author: Titone, J. Bellacosa, J.

text:
    [624 NE2d 631, 604 NYS2d 494]
    The People of the State of New York, Respondent, v Donald Favor, Appellant. The People of the State of New York, Respondent, v Leroy Smith, Jr., Appellant.
    Argued September 8, 1993;
    decided October 19, 1993

      POINTS OF COUNSEL

      Edward J. Nowak, Public Defender of Monroe County, Rochester (Drew R. DuBrin of counsel), for appellant in the first above-entitled action.
    I. Reversal is required because Mr. Favor was excluded from a material stage of trial — his Sandoval proceeding. (People v Dokes, 79 NY2d 656; People v Alexander, 80 NY2d 801; People v Beasley, 80 NY2d 981; Snyder v Massachusetts, 291 US 97; People v Velasco, 77 NY2d 469; People v Sandoval, 34 NY2d 371; People v Mayrant, 43 NY2d 236; People v Wright, 41 NY2d 172; People v Dickman, 42 NY2d 294; People v Williams, 56 NY2d 236.) II. Mr. Favor’s guilty pleas must be vacated. (People v Fuggazzatto, 62 NY2d 862.)

      Howard R. Relin, District Attorney of Monroe County, Rochester (Wendy Evans Lehmann of counsel), for respondent in the first above-entitled action.
    I. Defendant’s right to be present at trial was not violated by his absence from the Sandoval conference. To the extent that People v Dokes may mandate otherwise, it should not be applied retroactively. (People v Favor, 172 AD2d 1052, 78 NY2d 1075, 80 NY2d 903; People v Dokes, 79 NY2d 656; People v Charleston, 54 NY2d 622; People v Kinchen, 60 NY2d 772; People v Rosado, 166 AD2d 544; People v Buccufurri, 154 App Div 827; People v Narayan, 54 NY2d 106; People v Hicks, 88 AD2d 519; Snyder v Massachusetts, 291 US 97; People v Kirkland, 188 AD2d 1083.) II. There is no reason to reverse defendant’s conviction following his plea to the remaining counts of indictment No. 97, since the conviction based on a jury verdict as to the first two counts should not be reversed.

      Howard K. Broder, Rochester, for appellant in the second above-entitled action.
    I. The trial court’s failure to instruct the jury of the full import of a request for counsel during police interrogation constituted fundamental constitutional error. Mr. Smith testified at trial that, from the outset of police interrogation, he requested counsel several times. The jury had no way of knowing that all questioning should have ceased after a request for counsel and that any statements) taken thereafter need be disregarded. (People v Hodge, 53 NY2d 313; People v Cunningham, 49 NY2d 203; People v Esposito, 68 NY2d 961; Edwards v Arizona, 451 US 477; People v Huntley, 15 NY2d 72; People v Graham, 55 NY2d 144; Jackson v Denno, 378 US 368; People v Tucker, 101 AD2d 601; People v Hamlin, 71 NY2d 750.) II. The failings of substituted counsel, both individually and collectively, deprived Mr. Smith of his constitutional right to effective assistance of counsel. (People v Baldi, 54 NY2d 137; People v Droz, 39 NY2d 457; People v Wiley, 120 AD2d 66; People v Ellsworth, 131 AD2d 109; People v Zaborski, 59 NY2d 863; People v Wood, 8 NY2d 48; People v Lewis, 111 Misc 2d 682; People v Joyner, 26 NY2d 106; People v Ofunniyin, 114 AD2d 1045; People v Murray, 130 AD2d 773.) III. Holding a Sandoval proceeding outside Mr. Smith’s presence constituted reversible error. Holding a subsequent proceeding in Mr. Smith’s presence did not serve to cure the error. The rule of People v Dokes is applicable to cases pending on direct appeal. (People v Dokes, 79 NY2d 656; People v Sandoval, 34 NY2d 371; People v Gebrosky, 80 NY2d 995; People v Alexander, 80 NY2d 801; People v Mitchell, 80 NY2d 519; People v Antommarchi, 80 NY2d 247; Butler v McKellar, 494 US 407; Penry v Lynaugh, 492 US 302; Teague v Lane, 489 US 288; People v Sloan, 79 NY2d 386.)

      Richard M. Healy, District Attorney of Wayne County, Lyons (Valerie Friedlander of counsel), for respondent in the second above-entitled action.
    I. There was no Dokes violation in the instant case as all critical determinations and discussions regarding Sandoval issues were made in defendant’s presence. (People v Sandoval, 34 NY2d 371; People v Smith, 186 AD2d 976; People v Dokes, 79 NY2d 656; People v Alexander, 80 NY2d 801; People v Velasco, 77 NY2d 469; People v Rodriguez, 76 NY2d 918; People v Cruz, 179 AD2d 529, 81 NY2d 738; People v Beasley, 184 AD2d 1003, 80 NY2d 981; People v Gebrosky, 181 AD2d 692, 80 NY2d 995; People v Rose, 175 AD2d 32.) II. The rule of People v Dokes should be applied prospectively only. (People v Dokes, 79 NY2d 656; People v Mitchell, 80 NY2d 519; People v Morales, 80 NY2d 450; Griffin v Kentucky, 479 US 314; People v Pepper, 53 NY2d 213, 454 US 967; People v Antommarchi, 80 NY2d 247; Snyder v Massachusetts, 291 US 97; United States v Gagnon, 470 US 522; Luce v United States, 469 US 38; People v Contreras, 108 AD2d 627.) III. Defendant was not denied effective assistance of counsel. (People v Baldi, 54 NY2d 137; People v Benn, 68 NY2d 941; People v Rivera, 71 NY2d 705; People v Ellis, 81 NY2d 854; People v Smith, 186 AD2d 976; People v Galloway, 54 NY2d 396.) IV. Defendant’s failure to object to the trial court’s instruction on voluntariness of statements failed to preserve the issue for this Court’s review and in any event the court’s charge on voluntariness was adequate and correct. (People v Narayan, 54 NY2d 106; People v Freeman, 172 AD2d 1045, 78 NY2d 1011; People v McLeod, 109 AD2d 70; People v Roth, 72 NY2d 866; People v Kinchen, 60 NY2d 772; People v Carmine A., 53 NY2d 816; People v Samuels, 49 NY2d 218; People v Ermo, 47 NY2d 863; People v Cefaro, 23 NY2d 283.)

      Kevin M. Dillon, District Attorney of Erie County, Buffalo, for New York State District Attorneys Association, amicus curiae, in the first and second above-entitled actions.
    I. The decision in People v Dokes was not compelled by Federal law. (Snyder v Massachusetts, 291 US 97; Kentucky v Stincer, 482 US 730; United States v Gagnon, 470 US 522; People v Dokes, 79 NY2d 656; People v Mitchell, 80 NY2d 519; People v Morales, 80 NY2d 450; People v Pepper, 53 NY2d 213.) II. State retroactivity law calls for a holding that People v Dokes should apply only prospectively. (People v Pepper, 53 NY2d 213; People v Mitchell, 80 NY2d 519; People v Favor, 172 AD2d 1052, 80 NY2d 903; People v Dunbar, 172 AD2d 1006; People v Cole, 174 AD2d 970; People v Alexander, 174 AD2d 996, 80 NY2d 801; People v Jenkins, 157 AD2d 854; People v Floyd, 179 AD2d 770; People v Ray, 184 AD2d 596; People v Cruz, 179 AD2d 529.)
   OPINION OF THE COURT

Titone, J.

In People v Dokes (79 NY2d 656), this Court held that a defendant has a right to be present during the Sandoval hearing preceding the trial except when such presence would be "superfluous” (see, 79 NY2d, at 662). We also held that a violation of this right ordinarily requires reversal even in the absence of a timely objection (id.). Our prior holdings, however, leave open at least one important question. Although we have decided several other cases under the Dokes rule (People v Cruz, 81 NY2d 738; People v Gebrosky, 80 NY2d 995; People v Beasley, 80 NY2d 981; People v Rose, 80 NY2d 802; People v Alexander, 80 NY2d 801), we have not previously been asked to consider the degree to which that rule should be applied retroactively and, thus, the retroactivity question remains unsettled (see, People v Callahan, 80 NY2d 273, 284, n). These cases, both of which were tried before this Court handed down its decision in Dokes and both of which have been submitted with briefs raising retroactivity as an issue, present us with an opportunity to resolve that important question.

I.

People v Favor

Prior to defendant Favor’s trial, the court held an in camera conference to determine which prior convictions and bad acts the prosecutor would be permitted to raise on cross-examination if defendant elected to testify. Defendant was not present during this proceeding, although he was present in the courtroom when the trial court subsequently described the gist of the in camera discussion and set forth its Sandoval decision.

Following the trial, the jury returned a guilty verdict on the first two counts of the indictment. Defendant then pleaded guilty to the remaining counts with the understanding that the sentences imposed for these counts would run concurrently to the sentences to be imposed for the first two counts. On November 3, 1990, defendant was sentenced in accordance with this understanding.

On appeal from the judgment of conviction, defendant Favor argued that reversal was required because he had been deprived of his right to be present during a material stage of the trial. In a decision that was handed down some 13 Vi months before Dokes was decided, the Appellate Division declined to entertain defendant’s argument, noting that the argument had not been "preserve[d]” by timely objection (172 AD2d 1052). After the decision in Dokes was announced, defendant was granted leave to appeal by a Judge of this Court.

People v Smith

Defendant was charged with participating in a robbery that resulted in the killing of a bartender. During a pretrial colloquy conducted on December 10, 1990 in open court and in defendant’s presence, the prosecutor asked the court whether it wished to "address the [Sandoval] issues on the record.” When the court responded affirmatively, the prosecutor indicated that there were 14 prior incidents in issue and alluded to a prior "ruling” precluding the People from using all 14 for cross-examination. At that point, the transcript minutes indicate that "a brief discussion was held off the record between the court and counsel.”

When the recorded part of the proceeding resumed, in defendant’s presence, the prosecutor announced that the court "has advised that [the People] would not be allowed to use the combined 14 matters but would [be] limit[ed]” to the use of four specific prior incidents occurring in 1987, 1988 and 1989. The court then invited defense counsel to comment, and counsel responded by arguing that the People should be precluded from using one of the identified four because he had not received timely notice of the People’s intention to use it. Use of the other three, defense counsel argued, should be forbidden to the extent that they involved larcenies, since "unlawful taking” was also one of the elements before the jury in the upcoming trial for robbery. After hearing further argument from the prosecutor, the trial court ruled in the People’s favor with respect to all four of the remaining incidents.

Defendant was ultimately tried and convicted of several of the charged crimes. On his appeal from the judgment of conviction, the Appellate Division held that defendant’s exclusion from the bench conference at which the Sandoval issues were discussed did not require reversal because the outcome of that conference — the preclusion of 10 of the 14 prior incidents —was not prejudicial to defendant and, with respect to the remaining four, a full de nova hearing had been held in defendant Smith’s presence. This appeal, taken by permission of a Judge of this Court, ensued.

II.

Traditional common-law methodology contemplates that cases on direct appeal will generally be decided in accordance with the law as it exists at the time the appellate decision is made (see, Vandenbark v Owens-Ill. Co., 311 US 538; United States v Schooner Peggy, 1 Cranch [5 US] 103, 110; Gurnee v Aetna Life & Cas. Co., 55 NY2d 184; Gager v White, 53 NY2d 475, cert denied sub nom. Guertin Co. v Cachat, 454 US 1086; People v Pepper, 53 NY2d 213, 219; see also, Griffith v Kentucky, 479 US 314). This principle follows quite naturally from the bedrock assumptions that "our government is one of laws, and not of men” and that, consequently, judicial decisions reveal or elucidate, rather than create, the law (see generally, Linkletter v Walker, 381 US 618, 622-623; People v Pepper, supra, at 220; see also, Desist v United States, 394 US 244, 258-259 [Harlan, J., dissenting]). Taken to their logical conclusion, these assumptions lead to the tenet that recently announced rules of law, including those that overrule prior decisions, are "not 'new law but an application of what is, and theretofore had been, the true law’ ” (Linkletter v Walker, supra, at 623, quoting Shulman, Retroactive Legislation, 13 Encyclopaedia of Social Sciences, at 355, 356 [1934]). Accordingly, under this view, retroactive application of current rules is always required, since it would be unthinkable to apply anything less than the "true” law to an actual controversy.

In contrast to this view, some courts and scholars have recognized that "judges do in fact do something more than discover law” (Linkletter v Walker, supra, at 623) and that unwavering insistence on retroactivity is "out of tune with actuality largely because judicial repeal ofttime d[ces] 'work hardship to those who [had] trusted to its existence’ ” (id., at 624, quoting Cardozo, Address to the NY Bar Assn, 55 Rep NY St Bar Assn 263, 296-297). Recognizing the pragmatic wisdom of these observations, the courts have been willing to temper what would otherwise be "an absolute rule of retroaction” and, "in appropriate cases,” to limit their new rules of law to prospective application (Linkletter v Walker, supra, at 628-629; see, e.g., James v United States, 366 US 213; Great N. Ry. v Sunburst Co., 287 US 358, 364; People v Mitchell, 80 NY2d 519).

While the Supreme Court has steered away from the Link-letter position, at least for criminal appeals that have not yet become final (Griffith v Kentucky, 479 US 314, supra; cf, Teague v Lane, 489 US 288; see also, Graham v Collins, 506 US —, 113 S Ct 892, 122 L Ed 2d 260), we have recently reaffirmed the principle of prospective application of decisional law by holding that a new rule of State law need not automatically be applied to all cases currently in the direct appellate pipeline (People v Mitchell, supra, at 526-528; see, American Trucking Assns. v Smith, 496 US 167, 177 ["state courts generally have the authority to determine the retroactivity of their own decisions”]). Accordingly, when confronted with a direct appeal that implicates a newly announced State rule of law, an appellate court must consider the threshold question of retroactivity, weighing three basic factors — "(1) the purpose to be served by the new rule, (2) the extent of reliance on the old rule, and (3) the effect on the administration of justice of retroactive application” (People v Mitchell, supra, at 528). Application of these factors, which are derived from this Court’s earlier decision in People v Pepper (supra, at 220; see also, People v Morales, 37 NY2d 262, 268-269), will determine whether a new rule should be given retroactive effect.

III.

Turning to the dispute before us, we initially reject both defendants’ contentions that the Dokes rule rests on Federal constitutional due-process principles and that, consequently, the Mitchell-Pepper retroactivity test is inapplicable here. Although the Dokes opinion makes reference to the Federal due-process standard (79 NY2d, at 659, 662, quoting Snyder v Massachusetts, 291 US 97, 106-107), it ultimately characterized the question before it as one "concerning] the right conferred by CPL 260.20” (79 NY2d, at 662). Moreover, any question as to Dokes’ doctrinal underpinnings has been answered by our subsequent decision in People v Morales (80 NY2d 450, 456), in which we cited Dokes as an example of "our decisions [that] give greater protection than appears to be constitutionally required [under Federal due-process rules]”. Thus, as is the case with the right recognized in People v Antommarchi (80 NY2d 247; see, People v Mitchell, supra, at 526-527), the right to be present that we recognized in Dokes is derived from the State statutory right to be present at "material” stages of the proceeding (CPL 260.20; see generally, People v Mullen, 44 NY2d 1). Accordingly, we are free to apply our own State three-factor analysis in determining whether the Dokes rule should be given retrospective effect (People v Mitchell, supra, at 526-527).

IV.

The threshold question under that analysis is whether Dokes is really a "new” rule of law at all. Of course, a judicial holding overruling established precedent should, in most instances, be considered a "new” rule requiring analysis under the Pepper-Mitchell factors (see, Graham v Collins, 506 US, at —, 113 S Ct, at 897-898, 122 L Ed 2d, at 269-270, supra; Chevron Oil Co. v Huson, 404 US 97, 106-107, cited with approval in Gurnee v Aetna Life & Cas. Co., 55 NY2d 184, 192, supra). Similarly, a "new” rule may be created when "there has been such a sharp break in the continuity of law that its impact will 'wreak more havoc in society than society’s interest in stability will tolerate’ ” (Gager v White, supra, at 483, quoting Fairchild, Limitation of New Judge-Made Law to Prospective Effect Only: "Prospective Overruling” or "Sunbursting”, 51 Marq L Rev 254). Finally, a departure from the general rule of retroactive application may be warranted where a court’s recent holding "represented a dramatic shift away from customary and established procedure” (People v Mitchell, supra, at 525).

On the other hand, "[a] judicial decision construing the words of a statute [for the first time] does not constitute the creation of a new legal principle” (Gurnee v Aetna Life & Cas. Co., supra, at 192). Further, retroactivity should not be in question when a court’s ruling merely applies previously established principles in a new factual setting or settles a question in a manner that was clearly foreshadowed (see, Gurnee v Aetna Life & Cas. Co., 55 NY2d 184, 192, supra; see also, Yates v Aiken, 484 US 211; cf., Gager v White, supra; see also, Chevron Oil Co. v Huson, supra, at 106). Whatever criteria are used to define the concept of a "new” rule of law, care must be taken to assure that it remains a relatively narrow one, lest the exception swallow up what has always been considered the normal rule in legal methodology — i.e., that cases should be decided on the basis of the law as it exists at the time of decision.

When these principles are applied in this context, substantial questions may be raised as to whether Dokes, the judicial holding in issue, is really a "new” rule at all. Before Dokes, this Court had, on many recent occasions, explained and elaborated upon the right to be present that is conferred by CPL 260.20. We had held that the right includes the prerogative to be present at a hearing to elicit testimony from a witness about the accused’s alleged intimidating conduct (People v Turaine, 78 NY2d 871), at a rereading of a portion of the court’s charge to the jury (People v Cain, 76 NY2d 119), at pretrial hearings where factual questions are to be determined (People v Anderson, 16 NY2d 282) and at any proceeding in which the defendant’s presence is substantially and meaningfully related to the ability to defend (People v Ciaccio, 47 NY2d 431, 436; People v Mullen, 44 NY2d 1, 4-5, supra). Additionally, our pre-Dokes cases were consistent in identifying the defendant’s personal knowledge of relevant factual matters as among the most important factors in determining whether the right to be present is applicable to a particular proceeding (see, People v Turaine, supra, at 872; People v Anderson, supra, at 288). In contrast, the cases in which we held the right to be present inapplicable uniformly involved proceedings in which only questions of law, procedure or ministerial matters were discussed (e.g., People v Velasco, 77 NY2d 469; People v Rodriguez, 76 NY2d 918; see also, People v Ferguson, 67 NY2d 383).

Given this background, it cannot be said that Dokes broke any new legal ground (see, Teague v Lane, supra, at 301 [O’Connor, J.]). We relied heavily in Dokes on prior case law, which, we observed, established the defendant’s "peculiar knowledge” of relevant factual matters as "a key factor” in determining whether the defendant has a right to be present (79 NY2d, at 659-660). We then reasoned that if this factor were found to be present in the Sandoval context, it would follow that "as in Anderson (supra) and Turaine (supra), * * * the defendant has a right to be present” (79 NY2d, at 660). Having set forth this syllogism, we considered the precise nature of the Sandoval proceeding, making special note of the defendant’s unique knowledge of the facts surrounding his or her prior criminal record and "the significance of the court’s [Sandoval] determination” with respect to the defendant’s ultimate decision whether to testify (79 NY2d, at 661-662). Based on these considerations, we concluded that "the potential for meaningful participation by the defendant” in this context "is apparent” and that, accordingly, a defendant has a right to be present during the substantive portion of the Sandoval hearing (id., at 660-661). Dokes may thus be viewed as merely another point in a continuum of cases explaining and applying the statutory right to be present at "material” stages of the proceeding.

V.

We need not definitively resolve the question whether Dokes represents a "new” rule of law, as the dissent contends, or is instead a mere application of existing principles to a new set of facts. In either event, retroactive application of the rule is required because the Pepper analysis leads inevitably to that conclusion. The first prong of the Pepper test, which looks to the purpose of the new rule and its relationship to the fact-finding process, cuts in favor of retrospectivity. The purpose of Dokes — to enable the defendant to contribute his or her "peculiar knowledge” of the relevant facts — is directly related to enhancing the accuracy of the Sandoval determination. Further, the pretrial Sandoval proceeding implicates the fact-finding process at trial, in that the trial court’s Sandoval ruling "is often the pivotal factor in the defendant’s determination whether to testify” (People v Dokes, supra, at 662) and a sound Sandoval ruling can weed out impeachment evidence of low probative worth (see, People v Sandoval, 34 NY2d 371, 376-378, supra).

The second Pepper factor, the degree of prior reliance on pr e-Dokes law, also supports retroactivity here. Contrary to the People’s contentions, there was no firmly established body of case law approving the defendant’s exclusion from Sandoval hearings. As the People acknowledge, in the Fourth Department, where defendants Favor and Smith were tried, there were no pre-1991 reported Appellate Division decisions sanctioning such a procedure. A similar situation existed in the First Department, which first addressed the issue in December of 1990 (People v Lee, 168 AD2d 267) and then, in the three successive cases raising the issue, reached inconclusive results (compare, People v Rose, 175 AD2d 32, affd 80 NY2d 802; with People v Jordan, 174 AD2d 490; and People v Cruz, 179 AD2d 529, revd 81 NY2d 738, supra). The Second Department also demonstrated some uncertainty about the correct resolution of the issue (compare, People v Scott, 163 AD2d 341; and People v Jenkins, 157 AD2d 854; with People v Peterson, 151 AD2d 512; People v Dokes, 173 AD2d 724, revd 79 NY2d 656, supra; People v Floyd, 179 AD2d 770; People v Ray, 184 AD2d 596; People v Gebrosky, 181 AD2d 692, revd 80 NY2d 995, supra). In fact, the only real consistency on the issue came from the Fourth Department, which held, in a series of 1991 decisions, that the defendant’s exclusion from Sandoval hearings did not require reversal in the absence of preservation or a showing of prejudice (People v Wynn, 175 AD2d 659; People v Lomack, 174 AD2d 1037; People v Alexander, 174 AD2d 996, revd 80 NY2d 801; People v Cole, 174 AD2d 970; People v Favor, 172 AD2d 1052, supra [revd herein]; People v Dunbar, 172 AD2d 1006). And, even these Fourth Department decisions, which rested primarily on preservation grounds, could hardly be regarded as ringing endorsements of the practice of excluding the accused from Sandoval hearings.

Moreover, even if it could be argued that the Appellate Divisions had been developing a consistent body of case law on the subject, reliance on such a short-term phenomenon cannot be justified, particularly in view of the fact that of the 14 cases which the People now cite, five (including this one) were reversed when they reached this Court of Appeals. Such reliance would have been especially unwarranted, since the decisions handed down by this Court during the same period of time left little room for doubt about the need to include the defendant in any proceeding in which his or her participation would potentially be meaningful (see, III., supra).

Finally, the third Pepper factor, the effect of the new rule on the administration of justice, does not furnish a sound basis for withholding application of Dokes to all cases currently pending on direct appeal. Contrary to the People’s assertion, there is simply no indication in the parties’ submissions that retroactive application of Dokes could lead to wholesale reversals. Unlike in People v Mitchell, where the disapproved practice was virtually universal (see, 80 NY2d, at 529, supra), the People have failed to demonstrate that the practice of excluding defendants from Sandoval hearings was widespread throughout the State before it was rejected in Dokes. Moreover, unlike in Mitchell, there are no special factors here, such as the need to hold reconstruction hearings (see, 80 NY2d, at 529, supra) that would have a serious deleterious effect on the administration of justice in this State.

In sum, there is no convincing reason in this instance to depart from the general principle that cases on direct appeal are to be decided under the law at the time of the decision. Accordingly, our holding in Dokes is fully applicable to the two appeals before us and the only remaining question is whether that holding requires reversal under the facts and circumstances presented by each case.

VI.

People v Favor

As the record of his trial makes clear, defendant Favor was not present at the Sandoval hearing when the use of his prior criminal acts was discussed. This exclusion was a clear violation of the Dokes holding. The fact that the trial court recited the gist of its Sandoval decision in defendant’s presence does not ameliorate the error, since this recitation did not furnish defendant with the opportunity for meaningful participation to which he was entitled (see, People v Alexander, supra). Moreover, contrary to the dissent’s contention, there is no basis for holding defendant’s presence to have been "superfluous” in this context, since the outcome of the proceeding from which he was excluded was not wholly favorable and the surrounding circumstances do not negate the possibility that defendant might have made a meaningful contribution to the colloquy (cf., People v Smith [decided herewith]). We note that, notwithstanding the dissent’s vigorous arguments to the contrary, this conclusion is no more "speculative” here than it was in our unanimously decided rulings in People v Dokes (supra), People v Cruz (supra), People v Gebrosky (supra), People v Beasley (80 NY2d 981, supra), People v Rose (supra) and People v Alexander (80 NY2d 801, supra). Thus, reversal of defendant Favor’s conviction is required, even in the absence of a timely objection (see, People v Dokes, supra, at 662).

Our holding in this case represents a rejection of the People’s effort to inject a case-specific "prejudice” test into the Dokes inquiry. The suggestion that we should inquire into individualized prejudice is inconsistent with our rationale in Dokes, which stressed that prejudice is inherent when a defendant is deprived of the opportunity for meaningful participation at a "material” stage of trial (see, id., at 661-662). Likewise, we decline to adopt the People’s further contention that the remedy in cases involving Dokes error should be a remittal for a new Sandoval hearing rather than an outright reversal of the judgment of conviction. Such a proceeding, conducted in hindsight and on artificial terms, is not an adequate substitute for the authentic, give-and-take discussion that occurs when the Sandoval question is fresh.

People v Smith

The facts in defendant Smith’s case necessitate a different result. The only portion of the proceeding from which this defendant was even arguably excluded was a preparatory bench conference at which the prior criminal acts the People wished to use for cross-examination were identified and, insofar as may be discerned from the record, the court made a preliminary determination excluding 10 of the 14 identified acts. Defendant was indisputably present for the remainder of the proceeding, in which the parties argued about the admissibility of the remaining four criminal acts and the court made its de nova determination about those acts.

In view of the wholly favorable outcome of the portion of the Sandoval proceeding from which defendant was excluded, it cannot reasonably be said that there was any potential for additional meaningful input by defendant. Thus, this is one of those exceptional situations in which the accused’s presence would have been wholly "superfluous” (see, People v Dokes, supra, at 662).

Although we hold that Dokes does not require reversal in defendant Smith’s case, we note that the better practice would be to have the accused present during every colloquy relating to the Sandoval question, since the outcome of such colloquies can rarely be predicted in advance. In view of the significant potential for meaningful participation by the defendant, there would seem to be little sound reason, short of an affirmative waiver, for excluding the defendant from any aspect, informal or formal, of the Sandoval proceeding.

We have considered defendant’s remaining contentions concerning the effectiveness of his attorney’s representation and find those contentions to be without merit.

Accordingly, in People v Favor, the order of the Appellate Division should be reversed and a new trial ordered; in People v Smith, the order of the Appellate Division should be affirmed.

Bellacosa, J.

(dissenting in People v Favor). Insofar as the Court’s combined opinion resolves the appeal in People v Favor by not applying the Dokes (79 NY2d 656 [June 11, 1992]) superfluity exception and by giving the Dokes rule traditional retroactivity effect, I respectfully dissent and vote to affirm the order of the Appellate Division upholding defendant’s multiple convictions.

In the early morning hours of January 27, 1989, defendant seized a teenage girl, put a knife to her neck, ordered her to proceed down a driveway, and raped her. The victim described her attacker to the police, and after the perpetrator was arrested, she identified him in a lineup. Defendant was indicted for five crimes, including rapes against two different victims. Based on the identification of one of the victims and her testimony, defendant was convicted, after a jury trial on severed counts, of forcible rape in the first degree and kidnapping in the second degree. He did not testify. After his conviction, he pleaded guilty to the other rape, kidnapping and attempted robbery counts.

On the morning before the voir dire selection of the jury for trial, the trial court discussed the Sandoval issue in chambers with the prosecutor and defendant’s counsel. Since it was an untranscribed in-chambers conference, the record is silent as to whether defendant was present, but it appears uncontested that he was absent. However, with defendant present later that day in the courtroom, the trial court then recited for the record the result of the morning chambers’ conference:

"the court: All right. Before we started selecting the jury this morning we had a Sandoval conference in chambers. And I was told the defendant had a conviction for attempted unauthorized, or excuse me attempted unlawful imprisonment in the second degree from 1986 to which was sentenced to probation. I indicated that based on the similarity of unlawful imprisonment to kidnapping in the second degree that I would not allow the people to ask about that conviction’s underlying facts or the title of that conviction, but they could ask if he had ever been convicted of a misdemeanor. Are there any other issues you’d like to put on the record at this point?
"mr. Jacobs: Just that the district attorney informed me of no other bad acts which did not result in conviction. That was the only thing that I was aware of.
"mr. schauseil: Right.
"the court: Okay. Anything else before we have the openings tomorrow?” (Emphasis added.)

That is the entire record on the Sandoval issue. Defense counsel made no objection to the overwhelmingly favorable defense ruling, nor did counsel or defendant, at the express invitation of the trial court, request review or reopening of the bare misdemeanor aspect or any other aspect. The Appellate Division affirmed the conviction (172 AD2d 1052), and upon leave by a Judge of this Court, the Court reverses the convictions.

The majority retroactively applies the Dokes absolute-presence-no-preservation rule and holds that the Sandoval procedure employed by the Trial Judge in 1989, three years before Dokes was decided, nevertheless automatically entitles defendant to a new trial. The sole item with respect to which the trial court would have allowed cross-examination of defendant, had he chosen to testify, was the barest official fact and matter of record — his prior conviction for a misdemeanor. The ruling interdicted the People from identifying the nature, title or underlying facts of that prior misdemeanor. There is no cognizable or meaningful way defendant’s presence at the in-chambers discussion could have materially contributed to the trial court’s Sandoval ruling. To suggest otherwise on this record is speculative. Thus, the pro forma "absence” of defendant, as is customary (though no longer in Sandoval matters), from the Trial Judge’s in-chambers conference with the lawyers — for security and other logistical reasons — was not an "exclusion.” Also, it was truly "superfluous” on the sparse record, within the Dokes exception and within the comparable analysis applied to affirm the companion case here, People v Smith (decided today). I do not believe the labored distinctions between Favor and Smith on superfluousness hold up on close analysis.

In addition to my superfluousness analysis concerns, I believe the distinctions between Favor and People v Mitchell (80 NY2d 519 [Dec. 17, 1992]) are also unavailing. I discern no principled basis for rejecting in Favor the Mitchell (supra) prospectivity approach in its handling of the People v Antommarchi (80 NY2d 247 [Oct. 27, 1992]) presence rule. Prospectivity is before this Court for the first time in Favor, and is cogently presented for critical resolution based on recent precedential authority of this Court — Mitchell. By acknowledging the significantly expanded procedural and substantive features of Dokes and its sequelae and parallel procedural categories, this Court could quite justifiably utilize the analytical channel provided by People v Pepper (53 NY2d 213, cert denied. 454 US 967) to apply the Dokes formulation only prospectively (see, Cardozo, The Nature of the Judicial Process, reprinted in Selected Writings of Benjamin Nathan Cardozo, at 170 [Margaret E. Hall ed 1947]). It is no answer, I respectfully submit, that this problem, unlike the State-wide Antommarchi (80 NY2d 247, supra) impact, is claimed to be confined to Fourth Department practice and cases. The fact is otherwise, and the number of automatic reversals is very large and significant. The result unnecessarily unsettles hundreds of tried cases across the State. Thus, to me, Mitchell is to Antommarchi as Favor ought to be to Dokes.

I am mindful of the circumstance here that, unlike the coincidental back-to-back appeals and sessions of Court in Antommarchi and Mitchell, the Court is confronted in People v Favor with a relatively short period of time during which several appeals (see, e.g., People v Cruz, 81 NY2d 738; People v Gebrosky, 80 NY2d 995; People v Alexander 80 NY2d 801) were decided by this Court shortly after Dokes by applying its new rule. That rapid sequence feature is a distinction without legal significance and should not foreclose the Pepper prospectivity approach, especially since the Court correspondingly recognizes in this case that the retroactivity versus prospectivity issue was not argued in any of those intervening cases.

The Court has principled, analytical and precedential bases, in my view, to treat the intervening cases as serendipitous interludes and coincidences, which do not preclude application of the Antommarchi-Mitchell matrix to the parallel prospectivity problem presented here. The practical consequences in countless cases are equally devastating, and the rules in Dokes (79 NY2d 656, supra [defendant’s right to be present at a Sandoval hearing]) and Antommarchi (80 NY2d 247, supra [defendant’s right to be present at sidebar discussions]) certainly have sufficient related characteristics to warrant like prospective treatment.

Moreover, I am unpersuaded by that portion of Judge Titone’s opinion that concludes that this Court did not break "any new legal ground” in Dokes. Interestingly, he refers to mere "foreshadowings” in prior law for the characterization that Dokes is merely a "point in a continuum” (majority opn, at 264, 265), despite the fact that prior to Dokes this Court had not previously addressed the right to be present at Sandoval hearings, to say nothing of its newly promulgated forgiveness of the usual preservation requirements.

The proposition that Dokes broke new ground and broadened the presence-of-defendant procedural regimes is, in my view, unassailable. Simply put, the new rule insures automatic new trials in countless cases (1) without the necessity of any of this Court’s usually strict preservation requirements, a general protocol reasonably relied upon by the Bench and Bar (no objection is required and even tactical silence does not bar the ultimate relief); (2) without any examination or showing of prejudice or harmless error analysis (the superfluity exception mentioned in the new Dokes rule is in this case effectively rendered de minimis and different in kind, not just grade, from the genre of prejudice); and (3) with full retroactivity.

This Court’s expectation of clairvoyance from Trial Judges in anticipating how this Court eventually ruled on this issue, years before we did so, is not well founded. No Trial Judge could have reasonably foreseen these ratchetings. Yet, it is Trial Judges who ultimately bear the responsibility for these new trials that are being automatically mandated. They suffer these rebuffs to their handling of numerous trials because they were not prescient enough, despite otherwise fastidious precautions and procedures employed in the light of the "presence-preservation” law as it was before 1992. Protection of the record and the defendants’ rights, too, as in this 1989 case, with an almost entirely favorable defense ruling on the Sandoval issue itself, is held insufficient.

It cannot be overlooked that this case presents yet another category of cases in which virtual per se results are compelled, and now fully retroactively. The relatively recent phenomenon of this Court’s expanding per se jurisprudence appears to contradict the Holmesean-Cardozean notion of interstitial, incremental development in the common-law decisional process (Cardozo, The Nature of the Judicial Process, reprinted in Selected Writings of Benjamin Nathan Cardozo, at 134, 150 [Margaret E. Hall ed 1947]). Facets of individual cases intended to achieve the individually weighed justice desideratum are lost when automatic applications and results are commanded without regard to a broader-based examination of all relevant considerations and policies in each case.

In sum, my vote to affirm in Favor is driven by the Court’s unnecessarily restrictive construction of the Dokes superfluous presence exception for the first time on the record of the trial court’s ruling in this case. This construction and application is theoretically, functionally, practically and effectively indistinguishable from the analysis applied in People v Smith (decided today), yet with diametrically opposite results. Here, the Court uses the pure per se sweep. The starkness of this realization has led me to question the correctness of my own vote in Dokes. However, I cannot take that back and must acknowledge its stare decisis impact. That does not mean I cannot question the application of the deminimized superfluousness exception or look for a legitimate jurisprudential palliative, as the entire Court did in People v Mitchell (80 NY2d 519, supra), after recognizing and reciting the devastating consequences that per se nonpreservation presence rule would have if it were given retroactive operative effect. If this Court could make the sidebar presence rule applicable only to trials after the Antommarchi date, I cannot fathom why it cannot do the same thing here with this Dokes’ Sandoval presence rule, which inflicts comparably devastating consequences. The numerous automatic reversals recited by the majority itself, occurring in this Court alone, are testament to the widespread debacle and phenomenon in all the lower courts (see also, amicus curiae brief of NY State Dist Attorneys Assn).

My vote is to affirm the order of the Appellate Division upholding the conviction.

In People v Favor: Order reversed and a new trial ordered.

Chief Judge Kaye and Judges Simons, Hancock, Jr., Smith and Levine concur with Judge Titone; Judge Bellacosa dissents and votes to affirm in a separate opinion.

In People v Smith: Order affirmed.

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

      . See, People v Sandoval (34 NY2d 371).

      . Because of the important "underlying considerations of finality,” the Supreme Court has not been as generous in applying new rules of constitutional law to collateral proceedings such as those seeking habeas corpus relief (Teague v Lane, supra, at 305-316 [O’Connor, J.]; see, Graham v Collins, supra). Similarly, for purposes of retroactivity analysis, our Court has drawn a sharp distinction between cases on direct appeal and cases in which "[t]he normal appellate process [has come] to an end” (see, People v Pepper, supra, at 222).

      . For example, the Supreme Court has indicated that a legal rule will be considered "new” if it "was not 'dictated by precedent’ ” (Graham v Collins, 506 US, at —, 113 S Ct, at 897, 122 L Ed 2d, at 269, supra, quoting Teague v Lane, supra, at 301 [O’Connor, J.] [emphasis in original]). Manifestly, this standard, which was devised to address the applicability of recent judicial decisions to collateral habeas corpus proceedings, would dramatically expand the class of cases in which retroactivity is in issue, since few decisions made by an appellate court such as ours are truly "dictated” or compelled by precedent.


source: Caselaw Access Project

author: Hancock, Jr., J.

license: Public Domain

text:
    [624 NE2d 643, 604 NYS2d 506]
    In the Matter of Maria P. Tucker, Respondent, v Board of Education, Community School District No. 10, et al., Appellants.
    Argued October 7, 1993;
    decided November 11, 1993

      POINTS OF COUNSEL

      O. Peter Sherwood, Corporation Counsel of New York City (Jane S. Earle and Francis F. Caputo of counsel), for appellants.
    I. The blind adherence to the literal language of the 60-day notice of termination provision in Education Law § 2573 (1) (a) was improper in this case because petitioner’s commission of the terminable offenses during the 60-day period made it impossible for the Board to provide the requisite notice. (Pavilion Cent. School Dist. v Pavilion Faculty Assn., 51 AD2d 119, 42 NY2d 961; Matter of Weinbrown v Board of Educ., 28 NY2d 474; New York State Bankers Assn. v Albright, 38 NY2d 430; Le Drugstore Etats Unis v New York State Bd. of Pharmacy, 33 NY2d 298; Williams v Williams, 23 NY2d 592; Matter of Rushnek v Ford Motor Co., 85 AD2d 824; Matter of Nash v Board of Educ., 38 NY2d 686, 39 NY2d 943; Matter of Forman v Scribner, 57 AD2d 864.) II. Education Law § 2573 (1) (a) is silent as to any remedy for its violation. Courts that have awarded additional compensation to teachers under that statute have done so only for negligent or intentional failures to provide the required 60-day notice, not where, as here, such notice was simply not possible. Awarding this petitioner additional pay as a penalty to the Board for failing to provide 60 days’ notice of denial of tenure was improper. It only rewarded unsuitable behavior, at the taxpayers’ expense, and, in so doing, made clear that, at least as far as retroactive pay is concerned, the final 60 days of the probationary period is a safe "window of opportunity” for committing terminable offenses. (Matter of Brida v Ambach, 69 Misc 2d 900; Matter of Pascal v Board of Educ., 100 AD2d 622; Matter of Lehman v Board of Educ., 82 AD2d 832; Ricca v Board of Educ., 62 AD2d 987, 47 NY2d 385.)

      James R. Sandner, New York City, for respondent.
    I. The courts below properly held that Education Law § 2573 (1) (a) is mandatory, contains no exceptions, and respondents’ failure to comply was a violation of law. (Patrolmen’s Benevolent Assn. v

      City of New York, 41 NY2d 205; Matter of Weinbrown v Board of Educ., 28 NY2d 474; Ricca v Board of Educ., 62 AD2d 987, 47 NY2d 385; Matter of Lehman v Board of Educ., 82 AD2d 832; Matter of Pascal v Board of Educ., 100 AD2d 622; Matter of Lezette v Board of Educ., 35 NY2d 272.) II. The court below properly held that Education Law § 2573 (1) (a) does not contain any exceptions. (Matter of Nash v Board of Educ., 38 NY2d 686, 39 NY2d 943; Matter of Forman v Scribner, 57 AD2d 864; Matter of Rushnek v Ford Motor Co., 85 AD2d 824.)
   OPINION OF THE COURT

Hancock, Jr., J.

Education Law § 2573 (1) (a) provides that "[e]ach person who is not to be recommended for appointment on tenure shall be so notified by the superintendent of schools in writing not later than sixty days immediately preceding the expiration of his probationary period.” In this case, petitioner was denied tenure based upon acts of corporal punishment which she allegedly committed less than 60 days before the expiration of her probationary period. The issue is whether in these circumstances pursuant to section 2573 (1) (a) petitioner is entitled to an award of pay for each day respondents’ notice was late. For the reasons stated below, we conclude that petitioner is entitled to pay corresponding to the number of days for which she was not provided the statutory 60 days of notice.

I.

In June 1987, petitioner Maria Tucker was appointed by respondents, the Board of Education for Community School District No. 10 and the school district’s superintendent, as a probationary special education teacher. Petitioner’s three-year probationary period was to expire on June 15, 1990, at which time she would either receive tenure or be terminated.

On May 24, 1990, just 22 days before the end of her probationary period, petitioner is alleged to have committed acts of corporal punishment by cutting the hair of three of her students and to have used a racial epithet in talking to one of her students. After an investigation, petitioner’s principal recommended to the school superintendent that petitioner be denied tenure. Petitioner was formally notified by the superintendent by letter dated June 1, 1990, that she would be denied tenure and that her services would be terminated at the end of her probationary period. Petitioner received this letter on June 6, 1990, eight days before this period was to end.

Petitioner commenced this CPLR article 78 proceeding seeking to annul respondents’ determination denying her 52 days’ salary. Supreme Court granted the petition and awarded petitioner 52 days’ pay. The Appellate Division affirmed, concluding that although the claimed misconduct that led to petitioner’s dismissal occurred only 22 days before her probationary period was due to expire and respondents were expeditious in giving her notice of denial of tenure, section 2573 (1) (a) permitted no exception to its 60-day notice requirement; thus, petitioner was entitled to the relief sought (189 AD2d 704). The dissent stated that because the notice was provided at the earliest possible opportunity, the award of additional pay was an unfair penalty for the Board which had not acted negligently (id,., at 705). This Court granted respondents’ motion for leave to appeal. We now affirm.

II.

Education Law § 2573 (1) (a) provides that "[e]ach person who is not to be recommended for appointment on tenure shall be so notified by the superintendent of schools in writing not later than sixty days immediately preceding the expiration of his probationary period.” That section also provides that the service of a probationary teacher "may be discontinued at any time during such probationary period, on the recommendation of the superintendent of schools, by a majority vote of the board of education.” In conjunction with this latter requirement of section 2573 (1) (a), section 3019-a mandates that "[s]chool authorities or such boards which desire to terminate the services of a teacher during the probationary period shall give a written notice thereof to such teacher at least thirty days prior to the effective date of such termination of services.” Thus, as specified by these statutory provisions, whenever a probationary teacher’s services are discontinued, whether by denial of tenure at the end of the probationary period or by termination of services before the end of the probationary period, the teacher has a right to 30- or 60-day notice, as provided in the statutes.

The statutes do not specify a remedy for violation of the notice requirements (see, Matter of Brida, 11 Ed Dept Rep 76, 77, affd 69 Misc 2d 900 [Sup Ct, Albany County]; Matter of McDaniel, 12 Ed Dept Rep 182, 183). The courts and the State Commissioner of Education, however, have consistently held that teachers are awarded one day’s pay for each day the notice was late (see, e.g., Matter of Zunic v Nyquist, 48 AD2d 378, 380, affd 40 NY2d 962; Ricca v Board of Educ., 62 AD2d 987, 988, revd on other grounds 47 NY2d 385; Matter of Pascal v Board of Educ., 100 AD2d 622, 624; Matter of Lehman v Board of Educ., 82 AD2d 832, 834; Matter of Gordon, 24 Ed Dept Rep 277, 279; Matter of Rossi, 15 Ed Dept Rep 363, 365; Matter of Brown, 12 Ed Dept Rep 109, 110; Matter of Bourke, 12 Ed Dept Rep 261, 263; Matter of Slater, 12 Ed Dept Rep 275, 277). The foregoing decisions concern cases where the school board’s failure to provide the required notice was intentional or due to an oversight. The question presented is whether section 2573 (1) (a) should be applied differently where, as here, the failure was due to the timing of events over which the board had no control. We conclude that it should not.

When statutory language is unambiguous, a court will ordinarily give effect to the plain meaning of the words and apply the statute according to its express terms (Patrolmen’s Benevolent Assn. v City of New York, 41 NY2d 205, 208; Matter of Albano v Kirby, 36 NY2d 526, 530). Thus, where, as in this case, the statute unequivocally describes in general terms the particular situation in which it is to apply and nothing indicates a contrary legislative intent, the courts should not impose limitations on the clear statutory language (see, Matter of Di Brizzi [Proskauer], 303 NY 206, 214; McKinney’s Cons Laws of NY, Book 1, Statutes § 114). Education Law § 2573 (1) (a) does not provide for any exception to its 60-day tenure denial notice requirement; hence, we conclude that the Legislature did not intend to provide any exception (id.).

Nonetheless, respondents argue that giving effect to section 2573 (1) (a)’s unequivocal language should be avoided in this case because the timing of the commission of the offenses which justified petitioner’s termination made it impossible for the Board to provide the requisite notice, and that it would be absurd and unreasonable to hold the Board responsible for not doing what it could not do (see, New York State Bankers Assn. v Albright, 38 NY2d 430, 436-437). We disagree. The purpose of the statute’s 60-day notice requirement is to afford probationary teachers a reasonable period of time, before the end of their probationary period, to make plans for the upcoming school year. It is a rule founded on reasons of practicality and fairness to probationary teachers (see, Matter of Weinbrown v Board of Educ., 28 NY2d 474, 477; Ricca v Board of Educ., 62 AD2d 987, 988, revd on other grounds 47 NY2d 385, supra; Pavilion Cent. School Dist. v Pavilion Faculty Assn., 51 AD2d 119, 123, Iv dismissed 42 NY2d 961). We see nothing in the statute or its legislative history that persuades us to read in an exception which would be contrary to the statute’s broader purpose of providing probationary teachers with minimal notice of tenure denials to enable them to seek other employment (see, State Dept of Civil Service Mem, Bill Jacket, L 1958, ch 839; letter from T. F. Kuper, id.). We conclude that, although the Board’s failure to provide the required notice was occasioned by the timing of events over which it had no control, giving effect to its plain language would be entirely reasonable. A contrary conclusion would undercut the protective purpose of the notice provision.

We reject respondents’ further argument that it would be unjust to reward a teacher who has brought about her own termination through misconduct by giving her the benefit of the notice provision at the taxpayers’ expense and that the Legislature could not have intended this anomalous result. While, to be sure, teacher misconduct may not be a common reason for denying tenure, again we find no basis in the statutory language or legislative history to support respondents’ proposed exception. Moreover, we do not agree that requiring compliance with section 2573 (1) (a) in cases of tenure denial for alleged misconduct is unfair. Probationary teachers who are to be terminated do not have protection of a hearing procedure and as a general rule are subject to termination at any time for any reason (see, Matter of Cohoes City School Dist. v Cohoes Teachers Assn., 40 NY2d 774, 777; Matter of Lezette v Board of Educ., 35 NY2d 272, 278). Thus, it is a reasonable assumption that the Legislature, being cognizant of this lack of protection for probationary appointees, concluded that probationers should at least be given the protection of the required notice before a tenure denial. To construe the statute as respondents would have us, would mean that a teacher could be denied tenure without the protection of section 2573 (1) (a)’s notice requirement upon the mere allegation of misconduct, even if groundless.

Finally, our conclusion is supported by the related statutory provision that if a probationary teacher’s services are to be terminated before the end of the probationary period — for reasons other than tenure denial — 30 days’ notice is also required (Education Law § 3019-a). Like section 2573 (1) (a), section 3019-a — which it can be assumed is the usual vehicle for misconduct terminations — provides no exception to its notice provision for a termination based upon misconduct. These provisions read together evince a legislative concern that a probationary teacher — although subject to termination without a hearing — should not be deprived of the protection of a notice requirement when the termination is based on allegations of misconduct.

In sum, we conclude that section 2573 (1) (a) requires 60 days’ notice whenever a probationary teacher is being denied tenure irrespective of the reasons for the tenure denial or when those reasons arise.

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

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

Order affirmed, with costs.

       Respondents’ reliance on Matter of Nash v Board of Educ. (38 NY2d 686) is misplaced. In Nash, the school board did not provide the probationary teacher the notice of tenure denial required under the parties’ collective agreement because legislative changes to the length of the probationary term relieved the board of its notice obligation (id., at 689). Here, by contrast, there was no legislative action which relieved respondents of their statutory duty to provide 60 days’ notice.


author: Chief Judge Kaye. Simons, J.

text:
    [624 NE2d 647, 604 NYS2d 510]
    North Star Reinsurance Corporation, Respondent-Appellant, v Continental Insurance Company, Respondent, and U.S. Fire Insurance Company, Appellant-Respondent. Flora Valentin, as Administratrix Ad Prosequendum of the Estate of Julio Feliciano, Deceased, Respondent, v City of New York et al., Appellants and Third-Party Plaintiffs-Appellants. EMD Construction Corp., Third-Party Defendant-Respondent. Donald M. Prince et al., Plaintiffs, v City of New York, Defendant and Third-Party Plaintiff-Appellant. Slattery-Argrett Joint Venture Co., Third-Party Defendant-Respondent.
    Argued September 9, 1993;
    decided November 16, 1993

      POINTS OF COUNSEL

      Stock, Tinari, Paar, Matthews, O’Connell & Osborn, Mineóla (Thomas J. Stock, Thomas A. Osborn and James F. Matthews of counsel), for appellant-respondent in the first above-entitled action.
    The doctrine of preindemnification requires Continental Insurance Company to pay the first $1 million of the settlement amount from the owners’ protective policy purchased for the State of New York by Fresh Meadows. (Central Trust Co. v Sheahen, 66 AD2d 1015; Michalak v Consolidated Edison Co., 166 AD2d 213, 77 NY2d 989; Goffredo v Bay St. Landing Assocs., 179 AD2d 799; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509; Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465.)

      Quirk and Bakalor, P. C., New York City (Richard Bakalor of counsel), for respondent-appellant in the first above-entitled action.
    I. When an owner of a construction project seeks indemnity and/or contribution from a contractor, the owner’s recovery against the contractor should be reduced by the amount of any liability insurance purchased for the owner by the contractor, which liability insurance is applicable to the claim made against the owner by the injured parties. (Brown v Two Exch. Plaza Partners, 146 AD2d 129, 76 NY2d 172; Moore v Leggette, 24 AD2d 891, 18 NY2d 864; Meadvin v Buckley-Southland Oil Co., 84 AD2d 907, 59 NY2d 822; Michalak v Consolidated Edison Co., 166 AD2d 213, 77 NY2d 989; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509; Fowler v Stillwater Assocs., 169 AD2d 226.) II. The court below was correct in determining that the Continental $1 million policy, purchased for the State by Fresh Meadows, was applicable to the claim made against the State by the injured parties. (Benjamin v Morgan Guar. Trust Co., 163 AD2d 135; Kohilakis v Town of Smithtown, 167 AD2d 513; Karasik v Bird, 104 AD2d 758; Schiff Assocs. v Flack, 51 NY2d 692; O’Dowd v American Sur. Co., 3 NY2d 347; Gerka v Fidelity & Cas. Co., 251 NY 51; Hartford Ins. Group v Mello, 81 AD2d 577; Corcoran v Abbott Sommers, Inc., 143 AD2d 874; Dryden Mut. Ins. Co. v Michaud, 115 AD2d 150; County of Sullivan v State of New York, 135 Misc 2d 810.)

      Alio, Caiati & McDonough, New York City (John J. McDonough and Kevin A. Jones of counsel), for respondent in the first above-entitled action.
    I. Continental is entitled to full indemnification. (Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co., 61 NY2d 569; Michalak v Consolidated Edison Co., 166 AD2d 213; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509; Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465.) II. Indemnity payments without recourse render an insurance procurement clause violative of General Obligations Law § 5-322.1. (Kinney v Lisk Co., 76 NY2d 215; County of Onondaga v Penetryn Sys., 84 AD2d 934, 56 NY2d 726.) III. The doctrine of preindemnification is not applicable to the coverage afforded under Continental’s $1 million general liability policy. (Moore v Leggette, 24 AD2d 891, 18 NY2d 864; Meadvin v Buckley-Southland Oil Co., 84 AD2d 907, 59 NY2d 822; State Bank v Dan-Bar Contr. Co., 12 AD2d 416, 12 NY2d 804.) IV. Preindemnification’s voiding of an insurer’s subrogation rights is an unconstitutional impairment of contract. (Patterson v Carey, 41 NY2d 714.) V. Voiding Continental’s subrogation rights by preindemnification is an unconstitutional taking of property without just compensation. (Gilbert v Ackerman, 159 NY 118; Greyhound Food Mgt. v City of Dayton, 653 F Supp 1207, 852 F2d 866.) VI. Continental’s due process rights would be violated by the adoption of preindemnification. (Steamship Co. v Joliffe, 2 Wall [69 US] 450; Greyhound Food Mgt. v City of Dayton, 653 F Supp 1207, 852 F2d 866; Hammond v United States, 786 F2d 8.) VII. Continental’s subrogor did not waive its right to common-law indemnification. (Michalak v Consolidated Edison Co., 166 AD2d 213; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509.)

      Ohrenstein & Brown, New York City (Mark J. Bunim and Jon D. Lichtenstein of counsel), for appellants and third-party plaintiffs-appellants- in the second above-entitled action.
    I. The decision and order of the court below should be reversed because it improperly applied the contractual defense of preindemnification to this case. (Beacon Term. Corp. v Chemprene, Inc., 75 AD2d 350; Alsens Am. Portland Cement Works v Degnon Contr. Co., 222 NY 34; Millerton Agway Coop, v Briarcliff Farms, 17 NY2d 57; Matter of East 56th Plaza v Abrams, 91 AD2d 1129; Hawthorne v South Bronx Community Corp., 78 NY2d 433; Gorham v Arons, 282 App Div 147, 306 NY 782; Michalak v Consolidated Edison Co., 166 AD2d 213; Mennis v Westchester County Playland Commn., 87 AD2d 862; Warren v Arena Assocs., 109 AD2d 738; Jefpaul Garage Corp. v Presbyterian Hosp., 61 NY2d 442.) II. The decision and order of the court below should be reversed because it improperly applied the antisubrogation rule to this case. (Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465; Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co., 61 NY2d 569; Kelly v Diesel Constr. Div. of Carl A. Morse, Inc., 35 NY2d 1; Hawthorne v South Bronx Community Corp., 78 NY2d 433; Lagzdins v United Welfare Fund-Sec. Div. Marriott Corp., 77 AD2d 585; Dole v Dow Chem. Co., 30 NY2d 143.)

      Herzfeld & Rubin, P. C, New York City (David B. Hamm, Herbert Rubin and Linda M. Brown of counsel), and Raymond C. Green for third-party defendant-respondent in the second above-entitled action.
    I. Having purchased insurance covering the City for any liability arising out of work performed by EMD, EMD has preindemnified the City for such liability to the extent of the coverage provided. (Michalak v Consolidated Edison Co., 166 AD2d 213; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509; Goffredo v Bay St. Landing Assocs., 179 AD2d 799; McDermott v City of New York, 50 NY2d 211; Bay Ridge Air Rights v State of New York, 44 NY2d 49; Peoples’ Democratic Republic v Goodpasture, Inc., 782 F2d 346; Hogeland v Sibley, Lindsay & Curr Co., 42 NY2d 153; Meadvin v Buckley-Southland Oil Co., 59 NY2d 822; Moore v Leggette, 24 AD2d 891.) II. Since the third-party plaintiff and third-party defendant in this action are both insured by the same insurer for the same risk, the third-party action is, in effect, a claim by an insurer against its own insured. As such, it must be dismissed as a matter of law and public policy. (Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465; Weinreb v Weinreb, 140 AD2d 226; Chrysler Leasing Corp. v Public Adm’r, N. Y. County, 85 AD2d 410;
      Fowler v Stillwater Assocs., 169 AD2d 226; Rush Presbyt. St. Luke’s Med Ctr. v Safeco Ins. Co., 712 F Supp 1344; Covert v City of Binghamton, 117 Misc 2d 1075; Feller v Sano-Rubin Constr. Co., 82 Misc 2d 890; National Union Fire Ins. Co. v Aetna Cas. & Sur. Co., 790 F Supp 491, 983 F2d 1048.) III. The confluence of preindemnification — indemnification in advance through the medium of insurance, prohibiting duplicative indemnification, and the Pennsylvania Gen. rule — prohibiting an insurer’s conflict-laden subrogation claim against its insured, renders meritless all arguments raised against application of these doctrines. (North Riv. Ins. Co. v United Natl. Co., 81 NY2d 812; Weinreb v Weinreb, 140 AD2d 226; New York Bd. of Fire Underwriters v Trans Urban Constr. Co., 60 NY2d 912; Gonzales v Armac Indus., 81 NY2d 1; Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co., 61 NY2d 569; Dole v Dow Chem. Co., 30 NY2d 143; Board of Educ. v Sargent, Webster, Crenshaw & Folley, 71 NY2d 21; National Union Fire Ins. Co. v Aetna Cas. & Sur. Co., 790 F Supp 491.)

      Morris, Duffy, Alonso & Marulli, New York City (Irwin H. Haut of counsel), for defendant and third-party plaintiff-appellant in the third above-entitled action.
    CNA, as the insurance carrier for the City of New York, is entitled to recover subrogation from third-party defendant-respondent, Slattery-Argrett Joint Venture Co., notwithstanding that the latter is also an insured under another separate distinct and independent policy of insurance issued by it. (Brown v Two Exch. Plaza Partners, 76 NY2d 172; Hawthorne v South Bronx Community Corp., 165 AD2d 652, 78 NY2d 433; Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509; Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co., 61 NY2d 569; Transport Trailer Serv. v Upjohn Co., 506 F Supp 442; Fashion Tanning Co. v Fulton County Elec. Contrs., 142 AD2d 465; Insurance Co. v Dayton Tool & Die Works, 57 NY2d 489; Moore v Leggette, 24 AD2d 891; Meadvin v Buckley-Southland Oil Co., 84 AD2d 907, 59 NY2d 822.)

      Ahmuty, Demers and McManus, Albertson (Frederick B. Simpson of counsel), for third-party defendant-respondent in the third above-entitled action.
    I. The court below properly held that Slattery-Argrett preindemnified the City of New York. (Kinney v Lisk Co., 76 NY2d 215; Michalak v Consolidated Edison Co., 166 AD2d 213, 77 NY2d 989; Rocovich v Consolidated Edison Co., 167 AD2d 524, 78 NY2d 509.) II. The City of New York cannot attempt to recover from Slattery-Argrett as this represents an attempt by a carrier, CNA, to recover from its own assured. (Pennsylvania Gen. Ins. Co. v Austin Powder Co., 68 NY2d 465; Covert v City of Binghamton, 117 Misc 2d 1075; United States Steel Corp. v Hartford Acc. & Indem. Co., 511 F2d 96; Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co., 61 NY2d 569; National Union Fire Ins. Co. v Aetna Cas. & Sur. Co., 790 F Supp 491; Moore v Leggette, 24 AD2d 891; Meadvin v Buckley-Southland Oil Co., 84 AD2d 907, 59 NY2d 822.) III. Preindemnification should apply in this case irrespective of the application of Austin Powder. (J. P. Realty Trust v Public Serv. Mut. Ins. Co., 102 AD2d 68; Kinney v Lisk Co., 76 NY2d 215.)
   OPINION OF THE COURT

Chief Judge Kaye.

These cases, which originated as damages claims for employees’ work site injuries, are today solely contests among insurance carriers over which insurance policy should bear the loss. The novel issue presented is whether this Court will recognize the doctrine of "preindemnification” asserted by insurers for the employer-contractors (the primary wrongdoers) to put the insurance coverage of the construction site owners (who are only vicariously liable) ahead of their own insurance. Having procured the separate insurance for the owners, as required by their agreements, the contractors argue that they have automatically "preindemnified” the owners for losses up to the limits of the owners’ policy. We reject that doctrine in favor of common-law indemnification principles, but further conclude that the insurers’ claims in Prince and Valentin are precluded by the independent, narrower, antisubrogation rule.

I.

These three appeals present a common fact pattern: in each, the agreement between the contractor and the owner (the City or State) specifies that the contractor will hold the owner harmless against any claims resulting from the contractor’s performance, and additionally requires the contractor to procure separate liability insurance for the owner. The contractor now points to the owner’s policy as preindemnification (up to the policy limits) for any losses sustained by the owner as a result of the contractor’s negligence, and argues that the owner’s policy should apply ahead of its own insurance. In all three appeals, more fully described below, common-law — not contractual — indemnification claims are the focus of the parties’ arguments.

Valentin v City of New York

In July 1988, EMD Construction Corporation was awarded a contract by the New York City Board of Education for construction and repair work at Louis D. Brandéis High School in Manhattan. The agreement obligated the contractor to maintain owners’ contractors’ protective (OCP) insurance naming the Board and the City (collectively "the City”) as insureds, general contractors’ liability (GCL) insurance, insurance against loss or damage to the work site, and workers’ compensation insurance. Additionally, the contract provided that the City’s right to indemnification would in no way be diminished "by the exercise of any other remedy provided for by contract or by law,” and that "[i]f the persons or property of others sustain loss, damage or injury resulting directly or indirectly from the work of [EMD] in their performance of this contract * * * [EMD] shall indemnify and hold the board and the city harmless for any and all claims and judgments for damages.”

As required by contract, EMD purchased an OCP policy from National Union Fire Insurance Company, naming only the City as insured, which afforded the City coverage for bodily injury in the amount of $3 million per occurrence. EMD paid a $3,000 premium for the City’s coverage. EMD purchased a separate GCL policy from National Union, which provided coverage for bodily injury of $1 million per occurrence, at a premium of $72,682. EMD also procured a $5 million excess policy from the North River Insurance Company and workers’ compensation coverage from the State Insurance Fund.

In November 1988, an EMD employee died of injuries sustained in a fall from the roof of the high school. His administrator brought suit for wrongful death against the City, as the owner of the work site, seeking $12 million in damages, and the City in turn brought a third-party action seeking common-law indemnification on the ground that the contractor’s negligence had been the sole cause of the loss.

The trial court granted EMD’s motion to dismiss the third-party action on the ground that EMD had preindemnified the City by maintaining the OCP insurance policy, and that the third-party action was, in effect, an improper attempt by an insurer to recover from its own insured. The Appellate Division reinstated the claim to the extent that any judgment exceeded the face amount of the policy, holding that "by requiring the acquisition of insurance on their behalf, third-party plaintiffs have waived any right of common-law indemnity up to the limit of the subject policy” and that the third-party plaintiffs "would be compelling National Union to demand subrogation from its own insured, EMD, for exactly the sort of claim for which EMD purchased the policy in the first place.” (187 AD2d 343, 344.) This appeal is before us by the Appellate Division’s grant of leave to the City. The Appellate Division certified the following question: "Was the order of this Court, which modified the order of the Supreme Court, properly made?”

Prince v City of New York

In March 1983, the City of New York engaged Slattery-Argrett Joint Venture Company as general contractor on a construction project at the North River Water Pollution Control Project. Pursuant to contract, Slattery purchased an OCP insurance policy from CNA (naming only the City as insured), which afforded coverage for bodily injury and property damage in the amount of $1 million per occurrence, for which it paid a $3,700 premium. For itself, the contractor purchased a separate GCL policy from CNA providing similar coverage for a $74,000 premium, a $1 million excess insurance policy from the Hartford Accident and Indemnity Company, and workers’ compensation coverage from Amerisure.

A Slattery employee injured when he fell from a ladder at the work site sued the owner and the contractor. The City cross-claimed against Slattery for indemnification on the ground that the contractor’s negligence caused the injuries. The trial court dismissed the employee’s direct action against the contractor and deemed the City’s cross claim to be a third-party complaint. After denial of the contractor’s motion for summary judgment dismissing the third-party action, the jury fixed damages at $335,000, and the trial court directed a verdict in favor of the City on its indemnification claim.

The Appellate Division reversed and dismissed the third-party action, holding that "[permitting the indemnification claim to go forward would involve CNA in an obvious conflict of interest given its obligation to defend Slattery on the same claim that it asserts on behalf of the City.” (189 AD2d 33, 37.) The Appellate Division granted leave to appeal to this Court on the following certified question: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?”

North Star Reins. Corp. v Continental Ins. Co.

In July 1984, the State of New York contracted with Fresh Meadows Painting Corporation to clean and paint 20 Suffolk County bridges. As required by contract, Fresh Meadows purchased an OCP insurance policy, naming the State as the only insured, which afforded coverage for bodily injury in the amount of $1 million per occurrence and other coverage, for which Fresh Meadows paid a $1,772 premium. Fresh Meadows also purchased a separate GCL policy from the same insurer, Continental, for a $1,304 premium, which provided coverage for bodily injury and property damage of $500,000 per occurrence, subject to several exclusions, a $2 million excess insurance policy from North Star Reinsurance Corporation, and workers’ compensation coverage from U.S. Fire Insurance Company.

Two Fresh Meadows employees injured while painting a railroad overpass sued the State, as owner of the work site, and the State in turn brought a third-party action for common-law indemnification on the ground that the contractor’s negligence caused the injuries. Just prior to trial, the employees settled the action for $3 million, funded $750,000 by Continental, $750,000 by North Star and $1,500,000 by U.S. Fire pursuant to stipulation by which the insurers agreed to have their respective liability determined in a declaratory judgment action.

In that action, the various insurers sought summary judgment against one another, which the trial court denied. The Appellate Division, however, granted Continental’s motion, holding that the exclusions in the $500,000 GCL policy rendered it inapplicable to the loss, and that the $1 million OCP policy could not be applied to the settlement "because any payments on behalf of the State for vicarious liability would subrogate Continental to the State’s claims against Fresh Meadows, the actual wrongdoer.” (185 AD2d 187, 188.) The court also determined that, irrespective of Continental’s assertion that the OCP also contained an exclusion barring coverage of the claim, Continental had acknowledged coverage under the OCP policy by the stipulation. We granted leave to appeal to U.S. Fire and North Star.

II.

The Preindemnification Doctrine

As a rule, an insurer that has paid a claim on behalf of an insured who is only vicariously liable for the loss is entitled to recover the amount paid by way of indemnity from the wrongdoer (see, 16 Couch, Insurance 2d § 62:187 [rev ed]). The obligation to indemnify arises from the equitable principle that the wrongdoer ought to bear responsibility for the loss (see, Leflar, Contribution and Indemnity Between Tortfeasors, 81 U Pa L Rev 130, 146-148 [1932]).

"Preindemnification” is a departure from this fundamental principle. As framed by the parties, the doctrine would bar a common-law claim for indemnification by the vicariously liable party (or its insurer) to the extent that the wrongdoer, pursuant to contractual obligation, has insured that party against the loss (see, Rawson v Pyramid Champlain Co., 193 AD2d 1052; Rocovich v Consolidated Edison Co., 167 AD2d 524, 526, affd on other grounds 78 NY2d 509; Michalak v Consolidated Edison Co., 166 AD2d 213, 214, lv dismissed 77 NY2d 989).

Preindemnification apparently first appeared more than a decade ago (see, e.g., Covert v City of Binghamton, 117 Misc 2d 1075) and has recently been recognized by the Appellate Divisions as an application of Pennsylvania Gen. Ins. Co. v Austin Powder Co. (68 NY2d 465). As the Appellate Division explained in Michalak (166 AD2d, at 214), "by requiring the procurement of insurance naming itself as 'additional insured’, Con Edison has waived any right of common-law indemnity” up to the limit of the policy. Citing Pennsylvania Gen., the court additionally noted that permitting the claim "would allow those carriers a right of subrogation against their own insured for a claim arising from the very risk for which the insured was covered” (166 AD2d, at 214-215).

Since Michalak in 1990, the Appellate Divisions have several times applied the doctrine to preclude indemnification claims by an owner against a contractor on similar facts (see, Glinsman v Long Is. Light. Co., 196 AD2d 571; Rawson, 193 AD2d, at 1052; Mcelroye v City of Rochester, 190 AD2d 1025, 1026; Goffredo v Bay St. Landing Assocs., 179 AD2d 799, 801; Fowler v Stillwater Assocs, 169 AD2d 226, 227-228; Rocovich, 167 AD2d, at 526-527; compare, North Star Reins. Corp. v Continental Ins. Co., 185 AD2d 187, 188 [declining to adopt preindemnification]). These later cases rely on Michalak, Pennsylvania Gen. and each other, and offer little by way of analysis. We conclude that the theories advanced in support of preindemnification do not justify the departure from long-standing principles of indemnification.

Preindemnification rests on the legal conclusion that simply by requiring the contractor to maintain the insurance, the owner has automatically waived its right of common-law indemnification (see, Rawson, 193 AD2d, at 1052; Valentin, 187 AD2d, at 344; Rocovich, 167 AD2d, at 526; Michalak, 166 AD2d, at 214).

However, any notion of waiver is contradicted by the plain language of the contracts before us, which explicitly reserve the owners’ right to indemnification from the contractor (see, Hawthorne v South Bronx Community Corp., 78 NY2d 433, 437 [common-law and contractual indemnification give rise to distinct claims that may be asserted simultaneously]).

Moreover, the large disparity in premiums paid for the policies covering the owner and contractor signals that indemnification was contemplated by the parties. In Valentin and Prince, the contractor paid more than $70,000 for coverage under the GCL policy and less than $4,000 to insure the owner under the OCP, even though the policies provided similar coverage against the same risk. The OCP premiums evidence the insurers’ expectations that there was a relatively low risk of liability under the OCP policies. Moreover, the parties must have anticipated that the OCP would cover the owner’s own negligence because full protection against vicarious liability for the contractor’s negligence could have been achieved simply by requiring adequate coverage for the contractor (see, Kinney v Lisk Co., 76 NY2d 215, 218; Roblee v Corning Community Coll., 134 AD2d 803, 805, lv denied 72 NY2d 803). Applying preindemnification results in shifting the loss to the OCP policy despite the parties’ evident intention that the GCL policy bear all risks other than that of the owner’s own negligence.

Nor is preindemnification supported by the policy arguments underlying Pennsylvania Gen.: that permitting indemnification between the owner and the contractor would involve their mutual insurer in a conflict of interest (see, Mcelroye, 190 AD2d, at 1026; Prince v City of New York, 189 AD2d 33, 37), and that the insurer, and not the insureds, ought to pay the loss on the insured risk (see, Glinsman, 196 AD2d, at 572). Indeed, those same policy arguments would preclude contractual indemnification (see, Pennsylvania Gen., 68 NY2d, at 468).

The preindemnification doctrine, however, is different from and potentially broader than the antisubrogation rule. The concept of preindemnification as advanced by the parties would bar indemnification claims wherever a wrongdoer procured insurance on another’s behalf, whether or not the wrongdoer was insured by the same company against the same risk. Thus, neither of the policy grounds underlying Pennsylvania Gen. and the narrower antisubrogation rule supports the policy argument now advanced for preindemnification.

The contractors analogize preindemnification to mitigation of the owners’ "damages” herein, barring recovery to the extent the owners’ liability is covered by the insurance proceeds (see, e.g., Meadvin v Buckley-Southland Oil Co., 84 AD2d 907, revd on dissent below 59 NY2d 822; Moore v Leggette, 24 AD2d 891, affd 18 NY2d 864). In Meadvin and Moore, the injured plaintiff sought to recover damages directly from the tortfeasor, and we agreed that insurance proceeds provided by the wrongdoer should be deducted from the plaintiff’s recovery. By contrast, these cases involve vicarious liability, not damages. An indemnitee is entitled to recover the entire amount paid (see, Leflar, Contribution and Indemnity Between Tortfeasors, 81 U Pa L Rev 130, 131 [1932]); there is no "mitigation” of the right to be indemnified.

The contractors assert that the indemnification claims are barred in any event because the owner, whose insurer covered the loss under the OCP, has suffered no personal outlay of funds (see, Glinsman, 196 AD2d, at 572). While it is true that a common-law indemnification claim arises when the party seeking indemnity — i.e., the owner — has suffered an out-of-pocket loss (see, e.g., Bay Ridge Air Rights v State of New York, 44 NY2d 49, 54), the owner’s insurer has paid the claim out of its pocket, and the owner may seek indemnification on behalf of its insurer, who is the real party in interest (Pennsylvania Gen., 68 NY2d, at 470). Thus, the fact that the owner did not personally pay the contractor’s liability does not support the preindemnification doctrine.

Finally, we reject the contractors’ suggestion that preindemnification avoids a windfall to the owner, who has received the benefit of the insurance coverage and now seeks indemnification. Neither the vicariously liable owner seeking indemnification in these cases, nor its insurer, receives a double recovery by being permitted to seek reimbursement from the primary wrongdoer. It is not a "windfall” to be relieved of a vicarious liability.

Thus, we decline to adopt the doctrine of preindemnification.

The Separate Antisubrogation Rule

Subrogation, an equitable doctrine, entitles an insurer to "stand in the shoes” of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse (see, Pennsylvania Gen., 68 NY2d, at 471; 16 Couch, Insurance 2d § 61:37 [rev ed]; Keeton and Widiss, Insurance Law § 3.10 [a] [Practitioner’s ed]). Subrogation allocates responsibility for the loss to the person who in equity and good conscience ought to pay it, in the interest of avoiding absolution of a wrongdoer from liability simply because the insured had the foresight to procure insurance coverage (see, 16 Couch, Insurance 2d § 61:18 [rev ed]). The right arises by operation of law when the insurer makes payment to the insured (see, 16 Couch, Insurance 2d § 61:4 [rev ed]).

An insurer, however, has no right of subrogation against its own insured for a claim arising from the very risk for which the insured was covered (Pennsylvania Gen., 68 NY2d, at 468; 16 Couch, Insurance 2d § 61:136 [rev ed]). Public policy requires this exception to the general rule both to prevent the insurer from passing the incidence of loss to its own insured and to guard against the potential for conflict of interest that may affect the insurer’s incentive to provide a vigorous defense for its insured (Pennsylvania Gen., 68 NY2d, at 471-472).

Pennsylvania Gen. involved a single insurance policy under which the insurer sought subrogation against an additional insured. These cases require us to consider whether the antisubrogation rule should be applied in a situation where the owner and contractor are insured under two policies covering the same risk, issued simultaneously by the same insurer. We are unpersuaded that the public policy underlying Pennsylvania Gen. should be limited to the facts of that case and therefore conclude that the same rule applies in the immaterially different circumstance now before us.

The policy considerations underlying Pennsylvania Gen., preventing the insurer from recouping the insurance proceeds from its insured, and avoiding the potential for conflict of interest when the parties’ insurer is subrogated against an insured, are equally applicable here. The OCP and GCL were purchased together as coverage against the same risk and paid for by the same party (see, Mollica v Metro-N. Commuter R. R., 1989 WL 123084, *5 [US Dist Ct, SD NY, Sweet, J., 87 Civ 7948]; compare, Note, Extension of the No Subrogation Against Insured Rule, 56 Neb L Rev 765, 773-780 [antisubrogation rule should not be extended to distinct and separate policies]), and, as in Pennsylvania Gen., the covered loss occurred. Application of Pennsylvania Gen. is warranted because the two policies are integrally related and indistinguishable from a single policy in any relevant way.

Plainly, a potential conflict of interest arises where the insurer that issued both policies seeks indemnification against the contractor. As is apparent in the present cases, the mutual insurer, as subrogee of the owner, can fashion the litigation so as to minimize its liability under the GCL. By failing to assert a contractual indemnification claim on the owner’s behalf, the insurer can trigger coverage under other insurance policies held by the contractor such as a workers’ compensation or excess policy (see, National Union, 790 F Supp, at 492; Covert, 117 Misc 2d, at 1080).

Thus, we conclude that the antisubrogation rule applies to bar the insurers’ subrogation claims against the contractors in Prince and Valentin. However, we agree with the Appellate Division in North Star that, because exclusions in the GCL rendered that policy inapplicable to the loss, the antisubrogation rule does not apply in that case.

Accordingly, the orders of the Appellate Division in all three cases should be affirmed, with costs, and the certified questions in Prince and Valentin answered in the affirmative.

Simons, J.

(dissenting). The majority concludes that "the doctrine of preindemnification” does not apply in these actions. The contracting parties were, however, free to make any bargain they chose unless it was illegal or contrary to public policy. The insurers here claim that the parties agreed the owner’s insurance (purchased by the contractor) was to serve as the owner’s indemnity if a claim arose in which the owner was vicariously liable for the contractor’s fault. The parties were free to make that agreement if they chose to do so and the only question remaining is whether they did. In my view, a question of fact is presented on that issue and the cases should be remanded for a factual determination of whether the owners waived their common-law right to be indemnified.

My primary disagreement, however, is with the majority’s conclusion that the antisubrogation rule prohibits subrogation in these cases. Relying on fears of "potential conflicts of interest”, the majority prohibits the insurers from spreading the loss among the contractors’ various insurers, though all have been paid premiums to cover the losses at issue here.

Nearly 70 years ago, our Court stated: "It is so well settled as not to require discussion that an insurer who pays claims against the insured for damages caused by the default or wrongdoing of a third party is entitled to be subrogated to the rights which the insured would have had against such third party for its default or wrongdoing. This right of subrogation is based upon principles of equity and natural justice” (Ocean Acc. & Guar. Corp. v Hooker Electrochemical Co., 240 NY 37, 47). That right, so firmly embedded in our equitable jurisprudence and case law, should be abrogated only under compelling circumstances. When we have decided to limit it, we have proceeded cautiously, narrowly defining the proper rule. Thus, in Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co. (61 NY2d 569), we stated that the antisubrogation rule applies only when a single policy covers both insureds. That rendering of the antisubrogation rule is sound. It broadly recognizes the right to subrogation yet limits the right when the insurer’s conflict of interest is most apparent and legal action by the insurer against the insured is likely to undermine the coverage purchased by the insured.

In each of the three cases now before us, the common insurer has issued two policies, one covering the owner and one covering the contractor. The premiums for the two policies differed substantially to reflect the actuarial assessment of the potential liability of the insured for the risks covered by each policy. Unless Hartford is no longer good law, it should govern and the antisubrogation rule should not bar the insurers’ litigation against the contractors. I find no support for the majority’s statement that Hartford merely "alludes to” the antisubrogation rule (majority opn, at 295, n 4). Indeed, the "single policy” limitation of the antisubrogation rule was essential to our decision in Hartford, and if it is no longer good law, the majority should say so and explain why.

I would find that these cases are governed by Hartford and conclude that the antisubrogation rule is not applicable. The circumstances presented by these cases do not provide compelling reasons to cut back further on the equitable right to subrogation and doing so shifts the losses away from the primary tortfeasors.

The majority justifies extending the prohibition to these cases because a "potential conflict of interest” exists (majority opn, at 295 [emphasis added]). That concern is unfounded on the facts presented. While in form the insurers are suing their own insured, and are therefore on both sides of the lawsuits, in reality they are bringing the suit to reach other insurers because in each case the contractor has additional insurance, issued by insurers other than the subrogees, which may cover the loss. Thus, the subrogees are not seeking to merely transfer assets from one of their pockets to another or even to get the contractor to pay for the loss out of its own pocket; they are trying to fully allocate the loss among those insurers who have undertaken to cover the risk of the contractor’s primary negligence.

Moreover, the possibility of conflict is more imagined than real, for as a practical matter an insurer has little incentive to seek subrogation against its own insured if it must shoulder the loss regardless of which party prevails. But here the contractor’s other insurers are the real parties in interest, and their presence and adverse interests assure that the issues will be fully litigated, making the action an appropriate vehicle for determining how the loss is to be spread among the insurers. The majority’s rule forecloses that allocation of loss, however, and assigns the loss solely to one insurer, no matter what the parties and insurers contemplated and no matter what the various insurance contracts dictate.

It is difficult to find any other grounds in these cases to warrant barring subrogation. The fact that both the owners’ and the contractors’ policies cover the same risk does not justify a departure from Hartford. The courts are regularly confronted with similar cases of "potential conflicts”, cases in which the same insurer covers both parties involved in an automobile accident, for example. The insurer has an independently enforceable contractual obligation to defend each party in such cases and the matter is handled simply by requiring that different counsel be appointed for each party, thereby obviating any conflict and assuring vigorous representation for both sides.

Nor is a conflict created because one party paid for both policies. The duty to defend is owed to the insured, not the purchaser. Indeed, the majority’s rule, as far as one can tell from the writing, would apparently allow subrogation if the contractor bought policies for the owner and itself from two different carriers.

It may well be that subrogation should be prohibited in some instances not covered by the Hartford rule — for instance, when the contractor is not insured by others. In such cases, a real conflict of interest may exist, the insureds may face out-of-pocket liability for risks they assumed to be covered by their insurance purchases, and a broadening of Hartford’s antisubrogation rule may be justified. But that case is not before us today. In each of these cases, there are two separate insurance policies and adverse parties able and willing to litigate fully the issues arising from an action premised on subrogation. The need for subrogation is apparent because the owner’s insurer by suing the contractor, which it also insures, is not merely suing itself, it is seeking to allocate the owner’s loss among all insurers who have sold policies to the contractor. The subrogee may legitimately ask them as insurers of the party primarily liable to share in the loss.

Accordingly, I dissent and would vote to reverse the orders of the Appellate Division in all three cases.

Judges Titone, Hancock, Jr., and Levine concur with Chief Judge Kaye; Judge Simons dissents in a separate opinion in which Judges Bellacosa and Smith concur.

In North Star Reins. Corp. v Continental Ins. Co.: Order affirmed, with costs.

In Valentin v City of New York and Prince v City of New York: Order affirmed, with costs, and certified question answered in the affirmative.

      . The dissent misconstrues the contractors’ argument concerning the doctrine of preindemnification (dissenting opn, at 296-297). What is at issue in the appeals before us is not case-by-case contractual preindemnification at all. What is at issue is the contractors’ assertion that, merely by requiring them to purchase and maintain insurance for the owners, the owners have thereby automatically been preindemnified as a matter of law. Presumably the parties could, if they wished, contract for such a result. We consider, and reject, only the conclusion that the owners’ right to common-law indemnification is waived by reason of the contractors’ obligation to procure insurance.

      . In North Star, the contractor paid roughly the same amounts for each policy, but the GCL contained numerous exclusions.

      . Nor does Leaseway of Cent. N. Y. v Climax Mfg. Co. (81 AD2d 1038, affd on mem below 54 NY2d 822) provide support for preindemnification, wherein the insurance coverage was purchased by the party seeking indemnification, not by the wrongdoer, and a double recovery would have resulted had the claim been allowed.

      . Our holding in Hartford Acc. & Indem. Co. v Michigan Mut. Ins. Co. (61 NY2d 569, 573) that an insurer must demonstrate a good-faith basis for refusing to implead an affiliated company, does not require a different conclusion (see, Pennsylvania Gen., 68 NY2d, at 471 [noting Hartford alludes to but does not formally address antisubrogation rule]; National Union Fire Ins. Co. v Aetna Cas. & Sur. Corp., 790 F Supp 491, 493 [SD NY], affd 983 F2d 1048 [2d Cir 1992]). We held in Hartford that Michigan Mutual, in defending two insureds under a GCL, could not refuse on antisubrogation grounds to implead an additional insured under that policy where that insured would have been covered only under a separate workers’ compensation policy also issued by Michigan Mutual. The GCL and workers’ compensation policies obviously did not cover the same risk — an essential element of our holding here — making Hartford more analogous to the situation where one automobile insurer has insured both drivers involved in the same accident and subrogation is available.

      . Addressing the dissent, the conclusion that the issue is an open one— not precluded by Hartford — was the Court’s unanimous view in Pennsylvania Gen. (68 NY2d, at 471). Nor should we allow subrogation in the factual circumstances presented here. Indeed, to do so exalts form over substance, for the very concerns that motivated Pennsylvania Gen. (where there was a single policy) are present here (though there are two policies). The policies, though separate, were purchased together, by the same party, insuring the same risk — not at all the case in the automobile insurance example given by the dissent. The conflict is real, not simply imagined, as evidenced by the fact that only common-law indemnification claims are asserted here, although an unconflicted insurer might have asserted contractual indemnification claims as well. Finally, we are mindful of the dozen or more Appellate Division opinions, trial court decisions and Federal cases concluding over the past several years that public policy is violated by permitting subrogation in these circumstances. While those decisions confuse the issue by reaching this conclusion under the rubric of "preindemnification,” and while they are of course not binding on this Court, they offer persuasive authority for the conclusion we now reach.