author: Chief Judge Kaye.

text:
    [900 NE2d 970, 872 NYS2d 419]
    In the Matter of Suffolk Regional Off-Track Betting Corporation, Appellant-Respondent, v New York State Racing and Wagering Board et al., Respondents-Appellants. (And Four Other Related Proceedings.)
    Argued November 19, 2008;
    decided December 17, 2008

      POINTS OF COUNSEL

      Andrew M. Cuomo, Attorney General, Albany (Victor Paladino, Barbara D. Underwood and Andrea Oser of counsel), for New York State Racing and Wagering Board, respondent-appellant.
    I. The New York State Racing and Wagering Board’s reasonable interpretation of the statutory maintenance of effort provision should have been sustained. (People v Ryan, 274 NY 149; Bragg v Genesee County Agrie. Socy., 84 NY2d 544; New York State Bankers Assn. v Albright, 38 NY2d 430.) II. The Racing, PariMutuel Wagering and Breeding Law obligates Off-Track Betting Corporations to make dark day payments to regional harness tracks. (Matter of Dawn Joy Fashions v Commissioner of Labor of State of N.Y., 90 NY2d 102; Matter of Ontario County v Capital Dist. Regional Off-Track Betting Corp., 162 AD2d 865; People ex rel. Pughe v Parrott, 302 AD2d 823.)

      Bleakley Platt & Schmidt, LLP, White Plains (Frederick J. Martin, Susan E. Galvão and Robert D. Meade of counsel), for Yonkers Racing Corporation, respondent-appellant.
    I. The New York State Racing and Wagering Board and Supreme Court correctly construed the provisions of section 1017-a of the Racing, Pari-Mutuel Wagering and Breeding Law. (Matter of Capital Dist. Regional Off-Track Betting Corp. v New York State Racing & Wagering Bd., 54 NY2d 154; Matter of Finger Lakes Racing Assn., Inc. v State of N.Y. Racing & Wagering Bd., 34 AD3d 895, 8 NY3d 810.) II. The New York State Racing and Wagering Board and Supreme Court correctly construed the provisions of section 1017 of the Racing, Pari-Mutuel Wagering and Breeding Law.

      Nolan & Heller, LLP, Albany (Richard L. Burstein of counsel), for Saratoga Harness Racing, Inc., respondent-appellant.
    The New York State Racing and Wagering Board’s (Board) determinations should be upheld as they are reasonable interpretations by the agency vested with authority to administer the statute, and draw upon the Board’s understanding of the underlying operational practices in the industry. (Matter of Ontario County v Capital Dist. Regional Off-Track Betting Corp., 162 AD2d 865; Matter of Excellus Health Plan v Serio, 303 AD2d 864, 2 NY3d 166; Matter of Capital Dist. Regional Off-Track Betting Corp. v New York State Racing & Wagering Bd., 54 NY2d 154; Matter of Finger Lakes Racing Assn., Inc. v State of N.Y. Racing & Wa

      gering Bd., 34 AD3d 895; People ex rel. Pughe v Parrott, 302 AD2d 823; People v O’Neil, 280 App Div 145; City of Poughkeepsie v Town of Poughkeepsie, 52 Misc 2d 721, 37 AD2d 852.)

      Marvin Newberg, Monticello, for Monticello Raceway Management, Inc., respondent-appellant.
    The custom and usage in the harness racing industry lend further support to the conclusion that the Racing, Pari-Mutuel Wagering and Breeding Law obligates Off-Track Betting Corporations to make dark day payments to regional harness tracks. (Anderson v Regan, 53 NY2d 356; Matter of Kolb v Holling, 285 NY 104; New York State Bankers Assn. v Albright, 38 NY2d 430; Wasserbauer v Marine Midland Bank—Rochester, 92 Misc 2d 388; City of Poughkeepsie v Town of Poughkeepsie, 52 Misc 2d 721, 37 AD2d 852; Knapp v Fasbender, 1 NY2d 212; Blaine Personnel v Lee Org., 76 Misc 2d 110; Matter of Ontario County v Capital Dist. Regional Off-Track Betting Corp., 162 AD2d 865.)

      Jaspan Schlesinger Hoffman, LLP, Garden City (Thomas J. Garry and Keith M. Corbett of counsel), for Nassau Regional Off-Track Betting Corporation, appellant-respondent.
    I. The Appellate Division, Third Department erred in dismissing appellants-respondents’ petitions as the New York State Racing and Wagering Board’s “separate payment” determination contradicts Racing, Pari-Mutuel Wagering and Breeding Law § 1017-a (2) (a). (Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471; Weiss v City of New York, 95 NY2d 1; Matter of Beer Garden v New York State Liq. Auth., 79 NY2d 266; Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753.) II. The Appellate Division, Third Department erred in holding that the New York State Racing and Wagering Board’s “separate payment” determination was exempt from the rule-making authority requirements of the State Administrative Procedure Act. (Matter of Roman Catholic Diocese of Albany v New York State Dept. of Health, 66 NY2d 948; Matter of Schwartfigure v Hartnett, 83 NY2d 296; Matter of Cordero v Corbisiero, 80 NY2d 771.) III. The Appellate Division, Third Department correctly held that the New York State Racing and Wagering Board’s “dark day” determination is contrary to Racing, Pari-Mutuel Wagering and Breeding Law §§ 1017 and 1008. (Anderson v Regan, 53 NY2d 356; Weiss v City of New York, 95 NY2d 1.) IV. The Appellate Division, Third Department correctly held the New York State Racing and Wagering Board’s “maintenance of effort” determination is contrary to Racing, Pari-Mutuel Wagering and Breeding Law § 1017-a (2) (a). (Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 62 NY2d 539; Matter of Madison-Oneida Bd. of Coop. Educ. Servs. v Mills, 4 NY3d 51; Matter of Moran Towing & Transp. Co. v New York State Tax Commn., 72 NY2d 166; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Matter of Jansen Ct. Homeowners Assn. v City of New York, 17 AD3d 588; Matter of New York Botanical Garden v Board of Stds. & Appeals of City of N.Y., 91 NY2d 413; Seittelman v Sabol, 91 NY2d 618; Patrolmen’s Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d 205; Longines-Wittnauer Watch Co. v Barnes & Reinecke, 15 NY2d 443; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577.)

      Michael A. Cardozo, Corporation Counsel, New York City (Susan Choi-Hausman, Pamela Seider Dolgow, Ira H. Block and June R. Buch of counsel), for New York City Off-Track Betting Corporation, appellant-respondent.
    I. The Appellate Division correctly annulled the New York State Racing and Wagering Board’s maintenance of effort determination. (People v Robinson, 95 NY2d 179; Community Bd. 7 of Borough of Manhattan v Schaffer, 84 NY2d 148; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539.) II. The Appellate Division correctly annulled the New York State Racing and Wagering Board’s February 23, 2005 dark day determination. (People v Ercole, 308 NY 425; People v Realmato, 294 NY 45; Matter of Notre Dame Leasing v Rosario, 2 NY3d 459; People v Mobil Oil Corp., 48 NY2d 192; Matter of Tall Trees Constr. Corp. v Zoning Bd. of Appeals of Town of Huntington, 97 NY2d 86; Matter of Orens v Novello, 99 NY2d 180; Matter of Branford House v Michetti, 81 NY2d 681; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471; Anderson v Regan, 53 NY2d 356; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539.) III. The Appellate Division erred in affirming so much of the judgment as confirmed the New York State Racing and Wagering Board’s separate calculation determination. (Matter of Yolanda D., 88 NY2d 790; Matter of Bliss v Bliss, 66 NY2d 382.) IV. The Appellate Division erroneously held that the New York State Racing and Wagering Board’s determinations were not rules required to be adopted in accordance with the State Administrative Procedure Act. (Matter of Cordero v Corbisiero, 80 NY2d 771; Matter of Alca Indus. v Delaney, 92 NY2d 775; Matter of Schwartfigure v Hartnett, 83 NY2d 296; People v Cull, 10 NY2d 123; Matter of Medical Socy. of State of N.Y. v Serio, 100 NY2d 854; Matter of New York City Tr. Auth. v New York State Dept. of Labor, 88 NY2d 225; Cubas

      v Martinez, 8 NY3d 611; Matter of Elcor Health Servs. v Novello, 100 NY2d 273; Matter of Burns v New York State Off. of Vocational & Educ. Servs. for Individuals with Disabilities, 233 AD2d 781, 89 NY2d 1002; Allied Chem. v Niagara Mohawk Power Corp., 72 NY2d 271, 488 US 1005.)

      Powers & Santola, LLP, Albany (Michael J. Hutter of counsel), Neil H. Tiger, Hauppauge, and Stern & Rindner, Goshen (Mark D. Stern of counsel), for Suffolk Regional Off-Track Betting Corporation and others, appellants-respondents.
    I. The New York State Racing and Wagering Board’s determinations must be annulled because they constitute rules within the meaning of State Administrative Procedure Act § 102 (2) (a) (i) but were not promulgated in conformity with the rule-making requirements of State Administrative Procedure Act § 202 and article IV § 8 of the State Constitution. (Matter of Cordero v Corbisiero, 80 NY2d 771; Matter of New York State. Coalition of Pub. Empls. v New York State Dept. of Labor, 60 NY2d 789; Matter of Jones v Smith, 64 NY2d 1003; Matter of Schwartfigure v Hartnett, 83 NY2d 296; Matter of Roman Catholic Diocese of Albany v New York State Dept. of Health, 66 NY2d 948; People v Cull, 10 NY2d 123; Matter of Alca Indus. v Delaney, 92 NY2d 775; Matter of New York City Tr. Auth. v New York State Dept. of Labor, 88 NY2d 225; Matter of Gill v New York State Racing & Wagering Bd., 11 Misc 3d 1068[A], 2006 NY Slip Op 50433[U], 50 AD3d 494; Matter of UCP-Bayview Nursing Home v Novello, 2 AD3d 643.) II. The Appellate Division correctly annulled the New York State Racing and Wagering Board’s maintenance of effort determination. III. The Appellate Division correctly annulled the New York State Racing and Wagering Board’s February 23, 2005 dark day determination. IV. The Appellate Division erred in affirming so much of the judgment as confirmed the New York State Racing and Wagering Board’s separate calculation determination.
   OPINION OF THE COURT

Chief Judge Kaye.

At the core of this litigation—with the Off-Track Betting Corporations (OTBs) on one side, and the State Racing and Wagering Board and state harness racing tracks on the other side— are questions of statutory interpretation. We begin with a brief history of the relevant sections of the Racing, Pari-Mutuel Wagering and Breeding Law and the present controversy.

Prior to 1970, New York permitted wagering on horse racing only at its thoroughbred and harness tracks, leaving (as Supreme Court observed) “a lucrative and illegal niche for local bookies, who took bets from those individuals who wished to gamble on horse racing but who were unable or unwilling to travel to the race track to place their wagers.” When off-track betting was thereafter authorized, its popularity depleted attendance at the tracks and threatened their viability. To redress the situation, the Legislature in 1973 created seven regional OTBs to administer off-track wagering and required them to pay a “state tax,” a portion of which went to the regional harness tracks and nonprofit racing associations (L 1973, ch 346, § 4, as amended). The intention of the Legislature was:

“to derive from such betting ... a reasonable revenue for the support of government, and to prevent and curb unlawful bookmaking and illegal wagering on horse races. It is also the intention of this article to ensure that off-track betting is conducted in a manner compatible with the well-being of the horse racing and breeding industries in this state, which industries are and should continue to be major sources of revenue to state and local government and sources of employment for thousands of state residents.” (Racing, Pari-Mutuel Wagering and Breeding Law § 518.)

In 1984, the Legislature authorized the simulcasting, or telecasting, of horse races conducted in the state for the purposes of pari-mutuel wagering (Racing, Pari-Mutuel Wagering and Breeding Law § 1001 [a]). That again was a perceived threat to the financial stability of the regional harness tracks, leading to new legislation requiring OTBs to pay them commissions on the simulcast wagers placed at OTB facilities.

Between 1984 and 2003, simulcasting of thoroughbred races was prohibited between 7:30 p.m. and midnight—evenings were traditionally reserved for harness racing. In 2003, however, the Legislature allowed simulcast licensees to broadcast, and accept bets on, thoroughbred races conducted after 7:30 p.m. from anywhere in the world. Again perceiving an adverse impact on nighttime harness racing, the Legislature provided for “maintenance of effort” payments, requiring OTBs that simulcast nighttime thoroughbred racing, every year after 2002, to guarantee to their regional harness tracks minimum payments based upon the commissions those tracks received before the nighttime thoroughbred simulcasts were permitted.

That requirement engendered two of the statutory questions now before us: first, can the OTBs credit commissions derived from daytime harness racing against the maintenance of effort payments and second, are those payments to be made on a regional, or track-by-track, basis.

The third statutory issue before us involves so-called “dark day” payments. “Dark days” occur when the State Racing Association is not conducting a thoroughbred race meeting, and no licensed harness track is accepting wagers on or displaying the signal of any thoroughbred track. On dark days, simulcast licensees can broadcast out-of-state thoroughbred races, but they must make payments to the harness tracks (which are not open for business that day) in accordance with a statutory formula (Racing, Pari-Mutuel Wagering and Breeding Law § 1017). From 1997 through 2003, all OTBs made dark day payments to their respective regional harness tracks, but in 2004 New York City OTB (NYC OTB) stopped payment on the ground that the statute required the tracks, not OTBs, to make such payments to one another.

Seeking clarification on maintenance of effort and dark day payments, the OTBs brought their claims to the State Racing and Wagering Board, which in February 2005 rejected their arguments. The Board concluded that OTBs cannot credit commissions derived from daytime harness racing against the maintenance of effort payment; that Racing, Pari-Mutuel Wagering and Breeding Law § 1017-a required calculation of the maintenance of effort payment on a track-by-track (not regional) basis; and that Racing, Pari-Mutuel Wagering and Breeding Law § 1017 required OTBs to make dark day payments to their respective regional harness tracks. Five of the State’s six regional OTBs (Western did not join) brought CPLR article 78 proceedings challenging the Board’s determinations. After consolidating the proceedings, Supreme Court dismissed the petitions, including a new claim that the Board’s determinations were rules not properly promulgated under the State Administrative Procedure Act. On appeal, the Appellate Division modified Supreme Court’s dismissal: while affirming the separate payment distribution and State Administrative Procedure Act determinations, the court reversed on the maintenance of effort and dark day payments issues (47 AD3d 133 [2007]). The Board and the harness tracks moved for leave to appeal, the OTBs cross-moved, and we granted leave to appeal to all parties (10 NY3d 706 [2008]). We now conclude that the Board and harness tracks, not the OTBs, were correct in their reading of the relevant statutory sections.

Analysis

Given the growth in codification of the law over recent decades, the principles governing the Court’s statutory review have by now been extensively articulated. First and foremost, it is our role to implement the intent of the Legislature (Matter of DaimlerChrysler Corp. v Spitzer, 7 NY3d 653, 660 [2006]). Deference to administrative agencies charged with enforcing a statute is not required when an issue is one of pure statutory analysis (Matter of Astoria Gas Turbine Power, LLC v Tax Commn. of City of N.Y., 7 NY3d 451, 455 [2006]). Even if no deference is owed to an agency’s reading of a statute, a court can nevertheless defer to an agency’s definition of a term of art contained within a statute (Matter of Trump-Equitable Fifth Ave. Co. v Gliedman, 57 NY2d 588, 595 [1982]). Against this backdrop, we turn to the specific issues in controversy.

Maintenance of Effort Payments. Starting in May 2003, when OTBs were permitted to accept wagers on simulcast nighttime out-of-state thoroughbred races, Racing, Pari-Mutuel Wagering and Breeding Law § 1017-a (2) (a) required them to make maintenance of effort payments to their regional harness tracks, to hold the tracks harmless from the new competition.

Section 1017-a (2) (a) provides:

“Any off track betting corporation which engages in accepting wagers on the simulcasts of thoroughbred races from out-of-state or out-of-country as permitted under subdivision one of this section shall submit to the board, for its approval, a schedule of payments to be made in any year or portion thereof, that such off track corporation engages in nighttime thoroughbred simulcasting. In order to be approved by the board, the payment schedule shall be identical to the actual payments and distributions of such payments to tracks and purses made by such off track corporation pursuant to the provisions of section [1016] of this article during the year [2002], as derived from out-of-state harness races displayed after 6:00 EM. If approved by the board, such scheduled payments shall be made from revenues derived from any simulcasting conducted pursuant to this section and section [1016] of this article.”

The apparent tension between the final two sentences of this subdivision gives rise to the present dispute. The Board and the tracks rely on the penultimate sentence in urging that OTBs cannot credit commissions from daytime harness racing against their maintenance of effort payments, and that payment must be identical to actual payments during 2002 as derived from out-of-state harness races displayed after 6:00 p.m. The OTBs, in urging that they can credit commissions from daytime racing, rely on the last sentence, directing that scheduled payments be made from revenues derived from any simulcasting conducted pursuant to this section and section 1016 of this article.

Here, the trial court and Appellate Division understandably divided, each pointing to the plain language of the statute. Reading the provision as a whole, however, and taking into account the Legislature’s purpose in requiring maintenance of effort payments, we conclude that the correct interpretation of this less-than-perfectly-clear subdivision is that given by the trial court.

The penultimate sentence establishes the baseline, or minimum, amounts that OTBs must pay to harness tracks for the privilege of simulcasting evening thoroughbred racing: at least the same level of payments received in 2002 from evening simulcasting. The final sentence must then be read to concern only the total pool of dollars from which the mandated amounts can be paid. The amount of daytime harness racing commissions OTBs pay to a harness track is irrelevant to determine whether the OTB met its promised nighttime revenues threshold; allowing OTBs to credit daytime harness racing commissions against the mandated maintenance of effort payments would satisfy neither the words nor the objective of the statute.

“Separate Payment” Distribution. The OTBs urge that the maintenance of effort payments are to be made on a regional, rather than track-by-track, basis. They argue that Racing, PariMutuel Wagering and Breeding Law § 1017-a (2) (a) incorporates the payment scheme of section 1016, which distributes commissions from harness racing simulcasting on a regional basis. The Board and the tracks, by contrast, contend that the maintenance of effort payment should be on a track-by-track basis because section 1017-a requires that the payment be “identical to the actual payments and distributions of such payments to tracks and purses made by such off track corporation” (emphasis supplied).

We agree with the Board and the tracks that the plain text requires that the maintenance of effort payments be distributed on a track-by-track basis. As the Appellate Division noted, had the Legislature intended that the maintenance of effort payment be made on a regional basis, it could have used the same language as that used in the very next paragraph:

“During each calendar year, to the extent, and at such time in the event, that aggregate statewide wagering handle after 7:30 EM. on out-of-state and out-of-country thoroughbred races exceeds [$100,000,000], each off track betting corporation conducting such simulcasting shall pay to its regional harness track or tracks, an amount equal to [2%] of its proportionate share of such excess handle. In any region where there are two or more regional harness tracks, such [2%] shall be divided between or among the tracks in a proportion equal to the proportion of handle on live harness races conducted at such tracks during the preceding calendar year” (Racing, Pari-Mutuel Wagering and Breeding Law § 1017-a [2] [b]).

Track-by-track payments thus are required by the explicit language of the statute. That conclusion is underscored by the contrasting language of the immediately ensuing paragraph and indeed by the very purpose of the statute—to hold each track harmless from the potentially negative impact of permitting OTBs to simulcast nighttime out-of-state thoroughbred races.

Dark Day Payments. As the foregoing discussion demonstrates, the Racing, Pari-Mutuel Wagering and Breeding Law remains “an imbroglio, being born out of the union of diverse racing industry interests and legislative compromise” (Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471, 476 [1978]). That observation is nowhere more evident than in Racing, Pari-Mutuel Wagering and Breeding Law § 1017, which governs distribution of wagers placed on dark days at facilities that simulcast out-of-state races.

Section 1017 itself contains one subdivision, two paragraphs, six subparagraphs, 22 clauses, six subclauses, and six tables listing percentages due for state payments (with varying percentages depending on the type of bet, race and facility). Racing, Pari-Mutuel Wagering and Breeding Law § 1017 (1) (b) (5) (E) and (6) (F) provide in relevant part:

“On days when a non-profit racing association is not conducting a race meeting and when a licensed harness track is neither accepting wagers nor displaying the signal from an in-state thoroughbred corporation or association or an out-of-state thoroughbred track:
“(i) Such licensed regional harness track shall receive in lieu of any other payments on wagers placed at off-track betting facilities outside the special betting district on races conducted by an instate thoroughbred racing corporation, two and eight-tenths percent on regular and multiple bets during a regional meeting and one and nine-tenths percent of such bets if there is no regional meeting and four and eight-tenths percent on exotic bets on days on which there is a regional meeting and three and four-tenths percent of such bets if there is no regional meeting.
“(ii) Such licensed regional harness track shall receive one and one-half per centum on total regional handle on races conducted at out-of-state or out-of-country thoroughbred tracks.”

From 1997 through 2003, without apparent problem, OTBs made payments to tracks in their region that did not open for business on dark days. Then in 2004, NYC OTB stopped making such payments. It claimed that the headings of section 1017 (1) (b) (5) and (6) required dark day payments only of “facilities licensed in accordance with section [1007] of this article,” and OTBs do not operate facilities under section 1007. Racing, PariMutuel Wagering and Breeding Law § 1007 indeed does provide for simulcast licenses from track to track, not off-track branch offices or simulcast theaters.

Those headings, however, stand in marked contrast to the headings of section 1017 (1) (b) (3) and (4) that govern the distribution of wagers placed at “facilities licensed in accordance with sections [1008] and [1009]”—meaning OTB branch offices and simulcast theaters. According to the OTBs, the statutory headers of subparagraphs (5) and (6) dictate that the tracks must simply pay one another. The Board and tracks claim that the body of the text, not the statutory headings, determines the meaning. Again, we agree with the Board and the tracks because the text’s unambiguous language requires OTBs to make the dark day payments, as they apparently also believed for several years.

While a statute’s heading may help in ascertaining the intent of an otherwise ambiguous statute, a heading cannot trump the clear language of the statute (see McKinney’s Cons Laws of NY, Book 1, Statutes § 123 [b]). Here, section 1017 specifies that dark day payments are a percentage of “total regional handle”—a term of art which the Board explained is used in the Racing, Pari-Mutuel Wagering and Breeding Law in relation to the concept of payments by off-track betting corporations to tracks; harness tracks do not have regions but rather are located for defined purposes within established off-track betting regions. Under the OTBs’ reading, if a region has only one track and it remains closed on the dark day, it will not receive any commissions because only tracks can contribute to regional handle. We conclude that, applying the Board’s definition of regional handle (meaning an OTB’s commissions), the statute makes sense: if a track remains closed on a dark day, then it will receive 1.5% of the total regional handle made by the OTB.

Additionally, the statute directs “off-track betting facilities”—a term used elsewhere in the Racing, Pari-Mutuel Wagering and Breeding Law to apply only to OTBs (see Racing, Pari-Mutuel Wagering and Breeding Law § 520 [1]; § 532 [1], [3-a]; § 901 [2] [b]; § 907 [1] [e]; § 1016 [3] [b])—to make dark day payments to regional harness tracks. Finally, the purpose of dark day payments is to compensate harness tracks when the OTBs—competitors to harness tracks—simulcast out-of-state thoroughbred races. Requiring OTBs to pay the 1.5% of regional handle to harness tracks in their region that remain closed on the dark day implements that statutory purpose.

State Administrative Procedure Act. The State Constitution, as well as the State Administrative Procedure Act, mandates the procedures that must be followed for promulgation of rules and regulations. Excluded from these requirements are “interpretive statements and statements of general policy which in themselves have no legal effect but are merely explanatory” (State Administrative Procedure Act § 102 [2] [b] [iv]). A rule or regulation, by contrast, is “a fixed, general principle to be applied by an administrative agency without regard to other facts and circumstances relevant to the regulatory scheme of the statute it administers” (Matter of Roman Catholic Diocese of Albany v New York State Dept. of Health, 66 NY2d 948, 951 [1985]).

The OTBs argue that the Board’s maintenance of effort, separate payment distribution and dark day payment determinations were fixed, general principles to be applied without regard to other facts and circumstances relevant to the regulatory scheme of the Racing, Pari-Mutuel Wagering and Breeding Law by imposing financial obligations upon the OTBs. We agree with both Supreme Court and the Appellate Division that the Board here promulgated no rules or regulations, but rather interpreted the requirements of the statutes in issue, which we have now independently construed.

Accordingly, the order of the Appellate Division should be modified, with costs to respondents-appellants, by reinstating the judgment of Supreme Court, and, as so modified, affirmed.

Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.

Order modified, etc.

      . Currently, there are six regional OTBs: New York City, Suffolk, Nassau, Capital District, Catskill and Western.

      . While the Legislature recently renumbered relevant sections of the Racing, Pari-Mutuel Wagering and Breeding Law, to maintain consistency we adhere to the statutory numbering used by Supreme Court and the Appellate Division in this case.

      . The trial court additionally accorded deference to the Board’s reading of the statute it is empowered to oversee. What is at issue, however, is a matter of statutory interpretation, not deference to the operational expertise of the administrative agency.


source: Caselaw Access Project

author: Graffeo, J.

license: Public Domain

text:
    [900 NE2d 977, 872 NYS2d 426]
    Claire Van Kipnis, Appellant, v Gregory Van Kipnis, Respondent.
    Argued November 20, 2008;
    decided December 18, 2008

      POINTS OF COUNSEL

      Berkman Bottger & Rodd, LLP, New York City (Walter F. Bottger, Elizabeth A. Fox and Amelia A. Nickles of counsel), for appellant.
    I. An agreement to hold property separately should not, without more, effect a waiver of equitable distribution. (Merrier v Merrier, 103 Misc 2d 1029; Torres v $36,256.80 U.S. Currency, 827 F Supp 197; Lauro v Bradley, 266 AD2d 911; McLaren v McLaren, 99 Misc 2d 797; Tucker v Tucker, 55 NY2d 378; Valladares v Valladares, 80 AD2d 244, 55 NY2d 388; DeLuca v DeLuca, 97 NY2d 139; DeJesus v DeJesus, 90 NY2d 643; Price v Price, 69 NY2d 8; O’Brien v O’Brien, 66 NY2d 576.) II. All of the wife’s counsel fees should be paid by the husband. (Schapiro v Schapiro, 204 AD2d 87; Lucci v Lucci, 227 AD2d 387; Lamborn v Lamborn, 56 AD2d 623; O’Shea v O’Shea, 93 NY2d 187.) III. The maintenance award fails as against the statutory standards, the evidence and equity. (Comstock v Comstock, 1 AD3d 307; Spencer v Spencer, 230 AD2d 645; Patron v Patron, 40 NY2d 582; Holterman v Holterman, 3 NY3d 1; Matter of Cassano v Cassano, 85 NY2d 649.)

      Gartner + Bloom, PC, New York City (Stuart F. Gartner and Arthur P. Xanthos of counsel), for respondent.
    I. The prenuptial agreement is a valid and enforceable agreement, and by its terms applicable upon divorce. (Roos v Roos, 206 AD2d 293; Matter of Weeks, 294 NY 516; Lemye v Sirker, 226 App Div 159;
      Matter of Majot, 199 NY 29; Bonati v Welsch, 24 NY 157; Van Cortlandt (de Graffenried) v de Graffenried, 147 App Div 825; De Ganay v De Ganay, 269 AD2d 157; Bourbon v Bourbon, 300 AD2d 269; Strebler v Wolf, 152 Misc 859; Housset v Housset, 200 AD2d 508.) II. The equitable distribution, legal fees and maintenance ordered by the trial court were more than fair to appellant and in accordance with the law. (Ford Motor Credit Co. v Colonial Funding Corp., 215 AD2d 435; Jones Lang Wootton USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168, 92 NY2d 962; D & L Holdings v Goldman Co., 287 AD2d 65, 97 NY2d 611; Environmental Concern v Larchwood Constr. Corp., 101 AD2d 591; Matter of Bianchi v New York State Div. of Hous. & Community Renewal, 5 AD3d 303; Schapiro v Schapiro, 204 AD2d 87; Wyser-Pratte v Wyser-Pratte, 160 AD2d 290; Lamborn v Lamborn, 56 AD2d 623; Anonymous v Anonymous, 258 AD2d 547; Kenyon v Kenyon, 155 AD2d 825.)
   OPINION OF THE COURT

Graffeo, J.

The principal issue in this matrimonial case is whether the parties’ foreign prenuptial agreement precludes the equitable distribution of certain property under New York law. Like the courts below, we conclude that it does.

Plaintiff Claire Van Kipnis (wife) and defendant Gregory Van Kipnis (husband) were married in Paris, France in 1965. At the time of the parties’ marriage, wife was a Canadian citizen from Quebec studying at the Sorbonne and husband was a citizen of the United States, having recently completed college. Prior to the marriage ceremony, wife had a “Contrat de Mariage” drafted under the French Civil Code and arranged for legal counsel to explain the terms of the prenuptial agreement in English to husband. The agreement was executed by the parties on September 30, 1965.

Under the provisions of the Contrat de Mariage, the parties opted out of the community property scheme (the governing custom in France) in favor of a separation of estates regime. In relevant part, the agreement provides:

“The future spouses declare that they are adopting the marital property system of separation of estates, as established by the French Civil Code.
“Consequently, each spouse shall retain ownership and possession of the chattels and real property that he/she may own at this time or may come to own subsequently by any means whatsoever.
“They shall not be liable for each other’s debts established before or during the marriage or encumbering the inheritances and gifts that they receive.
“The wife shall have all the rights and powers over her assets accorded by law to women married under the separate-estates system without any restriction.”

After the wedding, the parties moved to New York where they resided during their 38-year marriage. Husband was employed in finance while wife worked as a professor at Cooper Union and later as a cultural counselor for the Quebec government. Wife was also the primary caretaker of the parties’ two children, now emancipated. Throughout their marriage, the parties maintained separate accounts and assets, with the exception of the joint ownership of their two homes—a $625,000 house in Massachusetts and a cooperative apartment in Manhattan valued at $1,825,000.

In 2002, wife commenced this action for divorce and ancillary relief. Following discovery, but before trial, Supreme Court granted husband’s motion to amend his answer to assert the 1965 prenuptial agreement as a defense to wife’s equitable distribution claims. After the Appellate Division affirmed the order permitting the amendment (8 AD3d 94 [2004]), Supreme Court appointed a Special Referee to conduct a hearing on the issues of equitable distribution, maintenance and counsel fees.

The Referee determined that the French contract provided for the separate ownership of assets held in the parties’ respective names during the course of the marriage. As a result, husband retained his liquid assets of approximately $7 million and wife kept her assets ranging from $700,000 to $800,000. But as to the jointly held properties, which the parties agreed were subject to equitable distribution, the Referee recommended that wife be awarded the Manhattan apartment, together with $75,000 in reimbursement for repairs, and husband be awarded the country home in Massachusetts. After reviewing the statutory factors related to maintenance, the Referee proposed that wife receive $7,500 per month in maintenance until either husband or wife dies or wife remarries. Finally, the Referee concluded that legal fees expended in connection with wife’s challenge to the prenuptial agreement were not compensable under Domestic Relations Law § 237. After deducting that portion of wife’s claim for counsel fees attributable to contesting the agreement, the Referee awarded wife $92,779.57 in attorneys’ fees. Supreme Court confirmed the Referee’s report. The Appellate Division, with one Justice dissenting, affirmed (43 AD3d 71 [2007]), and we granted wife leave to appeal (10 NY3d 705 [2008]).

Wife contends that all of the parties’ property should be subject to equitable distribution under Domestic Relations Law § 236 (B) (5). She asserts that the 1965 agreement, drafted and executed in France, was intended to apply to property ownership during the course of the marriage, but not to the distribution of property in the event of a divorce. In her view, the primary purpose of the agreement was for each spouse to avoid liability for the other’s debts. Belatedly, wife posits that a prenuptial agreement cannot waive a party’s right to equitable distribution under the Domestic Relations Law absent an explicit waiver. Husband counters that the agreement unambiguously provides that the parties shall retain their property separately throughout their marriage and, as a result, all property not held in joint names must be treated as separate property and excluded from equitable distribution.

It is well settled that duly executed prenuptial agreements are generally valid and enforceable given the “strong public policy favoring individuals ordering and deciding their own interests through contractual arrangements” (Bloomfield v Bloomfield, 97 NY2d 188, 193 [2001] [internal quotation marks and citation omitted]). As with all contracts, prenuptial agreements are construed in accord with the parties’ intent, which is generally gleaned from what is expressed in their writing. Consequently, “a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms” (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]). Extrinsic evidence of the parties’ intent may not be considered unless a court first finds that the agreement is ambiguous.

Prenuptial agreements addressing the ownership, division or distribution of property must be read in conjunction with Domestic Relations Law § 236 (B), enacted in 1980 as part of New York’s Equitable Distribution Law. The statute provides that, unless the parties agree otherwise in a validly executed prenuptial agreement pursuant to section 236 (B) (3), upon dissolution of the marriage marital property must be distributed equitably between the parties while separate property shall remain separate (see Domestic Relations Law § 236 [B] [5] [a]-[c]). As relevant here, separate property is defined to include “property described as separate property by written agreement of the parties pursuant to subdivision three of this part” (Domestic Relations Law § 236 [B] [1] [d] [4]). Under the statute, a prenuptial agreement may include a “provision for the ownership, division or distribution of separate and marital property” and is valid and enforceable if it “is in writing, subscribed by the parties, and acknowledged or proven in the manner required to entitle a deed to be recorded” (Domestic Relations Law § 236 [B] [3]; see also Matisoff v Dobi, 90 NY2d 127, 130 [1997]).

The Domestic Relations Law therefore contemplates two basic types of prenuptial agreement that affect the equitable distribution of property. First, parties may expressly waive or opt out of the statutory scheme governing equitable distribution (see e.g. Bloomfield, 97 NY2d at 193; Housset v Housset, 200 AD2d 508, 509 [1st Dept 1994]). Second, parties may specifically designate as separate property assets that would ordinarily be defined as marital property subject to equitable distribution under Domestic Relations Law § 236 (B) (5). Such property would then remain separate property upon dissolution of the marriage. In either case, the intent of the parties “must be clearly evidenced by the writing” (Tietjen v Tietjen, 48 AD3d 789, 791 [2d Dept 2008]).

Here, the parties’ written agreement, adopting a “separation of estates” scheme, falls within the second prenuptial agreement category. The agreement specifies that separate ownership of assets applies not only to the property that each party had acquired at the time of the marriage, but also to property that they “may come to own subsequently by any means whatsoever.” It further assures that “wife shall have all the rights and powers over her assets accorded by law to women married under the separate-estates system without any restriction.” Contrary to wife’s argument, the Domestic Relations Law contains no categorical requirement that a prenuptial agreement must set forth an express waiver of equitable distribution. Rather, when read together, Domestic Relations Law § 236 (B) (1) (d) (4) and (5) (b) provide that assets designated as separate property by a prenuptial agreement will remain separate after dissolution of the marriage. Such is the case here. Indeed, as recognized by the Appellate Division, with the exception of two jointly owned residences (which were distributed as marital property), the parties did not commingle their separately owned assets throughout their 38-year marriage. We therefore agree with the courts below that the agreement constitutes an unambiguous prenuptial contract that precludes equitable distribution of the parties’ separate property, rendering it unnecessary to resort to extrinsic evidence.

Turning to the issue of maintenance, which was not addressed by the prenuptial agreement, wife contends that the courts below improperly weighed the factors listed in Domestic Relations Law § 236 (B) (6) (a), resulting in an inadequate monthly maintenance award. The record here, however, supports the affirmed findings of the courts below and we perceive no abuse of discretion in their calculation.

Finally, wife submits that the courts below erred in precluding her recovery of legal fees under Domestic Relations Law § 237 for services provided in opposing her husband’s affirmative defense predicated on the prenuptial agreement. Neither party here seeks to set aside the prenuptial agreement; instead, their dispute centers on whether the terms of the contract apply to the ownership of assets upon divorce. In this respect, her request is similar to the fee application in Ventimiglia v Ventimiglia (36 AD3d 899 [2d Dept 2007]), where attorneys’ fees were awarded to a party who contested her spouse’s affirmative defense based on an antenuptial agreement. Remittal to Supreme Court for reconsideration is therefore necessary because this portion of wife’s fee application should not have been excluded as a matter of law.

Accordingly, the order of the Appellate Division should be modified, without costs, by remitting to Supreme Court for further proceedings in accordance with this opinion and, as so modified, affirmed.

Chief Judge Kaye and Judges Ciparick, Read, Smith, Pigott and Jones concur.

Order modified, etc.

      . Husband had also commenced an action for divorce in Massachusetts that resulted in an ex parte, no-fault divorce. The Massachusetts court referred the parties’ economic issues to wife’s pending proceeding in New York.

      . Marital property is defined as
      “all property acquired by either or both spouses during the marriage and before the execution of a separation agreement or the commencement of a matrimonial action, regardless of the form in which title is held, except as otherwise provided in agreement pursuant to subdivision three of this part” (Domestic Relations Law § 236 [B] [1] [c] [emphasis added]).

      . Noncompliance with the execution formalities outlined in Domestic Relations Law § 236 (B) (3) does not invalidate prenuptial agreements that predate the effective date of that subdivision (see Bloomfield v Bloomfield, 97 NY2d 188, 194 [2001]). Here, wife concedes that the prenuptial agreement was validly executed.


author: Smith, J. Jones, J.

text:
    [901 NE2d 744, 873 NYS2d 251]
    Pasquale D'Onofrio et al., Appellants, v City of New York, Respondent, and New York City Transit Authority, Defendant. Ida Shaperonovitch et al., Respondents, v City of New York, Appellant.
    Argued November 20, 2008;
    decided December 18, 2008

      POINTS OF COUNSEL

      Pollack, Pollack, Isaac & De Cicco, New York City (Brian J. Isaac of counsel), and Burns & Harris (Seth A. Harris of counsel), for appellants in the first above-entitled action.
    The complaint should not have been dismissed as the Big Apple map sufficed to give the City of New York prior written notice as required under the Pothole Law. The jury was properly allowed to decide the issue, and its liability verdict in favor of plaintiff was not irrational or legally insufficient and should not have been disturbed. (Becker v City of New York, 131 AD2d 413; Acevedo v City of New York, 128 AD2d 488; Cipriano v City of New York, 96 AD2d 817; Matter of Big Apple Pothole & Sidewalk Protection Comm. v Ameruso, 110 Misc 2d 688; Amabile v City of Buffalo, 93 NY2d 471; Holt v County of Tioga, 56 NY2d 414; Fullerton v City of Schenectady, 285 App Div 545, 309 NY 701, 350 US 980; Barry v Niagara Frontier Tr. Sys., 35 NY2d 629; Bruni v City of New York, 2 NY3d 319; Poirier v City of Schenectady, 85 NY2d 310.)

      Michael A. Cardozo, Corporation Counsel, New York City (Deb

      orah A. Brenner, Stephen J. McGrath and Alan Beckoff of counsel), for respondent in the first above-entitled action.
    The trial court properly set aside the jury verdict and directed that judgment be entered in the City of New York’s favor because the City had not received prior written notice of the sidewalk defect that caused plaintiffs accident. (Amabile v City of Buffalo, 93 NY2d 471; David v City of New York, 267 AD2d 419; Katz v City of New York, 87 NY2d 241; Poirier v City of Schenectady, 85 NY2d 310; Leary v City of Rochester, 67 NY2d 866; Roldan v City of New York, 36 AD3d 484; Waner v City of New York, 5 AD3d 288; Curci v City of New York, 209 AD2d 574; Jones v Town of Brookhaven, 227 AD2d 530; Fraser v City of New York, 226 AD2d 424.)

      Michael A. Cardozo, Corporation Counsel, New York City (Deborah A. Brenner and Barry P. Schwartz of counsel), for appellant in the second above-entitled action.
    Because the Big Apple map bore no symbol corresponding to the defect at issue here, but only an indecipherable or ambiguous marking that was legally insufficient to constitute prior written notice of any specific hazard, the Appellate Division erred as a matter of law in declining to dismiss the complaint. (Katz v City of New York, 87 NY2d 241; David v City of New York, 267 AD2d 419; Drennen v City of New York, 256 AD2d 379; Poirier v City of Schenectady, 85 NY2d 310; Amabile v City of Buffalo, 93 NY2d 471; Laughton v City of New York, 30 AD3d 472; Solone v City of New York, 238 AD2d 332; Gianna v Town of Islip, 230 AD2d 824; Espinosa v JMG Realty Corp., 53 AD3d 408; Roldan v City of New York, 36 AD3d 484.)

      Lester B. Herzog, Brooklyn, for respondents in the second above-entitled action.
    Since, as noted by a unanimous panel of the Appellate Division, Second Department, the Big Apple map “contained numerous symbols for defects at the location of the accident” and since one of them was “ambiguous” as conceded by the City of New York’s witness, the factual dispute regarding the issue of prior written notice was properly submitted to the jury. The verdict in favor of plaintiffs was not irrational or legally insufficient and should not be disturbed. (Almadotter v City of New York, 15 AD3d 426; Vertsberger v City of New York, 34 AD3d 453; Weinreb v City of New York, 193 AD2d 596; Alvino v City of New York, 49 AD3d 676; Kruszka v City of New York, 29 AD3d 742; Silva v City of New York, 17 AD3d 566; Doremus v Incorporated Vil. of Lynbrook, 18 NY2d 362; City of New York v Kalikow Realty Co., 71 NY2d 957; Garricks v City of New York, 1 NY3d 22; Lopes v Rostad, 45 NY2d 617.)
   OPINION OF THE COURT

Smith, J.

In each of these cases, the issue is whether a map submitted to New York City by Big Apple Pothole and Sidewalk Protection Corporation gave the City the notice of a sidewalk defect that is required by the Pothole Law (Administrative Code of City of NY § 7-201 [c] [2]). We hold that neither map adequately identified the defect.

Pasquale D’Onofrio and Ida Shaperonovitch fell and were injured while walking in New York City. They and their spouses sued the City for their injuries. The City defended the lawsuits on the basis of the Pothole Law, which says in relevant part:

“No civil action shall be maintained against the city for . . . injury to person . . . sustained in consequence of any . . . sidewalk . . . being out of repair, unsafe, dangerous or obstructed, unless it appears that written notice of the defective, unsafe, dangerous or obstructed condition, was actually given to the commissioner of transportation or any person or department authorized by the commissioner to receive such notice.” (Id.)

Plaintiffs asserted that Big Apple maps had given the “written notice” that the law requires.

Big Apple is a corporation established by the New York State Trial Lawyers Association for the purpose of giving notices in compliance with the Pothole Law. It does so through maps on which coded symbols are entered to represent defects. For example, a straight line is used for a raised or uneven portion of a sidewalk, a circle for a hole or hazardous depression, a line with a triangle at each end for an extended section of cracks and holes in a sidewalk, and so forth. In each of these cases, Big Apple submitted a map to the City before the accident; the map had a symbol at the place where the accident happened; and the issue is whether the symbol was sufficient notice of the defect complained of.

The notice issue was submitted to the jury in both cases, and both juries found the notice adequate. In D’Onofrio, however, Supreme Court held the notice insufficient as a matter of law, set aside the verdict and granted judgment in the City’s favor (2005 NY Slip Op 30375[U]); the Appellate Division affirmed (41 AD3d 235 [2007]). In Shaperonovitch, Supreme Court denied the City’s post-trial motion to set aside the verdict, and entered judgment in plaintiffs’ favor; this judgment, too, was affirmed by the Appellate Division (49 AD3d 709 [2008]). We granted leave to appeal in both cases (10 NY3d 702, 712 [2008]), and now affirm in D’Onofrio and reverse in Shaperonovitch.

The symbol used in D’Onofrio was a straight line, indicating “[r]aised or uneven portion of sidewalk.” There is no evidence, however, from which the jury could have found that such a defect caused Mr. D’Onofrio’s injury. He testified that, as he was walking over a grating, both his feet became caught almost simultaneously, causing him to fall forward. He said that he felt the grating move, and that he observed broken cement in the area; he attributed his fall to “the movement of the grating, plus the broken cement, the combination of the two.” It is not completely clear how the accident happened, but there is no evidence that Mr. D’Onofrio walked across a raised or uneven portion of a sidewalk, even on the assumption that the grating is part of the sidewalk. A photograph of the area where he fell does not show any surface irregularity or elevation. Since the defect shown on the Big Apple map was not the one on which the claim in D’Onofrio was based, the lower courts in that case correctly set aside the verdict and entered judgment in the City’s favor.

The problem in Shaperonovitch is in a way the reverse of that in D’Onofrio-. the nature of the defect that caused the accident is clear, but the symbol on the Big Apple map is not. Ms. Shaperonovitch testified that she tripped over an “elevation on the sidewalk.” No unadorned straight line, the symbol for a raised portion of the sidewalk, appears on the Big Apple map at the relevant location. The Shaperonovitch plaintiffs rely on a symbol that does appear there: it is a line with a diamond at one end and a mark at the other that has been variously described as a poorly drawn X, the Hebrew letter shin, or a pitchfork without the handle. No symbol resembling this appears in the legend to the map. A Big Apple employee, called to testify by the City, acknowledged that Big Apple “did not notify the city of any raise” in the location where Ms. Shaperonovitch fell.

Plaintiffs in Shaperonovitch argue that the symbol on the map is “ambiguous” and that its interpretation is for the jury. We disagree; we do not see how a rational jury could find that this mark conveyed any information at all. Because the map did not give the City notice of the defect, the City was entitled to judgment as a matter of law.

Accordingly, in D’Onofrio v City of New York, the order of the Appellate Division should be affirmed, with costs. In Shaperonovitch v City of New York, the order of the Appellate Division should be reversed, with costs, and the complaint dismissed.

Jones, J.

(dissenting). Because I believe that the question of whether or not the Big Apple Pothole and Sidewalk Protection Corporation maps gave notice to the City of the defects injuring plaintiffs was properly decided by the jury, I respectfully dissent.

Mapping hazards is hardly an exact science. Although the symbols on the Big Apple maps were not designed to give notice of every unique defect found on the sidewalks and roads of New York City, each symbol on the map legend represents a general category of potentially hazardous defects (e.g., “Hole or hazardous depression,” “Raised or uneven portion of sidewalk,” “Pothole or other hazard”). Clearly, if no symbol or a completely different symbol is used on the map, the City does not receive notice of a given defect. It follows that where the defect could reasonably be encompassed by the symbol used on the map, the question of whether the City received notice of that defect is for the factfinder and not one that can be easily answered as a matter of law.

Plaintiff D’Onofrio was injured when he tripped over a combination of the movement of a loose metal grating and the broken cement alongside the edge of that grating. In the area where he fell, the Big Apple map depicted the defect as a “[r]aised or uneven portion of sidewalk.” In my view, the gap created from the crumbling cement alongside the grating was an irregularity in elevation and could reasonably have been included under the category of “uneven . . . sidewalk”—it was at least a close call. This is not a case where a wrong symbol representing a different category of hazards was used (compare Camacho v City of New York, 218 AD2d 725 [2d Dept 1995] [no notice to the City where plaintiff was injured by a one foot deep hole but map symbol used was “raised or uneven sidewalk” rather than “hole or hazardous depression”]). To the contrary, no other symbol on the legend could more closely describe the instant hazard. As such, the question of notice to the City was properly resolved by the jury. Because the jury found that the City received notice, I would reverse the order of the Appellate Division and remit on the issue of apportionment of liability.

Plaintiff Shaperonovitch was injured when she tripped over an elevation on the sidewalk. Although such a defect would properly be depicted as a straight line (the symbol representing a “[rjaised or uneven portion of sidewalk”), the ambiguous symbols used on the map were: (1) a diamond disconnected horizontally through the middle (or two letter “V”s, one upside down), (2) a straight line, and (3) a mark resembling a poorly drawn “X” or a pitchfork prong. I disagree with the majority that these symbols are meaningless. To the contrary, a deliberate mark on the map gives notice to the City of some defect— rather than no defect at all—at that location. As to which specific defects were depicted, the symbols could be reasonably interpreted in several ways. In my view, the question of whether the symbols were meaningless or whether they gave notice of one or more separate defects is not one that could be determined as a matter of law—the issue was properly resolved by the jury. Accordingly, I would affirm the order of the Appellate Division.

Chief Judge Kaye and Judges Ciparick, Graffeo and Read concur with Judge Smith; Judge Jones dissents and votes to reverse in a separate opinion in which Judge Pigott concurs.

In D’Onofrio v City of New York: Order affirmed, with costs.

Chief Judge Kaye and Judges Ciparick, Graffeo and Read concur with Judge Smith; Judge Jones dissents and votes to affirm in a separate opinion in which Judge Pigott concurs.

In Shaperonovitch v City of New York: Order reversed, with costs, and complaint dismissed.


author: Jones, J.

text:
    [901 NE2d 1268, 873 NYS2d 517]
    Richard S. Lawrence et al., as Preliminary Executors of Alice Lawrence, Deceased, Appellants, v Graubard Miller et al., Respondents. In the Matter of the Estate of Sylvan Lawrence, Deceased. Graubard Miller, Respondent; Richard S. Lawrence et al., as Preliminary Executors of Alice Lawrence, Deceased, et al., Appellants. In the Matter of the Estate of Sylvan Lawrence, Deceased. Graubard Miller et al., Respondents; Richard S. Lawrence et al., as Preliminary Executors of Alice Lawrence, Deceased, Appellants.
    Argued October 23, 2008;
    decided December 2, 2008

      POINTS OF COUNSEL

      Greenberg Traurig, LLP, New York City (Leslie D. Corwin, Israel Rubin and Rachel Sims of counsel), for Richard S. Lawrence and another, as preliminary executors of Alice Lawrence, deceased, appellants.
    I. The appellate court erred in finding that issues of fact preclude a finding that the revised fee agreement is unconscionable as a matter of law. (Gillman v Chase Manhattan Bank, 73 NY2d 1; State of New York v Wolowitz, 96 AD2d 47; Brower v Gateway 2000, 246 AD2d 246; Matter of Teleserve Sys. [MCI Telecom. Corp.], 230 AD2d 585; Gair v Peck, 6 NY2d 97, 361 US 374; Ween v Dow, 35 AD3d 58; King v Fox, 7 NY3d 181; Belzer v Bollea, 150 Misc 2d 925.) II. This Court should find, as a matter of law, that the revised fee agreement is unconscionable. (Gillman v Chase Manhattan Bank, 73 NY2d 1; Brower v Gateway 2000, 246 AD2d 246; King v Fox, 7 NY3d 181; Gair v Peck, 6 NY2d 97; Ween v Dow, 35 AD3d 58; Matter of Cooperman, 83 NY2d 465; Meinhard v Salmon, 249 NY 458; Matter of Lanyi, 147 AD2d 644; Agusta & Ross v Trancamp Contr. Corp., 193 Misc 2d 781; Matter of Howell, 215 NY 466.)

      Greenfield Stein & Senior, LLP, New York City (Norman A. Senior, Gary B. Freidman and Jeffery H. Sheetz of counsel), for Richard S. Lawrence, individually and as executor of the estate of Sylvan Lawrence, deceased, appellant.
    I. Graubard Miller’s claim for tortious interference should be dismissed because the contract it seeks to enforce is unconscionable. (Matter of Cooperman, 83 NY2d 465; King v Fox, 7 NY3d 181; Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172; Matter of Howell, 215 NY 466; Matter of Schanzer, 7 AD2d 275, 8 NY2d 972; Gair v Peck, 6 NY2d 97; Matter of Fitzsimons, 174 NY 15; Morehouse v Brooklyn Hgts. R.R. Co., 185 NY 520; Gillman v Chase Manhattan Bank, 73 NY2d 1; Landsman v Moss, 180 AD2d 718.) II. Because of the conduct of Messrs. Chill and Mallis and Ms. Reich, Grauard Miller is not entitled to any legal fees. (Gair v Peck, 6 NY2d 97; Baye v Grindlinger, 78 AD2d 690; Petition of Rosenman & Colin, 668 F Supp 788, 850 F2d 57; Matter of Sherbunt, 134 AD2d 723; Matter of Buchyn, 300 AD2d 739; Shelton v Shelton, 151 AD2d 659; Quinn v Walsh, 18 AD3d 638; Matter of Winston, 214 AD2d 677; Bank of Commerce v De Santis, 114 Misc 2d 491; In re Securities Group, 926 F2d 1051.) III. Graubard Miller has failed to state a claim under SCPA 2110. (Matter of Warhol, 165 Misc 2d 726; Matter of Duke, 297 AD2d 469; Matter of Papadogiannis, 196 AD2d 871; Matter of Verplanck, 151 AD2d 767; Matter of Bloomingdale, 172 Misc 218; Matter of Potts, 213 App Div 59, 241 NY 593; Matter of Freeman, 34 NY2d 1; Matter of Schoonheim, 158 AD2d 183.)

      Berchem, Moses & Devlin, P.C. (Robert L. Berchem, of the Connecticut bar, admitted pro hac vice, of counsel), Kim Koopersmith, P.C., New York City, and Akin Gump Strauss Hauer & Feld LLP (Elizabeth H. Raskin of counsel), for Marta Jo Lawrence and another, residuary legatees.
    I. A contract may be unenforceable on the grounds of substantive unconscionability alone. (Gillman v Chase Manhattan Bank, 73 NY2d 1; Gair v Peck, 6 NY2d 97, 361 US 374; King v Fox, 7 NY3d 181; Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172; Ween v Dow, 35 AD3d 58.) II. The revised fee agreement is unconscionable as a matter of law.

      Flemming Zulack Williamson Zauderer LLP, New York City (Mark C. Zauderer of counsel), Steven Mallis, pro se, and Jones Day, Washington D.C. (Michael A. Carvin of counsel), for respondents.
    I. Under the standard of review applicable to a motion to dismiss, Graubard Miller is entitled to the benefit of every possible favorable inference. (Nonnon v City of New York,
      9 NY3d 825; 511 W. 232nd Owners Corp. v Jennifer Realty Co., 98 NY2d 144; Tenuto v Lederle Labs., Div. of Am. Cyanamid Co., 90 NY2d 606; Leon v Martinez, 84 NY2d 83; Rovello v Orofino Realty Co., 40 NY2d 633.) II. The contingency fee agreement is not unconscionable as a matter of law. (King v Fox, 418 F3d 121, 7 NY3d 181; Matter of Fitzsimons, 174 NY 15; Gross v Russo, 47 AD2d 655; Nonnon v City of New York, 9 NY3d 825; Matter of Peters [Bachmann], 271 App Div 518, 296 NY 974; Matter of Sasson, 231 App Div 524; Murray v Waring Hat Mfg. Co., 142 App Div 514; Syme v Terry & Tench Co., 125 App Div 610; Sea Isle Foods v State of New York, 40 Misc 2d 872; Morehouse v Brooklyn Hgts. R.R. Co., 123 App Div 680, 195 NY 537.) III. Appellants’ unproven allegations of professional misconduct afford no basis for dismissal of the petition. (Matter of Lanyi, 147 AD2d 644; Landsman v Moss, 180 AD2d 718; Wade v Clemmons, 84 Misc 2d 822; King v Fox, 7 NY3d 181; Matter of Fitzsimons, 174 NY 15; Gross v Russo, 47 AD2d 655; Matter of Phillips, 284 AD2d 897; Matter of Lippman, 232 AD2d 69; Radin v Opperman, 64 AD2d 820; Matter of Buchyn, 300 AD2d 739.) IV. Graubard Miller’s claim for legal fees under SCPA 2110 should not be dismissed. (Matter of Graves, 197 Misc 638; Matter of Quattrocchi, 293 AD2d 481; Rosenman & Colin v Winston, 205 AD2d 451; Matter of Burns, 126 AD2d 809; Matter of Bellinger, 55 AD2d 448; Abramowitz v American Gen. Contr. Co., 239 AD2d 303; Matter of Potts, 213 App Div 59, 241 NY 593; Matter of Duke, 297 AD2d 469.) V. This Court lacks the constitutional authority to grant appellants’ motions to dismiss. (King v Fox, 418 F3d 121, 7 NY3d 181; Morehouse v Brooklyn Hgts. R.R. Co., 185 NY 520; Matter of Fitzsimons, 174 NY 15; Laidlaw Transp. v Helena Chem. Co., 255 AD2d 869; Matter of State of New York v Avco Fin. Serv. of N.Y., 50 NY2d 383; State of New York v Wolowitz, 96 AD2d 47; Magraw v Hann, 263 NY 674; Bowlby v McQuail, 240 NY 684; Matter of Martin, 219 NY 557; Palmer v State of New York, 217 NY 601.)
   OPINION OF THE COURT

Jones, J.

Sylvan Lawrence died testate in 1981, leaving his estate to his wife, Alice Lawrence, and three children. In 1982, decedent’s will was admitted to probate and decedent’s brother, Seymour Cohn, was named executor. In 1983, Mrs. Lawrence retained the law firm of Graubard Miller, on an hourly basis, to represent her in matters related to decedent’s estate, including her lawsuit regarding Mr. Cohn’s administration of decedent’s estate. Mrs. Lawrence’s retention of Graubard was confirmed in a letter dated August 4, 1983. Over the next 21 years, more than $350 million in distributions were made to the beneficiaries of the estate, and the firm billed Mrs. Lawrence over $18 million in legal fees. Mrs. Lawrence also paid, unbeknownst to the firm, over $5 million in “bonuses” or “gifts” to three of the firm’s partners and approximately $2.7 million in taxes on those bonuses or gifts.

In November 2004, Mrs. Lawrence, facing legal bills which, according to her, had increased to almost $1 million per quarter, asked the firm about the possibility of entering a new fee arrangement. By letter dated January 14, 2005, shortly before commencement of trial in connection with decedent’s estate, Mrs. Lawrence and Graubard entered a revised retainer agreement, providing that (1) for one year commencing January 1, 2005, Mrs. Lawrence would pay the firm a flat fee not exceeding $300,000 per quarter, (2) hourly billings would be capped at $1.2 million and (3) if additional monies were distributed to beneficiaries of decedent’s estate, or if Mrs. Lawrence settled her case against Mr. Cohn’s estate, Mrs. Lawrence was to pay from her share 40% of the total distributed to the beneficiaries, minus any amount she had already paid the firm under the revised retainer agreement.

On May 18, 2005, five months after the revised retainer agreement became effective, the firm, on behalf of Mrs. Lawrence, reached a settlement by which Mr. Cohn’s estate agreed to pay decedent’s estate approximately $104.8 million. Under the terms of the revised retainer agreement, Mrs. Lawrence was required to pay legal fees in excess of $40 million. She refused to pay and on August 5, 2005, Graubard commenced a proceeding in Surrogate’s Court to compel payment of its legal fees. Four days later, the firm amended its petition, which further alleged that appellant Richard Lawrence is liable to Graubard for its legal fees both individually, under a theory of tortious interference with contractual relationship, and as successor executor pursuant to Surrogate’s Court Procedure Act § 2110 and other applicable law. By order dated September 12, 2005, Surrogate Renee R. Roth referred Graubard’s contract enforcement proceeding to the Honorable Howard A. Levine (the Referee) to hear and report.

On September 13, 2005, Mrs. Lawrence brought suit in Supreme Court against the Graubard firm and three individual partners who had received over $5 million in bonuses or gifts from Mrs. Lawrence. This suit seeks rescission of the revised retainer agreement, return of all fees paid to Graubard Miller during the entire 22-year period it represented Mrs. Lawrence, as well as the monies she paid separately to the three partners, on the ground that the revised retainer agreement is unconscionable as a matter of law. By order of Supreme Court dated December 14, 2005, Justice Helen E. Freedman directed that Mrs. Lawrence’s rescission action be removed to Surrogate’s Court pursuant to CPLR 325 (e). Thereafter, Surrogate Roth referred this action to the Referee, who also had before him the firm’s contract enforcement proceeding.

Meanwhile, on or about October 24, 2005, Alice Lawrence and Richard Lawrence, individually and as successor executor to decedent’s estate, each moved before the Referee to dismiss Graubard’s petition under CPLR 3211. The firm countered by cross-moving for partial summary judgment dismissing Mrs. Lawrence’s counterclaim for a refund of all fees previously paid to Graubard and three of its partners.

Taking into account the standard of review applicable to CPLR 3211 motions to dismiss, the Referee recommended denying the motions to dismiss the petition. In support of this recommendation, the Referee, noting the general rule that retainer agreements must be fair and reasonable to the client, explained that determining whether the revised retainer agreement is unconscionable “will require evidence concerning all factors relevant to Mrs. Lawrence’s capacity, her understanding of the terms of the revised agreement, the completeness of the attorneys’ disclosure and whether they exploited their preexisting confidential relationship with her to obtain the favorable terms of the agreement,” and that an “excessive fee” determination pursuant to Code of Professional Responsibility DR 2-106 (22 NYCRR 1200.11) shall be made “after a review of the facts.” The Referee further noted the presence of numerous questions of fact, which cannot be resolved on a pre-answer motion to dismiss. By decision dated July 10, 2006, Surrogate Roth granted motions to confirm the Referee’s report and adopted his recommendations in their entirety.

By decision and order entered November 27, 2007, the Appellate Division, in a 4-1 decision, affirmed (see 48 AD3d 1 [1st Dept 2007]). The majority, noting that unconscionability determinations require a showing of both procedural and substantive unconscionability, found that

“while at first blush [the revised retainer] agreement might arguably seem excessive and invite skepticism, before any determination regarding unconscionability can be made, the circumstances underlying the agreement must be fully developed, including any discussions leading to the agreement, as well as the prospects at that time of successfully concluding the litigation in favor of Mrs. Lawrence” (48 AD3d at 4).

Similarly, the majority found that

“Mrs. Lawrence’s claims that the so-called ‘bonuses’ or ‘gifts,’ as well as the agreement itself, violated attorney disciplinary rules against self dealing, etc., cannot be resolved without determining [certain factual issues, i.e.,] Mrs. Lawrence’s capacity . . . ; what she was advised; and whether she understood the ramifications of the revised agreement” (id. at 8).

The dissenting Justice, noting that prior to the revised retainer agreement, Mrs. Lawrence had declined a $60 million settlement offer from Mr. Cohn’s estate, concluded that a court “may find a provision of a contract so outrageous as to warrant holding it unenforceable on the grounds of substantive unconscionability alone” (id. at 18). He would have ruled that the firm is not entitled to any legal fees under the revised retainer agreement, and further, that it would be appropriate to refer Mrs. Lawrence’s complaints regarding the three partners to the Departmental Disciplinary Committee.

The Appellate Division granted the Lawrences leave to appeal from its order and certified the following question to this Court: “Was the decision and order of this Court, to the extent that it affirmed the orders of the Surrogate’s Court, properly made?” We now affirm and answer the certified question in the affirmative.

Whether the revised retainer agreement is unenforceable because it was unconscionable when entered into, or became so in retrospect, is the issue before us on appellants’ motions to dismiss the firm’s petition to compel payment of legal fees. On a motion to dismiss a petition we, of course, must accept the facts alleged in the petition as true, petitioner must be afforded every possible favorable inference, and we must determine whether the facts alleged by petitioner fit within any cognizable legal theory (see Leon v Martinez, 84 NY2d 83, 87-88 [1994]). Affidavits submitted by a respondent will almost never warrant dismissal under CPLR 3211 unless they “establish conclusively that [petitioner] has no [claim or] cause of action” (Rovello v Orofino Realty Co., 40 NY2d 633, 636 [1976]).

It is well settled that an unconscionable contract is generally defined

“as one which is so grossly unreasonable as to be [unenforceable according to its literal terms] because of an absence of meaningful choice on the part of one of the parties [‘procedural unconscionability’] together with contract terms which are unreasonably favorable to the other party [‘substantive unconscionability’]” (King v Fox, 7 NY3d 181, 191 [2006]; see Gillman v Chase Manhattan Bank, 73 NY2d 1, 10-11 [1988]).

As noted above, a fee arrangement can be deemed unconscionable when entered into or in retrospect.

In light of the applicable standard of review in resolving a motion to dismiss a petition, we conclude that the facts and circumstances surrounding the revised retainer agreement have not, at this time, been sufficiently developed to determine whether or not the agreement was unconscionable at the time it was made. Petitioner Graubard Miller has not had the opportunity to lay bare admissible proof as to, among other things, whether the revised retainer agreement was fair, reasonable, and fully known and understood by Mrs. Lawrence. Further, appellants have not submitted admissible, conclusive proof that the firm’s petition is somehow deficient and/or that dismissal is otherwise warranted.

Given the courts’ role in closely scrutinizing contingent fee agreements between attorneys and their clients (see Shaw v Manufacturers Hanover Trust Co., 68 NY2d 172, 176 [1986]), even if such an agreement is not determined to be unconscionable as of its inception, that is not the end of a court’s analysis. Our case law clearly provides that circumstances arising after contract formation can render a contingent fee agreement— not unconscionable when entered into—unenforceable where the amount of the fee, combined with the large percentage of the recovery it represents, seems disproportionate to the value of the services rendered (see Gair v Peck, 6 NY2d 97, 106-107 [1959] [“there comes a point where the amounts to be received by attorneys under contingent fee contracts are large enough to be (unenforceable) under the circumstances of the case” (id. at 107)]; see also King, 7 NY3d at 192 [determining whether a contingent fee agreement is unconscionable requires an analysis of “the facts and circumstances surrounding the agreement, including the parties’ intent and the value of the attorney’s services in proportion to the fees charged, in hindsight”]).

Here, the firm and Mrs. Lawrence—after a long professional relationship, and $18 million in fees—entered the revised retainer agreement which provided for a 40% contingent fee. Five months later, Graubard secured a settlement with the Cohn estate exceeding $100 million and, pursuant to the agreement, the firm sought to collect legal fees exceeding $40 million from Mrs. Lawrence. On its face, the amount of the fee seems disproportionate to the five months of work since the agreement’s revision. However, we have not been presented with facts to refute or support this hypothesis, or to evaluate the agreement’s unconscionability.

Because questions which cannot be resolved on a motion to dismiss are present and because a full record has not been developed, dismissal of the petition is not warranted at this time. Moreover, until a determination regarding the validity of the agreement is made, appellants’ claims concerning the excessiveness of the contingent fee, the partners’ acceptance of the bonuses or gifts and the alleged violation of certain disciplinary rules, as well as Mr. Lawrence’s motion to dismiss Graubard’s tortious interference with contract claim, cannot be resolved.

Accordingly, the order of the Appellate Division should be affirmed, without costs, and the certified question answered in the affirmative.

Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith and Pigott concur.

Order affirmed, etc.

      . In late 2003, Mr. Cohn died and decedent’s son, appellant Richard Lawrence, took over as successor executor.

      . Mrs. Lawrence died after the Appellate Division granted leave to appeal. The preliminary executors of her estate have been substituted. Further, the Appellate Division’s leave grant included so much of its order as affirmed Surrogate’s Court orders denying Mrs. Lawrence’s challenge to a Referee’s order directing her appearance at a deposition and removing the action, Lawrence v Graubard Miller, from Supreme Court to Surrogate’s Court. Because the appellants do not address these issues in their briefs, we do not reach them.

      . An unconscionable contract is usually voidable since a party to a contract has the power to validate, ratify or avoid it (see 1 Corbin on Contracts § 1.6, at 17-18 [1993 rev ed]).

      . In general, agreements entered into between competent adults, where there is no deception or overreaching in their making, should be enforced as written. Accordingly, the power to invalidate fee agreements with hindsight should be exercised only with great caution. It is not unconscionable for an attorney to recover much more than he or she could possibly have earned at an hourly rate. Indeed, the contingency system cannot work if lawyers do not sometimes get very lucrative fees, for that is what makes them willing to take the risk—a risk that often becomes reality—that they will do much work and earn nothing. If courts become too preoccupied with the ratio of fees to hours, contingency fee lawyers may run up hours just to justify their fees, or may lose interest in getting the largest possible recoveries for their clients.


text:
    [894 NE2d 1183, 864 NYS2d 794]
    Windy Ridge Farm et al., Appellants, v Assessor of the Town of Shandaken et al., Respondents.
    Decided August 28, 2008

      APPEARANCES OF COUNSEL

      Cooper Erving & Savage LLP, Albany (Brian W. Matula of counsel), for appellants.

      Van DeWater and Van DeWater, LLP, Poughkeepsie (Amee C. Vantassell of counsel), for Assessor of Town of Shandaken, respondent.

      Joshua N. Koplovitz, County Attorney, Kingston, for County of Ulster, respondent.
   OPINION OF THE COURT

Memorandum.

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

Central to this appeal is petitioners’ claim that the Appellate Division erred in failing to apply the discretionary factors enumerated in Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals (5 NY3d 452 [2005]) before dismissing the proceeding for failure to join necessary parties Ulster County and the Onteora Central School District. We conclude that the Appellate Division reached the correct result.

CPLR 1001 (b) provides that joinder of a necessary party may be excused “[i]f jurisdiction over him can be obtained only by his consent or appearance,” upon the court’s consideration of five discretionary factors. Where the party is subject to the jurisdiction of the court, however, the statute instructs instead that “the court shall order him summoned” (CPLR 1001 [b]). The CPLR, therefore, “distinguishes between a necessary party ‘subject to the jurisdiction of the court’ and one over whom jurisdiction can be obtained only by consent or appearance” (Red Hook, 5 NY3d at 459).

In Red Hook, although the relevant limitations period had expired, the parties assumed that jurisdiction over the necessary party could have been obtained “only by his consent or appearance” (CPLR 1001 [b]). The Court, therefore, explicitly did not answer the question whether a necessary party “by virtue of the lapsed statute of limitations, [is] subject to, or beyond, the ‘jurisdiction’ of the court as the term is used in CPLR 1001” (id. at 459).

We now conclude—and answer the question left open in Red Hook—that the County and the District are subject to the jurisdiction of the court. We agree with the Appellate Division’s recent analysis in Matter of Romeo v New York State Dept. of Educ. (41 AD3d 1102 [3d Dept 2007]), where that court refused to “condone a loose interpretation of ‘jurisdiction’ in any provision of the CPLR,” finding that “[a] statute of limitations does not deprive a court of jurisdiction nor even a litigant of a substantive right, but is merely a defense which may, if properly asserted, deprive a plaintiff of any remedy from a defendant” (id. at 1104). Faced with clear language to the contrary, we are unwilling to consider an expired statute “the equivalent” of a jurisdictional defect (see e.g. Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y., 302 AD2d 155, 161 [1st Dept 2002]). This, as noted by one recent commentator, is a “gloss on the statute” that we cannot sustain (see Alexander, Supplementary Practice Commentaries, McKinneys Cons Laws of NY, Book 7B, 2008 Cum Pocket Part, CPLR C1001:2 [2006]).

When a necessary party “is subject to the jurisdiction of the court”—as we conclude that the County and the School District are—the statute directs that the court “order him summoned” (CPLR 1001 [b]). It does not provide for consideration of the discretionary factors. In most cases, therefore, the court would be required to join the necessary parties and remit for further proceedings (see e.g. Matter of Romeo, 41 AD3d at 1105). Here, however, following respondent Assessor’s motion to dismiss for, among other things, failure to join the County and School District as necessary parties, petitioners filed an amended petition naming as additional respondents the County and School District. They, in turn, moved to dismiss on statute of limitations grounds, and established their right to dismissal of the amended petition against them due to the expiration of the four-month limitations period. Thus, under these circumstances, the case against the Assessor was properly dismissed due to petitioners’ failure to join necessary parties (see CPLR 1003).

Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.

On review of submissions pursuant to section 500.11 of the Rules of the Court of Appeals (22 NYCRR 500.11), order affirmed, with costs, in a memorandum.


text:
    Vivia Amalfitano et al., Respondents, v Armand Rosenberg, Appellant.
    Decided August 28, 2008
   Certification of questions by the United States Court of Appeals for the Second Circuit, pursuant to section 500.27 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.27), accepted and the issues presented are to be considered after briefing and argument.

Concur: Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones.


text:
    In the Matter of Amber C., an Infant. Dutchess County Department of Social Services et al., Respondents; Theresa C., Appellant.
    Submitted May 19, 2008;
    decided August 28, 2008
   Motion for leave to appeal, purportedly on behalf of Theresa C., dismissed upon the ground that the proceeding against her abated upon her death.


text:
    Committee to Save St. Brigid’s Inc. et al., Appellants, v Edward Cardinal Egan et al., Respondents.
    Submitted August 25, 2008;
    decided August 28, 2008
   Motion by New York State Catholic Conference for leave to appear amicus curiae on the appeal herein granted only to the extent that the proposed brief is accepted as filed.


text:
    Episcopal Diocese of Rochester et al., Respondents, v David Harnish, as Former Rector of All Saints Protestant Episcopal Church, et al., Appellants, et al., Defendants. In the Matter of All Saints Anglican Church, Formerly Known as All Saints Protestant Episcopal Church, Appellant, v Episcopal Diocese of Rochester et al., Respondents.
    Submitted August 25, 2008;
    decided August 28, 2008
   Motion by Church of the Good Shepherd et al. for leave to file a brief amici curiae on the appeal herein granted. Two copies of the brief must be served and 24 copies filed within seven days.


text:
    Paula Fasso et al., Respondents, and Independent Health Association, Inc., Intervenor-Appellant, v Ralph J. Doerr, M.D., Respondent.
    Submitted June 30, 2008;
    decided August 28, 2008
   Motion by Medical Society of the State of New York for leave to file a brief amicus curiae on the appeal herein granted. Two copies of the brief must be served and 24 copies filed within seven days.


text:
    Betty L. Kimmel, Respondent, v State of New York et al., Appellants, et al., Defendants.
    Submitted May 27, 2008;
    decided August 28, 2008
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.

Judge Pigott taking no part.


text:
    County of Nassau, Respondent, v Hugo Rojas, Appellant.
    Submitted June 9, 2008;
    decided August 28, 2008
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for leave to appeal denied.


text:
    The People of the State of New York, Appellant, v Amber Bauman and Charles Edward Lafler, Respondents.
    Submitted July 21, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted only to the extent that Gary Muldoon, Esq., care of Muldoon & Getz, 144 Exchange Boulevard, Suite 402, Rochester, New York 14614 is assigned without fee to represent respondent Charles Edward Lafler on the appeal herein.


text:
    The People of the State of New York, Respondent, v Rigoberto Benitez, Appellant.
    Submitted July 14, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Lynn W.L. Fa-hey, Esq., Appellate Advocates, 2 Rector Street, 10th Floor, New York, NY 10006 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Respondent, v James Carncross, Appellant.
    Submitted August 4, 2008;
    decided August 28, 2008
   Motion for an extension of the time within which to apply for permission to appeal pursuant to CPL 460.20 granted and motion papers treated as a timely CPL 460.20 application.


text:
    The People of the State of New York, Respondent, v Walkins Contreras, Appellant.
    Submitted July 7, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Steven Banks, Esq., the Legal Aid Society, 199 Water Street, New York, NY 10038 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Respondent, v Jose Fuentes, Appellant.
    Submitted July 21, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Charles T. Glaws, Esq., care of Gruvman, Giordano & Glaws, LLP, 61 Broadway, Suite 2715, New York, NY 10006 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Appellant, v Victor Gomez, Respondent.
    Submitted July 21, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Steven Banks, Esq., the Legal Aid Society, 199 Water Street, New York, NY 10038 assigned as counsel to the respondent on the appeal herein.


text:
    The People of the State of New York, Respondent, v L. Dennis Kozlowski, Appellant. The People of the State of New York, Respondent, v Mark H. Swartz, Appellant.
    Submitted August 18, 2008;
    decided August 28, 2008
   Motion by Association of Corporate Counsel for leave to appear amicus curiae on the appeals herein granted only to the extent that the proposed brief is accepted as filed.


text:
    The People of the State of New York, Respondent, v Richard Lowe, Appellant.
    Submitted August 11, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Steven Banks, Esq., the Legal Aid Society, 199 Water Street, New York, NY 10038 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Respondent, v Jason Naradzay, Appellant.
    Submitted July 21, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Frank H. His-cock Legal Aid Society, 351 South Warren Street, Syracuse, New York 13202 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Respondent, v Michelle Rouse, Appellant.
    Submitted August 11, 2008;
    decided August 28, 2008
   Motion for assignment of counsel denied.


text:
    The People of the State of New York, Respondent, v Andrew C. Small, Appellant.
    Submitted July 7, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Timothy P Donaher, Esq., Monroe County Public Defender, 10 North Fitzhugh Street, Rochester, New York 14614 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York, Respondent, v Lorraine Washington, Appellant.
    Submitted August 25, 2008;
    decided August 28, 2008
   Motion for assignment of counsel granted and Robert S. Dean, Esq., Center for Appellate Litigation, 74 Trinity Place, 11th Floor, New York, NY 10006 assigned as counsel to the appellant on the appeal herein.


text:
    The People of the State of New York ex rel. DeAndre Williams, Appellant, v State of New York, Respondent.
    Submitted June 16, 2008;
    decided August 28, 2008
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the proceeding within the meaning of the Constitution. Motion for poor person relief dismissed as academic.


text:
    Yadid, LLC, Respondent, v GCW Bell Corp. et al., Defendants, and Jacques Romulus, Appellant.
    Submitted May 27, 2008;
    decided August 28, 2008
   Motion for leave to appeal dismissed as untimely (see CPLR 5513 [h]).


text:
    Eleanor Duffy, Appellant, v James M. Vogel et al., Respondents, et al., Defendant.
    Submitted June 16, 2008;
    decided September 2, 2008
   Motion to dismiss appeal denied.


text:
    In the Matter of Woodrow Flemming, Appellant, v Frank Rizzo et al., Respondents.
    Submitted June 23, 2008;
    decided September 2, 2008
   Motion for leave to appeal dismissed upon the ground that the Court of Appeals does not have jurisdiction to entertain it (see NY Const, art VI, § 3 [b]; CPLR 5602).


text:
    Monir Hosseiniyar, Respondent, v Ali Alimehri, Appellant.
    Submitted June 16, 2008;
    decided September 2, 2008
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution. Motion for a stay dismissed as academic.


text:
    Michael Israel et al., Respondents, v Surinder S. Chabra, Appellant, et al., Defendant.
    Decided September 2, 2008
   Certification of question by the United States Court of Appeals for the Second Circuit, pursuant to section 500.27 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.27), accepted and the issues presented are to be considered after briefing and argument.

Concur: Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones.


text:
    Mario Miguel Jaramillo, Appellant, v Weyerhaeuser Company et al., Respondents, et al., Defendant.
    Decided September 2, 2008
   Certification of question by the United States Court of Appeals for the Second Circuit, pursuant to section 500.27 of the Rules of Practice of the Court of Appeals (22 NYCRR 500.27), accepted and the issues presented are to be considered after briefing and argument.

Concur: Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones.


text:
    The People of the State of New York, Respondent, v Isaias Umali, Appellant.
    Submitted June 16, 2008;
    decided September 2, 2008
   Motion for reargument denied [see 10 NY3d 417 (2008)].


text:
    Joel B. Waterman, Appellant, v Weinstein Memorial Chapel et al., Respondents.
    Submitted May 19, 2008;
    decided September 2, 2008
   Motion, insofar as it seeks leave to appeal as against defendants Westchester Vault Co., Inc., Anne Cook and Norwalk Wilbert Vault Company of Bridgeport, dismissed as untimely (see CPLR 5513 [b]); motion, insofar as it seeks leave to appeal as against the remaining defendants, dismissed upon the ground that appellant has failed to demonstrate timeliness as required by Rules of the Court of Appeals (22 NYCRR) § 500.22 (b) (2).


text:
    [896 NE2d 658, 867 NYS2d 23]
    In the Matter of Inez D. Barron et al., Respondents, v Board of Elections in the City of New York, Appellant.
    Argued August 26, 2008;
    decided September 4, 2008

      APPEARANCES OF COUNSEL

      Michael A. Cardozo, Corporation Counsel, New York City (Pamela Seider Dolgow, Stephen Kitzinger and John Hogrogian of counsel), for appellant.

      Aaron D. Maslow, Brooklyn, for respondents.

      Todd S. Valentine, Albany, for State Board of Elections, amicus curiae.
   OPINION OF THE COURT

Memorandum.

The order of the Appellate Division should be reversed, without costs, and the petition dismissed.

On April 8, 2008, Member of Assembly Diane Gordon representing the 40th Assembly District in Kings County was convicted of various felonies, and by operation of law her office became vacant (Public Officers Law § 30 [1] [e]). On April 16,

2008, the State Board of Elections certified the vacancy, for a term ending December 31, 2008, to the Board of Elections in the City of New York.

Respondent Inez D. Barron, who was circulating designating petitions as candidate for the office of Member of Assembly for the 40th Assembly District for the term commencing January 1, 2009, also circulated petitions for the vacancy term ending December 31, 2008 of the same office. After learning that the Board did not intend to conduct an election to fill the term created by the vacancy, Barron and two candidates commenced a special proceeding, pursuant to Election Law §§ 16-100 and 16-104, to compel the Board to conduct primary and general elections to fill the vacancy term ending December 31, 2008.

Supreme Court, after a hearing, ordered the Board to conduct primary and general elections to fill the vacancy. In addition, the court set July 2, 2008 as the starting date for the circulation of designating petitions to eliminate the perceived unfair head start Barron had in acquiring signatures. The Appellate Division affirmed the order requiring the simultaneous elections but modified the date for commencement of the circulation of designating petitions to June 3, 2008, consistent with Election Law § 6-134 (4) and § 6-158 (1). We now reverse.

Public Officers Law § 42 (1) states the general rule for the filling of vacancies. It provides:

“A vacancy occurring before September twentieth of any year in any office authorized to be filled at a general election, except in the offices of governor or lieutenant-governor, shall be filled at the general election held next thereafter, unless otherwise provided by the constitution, or unless previously filled at a special election.”

Public Officers Law § 42 (4) further provides a special rule applicable only to members of Congress, state senators and assembly members:

“A special election shall not be held to fill a vacancy in the office of . . . member of assembly, unless the vacancy occurs before the first day of April of the last year of the term of office, or unless the vacancy occurs . . . after such first day of April and a special session of the legislature be called to meet between such first day of April and the next general election or be called after September nineteenth in such year. If a special election to fill an office shall not be held as required by law, the office shall be filled at the next general election.”

Although subdivision (1) generally provides for the filling of vacancies at the next general election if the vacancy occurs before September 20th, subdivision (4) modifies the general rule for vacancies occurring in the office of Member of Assembly. Under subdivision (4), a special election to fill a vacancy occurring in such office can be held only in limited circumstances and if such special election is not held as required by law, the office—meaning the new upcoming Assembly term, not the vacancy—shall be filled at the next general election.

Our holding is consistent with the intent of Public Officers Law § 42. Historically, the Legislature recessed or adjourned its regular session before April first of each year—the end of the fiscal year (see Zimmerman, Government and Politics of New York State, at 122 [1981]). While longer legislative sessions are commonplace today, they were rare when the predecessor to section 42 (4) was enacted in 1896 (L 1896, ch 909, as amended). The wording of the section has remained unchanged in the intervening years. Thus, unless a special session of the Legislature is called—in which case a special election would be authorized under subdivision (4)—the language of the statute indicates that the Legislature intended to allow a vacancy in the office of Member of Assembly occurring after April first in the last year of a term of office to remain unfilled for the remainder of the unexpired term, since no additional business was contemplated for the remainder of the year. Indeed, it would be anomalous to require the Board of Elections to assume the burden and expense of simultaneously conducting a regular general election for the term commencing January first and a separate general election to fill the vacancy for the last two months of the year (particularly when the statute potentially leaves the office vacant for a period of up to seven months).

Here, the vacancy occurred after April first in the last year of the term of office; accordingly, Public Officers Law § 42 (4) applies. In other words, the office will remain vacant for the remainder of the unexpired term but will be filled at the next general election by the successful candidate running for the regular term of office commencing January first of the following year.

Respondent’s argument that the words “term,” “office” and “vacancy” are used by the Legislature interchangeably in the statute is unpersuasive. In subdivisions (1) and (4), the Legislature used the word “vacancy” to refer to the unexpired term of office as a result of a vacancy (see Public Officers Law §42 [1], [4]). However, elsewhere in the statute, the word “office” clearly refers to the position—in this case, Member of the Assembly for the 40th District—not the unexpired term. Thus, in specifying in subdivision (4) that “the office shall be filled at the next general election,” the Legislature was not directing a separate election for the unexpired term (see Public Officers Law § 42 [4]). Rather, it was indicating that none of the triggers for a special election to fill the vacancy having occurred, the position would be filled in the usual course with the successor assuming office on January first at the commencement of the next legislative term.

Chief Judge Kaye and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur in memorandum.

Order reversed, etc.


text:
    In the Matter of Inez D. Barron et al., Respondents, v Board of Elections in the City of New York, Appellant.
    Submitted August 26, 2008;
    decided September 4, 2008
   Motion by Todd Valentine, Esq., as Coexecutive Director of State Board of Elections, to file a letter amicus curiae on the appeal herein granted and the letter accepted as filed.


text:
    In the Matter of Lee A. Goldberg, Respondent, v Thelen Reid Brown Raysman & Steiner LLP et al., Appellants.
    Submitted July 7, 2008;
    decided September 4, 2008
   Motion for leave to appeal denied. Cross motion to vacate stay denied. Cross motion for imposition of sanctions denied.


text:
    Gerald Goldman et al., Appellants, v Akin Gump Strauss Hauer & Feld LLP et al., Respondents.
    Submitted June 16, 2008;
    decided September 4, 2008
   Motion, insofar as it seeks leave to appeal from that part of the Appellate Division order that affirmed the denial of appellants’ motions for leave to amend the complaint and for renewal, dismissed upon the ground that such portion of the order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied.


text:
    Louis Anthony Graffeo, Respondent, v Debra Carol Paciello, Also Known as Debra Carol Graffeo, Appellant.
    Submitted July 7, 2008;
    decided September 4, 2008
   Motion for reargument of motion for leave to appeal denied [see 10 NY3d 891 (2008)]. Motion for a stay dismissed as academic.


text:
    IDT Corporation, Respondent, v Morgan Stanley Dean Witter & Co. et al., Appellants.
    Submitted June 30, 2008;
    decided September 4, 2008
   Motion to dismiss appeal denied.


text:
    In the Matter of Daryll Boyd Jones, an Attorney, Appellant. Grievance Committee for the Second and Eleventh Judicial Districts, Respondent.
    Submitted July 14, 2008;
    decided September 4, 2008
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the proceeding within the meaning of the Constitution. Motion for a stay dismissed as academic.


text:
    Joseph Kassis et al., Appellants, v The Ohio Casualty Insurance Company, Respondent.
    Submitted September 2, 2008;
    decided September 4, 2008
   Motion by Siller Wilk LLP for leave to file a brief amicus curiae on the appeal herein granted and the proposed brief is accepted as filed.


text:
    In the Matter of Gilbert Lau, Appellant, v Lucindo Suarez et al., Respondents.
    Submitted July 28, 2008;
    decided September 4, 2008
   Motion for reargument denied [see 10 NY3d 714 (2008)]. Motion for poor person relief dismissed as academic.