author: Levine, J.

text:
    [623 NE2d 1150, 603 NYS2d 800]
    In the Matter of Jeffrey V., a Person Alleged to be a Juvenile Delinquent, Appellant.
    Argued September 9, 1993;
    decided October 12, 1993

      POINTS OF COUNSEL

      Carol Goldstein, New York City, Lenore Gittis and Michael

      Somma for appellant.
    The Family Court Judge violated appellant’s statutory right to a probable-cause hearing when, on the third day after his initial appearance, the court denied him a probable-cause hearing and ordered the trial to commence despite his Law Guardian’s assertion that he had yet to conduct an investigation and was unprepared to represent his client effectively. The court’s action also deprived appellant of the assistance of counsel during a material stage of the trial and the fact finding must therefore be vacated. (Schall v Martin, 467 US 253; People ex rel. Kaufmann v Davis, 57 AD2d 597; Matter of Milton D., 72 AD2d 812; Matter of Robert W., 109 AD2d 623; People v Hodge, 53 NY2d 313; People ex rel. Vrod v Schall, 142 Misc 2d 968; People ex rel. Guggenheim v Mucci, 32 NY2d 307; Matter of Detrece H., 78 NY2d 107; People v McLaughlin, 291 NY 480; People v Snyder, 297 NY 81.)

      O. Peter Sherwood, Corporation Counsel of New York City (Ronald E. Sternberg and Leonard Koemer of counsel), for respondent.
    I. The courts below correctly determined that a detained juvenile does not have a statutory right to a probable-cause hearing when the highest count in the petition is less than a class C felony. (People v Mobil Oil Corp., 48 NY2d 192; Schall v Martin, 467 US 253; Matter of Robert L., 129 Misc 2d 742; Matter of Snap, 125 Misc 2d 314; People ex rel. Guggenheim v Mucci, 32 NY2d 307.) II. The Court below correctly determined that appellant, whose counsel fully participated in all phases of the fact-finding hearing, was not deprived of his constitutional right to the effective assistance of counsel. (Matter of Robert W., 109 AD2d 623; Matter of Milton D., 72 AD2d 812.)
   OPINION OF THE COURT

Levine, J.

This case raises issues concerning the application of Family Court Act §§ 325.1 and 340.1 to a detained juvenile charged with committing acts that, if committed by an adult, would constitute crimes less serious than a class C felony. Under Family Court Act § 325.1, a juvenile who is to be detained "for more than three days pending a fact-finding hearing” is entitled to a probable-cause hearing (Family Ct Act § 325.1 [1]), which "shall be held within three days following the initial appearance or within four days following the filing of a petition, whichever occurs sooner” (Family Ct Act § 325.1 [2]). Family Court Act § 340.1 (1) provides that when a detained juvenile is charged in a petition in which the highest count is less than a class C felony "the fact-finding hearing shall commence no more than three days after the conclusion of the initial appearance except as provided in subdivision four [i.e., adjournments for good cause]”.

Appellant initially appeared in Family Court August 14, 1990 on a juvenile delinquency petition charging him with one count of unlawful possession of weapons by persons under the age of 16 (Penal Law § 265.05) and three counts alleging acts which, if committed by an adult, would constitute the crimes of attempted assault in the third degree (Penal Law §§ 110.00, 120.00 [1]); criminal possession of a weapon in the fourth degree (Penal Law § 265.01 [2]); and menacing (Penal Law § 120.15). He denied all charges and was remanded to detention. At his next appearance three days later, the presentment agency expressed its readiness to proceed with a fact-finding hearing. Appellant’s Law Guardian stated the defense was not prepared to go forward with the fact-finding hearing, but requested that the court hold a probable-cause hearing pursuant to Family Court Act § 325.1. The court denied the Law Guardian’s request for a probable-cause hearing and directed the commencement of the fact-finding hearing.

In refusing to hold a probable-cause hearing, Family Court looked to the mandate of Family Court Act § 340.1 (1) that, because the petition charged appellant with acts less serious than a class C felony, a fact-finding hearing had to be commenced not more than three days after his initial appearance. From this mandate, Family Court inferred that the statutory right of a detained juvenile to a probable-cause hearing within three days of the initial appearance (see, Family Ct Act § 325.1 [1], [2]) did not apply when, as here, all of the charges in the petition are less serious than a class C felony (accord, Matter of Robert L., 129 Misc 2d 742). The fact-finding hearing then began with the direct examination of the complainant by the presentment agency. She related an incident in which appellant pressed the point of a kitchen knife against her side and told her he was the "zodiac killer”. At the conclusion of the complainant’s direct testimony, Family Court granted the Law Guardian’s request for a continuance.

The fact-finding hearing resumed and was concluded four days later, with the Law Guardian’s cross-examination of the complainant, the presentation of appellant’s alibi defense and rebuttal testimony from the complainant. Following the hearing, Family Court found appellant guilty of acts constituting criminal possession of a weapon in the fourth degree and menacing, and exonerated him on all remaining counts of the petition. The Appellate Division affirmed (185 AD2d 240). This Court granted leave to appeal. We now affirm.

Appellant asserts two grounds for reversal of the adjudication of juvenile delinquency: first, that he was denied his statutory right to a probable-cause hearing and second, that he was denied his constitutional right to effective assistance of counsel.

At the outset, we find untenable Family Court’s conclusion, urged as a ground for affirmance by the presentment agency before us, that the statutory direction to commence a fact-finding hearing within three days of the initial appearance of a detained juvenile charged with acts each constituting less than a class C felony implicitly restricts the statutory entitlement to a probable-cause hearing to detained juveniles charged with committing acts constituting class A, B or C felonies. Not only does such a reading of article 3 of the Family Court Act lack support in any express statutory language, but it also ignores various provisions clearly maintaining a dichotomy between a juvenile detainee’s rights to a probable-cause hearing and to a prompt fact-finding hearing.

Thus, Family Court is authorized to grant a juvenile’s request for an adjournment of the fact-finding hearing "for good cause shown” (Family Ct Act § 340.1 [4] [b]), as an exception to the prompt fact-finding hearing mandate (see, Family Ct Act § 340.1 [1]). A justifiable claim of the Law Guardian’s lack of readiness for trial would be a prime example of good cause for the discretionary granting of an adjournment. Yet the statute provides that a juvenile’s unreadiness for a fact-finding hearing does not constitute a waiver of the probable-cause hearing (Family Ct Act § 325.1 [4]). Moreover, Family Court’s interpretation would produce the anomalous result that juvenile detainees charged with minor criminal acts would have less procedural protection against unjustified detention than those charged with the most serious criminal acts. For the foregoing reasons, we hold that the requirement in Family Court Act § 325.1 for a probable-cause hearing cannot be limited to cases where the petition charges acts constituting class A, B or C felonies.

Nonetheless, we find no basis for reversal here. The fact-finding hearing was actually commenced not more than three days after appellant’s initial appearance and detention. Therefore, as the Appellate Division properly held, he was not detained "for more than three days pending a fact-finding hearing”, and the failure to accord him a separate probable-cause hearing did not violate any statutory right (see, Family Ct Act § 325.1 [1]). Moreover, the testimony of the complainant on direct examination during the first session of the fact-finding hearing, held within three days of appellant’s initial appearance, clearly established probable cause. Thus, the procedure employed in the instant case essentially conformed to that suggested by this Court in People ex rel. Guggenheim v Mucci (32 NY2d 307, 313). We have no occasion now to address the effect of a failure to establish probable cause during the initial part of the fact-finding hearing held within the statutory three-day period.

We are equally unpersuaded by appellant’s alternative claim of reversible error, that by directing the commencement of the fact-finding hearing over the Law Guardian’s claim of unpreparedness, Family Court deprived appellant of his constitutional right to effective assistance of counsel (see, US Const 6th Amend; NY Const, art I, § 6). When ineffectiveness of representation is claimed to be due to lack of preparedness of counsel, the United States Supreme Court has eschewed any per se inference of a constitutional deprivation; counsel who was present is presumed to have been competent and the burden is on the accused to demonstrate upon the record the absence of meaningful adversarial representation. This is so whether the claim is general unpreparedness of counsel throughout the trial (see, United States v Cronic, 466 US 648, 658, 666) or unpreparedness at some specific critical stage (see, Darden v Wainwright, All US 168, 184-186). Also, the refusal to postpone a trial at counsel’s request for further time to prepare does not by itself give rise to an inference of ineffective representation (see, United States v Cronic, supra, at 661-662). Our cases applying the Right to Counsel Clause of the State Constitution, as well as that of the United States Constitution, are consistent with the Cronic holding (see, People v Rivera, 71 NY2d 705, 708-709; People v Benn, 68 NY2d 941, 942; People v Satterfield, 66 NY2d 796, 798-799).

Applying the foregoing principles in the instant case, the record establishes that, viewed in the totality of the proceedings, appellant received meaningful representation by his Law Guardian (see, People v Rivera, supra, at 708; People v Baldi, 54 NY2d 137, 146-147), a conclusion supported by the Law Guardian’s success in achieving dismissal of two of the four counts of the petition. Appellant has completely failed to point to any omission or error of the Law Guardian which arguably would have been avoided by reasonably competent counsel. Examination of the brief transcript of the complainant’s simple narrative of the incident on direct examination reveals that the Law Guardian did participate, interposing the only viable objection to any portion of her testimony. Thus, there has been no demonstration whatsoever that appellant was not afforded meaningful representation at that initial portion of the fact-finding hearing.

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

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

Order affirmed, without costs.


source: Caselaw Access Project

author: Hancock, Jr., J.

license: Public Domain

text:
    [623 NE2d 1154, 603 NYS2d 804]
    In the Matter of Joseph M., Appellant. New York City Board of Education, Respondent.
    Argued September 9, 1993;
    decided October 14, 1993

      POINTS OF COUNSEL

      Frederick K. Reich, New York City, and James R. Sandner for appellant.
    I. Even if the Court of Appeals is inclined to extend the availability of an unsealing of records sealed pursuant to CPL 160.50 to instances where the records are sought for use in a tenured teacher’s disciplinary proceeding, respondent has failed to make a compelling demonstration of necessity as that standard has been previously articulated by the Court. (People v Patterson, 78 NY2d 711; Matter of Hynes v Karassik, 47 NY2d 659; Matter of Dondi, 63 NY2d 331; People v Joseph W. F., 111 Misc 2d 752.) II. The vote of probable cause to commence the Education Law § 3020-a disciplinary proceedings should preclude respondent from successfully applying for an unsealing of the records in issue. (Matter of Dondi, 63 NY2d 331.) III. The Court below erred to the extent that it opined with respect to what facts or evidence may be presented to the Education Law § 3020-a disciplinary panel. (Matter of Jerry v Board of Educ., 35 NY2d 534.)

      O. Peter Sherwood, Corporation Counsel of New York City (Deborah R. Douglas and Fay Leoussis of counsel), for respondent.
    The Court below correctly affirmed the Supreme Court’s order to unseal records and physical evidence pertaining to appellant’s drug arrest and prosecution for use in an administrative hearing to determine appellant’s fitness to teach children, given, inter alla, that the intent of CPL 160.50 to prohibit the imposition of adverse consequences merely on the basis of an accusation has no relevance to a disciplinary proceeding in which appellant is accorded ample due process to refute the charges, and that courts, in any event, have inherent power to unseal records "when justice demands”. (Reed v State of New York, 78 NY2d 1; Scales v Maxwell, 52 AD2d 719; Helvering v Mitchell, 303 US 391; Matter of Perry v Blair, 64 AD2d 870; Matter of Bott v Board of Educ., 41 NY2d 265; Ambach v Norwick, 441 US 68; Gebbie v Gertz Div. of Allied Stores, 94 AD2d 165; People v Patterson, 78 NY2d 711; Matter of Riforgiato v Board of Educ., 86 AD2d 757; Matter of Dondi, 63 NY2d 331.)
   OPINION OF THE COURT

Hancock, Jr., J.

The general rule established by CPL 160.50 is that — unless the court determines that the interests of justice require otherwise — the record of a criminal action or proceeding upon termination in favor of the accused "shall be sealed and not made available to any person or public or private agency” (subd [1] [c]). The statute specifies that the sealed records shall be made available upon request to the accused and to six enumerated categories of persons or public or private agencies (see, subd [1] [d]). The question presented in this appeal is whether a Board of Education, a public agency not listed in CPL 160.50 (1) (d), is entitled to obtain such sealed records for use in a hearing under Education Law § 3020-a on charges brought against a tenured teacher.

For reasons to be explained, we conclude that a Board of Education may not have access to sealed records for such purpose. It follows that in this case there was no legal basis for directing the unsealing of records pertaining to the unsuccessful prosecution of respondent for a misdemeanor charge of drug possession. There should, accordingly, be a reversal.

I

Respondent, a tenured music teacher, was arrested on May 12, 1990 on charges of misdemeanor possession of a controlled substance (Penal Law § 220.03). On April 15, 1991, a jury acquitted him of the charge. As required by CPL 160.50, the Trial Judge sealed the records pertaining to the arrest and prosecution. On May 29, 1991, the petitioner Board of Education commenced disciplinary proceedings against respondent pursuant to Education Law § 2590-j (7) (b) and § 3020-a, charging him with the same misconduct as alleged in the unsuccessful criminal prosecution.

The Board brought the instant application on January 21, 1992 in Supreme Court for an order unsealing the criminal court records as well as releasing the prosecutor’s file and the physical evidence. Supreme Court granted the Board’s application, concluding that despite the lack of specific statutory power it had inherent discretionary power to unseal records "in extraordinary circumstances in the interests of fairness and justice”, citing Matter of Dondi (63 NY2d 331, 338) and Matter of Hynes v Karassik (47 NY2d 659, 664-665). The court held that the Board had "demonstrated a compelling need to unseal the records because it cannot obtain the information elsewhere and it needs the records to conduct the disciplinary proceeding”. The Appellate Division affirmed unanimously on the authority of Matter of Dondi, noting that " 'without an unsealing of criminal records, the ends of protecting the public through investigation and possible discipline * * * cannot be accomplished.’ ” (188 AD2d 319.) We granted leave to appeal.

II

CPL 160.50 was enacted in 1976 in the same reform legislation that added a provision to the Human Rights Law (now Executive Law § 296 [16]) making it an unlawful discriminatory practice for an employer, in connection with the employment of an individual, to inquire about or act adversely on any prior criminal accusation which had terminated in the employee’s favor. The purpose in adding these provisions to the Criminal Procedure Law and the Human Rights Law was to ensure that the protections provided to exonerated accuseds be "consistent with the presumption of innocence, which simply means that no individual should suffer adverse consequences merely on the basis of an accusation, unless the charges were ultimately sustained in a court of law” (Governor’s Approval Mem, 1976 McKinney’s Session Laws of NY, at 2451). As we noted in People v Patterson (78 NY2d 711):

"Indeed, the over-all scheme of the enactments demonstrates that the legislative objective was to remove any 'stigma’ flowing from an accusation of criminal conduct terminated in favor of the accused, thereby affording protection (i.e., the presumption of innocence) to such accused in the pursuit of employment, education, professional licensing and insurance opportunities (see, People v Anderson, 97 Misc 2d 408 * * *)” (id., at 716).

To effectuate this purpose, CPL 160.50 employs language that is mandatory. Upon termination of a criminal action in favor of an accused, the section provides that the record of such action "shall be sealed” (160.50 [1]); that all photographs, palmprints and fingerprints "shall forthwith be returned to such person” (160.50 [1] [a]); that any agency which may have transmitted copies of such photographs, palmprints, or fingerprints to an agency of another jurisdiction "shall forthwith formally request [their return]” (160.50 [1] [b]); and that all official records and papers relating to the arrest or prosecution "on file with the division of criminal justice services, any court, police agency, or prosecutor’s office shall be sealed and not made available to any person or public or private agency ” (160.50 [1] [c] [emphasis added]).

After a sealing order issues, CPL 160.50 (1) (d) specifies a few instances when the sealed records may be released to specified categories of persons or agencies, viz., to a prosecutor in a criminal proceeding involving marihuana in which the accused has moved for adjournment in contemplation of dismissal (cl [i]); to a law enforcement agency on a showing that justice requires such release (cl [ii]); to an agency acting on an application made by the accused for a gun license (cl [iii]); to the New York State Division of Parole, under certain conditions, when the accused is on parole (cl [iv]); to a prospective employer in connection with an employment application of an accused for a position as a police officer or peace officer (cl [v]); and to the probation department responsible for supervision of the accused when the arrest subject to the inquiry occurred while the accused was under such supervision (cl [vi]).

These exceptions in CPL 160.50 (1) (d) have been characterized as "narrowly defined” (Matter of Hynes v Karassik, 47 NY2d 659, 663, supra). Indeed, in Karassik, we construed the statute strictly and held that none of the exceptions could justify making sealed records available to assist a grievance committee in determining whether to bring professional disciplinary charges against a lawyer (id., at 663; see, Patterson, supra, at 714 [finding "no authorization in (CPL 160.50) for the use in a law enforcement agency’s investigatory procedures of a photograph retained in violation thereof’]; Dondi, supra, at 338 [restating rule in Karassik that a grievance committee "has no standing under CPL 160.50 to seek an order to obtain records sealed pursuant to that provision as it does not constitute a Taw enforcement agency’ ”]; see also, Matter of Skyline Inn Corp., 44 NY2d 695, 696, supra [refusing to make exception to the Human Rights Law provision (now Executive Law § 296 [15]) to permit State Liquor Authority to consider dismissed criminal charge against licensee seeking a renewal]; and supra, note).

Despite the statute’s mandatory language, its evident intent to limit the exceptions to persons or groups having some association with law enforcement problems, and the legislative recognition of the importance of protecting individuals from having dismissed criminal charges considered in connection with their employment, the Board would have us construe the statute as including an exception for teacher disciplinary proceedings. This we decline to do. Suffice it to say that if the Legislature had intended to create such an exception — one which, unlike the other exceptions, would have no law enforcement association — it would have done so (see generally, McKinney’s Cons Laws of NY, Book 1, Statutes § 240 ["Expression of one thing as excluding others”]). Moreover, such a holding would be contrary to our decisions (see, Patterson, supra, at 714; Dondi, supra, at 338; Karassik, supra, at 663).

The Board argues alternatively that the unsealing order should be sustained, not as a proper exercise of power conferred by the statute, but as an exercise of "an inherent power to unseal records when justice demands, whether or not there is specific statutory authority” (emphasis added). The Board relies on our suggestion in Karassik (supra, at 664-665), later endorsed in Dondi, "that in 'extraordinary circumstances’ the Appellate Division may exercise its discretion, pursuant to inherent authority over records and its oversight and disciplinary power over attorneys and counselors at law, to permit the unsealing of criminal records” (Dondi, supra, at 338).

But Dondi and Karassik do not support the Board’s argument. In Dondi, we based our conclusion that the Appellate Division had inherent power to obtain sealed records pertaining to attorneys on Judiciary Law § 90 (2). This section specifically vests the Appellate Division with the responsibility for overseeing and disciplining attorneys. But the Appellate Division has been granted no comparable power as to teachers who are subject to disciplinary hearings not by the court system but by the Boards of Education under the Education Law (see, e.g., Education Law §§ 2590-j, 3020-a). Absent such a specific grant of power, a holding that the court has inherent authority to order the unsealing of records for use in a teacher disciplinary proceeding would frustrate a primary purpose of the 1976 amendments to the Criminal Procedure Law and the Human Rights Law (L 1976, ch 877) — protecting exonerated individuals from the unwarranted stigma that their employers or others could attach to dismissed criminal charges (see, Patterson, supra, at 714; Matter of Skyline Inn, supra, at 696; supra, note).

Moreover, finding such an "inherent power” basis for an unsealing order here would subvert the plain intendment of the statutory scheme — to establish, in unequivocal mandatory language, a general proscription against releasing sealed records and materials, subject only to a few narrow exceptions. If there is to be an exception to the general rule proscribing the release of sealed records — upon a showing of "extraordinary circumstances” (Dondi, supra, at 338) of the type alleged here — it should be created by the Legislature, not by the courts.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the application to unseal denied.

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

Order reversed, etc.

       L 1976, ch 877; the amendment to the Human Rights Law was adopted as subdivision (14) of section 296 of the Executive Law and renumbered as subdivision (16) (L 1980, ch 689). In pertinent part it provides that it shall be an unlawful discriminatory practice for "any person, agency, bureau, corporation or association * * * to make any inquiry about * * * or to act upon adversely to the individual involved, any arrest or criminal accusation of such individual * * * [which was terminated in his favor] in connection with the licensing, employment or providing of credit or insurance to such individual” (see, Matter of Skyline Inn Corp. v New York State Liq. Auth., 44 NY2d 695, 696 [holding that it was unlawful for the State Liquor Authority to consider a dismissed criminal charge against licensee in disapproving liquor license renewal applications]).


text:
    [623 NE2d 1157, 603 NYS2d 807]
    In the Matter of Joseph Morris, Appellant, v New York State Department of Taxation and Finance et al., Respondents.
    Argued September 7, 1993;
    decided October 19, 1993

      POINTS OF COUNSEL

      Dorsey & Whitney, New York City (Richard H. Silberberg and Robert G. Manson of counsel), and Simon, Uncyk & Borenkind, New York City (Eli Uncyk of counsel), for appellant.
    I. The Court below erred in affirming the assessment of New York use tax against Joseph Morris based on the doctrine of "piercing the corporate veil”. (Lowendahl v Baltimore & Ohio R. R. Co., 247 App Div 144, 272 NY 360; Marino v Dwyer-Berry Constr. Corp., 146 AD2d 750; Billy v Consolidated Mach. Tool Corp., 51 NY2d 152; Port Chester Elec. Constr. Corp. v Atlas, 40 NY2d 652; Walkovszky v Carlton, 18 NY2d 414; Bartle v Home Owners Coop., 309 NY 103; International Aircraft Trading Co. v Manufacturers Trust Co., 297 NY 285; Netley Offs. v Burgundy Realty Corp., 238 App Div 559, 265 NY 581; Waldman v Englishtown Sportswear, 92 AD2d 833; Rose Hall, Ltd. v Chase Manhattan Overseas Banking Corp., 576 F Supp 107, 740 F2d 958, 469 US 1159.) II. The Court below erred in affirming that Joseph Morris is not entitled to the nonresident exemption from New York use tax. (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Matter of SIN, Inc. v Department of Fin., 71 NY2d 616; Servomation Corp. v State Tax Commn., 51 NY2d 608; Kahal Bnei Emunim & Talmud Torah Bnei Simon Israel v Town of Fallsburg, 78 NY2d 194; Matter of McNulty v New York State Tax Commn., 70 NY2d 788.) III. The Court below erred in affirming the assessment of a penalty against Joseph Morris. (Matter of Higgins & McLaughlin v New York State Tax Commn., 109 AD2d 1029.)

      Robert Abrams, Attorney-General, Albany (Lew A. Millenbach, Jerry Boone and Peter H. Schiff of counsel), for New York State Department of Taxation and Finance, respondent.
    I. The Tax Appeals Tribunal correctly ruled that the Division of Taxation could disregard the corporate entity, Sunshine Developers, Inc., and look to the petitioner for payment of the tax assessed. (Port Chester Elec. Constr. Corp. v Atlas, 40 NY2d 652; International Aircraft Trading Co. v Manufacturers Trust Co., 297 NY 285; Billy v Consolidated Mach. Tool Corp., 51 NY2d 152; Moline Props. v Commissioner, 319 US 436; National Investors Corp. v Hoey, 144 F2d 466; United States v Brager Bldg. & Land Corp., 124 F2d 349; Dewitt Truck Brokers v Flemming Fruit Co., 540 F2d 681; Walkovszky v Carlton, 18 NY2d 414; Establissement Tomis v Shearson Hayden Stone, 459 F Supp 1355.) II. The Tax Appeals Tribunal correctly held that petitioner failed to demonstrate that he was a nonresident of New York when the two boats were purchased and that he was, therefore, not entitled to the nonresident exemption. (Cibro Petroleum Prods. v Chu, 67 NY2d 806; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471; Matter of Sunshine Developers v Tax Commn., 132 AD2d 752; Matter of Mobil Oil Corp. v Finance Adm’r of City of N. Y., 58 NY2d 95; Matter of Grace v New York State Tax Commn., 37 NY2d 193; Dental Socy. v New York State Tax Commn., 110 AD2d 988.) III. The Court below properly rejected petitioner’s plea for abatement of penalties. (Matter of Franklin Mint Corp. v Tully, 94 AD2d 877, 61 NY2d 980.)
   OPINION OF THE COURT

Hancock, Jr., J.

Petitioner, a New Jersey resident who maintained a rented apartment in New York, was the president of Sunshine Developers, Inc. (Sunshine), a closely held corporation owned entirely by his brother and his nephew. Respondent New York State Department of Taxation and Finance (the Department) assessed a compensating use tax against petitioner for two cabin cruisers purchased by the corporation outside of New York and allegedly used by him on his individual business in State waters. Although owning no stock in Sunshine, petitioner assertedly controlled the corporation and his responsibility for the tax has been upheld by disregarding the separate corporate entity under the doctrine of piercing the corporate veil. Because of his leasing a New York apartment, it has been held that petitioner, although a New Jersey resident, could not claim the nonresident’s exemption from the tax (see, Tax Law § 1118 [2]). On his appeal, the decisive question is whether the Tax Appeals Tribunal and Appellate Division properly sustained the assessment against petitioner on the theory of piercing the corporate veil. For reasons to be explained, we conclude that, on the facts in this record, that theory should not have been applied. We, therefore, reverse.

I

The pertinent facts may be summarized from the determinations of the Administrative Law Judge of the Division of Tax Appeals and of the Tax Appeals Tribunal. Sunshine was a company with offices in New Jersey incorporated in Delaware in 1977 for the purpose of purchasing, owning, operating and leasing boats. Petitioner’s brother, Robert Morris, was the majority shareholder and acted as Sunshine’s secretary-treasurer; petitioner’s nephew Drew, 14 years old at the time of incorporation, was the other shareholder. Robert Morris knew little about the assets or business activities of the corporation and did not participate in business decisions. As the sole board member, petitioner acted as chair and board secretary and made all corporate decisions. Petitioner had been a resident of New Jersey since 1980; from 1977 until 1984 he rented an apartment in New York City for the rare occasion when he stayed in New York overnight for business reasons.

In 1977 and in 1978 Sunshine purchased, owned, and operated at different times its primary assets, two boats ("the 1977 boat” and "the 1978 boat”), which it leased for the purpose of business entertainment to other companies owned by petitioner and Robert Morris. In October 1982, the Department assessed sales and use taxes against Sunshine for the purchase and use of these boats (see, Matter of Sunshine Developers v Tax Commn., 132 AD2d 752, lv denied 70 NY2d 609). On appeal, an Administrative Law Judge (AU), finding delivery of the boats to have occurred outside of New York, cancelled all sales tax assessments as well as the use tax on the 1977 boat, which had been used only infrequently in New York. The AU sustained the use tax on the 1978 boat, however. The Appellate Division upheld the tax, concluding that the 1978 boat "was seasonally moored, and therefore used, in New York. These facts support [the Department’s] further conclusion that petitioners [including Sunshine] were engaged in carrying on a business in this State and, thus, not entitled to the exemption for nonresidents” (id., at 754-755). The use tax assessed on the 1978 boat was paid to the Department.

The corporation subsequently sold these assets, and from June 1981 through August 1984 it purchased, owned and operated at different times two other boats ("the 1981 boat” and "the 1984 boat”). The corporation bought them following special board meetings at which petitioner, sitting as sole board member, authorized the purchases. Both boats were picked up by petitioner in North Carolina. And both boats were moored during the summer months at Montauk, New York.

In April 1985, the Department sent a notice of determination of sales and use taxes due on the 1981 and 1984 boats in the amount of $76,390, plus interest and penalties, to petitioner, Robert Morris and Sunshine. The Department’s action was based upon the mooring of the 1981 and 1984 boats at Montauk as well as on the allegation that Sunshine was a corporate resident of New York. On appeal, it was claimed that no sales tax was due as Sunshine was exempt from the use tax as a nonresident corporation. In May 1990, an AU concluded: (1) that Sunshine was entitled to the nonresident exemption pursuant to Tax Law § 1118 (2); and (2) that, notwithstanding the Department’s contentions, the corporate veil should not be pierced to impose personal liability for the taxes upon either petitioner or Robert Morris. In 1988, the sales and use tax on the 1981 boat was paid to the New Jersey Department of the Treasury.

The Department appealed to respondent Tax Appeals Tribunal (the Tribunal). In May 1991, the Tribunal sustained the AU’s determination of no imposition of sales or use taxes upon Sunshine, concluding that Sunshine was a nonresident corporation, which did no business in New York; it also sustained, the determination pertaining to Robert Morris that he had insufficient control of Sunshine to justify piercing the corporate veil. But the Tribunal reversed as to petitioner Joseph Morris and pierced the corporate veil, concluding that he was the equitable owner and controlling principal of Sunshine and therefore personally liable for the tax. The Tribunal also held that petitioner Joseph Morris did not qualify for the nonresident tax exemption due to his rental of a New York City apartment when the 1981 and 1984 boats were purchased. The Tribunal modified the total amount of tax assessed against him to reflect a credit for the sales and use tax paid to the State of New Jersey on the 1981 boat.

Petitioner commenced a CPLR article 78 proceeding in the Appellate Division to review the Tribunal’s determination. The Appellate Division sustained all of the Tribunal’s conclusions, relieving Sunshine and Robert Morris of any liability and holding "that there is substantial evidence to support the Tribunal’s decision to impute equitable ownership, and the resulting liability for the tax assessed, to petitioner” (Matter of Morris v New York State Dept. of Taxation & Fin., 183 AD2d 5, 8). We granted petitioner leave to appeal and now reverse.

II

In Walkovszky v Carlton (18 NY2d 414), we stated the general rule that:

"Broadly speaking, the courts will disregard the corporate form, or, to use accepted terminology, 'pierce the corporate veil’, whenever necessary 'to prevent fraud or to achieve equity’. (International Aircraft Trading Co. v. Manufacturers Trust Co., 297 N. Y. 285, 292.)” (Id., at 417.)

The concept of piercing the corporate veil is a limitation on the accepted principles that a corporation exists independently of its owners, as a separate legal entity, that the owners are normally not liable for the debts of the corporation, and that it is perfectly legal to incorporate for the express purpose of limiting the liability of the corporate owners (see, Bartle v Home Owners Coop., 309 NY 103, 106; Rapid Tr. Subway Constr. Co. v City of New York, 259 NY 472, 487-488; Presser, Piercing the Corporate Veil § 1.01, at 1-4 — 1-5).

The doctrine of piercing the corporate veil is typically employed by a third party seeking to go behind the corporate existence in order to circumvent the limited liability of the owners and to hold them liable for some underlying corporate obligation (see, e.g., Billy v Consolidated Mach. Tool Corp., 51 NY2d 152; Port Chester Elec. Constr. Corp. v Atlas, 40 NY2d 652; Walkovszky v Carlton, supra; Bartle v Home Owners Coop., supra). The concept is equitable in nature and assumes that the corporation itself is liable for the obligation sought to be imposed (see, 1 Fletcher, Cyclopedia of Private Corporations § 41, at 603 [perm ed]). Thus, an attempt of a third party to pierce the corporate veil does not constitute a cause of action independent of that against the corporation; rather it is an assertion of facts and circumstances which will persuade the court to impose the corporate obligation on its owners (see, id., at 602-603).

Because a decision whether to pierce the corporate veil in a given instance will necessarily depend on the attendant facts and equities, the New York cases may not be reduced to definitive rules governing the varying circumstances when the power may be exercised (see, Presser, Piercing the Corporate Veil § 2.33 [1], at 2-291 — 2-293). Generally, however, piercing the corporate veil requires a showing that: (1) the owners exercised complete domination of the corporation in respect to the transaction attacked; and (2) that such domination was used to commit a fraud or wrong against the plaintiff which resulted in plaintiffs injury (see, Matter of Guptill Holding Corp. v State of New York, 33 AD2d 362, 364-365, affd 31 NY2d 897; Lowendahl v Baltimore & Ohio R. R. Co., 247 App Div 144, 157, affd 272 NY 360; American Protein Corp. v AB Volvo, 844 F2d 56, 60 [2d Cir 1988] [analyzing New York law and citing Lowendahl (supra)]; International Aircraft Trading Co. v Manufacturers Trust Co., 297 NY 285, 292; see generally, Presser, Piercing the Corporate Veil § 2.33 [3], at 2-304 — 2-313).

While complete domination of the corporation is the key to piercing the corporate veil, especially when the owners use the corporation as a mere device to further their personal rather than the corporate business (see, Walkovszky, supra, at 417), such domination, standing alone, is not enough; some showing of a wrongful or unjust act toward plaintiff is required (see, Guptill, supra, at 365; Lowendahl, supra, at 157; Passalacqua Bldrs. v Resnick Developers S., 933 F2d 131, 138 [2d Cir 1991] [applying New York law]; see generally, 18 Am Jur 2d, Corporations, § 51). The party seeking to pierce the corporate veil must establish that the owners, through their domination, abused the privilege of doing business in the corporate form to perpetrate a wrong or injustice against that party such that a court in equity will intervene (see, Guptill, supra, at 365; National Labor Relations Bd. v Greater Kan. City Roofing, 2 F3d 1047, 1052-1053).

Ill

In deciding whether respondents have established a sufficient basis for piercing the corporate veil under these general rules, we first address the element of petitioner’s control of the corporation. Because petitioner was not a stockholder of Sunshine, he argues that, as a matter of law, he was not in a position to exercise the necessary domination of the corporation (see, 1 O’Neal and Thompson, O’Neal’s Close Corporations § 1.10, ch 1, at 47 [3d ed], for the proposition that almost all of the cases dealing with the issue of piercing the corporate veil involve control by a stockholder or stockholders of closely held corporations). Respondents contend, nevertheless, that Joseph Morris, although not a stockholder — through his status as Sunshine’s president and its only director and his close relationship with his brother and nephew, the only stockholders— was in a position to and did dominate the corporation with respect to the transactions at issue (see, Lowendahl, supra, at 157). The Appellate Division accepted this argument, holding: "we perceive that we should be concerned with 'reality and not form [and] with how the corporation operated and [petitioner’s] relationship to that operation’ [citation omitted]” (Matter of Morris v New York State Dept. of Taxation & Fin., 183 AD2d 5, 8, supra).

We have found no definitive authority on the issue of whether a nonshareholder could be personally liable under a theory of piercing the corporate veil (but see, Establissement Tomis v Shearson Hayden Stone, 459 F Supp 1355, 1366, n 13 [declining to hold, as a matter of law, that defendant, a nonshareholder and president of a corporation wholly owned by his wife, could not be held responsible for a corporate obligation]). It is not necessary to decide the question, however, because respondents fell far short of meeting their burden on the second critical point: that petitioner, through his domination, misused the corporate form for his personal ends so as to commit a wrong or injustice on the taxing authorities of New York State (see, Guptill, supra, at 364-365; Lowendahl, supra, at 157). The specific finding of the AXJ that there is no indication of "fraud or wrongdoing” on the part of petitioner or the corporation, it must be noted, was not disturbed on review by either the Tax Appeals Tribunal or the Appellate Division. But, respondents maintain that there was wrongful conduct in any event and characterize the purchase of the boats by Sunshine as part of an illicit scheme to use the corporation to avoid New York taxes. We disagree.

There is no contention that there was anything improper in the formation of Sunshine for the stated purpose of purchasing, owning and leasing boats. Sunshine, it appears, in the early years after its incorporation, carried on its stated business; the very basis of the Department’s successful 1982 assessment of the use tax against Sunshine for the 1978 boat was that the corporation was conducting its business within the State of New York — i.e., buying boats and chartering them to businesses for entertaining clients (see, Sunshine Developers, supra).

Indeed, as in the 1982 assessment, the Department initially argued that Sunshine was liable for the current assessment because of its business presence in New York. However, once the ALJ and the Tribunal determined in this proceeding that Sunshine was a nonresident corporation and not engaged in business in New York and, therefore, entitled to the nonresident exemption on the 1981 and 1984 boats (see, Matter of Sunshine Developers, 1990 NY Tax LEXIS 183 [State of NY Div of Tax Appeals, May 3, 1990]; Matter of Sunshine Developers, 1991 NY Tax LEXIS 267 [Tax Appeals Tribunal, May 2, 1991]), respondents abandoned that course and took a different tack. They now claim that in doing no business during the period when the 1981 and 1984 boats were purchased, Sunshine must have operated solely as a sham to do the personal business of petitioner. They further argue that, because Sunshine was a sham, it existed solely for the purpose of avoiding taxes due on its asset.

However, there is no evidence of an intent to defraud by using the corporation as a tax shield. The corporation, not petitioner, purchased and owned the boats. There is no suggestian that any obligations of the corporation remained unpaid, including use taxes found to be due in New York. There is no reason to believe that if respondents had succeeded in their current assessment against the corporation on the 1984 boat, as they had in their 1982 assessment, Sunshine would not have paid the tax. That the Tribunal sustained the nonresident tax exemption for Sunshine on the 1984 purchase and declined to sustain it as to petitioner does not give rise to a claim of fraud or wrongdoing by petitioner.

Finally, there is a fundamental problem with respondents’ claim that petitioner has somehow perverted the protective benefits of the corporate privilege to commit a wrong against respondents. This is not the usual case where a third party seeks .to impose a corporate obligation on a controlling owner by penetrating the shield of limited liability. Quite the contrary. Here, there was no corporate obligation for respondents to impose. Sunshine, it has been determined, was entitled to the nonresident exemption for the 1984 boat and owes nothing. Thus, the claim against petitioner cannot be for what the corporation owed. Respondents, nevertheless, seek to collect the tax directly from petitioner because, unlike Sunshine, he maintained a rental apartment in New York and assertedly was deprived of his nonresident exemption. But, to pursue petitioner under the doctrine of piercing the corporate veil presupposes that "the corporation is liable” (1 Fletcher, Cyclopedia of Private Corporations § 41, at 603 [perm ed]; see, e.g., National Labor Relations Bd. v Greater Kan. City Roofing, 2 F3d 1047, 1051, supra; Transamerica Cash Reserve v Dixie Power & Water, 789 P2d 24, 26 [Utah]; Anderson v Durbin, 740 SW2d 417, 418 [Tenn]). To hold petitioner liable by piercing the corporate veil for a debt Sunshine does not owe, we think, would be inconsistent with the essential theory of the doctrine.

We are not persuaded by respondents’ argument that we should disregard the corporate entity and sustain the tax against petitioner under the theory articulated in Federal tax cases (see, e.g., Moline Props. v Commissioner, 319 US 436, 438-439, supra; Nelson v Commissioner of Internal Revenue, 281 F2d 1, 6-7 [5th Cir 1960]; Jackson v Commissioner of Internal Revenue, 233 F2d 289, 290 [2d Cir 1956]; Paymer v Commissioner of Internal Revenue, 150 F2d 334 [2d Cir 1945]). In general, in matters relating to revenue a corporation will be recognized as having a separate taxable identity unless it is shown to have had no legitimate business purpose either in its formation or its subsequent existence or that it was a sham or set up for tax avoidance (see, Moline, supra, at 438-439; Nelson, supra, at 6). First, of course, we are dealing here not with Federal law but with New York decisional law and a New York sales and use tax (see, Tax Law § 1101 et seq.). But, even applying the rule of the Federal cases the result would be the same, for it appears that Sunshine had a legitimate business purpose in its formation and carried on its business of owning and chartering boats thereafter. There is no showing that it was set up as a sham or for the purpose of tax avoidance.

In view of the foregoing, we need not address petitioner’s further contention that he was improperly denied a nonresident’s exemption under Tax Law § 1118 (2).

The judgment of the Appellate Division should be reversed, with costs, and respondent Tax Appeals Tribunal’s decision, insofar as it held petitioner personally liable for the use tax assessed and penalty imposed, annulled.

Chief Judge Kaye and Judges Simons, Titone, Bellacosa and Smith concur; Judge Levine taking no part.

Judgment reversed, etc.

       There are, however, cases (see, e.g., Matter of Orda v State Tax Commn., 25 AD2d 332, affd 19 NY2d 636; Matter of Redman v Mealey, 270 App Div 75) generally involving tax matters where the corporation’s owner has sought to pierce the corporate veil to claim some deduction or other benefit due to the corporation (see also, Moline Props. v Commissioner, 319 US 436).


author: Titone, J.

text:
    [623 NE2d 1163, 603 NYS2d 813]
    Elliot M. Gross, Appellant, v New York Times Company et al., Respondents, et al., Defendants.
    Argued and submitted September 7, 1993;
    decided October 21, 1993

      POINTS OF COUNSEL

      Squadron, Ellenoff, Plesent, Sheinfeld & Sorkin, New York City (Howard M. Squadron and Steven G. Mintz of counsel), and Segan, Culhane, Nemerov & Singer, P. C. (Leon Segan of counsel), for appellant.
    I. By dismissing the complaint prior to discovery, the courts below have improperly extended Immuno AG. v Moor-Jankowski (74 NY2d 548) and created an "editorial privilege” and absolute "opinion immunity”. (Herbert v Lando, 441 US 153; New York Times Co. v Sullivan, 376 US 254; Curtis Publ. Co. v Butts, 388 US 130, 389 US 889.) II. The Times articles contain allegations of criminality which are actionable. (Silsdorf v Levine, 59 NY2d 8; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Milkovich v Lorain Journal Co., 497 US 1; Arrigoni v Velella, 110 AD2d 601; James v Gannett Co., 40 NY2d 415.) III. The statements in the complained of articles state or imply assertions of objective fact under both Milkovich and Immuno. (Milkovich v Lorain Journal Co., 497 US 1; 600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130; Immuno AG. v Moor-Jankowski, 74 NY2d 548; Steinhilber v Alphonse, 68 NY2d 283; Greenbelt Publ. Assn. v Bresler, 398 US 6; Hustler Mag. v Falwell, 485 US 46; Letter Carriers v Austin, 418 US 264; James v Gannett Co., 40 NY2d 415; Julian v American Bus. Consultants, 2 NY2d 1; Mr. Chow of N. Y. v Ste. Jour Azur, 759 F2d 219.) IV. The complained of statements constitute actionable mixed opinion. (Silsdorf v Levine, 59 NY2d 8; Chalpin v Amordian Press, 128 AD2d 81; Rand v New York Times Co., 75 AD2d 417; Gertz v Robert Welch, Inc., 418 US 323; Brady v Ottaway Newspapers, 84 AD2d 226, 97 AD2d 451, 63 NY2d 1031; Steinhilber v Alphonse, 68 NY2d 283.)

      Cahill Gordon & Reindel, New York City (Floyd Abrams and Dean Ringel of counsel), George Freeman, Adam Liptak and Rothwell, Figg, Ernst & Kurz (Steven Lieberman of counsel, of the District of Columbia Bar, admitted pro hac vice), for The New York Times Company and others, respondents.
    I. The Court below has not created an "editorial privilege” or "absolute opinion immunity”. (Herbert v Lando, 441 US 153.) II. The libel claims against the Times defendants were properly dismissed because the statements alleged to be defamatory are nonactionable opinion. (Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Immuno AG. v Moor-Jankowski, 145 AD2d 114, 74 NY2d 548; Janklow v Newsweek, Inc., 788 F2d 1300, 479 US 883; Bruno v New York News, 89 AD2d 260; Price v Viking Penguin, 881 F2d 1426, 493 US 1036; Steinhilber v Alphonse, 68 NY2d 283; Ollman v Evans, 750 F2d 970, 471 US 1127; 600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130.) III. Dr. Gross’s argument that the articles are accusations of criminal conduct, and are, therefore, stripped of their constitutional protection, is without merit. (Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Milkovich v Lorain Journal Co., 497 US 1; Janklow v Newsweek, Inc., 788 F2d 1300; Silsdorf v Levine, 59 NY2d 8; Di Bernardo v Tonawanda Publ. Corp., 117 AD2d 1009.) IV. The statements at issue do not state or imply assertions of objective fact and do not constitute mixed opinion. (Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Silsdorf v Levine, 59 NY2d 8.)

      Golden & Mandel, New York City (Philip Mandel of counsel), for Theodore Ehrenreich, respondent.
   OPINION OF THE COURT

Titone, J.

This dispute has its origin in a series of investigative reports published by defendant New York Times between January of 1985 and February of 1986. The articles in question charged plaintiff, the former Chief Medical Examiner of the City of New York, with having mishandled several high profile cases and having used his authority to protect police officers and other city officials from suspicion after individuals in their custody had died under questionable circumstances. Defendants’ articles spawned four separate criminal investigations into plaintiff’s conduct, each of which terminated with findings that there was no evidence of professional misconduct or criminal wrongdoing by plaintiff. Plaintiff thereafter commenced the present action for libel. The issue at this early, preanswer stage of the litigation is whether plaintiff’s pleadings sufficiently allege false, defamatory statements of fact rather than mere nonactionable statements of opinion. We hold that plaintiff’s complaint, which encompasses actionable assertions of fact as well as nonactionable opinions and conclusions, is sufficient to withstand a motion to dismiss under CPLR 3211 (a) (7).

I.

Plaintiff’s 59-page complaint cites essentially eight "false and defamatory” articles as the basis for his libel action. The first article in the series, which was published on January 27, 1985 under defendant Philip Shenon’s byline, was entitled Chief Medical Examiner’s Reports in Police-Custody Cases Disputed and had, as a subheadline, Cover-Ups Charged in Autopsies in Some Deaths — Gross Denies Misleading in Any Instance’. The opening two paragraphs asserted that, as the City’s Chief Medical Examiner, plaintiff had "produced a series of misleading or inaccurate autopsy reports on people who died in custody of the police, according to colleagues in the Medical Examiner’s office and pathologists elsewhere.” Further, according to the article, plaintiff had "instituted a policy of special handling for police-custody cases,” had "performed the autopsies himself’ in many such cases and "[i]n others, documents show[,] he intervened to alter the findings of other pathologists.” What follows is a series of assertions about plaintiffs actions in connection with several specific cases, including that of "a Brooklyn man who neighbors say was beaten by police officers” and that of Eleanor Bumpurs, "the 66-year old Bronx woman who was shot to death * * * by police officers trying to evict her.”

The article, which also discussed the purported disarray in the Medical Examiner’s office, reported on interviews conducted with several pathologists, who both described and characterized plaintiffs specific actions in relation to cases handled by the Medical Examiner’s office. One pathologist who had worked with plaintiff asserted for example, that, in the case of the man who had allegedly been beaten by the police, plaintiff had changed the autopsy findings to state that death had resulted from a procedure performed by doctors after the incident rather than from a fractured skull. The pathologist was then quoted as asserting: "What Gross has done is bend over backwards to help the police” and "[i]t’s weaseling.” Another pathologist, who had not worked with plaintiff but who had been asked to review some of the disputed autopsy findings, was quoted as saying: "If he did these cases honestly, Dr. Gross is unbelievably incompetent”; "[i]f he has done this deliberately — and I believe he has — he may well be looking for a way out for the police.” The tenor of the other articles cited in plaintiffs complaint was similar, with quotes from documents and individuals describing plaintiffs specific actions, disagreeing with his medical conclusions and drawing conclusions about his motives. The over-all thrust of the series was that plaintiff had issued false or misleading reports about deaths occurring within his jurisdiction in order to protect the police and that his conduct ranged from "highly suspicious” (article published Feb. 5, 1985) to "possibly illegal” (article published Jan. 28, 1985).

Before discovery had begun, defendants moved to dismiss the libel claims in plaintiffs complaint, arguing that the articles on which it was based conveyed only the opinion of its staff and their interviewees and were therefore not actionable. The trial court agreed with defendants’ position and on June 10, 1991 granted the requested relief.

The Appellate Division affirmed the trial court’s determination, stressing that the "articles complained of report accusatory opinions together with a recitation of the facts upon which they are based” and that "[especially when attributed to a source, the average reader will recognize that criticisms, allegations and accusations are not statements of fact but rather expressions of opinion” (180 AD2d 308, 316). The Court also rejected plaintiff’s contention that the articles could not be characterized as protected opinion to the extent that they suggested he was guilty of criminal wrongdoing. In the Court’s view, the allegations that plaintiff had "lied” in his professional conclusions regarding the causes of death in controversial cases and had "covered up” for misconduct by city police officers were too "[v]ague” to "amount to accusations of criminal misconduct” (id., at 317). This Court subsequently granted plaintiff leave to appeal from the Appellate Division’s order. We now reverse and hold that the complaint should have been sustained, since, in addition to the expressed opinions and conclusions, the articles contain defamatory assertions that a reasonable reader would understand to be advanced as statements of fact.

II.

At the core of the dispute in this case is the much discussed distinction between expressions of opinion, which are not actionable, and assertions of fact, which may form the basis of a viable libel claim. The distinction has been the subject of considerable analysis and legal evolution in recent years (see, e.g., Milkovich v Lorain Journal Co., 497 US 1; Immuno AG. v Moor-Jankowski, 77 NY2d 235, cert denied 500 US 954; Steinhilber v Alphonse, 68 NY2d 283). Indeed, we revisited the question ourselves just one year ago (600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130). Nonetheless, as the opinions below and the parties’ submissions illustrate, there remain many unanswered questions and areas of uncertainty in this developing field of libel law.

The underlying principles are not in dispute. The Supreme Court’s decision in New York Times Co. v Sullivan (376 US 254) injected a constitutional dimension into what had previously been regarded as a matter of State common law. In that case and others (e.g., Philadelphia Newspapers v Hepps, 475 US 767; Curtis Publ. Co. v Butts, 388 US 130; see also, Gertz v Robert Welch, Inc., 418 US 323), the Court delineated the increased burden of proof that libel plaintiffs in the public arena must bear in order to assure the " 'unfettered interchange of ideas’ ” that is so necessary to the continued vitality of a government " 'responsive to the will of the people’ ” (New York Times Co. v Sullivan, supra, at 269, quoting Roth v United States, 354 US 476, 484; and Stromberg v California, 283 US 359, 369). Additionally, in Greenbelt Publ. Assn. v Bresler (398 US 6, 12, 14), the Court recognized that there are constitutional restrictions on the "permissible scope” of defamation actions and, specifically, that evident "rhetorical hyperbole” is simply not actionable (see, Milkovich v Lorain Journal Co., supra, at 16; see also, Hustler Mag. v Falwell, 485 US 46, 50; Letter Carriers v Austin, 418 US 264, 284-286).

The focus in this appeal, which involves a preanswer dispute over the sufficiency of the complaint, is whether the articles published by defendants fall into a category that is actionable and, more specifically, whether the articles constitute the type of opinion statements that cannot, under the case law, form the basis of a defamation claim. While the Supreme Court has rejected the notion that there is a special categorical privilege for expressions of opinion as opposed to assertions of fact, it has recognized that "a statement of opinion relating to matters of public concern which does not contain a provably false factual connotation will receive full constitutional protection” (Milkovich v Lorain Journal Co., supra, at 17-21). Further, this Court has adopted a similar view under our own State Constitution and has embraced a test for determining what constitutes a nonactionable statement of opinion that is more flexible and is decidedly more protective of "the cherished constitutional guarantee of free speech” (Immuno AG. v Moor-Jankowski, supra, at 256; see, 600 W. 115th St. Corp. v Von Gutfeld, supra, at 145).

The dispositive inquiry, under either Federal or New York law, is "whether a reasonable [reader] could have concluded that [the articles were] conveying facts about the plaintiff” (600 W. 115th St. Corp. v Von Gutfeld, supra, at 139). Since falsity is a necessary element of a defamation cause of action and only "facts” are capable of being proven false, "it follows that only statements alleging facts can properly be the subject of a defamation action” (id., at 139; accord, Immuno AG. v Moor-Jankowski, supra, at 254). In our State the inquiry, which must be made by the court (see, 600 W. 115th St. Corp. v Von Gutfeld, supra, at 139; Steinhilber v Alphonse, supra, at 290), entails an examination of the challenged statements with a view toward (1) whether the specific language in issue has a precise meaning which is readily understood; (2) whether the statements are capable of being proven true or false; and (3) whether either the full context of the communication in which the statement appears or the broader social context and surrounding circumstances are such as to " 'signal * * * readers or listeners that what is being read or heard is likely to be opinion, not fact’ ” (Steinhilber v Alphonse, supra, at 292, quoting Ollman v Evans, 750 F2d 970, 983, cert denied 471 US 1127; accord, Immuno AG. v MoorJankowski, supra).

This is not to suggest that the wisdom to be derived from the formerly utilized common-law analysis has been completely discarded. To the contrary, although the terminology may have fallen out of favor, the seasoned common-law categories for actionable and nonactionable reportage have been invoked to inform our modern constitutional analysis (Immuno AG. v Moor-Jankowski, supra, at 250; see, e.g., James v Gannett Co., 40 NY2d 415; Julian v American Bus. Consultants, 2 NY2d 1; see also, Steinhilber v Alphonse, supra, at 293).

Thus, in determining whether a particular communication is actionable, we continue to recognize and utilize the important distinction between a statement of opinion that implies a basis in facts which are not disclosed to the reader or listener (see, Hotchner v Castillo-Puche, 551 F2d 910, 913, cert denied sub nom. Hotchner v Doubleday & Co., 434 US 834; Restatement [Second] of Torts § 566), and a statement of opinion that is accompanied by a recitation of the facts on which it is based or one that does not imply the existence of undisclosed underlying facts (see, Ollman v Evans, supra, at 976; Buckley v Littell, 539 F2d 882, 893, cert denied 429 US 1062; Restatement [Second] of Torts § 566, comment c). The former are actionable not because they convey "false opinions” but rather because a reasonable listener or reader would infer that "the speaker [or writer] knows certain facts, unknown to [the] audience, which support [the] opinion and are detrimental to the person [toward] whom [the communication is directed]” (Steinhilber v Alphonse, supra, at 290). In contrast, the latter are not actionable because, as was noted by the dissenting opinion in Milkovich v Lorain Journal Co. (supra, at 26-27, 28, n 5 [Brennan, J.]), a proffered hypothesis that is offered after a full recitation of the facts on which it is based is readily understood by the audience as conjecture (see, e.g., Potomac Valve & Fitting v Crawford Fitting Co., 829 F2d 1280, 1290). Indeed, this class of statements provides a clear illustration of situations in which the full context of the communication " 'signal[s] * * * readers or listeners that what is being read or heard is likely to be opinion, not fact’ ” (Steinhilber v Alphonse, supra, at 292, quoting Ollman v Evans, supra, at 983).

III.

Applying these principles to plaintiff’s cause is not a simple task because plaintiff’s pleadings cite the whole series of articles, each in its entirety, as the basis for plaintiff’s defamation claim. Obviously, not every word and assertion in the disputed articles is false or defamatory. Some of the actions and words attributed to plaintiff undoubtedly did take place. Furthermore, many of the objective assertions made in this series of many thousand words are uncontroversial and are therefore not the proper subject for a defamation action.

We conclude, however, that the courts below erred in dismissing the complaint, since the articles it cited contain many assertions of objective fact that, if proven false, could form the predicate for a maintainable libel action. Additionally, although the articles contain many assertions that would be understood by the reasonable reader as mere hypotheses premised on stated facts, there are also actionable charges made in the articles — such as the charges that plaintiff engaged in cover-ups, directed the creation of "misleading” autopsy reports and was guilty of "possibly illegal” conduct— that, although couched in the language of hypothesis or conclusion, actually would be understood by the reasonable reader as assertions of fact (see, Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 382).

Contrary to the Appellate Division’s conclusion, these assertions are not too vague to constitute concrete accusations of criminality. Nonetheless, we hold them to be actionable not, as plaintiff would have it, because they involve accusations of criminality per se, but rather because in this context they convey "facts” that are capable of being proven true or false. Although plaintiff repeatedly suggests otherwise, there is simply no special rule of law making criminal slurs actionable regardless of whether they are asserted as opinion or fact.

In Silsdorf v Levine (59 NY2d 8, 16, cert denied 464 US 831), we merely held that an accusation of criminality that, read in context, is set forth as a fact is not transformed into a nonactionable expression of opinion merely because it is couched "in the form of [an] opinion.” To illustrate, if the statement "John is a thief’ is actionable when considered in its applicable context, the statement "I believe John is a thief’ would be equally actionable when placed in precisely the same context. By the same token, however, the assertion that "John is a thief’ could well be treated as an expression of opinion or rhetorical hyperbole where it is accompanied by other statements, such as "John stole my heart,” that, taken in context, convey to the reasonable reader that something other than an objective fact is being asserted. Indeed, it has already been held that assertions that a person is guilty of "blackmail,” "fraud,” "bribery” and "corruption” could, in certain contexts, be understood as mere, nonactionable "rhetorical hyperbole” or "vigorous epithet[s]” (see, e.g., Greenbelt Publ. Assn. v Bresler, supra, at 14; 600 W. 115th St. Corp. v Von Gutfeld, supra, at 143-145).

Similarly, even when uttered or published in a more serious tone, accusations of criminality could be regarded as mere hypothesis and therefore not actionable if the facts on which they are based are fully and accurately set forth and it is clear to the reasonable reader or listener that die accusation is merely a personal surmise built upon those facts. In all cases, whether the challenged remark concerns criminality or some other defamatory category, the courts are obliged to consider the communication as a whole, as well as its immediate and broader social contexts, to determine whether the reasonable listener or reader is likely to understand the remark as an assertion of provable fact (600 W. 115th St. Corp. v Von Gutfeld, supra; see, Immuno AG. v Moor-Jankowski, 77 NY2d 235, supra).

In this case, the assertion that plaintiff engaged in "corrupt” conduct in his capacity as Chief Medical Examiner cannot be treated as a mere rhetorical flourish or the speculative accusation of an angry but ill-informed citizen made during the course of a heated debate (see, 600 W. 115th St. Corp. v Von Gutfeld, supra). Rather, the accusation was made in the course of a lengthy, copiously documented newspaper series that was written only after what purported to be a thorough investigation. Having been offered as a special feature series rather than as coverage of a current news story, the disputed articles were calculated to give the impression they were "the product of some deliberation, not of the heat of [the] moment” (id., at 142). Moreover, since the articles appeared in the news section rather than the editorial or "op ed” sections, the common expectations that apply to those more opinionated journalistic endeavors were inapplicable here (see, Immuno AG. v Moor-Jankowski, supra). Thus, the circumstances under which these accusations were published "encourag[ed] the reasonable reader to be less skeptical and more willing to conclude that [they] stat[ed] or implied] facts” (600 W. 115th St. Corp. v Von Gutfeld, supra, at 142).

In closing, we stress once again our commitment to avoiding the "hypertechnical parsing” of written and spoken words for the purpose of identifying "possible Tact[s]’ ” that might form the basis of a sustainable libel action (Immuno AG. v Moor-Jankowski, supra, at 256). The core goal of "exercises” such as this is to protect the individual’s historic right to vindicate reputation without impairing our "cherished constitutional guarantee of free speech” (id., at 256) or casting a pall over citizens’ ability to engage in robust debate through the print and broadcast media. In this case, the reputation of a public official with significant professional credentials was allegedly impaired by a series of widely read newspaper articles that portrayed him as unethical and corrupt. Under the circumstances of his case, we conclude that this individual should be permitted to go forward in an effort to establish a right to a libel recovery. The defendants’ expressional rights as well as the cherished values embodied in the First Amendment guarantees can be adequately protected in this context by the well-established rule requiring that plaintiff prove not only that the statements he cites are false and defamatory but also that they were made with actual malice. As this Court has previously observed, compliance with the latter requirements is a matter that is well suited to testing, at least in the first instance, on a motion for summary judgment brought pursuant to CPLR 3212 (see, Immuno AG. v Moor-Jankowski, supra, at 256; Karaduman v Newsday, Inc., 51 NY2d 531, 545).

Accordingly, the order of the Appellate Division, insofar as appealed from, should be reversed, with costs, and the motion of the Times defendants to dismiss causes of action 1 through 5 and 8 through 13 of the complaint denied.

Chief Judge Kaye and Judges Simons, Hancock, Jr., and Bellacosa concur; Judges Smith and Levine taking no part.

Order, insofar as appealed from, reversed, etc.

      . For a review of the factual background of the Bumpurs case, see People v Sullivan (68 NY2d 495).

      . The dismissal motion at issue in this appeal is the one made by The New York Times, Philip Shenon, Sam Roberts, A. M. Rosenthal and Peter Milones, all of whom are affiliated with defendant newspaper. An earlier dismissal motion by the other named defendants was granted by the trial court. The trial court also dismissed plaintiff’s sixth, seventh, fourteenth and fifteenth causes of action against the New York Times defendants. Those dismissals are not being challenged on this appeal.