accuracy of his prior, precise identification of the role of each defendant, made to the police shortly after the events occurred, more than a year before the trial. This past recollection recorded suffices to remove any doubt as to the "identification” testimony (see Richardson, Evidence [10th ed], §§ 469-473).

The principal issue in the case arises not from Edwards’ testimony, but from the improper admission of testimony by a police officer who, later on the night in question, had stopped, and then searched, a suspicious "gypsy” taxicab, only to find the four culprits, the contraband and loot, and the weapons used in the Edwards’ robbery. At a pretrial hearing, a motion to suppress this evidence was denied, and the evidence was admitted at trial.

Under People v Ingle (36 NY2d 413, 414-415), and People v Simone (39 NY2d 818), both decided after the trial in this case, the taxicab search, made only on a "hunch”, was unlawful. On separate appeals, the Appellate Division, relying on the now conceded unlawfulness of the search, reversed defendants’ convictions on the law alone, and remanded the cases for new trials.

On appeal, the People contend that the constitutional error was harmless. The Supreme Court has said that Federal constitutional error in a criminal case may be harmless only if it is "harmless beyond a reasonable doubt”, that is, if there is no reasonable possibility that the erroneously admitted evidence contributed to the conviction (Chapman v California, 386 US 18, 22-24, supra; see Fahy v Connecticut, 375 US 85, 86). The test is concededly stricter than the one applied to nonconstitutional error in New York (People v Crimmins, 36 NY2d 230, 242). The very fact that a test has been articulated, however, implies necessarily that in some cases Federal constitutional error may be harmless (Harrington v California, 395 US 250, 254; cf. People v Ramos, 40 NY2d 610, 618-619).

This is such a case. The cogent testimony of Edwards, the crime victim, who knew and recognized two of the culprits, is, by itself, uncontradicted and all but conclusive. The able and experienced Trial Judge explicitly credited Edwards’ testimony, and noted the extensive corroboration by the witness Maisonave who discovered Edwards tied up. One of the robbers, Rodriguez, made an admission to Edwards after the arrest but, arguably, this may be attributed to the unlawful search and seizure. Hence, for the purpose of this case, in view of the other evidence it may be disregarded.

Defendants note that, in giving his oral decision, the Trial Judge made extensive use of the improperly admitted testimony. Of course he did. Any knowledgeable Judge, presented with additional conclusive evidence, apparently admissible under the then prevalent automobile stop rule, would have done as much (see, e.g., People v Rowell, 27 NY2d 691). Such use does not, however, preclude application of the harmless error doctrine. So long as there is no reasonable possibility that admission of the evidence contributed to the conviction, and there is none in this case, the error was harmless and the conviction should not be nullified as a matter of law.

Crucial is that Edwards’ testimony was entirely independent of the unlawful search. If Edwards’ knowledge of the crime or ability to identify defendants had been based on the results of a prior unlawful search, it would be more difficult to find the error harmless. Even where the unlawful actions of the police lead to a live and willing witness, the testimony of the witness may not be gagged by an exclusionary rule (People v Mendez, 28 NY2d 94, esp pp 100-101, cert den 404 US 911). But here, a fortiori, where Edwards was the victim of the crime, and hence where his knowledge of and willingness to testify about defendants’ criminal activity preceded the unlawful search, the taint does not project backwards.

Thus, the case is distinguishable from Fahy v Connecticut (375 US 85, supra). There defendant had confessed to the crime charged after being advised that the police had recovered the paint and brush used in commission of the crime. Both the illegally seized evidence and the confession were admitted at trial, and defendant was convicted. The Supreme Court reversed the conviction, despite defendants’ full confession, noting that the confession may have been induced by the illegally seized evidence (id., pp 90-91; but cf. dissenting opn per Harlan, J., pp 92-94). Thus, that confession was not a source of evidence entirely independent of the taint, and the error in admitting the illegally seized evidence was not harmless. Without the confession and without the paint and brush the remaining evidence was circumstantial only and insufficient by any standard applicable to proof of criminal liability by circumstantial evidence alone (People v Cleague, 22 NY2d 363, 365-366).

Accordingly, the orders of the Appellate Division should be reversed, and the matters remitted to the Appellate Division for a review of the facts.

Cooke, J. (dissenting).

When there is Federal constitutional error, as there was in this case, a reversal of the conviction and the order of a new trial is required unless the error was harmless under the test—for harmless constitutional error— set down by the Supreme Court of the United States. The standard is that a reversal must occur if "there is a reasonable possibility that the evidence complained of might have contributed to the conviction” (Fahy v Connecticut, 375 US 85, 86-87). As with the requirement of proof of guilt beyond a reasonable doubt, "before a federal constitutional error can be held harmless, the court must be able to declare a belief that it was harmless beyond a reasonable doubt” (Chapman v California, 386 US 18, 24). These words were carefully articulated to provide a workable standard, and it is apparent that they were intended to place a heavy burden on one seeking to demonstrate that an error was harmless. Indeed, as this court has recognized, it is "perhaps the most demanding test yet formulated” (People v Crimmins, 36 NY2d 230, 241). Considering the trial under scrutiny, it is respectfully urged that the record does not support the majority’s conclusion that the error was harmless under this most rigorous test.

While the Trial Justice stated in his findings that he credited the testimony of Mr. Edwards, the complaining witness, he also made extensive use of the evidence that resulted from the unlawful search. The majority, however, places unwarranted emphasis on the fact that the Edwards’ testimony was independent of the unlawful search. The proper significance of the evidence complained of is that it revealed to the trier of the facts that defendants were in possession of articles relating to the crime, including proceeds of the robbery and a machete, the latter item lending support to Edwards’ story that it was these defendants who made a small cut on his throat with a machete. That this evidence was separate and apart from Edwards’ testimony in no way negates its part in the picture presented to the Trial Justice. He was both Judge and jury and, while he may have harbored some doubts concerning the testimony of Edwards, any doubts were certainly disspelled by the physical evidence which is always likely to be more persuasive and which undoubtedly sealed the lid on the People’s case.

If the standard was simply whether it is possible to subtract out the tainted evidence and still arrive at a guilty verdict, one could accept the majority’s conclusion, but a "legal residuum” rule has no applicability or validity here. The test is far more exacting. To repeat: "The question is whether there is a reasonable possibility that the evidence complained of might have contributed to the conviction” (Fahy v Connecticut, supra, pp 86-87 [emphasis added]). In the instant case, not only is it reasonably possible, indeed it is very likely, not merely that such evidence "might have contributed”, but that it was in actuality a substantial factor in the conviction.

There can, of course, always be a difference of opinion on the question of whether evidence contributed to a conviction, and hence whether an error is harmless, but that is only half the problem in this case. The real danger with the majority’s analysis is that it provides a model by which an appellate court may separate out the tainted evidence, examine the permissible evidence,and virtually ignore the possibility that the tainted evidence might have contributed to the conviction. Such a concept bears close resemblance to and is basically no different than the harmless error doctrine or standard in regard to nonconstitutional error adopted by this court in People v Crimmins (36 NY2d 230, supra), and explained in this fashion: "What is meant here, of course, is that the quantum and nature of proof, excising the error, are so logically compelling and therefore forceful in the particular case as to lead the appellate court to the conclusion that 'a jury composed of honest, well-intentioned, and reasonable men and women’ on consideration of such evidence would almost certainly have convicted the defendant” (pp 241-242). By its holding the majority has in effect given license to the prosecutor to commit constitutional error in any case where he feels there is overwhelming independent evidence to support the conviction because, under the majority’s formulation, the additional conclusive evidence can be separated out by the appellate court as long as the remaining proof is from "a source of evidence entirely independent of the taint” (p 227) and, of course, overwhelmingly persuasive. This is the great vice of the rule, apart from its misapplication of Chapman and Fahy.

The instant case adapts well to the majority’s analysis, but the mechanism created will fit neatly into many future cases. That this case was tried before a Judge without a jury should not negate the principles involved. Indeed, the influence of the tainted proof is all the more obvious in this case from the Trial Justice’s findings. The test laid down by the Supreme Court is whether the tainted evidence might have contributed to the conviction, and not whether the remaining evidence is independent of the taint. The tainted and the untainted evidence present a composite picture, and the appellate courts should not cull out the tainted evidence, and, upon examining the new sparser picture, reach its own conclusion as to what verdict would have been reached by a jury or even a Trial Justice. That, it is submitted, is the effect of the majority’s holding, for it simply cannot be said that the testimony of the victim and the tainted physical evidence were not, at the very least, coequal contributors to defendants’ conviction in this case.

Accordingly, the order of the Appellate Division, remanding the matter for a new trial, should be affirmed.

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

Orders reversed and the matters remitted to the Appellate Division, First Department, for further proceedings in accordance with the opinion herein.


source: Caselaw Access Project

author: Jones, J.

license: Public Domain

text:
    In the Matter of Raymond F. Gallagher et al., as Erie County Legislators and Citizen Taxpayers, Respondents, v Edward V. Regan, as Chief Executive and Budget Officer of the County of Erie, et al., Appellants.
    Argued May 31, 1977;
    decided July 5, 1977

      James L. Magavern and James P. Caher for appellants.

      Timothy A. McCarthy for respondents.
   Jones, J.

We hold that positions in Erie County government established by the County Charter and the Administrative Code cannot be abolished by the County Legislature by striking salary appropriations for such positions from the budget submitted by the County Executive.

As members of the Erie County Legislature and as citizen-taxpayers, petitioners initiated this litigation by submission to the Appellate Division of a controversy on an agreed statement of facts under CPLR 3222, presenting several questions relating to various items involved in the 1977 Erie County budget. Those questions were resolved by the judgment entered in the court below, only one ordering paragraph of which is before us for review on this appeal taken by petitioners by leave of this court. That paragraph provides that the 1977 budget "shall not include the positions of Deputy County Executive, Deputy Commissioner of Public Works-Buildings and Grounds, Deputy Director of Purchasing, Deputy Commissioner-Recreation, County Forester and Commissioner of Environmental Quality.” As to the first five positions, the question is whether the Appellate Division correctly directed that they not be included in the 1977 Erie County budget in consequence of certain action taken by the County Legislature.

The submission of controversy agreed to by the parties, as amended by their conduct and oral stipulation on argument, discloses the following: On July 19, 1976 the Erie County Executive submitted to the County Legislature his tentative budget for 1977, which included an item for salary for each of the positions in question. On November 10, 1976 the County Executive submitted an unofficial amended tentative budget containing the same salary items. On November 30, 1976, following receipt of a report from its budget committee, the County Legislature adopted an amended budget from which it had excised each of the five salary items for the positions here involved. Appellants, the County Executive, the Commissioner of Finance and the Director of the Budget Division in the office of the County Executive, contend that the deletions were invalid and ineffective, as the County Executive advised the County Legislature in a letter dated December 6, 1976. We agree.

Each of the five positions in question was expressly created by one or more provisions either of the County Charter or of the Administrative Code enacted to set forth the details of county government in harmony with the charter (Deputy County Executive—Erie County Charter, §§ 304, 309; Deputy Commissioner of Public Works-Division of Buildings and Grounds—Erie County Administrative Code, §§ 10.01, 10.04; Deputy Director of Purchasing—Erie County Administrative Code, § 3.06, subd a; Deputy Commissioner-Recreation—Erie County Administrative Code, § 7.01, subd [b]; County Forester —Erie County Administrative Code, § 7.04). Both the charter and the Administrative Code may be amended by a local law only (Erie County Charter, § 2002; Municipal Home Rule Law, § 2, subd 9; § 33, subd 1; § 32, subd 2; Erie County Charter, § 202, subd c; Erie County Administrative Code, § 20.01). A local law is subject to an initial veto by the County Executive and may not receive approval by him until a public hearing thereon has been held before him (Erie County Charter, § 205; Municipal Home Rule Law, § 21). The adoption of the county budget, however, is effected by action of a majority of the County Legislature, as to which the County Executive may exercise a veto with respect to increases made over the tentative budget by the County Legislature but not with respect to legislative decreases (Erie County Charter, § 1803).

In the present case, the County Legislature’s omission of salary items for the five positions (representing a decrease in the budget), unlike a local law enacted by the same body, could not be vetoed by the County Executive. The check and balance assured by the right of veto in the elected executive is, however, basic to our traditional governmental polity. Thus, the adoption of a budget without an appropriation for the offices in question was not, in terms of the required procedures, the legislative equivalent of the adoption of a local law amending the County Charter and Administrative Code to eliminate the positions. It was therefore ineffective to accomplish what would in fact have amounted to an amendment of the charter and code by abolishing offices there created. As this court recognized in Matter of Moran v La Guardia (270 NY 450, 452) (addressing a change authorized by State statute with respect to the salary of an office in local government): "To repeal or modify a statute requires a legislative act of equal dignity and import. Nothing less than another statute will suffice.” The principle applies to the abolition of public offices. (3 McQuillin, Muncipal Corporations [3d ed], § 12.121: "But an office created by charter cannot be abolished by ordinance. Nor can an office created by statute or ordinance be abolished by mere resolution, or by mere declaration. If the office is created by ordinance it can only be abolished by ordinance and not by resolution.”) The doctrine of legislative equivalency has uniformly been applied with respect to the abolition of offices in local government (Matter of O’Rourke v Graul, 261 App Div 87, affd 285 NY 755 [abolition of a position created by city resolution]; Timpano v Hanna, 77 Misc 2d 874, affd 44 AD2d 912 [refusal to fund positions created by city ordinance]; Matter of Collins v City of Schenectady, 256 App Div 389 [abolition of office created by city ordinance]).

Respondents’ reliance on section 204 of the County Law is misplaced. That section provides, insofar as pertinent: "In addition to those positions of employment specifically provided by law, the board of supervisors shall have power to establish positions of employment and may abolish the same. The establishment and abolition of such positions may be by local law, by resolution or by the adoption of the budget.” It is respondents’ contention that the reference to positions "provided by law” relates only to positions created by general State law, and that inasmuch as the positions here involved were created by charter and Administrative Code rather than general law, the County Legislature could exercise the authority to abolish these positions granted it under section 204. To this argument, several answers can be made. First, it is not clear that "provided by law” does not embrace provisions of charter and code as well as those of general law. Second, even if the interpretation of the introductory phrase urged by respondents be accepted, we do not read section 204 as authorizing or contemplating the abolition of offices other than by action which is the legislative equivalent of that by which the offices were established. We read the statute as importing the general doctrine of equivalency of legislative action. In the third place, however, even if all of respondents’ arguments as to the interpretation of section 204 were to be accepted and the section were then to be read in effect as authorizing the abolition of a position created by charter or code by means of the adoption of a budget carrying no appropriation for the position, respondents would still fail in their attempt to sustain the legislative action as effective to abolish the positions here at issue. Inasmuch as charter and code amendment may be accomplished only by local law, there would be an inconsistency between charter and code on the one hand and the County Law on the other. In such a circumstance the County Law itself provides that "unless a contrary intent is expressly stated”—and none is to be found in section 204—if there is a conflict between the provisions of the County Law and those of any local charter or Administrative Code, the provisions of the County Law shall not be applicable (County Law, § 2, subd [b]; § 1001, subd [3]).

Similarly, we reject the contention that the positions in question—expressly created as they are by the County Charter or Administrative Code—fall within the ambit of particular code provisions which condition the authority to create offices on appropriations being made therefor by the Legislature. A distinction must be made between the nonspecific "deputies, other officers and employees”, which heads of administrative units may appoint under subdivision d of section 3.09 of the Erie County Administrative Code within appropriations, and those offices particularly defined and described by the charter or other provisions of the code.

In the terms of the controversy submitted by the parties, petitioners are not entitled to the judgment rendered by the court below directing that the five subject positions not be included in the 1977 Erie County budget. The judgment, insofar as appealed from, should therefore be reversed, without costs, and the case remitted to the Appellate Division for judgment in accordance with this opinion.

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

Judgment, insofar as appealed from, reversed , etc.

      . As agreed by the parties, all questions as to the last-named position—Commissioner of Environmental Quality—have become moot and it will therefore not be considered further.

      . While the submission in form requested only a determination as to the first three of the five described positions, it appears that the parties have proceeded throughout on the assumption that all five positions are properly in issue and have addressed them all in their arguments and briefs before us.

      . As to both local laws and budget increases an executive veto could be overriden by a vote of two thirds of the members of the Legislature (Erie County Charter, §§ 205, 1803, subd c).


author: Gabrielli, J.

text:
    In the Matter of Great Atlantic & Pacific Tea Company, Inc., Appellant, v Thomas J. Kiernan, as Assessor of the Town of Horseheads, et al., Respondents.
    Argued May 31, 1977;
    decided July 5, 1977

      Edward B. Hoffman for appellant.

      Louis J. Mustico for respondents.
   Gabrielli, J.

In this tax certiorari proceeding the issue presented for review is the proper method of valuation of appellant’s property, one of the world’s largest food processing plants. Respondent tax officials contend that the property is a specialty and thus the reproduction cost-less depreciation method should be utilized in establishing the value of the property for tax assessment purposes, while appellant maintains that the traditional market value approach will yield its true legal and full value.

The subject property is located in the Town of Horseheads, Chemung County, in that area of New York State known as the "Southern Tier”. The structure was designed and constructed for appellant to accommodate its food processing, warehousing and shipping operations on a regional scale; and the plant, which has a floor area of 1,544,916 square feet, serves a large portion of the eastern United States. It contains 73 truck loading docks, several interior railroad sidings, laboratories, offices, cold storage and refrigeration facilities, in addition to other fixtures utilized in appellant’s food processing enterprise. The building is divided into large open areas on the main floor while mezzanine walkways above the main floor provide employee access to working areas, and tunnels beneath it furnish utility services.

In 1973, respondents fixed the assessment of the property in the amount of $4,683,000 at an equalization rate of 21%, thus yielding a full value of $22,300,000. Appellant commenced this proceeding to declare the assessment void, or in the alternative to have it reduced to a proper level. At trial, real estate appraisers and experts produced by appellant, espousing the market value approach, testified that the value of the property was $13,900,000 while respondents’ appraiser fixed the value at $19,200,000. In arriving at their valuation, appellant’s appraisers relied upon sales of similar properties located in the eastern United States, which were some 500 to 1,000 miles distant from the subject property. The trial court, relying on the unchallenged testimony of the appellant’s appraisers that the market for the subject property was regional in nature, found that there was an active market for the type of building here involved throughout the eastern United States. Significantly, the court also found that, while the subject property was built to serve the particular purposes of appellant’s business, "the building is easily convertible to other industrial uses. It can readily be subdivided into smaller units, if desired. No heavy expenditure is called for to remove present fixtures or install others and the manner in which the building is constructed and laid out lends itself to simple alteration”. Thus, the court, holding that the market value approach was proper in this case and that valuation of the subject property could be based upon sales of comparable properties beyond its immediate area, adopted the appellant’s appraisers’ value of $13,900,000.

Without disturbing the trial court’s findings, the Appellate Division reversed and held that the property should be valued as a "specialty” because of the above-described features adapting it to appellant’s use and, further, because no sales of similar property in the immediate locale could be found. The Appellate Division thus remitted the matter for a further hearing in which the value of the property was directed to be determined by the reproduction cost-less depreciation method of valuation. Following this hearing, the trial court fixed the value of the property, according to the method mandated by the Appellate Division, at $16,700,000. This latter determination, of course, is not subject to review on this appeal, as we are here concerned only with the original, nonfinal order of the Appellate Division from which this appeal is taken pursuant to CPLR 5601 (subd [d]) (see First Westchester Nat. Bank v Olsen, 19 NY2d 342).

Section 306 of the Real Property Tax Law requires that all property be assessed at its full value and, generally, it is "market value” which provides the most reliable valuation for assessment purposes (see People ex rel. Parklin Operating Corp. v Miller, 287 NY 126, 129; Lee & Le Forestier, Review and Reducing of Real Property Assessments, § 1.03, p 3). However, where there is no reliable market data, other methods are available such as the capitalization of income method which is utilized in valuing rental property (see, e.g., Matter of City of New York [Oceanview Terrace], 42 NY2d 948; Matter of Pepsi-Cola Co. v Tax Comm., 19 AD2d 56), or the reproduction cost-less depreciation method which is utilized when the subject property may properly be categorized as a "specialty” (see People ex rel. New York Stock Exch. Bldg. Co. v Cantor, 221 App Div 193, 197, affd 248 NY 533). While various definitions have been advanced, a specialty may perhaps be best defined as a structure which is uniquely adapted to the business conducted upon it or use made of it and cannot be converted to other uses without the expenditure of substantial sums of money (People ex rel. Hotel Paramount Corp. v Chambers, 298 NY 372, 375; Matter of Sperry Rand Corp. v Board of Assessors of County of Nassau, 10 AD2d 720; see, also, Matter of County of Nassau [Colony Beach Club of Lido], 43 AD2d 45, 49, affd 39 NY2d 958). Property has been categorized as a specialty where some intangible element such as the owner’s prestige or good will inheres in its value (see, e.g., G.R.F., Inc. v Board of Assessors of County of Nassau, 41 NY2d 512, 513-514; Matter of Seagram & Sons v Tax Comm of City of N. Y., 18 AD2d 109, affd 14 NY2d 314, 318; People ex rel. Hotel Paramount Corp. v Chambers, supra, pp 374-375).

On the other hand, property does not qualify as a specialty where it possesses certain features which, while rendering the property suitable to the owner’s use, are not truly unique to his business but, in fact, make the property adaptable for general industrial use. Thus, if no great expense would be entailed in converting the property from the present owner’s use to other business and industrial uses and if a market value may be ascertained, property should not be valued as a specialty merely because it contains such features as interior railroad sidings, truck loading docks or other amenities and fixtures which are not truly unique to the owner’s business (see McDonald v State of New York, 52 AD2d 721, 722, affd 42 NY2d 900; Dormitory Auth. of State of N. Y. v 59th St. & 10th Ave. Realty Corp., 51 AD2d 953, affd 41 NY2d 1038; Matter of City of New York [Lincoln Sq. Slum Clearance Project], 15 AD2d 153, 170-171). Such "special features” do not, without more, require departure from the market value approach to valuation (cf. G.R.F., Inc. v Board of Assessors of County of Nassau, supra, p 515). In McDonald v State of New York (supra) an animal hospital equipped with "kennels, dog runs, [and] an incinerator” was held not to be a specialty. Similarly, such "special features” as "dehumidifying equipment” and "recessed lighting” did not mandate valuation of property as a specialty in Matter of City of New York (Lincoln Sq. Slum Clearance Project) (supra). And, in a recently decided condemnation case, we rejected the owner’s argument that, inter alia, interior truck loading docks and luxury office space qualified the property as a specialty (Dormitory Auth. of State of N. Y. v 59th St. & 10th Ave. Realty Corp, supra).

In the instant case, those facilities such as utility tunnels, employee walkways, truck loading docks, refrigeration facilities or the like do not render the subject property a specialty incapable of valuation according to the normal market value method. There was testimony by witnesses on both sides that these so-called "special features” would not interfere with the use of the property for other industrial purposes and, indeéd, respondents concede that the property may be so used. Moreover, the features relied upon by the Appellate Division in categorizing the plant as a specialty could be utilized in a wide variety of industrial uses and, in fact, there was testimony that some of them such as utility tunnels, employee walkways and temperature control systems made the plant more flexible and adaptable. The property, therefore, was not so uniquely suited to appellant’s business as not to be reasonably adaptable to other industrial uses; and this conclusion finds further support in the trial court’s finding, not disturbed by the Appellate Division, that the property could be converted to general industrial use without a substantial expenditure of funds.

The Appellate Division reasoned that the reproduction costless depreciation method of valuation should be utilized since there were no reliable indicia of market value because of the lack of evidence of comparable sales in the immediate area. That court also rejected the trial court’s reliance on appellant’s out-of-State comparable sales. While it is generally true that comparable sales should not be too remote in location from the subject property (see Lee & Le Forestier, op. cit, § 1.19, p 15), we have previously stated that "Receiving evidence of sales of property beyond the immediate vicinity of the subject property is a matter resting in the sound discretion of the trial judge” (Levin v State of New York, 13 NY2d 87, 92 [Fuld, J.]; see, also, 1 Orgel, Valuation Under Eminent Domain, § 138, p 586). Whether evidence should be received of comparable sales which are some distance away from the subject property depends, of course, on the nature and character of the property involved. It would not be proper, for example, to look beyond New York City in valuing an office building located therein because such a building would obviously have a local market. Here, however, there is no local market for appellant’s facility but the record is clear, and the Trial Judge so found, that there was a broad regional market for this type of industrial plant. Under these circumstances, we think that it was not error to depart from the ordinary rule with respect to location of comparables and, thus, the trial court properly relied upon the out-of-State comparable sales utilized by appellant’s appraiser in determining the value of the property by the market value approach. The ordinary or general rule should not blind us to the fact that the ultimate purpose of valuation, whether in eminent domain or tax certiorari proceedings, is to arrive at a fair and realistic value of the property involved. The reproduction cost method of valuation may result in serious overvaluation of the property due to rising construction costs and its failure to adequately account for factors such as functional obsolescence and physical deterioration (see G.R.F., Inc. v Board of Assessors of County of Nassau, supra, p 514; Lee & Le Forestier, op. cit., § 1.07, p 5; 2 Orgel, op. cit, §§ 188, 199). Thus, reproduction cost should be utilized only in those limited instances in which no other method of valuation will yield a legally and economically realistic value for the property (see, generally, 1 Bonbright, Valuation of Property, pp 175-176). Here, because of the lack of any local market and the existence of a broad regional market for appellant’s type of property, it is proper to depart from the ordinary rule relating to the proximity of comparables in order to arrive at a more realistic value than would be obtained by the reproduction cost method. To reject a sound and valid approach to valuation where the normally applipable rule has no relevance under the circumstances of a particular case, is to abandon the economic realism which should characterize valuation and embrace a rigid, dogmatic approach which will not yield fair and equitable results. As we recently stated in G.R.F., Inc. v Board of Assessors of County of Nassau (supra, p 515), "[p]ragmatism * * * requires adjustment when the economic realities prevent placing * * * properties in neat logical valuation boxes” (citations omitted).

Finally, with respect to the Appellate Division’s objection that no adjustments were made by the appraisers for differences in the localities in which the out-of-State comparable sales were located, it should be noted that there was testimony indicating that conditions such as business climate, labor, transportation and availability of public utilities were taken into account, and, in certain cases no adjustments were necessary. There was also testimony that if adjustments were made for differing conditions, the result would have been a reduction in value since conditions in the localities of the comparables were all more favorable than those in the Town of Horseheads, the location of the subject property.

Accordingly, the order appealed from should be reversed and the order of Supreme Court, Chemung County, entered July 3, 1974, reinstated, with costs.

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

Order reversed, with costs, etc.

         Of course, reproduction cost-less depreciation may always be introduced to establish the upper limit of value (see G.R.F., Inc. v Board of Assessors of County of Nassau, supra, p 514; People ex rel. Manhattan Sq. Beresford v Sexton, 284 NY 145).


author: Fuchsberg, J. Jasen, J. (dissenting in part).

text:
    In the Matter of Windsor Park Nursing Home, Appellant, v Charles J. Hynes, as Deputy Attorney-General of the State of New York, Respondent.
    Argued June 7, 1977;
    decided July 7, 1977

      Robert A. Goldschlag and Jack S. HofBnger for appellant.

      Charles J. Hynes, Deputy Attorney-General (T. James Bryan of counsel), for respondent.
   Fuchsberg, J.

The issues on this appeal are whether the Special Prosecutor has established a sufficient factual basis for the issuance of an office subpoena duces tecum and, if he has, whether it entitles him tq retain possession of the books and records so subpoenaed for his private examination and audit.

The Special Prosecutor served an office subpoena duces tecum upon a partner in petitioner Windsor Park Nursing Home, which thereupon moved to quash, contending, in the main, that the prosecutor has failed to establish relevancy of the items he seeks and that, in any event, he is not entitled to "seize and examine” them.

On the question of relevancy the prosecutor relied, among other things, on the results of a 1969 audit by the State Department of Health which revealed that "$21,077 in expenses claimed by petitioner to have been incurred in patient care had been wrongfully claimed.” Petitioner asserts that the disallowances were caused by the imposition of cost ceilings upon legitimate patient-related expenses. But the Special Prosecutor counters that some of the disallowed items included payments for personal items of the directors and partners.

Criminal Term denied the motion, except that, in a resettled order, it provided "that a representative of Windsor Park or its counsel may be present during the audit, inspection, photocopying, and examination of its books and records produced * * * pursuant to the subpoena duces tecum. The documents may not be retained beyond a reasonable time and petitioner’s representative is entitled to access to them during normal weekday business hours.” On cross appeals, the Appellate Division unanimously modified the resettled order by striking the provision permitting petitioner or its representative to be present during the "audit”.

Preliminarily, it appears clear that the relevancy question need not long detain us. Nonjudicial office subpoenas must bear only a "reasonable relation to the subject-matter under investigation and to the public purpose to be achieved” (Matter of Sussman v New York State Organized Crime Task Force, 39 NY2d 227, 231; Myerson v Lentini Bros. Moving & Stor. Co., 33 NY2d 250, 257). Probable cause that there has been wrongdoing is not essential. The records sought here obviously concern a nursing home. Given the Department of Health audit, it cannot be said that the possible fiscal and recordkeeping irregularities to which the Special Prosecutor points do not meet the necessary standard (cf. Matter of Lewis v Hynes, 82 Misc 2d 256, affd 51 AD2d 550). As we observed in rejecting an analogous challenge in Matter of Alexander v New York State Comm, to Investigate Harness Racing (306 NY 421, 426), the prosecutor "will, of course, be restricted to such material as is relevant to the subject of the inquiry, but [he] is not obliged to take petitioners’ word for what is or is not relevant.”

Turning now to the core issue of whether the prosecutor may take possession of the records, we note that his subpoena was issued pursuant to subdivision 8 of section 63 of the Executive Law, which authorizes the Special Prosecutor, in his nursing home inquiry (see Matter of Sigety v Hynes, 38 NY2d 260), "to subpoena witnesses, compel their attendance, examine them under oath before himself or a magistrate and require the production of any books or papers which he deems relevant or material to the inquiry” (emphasis supplied).

Authorization to conduct an inquiry and issue subpoenas is not authorization to take possession of books and records for examination and audit (see Matter of Heisler v Hynes, 42 NY2d 250 [decided herewith]). Even when the Legislature has authorized a government agency to examine or audit records, the enabling statute has expressly spelled out that power (e.g., Agriculture and Markets Law, § 256-a [commissioner granted "power to inspect and copy and audit”]; Alcoholic Beverage Control Law, § 43, subd 4 [local board given power "to examine or cause to be examined the books and records”]; Banking Law, § 471, subd 2, par [d] [supervisory committee, of credit union given power to "audit” books and records]; Executive Law, § 758, subd 9, par [c] [Board of Social Welfare given power to "examine books and records”); Public Health Law, § 2803, subd 1, par [b] [Commissioner of Health given power to conduct examinations and audit financial records]; Pari-Mutuel Revenue Law, L 1940, ch 254, § 36, subd 2, as amd by L 1959, ch 881, § 3 [State Harness Racing Commission empowered "to visit, investigate, and place expert accountants * * * in the offices [and] tracks”). And/ even in civil litigation, the right of a party to "inspect, copy, test or photograph” documents is expressly provided for in CPLR 3120.

Many of the agencies given the power to conduct audits also have subpoena power (e.g., Alcoholic Beverage Control Law, § 43, subd 4; Executive Law, § 752). It is logical to assume, therefore, that the Legislature intended even these statutes for separate purposes. Similarly, attorneys for parties in civil litigation are granted the power to issue a subpoena duces tecum (CPLR 2302); there too, were the power to inspect and copy books and records synonymous, CPLR 3120 would be superfluous.

In sum, the statute under which the Special Prosecutor issued the subpoena does not authorize him to retain custody of the documents for the purpose of audit and examination. It would take an enlargement of his power for him to do so; that would require legislative, not judicial, sanction.

Accordingly, while petitioner must produce the books and records, we conclude it may not be required to relinquish them and the order of the Appellate Division must be modified, accordingly.

Jasen, J. (dissenting in part).

While I agree with the court that the inquiry is within the jurisdiction of the Deputy Attorney-General and that documents subpoenaed bear a reasonable relationship to the subject matter under investigation, I cannot agree with the majority’s conclusion that the Deputy Attorney-General lacks authority to take temporary custody of the relevant documents in pursuance of his lawful investigatory authority.

In contrast to Matter of Heisler v Hynes (42 NY2d 250, decided herewith), which dealt with the plenary investigatory authority of Grand Juries, the issue in this case turns on authority conferred on the Deputy Attorney-General by virtue of subdivision 8 of section 63 of the Executive Law. The statute provides that, whenever required by the public interest, the Attorney-General may, with the approval of the Governor, and when directed by the Governor, shall "inquire into matters cncerning the public peace, public safety and public justice.” In 1975, in response to growing concern as to the quality of care provided by private nursing homes receiving public financial assistance, a Deputy Attorney-General was appointed to conduct an inquiry into possible criminal violations in connection with or related to the management, control, operation or funding of any nursing home or health-related facility. We have concluded that this investigation is a proper exercise of the authority conferred by subdivision 8 of section 63 of the Executive Law. (Matter of Sigety v Hynes, 38 NY2d 260.) In pursuance of his statutory authority, the Deputy Attorney-General is explicitly authorized "to subpoena witnesses, compel their attendance, examine them under oath before himself or a magistrate and require the production of any books or papers which he deems relevant or material to the inquiry.”

I cannot agree with the court’s conclusion that the right to compel the production of relevant books and records does not include the right to inspect such records and retain them for a reasonable time in furtherance of the lawful investigation. The Legislature did not intend the right to produce be as hollow and barren as it is interpreted by the majority. In my view, the great legislative concern with matters of peace, safety and justice indicates an intention to confer sufficient authority on the Attorney-General and his designated deputies to permit them to conduct meaningful inquiries in conjunction with lawful investigations. Thus, the Legislature provided that the Deputy Attorney-General should have access to any books or papers he deems relevant or material to the inquiry. Without authority to inspect, study, analyze and retain relevant or material documents, most investigations would surely fail. Yet, this, I submit, is the consequence of the court’s decision.

The fact that, in several instances, the Legislature explicitly conferred upon established regulatory agencies the authority to audit the books and records of the enterprises to be regulated is scarcely relevant to this case. We do not deal here with regulatory agencies, whose jurisdiction is very limited, but with the office of the Attorney-General and his power and duty to investigate into matters touching the public peace, safety and justice. There are obvious differences between a statute authorizing exceptional investigations and statutes authorizing regulatory agencies to conduct positive audits. In fact, the point made by the majority is actually favorable to the argument advanced by the Deputy Attorney-General. If the Legislature was sufficiently concerned to authorize limited audits of various race tracks, as noted by the majority, then how much more was the Legislature concerned when it authorized the Governor to direct full-scale investigations directly necessitated by the public welfare? Further, we are not concerned here with the power to audit. The Deputy Attorney-General seeks access to the records of the petitioner in order to assist him in his search for possible criminal violations.

The operation of nursing homes is a matter of grave public concern. Particularly in the past few years, attention has been focused on the maltreatment of elderly and infirm patients on the part of nursing home operators more interested in profit-making than in delivering quality health care services. The State has an important interest in protecting a particularly vulnerable class of citizens from the consequences of fraud and overreaching. Indeed, the State itself has been victimized by fraudulent claims made on the public treasury by nursing home operators. The State presently stands to lose substantial amounts in Federal assistance because of allegedly inadequate supervision of nursing home operators. As we said in Matter of Sigety v Hynes (38 NY2d 260, 266, supra), "[widespread corruption in the nursing home industry, care of the elderly and infirm and compensation for that care from the public treasury are 'matters concerning the public peace, public safety and public justice’ ”. It is regrettable, therefore, the court has strained to so construe the provisions of subdivision 8 of section 63 of the Executive Law as to strangle an inquiry of manifest public importance. The statute should be read in a commonsense manner and, in my view, the public interest requires nothing less.

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

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

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


text:
    In the Matter of Clara Heisler, Appellant, v Charles J. Hynes, as Deputy Attorney-General of the State of New York, Respondent.
    Argued June 7, 1977;
    decided July 7, 1977

      Robert A. Goldschlag and Jack S. Hoíñnger for appellant.

      Charles J. Hynes, Deputy Attorney-General (T. James Bryan of counsel), for respondent.
   Fuchsberg, J.

The sole issue on this appeal is whether a Grand Jury subpoena duces tecum may be used to compel a witness to surrender possession of records or other property to a prosecutor for independent examination outside the presence of the Grand Jury.

Clara Heisler, the petitioner, is one of the operators of the Oceanview Nursing Home. The Special Prosecutor issued a subpoena directing her to "appear before the Grand Jury of the County of Queens * * * as a witness in a criminal prosecution” and "to bring with you and produce” numerous books and records of the nursing home covering a five-year period. On petitioner’s motion to quash, she asserted that the prosecutor intended to use the subpoena as a device by which he would, in effect, "illegally seize” the home’s books and records by removing them from the Grand Jury room and retaining them for examination by his assistants and auditors.

Criminal Term denied the motion in a resettled order which provided, however, "that at all times, other than when the subpoenaed materials are being presented to the Grand Jury, a representative of the petitioner may be present when the Special Prosecutor inspects, audits or otherwise examines” them. Both parties appealed, the prosecutor from so much of the order as granted the petitioner the right to be present while the records are examined outside the presence of the Grand Jury and the petitioner from so much thereof as would have permitted the Grand Jury and the prosecutor to retain possession of them for his independent examination. It was her position that the subpoena duces tecum could only be used to require her to produce the books and records to enable her to answer questions concerning them. The Appellate Division modified the order by deleting the provision permitting the petitioner’s representative to be present during audit. Petitioner now appeals as of right.

Under CPL 610.10 (subd 3), a subpoena duces tecum directs a "witness [to whom such process is addressed] to bring with him and produce specified physical evidence”. Such a subpoena does not authorize the seizure, impoundment or other disruption in possession of records or property (Matter of Kelly, 19 FRD 269 [Weinfeld, J.]). Its function is to cause the physical evidence to which it is directed to be brought before the court. It is not intended to deprive its custodian of control which is compatible with its production. So "[o]bedience to the subpoena will be complete when the books called for are presented to the grand jury in an actual session, and are taken away again * * * as soon as the particular session adjourns” (Matter of American Sugar Refining Co., 178 F 109, 111, error dsmd 223 US 743; see, also, United States v Birrell, 242 F Supp 191, 204; Matter of Amalgamated Union v Levine, 31 Misc 2d 416, 417 [Meyer, J.]; Matter of Atlas Lathing Corp. v Bennett, 176 Misc 959; cf. Matter of Randall, 87 App Div 245; contra Robert Hawthorne, Inc. v Director of Internal Revenue, 406 F Supp 1098, 1131, n 66).

We do not suggest that a naked presentation of the records is all that is required. They may serve to refresh a witness’ recollection, to enable them to be identified, and for use as direct evidence on their own. These uses, of course, are ones to be employed within the framework of the procedural protections against abuse "which attach when appearance is before a Grand Jury” or other judicial body (cf. Matter of Sussman v New York State Organized Crime Task Force, 39 NY2d 227, 232).

But what the prosecutor has been granted by the order of the Appellate Division here goes far beyond that. It gives him unsupervised possession of the petitioner’s books and records and it does so on the basis of the subpoena duces tecum alone.

This is not to say that circumstances may not arise which may be thought to warrant impoundment or other lawful interference with possession of records or property, but authorization for the imposition of such a condition must be grounded on powers and procedures not inherent in the subpoena duces tecum (Hagan, Impounding and the Subpoena Duces Tecum, 26 Bklyn L Rev 199, 213). Such additional powers do not reside in the Special Prosecutor and he may not assume them willy-nilly ex parte.

There are significant contrasts between the power of subpoena, on the one hand, and that of impoundment or inspection, on the other. Since prosecutors have no general right to discovery in criminal cases under our State law (but cf. CPL 250.20 [notice of alibi]; CPL 250.10 [notice of insanity defense]), the taking of unsupervised possession of the petitioner’s records without more must be regarded as in the nature of an impoundment. This is particularly so in this case where the subpoena, not being an office subpoena, was one issued by the Special Prosecutor on behalf of the Grand Jury rather than on his own (cf. Matter of Windsor Park Nursing Home v Hynes, 42 NY2d 243 [decided herewith]).

Impoundment is a measure so drastic that, when exercised, the taking and keeping that it brings about must be one by or solely on behalf of a court itself. By no means is it one which, as in this case, would put the prosecutor in sole possession of the petitioner’s records. It may be granted only on a demonstration of special circumstances, as, for instance, when evidence is likely to disappear or be altered unless guarded and preserved (United States v Birrell, 242 F Supp 191, 202, supra), the burden of showing which rests with the one who seeks it (Hagan, op. cit., p 215). In the present case no such application was made and no such showing even attempted.

Even in the Federal courts, where authority to examine evidence subpoenaed before a Grand Jury is expressly conferred upon "attorneys for the government” by rule 6 (e) of the Federal Rules of Criminal Procedure (US Code, tit 18, Appendix; United States v Universal Mfg. Co., 525 F2d 808, 811; United States v Zirpolo, 288 F Supp 993, 1015, revd on other grounds 450 F2d 424), disclosure is subject to court supervision and authorization (United States v Universal Mfg. Co., supra, p 812; Matter of July 1973 Grand Jury, 374 F Supp 1334, esp p 1335, n 2; Matter of Pflaumer & Sons, 53 FRD 464) and conditions which strike a "proper balance” between a Grand Jury’s right to "temporary use of the books” and the right of the party whose records are involved to protection against disruption of his affairs (see Matter of Kelly, 19 FRD 269, 270, supra). While in some of the cases the records were directed to be left with the Grand Jury by court order, none of them permitted a Government attorney to take possession of them on his own (see Hagan, op. cit., 26 Bklyn L Rev 199, 225; but - see Robert Hawthorne, Inc. v Director of Internal Revenue, 406 F Supp 1098, 1106, supra).

There is no comparable statutory scheme in New York. If our Legislature had intended to authorize prosecutors to use a subpoena duces tecum to compel a witness to surrender possession of books and records for audit and examination, if that be constitutionally valid, it is to be assumed that it would have done so expressly (cf. Matter of Windsor Park Nursing Home v Hynes, 42 NY2d 243, supra [decided herewith]).

Our decision today hardly leaves law enforcement officials powerless. The custodian is required to bring the books with him to the Grand Jury not only on its return dates, but on others to which it may be adjourned so that he or any other witness who is expected to give testimony from, about or with the aid of them may be called to the stand. Skilled questioning regarding the contents of the records produced will generally elicit all the information needed (see Evans v Evans, 98 Utah 189, esp p 199). And, of course, as indicated, where circumstances warrant, a prosecutor may apply for an order of impoundment or inspection, which is within the inherent power of a court to grant (8 Wigmore, Evidence [McNaughton rev], § 2200, subd [viii]). Moreover, experience teaches that counsel, in assisting the court or Grand Jury in the expedition of its business, most often stipulate to mutually convenient modus vivendi with regard to the scope, time, place and protections that relate to the particular inquiry at hand so as to alleviate burdens that achieve no substantive end.

Accordingly, since the prosecutor may not use the Grand Jury subpoena duces tecum to impound the records or conduct an inspection without specific court authorization, the order of the Appellate Division should be modified by the addition of a provision that, on petitioner’s production of the books before the Grand Jury, as directed by the subpoena, she need not surrender custody of them to that body.

Jasen, J. (dissenting in part).

I dissent and vote to affirm the order of the Appellate Division. This case presents two distinct but important issues: whether the Grand Jury can compel a witness to temporarily relinquish custody of business records so that the records may be used to assist the Grand Jury in the conduct of a lawful investigation and whether the Grand Jury may obtain the assistance of financial experts in analyzing those records.

In my view, the Grand Jury may properly do both. The contrary result reached by the majority hamstrings the abilities of Grand Juries, throughout the State, to fulfill their constitutional and statutory obligation to ferret out criminal conduct and initiate the prosecution of those responsible for serious offenses. The court’s decision is particularly unfortunate since the reasoning to support it overlooks the separate capacity of the Grand Jury which issued the judicial subpoena at issue and, instead, fuses together, and thus blurs, important distinction between the function of Grand Jury and prosecutor. Further, the issues presented raise matters of State law and, to resolve these issues, the majority relies upon dicta in unreasoned decisions of Federal lower courts construing the powers of Federal Grand Juries which are derived from a wholly different set of statutes and rules, upon gratuitous comments in State nisi prius cases never subjected to appellate review, and upon a single but ancient decision by the Appellate Division. I conclude that the majority’s decision is unwarranted in law and, most important of all, frustrates an important investigation in the affairs of nursing homes, institutions which, when operated by the wrong people, have abused the old and the infirm.

The Grand Jury is a constitutional institution (NY Const, art I, § 6) responsible for investigating instances of criminal activity. (GPL 190.05.) The court and the District Attorney are its legal advisors. (CPL 190.25, subd 6.) The Grand Jury has full power to make an investigation or to conduct an inquiry on its own initiative and to accuse persons, by indictment, of criminal activity. (Matter of Manning v Valente, 272 App Div 358, 363, affd 297 NY 681.) Grand Juries "are clothed by the common law with inquisitorial powers and, of their own motion, may make full investigation to see whether a crime has been committed, and, if so, who committed it. They may investigate on their own knowledge, or upon information of any kind derived from any source deemed reliable; may swear witnesses generally and may originate charges against those believed to have violated the criminal laws.” (People ex rel. Livingston v Wyatt, 186 NY 383, 391-392.) The Grand Jury has always been considered to be the arm of the community in maintaining peace and order. (People v Woodruff, 26 AD2d 236, 239, affd 21 NY2d 848.)

Since the function of the Grand Jury is to inquire into the existence of possible criminal conduct and to return only well-founded indictments, the investigatory powers of the Grand Jury are very broad. Indeed, the courts have traditionally afforded Grand Juries the widest possible latitude in the exercise of its powers and have repeatedly held that, in the absence of a clear constitutional or legislative provision to the contrary, the powers of the Grand Jury may not be curtailed, nor its proper investigations frustrated. (E.g., People v Stern, 3 NY2d 658, 661.) Included among the powers of the Grand Jury is the authority to compel the attendance of witnesses and the production of books and records. The Grand Jury, as the investigatory arm of the community and the courts, "has a right to every man’s evidence”, excepting only such persons as are entitled to a constitutional, statutory or common-law privilege. (Branzburg v Hayes, 408 US 665, 688; 8 Wigmore, Evidence [McNaughton rev], § 2192, p 70.) "The community is entitled to the assistance and information of its members in seeking out and controlling the commission of crime.” (People v Woodruff, 26 AD2d 236, 238, affd 21 NY2d 848, supra.) Every person owes a duty to society to give evidence when called upon to do so. This rule is expecially applicable to a criminal prosecution. (Matter of Manning v Valente, 272 App Div 358, 364, affd 297 NY 681, supra.)

If need be, a person within the State may be required to attend a Grand Jury proceeding as a witness by the issuance and service of a subpoena. (CPL 610.10, subd 1.) A subpoena is a court process directing the person to whom it is addressed to attend and appear as a witness in a designated proceeding on a specified date. (CPL 610.10, subd 2.) The term subpoena includes a subpoena duces tecum which is a subpoena "requiring the witness to bring with him and produce specified physical evidence”. (CPL 610.10, subd 3.) Any criminal court may issue a subpoena for the attendance of a witness in a criminal action or proceeding. (CPL 610.10, subd 1.) Similarly, a District Attorney, or other prosecutor where appropriate, may, as an officer of the court in which he is conducting the prosecution of a criminal action or proceeding, issue a subpoena of such court for the attendance of any witness whom the people are entitled to call in the action or proceeding. (CPL 610.20, subd 2.) Hence, under the pertinent statutory provisions, a witness, together with specified books and records, may be compelled to appear before the Grand Jury upon a service of subpoena issued by the court or by the prosecutor, as an officer of the court on behalf of the Grand Jury. It is reasonable to delegate to the prosecutor the duty of notifying a witness that the Grand Jury wishes to have his testimony.

It follows that the Grand Jury may compel the attendance of a witness for as long as is reasonably necessary for legitimate investigatory purposes. Likewise, it must logically be concluded that property, produced in accordance with a judicial subpoena duces tecum, may also be at the disposal of the Grand Jury for a reasonable period sufficient to permit orderly and intelligent evaluation and assessment. This is a matter of common sense. The requirement that detailed records be "produced” is scarcely meaningful if the Grand Jury, and its duly authorized legal advisor and assistants, did not have time to study and evaluate the material contained in the records. The majority notes that this deficiency could be cured by "skilled questioning” (p 254). However, especially when dealing with complex white-collar criminal activities, detailed study of financial records is necessary in order to conduct "skilled questioning”.

More importantly, it has long been held that a Grand Jury may issue subpoenas for documentary evidence even if thp party called upon to produce the documents is not called to testify. (See Wilson v United States, 221 US 361, 373-375.) Phrased somewhat differently, it is quite possible, and in this case quite likely, that the Grand Jury is far more interested in the documents than in the personal testimony of the witness. In fact, where the witness is suspected of criminal activity, the Grand Jury may not wish to grant immunity and, hence, is compelled to forego the personal examination of the witness. However, few constitutional self incrimination problems are posed by documentary evidence. The court’s decision, thus, forcloses an important avenue of investigation by eliminating a useful, and legitimate, investigatory technique.

The court’s opinion also reflects a misunderstanding of the nature of the Grand Jury process. The subpoena issued by the prosecutor, on the behalf of the Grand Jury, is returnable before the Grand Jury. It is the Grand Jury, not the prosecutor, who would obtain possession of these records. To say that the order of the Appellate Division gives the prosecutor "unsupervised possession of the petitioner’s books and records”, as the majority puts it (p 253) is an inexplicable inaccuracy. The Grand Jury would be given possession of the records and the prosecutor’s access to the records would be controlled by the members of the Grand Jury. The fact that prosecutors generally have no right to discovery in criminal cases (p 253) is also irrelevant. The Grand Jury has plenary investigatory power. Unlike the situation with office subpoenas issued by prosecutorial agencies of various kinds where issues of relevancy are carefully considered (see Matter of Sussman v New York State Organized Crime Task Force, 39 NY2d 227, 231-232), it has been authoritatively stated that the Grand Jury may even act on rumor or suspicion. (Matter of Manning v Valente, 272 App Div 358, affd 297 NY 681, supra; People ex rel. Travis v Knott, 204 App Div 379, 383.) The cases that hold that a subpoena duces tecum may not be used to ascertain the existence of evidence have no application to Grand Jury subpoenas. (Compare People v Coleman, 75 Misc 2d 1090; Matter of Saratoga Harness Racing Assn. v Monaghan, 9 Misc 2d 868; Matter of Atlas Lathing Corp. v Bennett, 176 Misc 959 [none of which involved a Grand Jury subpoena].)

As for Matter of Amalgamated Union v Levine (31 Misc 2d 416, 417), the statement that no right to retain subpoenaed records exists must be regarded as sheer dicta since the court concluded that it was without authority to consider the issue. It is true that, in Matter of American Sugar Refining Co. (178 F 109, 111, error dsmd 223 US 743), a Federal Trial Judge concluded that subpoenaed records may be removed at the close of each Grand Jury session. However, the court, in its four-paragraph memorandum, cited no authority whatsoever for this position, nor did it express any reason for this conclusion. The holding of American Sugar was explicitly rejected, in a lengthy opinion, in the case of Robert Hawthorne, Inc. v Director of Internal Revenue (406 F Supp 1098, 1130-1131, n 66.) There, the Federal rule was stated to be that: "the grand jury and its executive agents * * * may retain the plaintiffs original documents while they are performing their lawful criminal investigatory functions, so long as the plaintiffs legitimate business need for the documents is at all times accommodated in some reasonable way. When the legitimate, good faith, criminal investigatory use of the documents has ended, however, or when the grand jury is discharged without the investigation’s having been resubmitted or scheduled for resubmission to a new grand jury, then all original subpoenaed materials must be returned immediately to their owner, the plaintiff. Subpoenaed documents may only be retained after this time, for whatever purpose, on the authority of a judicial order of impoundment, duly applied for by the government.” (406 F Supp, at p 1130.) This, I urge, is precisely what the rule should be in New York.

The Grand Jury should be permitted to retain custody of the documents for such time as is reasonably necessary to complete their lawful investigation. The interests of the owner of the documents may be accommodated by permitting access to the originals from time to time, or by returning a full set of photocopies. (406 F Supp, at p 1130, n 65.) Of course, where the Grand Jury is dissolved without returning an indictment, the papers subpoenaed should be promptly returned to their owner. (See Matter of Bendix Aviation Corp., 58 F Supp 953.) Where the documents are held for an unreasonable period of time and are not utilized by the Grand Jury, then continued retention by the Grand Jury is unwarranted. (See Matter of Gay Cottons v Hogan, 55 Misc 2d 126.)

The rule espoused here actually would work to the advantage of the witness whose documents were subpoenaed. The Grand Jury would have custody of the documents so that it may conduct an expeditious examination at the conclusion of which the documents would be returned. The majority adopts a laborious procedure requiring daily production and return. This procedure adds the inconvenience of having the witness appear daily and increases the likelihood that the investigation would be substantially delayed, a disadvantage to both the people and the witness.

Finally, the majority does not dispute the well-settled power of the Grand Jury to employ experts to assist it to understand and analyze books and records. (See, e.g., United States v Kleen Laundry & Cleaners, 381 F Supp 519, 523.) Nevertheless, the court would require that the Grand Jury physically sit in session while such expert examination is undertaken. Such requirement is an impractical waste of time on behalf of all concerned. This extreme approach was explicitly rejected in Matter of Kelly (19 FRD 269), which the majority cites approvingly. In the Kelly case, the court stated that "no officer of petitioner-union would be entitled to be present while the grand jury was in actual session and then considering or examining the records and documents which had been produced pursuant to the subpoena.” (19 FRD, at p 269.) Further, the court stated that "[i]t would involve an unnecessary and unwarranted waste of time were the grand jury required to sit in session while accountants engaged to assist it examined each item—separating the wheat from the chaff and isolating matters which bear on the subject matter of the Grand Jury investigation.” (19 FRD, at pp 269-270.)

I conclude that the Grand Jury should be permitted to retain the subpoenaed records for a reasonable time in furtherance of its lawful investigatory purposes. Further, such retention would serve to permit the Grand Jury, as it deems fit, to arrange for experts to assist it in analyzing the information contained in the records. The majority’s decision to the contrary frustrates an. important investigation into matters of grave public interest—the care and treatment of the elderly and the infirm in nursing homes.

For these reasons, I dissent and vote to affirm the order of the Appellate Division.

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

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

      . The prosecutor in this case is the deputy appointed by the Attorney-General to conduct an inquiry into the "management, control, operation or funding of nursing homes” which had been ordered by the Governor pursuant to subdivision 8 of section 63 of the Executive Law (Executive Order No. 4; 9 NYCRR 3.4; see Matter of Sigety v Hynes, 38 NY2d 260). His office is also denominated that of Special Prosecutor.

      . The subpoena also was originally attacked for overbreadth and lack of relevancy to the investigation, but those issues are not raised on this appeal.


author: Per Curiam.

text:
    In the Matter of Louis F. Joan Moschera et al., Appellants; Catholic Home Bureau et al., Respondents.
    Argued June 9, 1977;
    decided July 7, 1977

      Gerald Goldfeder and Sherry J. Sandler for appellants.

      David H. Berman and Frederick J. Magovern for Catholic Home Bureau, respondent.

      Robert Schnapp and Marvin A. Poliak for Diana Flores, respondent.

      Marcia Robinson Lowry, William J. Toppeta and Steven R. Shapiro for Children’s Rights Project, New York Civil Liberties Union, amicus curiae.

      Marttie L. Thompson and Louise Gruner Gans for Community Action for Legal Services, Inc., amicus curiae.

   Per Curiam.

At issue is the extent to which foster parents, in proceedings under section 392 of the Social Services Law, should have access to the confidential records kept by authorized child care agencies concerning the child and his natural parents.

The mother of Louis F. voluntarily entrusted him, four months after he was born, to the New York City Department of Social Services for foster care. Three and a half years later the foster parents by initiating a foster care review proceeding sought to free the child for possible adoption (Social Services Law, § 392, subd 7, par [c]). They moved for prehearing disclosure of agency records relating to the boy and his natural parents.

Respondents are the natural mother, the city Department of Social Services, and the Catholic Home Bureau, the agency, by delegation, responsible for finding the foster home. In a separate review proceeding, now consolidated with that of the foster parents, the city Department of Social Services seeks continuation of the foster status looking to the child’s early return to his natural mother (Social Services Law, § 392, subd 7, par [a]).

Family Court, after an in camera review of the confidential records, denied the discovery motion. The Appellate Division affirmed, and the foster parents appeal.

There should be an affirmance. Proper regard for encouraging open communication with the natural parents requires that the confidential records kept by child care agencies be produced only under limited circumstances. Foster parents’ interests are sufficiently served when availability is premised upon an independent showing of necessity and a cautious screening, in camera, by the court.

The purpose of the instant disclosure motion, and the supporting and opposing arguments, are adequately summarized in the opinion by Mr. Justice Vincent A. Lupiano at the Appellate Division. One critical circumstance, however, was not mentioned. Not only was a Law Guardian appointed to represent the child, but she apparently had access to the confidential agency records.

To be sure, foster parents have an explicit statutory right to initiate, let alone participate in, foster care status review proceedings (Social Services Law, § 392, subd 2, par [c]; subd 4, par [c]). But the right to demand disclosure must reflect the nature and purposes of foster care. In that regard, in Matter of Bennett v Jeffreys (40 NY2d 543, 552, n 2), this court recently rejected "the notion * * * that third-party custodians may acquire some sort of squatter’s rights in another’s child” (see, generally, Smith v Organization of Foster Families, 431 US 816, esp p 864, n 54). In particular, this court explained that the "rights” of foster parents are derivative, enjoyed only "by virtue of the child’s best interests being considered” (40 NY2d, p 552, n 2).

To safeguard both the child and its natural parents, it is imperative that the extensive records customarily kept by authorized child care agencies, often containing probing and confidential information, not be easily disclosed (see Social Services Law, § 372). To that end, the Appellate Division correctly required, preliminarily, that there be a showing of necessity for an in camera viewing. If that necessity be present, a favorable determination permitting disclosure may, if otherwise justified, ensue (see, also, Matter of Carla L., 45 AD2d 375, 387).

As noted earlier, a Law Guardian had been appointed to represent the interests of the child. In evaluating the foster parents’ alleged need to override the confidentiality of the social agency’s records, it is highly significant that the Law Guardian evidently had free access to those records. Such access, if available to a competent and objective representative of the child’s interests, is generally an adequate safeguard. Thus, in the absence of cogent reason for questioning the Appellate Division’s discretionary determination, applying proper standards, its disposition should not be disturbed.

As suggested by Community Action for Legal Services, Inc., amicus curiae, it is not unusual for social agencies, in a section 392 proceeding, to place portions of a record affecting the child into evidence, and that in such case a different rule should perhaps obtain. What such rule should be it is neither necessary nor appropriate to consider now. Amicus argues, however, that in such event the agencies should, prior to the hearing, notify the parties of their intention. Then they argue, if the records are ruled admissible as a preliminary matter, disclosure should be made available to the foster parents.

The foregoing analysis not only safeguards natural parents from undue intrusion into confidential matters and encourages free communication between them and the social agencies, but it also accords foster parents adequate opportunity for disclosure commensurate with their legitimate interest in the child’s foster care status. Most important, however, it implements the statutory mandate that, at the close of a section 392 proceeding, an order of disposition be entered "in accordance with the best interest of the child” (Social Services Law, § 392, subd 7).

Accordingly, the order of the Appellate Division should be affirmed, without costs.

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

Order affirmed, without costs. Question certified answered in the affirmative.


text:
    In the Matter of the Arbitration between Candor Central School District, Respondent, and Candor Teachers Association, Appellant.
    Argued June 9, 1977;
    decided July 7, 1977

      Richard C Heffern and Bernard F. Ashe for appellant.

      William Goldman for respondent.
   Jones, J.

We address yet another in the series of cases in which it has been sought to resolve problems generated by the termination of a probationary appointment in public schools through recourse to arbitration.

Mrs. Miller was appointed a probationary teacher by the school district on September 1, 1971. Initially her probationary period would have expired in 1976. The five-year term was reduced, however, to three years by virtue of chapter 735 of the Laws of 1974, and was thus to expire on September 30, 1974.

The school district and the teachers association were parties to a collective bargaining agreement whose term ended on June 30, 1974. That agreement contained an extension clause that "If no contract has been reached after the date of the expiration of this agreement the conditions herein will remain in force until a new contract or agreement is reached”. On July 9, 1974 the negotiators for the parties reached agreement as to the terms of the new contract, subject to formal approval of the parties. The new contract was approved by the teachers association on September 3, 1974 and by the school district on September 10, 1974, and as approved contained a provision that it was to be effective as of July 1, 1974. Both the old and the new contracts contained grievance procedures terminating in arbitration. Only the new contract contained a provision prohibiting dismissal without just cause and prescribing a procedure to be followed preliminary to dismissal:

"No employee will be reduced in rank or dismissed within the period of his or her employment appointment without just cause during the term of this agreement. If the Board is considering dismissal it will provide at least one written warning and will schedule a meeting among the immediate supervisor, the employee and his association representative for the purpose of improving his performance in order to continue his employment.
"Following such a conference, if the Board still determines that the employee should be dismissed, it will give said employee a minimum of 60 days written notice specifying reasons for dismissal.”

On July 15, 1974 the district superintendent of schools notified Mrs. Miller in writing that he was not recommending her for tenure appointment. On August 14, 1974 Mrs. Miller filed a grievance claiming that her employment had been terminated without just cause and in violation of the dismissal procedure negotiated by the school district and the teachers association. The grievance proceeded to arbitration and on January 29, 1975 the three-person board of review sustained Mrs. Miller’s contentions and directed the school district to reinstate her to her teaching position retroactive to September 1, 1974, with back salary (less earnings) and all fringe benefits.

The school district moved to vacate the award on the ground that the arbitrators had exceeded their powers. Supreme Court modified the award to eliminate any grant of tenure and otherwise denied the relief sought. The Appellate Division reversed and vacated the award. We now reverse the disposition at the Appellate Division and remit the matter to the arbitration panel to fashion an appropriate remedy in the light of the views expressed in this opinion.

No challenge was or is now raised to the propriety of recourse to arbitration as provided in the collective bargaining agreements. The attack by the school district is focused only on the content of the award. It is the position of the district that notwithstanding the formal recital that July 1, 1974 was to be the effective date of the new contract (that date said now by the district to have been an inadvertent insertion), the provisions of the dismissal clause cannot legally be applied retroactively to a dismissal accomplished prior to approval of the new contract. (Mrs. Miller does not dispute that her grievance depends entirely on the application of that clause to the termination of her employment.) Whatever may or may not be the strength of the school district’s argument on the merits, in consequence of its agreement under both old and new contracts to submit to arbitration disputes as to the interpretation and application of the collective bargaining agreement, errors, if any, of law or fact are beyond the reach of judicial review; the determination by the arbitration panel that the new contract is applicable has become final and conclusive on the school district. (Matter of Professional Staff Congress/City Univ. of N. Y. v Board of Higher Educ.. 39 NY2d 319, 323; Matter of Raisler Corp. [New York City Housing Auth.], 32 NY2d 274, 282.)

We proceed, therefore, on the assumption that the terms of the dismissal clause were applicable to the termination of Mrs. Miller’s employment. We note that the dismissal clause has two aspects:—one, substantive (that "No employee will be * * * dismissed * * * without just cause”); the other, procedural (requiring "at least one written warning”, "a meeting among the immediate supervisor, the employee, and his association representative for the purpose of improving his performance in order to continue his employment”, and "a minimum of 60 days written notice [from the board] specifying reasons for dismissal”). The arbitration panel determined that the contract provisions had been violated in both aspects and fashioned the remedy accordingly.

For purposes of our review, the violations of the procedural and substantive aspects of the dismissal clause as found by the arbitrators must be treated discretely. As to the substantive provision—that no employee may be dismissed without just cause—our recent decision in Matter of Cohoes City School Dist. v Cohoes Teachers Assn. (40 NY2d 774) is dispositive. We there held that it was beyond the power of a board of education to surrender its responsibility and authority to make tenure decisions, and thus that any agreement purporting to limit or restrict the unfettered right to terminate a probationary appointment at the close of the probationary period would be unenforceable as against public policy. Accordingly, in this case to the extent that the arbitration panel determined that the school district was liable for having terminated Mrs. Miller’s employment a few weeks prior to the end of her probationary term "without just cause” and granted her a remedy therefor, the award must be set aside as in excess of the authority of the arbitrators.

It is also relevant here, however, that in Cohoes we further held that a board of education in a collective bargaining agreement may limit or restrict its right to terminate a probationary appointment during the probationary period or agree to supplementary procedural steps preliminary to the termination of a probationary appointment—in that case "more structured evaluation procedures” (40 NY2d, at p 778). It follows, then, in this case that the school district’s commitment to the procedural aspect of the dismissal clause is not to be set aside as against public policy. Accordingly, there is no basis to interfere with the determination of the arbitration panel that the school district had violated this component of its agreement with the teachers association and that Mrs. Miller was entitled to a remedy for such violation.

In reviewing the arbitration award it cannot be ascertained, however, that the remedy fixed by the arbitrators was not at least in part predicated on the determination, which was beyond their authority to make, that the school district was liable for violation of the termination-without-just-cause provision of the collective bargaining agreement. It is thus necessary to remit this matter to the arbitration panel for determination by it of the remedy suited to its finding that there was a violation with respect to the procedure preliminary to the termination of Mrs. Miller’s employment.

Accordingly, the order of the Appellate Division should be modified, with costs, and the matter remitted to Supreme Court, Tompkins County, with directions to remand to the arbitration panel for further proceedings in conformity with this opinion.

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

Order modified, with costs, and the matter remitted to Supreme Court, Tompkins County, with directions to remand to the arbitration panel for further proceedings in accordance with the opinion herein and, as so modified, affirmed.

       That fact, however, does not preclude the school district from asserting an excess of authority by the arbitrators in this case (Matter of Cohoes City School Dist. v Cohoes Teachers Assn., 40 NY2d 774).