author: Cooke, J. Fuchsberg, J. (concurring in part and dissenting in part).

text:
    In the Matter of Arthur A. Grossman, Individually and on Behalf of Others, Appellant, and John M. Gerity, Intervenor-Appellant, v J. Lee Rankin, as Corporation Counsel of the City of New York, et al., Respondents.
    Argued November 10, 1977;
    decided December 21, 1977

      POINTS OF COUNSEL

      Julian A. Jackson for appellant and Arthur A. Grossman, appellant pro se.

    I. An Assistant Corporation Counsel is not entitled to exempt status except when qualified by an exception permitted by the State Constitution, Civil Service Law, and city charter. (Matter of Byrnes v Windels, 265 NY 403; Matter of Board of Educ. v Nyquist, 31 NY2d 468; Amico v Erie County Legislature, 36 AD2d 415, 30 NY2d 729.) II. The various courts below erred in limiting the issues to 16 positions. This appellate court should grant relief for all 101 challenged positions. (Matter of Cash v Bates, 301 NY 258; Matter of Andresen v Rice, 277 NY 271.) III. The courts below should have given judgment for petitioner-plaintiff on the papers. IV. None of the 101 Assistant Corporation Counsels who are the subject of this litigation are deputies within the permissible scope of section 41 (subd 1, par [b]). V. All of the 101 Assistant Corporation Counsels could be selected on the basis of competitive examinations. (Matter of Meenagh v Dewey, 286 NY 292; Chittenden v Wurster, 152 NY 345; People ex rel. Crane v Taylor, 17 Misc 505; Matter of Bass v Bragalini, 207 Misc 1055, 286 App Div 944, mot for lv to app den sub nom. Matter of Mclnerney v Bragalini, 309 NY 1032; Matter of Fink v Finegan, 270 NY 356; Matter of Cowen v Reavy, 283 NY 232.) VI. It was improper for the Trial Judge during the trial to induce the parties to stipulate that further testimony as to additional divisions would be the same as those already presented and then to ignore the stipulations. This effectively deprived petitioners-plaintiffs of their right of trial of the issues. VII. The burden of proof was on respondents-defendants who claimed an exception from the constitutional rule establishing the merit system as the norm. (Matter of Board of Educ. v Nyquist, 31 NY2d 468; Amico v Erie County Legislature, 36 AD2d 415, 30 NY2d 729; Matter of Martin v Burke, 25 Misc 2d 1042, 15 AD2d 730.) VIII. The case should not have been remanded by the court to the Civil Service Commission, but instead judgment should have been rendered for petitioner-plaintiff. IX. The Civil Service Commission so mishandled its statutory responsibility to study and evaluate that the 16 slots at issue were of necessity terminated with judgment for petitioner-plaintiff. (Matter of Rochester Gas & Elec. Corp. v Maltbie, 272 App Div 162; Matter of Purcell v Kaplan, 16 AD2d 281, 12 NY2d 252.) X. Petitioner-plaintiff is entitled to the declaratory judgment and injunctive relief specified in the petition-complaint as to all 101 exempt positions the court below should have reversed. (Slavin v McGuire, 205 NY 84.) XI. Petitioner-plaintiff is entitled to a judgment disposing of the entire proceeding, not one limited to 16. XII. The Trial Justice erred when he decided on the merits that the head of the Law Department’s consumer protection division was a proper exempt. XIII. The courts’ role in reviewing a determination of a Civil Service Commissin is neither limited nor qualified as found by the trial court and the court below. (People ex reí Schau v McWilliams, 185 NY 92; Matter of Mandle v Brown, 5 NY2d 51; Matter of Andre-sen v Rice, 277 NY 271; Matter of Simons v McGuire, 204 NY 253; Matter of Friedman v Finegan, 268 NY 93; Matter of Gluck v Rice, 265 NY 132; Matter of Rooney v Rice, 274 NY 347; Matter of Meenagh v Dewey, 286 NY 292; Matter of Powers v Taylor, 286 App Div 575, 3 NY2d 952.)

      John M. Gerity, intervenor-appellant pro se.

    I. In constitutional challenges (under NY State Const, art V, § 6) to civil service procedures, the courts have not limited their remedy because of claims of laches or Statute of Limitations where such limitation would deprive those seeking competitive appointments from such opportunities. (Matter of Andresen v Rice, 277 NY 271.) II. Procedural defects in both the New York Civil Service Commission’s conduct in classifying and continuing the 105 "Assistant Corporation Counsel” positions as exempt are sufficient in themselves to invalidate the determination that any of the 105 "Assistant Corporation Counsel” are exempt. (Matter of Rochester Gas & Elec. Corp. v Maltbie, 272 App Div 162; Matter of Purcell v Kaplan, 16 AD2d 281, 12 NY2d 252; Matter of Byrnes v Windels, 265 NY 403.) III. The positions in question do not meet the requirements of section 41 (subd 1, par [b]) of the Civil Service Law regarding deputies. (Matter of Byrnes v Windels, 265 NY 403; Matter of Carey v Morton, 297 NY 361; Matter of Gilfillan v Price, 127 App Div 846, 193 NY 655.) IV. The positions in issue do not meet the requirements of section 41 (subd 1, par [e]) of the Civil Service Law regarding impracticability to examine competitively. (Matter of Fink v Finegan, 270 NY 356; Matter of Camfield v Mealy, 288 NY 149.) V. Arguments based on the need for the effective administration of New York City’s legal affairs and percentage ratios between exempt and competitive appointments as practices in government law offices are both factually and legally incorrect. VI. The court below was in error in not finding that the burden of proof was on respondents-defendants who were seeking to assert an exception to the State Constitution and Civil Service Law; further, objections by respondents-defendants to a line of questioning aimed at impeaching the testimony of respondents-defendants’ witnesses were improperly sustained contrary to Matter of Mandle v Brown (5 NY2d 51 [1958]). (Matter of Mandle v Brown, 5 NY2d 51; Matter of Andresen v Rice, 277 NY 271; Matter of Martin v Burke, 25 Mise 2d 1042; 15 AD2d 730; Harris v White, 81 NY 532.)

      W. Bernard Richland, Corporation Counsel (L. Kevin Sheridan and Stanley Buchsbaum of counsel), for respondents.
    I. Special Term properly limited the determinations in issue in this proceeding to the 18 as to which it held there had been a demand and timely commencement of suit. As to such determinations, the record overwhelmingly supports the reasonableness of all the Civil Service Commission’s determinations. Assuming, arguendo, that the proceeding should not have been so limited, the commission’s determinations should at least be sustained as to the positions in issue at trial. In addition, the evidence is sufficient to uphold the exempt classification of all Assistant Corporation Counsel positions. (Matter of Cash v Bates, 301 NY 258; Matter of Andresen v Rice, 277 NY 271; Matter of Fornara v Schroeder, 261 NY 363; Matter of Sandford v Finegan, 276 NY 70; Matter of Rohr v Kenngott, 288 NY 97; Amico v Erie County Legislature, 36 AD2d 415, 30 NY2d 729; Matter of Jampol v Finegan, 167 Misc 823, affd sub nom. Matter of Jampol v Kern, 254 App Div 733, 280 NY 659; Matter of Kinsella v Kern, 168 Misc 847, 254 App Div 834, 278 NY 739; People ex rel. Schau v McWilliams, 185 NY 92.) II. The determinations here challenged were not rendered "void” by reason of alleged "procedural irregularities”. (Union Free School Dist. No. 6 of Towns of Islip & Smithtown v New York State Human Rights Appeal Bd., 35 NY2d 371; Matter of Love v Bronstein, 43 AD2d 426; Matter of Christian [Catherwood], 29 AD2d 804; Matter of 121-129 Broadway Realty v New York State Div. of Human Rights, 43 AD2d 754; Matter of Purcell v Kaplan, 12 NY2d 252.)
   OPINION OF THE COURT

Cooke, J.

This case presents a challenge by attorneys in the competítive class of civil service to the exempt classification of the Assistant Corporation Counsel positions in the Law Department of the City of New York. At the time of the institution of this litigation, 278 attorneys in the Corporation Counsel’s Office were in the competitive class and 105 were classified as exempt. We hold that the positions under review were properly classified under the State Constitution and the Civil Service Law.

To begin with framework, the civil service in this State is divided into unclassified and classified service. The unclassified service is comprised of such persons, to name a few, as those holding elective offices, all officers and employees of the State Legislature, certain offices filled by appointment of the Governor, and various other offices and positions (see, generally, Civil Service Law, § 35). The classified service, on the other hand, is comprised of all offices and positions not included in the unclassified service and is divided into four classes designated as exempt, noncompetitive, labor, and competitive (Civil Service Law, § 40; see, also, §§ 41-44). This controversy concerns the correctness of classification of various positions as exempt, as a result of which neither competitive nor noncompetitive examinations are required to fill these positions. A position is classified as exempt when it is found that an examination of prospective candidates is not practicable.

Petitioner-plaintiff is employed by the Law Department as a lawyer and is in the competitive class with the permanent civil service title of attorney. Various other competitive class attorneys in the Law Department were permitted to intervene. The litigation was commenced on June 4, 1970 by service of what is styled here as a petition-complaint which seeks, inter alia, an order directing the Corporation Counsel to cease and desist from employing approximately 100 exempt class attorneys, a declaratory judgment that the actions of respondents are in violation of the State Constitution and Civil Service Law, and a declaration that the exempt class attorneys are not legally entitled to their positions and that their employment should be terminated forthwith.

Prior to trial, an order was made limiting review to consideration of 16 out of the 100 or more positions challenged. In addition, on December 29, 1972, Trial Term remanded the proceeding to the Civil Service Commission to amplify the basis of its determination that the 16 exempt class attorneys were properly classified and to conduct an investigation concerning the propriety of all the exempt class positions in the Law Department, focusing on the questions of whether Assistant Corporation Counsels should be classified in the exempt class and, if so, how many should be so classified. On June 3, 1974, the matter proceeded to trial.

Of the 16 positions considered, Trial Term upheld the commission’s classification as to 13. The positions determined to be properly classified were seven engaged in various types of litigation, two having responsibility for trial of real estate actions and proceedings and some drafting of legislation, three involving assistance to the Mayor’s legislative representative and work incident to proposed legislation concerning policy matters which involve a high degree of confidentiality, and one position to handle trial work in Criminal Court and Family Court. Those found improperly classified were two positions involving the preparation of appellate briefs and oral argument in all appellate courts, and one engaging in proceedings to review the assessed valuation of property. Having determined that the latter three positions were improperly continued in the exempt class, trial court remitted the matter to the Civil Service Commission for appropriate classification. Upon appeal, the Appellate Division modified, as to those found by the trial court to be improperly classified, holding that there was a rational basis for the determination of the Civil Service Commission finding that all subject exempt class positions of Assistant Corporation Counsel were proper and necessary to the effective administration of New York City’s legal affairs. For reasons that follow, we agree that the classifications were within statutory and constitutional confines.

Our Constitution provides that "[appointments and promotions in the civil service of the state and all of the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, as far as practicable, by examination which, as far as practicable, shall be competitive” (NY Const, art V, § 6). Pursuant to an authorization in the Constitution, the Legislature has enacted section 41 of the Civil Service Law which provides (subd 1):

"The following offices and positions shall be in the exempt class:
* * *
"(b) the deputies of principal executive officers authorized by law to act generally for and in place of their principals;
* * * ‘
"(e) all other subordinate offices or positions for the filling of which competitive or non-competitive examination may be found to be not practicable.”

Before determining whether the constitutional and statutory requirements have been satisfied, it is necessary to consider procedural and statutory arguments urged by petitioner and one of the intervenors. One assertion is a two-fold challenge to the Civil Service Commission’s method of compliance with the Civil Service Law, and the other concerns the burden of proof.

With respect to the time for compliance, within four months of the occurrence of a vacancy in an exempt position, the Civil Service Commission is required to study and evaluate such position and determine whether it is properly classified as exempt (Civil Service Law, § 41, subd 2). In this regard, it is asserted that the court below erred in assuming that the argument was that after the four-month period the commission was ousted of jurisdiction. Instead, it is urged that the commission’s failure to accomplish this task within the time set forth in the statute requires it to comply with procedures for classifying a newly created position involving notice and public hearings. Even if one were to accept the rather strained suggestion that this is not an ouster of jurisdiction, this argument is devoid of merit. The courts have repeatedly held that unless the language used by the Legislature shows that the designation of time was intended as a limitation on the power of the body or officer, the provision is directory rather than mandatory (Matter of Rochester Gas & Elec. Corp. v Maltbie, 272 App Div 162; see Union Free School Dist. No. 6 of Towns of Islip & Smithtown v New York State Human Rights Appeal Bd., 35 NY2d 371, 380-381; see, generally, McKinney’s Cons Laws of NY, Book 1, Statutes, § 172; but see State Div. of Human Rights v Board of Educ., 53 AD2d 1043, affd 42 NY2d 862, where dismissal was based on repeatedly protracted and prejudicial delays by a particular administrative agency). While the commission should seek to comply in a timely fashion with the guidelines of the statute, it is recognized that delays may occur and that the time provision as drafted is merely directory.

With respect to the manner of compliance, after a vacancy occurs in a position in the exempt class, the Civil Service Commission is required to determine "whether such position, as then constituted, is properly classified in the exempt class” (Civil Service Law, § 41, subd 2). As to this requirement, based on a statement at trial by the chairman, it is asserted that the commission has improperly studied and evaluated the position being filled by the incoming employee rather than the position occupied by the prior incumbent. First of all, this asserted irregularity is contradicted by the Civil Service Commission report which states that it evaluates the duties and responsibilities of the particular position as then constituted. But, even assuming the provision was not mechanically followed, for purposes of the positions in question, there was sufficient compliance. The purpose of this evaluation is to prevent the creation of new positions under the guise of continuation of a former position. However, in this circumstance, a new position has not been created merely because different responsibilities are assigned. (Cf. Matter of Ryan v City of New York, 228 NY 16, 19; People ex rel. O’Connor v Girvin, 227 NY 392.) The position of Assistant Corporation Counsel must be filled by an attorney and the fact that varying needs and developing areas of the law may require changing responsibilities does not show that a different position has been created. It is hardly the same as replacing a nonprofessional with one performing different tasks. At least as to these positions, the statute should not be so narrowly construed as to prevent the flexibility needed in a law department of this magnitude.

The next contention is that the courts below erred in not finding that the burden of proof was on respondents to show that an examination was not practicable. This argument is also without merit. The general rule is that the burden is on the party asserting the affirmative of an issue (see Farmers’ Loan & Trust Co. v Siefke, 144 NY 354; 8 Carmody-Wait 2d, NY Prac, § 56:9). So here, in this proceeding in the nature of mandamus, petitioners have the burden of showing that respondent’s determination was arbitrary, capricious or affected by an error of law (see Matter of Rosner v Civil Serv. Comm., 38 AD2d 628; Matter of Mallen v Morton, 199 Misc 805, 812; see, also, Haberman v Codd, 48 AD2d 505, 508). Although an exemption from competitive exam is the exception to the general rule, the burden remains on the petitioners to show that the commission erred in its determination (cf. Murray v Narwood, 192 NY 172). The commissioner has found that the position should be classified as exempt, and it is petitioners who seek affirmatively to overcome this determination. To aid in satisfying this burden, a de novo review of the basis for the administrative action was undertaken, and any competent and relevant proof is admissible to show that the underlying material on which the commission based its determination has no basis in fact (Matter of Mandle v Brown, 5 NY2d 51, 65; see 8 Weinstein-Korn-Miller, NY Civ Prac, pars 7803.10, 7803.11). In the instant matter, Trial Term allowed an ample range of proof with respect to the validity of the commission’s action, and we find no merit to the contentions that , the proof was improperly limited.

The crucial issue in this case is whether the commission properly found that it was not practicable to fill the position of Assistant Corporation Counsel by competitive examination. In considering this issue, our scope of review is limited. Long ago, in People ex rel. Schau v McWilliams (185 NY 92, 99), this court drew the following guidelines: "If the position is clearly one properly subject to competitive examination, the commissioners may be compelled to so classify it. * * * But where the position is one, as to the proper mode of filling which there is fair and reasonable ground for difference of opinion among intelligent and conscientious officials, the action of the commission should stand, even though the courts may differ from the commission as to the wisdom of the classification.”

This standard of review was not casually formulated; rather it was the result of experience with broad scrutiny. Earlier, in People ex rel. Sims v Collier (175 NY 196), it had been held that the duty of classification by the commission was quasi-judicial in nature and therefore was reviewable, not by mandamus, but by certiorari as in other cases involving judicial functions. However, as explained in Matter of Simons v McGuire (204 NY 253, 257), experience under the Sims decision demonstrated that the court had in effect assumed the function of a civil service commission with every challenged classification coming to the court as a question of law. To overcome what was viewed as inappropriate judicial interference, the court retracted its earlier position, realizing that the determinations of the commission, "although involving the exercise of judgment and discretion, is more of a legislative or executive character than judicial or quasi judicial” (p 257). Hence, in Schau (supra), the court reasoned that its review should be limited to the type of questions that might be raised in proceedings in the nature of mandamus (see, also, People ex rel. Finnegan v McBride, 226 NY 252; Civil Service Commissions—Classification, Ann., 134 ALR 1103, 1116-1117). In short, unless the position is clearly one subject to competitive examination, mandamus will not lie for the sound reason that experience has shown that in these matters the court should not substitute its judgment for that of the commission.

In considering this question, the courts have for some time recognized that there are many positions for which competitive examinations are not practicable (see, e.g., Chittenden v Wurster, 152 NY 345 [1897]; People ex rel. Langdon v Dalton, 49 App Div 71, affd 163 NY 556). Furthermore, it has been accepted that some desired qualities cannot be measured (see Matter of Ottinger v State Civ. Serv. Comm., 240 NY 435, 442-443; Matter of De Luca v Gaffney, 282 App Div 607, 610-611 [Foster, J.]; cf. Barlow v Berry, 245 NY 500, 504). Of particular significance to this case, however, is the acknowledgment that classification of a position as exempt may be permissible even though other persons in the same title were classified in the competitive class. Thus, in Matter of Meenagh v Dewey (286 NY 292, 306), the court commented: "We may assume that the classification of twelve of the original sixty positions of process server in the exempt class, while forty-eight of the positions with that title were classified in the competitive class, was made because the Commission found that for the performance of some duties a few men were needed with special qualities for which an examination would furnish no practicable test. Ability to perform the routine duties of a process server would not prove fitness to perform those duties which, in the opinion of the Commission, could be performed only by men selected by the District Attorney because of their personal qualities.”

The underlying basis for petitioners’ argument that it is practicable to have a competitive examination for all Assistant Corporation Counsel positions is the claim that competitive class attorneys in the Law Department often do work comparable to that performed by those classified as exempt. In support of this assertion, at trial, petitioners sought to demonstrate that in many instances the work done by competitive and exempt class attorneys is identical, and that frequently those in the competitive class have been selected to fill slots requiring special skills and have been placed in positions of great responsibility including those involving supervision of exempt class attorneys. The obvious flaw in this approach, as noted by Trial Term, is that the testimony of various witnesses showed that the competitive class persons assigned to positions of responsibility were not chosen because they had passed an examination, but rather because they had shown the sort of personal qualities and capabilities considered necessary to fill the position. These attributes included such intangibles as dedication to responsibility, conscientiousness, ability to interact with people, judgment and resourcefulness. In addition, some were selected because they had demonstrated experience or competence in their particular field.

Essentially petitioners’ argument is founded on an invalid assumption. It does not necessarily follow that because some competitive class attorneys perform the same functions as those in the exempt class that all competitive class attorneys possess the qualities desired in the position of Assistant Corporation Counsel. Furthermore, the fact that examinations are given to those in the competitive class is no assurance that such tests are the best or even an effective method of selecting attorneys. In . short, the logic of petitioners’ position stands and falls on the assumption that the quality of the competitive class is solely the result of choosing its members by competitive examination.

Respondents urge, on the other hand, that it would not be unreasonable for the Civil Service Commission to classify as exempt all attorney positions in the Corporation Counsel’s Office. This possibility, of course, is not before us, but it is not entirely without relevance. In prior cases our review has been guided to a certain extent by reference to the manner of classification by government units having similar responsibilities (see, e.g., Matter of Andresen v Rice, 277 NY 271, 279-280), and in this instance we take note that, for example, attorneys employed by various District Attorneys and United States Attorneys are classified as exempt.

To reiterate, in the final analysis, the focus of the court must be on whether "the position is clearly one properly subject to competitive examination” and that where "there is fair and reasonable ground for difference * * * the action of the commission should stand, even though the courts may differ from the commission as'to the wisdom of the classification” (People ex rel. Schau v McWilliams, 185 NY 92, 99, supra). The question of classification is for the commission, and the court should not interfere with its judgment in situations where an argument can be made for either classification and the position is one for which there is a substantial variance of opinion (see Matter of Simons v McGuire, 204 NY 253, 258, supra; Matter of Neff v Falk, 10 AD2d 789; cf. Matter of Paroli v Bolton, 35 NY2d 772; Matter of Rooney v Rice, 274 NY 347). In light of the considerable testimony that examination for these positions is not practicable, it would be an unwarranted, and perhaps even irresponsible, intrusion on the decision-making process of the commission for this court to order reclassification here. As noted, the fact that some of those in the competitive class are utilized in positions also held by those in the exempt class does not mean that all members of the competitive class possess the qualities desired in the position of Assistant Corporation Counsel. Therefore, we conclude that petitioners’ argument does not have a firm foundation in logic or law, and does not justify interference with the administrative action.

Respondents also urge that the position of Assistant Corporation Counsel may properly be classified as exempt "deputy” positions pursuant to paragraph (b) of subdivision 1 of section 41 of the Civil Service Law. Petitioners, on the other hand, advising of certain changes in the city charter since the decision in Matter of Byrnes v Windels (265 NY 403), and distinguishing the facts and rationale for that holding, urge that the assistants may not be considered deputies. On this issue, we hold that, as to the positions under scrutiny, there has been no adequate showing that these assistants were authorized to act generally for or in place of the Corporation Counsel so as to allow classification as deputies.

In conclusion, although we find no basis for disturbing the determination of the commission as to the 16 positions considered by the courts below, we conclude that it was error to limit the review to those positions filled within four months of the commencement of the litigation (see CPLR 217). Since the petition charges a continuing failure of respondents to follow the command of section 6 of article V of the Constitution, the usual time limitations will not bar review of the other challenged positions (Matter of Cash v Bates, 301 NY 258, 261). The challenge to the° exempt classification is separate and apart from the problem of the relief to be given under the remedy of mandamus, and the extent of relief, if any, to be granted can be considered at a future time (see Matter of Andresen v Rice, 277 NY 271, 282, supra).

Accordingly, the order of the Appellate Division should be modified, without costs, to the extent of remitting the matter to Trial Term to consider whether the other positions of Assistant Corporation Counsel were properly classified, and, except as so modified, affirmed.

Fuchsberg, J. (concurring in part and dissenting in part).

I would reverse the order of the Appellate Division and reinstate the judgment at Trial Term as to the 16 positions with which it treated. As to the remaining 86 positions, I would concur in their remittal to Trial Term for consideration of whether they were properly classified.

In dealing with matters involving entry into public employment we must always begin by reminding ourselves that this is not an area where administrators, Judges, or even legislators, have wide latitude in determining policy. It is not they, but the People speaking through the Constitution, who have decreed that "[appointments and promotions in the civil service of the state and of all the civil divisions thereof, including cities and villages, shall be made according to merit and fitness to be ascertained, as far as practicable, by examination which, as far as practicable, shall be competitive” (NY Const, art V, § 6). From this constitutional imperative there must be no flinching for "[i]f the beneficent merit system with competitive examinations is [undermined] * * * not alone might incompetence be thus permitted, but favoritism or discrimination might thus be enabled to raise its ugly head” (Matter of Board of Educ. v Nyquist, 31 NY2d 468, 473, quoting from Bacon v Board of Educ., 205 Misc 73, 79).

Mindful of this danger and in furtherance of the constitutional mandate, the Legislature has enacted section 41 of the Civil Service Law which enumerates the limited categories of civil servants exempted from competitive examination. It is clear that neither the Constitution nor the Civil Service Law makes any exception for trained professionals generally or for lawyers alone. Indeed, it has been the long-standing practice of a great many governmental employers to require examination before hiring attorneys. Among these is respondent Corporation Counsel, whose department at the time of the institution of this litigation employed 278 lawyers so chosen. Many of these perform functions almost indistinguishable from those in the exempt class.

That certain lawyering qualities may not readily be measured by competitive examination is an insufficient premise for finding "impracticability” in the strict constitutional sense relevant here (see Matter of Fink v Finegan, 270 NY 356, 362-363). Nor is the fact that the position will require the exercise of judgment and discretion, or the assumption of individual responsibility of the kind which characterizes most legal employment, in itself a reason for exemption. Numerous nonlegal governmental positions call upon similar qualities. So it is no disparagement of the often unique attributes of members of the Bar to recognize that a significant share of their skills are measurable by examination. Indeed, at the entry stages of their careers—particularly before, during, and at the end of their educations—they are subjected to an examination process at least as rigorous as that of any other vocation.

As I read subdivision 2 of section 41 of the Civil Service Law each time an exempt position falls vacant, its classification is to be restudied in order to determine whether a recognizable reason for continued exemption exists. Such reasons may be that the appointee will have a truly confidential relationship with the head of an agency (i.e., be his or her deputy), that he or she is empowered to exercise authority at a high level, that the position involves truly unusual skills not measurable by ordinary testing, or—in some rare cases—that it bespeaks mastery of an expertise so much in demand that the ordinary advertisement of a civil service opening is unlikely to attract applicants.

In this case, it does not appear that the New York City Civil Service Commission consciously applied these criteria in finding that an appointment in the Law Department should be exempt. To the contrary, evidence introduced at the trial indicates that, at least in regard to the 16 positions actively litigated, the commission’s decisions were relatively perfunctory. For each of them the determination, almost as a matter-of rote, was framed in the following identical, nonevaluative, conclusory language: "In accordance with the case of Byrnes v Windels [265 NY 403], persons employed as Assistant Corporation Counsels are Deputies of the Corporation Counsel. By virtue of the Civil Service Law, such deputies should be in the Exempt Class. * * * The language of [chapter 16 of the New York City] Charter contemplates that the Corporation Counsel shall appoint exempt assistants to assist him in carrying out administrative policies. As legal advisor to the Mayor and other city officials on many questions of administrative policy, the Corporation Counsel should not be restricted in his choice of assistants to eligibles on a civil service list.”

The substance of this manner of determination was found to be "sparse and somewhat opaque” at an earlier attempt to try this case. The trial court therefore remanded the matter to the Civil Service Commission so that the reasons for the classifications could be more adequately explained. The commission responded by issuing a statement which sought to detail the unusual characteristics of each position. The statement also attempted to outline the features the positions possessed in common. At the ultimate trial, the Judge reviewed this statement and found that the generalized reasons given were legally insufficient; additionally, upon studying the individualized reasons in the light of the evidence, he concluded that three of the positions were arbitrarily and capriciously exempted. It seems to me that the record amply justifies the trial court’s decision. Although a report issued by the commission is indeed to be accorded the deference described by the majority, three deficiencies are particularly striking.

First, I note the commission’s continued insistence on the concept that all these positions are covered by the statutory exemption prescribed for "the deputies of principal executive officers authorized by law to act generally for and in place of their principals” (Civil Service Law, § 41, subd 1, par [b]). Relying on Matter of Byrnes v Windels (supra), it asserted that all Assistant Corporation Counsels fit this description. That case, decided in the depths of the Depression, as the majority agrees, was correctly found inapposite below. It dealt with the question of whether an Assistant Corporation Counsel could be protected by special laws safeguarding publicly employed veterans against dismissal without a hearing. In that context, these were held to be among the "deputies” who could be terminated summarily. Byrnes did not attempt to interpret the sections of the Civil Service Law dealing with exemption from examination. It did not deal with a clause having the requirement of full delegation of powers that appears in section 41 (subd 1, par [b]). Furthermore, it specifically indicated (at p 407) that merely designating an employee as a deputy was insufficient for him to be so considered in terms of the Civil Service Law. In view of the finding of fact by Trial Term that none of the positions in question had such broad delegation of powers—a finding in accord with the opinions expressed by the Judges who earlier had heard aspects of this case—it is clear that the commission’s reliance on section 41 (subd 1, par [b]) was erroneous as a matter of law.

Even more lamentable is the second deficiency in the commission’s expressed reasons for its determination: that the Corporation Counsel, in order "to implement and reflect, within the limits of the law, the social, economic, and political philosophy of the incumbent Administration” is entitled to select attorneys who have an "identity of approach and a sympathy of purpose” with him. It is difficult to see in this anything other than an invitation to reinstitute the patronage system which a competitive civil service was intended to supplant. It is axiomatic that "political philosophy” cannot be a valid basis, under our State Constitution, for choosing public officers at this level. While Trial Term found no evidence that political factors tainted the 16 employment decisions actively in contention here, it must still be reiterated that this can never be the proper grounds for a Civil Service Commission exemption.

The third deficiency involves the more specific qualities which, according to the commission, made it "impracticable” to examine for these positions. In reviewing an administrative determination courts may not, of course, replace an agency’s evaluation of the problems within its scope of authority with their own. However, it seems to me that, as discussed at length in the opinion of Mr. Justice Harry B. Frank at Trial Term, the evidence could compel no other decision but that the three positions the judgment ordered open to competition had not been properly exempted, even when measured against the commission’s professed goals of looking for previous expertise or unusual, nonmeasurable skills.

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

Order modified, without costs, and the matter remitted to Supreme Court, New York County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed.


source: Caselaw Access Project

author: Fuchsberg, J.

license: Public Domain

text:
    In the Matter of the City of New York, Appellant, Relative to Acquiring Title to Real Property for a Project Known as Harlem-East Neighborhood Development Area, Bounded by East 106th Street and Other Streets in the Borough of Manhattan. Salvation Army, Inc., Respondent.
    Argued January 5, 1978;
    decided February 9, 1978

      POINTS OF COUNSEL

      W. Bernard Richland, Corporation Counsel (Morris Einhorn and L. Kevin Sheridan of counsel), for appellant.
    While overheads should be considered in valuing a building on the basis of reproduction costs, a condemnee is "not entitled as a matter of law to recover these expenses” (Banner Milling Co. v State of New York, 240 NY 533, 545). Special Term allowed 28% of reproduction cost for overheads herein. Since claimant received its award while still in possession and prior to purchase or construction of an equivalent facility, Special Term properly declined to award financing costs. The court below erred in holding that an award therefor was mandatory. (Banner Milling Co. v State of New York, 240 NY 533; Matter of City of New York [Lincoln Sq. Slum Clearance Project—American Ice Co.], 24 Misc 2d 190, 15 AD2d 153, 12 NY2d 1086; United States v Benning Housing Corp., 276 F2d 248; United States v Toronto Nav. Co., 338 US 396; Matter of City of New York [Lincoln Sq. Slum Clearance Project—Schnurmacher Corp.], 15 AD2d 153, 16 NY2d 497; Dormitory Auth. of State of N. Y. v 59th St. & 10th Ave. Realty Corp., 51 AD2d 953, 42 NY2d 974; Matter of Huie [Campbell], 281 App Div 275; Matter of Board of Water Supply of City of N. Y. [Coykendall Quarry, Parcel 801 ], 209 App Div 231; Dennison v State of New York, 48 Misc 2d 778, 28 AD2d 28, 22 NY2d 409; Matter of City of New York [West 205th St.], 240 NY 68.)

      Michael J. Greco and Robert S. Gottlieb for respondent.
    The decision of the court below in the modification of a condemnation award, to allow for financing charges, was consistent with case law and the authorities and corrected the error by the trial court in not compensating for these charges solely on the grounds of posttitle vesting events. Further, appellant’s substantial reliance on Banner Milling Co. v State of New York (240 NY 533) is misplaced. (Richards "Of Course” v State of New York, 36 AD2d 572; D’Amico v State of New York, 37 AD2d 681; Lapides v State of New York, 37 AD2d 755; Wolfe v State of New York, 22 NY2d 292; Kahlen v State of New York, 223 NY 383; Keator v State of New York, 23 NY2d 337; Matter of City of New York [First Elephant Estates—La Hermosa Church], 17 AD2d 317; St. Patrick’s Church v State of New York, 30 AD2d 473; Matter of Westchester County, 204 Misc 1031; Chester Litho v Palisades Interstate Park Comm., 27 NY2d 323.)
   OPINION OF THE COURT

Fuchsberg, J.

In this eminent domain proceeding, the sole question before us is whether financing costs that would have had to be expended in the course of reproducing a building situated on a taken parcel are to be included in an award properly calculated in accordance with the summation method (reproduction cost less functional and physical depreciation). We hold that they are.

The property, in the Borough of Manhattan, consists of a land area on which is located a five-story brick structure. It was originally erected, later renovated and, at all times until its condemnation, owned and occupied by respondent the Salvation Army. During trial, it and the City of New York, here the appellant, were in agreement that the building, into whose structure had been incorporated a gymnasium, a chapel, offices, in-house staff living quarters and other facilities uniquely designed to serve as the focal point for the respondent’s community activities, was one appropriately to be regarded as a specialty not readily convertible to other uses or capable of valuation by comparison with available market prices. Therefore, though the parties contended for widely divergent amounts as the correct valuation, the figures presented on behalf of each were computed, insofar as the building was concerned, solely in conformity with accepted cost of reproduction less depreciation standards. (See Keator v State of New York, 23 NY2d 337; cf. Matter of Great Atlantic & Pacific Tea Co. v Kiernan, 42 NY2d 236, 240-241.)

Resolving the differences in amount, the trial court awarded a total of $607,000, allocating $41,425 for the land, $7,000 for fixtures and $558,575 for the building. The court excluded reproduction financing costs when it arrived at the last figure. In doing so, it pointed out that the Salvation Army had not "chosen to proceed to rebuild prior to receipt of the final award”, that it was still occupying the premises [under a rental agreement with the city] and that it had been paid interest on the award by the city to cover the interval between the taking and payment.

Modifying the Trial Judge’s decree, the Appellate Division ruled that an allowance should have been made for financing costs, which it fixed at $27,146. The city, whose own appraiser, after taking into account the contemporary condition of the money market, had estimated the financing item, if allowable, at $27,000, does not now challenge the quantum of either Special Term’s award for the building sans financing costs or of the allowance added by the Appellate Division to include them. It presses essentially one issue: the allowability of financing costs. For the reasons we now articulate, we agree with the Appellate Division’s disposition.

Implementation of the summation method requires the inclusion not only of payments for material, equipment, labor and other obvious physical ingredients which go directly into construction, but also of those charges which may be termed indirect or less direct, such as architects’ fees, contractors’ profits, interest and taxes on land value during the period of construction, cost of procuring necessary licenses and the miscellany of other essential overhead or incidental expenses. For a fair and realistic appraisal of reproduction costs must embrace in its reckoning all expenditures that reasonably and necessarily are to be expected in the re-creation of a structure so idiosyncratic as to leave no alternative method by which to measure fair compensation (Richards "Of Course” v State of New York, 36 AD2d 572, 573; 5 Nichols, Eminent Domain, par 20.2, subd [3]; 2 Orgel, Valuation Under Eminent Domain [2d ed], §§ 193, 194).

Financing costs are such an expenditure (see Kahn and Case, Real Estate Appraisal and Investment [2d ed], pp 185-187). Commonly, an owner will make payments to a contractor from the proceeds of a loan it will have secured for financing the work; clearly the lender’s charges will be just as real an expense to the borrower as the dollars it pays to its contractor. Such costs will be no less real when an owner employs its own capital; it thereby foregoes its earning power by turning it into an equity investment which rarely will produce income during construction. In principle, the situation may be likened to that of an owner-carpenter or owner-bricklayer who contributes his services in kind. Thus, whether an owner uses its own or borrowed funds, the calculation of true cost would, either way, require inclusion of the costs of financing.

Banner Milling Co. v State of New York (240 NY 533, cert den 269 US 582), relied upon by the city, does not point to the opposite result. That decision, whose primary focus was on an issue foreign to the case before us (i.e., whether "good will” was a compensable item; see 240 NY, at pp 539-542; Orgel, op. cit., § 194, esp p 40, n 65), did not hold that financing charges were not an element of reproduction cost. To the contrary, the Banner court noted that all of the overhead expenses, including financing charges, had been considered in arriving at the total award the claimant there had received (240 NY, at pp 545-546). By no means did it suggest that it would have been proper to exclude them and it is not to be so understood (see Lapides v State of New York, 37 AD2d 755, 756; cf. Rustcon Developers v State of New York, 33 AD2d 582, 583).

We observe too that the expressions of our own lower courts, of tribunals in other jurisdictions and of respected textwriters are overwhelmingly in consonance with the inclusionary view of financing charges which we reiterate today (D’Amico v State of New York, 37 AD2d 681; Lapides v State of New York, supra, p 756; Matter of City of New York [Pelham Parkway Houses], 197 Misc 70; State v Willet Holding Co., 62 NJ 59; Kahn and Case, op. cit., pp 185-187; Encyclopedia of Real Estate Appraising [Friedman ed., 1968], p 85; cf. Matter of United States Comm., 295 F 950, app dsmd 265 US 598).

The fact that the claimant in the present case had received an award before it rebuilt was no reason to depart from that rule. It was the nature of the building compulsorily taken under constitutional power of eminent domain that called for fixing the award according to the summation method. There is no companion compulsion that one whose property is taken must in fact rebuild or, if it does, that it duplicate the taken structure or, for that matter, that it do so within any particular time frame. The choice to do any or none of these is entirely within the province of the condemnee. A sum of money equal to the amount of the award, not a substitute structure which it subsequently may or may not decide to build, is what it is entitled to receive for its property. The absurdity of an opposite rationale becomes apparent when it is followed to a logical conclusion. For then a claimant who did not rebuild would also not be entitled to architects’ fees, builders’ profits or other nonphysical components that entered into the creation of the particular building that was valued. In short, a claimant is to receive what it would cost to reconstruct and not what it in fact does or does not expend in doing so.

Nor does the city’s liability for interest to the date of actual payment of the award affect the claimant’s right to reproduction financing charges. Conceptually, a condemnee is entitled to just compensation as of the instant its property is taken by the vesting of title in the condemnor. It is as of that time that the value is to be fixed and that rule applies whether reproduction costs are or are not a factor in the valuation of a particular property. Save in special circumstances not present here, during any delay in payment, the condemnor, as the new owner, has the right to possession of the property and the condemnee does not. Interest for the period of delay is for the condemnor’s withholding of the condemnee’s award, which belonged to it beneficially from the very time of the taking. (Wolfe v State of New York, 22 NY2d 292, 295; Kahlen v State of New York, 223 NY 383, 390.)

In sum, interest on the award is not duplicative of reproduction financing charges. The latter are ingredients of the value of the condemned structure as of the time it was taken. The interest reflects the value of use of the award thereafter (see Becker v Huss Co., 43 NY2d 527, 543).

Finally, the fact that, by separate arrangement, the Salvation Army continued to occupy the condemned premises while its new quarters were being readied has no bearing on its entitlement to financing costs. It is not suggested that its occupancy was in a capacity other than that of tenant. As such, it was in no different position than if it had rented temporary quarters in another building owned by the city, or by another landlord. Whatever was the city’s motivation for the leasing, be it the nominal rental thus produced until the property would be put to the public use for which it was taken, or an occupancy that would secure the property against vandalism or deterioration, or even, perchance, the avoidance of unnecessary interruption in the Salvation Army’s valued community work, the matter is completely collateral to the issue at hand.

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

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

Order affirmed, with costs.


author: Gabrielli, J.

text:
    In the Matter of Tillie Venes, Appellant, v Community School Board of District 26 et al., Respondents.
    Argued January 5, 1978;
    decided February 14, 1978

      POINTS OF COUNSEL

      A. Michael Weber, Thomas C. Greble and James R. Sandner for appellant.
    I. The doctrine of administrative res judicata mandates that the unauthorized second determination of respondent Community School Board be invalidated and the first determination reinstituted. (Matter of Evans v Monaghan, 306 NY 312; People ex rel. Finnegan v McBride, 226 NY 252; Ess Pee Bee Realty Corp. v Gabel, 22 AD2d 207, 16 NY2d 524; Matter of Cupo v McGoldrick, 278 App Div 108.) II. The purported "hearing” petitioner received was fatally defective because the procedures utilized thereat violated section 105-a of the by-laws and deprived petitioner of due process of law. (Matter of Longarzo v Anker, 49 AD2d 879; Matter of Brown v Board of Educ., 42 AD2d 702; Matter of McAulay v Board of Educ., 46 AD2d 84; Board of Regents v Roth, 408 US 564; National Ins. Co. v Tidewater Co., 337 US 582; Morrissey v Brewer, 408 US 471; Meyer v Nebraska, 262 US 390; Truax v Raich, 239 US 33; Velger v Cawley, 525 F2d 334.) III. In any event, the unduly harsh and unwarranted penalty of dismissal should be vacated. (Matter of Pell v Board of Educ., 34 NY2d 222; Matter of O’Connor v Frank, 47 AD2d 924.)

      W. Bernard Richland, Corporation Counsel (L. Kevin Sheridan of counsel), for respondents.
    I. The court below properly reviewed Special Term’s order on respondents’ motion to reargue and renew. II. The respondent Community School Board was not barred from reconsidering the resolution to discontinue petitioner’s services. (Matter of Evans v Monaghan, 306 NY 312.) III. Petitioner was deprived of no right guaranteed her by the due process clause or by section 105-a of the by-laws of the New York City Board of Education. In addition, her nonpleaded claims of bias and stigma are not properly before this court. (Matter of Anonymous v Codd, 40 NY2d 860; Bishop v Wood, 426 US 341; Paul v Davis, 424 US 693.) IV. Petitioner’s dismissal should not be set aside as an unduly harsh penalty.
   OPINION OF THE COURT

Gabrielli, J.

In this case we are called upon to determine whether the doctrine of res judicata prevents a school board from reconsidering its prior determination not to dismiss a probationary employee. We hold that it does not.

The essential facts are undisputed. Petitioner was employed on a probationary basis as a licensed school secretary. She was assigned to two schools within respondent school district, working two days a week in one and three days a week in the other. In March, 1973, after working in the two schools for several months, petitioner received unsatisfactory ratings from the principals of the two schools. Both recommended that she be dismissed. Following a meeting with petitioner, the superintendent of the school district adopted the principals’ recommendation that petitioner be dismissed. Petitioner was then provided with a hearing pursuant to section 105-a of the by-laws of the board of education. On October 30, 1973, the hearing panel recommended petitioner’s discontinuance.

The district superintendent then forwarded to the school board the recommendation that petitioner be dismissed. A resolution to that effect was introduced at a school board meeting on January 17, 1974, but did not obtain the majority vote required by section 2573 of the Education Law for dismissal of a probationary employee. The resolution was reintroduced at the February 21, 1974 meeting of the board, and at that time it was adopted by a majority of the board. Petitioner subsequently commenced this article 78 proceeding seeking reinstatement. Special Term granted her petition, finding that the January 17 decision of the board was res judicata and barred subsequent reconsideration of the resolution to terminate petitioner. The Appellate Division reversed, holding that the doctrine of res judicata was not applicable, and today we affirm the order of the Appellate Division.

Res judicata is a doctrine associated with dispute-resolution rather than administrative determinations in general. Its application to administrative proceedings is remarkably elusive, for it has in large part been developed not in decisions applying res judicata to administrative adjudications, but rather by courts which, for one reason or another, found the doctrine inapplicable to the cases before them (see, e.g., Matter of Evans v Monaghan, 306 NY 312, 323-324; Matter of Sullivan v Board of Educ., 264 App Div 207, affd without opn 289 NY 672; Matter of Siegel v Mangan, 258 App Div 448, affd without opn 283 NY 557; see, also,- Matter of Irish Int. Airlines [Levine], 48 AD2d 202, affd 41 NY2d 819; but see People ex rel. Finnegan v McBride, 226 NY 252, 258-259; Matter of Cupo v McGoldrick, 278 App Div 108). The rationale underlying the New York cases was perhaps best expressed by Judge Van Voorhis in Matter of Evans v Monaghan (306 NY, at pp 323-324, supra): "Security of person and property requires that determinations in the field of administrative law should be given as much finality as is reasonably possible. The cases cited indicate that the rule of res judicata is applicable to such determinations as well as to the courts wherever consistent with the purposes of the tribunal, board or officer. (Cf. Res Judicata in Administrative Law, 49 Yale L. J. 1250.) Such departures from the rule as there may be in administrative law appear to spring from the peculiar necessities of the particular case or the nature of the precise power being exercised, rather than from any general distinction between courts and administrative tribunals.” A similar view has been expressed by Kenneth Culp Davis, an authority in the field of administrative law: "The common-law doctrine of res judicata, including the subsidiary doctrine of collateral estoppel, is designed to prevent the relitigation by the same parties of the same claims or issues. The reasons behind the doctrine as developed in the court system are fully applicable to some administrative proceedings, partially applicable to some, and not at all applicable to others. As a matter of principle, therefore, the doctrine should be applied to some administrative proceedings, modified for some, and rejected for others.” (Davis, Administrative Law Text [3d ed], § 18.10, p 371.)

Before applying the doctrine of res judicata to an administrative determination, it is necessary to determine whether to do so would be consistent with the function of the administrative agency involved, "the peculiar necessities of the particular case”, and "the nature of the precise power being exercised” (Matter of Evans v Monaghan, 306 NY, at p 324, supra). There is language in some of the older cases which might be interpreted as indicating that res judicata normally will apply to administrative decisions (see id.). We need not decide whether such a generalization would be valid today, in light of the vast proliferation in both number and type of administrative agency hearings in recent years. Rather, we hold that in each case, the doctrine of res judicata is to be applied to an agency determination only if such application is consistent with the nature of the particular administrative adjudication.

Turning to the case now before us, it is evident that to apply res judicata so as to bar a school board from reconsidering its prior decision not to terminate a probationary employee would be consistent with neither the nature of the power exercised by the school board in making such determinations, the purpose of the probationary system, nor the realities of the situation. It must be emphasized that a school board in making such a decision does not act in a quasi-judicial capacity; indeed, in the present case, the board was not even engaged in fact finding. There was no hearing before the board, nor was there any adversary proceeding. In fact, there was no adjudication. The board simply exercised its broad executive powers to dismiss a probationary employee (see Education Law, § 2573).

As Professor Davis has noted (Administrative Law Text, § 18.08, at p 368): "In name and tradition 'res judicata’ means thing adjudicated. Only what is adjudicated can be res judicata. Administrative action other than adjudication cannot be res judicata. Even if an exercise of the rulemaking power depends on a finding of facts, neither the rule nor the finding is regarded as res judicata. Executive acts have never been regarded as res judicata.” Similarly, if the power exercised by a school district with respect to dismissing probationary employees is executive in nature, the result is not to be changed simply because the board of education has provided a preliminary fact-finding hearing process to prevent purely arbitrary dismissals.

Section 2573 of the Education Law grants a school board the authority to dismiss a probationary employee at any time. Such an employee has no property rights in his position, and may be dismissed for almost any reason, or for no reason at all (James v Board of Educ., 37 NY2d 891, 892; Matter of Bergstein v Board of Educ., 34 NY2d 318). Since a dismissal need not be for cause, it would be illogical to hold that a decision not to terminate could bar a subsequent reconsideration of that first decision. The factors involved in such decisions are many and varied, and include not only the behavior and performance of the probationary employee, but also the changing needs and requirements of the school district as perceived by the school board. In making such determinations, a school board should not be limited by a doctrine developed within an adversarial system of justice and designed to prevent relitigation of disputes.

The petitioner also raises several other objections to her dismissal, all of which are entirely without merit. Primarily, petitioner contends that certain alleged defects in the hearing voluntarily provided her by the board of education constituted a denial of due process. We disagree. It is clear from the record that petitioner had notice of her unsatisfactory ratings, abundant time in which to prepare a defense, and an extremely fair hearing. She has had all she is entitled to, and more.

Finally, we would note that in reaching our decision, we found it unnecessary to consider the minutes of the school board meetings. Therefore, we do not rule on respondents’ belated attempt to include the minutes in the record on appeal.

Accordingly, the order appealed from should be affirmed, with costs.

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

Order affirmed, with costs.

       As a probationary employee, petitioner has no constitutional right to a hearing unless the grounds for her dismissal are such that she will be stigmatized thereby (Board of Regents v Roth, 408 US 564; Tuller v Central School Dist., 40 NY2d 487, 496; see, also, Codd v Velger, 429 US 624). Under the facts of this case, petitioner had no constitutional right to a hearing. Of course, once the board of education provided a hearing procedure for probationary employees, it was bound to comply with its own by-laws. In the present case, there has been no violation of those by-laws.


author: Chief Judge Breitel.

text:
    Charles E. Becker, Jr., Respondent, v Huss Co., Inc., Defendant and Third-Party Plaintiff. Spaulding Lumber Company, Third-Party Defendant; Fedders Corporation, Third-Party Defendant-Appellant. Joseph Gonzalez, Respondent, v Douglas P. Mans et al., Defendants, and State Insurance Fund, Appellant. Benjamin Andrews, Respondent, v Kenneth E. Williams, Defendant, and State Insurance Fund, Appellant. Jack D. France, Respondent-Appellant, v Abstract Title Division of Title Guarantee Co., et al., Defendants and Third-Party Plaintiffs. Niagara Window Cleaning Corp., Third-Party Defendant-Appellant-Respondent, and State Insurance Fund, Appellant-Respondent. George A. Cole, Respondent, et al., Plaintiff, v Roly-Door Sales Co. of Rochester, Inc., Defendant and Third-Party Plaintiff, et al., Third-Party Defendants, and State Insurance Fund, Appellant.
    Argued January 3, 1978;
    decided February 9, 1978

      POINTS OF COUNSEL

      Evan E. James, Peter M. Pryor and Frank S. Kedzielawa for third-party defendant-appellant in the first above-entitled ac-
    tion.
    I. The amendment to section 29 (subd 1) of the Workmen’s Compensation Law created a new right and only has prospective application. (Matter of Deutsch v Catherwood, 31 NY2d 487; Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 39 NY2d 1026; Cox v First Nat. Realty & Constr. Corp., 50 AD2d 535; Shielcrawt v Moffett, 294 NY 180, 840; Lewittes & Sons v Perlow, 254 App Div 94.) II. Application of the amendment to compensable accidents occurring prior to June 10, 1975 impairs vested rights, creates undue hardship and threatens contractual obligations. (Cox v First Nat. Realty & Constr. Corp., 50 AD2d 535; Rieseberg v State of New York, 40 Misc 2d 676; Goldstein v State of New York, 175 Misc 114; Baker v Sterling, 39 NY2d 397; Greene v Verven, 203 F Supp 607; Butchers’ Mut. Cas. Co. of N. Y. v Emerald Cab Corp., 174 Misc 1; Matter of Spielbeuhler v Spielbeuhler Constr. Corp., 28 AD2d 1047; Matter of Duffy v Fuller Co., 21 AD2d 725; Phillips v Agway, Inc., 88 Misc 2d 1087.) III. It was error for the court below to substitute its administrative rules for an equitable apportionment. IV. There should be no apportionment of fees when the employer is impleaded by the alleged tort-feasor and the carrier, in defense of its insured, cross-claims to recover its lien. (Valentino v Rickners Rhederei, G.m.b.H., SS ETHA, 552 F2d 466; Wargo v Longo, 85 Misc 2d 898.)

      David C. Quinn for respondent in the first above-entitled action.
    It is respondent’s position that the Supreme Court Justice erred in denying the fees based on his contention that the statute had no retroactive effect. (Cardillo v Long Is. Coll.

      Hosp., 86 Misc 2d 438; Cohen v Grant, 87 Misc 2d 780; Greenough v Deblinger, 84 Misc 2d 463.)

      Raymond C. Green, Peter M. Pryor, Leonard M. Schnitzer and Mark Slotkin for appellant in the second above-entitled action.
    The June 10, 1975 effective amendment to section 29 (subd 1) of the Workmen’s Compensation Law is not retroactively applicable to this case which stems from a pre-June 10, 1975 accident. (Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 39 NY2d 1026; Moore v Metropolitan Life Ins. Co., 33 NY2d 304; Matter of Parkchester Apts. Co. v Lefkowitz, 41 NY2d 987; Matter of Miller, 110 NY 216; Matter of Matthews, 255 App Div 80, 279 NY 732; Shielcrawt v Moffett, 294 NY 180; Abelson v Abelson, 59 Misc 2d 172; Greenough v Deblinger, 84 Misc 2d 463; Wargo v Longo, 85 Misc 2d 898; Arman v Marx, 85 Misc 2d 406.)

      Harold T. Arbiter for respondent in the second above-entitled action.
    I. The amendment to subdivision 1 of section 29 of the Workmen’s Compensation Law, effective June 10, 1975, set forth in chapter 190 of the Laws of 1975, being remedial in nature, is retroactive to an accident occurring prior to its effective date, where the recovery was effected subsequent to the effective date of the amendment. (Short v Thygiesen, 82 Misc 2d 786; Arman v Marx, 85 Misc 2d 406; Matter of Koutrakos v Long Is. Coll. Hosp., 78 Misc 2d 39; Kussack v Ring Constr. Corp., 1 AD2d 634, 4 NY2d 1011; Rice v Bankers Trust Co., 83 Misc 2d 797; Matter of People v Parker, 38 NY2d 743; Greenough v Deblinger, 84 Misc 2d 463.) II. Plaintiff’s attorney’s fees and his expenditures were equitably apportioned by the court since the statute authorizes the court to apportion the reasonable and necessary expenses, including attorney’s fees, incurred in effecting the recovery.

      Raymond C. Green, Peter M. Pryor, Leonard M. Schnitzer and Mark Slotkin for appellant in the third above-entitled action.
    I. The June 10, 1975 effective amendment to section 29 (subd 1) of the Workmen’s Compensation Law is not retroactively applicable to this case which stems from a pre-June 10, 1975 accident. (Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 39 NY2d 1026; Moore v Metropolitan Life Ins. Co., 33 NY2d 304; Matter of Parkchester Apts. Co. v Lefkowitz, 41 NY2d 987; Matter of Miller, 110 NY 216; Matter of Matthews, 255 App Div 80, 279 NY 732; Shielcrawt v Moffett, 294 NY 180; Abelson v Abelson, 59 Misc 2d 172; Greenough v Deblinger, 84 Misc 2d 463; Rice v Bankers Trust Co., 83 Misc 2d 797; Wargo v Longo, 85 Misc 2d 898; Cohen v Grant, 87 Misc 2d 780.) II. Where the Laws of 1975 (eh 190) amendment of section 29 (subd 1) of the Workmen’s Compensation Law is applicable, a lienor’s contribution towards third-party recovery expenditures is to be determined strictly on a quantum meruit basis vis-á-vis the lienor and not by the automatic pro rata application of a retainer agreement contingent fee percentage to the lien, nor by the utilization of said retainer agreement percentage as either presumptive or prima facie proof of the amount or percentage which the lienor must contribute. III. Where the Laws of 1975 (ch 190) amendment to section 29 (subd 1) of the Workmen’s Compensation Law is applicable, it mandates that plaintiffs and lienors separately pay attorneys’ fees and other prosecution expenses out of their separate shares of third-party recoveries, rather than requiring that plaintiffs pay fees and expenses on the gross recoveries, with the lienors then making reimbursements to plaintiffs for the lienor’s equitable shares of such recoveries.

      Sally Weinraub and Bert W. Subin for respondent in the third above-entitled action.
    I. The 1975 apportionment amendment to section 29 (subd 1) of the Workmen’s Compensation Law is to be applied retroactively to all pending actions in which recovery had not been had by judgment, settlement or otherwise. (Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500.) II. Established law holds that no lien attaches until the time of judgment or settlement; therefore no question of the retroactive effect of the amendment arises. (Utica Mut. Ins. Co. v Employers Mut. Life Ins. Co. of Wis., 57 Misc 2d 764; Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500.) II. The attorney’s fee requested is reasonable and should be affirmed. (Greenough v Deblinger, 84 Misc 2d 463; Gair v Peck, 6 NY2d 97.)

      Robert H. Silk for the New York State Trial Lawyers Association, amicus curiae, in the third above-entitled action.
    I. The statute is prospective in that it relates to the legal expenses to be borne for recovery of liens not yet in existence. (Seider v Roth, 17 NY2d 111.) II. The 1975 amendment was remedial. (Soffer v Glickman, 27 Misc 2d 721.) III. The 1975 amendment has not been shown to have harmed any interest of workmen’s compensation lienors.

      Mark Slotkin, Peter M. Pryor, Raymond C. Green and Leonard M. Schnitzer for The State Insurance Fund and another, appellants-respondents in the fourth above-entitled action.
    I. The June 10, 1975 effective amendment to section 29 (subd 1) of the Workmen’s Compensation Law is not retroactively applicable to this case which stems from a pre-June 10, 1975 accident. (Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 39 NY2d 1026; Moore v Metropolitan Life Ins. Co., 33 NY2d 304; Matter of Parkchester Apts. Co. v Lefkowitz, 41 NY2d 987; Matter of Miller, 110 NY 216; Matter of Matthews, 255 App Div 80, 279 NY 732; Shielcrawt v Moffett, 294 NY 180; Abelson v Abelson, 59 Misc 2d 172; Greenough v Deblinger, 84 Misc 2d 463; Rice v Bankers Trust Co., 82 Misc 2d 797; Wargo v Longo, 85 Misc 2d 898.) II. Where the Laws of 1975 (ch 190) amendment to section 29 (subd 1) of the Workmen’s Compensation Law is applicable, a lienor’s contribution towards third-party recovery expenditures is to be determined strictly on a quantum meruit basis vis-á-vis the lienor and not by the automatic pro rata application of a retainer agreement contingent fee percentage to the lien, nor by the utilization of said retainer agreement percentage as either presumptive or prima facie proof of the amount or percentage which the lienor must contribute. III. Where the Laws of 1975 (ch 190) amendment to section 29 (subd 1) of the Workmen’s Compensation Law is applicable, it mandates that plaintiffs and lienors separately pay attorneys’ fees and other prosecution expenses out of their separate shares of third-party recoveries, rather than requiring that plaintiffs pay fees and expenses on the gross recoveries, with the lienors then making reimbursements to plaintiffs for the lienor’s equitable shares of such recoveries. IV. Even if the subject amendment was applicable to certain pre-June 10, 1975 accidents, since the verdict and judgment dates preceded June 10, 1975, it would have no application here. V. Since plaintiff’s employer was impleaded in the action and was represented by counsel chosen by its workmen’s compensation carrier, which was ultimately required to pay a 60% Dole liability, it is inappropriate to require the carrier to contribute to plaintiff’s attorney’s fees. (Ballwanz v Jarka Corp. of Baltimore, 382 F2d 433; Russo v Flota Mercante Grancolombiana, 303 F Supp 1404; Valentino v Rickners Rhederei, G.m.b.H., SS ETHA, 552 F2d 466.) VI. Since plaintiff was paid interest on his entire verdict, including that portion allocable to the lien, and the State Fund ultimately paid 60% of such interest, the State Fund is entitled to interest on its lien also. (Donnelly v City of Brooklyn, 121 NY 9; Candiano v Moore-McCormack

      Lines, 407 F2d 385; Commissioners of State Ins. Fund v Crown, 65 Misc 2d 593,revd sub nom. Commissioners of State Ins. Fund v O’Dwyer, 37 AD2d 297.)

      Robert B. Nichols and Paul William Beltz for respondent-appellant in the fourth above-entitled action.
    I. The more reasoned and well thought out cases with reference to section 29 (subd 1) of the Workmen’s Compensation Law, effective June 10, 1975, direct that plaintiff’s attorneys should receive reasonable attorneys’ fees and expenses under the circumstances of this case. (Greenough v Deblinger, 84 Misc 2d 463; Kinney v Kinney, 48 AD2d 1002; Cole v Roly-Door Sales Co. of Rochester, 55 AD2d 1014; Koutrakos v Long Is. Coll. Hosp., 39 NY2d 1026.) II. The court should have allowed plaintiff to retain the 45% fee instead of reducing it to 3316%.

      Raymond C. Green, Peter M. Pryor, Leonard M. Schnitzer and Mark Slotkin for appellant ip. the fifth above-entitled action.
    I. The June 10, 1975 effective amendment to section 29 (subd 1) of the Workmen’s Compensation Law is not retroactively applicable to this case which stems from a pre-June 10, 1975 accident. (Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 39 NY2d 1026; Moore v Metropolitan Life Ins. Co., 33 NY2d 304; Matter of Parkchester Apts. Co. v Lefkowitz, 41 NY2d 987; Matter of Miller, 110 NY 216; Matter of Matthews, 255 App Div 80, 279 NY 732; Shielcrawt v Moffett, 294 NY 180; Abelson v Abelson, 59 Misc 2d 172; Greenough v Deblinger, 84 Misc 2d 463; Rice v Bankers Trust Co., 83 Misc 2d 797; Wargo v Longo, 85 Misc 2d 898; Arman v Marx, 85 Misc 2d 406.) II. Wheré the Laws of 1975 (ch 190) amendment of section 29 (subd 1) of the Workmen’s Compensation Law is applicable, a lienor’s contribution towards third-party recovery expenditures is to be determined strictly on a quantum meruit basis vis-á-vis the lienor and not by the automatic pro rata application of a retainer agreement contingent fee percentage to the lien, nor by the utilization of said retainer agreement percentage as either presumptive or prima facie proof of the amount or percentage which the lienor must contribute. III. Where the Laws of 1975 (ch 190) amendment to section 29 (subd 1) of the Workmen’s Compensation Law is applicable, it mandates that plaintiffs and lienors separately pay attorneys’ fees and other prosecution expenses out of their separate shares of third-party recoveries, rather than requiring that plaintiffs pay fees and expenses on the gross recoveries, with the lienors then making reimbursements to plaintiffs for the lienor’s equitable shares of such recoveries. IV. Since plaintiff’s employer was impleaded in the action and was represented by counsel chosen by the State Fund, its workmen’s compensation carrier, it is inappropriate to require the State Fund to contribute to plaintiff’s attorney’s fees. (Russo v Flota Mercante Grancolombiana, 303 F Supp 1404; Valentino v Rickners Rhederei, G.m.b.H., SS ETHA, 552 F2d 466.)

      Percival D. Oviatt, Jr. for respondent in the fifth above-entitled action.
    I. The amendment concerning apportionment of expenses is not being applied retroactively. (Greenough v Deblinger, 84 Misc 2d 463; Cardillo v Long Is. Coll. Hosp., 86 Misc 2d 438; Arman v Marx, 85 Misc 2d 406; Cohen v Grant, 87 Misc 2d 780; Rice v Bankers Trust Co., 83 Misc 2d 797; Matter of Schmidt v Wolf Contr. Co., 269 App Div 201, 295 NY 748; Matter of McCann v Walsh Constr. Co., 282 App Div 444, 306 NY 904; Matter of McCarthy v Heinz Co., 2 AD2d 908, 2 NY2d 708; Matter of Busch v Austin Co., 37 AD2d 648.) II. The carrier’s counsel has agreed that if apportionment of plaintiff’s expenses is governed by the amendment, then the method of apportionment employed by the lower court is proper. Plaintiff has waived any right to challenge the method of apportionment on this appeal.
   OPINION OF THE COURT

Chief Judge Breitel.

These are five separate appeals, each arising out of a third-party personal injury action brought by an injured employee. The State Insurance Fund, as workmen’s compensation lienor, seeks to avoid liability under a statute for its share of the litigation expenses incurred by the employee in recovering his damages from the third party (see L 1975, ch 190, eff June 10, 1975). In all five cases the Appellate Division held that apportionment between the employee and carrier is required. The carrier appeals.

In each case the employee had been injured, workmen’s compensation benefits ranging from $536.78 to over $19,000 had been collected, and a third-party action had been brought or a lawyer retained before June 10, 1975, the date the statute was enacted and became effective. In all but one case, however, as of that date, no judgment or settlement in the third-party action had been reached. In the France appeal, a verdict was returned in October, 1974, but the judgment, entered on December 16, 1974, was not paid until January, 1976, after affirmance on appeal.

The principal issue is whether the 1975 amendment to section 29 of the Workmen’s Compensation Law, requiring a compensation lienor to contribute to an employee’s expenses in securing a third-party recovery, applies to accidents occurring and actions brought before its enactment. The amendment provides only that it be "effective immediately” (L 1975, ch 190, § 3). If there be retroactivity, the method of computing the lienor’s share of the expenses is also at issue.

In each of the appeals except France there should be an affirmance. In France, there should be a modification and denial of the employee’s application for apportionment. Both policy and practicality suggest applying the amendment to judgments or settlements reached after June 10, 1975, regardless of when the employee was injured or the third-party action brought. The issue having been left, perhaps deliberately, for judicial resolution, it is appropriate, if not required, that the statute’s reach be determined in accord with the flexibility and social goals of the compensation system. That system allows for upward adjustment of benefits even with respect to prior accidents. Nor do the practical consequences of retroactivity produce inordinate, unusual, or unanticipatable harm to the carrier. The carrier’s financial burden is rarely fixed in amount and fluctuates because of a number of contingencies. With respect to the lienor’s share of the litigation expenses, the amendment explicitly calls for equitable apportionment, and, therefore, rigid formulas are inappropriate. In applying the statute realistically, however, standardized lawyers’ fees in personal injury cases, where such standardization exists, may be recognized, provided equitable factors present are also considered.

Section 29 of the Workmen’s Compensation Law governs the rights and liabilities of employee-claimants and their employers where injury is caused by a third party. Prior to 1937, the employee or his dependents were forced to elect between compensation benefits and a third-party action (see L 1913, ch 816, § 29; Matter of Curtin v City of New York, 287 NY 338, 340). If compensation were chosen, the cause of action against the third party was assigned, by operation of law, to the compensation carrier (see L 1913, ch 816, § 29). If, on the other hand, a third-party action was pursued by the employee, unless the recovery was less than the compensation benefits, the claim to compensation was lost (id.).

With a 1937 amendment, however, the Legislature abolished the forced election, giving the employee or his dependents the right to collect compensation benefits without relinquishing the right to a third-party action (§ 29, subd 1, as amd by L 1937, ch 684). But to avoid a double satisfaction, and continuing the concept that the carrier’s obligation should be diminished when damages are recovered from a third party, the carrier’s lien was introduced (id.; Matter of Curtin v City of New York, 287 NY 338, 342-343, supra). Subject only to "deduction of the reasonable and necessary expenditures, including attorney’s fees, incurred in effecting [the third-party] recovery”, the carrier has a "lien on the proceeds of any recovery” from a third party "to the extent of the total amount of compensation awarded” (§ 29, subd 1). If, however, after a prescribed time period the employee or his dependents fail to pursue the remedy against the third party the employer or his carrier is, as under the earlier statute, subrogated to the claim (id., subd 2). Should the carrier then recover more than the compensation paid plus the expenses incurred, two thirds of that excess must be turned over to the employee or his dependents (id.).

Despite its liberalizing changes the 1937 amendment still proved unsatisfactory. Where an employee recovered from a third party, once the attorney’s lien was satisfied the carrier received the full amount of its lien without contributing to the litigation expenses, including the lawyer’s fees. In short, the carrier benefited from a fund without having shared the burden of creating it. Yet, when the third-party action was brought by the carrier, not only did the carrier’s and attorney’s liens again receive priority over the employee, but the employee received only two thirds of the excess. Also problematic were modest third-party recoveries. Discharge of the lien of the attorney and carrier meant that little of the fund, if any, was left for the employee. (See Recommendation of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, p 1552.)

These inequities prompted widespread criticism, some litigation, and ultimately, legislative correction (see Koutrakos v Long Is. Coll. Hosp., 47 AD2d 500, 506, affd 39 NY2d 1026; Kussack v Ring Constr. Corp., 1 AD2d 634, 635, affd 4 NY2d 1011). The Law Revision Commission had repeatedly recommended that the carrier share responsibility for the litigation expenses, including lawyer’s fees, incurred by the employee (see, e.g., Recommendation of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, pp 1551-1554, NY Legis Doc, 1975, No. 65 [F]; McKinney’s 1974 Session Laws of NY, vol 2, pp 1904-1907, NY Legis Doc, 1974, No. 65 [F]; McKinney’s 1971 Session Laws of NY, vol 2, pp 2333-2335, NY Legis Doc, 1971, No. 65 [B]). Eventually, the 1975 statute was enacted. To the provisions of subdivision 1 of section 29 it added: "Should the employee or his dependents secure a recovery from [a third party], whether by judgment, settlement or otherwise, such employee or dependents may apply on notice to such lienor to the court in which the third party action was instituted, or to a court of competent jurisdiction if no action was instituted, for an order apportioning the reasonable and necessary expenditures, including attorneys’ fees, incurred in effecting such recovery. Such expenditures shall be equitably apportioned by the court between the employee or his dependents and the lienor.” (L 1975, ch 190.) Thus, New York joined the increasing number of States favoring apportionment (see Recommendation of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, p 1553; 2A Larson, Workmen’s Compensation Law, § 74.32, esp pp 14-232— 14-233, and n 56 [1976 & 1977 Supp]; Workmen’s Compensation—Tort Suit Expenses, Ann., 74 ALR3d 854, pp 863-866).

With respect to retroactivity, however, the act provided only that it be "effective immediately” (L 1975, ch 190, § 3; see Memorandum of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, p 1551). There is no explanation in the studies accompanying the proposed bills nor did the available proposed bills contain different language (see, e.g., NY Legis Ann, 1975, pp 337-338; Memorandum of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, p 1551; 1973 Assembly Intro No. 1339; 1975 Assembly Intro No. 4116; 1973 Senate Intro No. 1775; 1975 Senate Intro No. 3010).

Viewing the amendment as creating a new set of rights, the State Fund argues that application to pre-June 10, 1975 accident cases would upset the cost-price balance on which it operated and impair its section 29 liens. Also emphasized is the canon of construction that, unless its language clearly indicates to the contrary, an amendment is not to be given retroactive effect. Applicants, on the other hand, also relying, explicitly or in effect, on exegesis from the canons of construction, characterize the amendment as remedial and, disputing the existence of any vested rights, contend that retroactivity is required.

As is often the case the classic canons of statutory construction hardly settle the controversy (Frankfurter, Some Reflections on the Reading of Statutes, 47 Col L Rev 527, 544-545; Llewellyn, Remarks on the Theory of Appellate Decision and the Rules or Canons About How Statutes Are to Be Construed, 3 Vand L Rev 395, 401-406). True, it is encyclopedic black-letter that amendments are prospective only unless retroactive application is "clearly” spelled out (McKinney’s Cons Laws of NY, Book 1, Statutes, § 52; see 56 NY Jur, Statutes, § 265; 82 CJS Statutes, § 432). It is just as often said that exception is generally made for so-called remedial legislation or statutes dealing with procedural matters (see 2 Sutherland Statutory Construction [4th ed, Sands], § 41.09, pp 280-281; McKinney’s Cons Laws of NY, Book 1, Statutes, §§ 54-55). Numerous cases in this court restate and apply the familiar generalities but in contexts which exemplify their proper and restricted applicability (see, e.g., Matter of Deutsch v Cather-wood, 31 NY2d 487, 489-490; Shielcrawt v Moffett, 294 NY 180, 188 [Lehman, Ch. J.]). Thus, however helpful the maxims when discriminately used, they should not be abused as talismanic (see Shielcrawt v Moffett, 294 NY 180, 189, supra; Matter of Berkovitz v Arbib & Houlberg, 230 NY 261, 270-271 [Cardozo, J.]; Friedman, Law in a Changing Society, p 61; 2 Sutherland Statutory Construction [4th ed, Sands], § 41.05; cf. Matter of Consolidated Mut. Ins. Co. v Keepnews, 41 NY2d 982, 983). Frankfurter put it so well: "Nor can canons of construction save us from the anguish of judgment. Such canons give an air of abstract intellectual compulsion to what is in fact a delicate judgment, concluding a complicated process of balancing subtle and elusive elements” (Frankfurter, supra, 47 Col L Rev 527, 544).

Although, obviously, one might characterize the amendment as remedial, the "remedy” has a direct economic impact on carriers, saddling them with financial obligations not contemplated when prior insurance premiums had been computed. Similarly, calling the legislation procedural is fraught with difficulties, for in its implementation the employee gains the right to what might be a considerable sum. It is thus not the verbal category, be it remedial, nonremedial, substantive, or procedural, into which the amendment might be slotted for lack of more subtle subclassification that sheds light on the issue. It falls comfortably in none. Instead, examination of legislative intent, if it be discernible, recognition of the flexibility of the compensation law in achieving its social goals, and consideration of the practicalities and the realities offer more fruitful and sounder analysis. (See Matter of Berkovitz v Arbib & Houlberg, 230 NY 261, 270-271, supra, for Judge Cardozo’s penetrating discussion.)

As to legislative intent, the direction that the amendment "be effective immediately” evinces a sense of urgency. Yet, the meaning of the phrase is equivocal. Identical language in other acts has not been enough to require application to pending litigation (see Shielcrawt v Moffett, 294 NY 180, 188, 191, supra; Matter of Miller, 110 NY 216, 222-224). Nor, as observed earlier, do the available legislative studies or proposed bills furnish guidance.

It is possible, of course, that the Legislature had views on retroactivity, but failed to express them. Study of the act and its history is inconclusive and, therefore, suggests at least two other possibilities: the gap may be a true one, that is, an unintentional legislative omission; or, elaboration may have been deliberately left to the courts. Whatever the cause, the court has no choice but to determine the retroactive reach of the statute influenced by policy considerations and the practicalities. But, the relative disciplined freedom with which the court may thus approach the issue results directly from the Legislature’s invitation, be it deliberate or inadvertent.

Viewed broadly, the Workmen’s Compensation Law is a method, even a system, for implementing an injured employee’s right to monetary benefits. The allocation of economic benefits and burdens has always been subject to adjustment. More important, the system, designedly, has flexibility, much greater than that found in the more traditional forms of law. Thus, it is not unusual that carriers or employers have had their burdens shifted or increased with relation to past industrial accidents. (See, e.g., Matter of Mlodozeniec v Worthington Corp., 9 AD2d 21, 24, affd 8 NY2d 918, app dsmd 364 US 628; Matter of Schmidt v Wolf Contr. Co., 269 App Div 201, 204-205, affd 295 NY 748; Matter of De Concilus v Juney Jrs., 9 AD2d 17; Matter of Di Martino v Mountain Val. Water Co., 270 App Div 968.)

In context, then, the rights and liabilities set forth in section 29 are part of a larger, intricate system for fixing the economic consequences of industrially caused injury. The amendment at issue, presaged for some years, is just another adjustment in the allocation of the financial benefits and burdens. In an ultimate sense, the amendment neither created a new right nor impaired an existing one, although the reallocation might be characterized verbally either way (cf. Hession v Sari Corp., 283 NY 262, 266 [Loughran, J.], holding the 1937 amendment to section 29 to be "procedural” and applicable to accidents which occurred prior to the effective date of the amending statute). No new action at law is brought. The carrier always benefited from the third-party action; the amendment simply requires it to bear the cost of that benefit.

It should be noted that the carrier has some sort of contingent qualified right once the industrial accident has occurred. That right has been characterized as inchoate, inchoate because it is subject to contingencies and also to fluctuating value depending upon who initiates the tort action, against whom the action is brought, and whether the recovery is subject to allocation based either on comparative negligence or on relative degrees of culpability among joint tort-feasors. Thus viewed it offers no resolution to parse out how much of a "vested” right the compensation carrier has at any given point.

There being different degrees of retroactivity, the extent to which the amendment should be applied to accidents predating June 10, 1975 is another matter. Since the act and its history are inconclusive, it should not be inferred that the amendment was intended to be as retroactive as constitutional limitations would permit. Yet, from the direction that it be effective immediately, it must be inferred that the Legislature was interested in affecting as many cases as practicable. And, because the amendment states that the application for apportionment is to be upon "recovery”, it makes sense that the critical point be the date of judgment or settlement. Hence, the amendment should apply to a judgment or settlement effected after June 10, 1975, even if the injury occurred or the third-party action was brought before that date. On the other hand, to apply the apportionment to prior judgments or settlements, not made in contemplation of apportionment, suggests unfairness and likelihood of disappointed expectations.

Turning to the particular appeals, applicants Becker, Gonzalez, Andrews, and Cole are therefore entitled to an apportionment of their legal expenses. In each case, settlement or judgment followed enactment of the statute. With respect to France, however, because the judgment was entered in 1974 there should be no apportionment.

As to how the lienor’s share of the expenses should be calculated, extended discussion is not required. The statute is explicit: "expenditures shall be equitably apportioned” (§ 29, subd 1). If that were not enough, the Law Revision Commission concluded that an equitable apportionment was more practical and flexible than a rigid statutory formula (see Report of the Law Revision Commission, McKinney’s 1975 Session Laws of NY, p 1553). It does not follow, however, that standardized fees in personal injury cases should be ignored or that, except in the rare case, the lawyer’s fees should be determined on quantum meruit. That would be unrealistic. Instead, so long as the court weighs variable and distinguishing factors, which might suggest departure from the retainer or standardized fees set by local custom or court rule, standardized fees may be used. Such factors might include the reasonableness of the lawyer’s retainer and whether it was improperly influenced by the expectation that the lienor would be sharing in the burden of that fee, the fact that recovery was unusually simple or liability especially clear, and any other equitable circumstances. The practical advantage in limiting or even eliminating hearings on the applications is evident.

A subsidiary question is the right of the lienor to share in the interest accruing on the recovery. Once judgment or settlement results in recovery the lienor is entitled to interest on its share from the date that interest is computed and collectible on the gross recovery (cf. Candiano v MooreMcCormack Lines, 407 F2d 385, 387, contra; Commissioners of State Ins. Fund v O’Dwyer, 37 AD2d 297, 298-299; see, generally, 2A Larson, Workmen’s Compensation Law, § 74.32, at pp 14-240—14-241). This follows from the proposition that one entitled to a principal sum on which interest is accruing should receive the interest accrued, since interest is intended to compensate for the use or nonpayment of money (see 5 Weinstein-Korn-Miller, NY Civ Prac, par 5003.01; 32 NY Jur, Interest and Usury, §§ 1, 12). Thus, in the France case the lienor is entitled to the judgment interest on its share of the judgment entered December 16, 1974.

The ultimate determination of the equitable apportionment of legal expenses, both for jurisdictional and practical reasons, resides in the courts vested with the powers of fact finding and the exercise of a sound discretion. Only principles involving questions of law would remain subject to review as questions of law. Hence, it will be the unusual case in which review beyond the Appellate Division would be useful or available. (Cohen and Karger, Powers of the New York Court of Appeals [rev ed], §§ 145, 148.)

Accordingly, in the Becker, Andrews, Gonzalez, and Cole appeals there should be an affirmance, with costs, without prejudice to the lienor to apply to the court at nisi prius to reopen the apportionment upon a showing that a rigid formula was improperly followed. In the France appeal, the order of the Appellate Division should be modified, without costs, the application for apportionment and the cross appeal based thereon dismissed, interest awarded to the lienor from the date of judgment in Supreme Court for such portion of the judgment to which the lienor was entitled under its lien, and the matter remitted to Supreme Court for further proceedings in accordance with this opinion.

Judges Jasen, Gabrielli, Jones, Wachtler, Fuchsberg and Cooke concur.

In Becker v Huss Co., Gonzalez v Mans, Andrews v Williams and Cole v Roly-Door Sales Co. of Rochester: Order affirmed, with costs, without prejudice to the lienor to apply to the court at nisi prius to reopen the apportionment upon a showing that a rigid formula was improperly followed.

In France v Abstract Tit. Div. of Tit. Guar. Co.: On appeal by the lienor and the third-party defendant: Order modified, without costs, application for apportionment dismissed, and the matter remitted to Supreme Court, Erie County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed. On cross appeal by plaintiff: Cross appeal dismissed, without costs, as academic in view of the determination on the main appeal herein.

       In one of the appeals, Becker v Huss Co., the employer is designated as appellant in the caption and notice of appeal.