source: Caselaw Access Project

author: Ciparick, J.

license: Public Domain

text:
    [673 NE2d 123, 649 NYS2d 928]
    New York Overnight Partners, L.P., Respondent, v Joan Gordon et al., Appellants.
    Argued September 3, 1996;
    decided October 15, 1996

      POINTS OF COUNSEL

      Jay Goldberg, P. C., New York City (Jay Goldberg and John A. Kornfeld of counsel), for appellants.
    I. Given the limited
    role of the courts when the parties have agreed to an appraisal proceeding, whether to take into account the effect of the building’s presence on the land’s value is a question for the appraisers, not the courts. (Matter of Nationwide Gen. Ins. Co. v Investors Ins. Co., 37 NY2d 91; Steelworkers v American Mfg. Co., 363 US 564; Matter of Sprinzen [Nomberg], 46 NY2d 623; Matter of Silverman [Benmor Coats], 61 NY2d 299; Lentine v Fundaro, 29 NY2d 382; Sisters of St. John the Baptist v Geraghty Constructor, 67 NY2d 997; Matter of Penn Cent. Corp. [Consolidated Rail Corp.], 56 NY2d 120; Matter of Dimson [Elghanayan], 19 NY2d 316.) II. The land should not be appraised as if vacant and unimproved, thereby subjecting it to clearly inapplicable current zoning restrictions. (United Equities v Mardordic Realty Co., 8 AD2d 398, 7 NY2d 911; Moore v Eadie, 245 NY 166; Ruth v S. Z. B. Corp., 2 Misc 2d 631, 2 AD2d 970; Plaza Hotel Assocs. v Wellington Assocs., 55 Misc 2d 483, 28 AD2d 1209, 22 NY2d 846; Sparkill Realty Corp. v State of New York, 254 App Div 78, 279 NY 656; Spriggs v State of New York, 54 AD2d 1080; Beacway Operating Corp. v Concert Arts Socy., 123 Misc 2d 452; Ilasi v City of Long Beach, 38 NY2d 383; Town of Somers v Comarco, 308 NY 537; Matter of Syra

      cuse Aggregate Corp. v Weise, 51 NY2d 278.) III. Respondent conceded below that the appraisers, and not the courts, should determine the question of the effect of the building’s presence on the land’s value.

      Sidley & Austin, New York City (John G. Hutchinson, James D. Arden and John J. Kuster of counsel), for respondent.
    I. The Court below’s decision requiring the raw land to be appraised as though vacant and unimproved and subject to current zoning restrictions is supported by the controlling law, the language of the ground lease, and all other relevant appraisal authorities. (185 Lexington Holding Corp. v Holman, 19 Misc 2d 521, 10 AD2d 569, 8 NY2d 965; Plaza Hotel Assocs. v Wellington Assocs., 55 Misc 2d 483, 28 AD2d 1209, 22 NY2d 846; United Equities v Mardordic Realty Co., 8 AD2d 398, 7 NY2d 911; Ruth v S. Z. B. Corp., 2 Misc 2d 631, 2 AD2d 970; Beacway Operating Corp. v Concert Arts Socy., 123 Misc 2d 452; Sparkill Realty Corp. v State of New York, 254 App Div 78, 279 NY 656; Ilasi v City of Long Beach, 38 NY2d 383; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278.) II. By express agreement of the parties and as a matter of law, all issues addressed in the Court below’s decision and order were appropriately decided by a court of law. (Sherrill v Grayco Bldrs., 64 NY2d 261; Matter of Zimmerman v Cohen, 236 NY 15; United Equities v Mardordic Realty Co., 8 AD2d 398; Madison Murray Assocs. v Perlbinder, 215 AD2d 204; Ruth v S. Z. B. Corp., 2 Misc 2d 631; Matter of Penn Cent. Corp. [Consolidated Rail Corp.], 56 NY2d 120.)
   OPINION OF THE COURT

Ciparick, J.

Respondent, owner of the Ritz-Carlton Hotel at 112 Central Park South, New York City, leases the land underlying the hotel from appellants, owners of the land. When the parties deadlocked on the meaning of the lease term "appraised value of the land” during negotiations for the lease renewal, they agreed to seek a judicial interpretation of that term to settle their dispute. Appellants now challenge so much of the Appellate Division order which held that the appraiser must determine the value of the land as though vacant, without improvements, and subject to current zoning regulations. They argue that the court improperly directed the appraiser to disregard the effect of the hotel on the value of the land. Because the lease expressly provides that the appraiser value the land as unimproved, without regard to the existence of the hotel, we affirm the order of the Appellate Division.

A.

The impasse over the meaning of "appraised value of the land,” a term critical for establishing the rental amount for the first 15-year renewal term, resulted from respondent’s interpretation that the lease required an appraiser to value the parcel of land as though vacant and unimproved, whereas under appellants’ construction the appraiser would consider the "benefit” any improvement "imparts” to the land, even if that improvement constitutes a legally nonconforming use. The parties stipulated to resolve their dispute in court. Respondent thus proceeded with this action for declaratory and injunctive relief seeking a judgment declaring the meaning of the term "appraised value of the land,” and appellants counterclaimed seeking a declaration of the meaning of the word "land” as used in that phrase. Thereafter, respondent moved for summary judgment on the complaint and appellants cross-moved for summary judgment on their counterclaim. Supreme Court denied respondent’s motion, granted appellants’ cross motion and dismissed the complaint.

Respondent appealed, and the Appellate Division reversed, on the law, granted respondent’s motion for summary judgment and denied appellants’ cross motion (see, New York Overnight Partners v Gordon, 217 AD2d 20). The Appellate Division ruled that the "clear and unambiguous terms of the Lease [provide] that the 'appraised value of the land’ may he determined only by reference to the raw land designated as 112 Central Park South, exclusive of the building and all 'Improvements’ ” (id., at 29). While recognizing that land should be appraised for the best, most advantageous use, the court opined that in this case the land’s fair market value must be determined by the terms of the lease, taking into account any restrictions or encumbrances affecting the land. The court then directed the appraiser to determine the value of the land as if vacant and unimproved, subject to current zoning restrictions and contractual limitations, and to consider the effect of the lease on the value of the land (see, id., at 30). The court further granted appellants’ motion for leave to appeal to this Court and certified the question "Was the order of this Court, which reversed the order of the Supreme Court, properly made?” Because the order of the Appellate Division is final, we need not answer the certified question.

B.

In an effort to avoid the consequences of the legal determination that the land must be valued as if vacant and unimproved, appellants argue that the Appellate Division exceeded the scope of the limited review governing arbitration and appraisal proceedings by directing the appraiser to consider the land as "vacant, without improvements, and subject to current zoning restrictions” (217 AD2d 20, 30, supra) when the ground lease does not so dictate. While appellants do not challenge the Appellate Division’s determination that the term "land” as employed in the phrase "appraised value of the land” does not include improvements on the land, appellants nevertheless maintain that "it is a more advantageous use of the land for it to be valued as a parcel of property permitting usage of a building containing 152,000 square feet of floor space thereon, rather than as a theoretically vacant and unimproved parcel” (emphasis in original). Otherwise, appellants contend, the appraisal will reflect a parcel of land that is "much less valuable than economic reality dictates.” They further assert that current zoning regulations, which limit the size of new construction, are inapplicable because the owners of the land are legally entitled to continue the nonconforming use that is alleged to be the best and most advantageous use. Because the Appellate Division decision bars the appraiser from valuing the land at its highest and best use given its directive that the appraiser disregard the hotel, appellants claim that the decision should be reversed. We disagree.

c.

When the language of the lease so dictates, appraisals must take into consideration all restrictions — including current zoning regulations — and encumbrances on the land, as well as the lease term (see, United Equities v Mardordic Realty Co., 8 AD2d 398, affd 7 NY2d 911; Plaza Hotel Assocs. v Wellington Assocs., 55 Misc 2d 483, affd 28 AD2d 1209, affd on opn at Special Term 22 NY2d 846, rearg denied 22 NY2d 972). Distilled to its essence, the argument pressed on this appeal amounts to nothing more than an attempt to enjoin appraisal of the "land” as raw and unimproved — the very term submitted for legal interpretation — on the theory that the Appellate Division decision precludes appraisal of land at its highest and best use.

Although there is no question that it is the appraiser who must determine which of the myriad factors are relevant to a particular valuation and how such factors impact the valuation of the parcel of land (see generally, Appraisal Institute, The Appraisal of Real Estate ch 4 ["The Valuation Process”], ch 12 ["Highest and Best Use Analysis”], ch 13 ["Land or Site Valuation”] [10th ed 1992]), without interference or direction from the court, this case required a threshold legal interpretation of the scope of the very subject of the appraisal. Thus, the Appellate Division determined that the drafters of the lease intended the term "land” to mean only the vacant and unimproved land, subject to contractual limitations and current zoning regulations, which presently would permit construction of a smaller building. This determination properly discharged the court’s legal function, rendering the matter ripe for appraisal.

The precedents firmly establish that in addition to construing disputed terms of a lease in advance of an appraisal proceeding, it is also within the province of the court to identify those factors the lease expressly designates or excludes in the valuation process.

For example, in Plaza Hotel Assocs. v Wellington Assocs. (supra), Supreme Court rejected the appraisers’ valuation premised on the land’s highest and best use, free of the lease restrictions (see, 55 Misc 2d 483, supra). The court indicated that such valuation violated the express language of the lease requiring that the appraisal account for the lease restriction that the land be used for a hotel, a less profitable use (see, Plaza Hotel, 55 Misc 2d, at 486-487; accord, United Equities v Mardordic Realty Co., supra, 8 AD2d, at 400 [lease specified that fair market value of land be determined by reference to the renewal options and their terms contained in the lease and any restrictions affecting the land]; 185 Lexington Holding Corp. v Holman, 19 Misc 2d 521, affd 10 AD2d 569, affd 8 NY2d 965 [rental for renewal term based on value of land only, without improvements, under express terms of the lease]; see also, Madison Murray Assocs. v Perlbinder, 215 AD2d 204, 204-205).

Similarly, in Ruth v S. Z. B. Corp. (2 Misc 2d 631, 636-637, affd 2 AD2d 970), the court ruled that because the lease unambiguously provided that the land be valued "free of lease,” the drafters could not have intended that the arbitrator "might give heed to the very lease which so declared” otherwise and ruled that the land must be valued without considering the lease restrictions.

Consistent with these cases is the determination by the Appellate Division that the language of the lease unequivocally excludes the hotel from the valuation of this parcel of land — a determination not challenged on this appeal — and that the land’s valuation is subject to current zoning restrictions, contractual limitations and the lease itself. No less significant is the fact that this determination does not infringe on the appraiser’s discretion and judgment nor does it foreclose a valuation of the land for its highest and best use under different circumstances. Pursuant to the express terms of the lease, the parties did not intend the land to be appraised for its highest and best use to establish the rental rate for the renewal term.

That the unambiguous terms of the lease — dictating that a prime parcel of land in midtown Manhattan be appraised as vacant and unimproved for purposes of setting the rental rate for the next 15 years — strike appellants, the successors-in-interest to the original lessor and fee owner of the land, as a poor bargain 33 years after execution of the lease does not constitute a basis for recasting the agreement under the guise of judicial interpretation. Indeed, as fee owners of the land, the lessors will acquire title to the hotel structure and all "Improvements” on the land upon expiration of the last renewal option; it is not until then that the lessors will be poised to reap the economic advantages of the "legally nonconforming use.”

Accordingly, the order of the Appellate Division insofar as appealed from should be affirmed, with costs, and the certified question not answered upon the ground that the order appealed from is final and the certified question is thus unnecessary.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith and Levine concur.

Order, insofar as appealed from, affirmed, etc.

      . Article I, § 1.03 of the lease defines the demised premises as the land acquired by the lessor as described in Article II, § 2.01. As pertinent, Article II, § 2.01 describes the subject land as "[a]ll that certain plot, piece or parcel of land, without the buildings and improvements thereon erected, situate, lying and being in the Borough of Manhattan * * * [s]aid Premises now be known as and by the Street Number 112 Central Park South”. "Improvements” is defined in Article I, § 1.04 as "[a]ny and all buildings being premises known and described as 112 Central Park South * * * and the structures and improvements now or at any time hereafter erected, constructed or situated upon said premises or any part thereof. The Improvements shall include such buildings, structures and improvements and the foundations and footings thereof * * * excepting the land and Demised Premises hereinafter described in Article II, Section 2.01.”

      . We note that the lease contemplates arbitration when the parties fail to agree on the appraised value of the land as a "matter of fact or of value” (Lease Agreement, art XXX, § 30.02). Because the parties submitted the dispute over the legal meaning of the term "land” to the court, this case does not implicate the nature or scope of an arbitration or appraisal proceeding (cf., Matter of Dimson [Elghanayan], 19 NY2d 316, 325).


text:
    [673 NE2d 127, 649 NYS2d 932]
    In the Matter of Commerce Holding Corp., Respondent, v Board of Assessors of the Town of Babylon et al., Appellants.
    Argued September 11, 1996;
    decided October 22, 1996

      POINTS OF COUNSEL

      John C. Bivona, Huntington, for appellants.
    I. The Town should not be forced to share in the cost of a Superfund cleanup as a matter of public policy. Moreover, a purchaser would pay full price for the property knowing that Commerce assumed responsibility for most cleanup costs in a consent order. Thus, the property’s value should not be reduced by the cost to cure. (Grant Co. v Srogi, 52 NY2d 496; Adams Express Co. v Ohio, 166 US 185; G.R.F., Inc. v Board of Assessors, 41 NY2d 512; Matter of Hellerstein v Assessor of Town of Islip, 37 NY2d 1; People ex rel. Parklin Operating Corp. v Miller, 287 NY 126; Matter of Northville Indus. Corp. v Board of Assessors, 143 AD2d 135; Matter of Bass v Tax Commn., 179 AD2d 387, 80 NY2d 751.) II. Alternatively, if Commerce can reduce its property value by the cost to cure, then the cost must be projected and discounted to reflect the reality that the cleanup would be done in stages. (Matter of Seagram & Sons v Tax Commn., 14 NY2d 314; Matter of Adirondack Mtn. Reserve v Board of Assessors, 64 NY2d 727; Matter of White Plains Props. Corp. v

      Tax Assessor, 50 NY2d 839; G.R.F., Inc. v Board of Assessors, 41 NY2d 512; Matter of Altman & Co. v City of White Plains, 57 NY2d 904; Hotel Rutledge v Tax Commn., 85 AD2d 516; People ex rel. Railroad Fed. Sav. & Loan Assn. v Halpin, 4 AD2d 956; People ex rel. Four Park Ave. Corp. v Lilly, 265 App Div 68; Matter of Merrick Holding Corp. v Board of Assessors, 45 NY2d 538.)

      Meyer, Suozzi, English & Klein, P. C., Mineola (Andrew J. Turro, Jeffrey G. Stark, Michael A. Ciaffa and Anne J. DelCasino of counsel), for respondent.
    I. The Board’s claim that the property should be assessed and taxed as if uncontaminated is contrary to the State Constitution and controlling statutory and decisional law. (Grant Co. v Srogi, 52 NY2d 496; Matter of Great Atl. & Pac. Tea Co. v Kiernan, 42 NY2d 236; Matter of Adirondack Mtn. Reserve v Board of Assessors, 99 AD2d 600, 64 NY2d 727; Matter of General Elec. Co. v Macejka, 117 AD2d 896; Matter of Addis Co. v Srogi, 79 AD2d 856, 53 NY2d 603; Matter of Northville Indus. Corp. v Board of Assessors, 143 AD2d 135; Matter of Bass v Tax Commn., 179 AD2d 387, 80 NY2d 751; Matter of Allied Corp. v Town of Camillus, 80 NY2d 351; SCA Servs. v Thomas, 634 F Supp 1355.) II. The Board’s claim that petitioner’s expert evidence on remediation costs and the valuation thereof is unreliable, incompetent and without record support is not preserved; in any event, the trial court’s receipt of this unobjected to and uncontroverted expert evidence which provided ample record support was not erroneous as a matter of law. (Telaro v Telaro, 25 NY2d 433; Andrialis v Snyder, 159 Misc 2d 419; Matter of General Elec. Co. v Town of Salina, 69 NY2d 730; Matter of Shubert Org. v Tax Commn., 60 NY2d 93.)

      Paul A. Crotty, Corporation Counsel of New York City (Robert P. Carver, Paul T. Rephen and Elizabeth Dvorkin of counsel); Donna M. C. Giliberto, Albany; A. Kevin Crawford, Albany; Owen B. Walsh, County Attorney of Nassau County, Mineola (Robert T. Bloom and Robert N. Goldstein of counsel); Edward D. Peace, Corporation Counsel of City of Buffalo (Joyce J. Manch of counsel); and Joseph E. Lamendola, Corporation Counsel of City of Syracuse (Robert G. Stone of counsel), for City of New York and others, amici curiae.

    I. Local taxpayers should not be forced to share in the cost of a Superfund cleanup by lowering the property’s assessed value by the cost to cure. (Matter of Hellerstein v Assessor of Town of Islip, 37 NY2d 1; People ex rel. Parklin Operating Corp. v Miller, 287 NY 126;
      Matter of Weingarten v Town of Ossining, 85 AD2d 697; Matter of Central Westchester Tenants Corp. v Iagallo, 136 AD2d 53, 72 NY2d 810, 954; Matter of Allied Corp. v Town of Camillus, 80 NY2d 351; Matter of Northville Indus. Corp. v Board of Assessors, 143 AD2d 135; Matter of Bass v Tax Commn., 179 AD2d 387, 80 NY2d 751.) II. Alternatively, even assuming that value is to be reduced by the outstanding cost to cure, the cost must be discounted to present value when the cleanup will occur in the future. (Matter of White Plains Props. Corp. v Tax Assessor, 50 NY2d 839; G.R.F., Inc. v Board of Assessors, 41 NY2d 512; Matter of Altman & Co. v City of White Plains, 57 NY2d 904; Matter of Seagram & Sons v Tax Commn., 14 NY2d 314; Hotel Rutledge v Tax Commn., 85 AD2d 516; People ex rel. Railroad Fed. Sav. & Loan Assn. v Hatpin, 4 AD2d 956, 5 NY2d 925; People ex rel. Four Park Ave. Corp. v Lilly, 265 App Div 68; Matter of Merrick Holding Corp. v Board of Assessors, 45 NY2d 538; American List Corp. v U.S. News & World Report, 75 NY2d 38; Majauskas v Majauskas, 61 NY2d 481.)
   OPINION OF THE COURT

Ciparick, J.

In these consolidated tax certiorari proceedings, petitioner Commerce Holding Corp. seeks a reduction of the assessed value of its property by the Board of Assessors and the Board of Assessment Review of the Town of Babylon. The main point of contention is whether environmental contamination should be considered in valuing Commerce’s property for tax purposes. Because environmental contamination can depress a parcel’s true value, we hold that it must be considered in assessing real property tax. In addition, we review the methodology by which environmental contamination may be measured and uphold the valuation of Commerce’s property by the reviewing court.

I.

Commerce owns a parcel of industrial property in the Town of Babylon in Suffolk County. The property, purchased by Commerce in 1984, consists of 2.7 acres of land improved with a one-story industrial building that is presently divided into 37 rental units. A former tenant of the property performed metal plating operations on the premises and discharged wastewater containing copper, lead, cadmium, zinc and other metals into on-site leaching pools, ultimately resulting in severe subsurface contamination.

As a result of the contamination, the subject property was designated a Superfund site in 1986, pursuant to the provisions of the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA) (42 USC § 9601 et seq.), making the owner of the property strictly liable for the cleanup costs (42 USC § 9607 [a]). In 1988, Commerce entered into a consent order with the Environmental Protection Agency to remediate the site.

From 1986 to 1991, assessors for the Town valued Commerce’s property at between $1.5 million and $2.6 million each year. Commerce filed timely challenges to each yearly assessment on the ground of excessive valuation, contending that the assessors should have reduced the assessed property value to account for environmental contamination. Commerce thereafter instituted timely annual tax certiorari proceedings pursuant to RPTL article 7, later consolidated, to review the assessments for tax years 1986-1987 through 1991-1992.

In a hearing before Supreme Court, real estate experts for both Commerce and the Town primarily used the income capitalization method to determine the value of the property as if unaffected by contamination, and then subtracted a cost to cure from that value. Specifically, Commerce’s expert valued the property by using an income capitalization approach, with a sales approach for the land only, and then subtracted from the property’s value in each year the total remaining cost to cure all the contamination. The outstanding cost to cure was calculated in 1991 dollars, trended back to account for inflation in each of the prior years, and reduced by any sums actually spent on remediation that particular year. By contrast, the Town’s expert valued the property in an uncontaminated state based on comparable sales data "blended” with an income capitalization approach, and then subtracted from the property’s value only the amount actually expended by Commerce in the year the costs were incurred.

Supreme Court adopted Commerce’s analysis in its entirety. The court concluded that Commerce’s base value was more accurate in view of the "weakness of comparable sales in the area” and subtracted from that value the total remaining cost to cure the contamination in each year. The Appellate Division affirmed (see, Matter of Commerce Holding Corp. v Board of Assessors, 216 AD2d 466). This Court granted the Town’s motion for leave to appeal and we now affirm.

II.

The cardinal principle of property valuation for tax purposes, set forth in the State Constitution, is that property "[assessments shall in no case exceed full value” (NY Const, art XVI, § 2; see, Grant Co. v Srogi, 52 NY2d 496, 512). As this Court has stated, the "ultimate purpose of valuation * * * is to arrive at a fair and realistic value of the property involved” (Matter of Great Atl. & Pac. Tea Co. v Kiernan, 42 NY2d 236, 242).

The concept of "full value” is typically equated with market value, or what "a seller under no compulsion to sell and a buyer under no compulsion to buy” would agree to as the subject property’s price (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, 356). In view of this market-oriented definition of full value, the assessment of property value for tax purposes must take into account any factor affecting a property’s marketability (accord, RPTL 302 [1] ["The taxable status of real property * * * shall be determined annually according to its condition”] [emphasis added]). It follows that when environmental contamination is shown to depress a property’s value, the contamination must be considered in property tax assessment (see, Lee and LeForestier, Review and Reduction of Real Property Assessments in New York § 8.11, at 73 [3d ed 1996 Cum Supp]).

The Town nevertheless asks this Court to adopt a per se rule barring any assessment reduction for environmental contamination. Otherwise, the Town contends, polluters would succeed in shifting the cost of environmental cleanup to the innocent taxpaying public in contravention of the public policy of imposing remediation costs on polluting property owners and their successors in title.

Whatever the merits of the Town’s argument, the "full value” requirement is a constitutional mandate that cannot be swept aside in favor of the asserted environmental policy. As the State Board of Equalization and Assessment has recognized, the public policy "argument, while possessing superficial appeal, runs afoul of the requirement found in * * * New York’s Constitution, that real property may not be assessed at more than its full (fair market) value” (9 Opns Counsel SBEA No. 58, at 113 [citing NY Const, art XVI, § 2]). The high courts of Massachusetts and New Jersey have ruled likewise, concluding that statutory and constitutional full value requirements cannot be subordinated to environmental policy concerns (see, Reliable Elec. Finishing Co. v Board of Assessors, 410 Mass 381, 382-383, 573 NE2d 959, 960-961; Inmar Assocs. v Borough of Carlstadt, 112 NJ 593, 600-601, 549 A2d 38, 41-42; see also, Firestone Tire & Rubber Co. v County of Monterey, 223 Cal App 3d 382, 391-392, 272 Cal Rptr 745, 750-751).

Thus, in response to the Town’s contention that assessment reductions for environmental contamination will encourage landowners to delay remediating their property, this policy argument cannot eviscerate the constitutional directive. Moreover, the Town’s concern appears to be overstated; whatever tax benefit Commerce might obtain by deferring implementation of remedial measures pales in comparison to Commerce’s potential liability for failure to take appropriate remedial action, including severe penalties under CERCLA (see, 42 USC § 9607 [c] [3]) and $2,000 in daily penalties for noncompliance with the consent order.

We also reject the Town’s argument that because Commerce, by consent order, has agreed to pay the cleanup costs even if it sells the property, the property’s market value would be unaffected by the presence of contamination. This contention is belied by the reality that a purchaser of the site, on notice of the environmental contamination, nevertheless would be liable for the cleanup costs under CERCLA (see, 42 USC § 9607 [a]). Moreover, that Commerce has agreed to remediate the property does not resolve the question of whether, and to what extent, the contamination in fact affects the value of the land (see, Firestone Tire & Rubber Co., 223 Cal App 3d, at 392, 272 Cal Rptr, at 750-751, supra). As Commerce’s expert opined, a buyer of the property would have demanded an abatement in the purchase price to account for the contamination notwithstanding the existence of the consent order (see, Matter of Northville Indus. Corp. v Board of Assessors, 143 AD2d 135, 138). Whether a property owner’s agreement to pay the cleanup costs would affect the property’s value in a given case is a factual matter for the assessment board (cf., Fjetland v Brown, 1990 WL 311252, at *5 [Wash Bd Tax App]), but it cannot be said, as a matter of law, that the existence of the consent order in this case precluded an assessment reduction.

III.

We next consider the methodology by which the value of Commerce’s contaminated property was assessed. The Town argues that it was legal error to deduct from the value of the property in an uncontaminated state the total remaining cleanup costs in each year, as compared with the actual amount expended in each year. Based on the record in this case, we disagree.

In reviewing an assessment of property value, we are guided by the precept that "while property must be assessed at market value, there is no fixed method for determining that value * * *. Any fair and nondiscriminating method that will achieve that result is acceptable” (Matter of Allied Corp. v Town of Camillus, 80 NY2d 351, 356, supra). Flexibility is especially important in the valuation of contaminated properties, for which there has yet to emerge any single generally accepted valuation methodology.

The difficulty in assessing a polluted parcel of property stems from the uniqueness of environmental contamination (see, Wilson, The Environmental Opinion: Basis for an Impaired Value Opinion, Appraisal J, July 1994, at 411 ["Each environmental impairment to value is as unique as a fingerprint”]). Regardless of the traditional valuation technique selected by the assessor — comparable sales, capitalization of income, or reproduction cost — each is inevitably hampered to some extent by the lack of available market data. Recognizing the unsuitability of the strict application of traditional valuation techniques to contaminated properties, the prevailing trend in this field has been one of experimentation and adaptation, marked by the use of traditional techniques adjusted for environmental contamination (see generally, Lewandrowski, Toxic Blackacre: Appraisal Techniques & Current Trends in Valuation, 5 Alb LJ Sci & Tech 55; see also, Westling v County of Mille Lacs, 512 NW2d 863, 867 [Minn] [Keith, Ch. J., concurring]). We endorse this flexible approach (see, G.R.F., Inc. v Board of Assessors, 41 NY2d 512, 515 ["Pragmatism * * * requires adjustment when the economic realities prevent placing * * * properties in neat logical valuation boxes”]), but caution that a challenge to a property tax assessment must be supported, by sound theory and objective data (see, Matter of Katz v Assessor of Vil./ Town of Mount Kisco, 82 AD2d 654, 656-657).

While it is not possible to prescribe any one method to assess the effects of environmental contamination, there are certain factors that should be considered. These include the property’s status as a Superfund site, the extent of the contamination, the estimated cleanup costs, the present use of the property, the ability to obtain financing and indemnification in connection with the purchase of the property, potential liability to third parties, and the stigma remaining after cleanup (see generally, Patchin, Valuation of Contaminated Properties, Appraisal J, Jan. 1988, at 7; Wilson, op. cit.; Chalmers and Roehr, op. cit.).

Against this backdrop, we cannot say that the methodology here employed was erroneous as a matter of law. The valuation of Commerce’s property was accomplished by the use of the income capitalization approach to determine the value in an uncontaminated state of this income-producing property, combined with a downward environmental adjustment in the amount of outstanding cleanup costs. While cognizant of the potential of this valuation method to overstate the effects of environmental contamination, we nevertheless conclude that cleanup costs are an acceptable, if imperfect, surrogate to quantify environmental damage and provide a sound measure of the reduced amount a buyer would be willing to pay for the contaminated property (see, Westling v County of Mille Lacs, 543 NW2d 91 [Minn] [affirming assessment where value of property reduced by remaining cleanup costs and amount attributable to stigma]; Wilson, op. cit., at 413; cf., Matter of Northville Indus. Corp. v Board of Assessors, 143 AD2d 135, 138, supra [deducting total cost of compliance with Sanitary Code from each annual tax assessment]; Matter of Bass v Tax Commn., 179 AD2d 387, 388 [affirming deduction for "foreseeable cost of curing the building’s deficiencies,” including asbestos contamination]).

The Town next argues that even if the entire remaining cost to cure was properly deducted in connection with each yearly assessment, this amount should have been discounted to its present value. However, Commerce’s expert testified that the estimated cleanup costs were present value estimates, which he described as the present financial impact of the cleanup on the property’s value. The Town failed to introduce any controverting evidence and its challenge is thus precluded.

In conclusion, we hold that based on the record in this case, the reviewing court properly considered the effects of environmental contamination in assessing the value of Commerce’s property and applied an acceptable valuation technique.

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

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith and Levine concur.

Order affirmed, with costs.

      . Appearing as amici curiae in support of the Town are the City of New York, New York State Conference of Mayors and Municipal Officials, Association of Towns of the State of New York, County of Nassau, City of Buffalo, and City of Syracuse.

      . Commerce’s expert estimated that the total cost of remediation in then current 1991 dollars would be $925,365, and projected that the cleanup would be completed in 8 to 10 years.

      . Although the Town attempts to frame its policy argument in terms of environmental culpability — the guilty polluter versus the innocent taxpaying public — it should be recognized that CERCLA is a strict liability statute that imposes liability on property owners such as Commerce without regard to fault (see, 42 USC § 9607 [a] [responsible party and owner are liable]).

      . New valuation techniques are being developed that hold promise for the valuation of contaminated properties (see, e.g., Chalmers and Roehr, Issues in the Valuation of Contaminated Property, Appraisal J, Jan. 1993, at 36-38 [discussing regression analysis and contingent valuation methodology]).

      . The use of this method would be disfavored, for example, when the property is capable of productive use, but the high cleanup costs yield a negative property value. In such a case, the cleanup costs could be more appropriately accounted for by adjustments to the projected income stream (see, e.g., Mundy, The Impact of Hazardous and Toxic Material on Property Value: Revisited, Appraisal J, Oct. 1992, at 463).


author: Bellacosa, J.

text:
    [673 NE2d 586, 650 NYS2d 76]
    In the Matter of Laverack & Haines, Inc., et al., Appellants, v New York State Division of Human Rights et al., Respondents.
    Argued September 4, 1996;
    decided October 15, 1996

      POINTS OF COUNSEL

      Ferrara, Fiorenza, Larrison, Barrett & Reitz, P. C., East Syracuse (David W. Larrison and Michael L. Dodd of counsel), for appellants.
    I. Under the Human Rights Law, an employer faced with a legitimate reduction in force due to financial concerns has no obligation to permit an older employee to "bump” a younger, lower level employee. (McDonnell Douglas Corp. v Green, 411 US 792; St. Mary’s Honor Ctr. v Hicks, 509 US 502; Pena v Brattleboro Retreat, 702 F2d 322; Ashker v International Bus. Machs. Corp., 168 AD2d 724; Ridenour v Lawson Co., 791 F2d 52; Sahadi v Reynolds Chem., 636 F2d 1116; Wolfe v Time, Inc., 702 F Supp 1045; Meyer v Ernst & Young, 837 F Supp 865; Murphy v American Home Prods. Corp., 58 NY2d 293; Kipper v Doron Precision Sys., 194 AD2d 855.) II. The decision below conflicts with a prior decision of the Court of Appeals. (Matter of Corning Glass Works v Ovsanik, 84 NY2d 619.)

      Michael K. Swirsky, New York City, Lawrence Kunin for New York State Division of Human Rights, respondent.
    I. The Commissioner’s findings of fact are based on substantial evidence that Laverack treated Burns disparately by denying him equal terms, privileges, and conditions of employment because of his age. (Ashker v International Bus. Machs. Corp., 168 AD2d 724; McDonnell Douglas Corp. v Green, 411 US 792; St. Mary’s Honor Ctr. v Hicks, 509 US 502; Furnco Constr. Corp. v Waters, 438 US 567; Wolfe v Time, Inc., 702 F Supp 1045; Landwehr v Grey Adv., 211 AD2d 583; King v General Elec. Co., 960 F2d 617; Matter of CUNY-Hostos Community Coll. v State Human Rights Appeal Bd., 59 NY2d 69; Matter of State Div. of Human Rights [Cottongim] v County of Onondaga Sheriff’s Dept., 71 NY2d 623.) II. It was the Commissioner’s responsibility as fact finder to assess the credibility of evidence, including that proffered by Laverack for its dismissal of the complainant. (State Div. of Human Rights v Rochester Prods. Div. of Gen. Motors Corp., 112 AD2d 785; Matter of State Div. of Human Rights v Muia, 176 AD2d 1142; Matter of Club Swamp Annex v White, 167 AD2d 400, 77 NY2d 809; St. Mary’s Honor Ctr. v Hicks, 509 US 502; Brooklyn Union Gas Co. v New York State Human Rights Appeal Bd., 41 NY2d 84; Texas Dept. of Community Affairs v Burdine, 450 US 248; Kipper v Doron Precision Sys., 194 AD2d 855; Sabetay v Sterling Drug, 69 NY2d 329; Matter of Imperial Diner v State Human Rights Appeal Bd., 52 NY2d 72; Matter of State Div. of Human Rights [Cottongim] v County of Onondaga Sheriff’s Dept., 71 NY2d 623.) III. Laverack fails to show that it was prejudiced in any way by the length of time it took the Division to process the Burns’ complaint. (Matter of Corning Glass Works v Ovsanik, 84 NY2d 619; Matter of Harris & Assocs. v deLeon, 84 NY2d 698; Matter of Cortlandt Nursing Home v Axelrod, 66 NY2d 169, 476 US 1115; Matter of Sarkisian Bros. v State Div. of Human Rights, 48 NY2d 816.)
   OPINION OF THE COURT

Bellacosa, J.

The State Division of Human Rights (SDHR) found former employer Laverack & Haines, Inc., guilty of age discrimination based on its elimination of employee George Burns’ job. The Appellate Division essentially upheld the SDHR age discrimination determination. One Justice dissented and would have granted the petition to annul the agency’s ruling, and this Court granted leave to appeal.

We now reverse and grant the petition because, while the threshold prima facie case of discrimination was satisfied, the petitioners-appellants (the employer) met their burden of rebuttal by presenting a nondiscriminatory, nonpretextual explanation for the termination of employee-complainant Burns. The overall employment downsizing was the result of business setbacks. The elimination of his job and job title reflected no disparate treatment with respect to the handling of comparable job titles in the Buffalo and Syracuse offices. In sum, the employer was under no legal obligation to create a new or additional job for the fired employee or to bump or displace other employees to make room for him.

Laverack & Haines, Inc., was a company engaged in the representation of self-insured employers in matters before the New York State Workers’ Compensation Board. In January 1978, it hired complainant, George Burns, as the Claims Manager of its Syracuse, New York, office. By 1982, Laverack started downsizing its operations throughout the State based on severe economic downturns in its business. It sold off several components of its business and terminated several senior level employees. The reorganization eliminated the equivalent Claims Manager position in the company’s Buffalo office; the person previously holding the position, Casimir Wilbert, was dropped down to and retained as a Hearing Representative. In January 1983, continuing its reorganization struggle, Laverack transferred Jack Syracuse (age: early 30s), as a Hearing Representative in the Buffalo office, to assist Burns (age: early 60s), who was still the Claims Manager in the Syracuse office. Thereafter, in late April or early May 1983, Laverack eliminated the position of Claims Manager throughout its branch offices. Burns’ job title was included in this sweep and he was entirely phased out as of July 1983. At the time Burns’ job as Claims Manager ended, Laverack offered him a part-time Hearing Representative position on a consultant, low-paying basis. Burns declined. Laverack offered a similar arrangement to its Albany Claims Manager, who accepted the readjustment. In April 1985, Jack Syracuse’s employment as Hearing Representative in the Syracuse office was also terminated and his position was not refilled. Laverack itself was sold in 1987 and it went entirely out of business in 1989.

In October 1983, Burns filed a discrimination complaint alleging that Laverack improperly ended his employment on the basis of his mid-60s age level, in violation of the Human Rights Law (Executive Law § 296 [1] [a]). Close to 10 years later in 1992, a SDHR Administrative Law Judge issued an opinion, decision and order with recommended findings of fact. The ALJ stated that Laverack had improperly terminated Burns’ employment on the basis of age. The ALJ added that the record indicated that Laverack could have offered employee Syracuse’s position as Hearing Representative to Burns. Within two weeks, Laverack filed objections to the ALJ’s findings with the Commissioner of the SDHR. Six months later, the Adjudication Counsel for the SDHR presented an alternative proposed order for the Commissioner’s consideration. It recommended that the ALJ’s decision be rejected and the complaint dismissed. Burns filed pro se objections to the alternative proposed order.

Eight months later in August 1994, the SDHR Commissioner, opting for the report of the ALJ, found that Laverack unlawfully discriminated against Burns by terminating him from employment because of his age, in violation of Executive Law § 296 (1) (a). The Commissioner determined that Burns had made out a prima facie case of age discrimination, by establishing that while Laverack terminated him, it maintained a younger and less experienced individual in what was characterized as essentially the same position. The Commissioner, however, modified the remedial recommendations made by the ALJ. The final determination reduced the back pay awarded to Burns to $27,378, plus interest assessed from the date of unlawful termination until date of payment at 9% per annum. The award to Burns of $25,000 in compensatory damages for mental anguish was sustained. Furthermore, the Commissioner directed Laverack to pay Burns any pension benefits to which he would have become entitled had he remained in Laverack’s employ for another year and a half until April 12, 1985, also with interest at 9% per annum. Burns would have been 65 and entitled to a vested pension at that point except for his termination in 1983.

The Appellate Division unanimously agreed that a prima facie case of age discrimination was established and that Laverack unlawfully terminated Burns. So do we. The Appellate Division majority, however, further concluded that the SDHR properly rejected employer Laverack’s proffered nondiscriminatory reasons (its failing business) for the termination. That is the issue that divided the Appellate Division and it is in that respect that we reverse, essentially agreeing with Justice Balio’s dissent. In view of our disposition granting the petition to annul the SDHR determination itself, we need not address the remedial damage aspects of the case.

We are satisfied that the record in this case establishes that the employer rebutted the prima facie case of age discrimination with nondiscriminatory, nonpretextual reasons for the termination. The downsizing of a company’s employment rolls, due to business failings and economic setbacks, constitutes a sustainable rebuttal and explanation for the decision to terminate a particular employee, when demonstrated virtually without contradiction, as in this case and record.

This Court, in Matter of Miller Brewing Co. v State Div. of Human Rights (66 NY2d 937), established the burdens of persuasion and production in an age discrimination controversy. The Court concluded that satisfaction of the threshold prima facie component of an age discrimination case shifts the burden to employers "to rebut the presumption of discrimination by clearly setting forth, through the introduction of admissible evidence, legitimate, independent, and nondiscriminatory reasons to support its employment decision” (id., at 938). To satisfy this burden, the Appellate Division in Manning v Norton Co. (189 AD2d 971), harkening to Matter of Miller Brewing Co. (supra), stated that "[a] reduction in work force due to economic conditions has been recognized as a legitimate, independent and nondiscriminatory reason for an employment decision” (Manning v Norton Co., supra, at 972 [citations omitted]). Applying the principles and guideposts provided by Matter of Miller Brewing Co. (supra) and Manning v Norton Co. (supra), the Appellate Division in Kipper v Doron Precision Sys. (194 AD2d 855), held that an employer was not guilty of discrimination when it fired an employee pursuant to a company decision to terminate one person with a particular job title. The Court stated that ”[p]laintifFs evidence that some tasks which he could have performed were assigned to younger employees after he was terminated is insufficient” to establish that the defendant’s proffered reasons were merely a pretext for age discrimination (id., at 856).

That ruling and the precedents it relies on offer a cogent parallel in this Laverack-Burns controversy. Moreover, support for Laverack’s satisfaction of its burdens of persuasion and production necessary to establish a nondiscriminatory explanation for a disputed employment decision may be discerned from decisions of the United States Supreme Court (see, McDonnell Douglas Corp. v Green, 411 US 792; Texas Dept. of Community Affairs v Burdine, 450 US 248; St. Mary’s Honor Ctr. v Hicks, 509 US 502).

Notably, this Court has also held that the discharge of employees as a result of a city fiscal crisis does not constitute a discriminatory act (see, Steele v Board of Educ., 40 NY2d 456; Matter of Blyn v Bartlett, 39 NY2d 349). Also, in Matter of CUNY-Hostos Community Coll. v State Human Rights Appeal Bd. (59 NY2d 69), where the claimant alleged that he was discharged unlawfully due to his creed and national origin, this Court upheld the discharge effected under a 1976 employment reorganizational plan (id., at 72).

In the present case, Burns argues, and the Appellate Division majority agreed, that Laverack’s proffered nondiscriminatory reason for the termination was insufficient to rebut complainant’s prima facie case of age discrimination. We conclude that the state of this record and the proof in relation to the guiding precedents discussed above do not support Burns’ and the SDHR’s argument and the ruling at the Appellate Division.

No one really disputes that Laverack’s business distress led to the elimination of Burns’ job, among many others, and his job category entirely in all the branch offices. Most significantly, he was not replaced by a younger employee or by anyone at all. The Claims Manager position was removed from the roster of Laverack’s employment slots. Employee Syracuse merely assumed, for a period of time until his own job was also eliminated, some of Burns’ duties. Thus, this arrangement does not constitute an equivalency to the former position. In any event, as the Kipper (supra) Court correctly noted, the fact that some of Burns’ responsibilities were assumed by a younger employee is insufficient to establish that Laverack’s proffered reason for terminating complainant’s employment was pretextual. The failing company was not "playing musical chairs,” as rhetorically argued by counsel for SDHR. It was struggling to save its failing business.

Burns also contends that his particular complaint rests on disparate treatment. He argues that Laverack, by not extending to him an option of employment in a lesser title, as it offered to the younger Casimir Wilbert, the former Claims Manager of the Buffalo office, denied Burns equal terms, privileges and conditions of employment in his Syracuse office setting. This contention is not sustainable. First, this is not a case of disparate treatment of employees in the Buffalo and Syracuse offices, because there never was a lower job vacancy in the Syracuse office where Burns worked, as there was in the Buffalo office. The two branch office operations were legally discrete for purposes of the job rearrangements and comparisons presented here. Second, as the Appellate Division dissent correctly noted, Laverack was under no legal obligation to create a new or additional job or to bump or displace lower classified employees as a way to forestall or obviate an unlawful age discrimination complaint. These maneuvers might well have backfired with different discriminatory twists, resulting in a Hobson’s choice for the employer.

In sum, appellant employer Laverack rebutted the SDHRcomplainant Burns’ case with a nondiscriminatory, nonpretextual reason for ending Burns’ employment after eliminating his entire job classification in all its branch offices. Laverack had no duty to retain Burns at the expense of another employee by bumping measures or at its own expense by creating a new job slot (a self-evident contradiction, since it could not afford to do so with its business failing as it was).

Accordingly, the order of the Appellate Division should be reversed, with costs, and the determination of the New York State Division of Human Rights should be annulled.

Chief Judge Kaye and Judges Simons, Titone, Smith, Levine and Ciparick concur.

Order reversed, with costs, petition granted, respondent State Division of Human Rights’ determination annulled and complaint before the Division dismissed.


text:
    [673 NE2d 589, 650 NYS2d 79]
    The People of the State of New York, Respondent, v Edward Foy, Appellant.
    Argued September 12, 1996;
    decided October 17, 1996

      POINTS OF COUNSEL

      Natalie Rea, New York City, and Daniel L. Greenberg for appellant.
    Appellant, charged with multiple misdemeanors carrying a potential aggregate sentence of imprisonment greater than six months, had a constitutional right to a jury trial. (Codispoti v Pennsylvania, 418 US 506; Duncan v Louisiana, 391 US 145; Baldwin v New York, 399 US 66; District of Columbia v Clawans, 300 US 617; Matter of Morgenthau v Erlbaum, 59 NY2d 143; United States v Bencheck, 926 F2d 1512; Blanton v North Las Vegas, 489 US 538; Haar v Hanrahan, 708 F2d 1547; United States v Coppins, 953 F2d 86; United States v Musgrave, 695 F Supp 231.)

      Robert T. Johnson, District Attorney of Bronx County, Bronx (Lisa Ellen Mudd, Joseph N. Ferdenzi and Billie Manning of counsel), for respondent.
    I. Appellant’s guilt of harassment was proven beyond a reasonable doubt by overwhelming evidence. II. Appellant was not entitled to a jury trial. (Lewis v United States, 518 US —, 116 S Ct 2163; Matter of Morgenthau v Erlbaum, 59 NY2d 143; People v Iannelli, 69 NY2d 684; People v Figueroa, 173 AD2d 156, 78 NY2d 1075; People v Luperon, 85 NY2d 71; People v Thomas, 50 NY2d 467; People v Patterson, 39 NY2d 288, 432 US 197; People v Callahan, 80 NY2d 273; Frank v United States, 395 US 147; District of Columbia v Clawans, 300 US 617.)
   OPINION OF THE COURT

Bellacosa, J.

Defendant-appellant was charged with multiple petty offenses. None carries a maximum term of incarceration greater than six months upon conviction when prosecuted individually. The issue framed for our consideration is whether defendant is constitutionally entitled to a jury trial because the maximum aggregate sentences for the charged offenses, as consolidated, may exceed six months (US Const 6th Amend; NY Const, art I, § 2). The Appellate Term affirmed a judgment of New York City Criminal Court convicting defendant of harassment, after a bench trial, and sentencing him to a conditional discharge. A Judge of this Court granted leave to appeal and we now affirm.

Defendant was originally charged, under two separate informations, with multiple misdemeanors and lesser offenses relating to two altercations with his wife. By the time of the trial, the charges remaining on the first information were attempted criminal mischief in the fourth degree and menacing. These are classified as class B misdemeanors carrying maximum authorized jail sentences of three months. The charges in the second information were reduced to three class B misdemeanors, attempted third degree assault, attempted fourth degree criminal mischief, and attempted second degree criminal contempt, in addition to a single count of harassment. The latter is a violation punishable by a maximum sentence of 15 days and the others, as class B misdemeanors, are punishable by a maximum sentence of up to three months. Upon motion by the People, the informations were consolidated for trial.

Criminal Court rejected defendant’s demand for a jury trial. Relying on Baldwin v New York (399 US 66), it concluded that a jury trial is not constitutionally mandated when the maximum statutory sentence for a petty charge does not exceed six months. Furthermore, the court noted that CPL 340.40 (2) requires a trial before á Judge where no one charge carries an authorized sentence of more than six months. The court reasoned that because the two informations here involved entirely separate incidents which occurred on different dates, there was no constitutional authority or precedent requiring a jury trial.

The Appellate Term held that each count was a "petty” offense within the meaning of the Sixth Amendment and, thus, not triable by jury if prosecuted individually (166 Misc 2d 358). The court found unavailing defendant’s argument that a jury trial was required because he could have been sentenced to an aggregate jail term in excess of six months had he been convicted of more than one of the petty offenses joined under the consolidation. The court reasoned that "[t]he central point of inquiry in determining whether a jury trial is required is the seriousness of the offense with which the defendant is charged [citation omitted], and not the sheer number of accumulated offenses tried on a given day or on a given accusatory instrument” (id., at 360). Furthermore, the court noted that "[t]he administrative convenience of litigating these multiple charges in one trial did not serve to enhance the ultimate risk faced by the defendant or to somehow transform the 'petty’ offenses alleged to the level of a 'serious’ crime” (id., at 360). Finally, the court stated that "the widespread application of [an aggregate sentence] rule in our already overburdened criminal justice system would only serve to 'overwhelm the courts and prosecutors by consuming large amounts of time for selecting juries and would cause unmanageable delays’ ” (id., at 361, quoting Matter of Morgenthau v Erlbaum, 59 NY2d 143, 153).

Defendant argues that, when a defendant is charged with multiple petty offenses in a joined prosecution, carrying a potential aggregate sentence greater than six months’ imprisonment, both the New York and United States Constitutions mandate that the defendant be afforded a jury trial. Defendant urges this Court to adopt the "aggregate-sentence approach” for determining the constitutional right to a jury trial. We reject defendant’s arguments and agree with the Appellate Term that the determination as to whether a defendant is constitutionally entitled to a jury trial hinges on the seriousness of the offense, not the potential aggregate sentence for a series of petty offenses that may be consolidated for trial.

It is well settled that offenses carrying a maximum statutory term of imprisonment of greater than six months are "serious” offenses for which the New York and United States Constitutions unquestionably afford defendants the right to a jury trial (see, Baldwin v New York, 399 US 66, supra; Matter of Morgenthau v Erlbaum, 59 NY2d 143, supra). Equally settled is the proposition that offenses carrying sentences of less than six months are "petty” offenses, to which no right to a jury trial attaches (see, Baldwin v New York, supra; Matter of Morgenthau v Erlbaum, supra). Courts are required to examine each offense in a prosecution individually and separately, to determine whether the Legislature has ascribed a serious level classification fixed by the measurement of whether any of the individual offenses carry a potential maximum sentence of greater than six months. When a court determines that none does, the defendant is not constitutionally entitled to a jury trial.

In Matter of Morgenthau v Erlbaum (59 NY2d 143, supra), defendants were charged with multiple counts of prostitution. They challenged the constitutionality of CPL 340.40 (2), which mandates that crimes punishable by imprisonment of six months or less be heard before a Judge. We concluded that the statute did not violate the Sixth Amendment. The Court reasoned that the misdemeanors, each punishable by a maximum term of imprisonment of three months, were "petty” offenses within the meaning of the Sixth Amendment to which there is no right to a jury trial (id., at 154). The Court stated that "[although earlier cases may have considered various factors of a crime [citations omitted], recent Supreme Court decisions have emphasized the length of sentence to the exclusion of virtually everything else” (id., at 153). Our Court further stressed that "[t]he penalty is deemed of major relevance, a gouge of the locality’s social and ethical judgments on the heinousness of the offense” (id., at 153-154, citing Duncan v Louisiana, 391 US 145, 159-160).

At one point in time, this Court had even held the view that crimes for which the maximum punishment was not greater than one year of imprisonment were not afforded the constitutional guarantee of a jury trial (see, Matter of Hogan v Rosenberg, 24 NY2d 207, revd sub nom. Baldwin v New York, 399 US 66; People v Erickson, 302 NY 461; People v Bellinger, 269 NY 265). In Matter of Hogan, we stated that "the overburdening caseload existing in the criminal courts of the highly populated City of New York [gave] rise to extraordinary and unique circumstances” which provided a reasonable basis for refusing to permit "the more time-consuming trial by jury of misdemeanors” (Matter of Hogan v Rosenberg, supra, 24 NY2d, at 218).

The United States Supreme Court rejected that temporal extension of the operating principle and has consistently held that defendants charged with petty offenses, defined as those carrying maximum statutory prison terms of less than six months, are not entitled to a jury trial (see, Duncan v Louisiana, 391 US 145, supra; Baldwin v New York, 399 US 66, supra).

In a significant recent development and instruction to our jurisprudence, the Supreme Court in Lewis v United States (518 US —, 116 S Ct 2163) answered the question now posed to us from the perspective of the United States Constitution. There, the defendant was charged with two counts of Federal mail obstruction, each carrying a maximum six-month prison term. The Supreme Court reiterated that the Sixth Amendment’s guarantee of a jury trial is reserved for the prosecution of serious crimes — those carrying a maximum prison term of greater than six months. It held that the compulsory availability of that right is not implicated when a defendant faces a potential aggregate sentence in excess of six months by virtue of being charged with multiple petty offenses in a consolidated proceeding (Lewis v United States, supra, 518 US, at —, 116 S Ct, at 2165). The Supreme Court stated that "[t]he fact that the petitioner was charged with two counts of a petty offense does not revise the legislative judgment as to the gravity of that particular offense, nor does it transform the petty offense into a serious one, to which the jury-trial right would apply” (id., 518 US, at —, 116 S Ct, at 2167).

The United States Supreme Court, in its majority expression in Lewis, distinguished its prior holding in Codispoti v Pennsylvania (418 US 506). The latter case is heavily relied upon by the defendant here in his argument that we adopt a different rule in this area of the law for New York constitutional and jurisprudential purposes. In Codispoti, a defendant charged with several charges of criminal contempt was determined to be entitled to a jury trial based on the aggregate penalties actually imposed (id., at 517). The Supreme Court in Lewis expressly limited the Codispoti rationale based on the absence of a congressional direction pinpointing the seriousness of the distinctive offense of criminal contempt (Lewis v United States, 518 US —, —, 116 S Ct 2163, 2168, supra).

We are satisfied that the inescapably interrelated history and development of this Court’s and the United States Supreme Court’s rulings on the right to a jury trial for prosecution of petty offenses dictates an affirmance of the rulings of the courts below. No persuasive justification is presented for us to adopt defendant’s contention that prosecution of consolidated petty offenses, with a potential aggregate sentence in excess of six months, adds up to a constitutionally compelled right to a jury trial. Multiple petty crimes remain "petty” by legislative classification and their nature, and are not transformed by their sheer number alone into matters of a serious level and nature.

Defendant concedes that if he had been tried separately for each of the offenses for which he was charged, a bench trial for each offense would unquestionably have been proper, with no constitutional infirmity. The constitutional imperative of guaranteeing a jury trial for offenses punishable by imprisonment in excess of six months pivots and focuses on the severity of the offense, and that is reflected in the legislative policy classifications designating crime severity and punishment. Because individuals prosecuted for offenses punishable by imprisonment terms of greater than six months are exposed to a deprivation of liberty for serious crimes, the Constitutions provide a precious guarantee of a trial by their peers based on that root of constitutional analysis and protection. That is also the basis of our rationale for the resolution of this appeal and case, not efficiency considerations.

In sum, even in aggregate sentence circumstances for petty offenses, the unalterable fact remains that the defendant is not charged with any offense that qualifies as serious, thus invoking the guarantee of a jury trial. Since it is the discrete petty offense itself in these circumstances, and not the accumulation of them, which determines the constitutional entitlement to a jury trial, defendant-appellant’s arguments cannot prevail.

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

Chief Judge Kaye and Judges Simons, Titone, Smith, Levine and Ciparick concur.

Order affirmed.


author: Per Curiam.

text:
    [673 NE2d 896, 650 NYS2d 611]
    In the Matter of B. Marc Mogil, a Judge of the Nassau County Court, Petitioner. State Commission on Judicial Conduct, Respondent.
    Argued September 5, 1996;
    decided October 15, 1996

      POINTS OF COUNSEL

      Jacob R. Evseroff, P. C., Brooklyn (Jacob R. Evseroff of counsel), for petitioner.
    I. The Referee’s report contained errors and omissions regarding both the facts and law upon which the Commission based its determination. II. The law mandates a complete exoneration. (Matter of Gelfand, 70 NY2d 211; Matter of Shilling, 51 NY2d 397; Matter of Kiley, 74 NY2d 364.) III. There is a history of unexplained bias against appellant by counsel to the Commission. IV. The Commission ignored appellant’s exemplary history and the obvious lack of motivation to lower himself to the cohduct alleged or to jeopardize his career. V. Even assuming proven misconduct on all charges, the sanction of "removal” flies in the face of justice. (Matter of Kiley, 74 NY2d 364; Matter of Steinberg, 51 NY2d 74; Matter of Kane v Rudich, 256 App Div 586.)

      Robert H. Tembeckjian, New York City, and Gerald Stern for respondent.
    I. Petitioner engaged in serious misconduct by distributing his four-page Bar Association statement on June 23, 1994, by sending anonymous, harassing and threatening messages to Thomas Liotti, and by making false statements concerning his conduct. (Matter of Aldrich v State Commn. on Judicial Conduct, 58 NY2d 279; Matter of Shilling, 51 NY2d 397; People v Aharonowicz, 71 NY2d 678; People v Miller, 35 NY2d 65; People v Benzinger, 36 NY2d 29; Schneider v Kings Highway Hosp. Ctr., 67 NY2d 743.) II. Petitioner’s brief makes irrelevant and unpersuasive arguments for rejecting the findings of the Referee and Commission. (Matter of Kiley, 74 NY2d 364; Matter of Gelfand, 70 NY2d 211.) III. Petitioner has committed egregious misconduct and should be removed from office. (Matter of Gelfand, 70 NY2d 211.)
   OPINION OF THE COURT

Per Curiam.

Petitioner, a Judge of the County Court, Nassau County, has requested review of the determination of the State Commission on Judicial Conduct that from January through October 1994 he engaged in a course of misconduct directed at an attorney and that he further displayed a lack of candor and testified falsely before the Commission during its investigation of this matter, and imposing the sanction of removal (see, NY Const, art VI, § 22 [a]; Judiciary Law § 44 [1], [7]). Having conducted a plenary review of the record (Judiciary Law § 44 [9]), we conclude that the Commission’s determination is supported by a preponderance of the evidence, and that the sanction of removal is appropriate.

The evidence before the Referee established that, at least as early as 1991, petitioner was involved in a feud with a member of the criminal defense bar of Nassau County over the attorney’s activities in the Criminal Courts Bar Association of that County, of which both petitioner and the attorney were members. When the attorney became president of this Bar Association in 1993, petitioner publicly criticized the attorney’s conduct and announced that he was boycotting the organization during the attorney’s tenure in that office. In December 1993, the attorney wrote to petitioner’s court administrators complaining of petitioner’s judicial conduct and competence. One of these Administrative Judges shared the contents of this letter with petitioner who, despite the redaction of the attorney’s letterhead and signature, recognized its source. A second letter from the attorney to the Administrative Judges regarding petitioner followed, and, in early 1994, a speech given by the attorney at an induction ceremony for newly elected Nassau County Court Judges contained thinly veiled criticisms of petitioner.

The Referee found, and the evidence clearly demonstrates, that in the ensuing four months petitioner responded by sending eight anonymous communications to the attorney which were harassing, threatening and otherwise offensive. Then, in June 1994, at an annual social event of the Bar Association, petitioner distributed a four-page statement printed on his judicial stationery entitled "13 Suggestions for 'Confrontational’ or Intentionally Offensive Criminal Defense Attorneys.” This statement contained numerous disparaging and offensive comments regarding the conduct of criminal defense lawyers, including many indirect references to the attorney with whom petitioner was engaged in conflict. In addition, the statement contained repeated warnings to lawyers against making unfounded complaints against a Judge, indicating that doing so could result in serious personal consequences, including retaliation by the targeted Judge and the Judge’s colleagues. Petitioner’s statement also ridiculed a specific defense strategy being considered in a highly publicized case then pending before another Judge of petitioner’s court. Subsequent to this Bar Association event, petitioner sent the attorney at least two more anonymous threatening and abusive communications.

Following the Commission’s investigation into these allegations of misconduct, during which petitioner testified before members of the Commission at their request (see, Judiciary Law § 44 [3]), petitioner was served with a formal written complaint containing eight specific charges of misconduct. Charge I was based on the anonymous communications petitioner sent to the attorney, Charge II related to the statement petitioner circulated at the June Bar Association event, and Charges III through VIII alleged that petitioner had given false testimony, or had made other false statements, in connection with these events and the Commission’s investigation of them.

Following a 10-day hearing, which produced over 1,600 pages of testimony from 42 witnesses, the Referee found that six of these charges were supported by a preponderance of the evidence as required by the Commission’s rules (see, 22 NYCRR 7000.6 [i] [1]) and that petitioner’s misconduct had been established. The Commission confirmed the Referee’s report in all essential respects and determined that petitioner should be removed. Petitioner now seeks review of both the sufficiency of the evidence before the Commission and its determination that the sanction of removal be imposed.

In contending that the Commission failed to sustain its burden of proof, petitioner relies on the fact that the findings in this case rest largely on circumstantial evidence and credibility determinations. Petitioner errs, however, to the extent that he claims that the nature of the proof alone is sufficient to undermine the Commission’s findings. There is no question that misconduct need only be established by a preponderance of the evidence (Matter of Seiffert, 65 NY2d 278, 280 [Commission’s rule requiring proof only by preponderance of the evidence satisfies constitutional requirements]). Nor can there be any doubt that the Commission may meet its burden of proof with either circumstantial or direct evidence (see, e.g., Matter of Reedy, 64 NY2d 299, 302 [misconduct consisting of ticket-fixing established by circumstantial evidence]; Matter of Spector v State Commn. on Judicial Conduct, 47 NY2d 462, 469 [appearance of impropriety established by circumstantial evidence]), or that findings may rest on credibility determinations (see, Matter of Schiff, 83 NY2d 689, 693; Matter of Gelfand, 70 NY2d 211, 215-216, rearg denied 70 NY2d 747, cert denied sub nom. Gelfand v New York State Commn. on Judicial Conduct, 484 US 977; cf., Matter of Shilling, 51 NY2d 397, 402 [effect of favorable character evidence on Commission’s findings depends on the strength of the evidence establishing misconduct], adhered to on rearg 52 NY2d 758, appeal dismissed sub nom. Shilling v State Commn. on Judicial Conduct, 451 US 978). Thus, the only evidentiary issue we examine is whether the proof establishes by a preponderance of the evidence that petitioner engaged in the acts of misconduct in the six charges sustained by the Referee and Commission. We conclude that it does.

First, as to Charge II, premised on petitioner’s "13 Suggestions” contained in the statement admittedly his at the June 1994 Bar event, the evidence of misconduct was direct — the contents of the document itself and the very act of disseminating it under circumstances in which it would be perceived as representing petitioner’s official viewpoint. In this instance, the document is unambiguously threatening and intimidating regarding attorney complaints against Judges, in promising that retaliation would follow unless "your first figurative blow is so credible, powerful, and based upon indelible truth as to put the [Judge] 'down for the count.’ If not, and your target can arise after your most potent broadside, you’ve had it!” (Emphasis in original.) We agree with the Commission that petitioner’s public dissemination of these offensive and threatening remarks constitutes judicial misconduct as a matter of law (see, e.g., Rules Governing Judicial Conduct [22 NYCRR] § 100.2 [a] ["A judge * * * shall conduct himself or herself at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary”]; Code of Judicial Conduct Canon 2 [A]).

Moreover, the quantity and quality of proof linking petitioner to the anonymous communications underlying Charge I, although circumstantial, leads directly to the inference that petitioner was the source of these communications. Notably, there are striking similarities between the anonymous communications and the documents that petitioner admittedly prepared. There is a strong resemblance not only in tone and style, but also in subject matter (dwelling on retaliation for outspoken comments against the judiciary including public revelation of the complainant’s personal indiscretions), and in addition, there is overlap in the specific language, symbols and references used.

Likewise, the record establishes that petitioner repeatedly displayed a lack of candor and made both misleading and patently false statements in connection with the Commission’s investigation of his misconduct. To give only one example, two of the misconduct charges are based on statements petitioner made in connection with an e-mail message allegedly sent by him to the White House in which he criticized the President’s policy toward Haiti. Upon receipt of an acknowledgement letter from the White House, petitioner contacted a member of the Nassau County Police Department claiming that, as he had never communicated with the President on any subject, someone must be communicating with the President in his name and insinuating that the attorney with whom he was feuding might have been the individual who had done so. Petitioner then repeated this general allegation, without naming the attorney, in a letter to the Commission’s staff counsel, and, when testifying before the Commission, repeatedly denied that he had sent the e-mail in question. However, the evidence before the Referee cogently establishes that petitioner’s allegations and steadfast denials were false: there was evidence that the message was received at a time when petitioner’s personal on-line account was in use, that the account was only accessible by a secret password, that petitioner had shared this password with only one person (his secretary) who had never used it or revealed it to others, and that under such circumstances there was little likelihood that anyone other than petitioner had sent the message.

Moreover, as to another false testimony charge, regarding his enclosing in one of the anonymous mailings several pills for which he had prescriptions, petitioner’s prevarications were demonstrated by documentary proof.

Finally, having concluded that the Commission’s findings are supported by the evidence in the record, we agree that the offensive, harassing and vindictive nature of petitioner’s conduct, and his repeated dishonesty before the Commission, requires the sanction of removal (see, Matter of Gelfand, 70 NY2d 211, supra [misconduct consisting of harassment of former law clerk with whom petitioner had an extramarital affair and the giving of false testimony before Commission warrants removal from office]).

Accordingly, the determined sanction should be accepted, without costs, and petitioner should be removed from his office of Judge of the County Court, Nassau County.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur in Per Curiam opinion.

Determined sanction accepted, etc.

      . Specifically, the Commission found that petitioner had violated rules 100.1, 100.2 (a) and 100.3 (a) (6) of the Rules Governing Judicial Conduct (22 NYCRR) and Canons 1, 2 (A) and 3 (A) (6) of the Code of Judicial Conduct.

      . Notwithstanding a disclaimer that the views expressed were "personal,” the statement identified the petitioner as a Judge of the County Court, was printed on his judicial stationery and distributed at a local Bar Association function, and was written from the perspective of a Judge.


author: Chief Judge Kaye.

text:
    [673 NE2d 899, 650 NYS2d 614]
    In the Matter of Eileen Borenstein, Respondent, v New York City Employees’ Retirement System et al., Appellants.
    Argued September 3, 1996;
    decided October 15, 1996

      POINTS OF COUNSEL

      Paul A. Crotty, Corporation Counsel of New York City (A. Orli Spanier and Kristin M. Helmers of counsel), for appellants.
    I. The court below was without authority to determine, as a matter of law, that petitioner was medically disabled for the performance of city-service, where the New York City Employees’ Retirement System (NYCERS) Medical Board thoroughly evaluated all of the medical evidence, on two separate occasions, and found that she was not so disabled. (Matter of Canfora v Board of Trustees, 60 NY2d 347; Matter of Demarco v New York City Employees’ Retirement Sys., 211 AD2d 594; Matter of Cammarota v Teachers’ Retirement Sys., 205 AD2d 412; Matter of Nemecek v Board of Trustees, 99 AD2d 954; Matter of Whalen v Monaghan, 285 App Div 884, 309 NY 929; Matter of Appleby v Herkommer, 165 AD2d 727; Matter of Spiro v Ward, 159 AD2d 225; Matter of Bevers v New York City Employees’ Retirement Sys., 179 AD2d 489; Matter of Drayson v Board of Trustees, 37 AD2d 378, 32 NY2d 852; Matter of Brown v New York City Employees’ Retirement Sys., 99 AD2d 451.) II. The court below was without authority to award petitioner accidental disability retirement benefits, as a matter of law, where the NYCERS Board of Trustees never had the opportunity to consider and vote on whether her alleged disability was the natural and proximate result of an in-service accident. (Matter of Canfora v Board of Trustees, 60 NY2d 347; Matter of Russo v Board of Trustees, 143 AD2d 674; Matter of Archul v Board of Trustees, 93 AD2d 716; Belton v Herkommer, 84 AD2d 713; Matter of Drayson v Board of Trustees, 37 AD2d 378; Matter of Hodges v Board of Trustees, 203 AD2d 365; Matter of Jones v Board of Trustees, 123 AD2d 628.)

      David Jalosky, New York City, for respondent.
    I. The court below correctly reversed the finding of the Medical Board which was arbitrary and capricious. (Matter of Campazzi v Ward, 181 AD2d 431; Matter of Perkins v Board of Trustees, 86 AD2d 808; Matter of Rinaldi v Board of Trustees, 88 AD2d 870; Belton v Herkommer, 84 AD2d 713; Matter of Cassidy v Ward,
      169 AD2d 482; Matter of D’Angelo v Ward, 159 AD2d 425; Matter of Weisman v Teachers’ Retirement Bd., 23 AD2d 113.) II. The court below has the authority to award accident disability retirement to petitioner when the medical evidence is conclusive that petitioner is disabled. (Matter of Jones v Board of Trustees, 123 AD2d 628; Matter of Canfora v Board of Trustees, 60 NY2d 347; Matter of Hipple v Ward, 146 AD2d 201, 74 NY2d 614; Matter of Drayson v Board of Trustees, 37 AD2d 378, 32 NY2d 852; Matter of Lichtenstein v Board of Trustees, 57 NY2d 1010; Matter of McCambridge v McGuire, 62 NY2d 563; Matter of Schmidt v McGuire, 119 AD2d 532, 68 NY2d 605; Matter of Scotto v Board of Trustees, 76 AD2d 774.)
   OPINION OF THE COURT

Chief Judge Kaye.

This appeal centers on a determination by the Medical Board of appellant New York City Employees’ Retirement System (NYCERS) that respondent was not physically disabled for the purpose of performing city-service. We now consider the proper standard for judicial review of that determination.

In the early morning hours of December 25, 1990, while working at Rikers Island Correctional Facility as an Assistant Deputy Warden, respondent allegedly slipped on loose carpeting in the supervisors’ bathroom ánd suffered injuries to her neck, shoulder, back, and right hand and wrist. There were no eyewitnesses to the incident. Respondent was immediately examined by a Department of Correction clinical physician who diagnosed her right hand as sprained. The physician noted that respondent had some degree of neck discomfort but had full range of motion. A week later, another physician with the Department’s Health Management Division, after examining respondent, reported that she may have sustained a concussion in the fall. An X ray of respondent’s right hand revealed that there was no fracture.

Approximately two months later, respondent’s physician (Dr. Carlisle St. Martin) concluded from a number of neurological tests that she was suffering from postconcussion syndrome and cervical and lumbosacral sprains. An electroencephalogram was inconclusive, but a Magnetic Resonance Imaging (MRI) scan of respondent’s cervical spine on April 30, 1991 revealed a herniated disc at the C5-C6 interspace, a "prominent annulus” at the C6-C7 interspace and a slight reversal of the spine’s normal curvature. There were no "other focal abnormalities” and no "abnormalities of the brain stem or spinal cord.”

In August 1991, the Department applied to NYCERS requesting that respondent — who had been on sick leave for the seven months since the incident — be considered for disability benefits.

In that connection, on January 29, 1992, respondent was examined by the three NYCERS Medical Board physicians. At that time she complained of constant headaches, blurred vision, neck pain and weakness of her left arm. The Medical Board found that the motion in her cervical spine was limited, the grip of her left hand was weak, and her left paracervical and left trapezius muscles were painful to ordinary touch. The Board noted, however, that respondent could adequately extend both arms, the measurements of her left arm and forearm were equal to the right, the deep tendon reflexes of both of her arms were normal and she showed no signs of a hernial defect. The Board concluded that respondent’s complaints did not "substantiate the claim of disability” and recommended to the NYCERS Board of Trustees that she be denied disability benefits.

Respondent then obtained written opinions from her own doctors contradicting the Board’s findings. Dr. St. Martin opined that, based on his examination and test results, respondent suffered from cervical disc disease, was "unfit for any type of duty” and should "be removed from the workplace.” Dr. Harvey Levine, an orthopedic surgeon, writing to the attorney representing respondent on her claim for Social Security disability benefits, noted that because respondent had a herniated C6 disc and radiculitis (an inflammation of the nerve root) on the left side of her body, she would not be able "to function in any meaningful capacity.”

Following a determination by a Workers’ Compensation Board physician that respondent was "partially disabled,” the Medical Board reconsidered her application for accidental disability retirement, including the new reports of Dr. St. Martin and Dr. Levine. After reviewing her entire file and reinterviewing and reexamining her, the Medical Board again concluded that respondent was not medically disabled for the performance of city-service and recommended to the Board of Trustees that her request be denied. Some time after the Medical Board reported its findings to the Board of Trustees, the Social Security Administration approved respondent’s claim for disability benefits.

After the NYCERS Board of Trustees denied respondent’s request for accidental disability retirement benefits, respondent commenced a CPLR article 78 proceeding seeking to annul the determination. Supreme Court dismissed her petition, but the Appellate Division reversed and granted respondent’s application for an accident disability pension. We now reverse and dismiss the petition.

The award of accidental disability retirement benefits to a NYCERS applicant is a two-step process (see, Administrative Code of City of NY § 13-168 [a]). The first step involves fact finding by the NYCERS Medical Board (see also, Administrative Code § 13-123 [a] [composition of Medical Board]). After conducting its own medical examination of the applicant and considering the evidence submitted in support of the claim, the Medical Board, as a threshold matter, must certify whether the applicant is actually "physically or mentally incapacitated for the performance of city-service.” (Administrative Code § 13-168 [a].) If the Medical Board concludes that the applicant is disabled, it must then make a recommendation to the Board of Trustees as to whether the disability was "a natural and proximate result of an accidental injury received in such city-service” (id.).

The second step in the process involves the NYCERS Board of Trustees (see also, Administrative Code § 13-103 [b] [composition of Board of Trustees]). If the Medical Board certifies that the applicant is not medically disabled for duty, the Board of Trustees must accept that determination and deny applicant’s claim. The Board of Trustees is equally bound by a Medical Board finding that the applicant is disabled, but in that event it must then make its own evaluation as to the Medical Board’s recommendation regarding causation.

In an article 78 proceeding challenging the disability determination, the Medical Board’s finding will be sustained unless it lacks rational basis, or is arbitrary or capricious (see, Matter of Canfora v Board of Trustees, 60 NY2d 347, 351; Matter of Pell v Board of Educ., 34 NY2d 222, 230-231).

Ordinarily, a Medical Board’s disability determination will not be disturbed if the determination is based on substantial evidence (see, Matter of Tobin v Steisel, 64 NY2d 254, 259; Matter of Canfora v Board of Trustees, supra). While the quantum of evidence that meets the "substantial” threshold cannot be reduced to a formula, in disability cases the phrase has been construed to require "some credible evidence” (see, e.g., Matter of Longo v City of New York, 178 AD2d 253, 255, affd 79 NY2d 1011; Matter of Goldman v McGuire, 101 AD2d 768, 770, affd 64 NY2d 1041; Matter of Belnavis v Board of Trustees, 84 AD2d 244, 248; Matter of Manza v Malcolm, 44 AD2d 794; Matter of Drayson v Board of Trustees, 37 AD2d 378, 380, affd 32 NY2d 852). "Some credible evidence” strikes a proper balance between deference to the Medical Board and accountability to NYCERS members.

Here, the Medical Board’s determination was based on "some credible evidence” and was not arbitrary or capricious. The Appellate Division faulted the Medical Board for "solely” describing respondent’s condition in terms of her subjective complaints of pain, for basing its determination on "questionable clinical evidence garnered from its own examination” and for ignoring the "conclusive proof’ of disability provided by the results of the MRI scan — all of which the court deemed "irrational.” (218 AD2d 523.) Such a view of the record was erroneous.

Although the Medical Board did consider respondent’s subjective complaints of pain when determining disability, the record makes clear that it went beyond them. As the Medical Board found, the medical evidence submitted by respondent— including the MRI — was not dispositive on the issue of disability but was subject to conflicting interpretations. The Board alone had the authority to resolve such conflicts (see, Matter of Tobin v Steisel, supra, at 258-259; Matter of Cassidy v Ward, 169 AD2d 482, 483). In each of its two final reports submitted to the Board of Trustees, the Medical Board detailed what medical proof had been considered, specified the nature of respondent’s complaints and outlined the results of its physical examinations of respondent, concluding that respondent’s physical condition was not disabling for duty.

In the end, the Appellate Division here did what it should not do: "substitute [its] own judgment for that of the Medical Board” (Matter of Santoro v Board of Trustees, 217 AD2d 660, 660-661, citing Matter of Brady v City of New York, 22 NY2d 601; Matter of Appleby v Herkommer, 165 AD2d 727). Thus, the court erred in overturning the Medical Board’s finding regarding disability, and additionally erred in granting an accident disability pension, which is dependent on a finding of causation as well as disability.

Accordingly, the order of the Appellate Division should be reversed, with costs, and respondent’s article 78 petition dismissed.

Judges Simons, Titone, Bellacosa, Smith, Levine and Ciparick concur.

Order reversed, etc.