author: ClPARICK, J.

text:
    [904 NE2d 818, 876 NYS2d 682]
    In the Matter of Jason B., Respondent, v Antonia Coello Novello, as Commissioner of the New York State Department of Health, et al., Appellants.
    Argued January 13, 2009;
    decided February 19, 2009

      POINTS OF COUNSEL

      Andrew M. Cuomo, Attorney General, New York City (Cecelia C. Chang, Barbara D. Underwood and Benjamin N. Gutman of counsel), for appellants.
    Res judicata does not bar the Office of Mental Retardation and Developmental Disabilities from reevaluating and correcting a nonadjudicative determination to grant services. (Good Health Dairy Prods. Corp. v Emery, 275 NY 14; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481; Matter of Evans v Monaghan, 306 NY 312; United States v Utah Constr. & Mining Co., 384 US 394; Matter of Josey v Goord, 9 NY3d 386; Ryan v New York Tel. Co., 62 NY2d 494; Matter of Venes v Community School Bd. of Dist. 26, 43 NY2d 520; Allied Chem. v Niagara Mohawk Power Corp., 72 NY2d 271; Matter of Fury [Lubin], 4 AD2d 732; Drummond v Commissioner of Social Sec., 126 F3d 837.)

      Mental Hygiene Legal Service, Second Judicial Department,
      Mineóla (Felicia B. Rosen, Sidney Hirschfeld and Dennis B. Feld of counsel), for respondent.
    I. The Appellate Division did not preclude the Office of Mental Retardation and Developmental Disabilities from correcting its prior service approval. (Matter of Graham v New York State Police & Fire & Retirement Sys., 188 AD2d 826; Matter of Davidson v New York State & Local Employees’ Retirement Sys., 185 AD2d 513.) II. The Appellate Division properly held that the October 13, 2006 determination by the Commissioner of the New York State Department of Health was not supported by substantial evidence. (300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176; Matter of Williams v Barrios-Paoli, 270 AD2d 127; People v Santos, 127 Misc 2d 63.)
   OPINION OF THE COURT

ClPARICK, J.

In this appeal, we are asked to determine whether the doctrine of res judicata precludes the New York State Office of Mental Retardation and Developmental Disabilities (OMRDD) from reassessing an earlier decision that an applicant is eligible for benefits as a result of a developmental disability as defined by Mental Hygiene Law § 1.03 (22). We conclude that it does not.

The Medicaid Act, administered by the Secretary of the Department of Health and Human Services, is a cost-sharing arrangement under which the federal government reimburses a portion of the expenditures incurred by states that elect to provide medical assistance to individuals who lack the resources to cover the costs of their medical care. Medicaid eligibility usually depends upon a strict financial means test. Those who receive institutional care can ordinarily satisfy this test. The Act allows the Secretary to grant a Home and Community Based Services Waiver giving the states the option to provide home or community-based services to certain individuals who would otherwise require nursing home or other institutional care (see 42 USC § 1396a [a] [10] [A] [ii] [VI]; § 1396n [c]).

New York State, through OMRDD, is authorized to operate such programs, each designed to assist individuals who meet specific eligibility requirements. These programs provide home and community based services targeted to a limited number of individuals with developmental disabilities in order to assist them to be active and to participate in their communities. For an individual to be eligible for such waiver programs, 14 NYCRR 635-10.3 requires that the applicant must have a developmental disability and would be placed in an intermediate care facility for the developmentally disabled but for the provision of waiver services. These waiver services allow the Medicaid-eligible applicant to remain in the community by choosing to reside in an appropriate living arrangement instead of placement in a facility.

OMRDD, under the oversight of the New York State Department of Health (DOH), provides waiver services which can include in-home care, counseling, vocational training, rental subsidies, transportation and respite services for families and caretakers. In order to qualify for OMRDD-funded services, an applicant must show the disability:

“(a) (1) is attributable to mental retardation, cerebral palsy, epilepsy, neurological impairment, familial dysautonomia or autism;
“(2) is attributable to any other condition of a person found to be closely related to mental retardation because such condition results in similar impairment of general intellectual functioning or adaptive behavior to that of mentally retarded persons or requires treatment and services similar to those required for such person; or
“(3) is attributable to dyslexia resulting from a disability described in subparagraph (1) or (2) of this paragraph;
“(b) originates before such person attains age twenty-two;
“(c) has continued or can be expected to continue indefinitely; and
“(d) constitutes a substantial handicap to such person’s ability to function normally in society.” (Mental Hygiene Law § 1.03 [22].)

OMRDD, through its 13 regional Developmental Disabilities Services Offices, establishes eligibility for these services on the basis of the applicant’s developmental disability within the definition of Mental Hygiene Law § 1.03 (22). Generally, OMRDD bases its eligibility determination upon the documentation provided by the applicant. At any point during the eligibility determination process, however, OMRDD may request more information or further assessment of an individual. These further assessments can be performed by the referral source, the individual’s other current providers or by an independent qualified practitioner. If an applicant is found not to meet the requirements of Mental Hygiene Law § 1.03 (22), the denial is automatically reviewed by designated clinicians and an independent OMRDD committee composed of licensed practitioners. Approvals, however, are made without an administrative hearing and once a regional office determines an individual is eligible, no further clinical or committee review is required.

In 2003, petitioner Jason B. applied for OMRDD support services through the Hudson Valley regional office. He was found eligible for services and began receiving from OMRDD a rent subsidy and an in-home aide through a private service provider, Taconic Innovations, Inc. The aide was to assist him with his daily living skills, such as laundry, cooking and shopping, and further provide Jason B. with transportation and money management training.

Over the next couple of years, as Taconic provided the support services to Jason B., it began to question whether he was developmentally disabled, citing his repeated behavioral problems, and requested that OMRDD reevaluate him. In 2006, after a break in service caused by Jason B.’s arrest and incarceration, Taconic again asked OMRDD to reconsider his eligibility for services. In 2006, the Hudson Valley regional office reassessed Jason B.’s medical records and its eligibility committee concluded that its initial grant of services in 2003 was in error. Subsequently, two independent OMRDD committees, composed of licensed physicians, psychologists and social workers, reviewed the same medical information that had been previously considered in 2003 and agreed with Hudson Valley’s reassessment that Jason B. did not have a developmental disability as defined by Mental Hygiene Law § 1.03 (22).

In a decision dated June 15, 2006, DOH informed Jason B. that all support services would be terminated on July 1, 2006. The decision also provided details on how to appeal by doing both of the following: (1) asking for a meeting (conference) with the OMRDD, and (2) requesting a fair hearing with a state hearing officer from the New York State Department of Social Services. Further, in a letter from Hudson Valley dated June 22, 2006, Jason B. was notified that he could submit any additional documentation prior to the meeting. Jason B. did not, however, submit any additional documents, nor did he request further testing to confirm that he indeed had a developmental disability within the meaning of Mental Hygiene Law § 1.03 (22).

On October 4, 2006, a fair hearing was held. This was the first instance in which evidence was introduced, testimony was taken, arguments were presented, objections were made and a transcript of the fair hearing created. According to OMRDD’s Chief Psychologist, Dr. Ann Troy, the reason Jason B. was mistakenly approved for services in 2003 was because the committee members were not familiar with two of his tests and misinterpreted the results. In a decision dated October 13, 2006, the Commissioner of the New York DOH confirmed OMRDD’s determination that Jason B. was not developmentally disabled, and that his enrollment in the support waiver program should be terminated.

Jason B. commenced the instant CPLR article 78 proceeding challenging the DOH Commissioner’s determination that he is not developmentally disabled and therefore not eligible for services. After a transfer from the Supreme Court pursuant to CPLR 7804 (g), the Appellate Division granted Jason B.’s petition and annulled DOH’s determination. The Appellate Division held that when OMRDD concluded, based on then-available medical evidence, that Jason B. was developmentally disabled and eligible to receive support services in 2003, such a conclusion was a quasi-judicial determination and therefore entitled to limited res judicata effect. The court further found that since the 2006 determination was not based on any new evidence or changed circumstances, it was not supported by substantial evidence (44 AD3d 761, 762 [2007]). We granted leave to appeal (10 NY3d 710 [2008]) and now reverse.

The principles of administrative res judicata have been long settled. We have held that

“[s]ecurity of person and property requires that determinations in the field of administrative law should be given as much finality as is reasonably possible . . . Indeed, it is the instinct of our jurisprudence to extend court principles to administrative or quasi-judicial hearings insofar as they may be adapted to such procedures” (Matter of Evans v Monaghan, 306 NY 312, 323-324 [1954]).

The doctrine of res judicata, however, is not applicable in the instant case as no administrative or quasi-judicial hearing took place in 2003. The record shows that the 2003 eligibility determination was not based upon a practice and procedure of an administrative tribunal that is comparable to that of a court of law. In Matter of Josey v Goord (9 NY3d 386 [2007]) we stated that “res judicata is generally applicable to quasi-judicial administrative determinations that are ‘rendered pursuant to the adjudicatory authority of an agency to decide cases brought before its tribunals employing procedures substantially similar to those used in a court of law’ ” (id. at 390, quoting Ryan v New York Tel. Co., 62 NY2d 494, 499 [1984]).

In 2003, the procedures followed by the OMRDD which resulted in the administrative determination that Jason B. was eligible for support services were not the product of an adversarial proceeding where evidence was received, testimony taken, and arguments and objections made resulting in a record upon which OMRDD’s decision can be based. “Res judicata is a doctrine associated with dispute-resolution rather than administrative determinations in general” (Matter of Venes v Community School Bd. of Dist. 26, 43 NY2d 520, 523 [1978]). Indeed, State Administrative Procedure Act § 102 (3) defines an adjudicatory proceeding as

“any activity which is not a rule making proceeding or an employee disciplinary action before an agency ... in which a determination of the legal rights, duties or privileges of named parties thereto is required by law to be made only on a record and after an opportunity for a hearing.”

The record before us shows that in 2003 a regional office of OMRDD accepted medical documents submitted by petitioner and reached an administrative determination that Jason B. met the criteria of Mental Hygiene Law § 1.03 (22). In approving Jason B. as eligible to receive certain support services, OMRDD did not hold, nor was it required to conduct, a hearing. Since the 2003 eligibility determination was not “quasi-judicial,” which requires a trial-type hearing with opportunity for presentation of evidence and cross-examination, nor the product of an adversarial proceeding in which dispute resolution occurred, we find the Appellate Division erred in its application of the doctrine of res judicata.

To hold that res judicata applies to this nonadjudicative designation of eligibility, and thus preclude OMRDD from reviewing or reconsidering prior administrative action, would impermissibly estop it from enforcing its statutory mandate when it has erred in making an initial assessment (see Matter of New York State Med. Transporters Assn. v Perales, 77 NY2d 126 [1990]). We cannot sanction a rule that so severely limits an administrative agency’s ability to review its prior administrative actions in cases such as this where a nonadjudicative determination was initially made.

As to the issue of substantial evidence, the role of a court reviewing an administrative determination is limited to ensuring that the determination arrived at following an adversarial hearing is supported by substantial evidence (see Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222 [1974]; CPLR 7803 [4]). Here, we find that the Commissioner’s 2006 determination terminating petitioner’s benefits is supported by substantial evidence. In 300 Gramatan Ave. Assoc. v State Div. of Human Rights (45 NY2d 176 [1978]), we stated that “substantial evidence consists of proof within the whole record of such quality and quantity as to generate conviction in and persuade a fair and detached fact finder that, from that proof as a premise, a conclusion or ultimate fact may be extracted reasonably—probatively and logically” (id. at 181). At the 2006 hearing, OMRDD called an expert witness who interpreted differently the same medical evidence submitted in 2003 regarding petitioner’s alleged developmental disability. No new documentary evidence was presented and petitioner, although given an opportunity to refute OMRDD’s proof and present evidence on his own behalf, failed to do so. We therefore conclude that the Commissioner’s determination has a rational basis and is amply supported.

Accordingly, the judgment of the Appellate Division should be reversed, without costs, and the petition dismissed.

Judges Graffeo, Read, Smith, Pigott and Jones concur; Chief Judge Lippman taking no part.

Judgment reversed, etc.

      . See Office of Mental Retardation and Developmental Disabilities, OMRDD Services, http://www.omr.state.ny.us/ws/servletsAVsNavigationServlet (last updated Aug. 20, 2008).

      . See OMRDD Advisory Guideline—Determining Eligibility for Services: Substantial Handicap and Developmental Disability, Aug. 10, 2001, section iy at 15, available at http://www.omr.state.ny.us/wt/images/wt_advisory _guidelines.pdf.

      . The record states that Jason B. has held jobs such as driving an ice cream truck, a security job, cook, stock boy and has worked at family dollar stores. Further, a witness appearing on behalf of Jason B. testified at the time of his fair hearing that he was currently employed as a bus monitor working with handicapped children. The record additionally indicates that Jason B. has a driver’s license, has completed one semester of college and showed an interest in obtaining a degree in computer science.


source: Caselaw Access Project

author: Jones, J.

license: Public Domain

text:
    [906 NE2d 1033, 879 NYS2d 1]
    The People of the State of New York, Respondent, v George Quinones, Appellant.
    Argued January 13, 2009;
    decided February 24, 2009

      POINTS OF COUNSEL

      William G. Kastin, New York City, and Lynn W.L. Fahey for appellant.
    I. Appellant was illegally seized when the police, acting on the basis of an anonymous tip containing only a general description and having no indicia of reliability, forcibly stopped him when he continued walking away. (Florida v J.L., 529 US 266; People v Moore, 6 NY3d 496; People v William II, 98 NY2d 93; People v Holmes, 81 NY2d 1056; Sibron v New York, 392 US 40; California v Hodari D., 499 US 621; Terry v Ohio, 392 US 1; People v De Bour, 40 NY2d 210; People v May, 81 NY2d 725;
      People v Carrasquillo, 54 NY2d 248.) II. Appellant was denied his Sixth Amendment right to the effective assistance of counsel when his attorney failed to challenge the warrantless precinct search of his knapsack about 20 minutes after appellant had been cuffed behind his back and taken into police custody. (Strickland v Washington, 466 US 668; People v Gokey, 60 NY2d 309; People v Smith, 59 NY2d 454; People v Baldi, 54 NY2d 137; Coles v Peyton, 389 F2d 224; People v LaBree, 34 NY2d 257; People v Droz, 39 NY2d 457; People v Evans, 43 NY2d 160; New York v Belton, 453 US 454; Chimel v California, 395 US 752.) III. In light of Cunningham v California (549 US 270 [2007]), appellant was deprived of his due process and Sixth Amendment rights when, based on numerous facts not found by a jury beyond a reasonable doubt, he was adjudicated and sentenced as a discretionary persistent felony offender to a prison term of 18 years to life, instead of the maximum 3½-to-7-year prison term for the crime of which he was convicted. (Blakely v Washington, 542 US 296; Ring v Arizona, 536 US 584; Apprendi v New Jersey, 530 US 466; People v Rivera, 5 NY3d 61; People v Rosen, 96 NY2d 329; Almendarez-Torres v United States, 523 US 224; United States v Gaudin, 515 US 506; United States v Booker, 543 US 220; Washington v Poole, 507 F Supp 2d 342; Portalatin v Graham, 478 F Supp 2d 385.)

      Charles J. Hynes, District Attorney, Brooklyn (Thomas S. Burka and Leonard Joblove of counsel), for respondent.
    I. The hearing court’s denial of defendant’s motion to suppress physical evidence was proper. (People v Volpe, 60 NY2d 803; People v Martin, 50 NY2d 1029; People v Harper, 7 NY3d 882; People v Pines, 99 NY2d 525; People v McIntosh, 96 NY2d 521; People v Harrison, 57 NY2d 470; Maryland v Wilson, 519 US 408; People v Batista, 88 NY2d 650; People v De Bour, 40 NY2d 210; People v Cantor, 36 NY2d 106.) II. Defendant’s claim of ineffective assistance of counsel is meritless. (People v Henry, 95 NY2d 563; People v Benevento, 91 NY2d 708; People v Ford, 86 NY2d 397; Strickland v Washington, 466 US 668; People v Rivera, 71 NY2d 705; People v Garcia, 75 NY2d 973; People v Love, 57 NY2d 998; Eze v Senkowski, 321 F3d 110; Florida v Wells, 495 US 1; People v Johnson, 1 NY3d 252.) III. The trial court sentenced defendant in conformity with the rulings of the United States Supreme Court in Apprendi v New Jersey (530 US 466 [2000]) and its progeny. (People v Rosen, 96 NY2d 329, 534 US 899; People v Rivera, 5 NY3d 61, 546 US 984; Cunningham v California, 549 US 270; Blakely v Washington, 542 US 296; United States v Booker, 543 US 220; People v Bing, 76 NY2d 331; People

      v Taylor,; 9 NY3d 129; People v Damiano, 87 NY2d 477; People v Daniels, 5 NY3d 738; People v West, 5 NY3d 740.)
   OPINION OF THE COURT

Jones, J.

This appeal presents another Apprendi challenge to New York’s discretionary persistent felony offender sentencing scheme. The primary issue before us is whether, in light of Cunningham v California (549 US 270 [2007]), this sentencing scheme violates Apprendi and defendant’s due process and Sixth Amendment rights. We again uphold the constitutionality of New York’s discretionary persistent felony offender sentencing scheme and further hold that defendant’s constitutional rights were not violated.

Facts and Procedural History

On April 21, 2004, at about 12:05 p.m., the police received a radio run of a burglary in progress on the fifth floor of a six-floor apartment building located in Brooklyn, New York. The building, which is part of a New York City Housing Authority development, had two stairwells (Stairwell A and Stairwell B). The stairwells met on the fourth floor and were connected by a door. The radio run included physical descriptions of two perpetrators. Within minutes of the radio run, two police officers entered the building and split up, each going up one stairwell. On the fourth floor, the officer going up Stairwell A looked into Stairwell B through the door window and observed defendant, who matched the physical description of one of the perpetrators, as he was coming down from the fifth floor carrying a duffel bag. At about this time, the other officer was coming up Stairwell B. Seeing this, defendant quickly changed direction and proceeded to Stairwell A. When defendant opened the door to Stairwell A, he came upon the first officer and his eyes “popped open” in surprise. The officer asked defendant who he was and what he was doing in the building. Defendant, who was not a resident of the building, tried to evade the officer, who, in turn, tried to prevent defendant from leaving by reaching out and grabbing his arm. Defendant tried to break free by swinging at the officer with his other arm. After a brief struggle, the police subdued defendant and placed him under arrest. One of the officers went to the fifth floor (the floor defendant was coming from) where he discovered that the door to apartment 5-1 was open, the lock on the door broken, the door frame damaged and the apartment ransacked. After taking defendant to a police precinct for processing, the police officers searched the bag defendant had been carrying and recovered burglary tools and property later determined to be property stolen during the burglary.

Defendant, arguing that his arrest was the product of an illegal stop and detention, and that everything flowing from this illegality was tainted, moved to suppress the statement he made to a police officer after his arrest (he confessed to participating in the burglary as a “lookout”) and the property recovered from his duffel bag. Supreme Court held a Dunaway/Huntley hearing and considered defendant’s arguments. In light of the evidence adduced at the hearing, including the fully credited testimony of the arresting police officer, Supreme Court rejected defendant’s arguments and denied the motion in its entirety.

A jury ultimately convicted defendant of burglary in the third degree (Penal Law § 140.20 [“(a) person is guilty of (third degree burglary) when he knowingly enters or remains unlawfully in a building with intent to commit a crime therein”]), a class D felony which gives rise to an indeterminate sentence. Under the Penal Law, the maximum term for such sentence is at least three years and no more than seven years (Penal Law § 70.00 [2] [d]). Prior to sentencing, the People moved for Supreme Court to sentence defendant as a discretionary persistent felony offender. In so moving, the People sought to treat defendant’s class D felony as a class A-I felony (Penal Law § 70.10 [2]) and have defendant sentenced to an indeterminate prison term of 25 years to life (Penal Law § 70.00 [2] [a]; [3] [a] [i]). Defendant opposed the motion, arguing that the discretionary persistent felony offender sentencing scheme was unconstitutional under Apprendi and its progeny.

Supreme Court held a hearing pursuant to CPL 400.20 to determine whether to adjudicate defendant a discretionary persistent felony offender and impose a recidivist sentence. As set forth in CPL 400.20 (5), the court first concluded that defendant was a discretionary persistent felony offender based on defendant’s four prior felony convictions—a 1983 robbery conviction, a 1986 grand larceny conviction, a 1989 attempted robbery conviction and a 1994 attempted criminal sale of a controlled substance conviction (Penal Law § 70.10 [1] [a]). The court determined that defendant was eligible to be sentenced as a discretionary persistent felony offender and that a recidivist sentence was warranted. Defendant was sentenced to an indeterminate prison term of 18 years to life. The Appellate Division unanimously affirmed, concluding, among other things, that the police had reasonable suspicion to stop and detain defendant based on his “attempted flight” and “the temporal proximity between the reported robbery and the officers’ arrival on the scene” (45 AD3d 874, 875 [2007]). The court also concluded that in light of this Court’s decisions in People v Rosen (96 NY2d 329 [2001]) and People v Rivera (5 NY3d 61 [2005]), defendant’s Apprendi challenge lacked merit. A Judge of this Court granted defendant leave to appeal (10 NY3d 815 [2008]).

Discussion

Defendant seeks to have his conviction reversed on two grounds. First, he argues that Supreme Court erred in not suppressing his confession and the property recovered from his bag because they were the product of an illegal stop and detention. Second, defendant claims ineffective assistance of trial counsel based on his counsel’s failure to argue that even if the stop and detention were legal, the recovered property should have been suppressed because of the illegality of the warrantless search of defendant’s bag at the precinct.

Regarding defendant’s first contention, Supreme Court’s determination that the police possessed reasonable suspicion to stop and detain defendant (see People v De Bour, 40 NY2d 210, 223 [1976]; People v Hollman, 79 NY2d 181, 184-185 [1992]; People v McIntosh, 96 NY2d 521, 525 [2001]), a mixed question of law and fact, was not disturbed by the Appellate Division and is supported by the record. Accordingly, this determination is beyond our further review (see People v Harrison, 57 NY2d 470, 477-478 [1982]; People v Allen, 9 NY3d 1013, 1015 [2008]).

With respect to defendant’s ineffective assistance claim, we note that the facts surrounding the search of defendant’s bag were not fully developed at the suppression hearing. Accordingly, it is not clear what counsel knew or did not know regarding the search, such as whether the search was in accordance with police inventory procedures. Nor is it clear that this argument would have resulted in suppression of the evidence. Therefore, on the record before us, we are unable to determine that counsel’s assistance was ineffective.

Defendant also argues that his recidivist sentence violates Apprendi. Specifically, defendant asserts that in light of Cunningham, the sentence violates his right to due process and trial by jury, and New York’s discretionary persistent felony offender sentencing scheme is constitutionally infirm. Defendant’s arguments are unavailing.

In Apprendi v New Jersey (530 US 466 [2000]), the Supreme Court held that, “[o]ther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt” (Apprendi, 530 US at 490). In so holding, the Apprendi Court’s goal was to prevent legislative attempts to “remove from the [province of the] jury” factual determinations that impact the maximum punishment available for a statutory offense {id. [internal quotation marks omitted]). Apprendi and its progeny are rooted in the United States Constitution’s Sixth Amendment, which provides every person accused of a crime the right to “trial[ ] by an impartial jury,” and emanated from the Supreme Court’s prior decisions in Almendarez-Torres v United States (523 US 224, 226-227 [1998] [judicial fact-finding of a defendant’s prior conviction and consideration of same at sentencing is not a violation of the Sixth Amendment]) and Jones v United States (526 US 227, 239-252 [1999] [Court recognized that judicial fact-finding, outside the finding of a defendant’s prior convictions, operating to increase a defendant’s maximum punishment would diminish the role of the jury, thus creating a genuine issue under the Sixth Amendment]).

At issue in Apprendi was a New Jersey statutory scheme that allowed a judge to increase a defendant’s punishment beyond the maximum sentence range authorized for the crime of possession of a firearm for an unlawful purpose based on the judge’s finding by a preponderance of the evidence that defendant also committed a crime with the intent to intimidate based on race, religion, color, gender, ethnicity, sexual orientation or handicap. The Supreme Court held that because this sentencing scheme (1) removed what amounts to an element of a greater offense that would ordinarily be submitted to the jury (and proved beyond a reasonable doubt), and (2) allowed a judge to decide the fact using a lesser standard of proof and, thereby, increase the sentence beyond the permissible maximum sentence range, it violated the Sixth Amendment right to a trial by jury.

The common denominator of the sentencing schemes invalidated or partially struck down in the wake of Apprendi is that they provided for an increase to defendant’s punishment—beyond the range authorized by the jury’s finding of guilt or defendant’s admission—based on additional facts found by a judge using a preponderance-of-the-evidence standard (see e.g. Ring [sentencing scheme at issue provided that defendant convicted of first degree murder could only be sentenced to life imprisonment unless the judge determined the existence of aggravating factors warranting the imposition of the death penalty]; Blakely [sentencing scheme permitted an enhanced sentence beyond the statutory maximum based on the judge’s finding that defendant committed the crime with “deliberate cruelty” (542 US at 298)]; Booker [portion of the mandatory Federal Sentencing Guidelines required judicial fact-finding that could increase the maximum potential sentence of a defendant]). California’s determinate sentencing law (DSL) at issue in Cunningham was no different.

In describing California’s DSL, the Supreme Court noted that

“[flor most offenses, including Cunningham’s, the DSL regime is implemented in the following manner. The statute defining the offense prescribes three precise terms of imprisonment—a lower, middle, and upper term sentence. E.g., Penal Code § 288.5 (a) (West 1999) (a person convicted of continuous sexual abuse of a child ‘shall be punished by imprisonment in the state prison for a term of 6, 12, or 16 years’). See also [People v Black], 35 Cal. 4th [1238,] 1247 . . . Penal Code § 1170 (b) (West Supp. 2006) controls the trial judge’s choice; it provides that ‘the court shall order imposition of the middle term, unless there are circumstances in aggravation or mitigation of the crime.’ ‘[Circumstances in aggravation or mitigation’ are to be determined by the court after consideration of several items: the trial record; the probation officer’s report; statements in aggravation or mitigation submitted by the parties, the victim, or the victim’s family; ‘and any further evidence introduced at the sentencing hearing.’ Ibid.” (Cunningham, 549 US at 277.)

In addition, the DSL

“directed the State’s Judicial Council to adopt Rules guiding the sentencing judge’s decision whether to ‘[i]mpose the lower or upper prison term.’ Penal Code § 1170.3 (a) (2) (West 2004). Restating [Penal Code] § 1170 (b), the Council’s Rules provide that ‘[t]he middle term shall be selected unless imposition of the upper or lower term is justified by circumstances in aggravation or mitigation.’ Rule 4.420 (a). ‘Circumstances in aggravation,’ as crisply defined by the Judicial Council, means ‘facts which justify the imposition of the upper prison term.’ Rule 4.405 (d) (emphasis added). Facts aggravating an offense, the Rules instruct, ‘shall be established by a preponderance of the evidence,’ Rule 4.420 (b), and must be ‘stated orally on the record.’ Rule 4.420 (e).
“The Rules provide a nonexhaustive list of aggravating circumstances, including [facts relating to the crime committed and defendant] . . . Beyond the enumerated circumstances, ‘the judge is free to consider any “additional criteria reasonably related to the decision being made.” ’ Black, 35 Cal. 4th, at 1247. ‘A fact that is an element of the crime,’ however, ‘shall not be used to impose the upper term.’ Rule 4.420 (d). In sum, California’s DSL, and the rules governing its application, direct the sentencing court to start with the middle term, and to move from that term only when the court itself finds and places on the record facts—whether related to the offense or the offender—beyond the elements of the charged offense” (id. at 278-279 [footnotes and some citations omitted]).

Because California’s DSL, by its plain terms, authorized the judge, not the jury, to find facts exposing defendant to an elevated upper term sentence, the Supreme Court held that this sentencing scheme violated defendant’s Sixth Amendment right to a trial by jury and Apprendi (see id. at 274). Citing Blakely, the Cunningham Court made clear that

“broad discretion to decide what facts may support an enhanced sentence, or to determine whether an enhanced sentence is warranted in any particular case, does not shield a sentencing system from the force of our [Apprendi] decisions. If the jury’s verdict alone does not authorize the sentence, if, instead, the judge must find an additional fact to impose the longer term, the Sixth Amendment requirement is not satisfied” (id. at 290, citing Blakely, 542 US at 305).

Here, defendant argues that New York’s discretionary persistent felony offender sentencing scheme suffers from the same constitutional infirmity as California’s DSL because the “higher persistent felony offender range cannot be imposed without the judicially-found fact that the ‘nature and circumstances’ of the criminal conduct and the ‘history and character’ of the defendant warrant lifetime supervision in the public interest.” Defendant’s view of New York’s sentencing scheme is inaccurate.

The discretionary persistent felony offender sentencing scheme is comprised of two statutes: Penal Law § 70.10 and Criminal Procedure Law § 400.20. Under Penal Law § 70.10 (1) (a), “[a] persistent felony offender is a person, other than a persistent violent felony offender as defined in [Penal Law § ] 70.08, who stands convicted of a felony after having previously been convicted of two or more felonies.” Penal Law § 70.10 (2) further provides:

“When the court has found, pursuant to [Criminal Procedure Law § 400.20], that a person is a persistent felony offender, and when it is of the opinion that the history and character of the defendant and the nature and circumstances of his criminal conduct indicate that extended incarceration and life-time supervision will best serve the public interest, the court, in lieu of imposing the sentence of imprisonment authorized [under Penal Law article 70] for the crime of which such person presently stands convicted, may impose the sentence of imprisonment authorized by that section for a class A-I felony. In such event the reasons for the court’s opinion shall be set forth in the record.”

Criminal Procedure Law § 400.20 sets forth the procedure for determining whether a defendant should be sentenced as a persistent felony offender. Under Criminal Procedure Law § 400.20

(D,

“[s]uch sentence may not be imposed unless, based upon evidence in the record of a hearing held pursuant to this section, the court (a) has found that the defendant is a persistent felony offender . . . , and (b) is of the opinion that the history and character of the defendant and the nature and circumstances of his criminal conduct are such that [such sentence is] warranted to best serve the public interest.”

At the hearing provided for under this sentencing scheme, the burden is on the People to prove beyond a reasonable doubt that defendant is a persistent felony offender (CPL 400.20 [5]). Once defendant has been proven to be a persistent felony offender,

“[m]atters pertaining to the defendant’s history and character and the nature and circumstances of his criminal conduct may be established by any relevant evidence, not legally privileged, regardless of admissibility under the exclusionary rules of evidence, and the standard of proof with respect to such matters shall be a preponderance of the evidence” (id.).

After the hearing, if the court “is of the opinion that a persistent felony offender sentence is warranted, it may sentence the defendant in accordance with [Penal Law § 70.10 (2)]” (CPL 400.20 [9]). In sum, under New York’s discretionary persistent felony offender sentencing scheme, once the People prove beyond a reasonable doubt that a defendant is a persistent felony offender (i.e., a twice-prior convicted felon), defendant is eligible to be sentenced as a discretionary persistent felony offender and the court may consider defendant’s “history and character” to determine whether a discretionary persistent felony offender sentence is warranted.

This Court has on two occasions conducted an extensive analysis regarding whether New York’s discretionary persistent felony offender sentencing scheme violates Apprendi (see People v Rosen, 96 NY2d 329 [2001], cert denied 534 US 899 [2001]; People v Rivera, 5 NY3d 61 [2005], cert denied 546 US 984 [2005]). In Rosen, we held that upon proving that a defendant is a twice-prior convicted felon, the sentencing court may review defendant’s history and character as well as the nature and circumstances of defendant’s criminal conduct to determine whether to impose a recidivist (enhanced) sentence (CPL 400.20 [5]) and that, under the discretionary persistent felony offender statutes, prior felony convictions are the sole determinant of whether a defendant is eligible for recidivist sentencing as a persistent felony offender (Rosen, 96 NY2d at 335). Rivera, which was decided after Blakely and Booker, upheld Rosen (in reasoning and result), the discretionary persistent felony offender statutes and the recidivist sentence imposed (Rivera, 5 NY3d at 63). As we stated in Rivera,

“the relevant question under the United States Constitution is not whether those facts were essential to the trial court’s opinion (CPL 400.20 [1] [b]), but whether there are any facts other than the predicate convictions that must be found to make recidivist sentencing possible (see Blakely, 542 US at 303-304). Our answer is no. As we explained in Rosen, the predicate felonies are both necessary and sufficient conditions for imposition of the authorized sentence for recidivism; that is why we pointedly called the predicate felonies the ‘sole’ determinant (96 NY2d at 335). By this unequivocal statement, we meant, and today confirm, that Criminal Procedure Law § 400.20, by authorizing a hearing on facts relating to the defendant’s history and character, does not grant defendants a legal entitlement to have those facts receive controlling weight in influencing the court’s opinion. The statutory language requiring the sentencing court to consider the specified factors and to articulate the reason for the chosen sentence grants defendants a right to an airing and an explanation, not a result. . . .
“To reiterate our analysis in Rosen, a defendant adjudicated as a persistent felony offender has a statutory right to present evidence that might influence the court to exercise its discretion to hand down a sentence as if no recidivism finding existed, while the People retain the burden to show that the defendant deserves the higher sentence. Nevertheless, once a defendant is adjudged a persistent felony offender, a recidivism sentence cannot be held erroneous as a matter of law, unless the sentencing court acts arbitrarily or irrationally” {id. at 67-68 [footnote omitted]).

The preceding discussion makes clear that California’s DSL and New York’s discretionary persistent felony offender sentencing scheme are fundamentally different. The DSL accorded judges discretion to find the facts necessary for the imposition of an enhanced sentence (i.e., one beyond the relevant sentencing range authorized by a jury’s verdict based on findings other than a defendant’s prior convictions). That is, a defendant was only eligible for an enhanced sentence upon a judicial determination of certain facts other than recidivist status. Thus, the DSL is precisely the type of sentencing scheme that has been repeatedly invalidated under Apprendi.

New York’s sentencing scheme, in contrast, is a recidivist sentencing scheme. That is, under New York’s scheme, a defendant is subject to an enhanced sentence based solely on the existence of two prior felony convictions. This fact alone places the New York scheme outside the scope of the Apprendi rule. Another distinguishing feature of New York’s sentencing scheme is that it is only after a defendant’s eligibility for an enhanced sentence is determined that a judge is given the discretion to choose the appropriate sentence within a sentencing range prescribed by statute. A common theme of the Apprendi decisions is that sentencing schemes allowing for such discretion are permissible under the Sixth Amendment. For example, the Apprendi Court stated that

“nothing in [the Sixth Amendment’s] history suggests that it is impermissible for judges to exercise discretion—taking into consideration various factors relating both to offense and offender—in imposing a judgment within the range prescribed by statute. We have often noted that judges in this country have long exercised discretion of this nature in imposing sentence within statutory limits in the individual case” (Apprendi, 530 US at 481; see Booker, 543 US at 235 [the Sixth Amendment does not prohibit a judge from exercising his or her discretion within a sentence range authorized by a jury’s verdict or defendant’s admission of guilt—such an exercise does not impinge on the jurors’ role in determining the upper limits of a defendant’s sentence]).

Regarding the discretion a sentencing court must exercise, the Supreme Court further explained:

“Of course indeterminate [sentencing] schemes involve judicial factfinding, in that a judge (like a parole board) may implicitly rule on those facts he deems important to the exercise of his sentencing discretion. But the facts do not pertain to whether the defendant has a legal right to a lesser sentence—and that makes all the difference insofar as judicial impingement upon the traditional role of the jury is concerned. In a system that says the judge may punish burglary with 10 to 40 years, every burglar knows he is risking 40 years in jail. In a system that punishes burglary with a 10-year sentence, with another 30 added for use of a gun, the burglar who enters a home unarmed is entitled to no more than a 10-year sentence—and by reason of the Sixth Amendment the facts bearing upon that entitlement must be found by a jury” (Blakely, 542 US at 309).

Taking the foregoing into account, defendant’s argument that the higher persistent felony offender range cannot be imposed without judicially-found facts regarding the “nature and circumstances” of defendant’s criminal conduct and defendant’s “history and character” misses the point. Unlike the sentencing schemes in Apprendi, Ring, Blakely, Booker and Cunningham, all of which effectively provided for judicial fact-finding of an element(s) of an offense as a prerequisite to enhancing a sentence beyond the relevant sentencing range, the New York sentencing scheme, after a defendant is deemed eligible to be sentenced as a persistent felony offender, requires that the sentencing court make a qualitative judgment about, among other things, the defendant’s criminal history and the circumstances surrounding a particular offense in order to determine whether an enhanced sentence, under the statutorily prescribed sentencing range, is warranted. Stated differently, New York’s sentencing scheme, by requiring that sentencing courts consider defendant’s “history and character” and the “nature and circumstances” of defendant’s conduct in deciding where, within a range, to impose an enhanced sentence, sets the parameters for the performance of one of the sentencing court’s most traditional and basic functions, i.e., the exercise of sentencing discretion.

Finally, the Cunningham Court considered and struck down a sentencing scheme similar to those in Blakely and Booker. In so ruling, the Supreme Court did not expand the contours of the Apprendi rule so that it would be applicable to New York’s recidivist sentencing scheme (see Cunningham, 549 US at 281 [a court’s application of the Apprendi rule must honor the “longstanding common-law practice” that provides its foundation]; Oregon v Ice, 555 US —, —, 129 S Ct 711, 714 [2009] [Court stated that it “has not extended the Apprendi and Blakely line of decisions beyond the offense-specific context that supplied the historic grounding for the decisions”]).

Based on the foregoing, we hold that Cunningham does not render New York’s discretionary persistent felony offender sentencing scheme unconstitutional.

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

Judges Ciparick, Graffeo, Read, Smith and Pigott concur; Chief Judge Lippman taking no part.

Order affirmed.

      . Apprendi v New Jersey, 530 US 466 (2000).

      . The court noted that
      “[defendant’s background reveals a twenty-year criminal history which includes four felony convictions, three of which are violent felonies. ... In addition, [dlefendant has six misdemeanor convictions . . . Thus, [defendant’s criminal record establishes that he has made a career of crime, that he lacks respect for people and their property, and that he is a menace to society.”

      . The Apprendi rule seeks to preserve the jury’s historic role as a bulwark between the State and the accused at the trial for an alleged offense (see Apprendi, 530 US at 477). In further support of the rule, the Supreme Court stated that
      “structural democratic constraints exist to discourage legislatures from enacting penal statutes that expose every defendant convicted of . . . [an offense] to a maximum sentence exceeding that which is, in the legislature’s judgment, generally proportional to the crime. . . . Our rule ensures that a State is obliged to make its choices concerning the substantive content of its criminal laws with full awareness of the consequences, unable to mask substantive policy choices of exposing all who are convicted to the maximum sentence it provides” (id. at 490 n 16 [internal quotation marks omitted]).

      . See Ring v Arizona, 536 US 584, 602 (2002) (Court clarified Apprendi rule by stating, “If a State makes an increase in a defendant’s authorized punishment contingent on the finding of a fact, that fact—no matter how the State labels it—must be found by a jury beyond a reasonable doubt”); Blakely v Washington, 542 US 296, 303, 304 (2004) (Court stated: 1. the “ ‘statutory maximum’ for Apprendi purposes is the maximum sentence a judge may impose solely on the basis of the facts reflected in the jury verdict or admitted by the defendant,” and 2. “[w]hen a judge inflicts punishment that the jury’s verdict alone does not allow, the jury has not found all the facts ‘which the law makes essential to the punishment’ . . . and the judge exceeds his proper authority”); United States v Booker, 543 US 220, 232 (2005) (a judge’s determination of a fact that elevates defendant’s sentence above the “statutory maximum,” i.e., above the range authorized by a jury’s verdict or defendant’s admission of guilt, violates the Sixth Amendment).

      . Applying Rivera, we have rejected, as meritless, four challenges to the constitutionality of the discretionary persistent felony offender statutes (see People v Daniels, 5 NY3d 738 [2005]; People v West, 5 NY3d 740 [2005]; People v Leon, 10 NY3d 122 [2008]; People v Rawlins, 10 NY3d 136 [2008]). Note, Leon and Rawlins were decided after Cunningham.

      . The exercise of a trial court’s sentencing discretion is subject to review by the Appellate Division. In the exercise of its discretion in the interest of justice (see CPL 470.20 [6]), the Appellate Division “may conclude that a persistent felony offender sentence is too harsh or otherwise improvident” (Rivera, 5 NY3d at 68).


author: Pigott, J.

text:
    [907 NE2d 268, 879 NYS2d 355]
    IDT Corporation, Respondent, v Morgan Stanley Dean Witter & Co. et al., Appellants.
    Argued February 10, 2009;
    decided March 26, 2009

      POINTS OF COUNSEL

      Davis Polk & Wardwell, New York City (Guy Miller Struve, Benjamin S. Kaminetzky and Rebecca Winters of counsel), for appellants.
    I. IDT Corporation’s attempt to relitigate the issue of damages is impermissible under the well-settled doctrine of collateral estoppel. (Buechel v Bain, 97 NY2d 295; D’Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659; Kaufman v Eli Lilly & Co., 65 NY2d 449; Schwartz v Public Adm’r of County of Bronx, 24 NY2d 65; Ryan v New York Tel. Co., 62 NY2d 494; Matter of American Ins. Co. [Messinger—Aetna Cas. & Sur. Co.], 43 NY2d 184; Rembrandt Indus, v Hodges Intl., 38 NY2d 502; New York Lumber & Wood Working Co. v Schneider, 119 NY 475; Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183; Stuzin v Pizza Hut, 241 AD2d 647.) II. IDT Corporation’s claims are untimely. (Kronos, Inc. v AVX Corp., 81 NY2d 90; Ackerman v Price Waterhouse, 84 NY2d 535; Snyder v Town Insulation, 81 NY2d 429; Spinap Corp. v Cafagno, 302 AD2d 588; Matter of Martin v C. A. Prods. Co., 8 NY2d 226; Norris v Grosvenor Mktg. Ltd., 803 F2d 1281; Schwartz v Heyden Newport Chem. Corp., 12 NY2d 212; New York Univ. v Continental Ins. Co., 87 NY2d 308; Kvetnaya v Tylo, 49 AD3d 608; Shivers v Siegel, 11 AD3d 447.) III. IDT Corporation’s unjust enrichment cause of action fails as a matter of law. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382; Rosenberg, Minc & Armstrong v Mallilo & Grossman, 39 AD3d 335; Hutton v Klabal, 726 F Supp 67; Miller v Schloss, 218 NY 400; Young v Farwell, 165 NY 341; 805 Third Ave. Co. v M.W. Realty Assoc., 58 NY2d 447; Wujin Nanxiashu Secant Factory v Ti-Well Intl. Corp., 14 AD3d 352; Matter of Guttenplan, 222 AD2d 255; Matter of Moncrief, 235 NY 390; Morad v Morad, 27 AD3d 626.)

      Patterson Belknap Webb & Tyler LLP, New York City (Stephen P. Younger of counsel), Grayson & Kubli, PC., Vienna, Virginia (Alan M. Grayson, of the Virginia bar, admitted pro hac vice, and Victor A. Kubli of counsel), and Bracewell & Giuliani, LLP, Houston, Texas, and New York City (Glenn A. Ballard, Jr., Jeffrey L. Oldham and Michael D. Hess of counsel), for respondent.
    I. The courts below correctly held that IDT Corporation’s claims against Morgan Stanley Dean Witter & Co. are not affected by the doctrine of collateral estoppel. (D'Arata v New York Cent. Mut. Fire Ins. Co., 76 NY2d 659; Amarant v D'Antonio, 197 AD2d 432; PenneCom B.V. v Merrill Lynch & Co., Inc., 372 F3d 488; Inchaustegui v 666 5th Ave. Ltd. Partnership, 268 AD2d 121, 96 NY2d 111; Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183; International Mins. & Resources, S.A. v Pappas, 96 F3d 586; Matter of American Ins. Co. [Messinger— Aetna Cas. & Sur. Co.], 43 NY2d 184; R.S.J. Leasing Corp. v Michelin Tire Corp., 92 AD2d 914; Matter of Kellogg, 138 AD2d 799; Gramatan Home Invs. Corp. v Lopez, 46 NY2d 481.) II. The lower courts correctly held the IDT Corporation’s claims are timely because they were filed within the applicable limitations periods after IDT learned of Morgan Stanley Dean Witter & Co.’s misconduct, which Morgan Stanley fraudulently concealed. (Marine Midland Bank v Worldwide Indus. Corp., 307 AD2d 221; Maric Piping v Maric, 271 AD2d 507; Green v Albert, 199 AD2d 465; Zumpano v Quinn, 6 NY3d 666; Hetelekides v Ford

      Motor Co., 299 AD2d 868; Powers Mercantile Corp. v Feinberg, 109 AD2d 117; Matter of Steyer, 70 NY2d 990; Simcuski v Saeli, 44 NY2d 442; General Stencils v Chiappa, 18 NY2d 125; Vigliotti v North Shore Univ. Hosp., 24 AD3d 752.) III. The lower courts correctly held that IDT Corporation stated a claim for unjust enrichment. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382; Sosnoff v Carter, 165 AD2d 486; Sergeants Benevolent Assn. Annuity Fund v Renck, 19 AD3d 107; Duane Reade v Cardinal Health, Inc., 12 AD3d 224; Wiener v Lazard Freres & Co., 241 AD2d 114.) IV. This Court may properly consider the new allegations in IDT Corporation’s amended complaint. (Hummingbird Assoc. v Dix Auto Serv., 273 AD2d 58; Halmar Distribs. v Approved Mfg. Corp., 49 AD2d 841; Millard v Delaware, Lackawanna & W. R.R. Co., 204 App Div 80; Wahrhaftig v Space Design Group, 28 AD2d 940; Anthony J. Demarco, Jr., P.C. v Bay Ridge Car World, 169 AD2d 808; Vanderwoude v Post/Rockland Assoc., 130 AD2d 739; Watson v Sony Music Entertainment, 282 AD2d 222.)
   OPINION OF THE COURT

Pigott, J.

IDT Corporation and Telefonica Internacional, S.A., both telecommunications companies, executed a Memorandum of Understanding (MOU) in August 1999 concerning SAm-1, a vast underwater fiber-optic cable network Telefonica was building. Pursuant to the MOU, IDT was to buy from Telefonica a 10% equity share in NewCo, a corporation that would “construct, establish, operate and maintain . . . and . . . sell capacity on” SAm-1. A separate entity was to be created to market products associated with the network. IDT would have the right to buy capacity in the network, at a favorable rate, during its operational life.

In June 2000, Telefonica informed IDT that it intended to modify the MOU, replacing NewCo with a larger entity, Emergía, in which Telefonica offered IDT a five percent share. According to IDT, Morgan Stanley Dean Witter & Co. (Morgan Stanley), Telefonica’s investment banker, advised IDT in the summer of 2000 that the value of a five percent interest in Emergía was far greater than that of a 10% interest in NewCo. Nevertheless, IDT, unpersuaded, broke off negotiations with Telefonica in October 2000.

Although Morgan Stanley acted as Telefonica’s investment banker in relation to SAm-1, it had previously acted on IDT’s behalf in 1999, in negotiations concerning a different proposed fiber-optic cable network, and in subsequent matters. IDT engaged Morgan Stanley as its financial adviser in regard to shares in Net2Phone, Inc. that it sold in the summer of 2000 for about $1 billion. According to IDT, in 1999-2000, Morgan Stanley requested and received confidential business and financial information concerning IDT, had access to IDT’s records, and enjoyed wide-ranging communications with its executives.

IDT commenced an arbitration proceeding on May 25, 2001, against Telefonica, alleging that Telefonica had breached the MOU, in particular its provisions entitling IDT to an equity share in NewCo and giving it the right to buy capacity in SAm-1. IDT sought an award in an amount no less than $3.15 billion. IDT made no allegations against Morgan Stanley. No representative of Morgan Stanley testified, but a valuation memorandum concerning NewCo and Emergía that Morgan Stanley had presented to IDT in 2000 was subpoenaed and submitted to the arbitration panel.

Following a lengthy hearing, the panel concluded that Telefonica had breached both the “capacity purchase” and “equity purchase” provisions of the MOU. It calculated IDT’s aggregate damages for Telefonica’s capacity purchase breach to be $16,883,817. However, noting the weakness of the telecommunications market in the second half of 2000, the panel calculated that the present value of IDT’s interest in NewCo was negative, and concluded that IDT had suffered no damages as a result of Telefonica’s breach of the equity purchase provisions. Telefonica paid IDT $21.6 million, representing damages and interest.

On November 5, 2004, IDT commenced this action against Morgan Stanley, alleging that it had provided Telefonica with confidential information about IDT, induced Telefonica to breach the MOU and, moreover, presented false and misleading evidence to the arbitration panel, affecting the panel’s assessment of IDT’s damages. Its complaint contains five causes of action: (1) breach of fiduciary duty, (2) intentional interference with existing contract, (3) intentional interference with prospective business relations, (4) misappropriation of confidential and proprietary business information, and (5) unjust enrichment. IDT seeks compensatory damages, disgorgement of profits obtained by Morgan Stanley in connection with SAm-1, punitive damages, and the return of a $10,000,000 fee that IDT paid Morgan Stanley in relation to the Net2Phone, Inc. transaction, plus interest and fees.

Morgan Stanley moved to dismiss the complaint under CPLR 3211, arguing, among other things, that IDT’s claims were barred by collateral estoppel and the statute of limitations. Supreme Court dismissed IDT’s intentional interference with prospective business relations claim, but otherwise denied the motion (2006 NY Slip Op 30076[U]). On appeal, the Appellate Division affirmed, with one Justice dissenting, holding that IDT’s remaining claims were not barred by collateral estoppel, because IDT had not “had an opportunity to conduct discovery on the extent of the damages it suffered due to Morgan Stanley’s alleged tortious conduct” (45 AD3d 419, 419 [1st Dept 2007]). The majority also concluded that the claims stated valid causes of action and were not time-barred. The Appellate Division granted Morgan Stanley leave to appeal to this Court, certifying the question whether its order was properly made. We answer that question in the negative and reverse.

Although the issue of whether IDT is collaterally estopped from relitigating the amount of its compensatory damages divided the Appellate Division in this case, we need not address it, because all of IDT’s claims are either time-barred or fail to state a cause of action. We conclude that IDT’s breach of fiduciary duty, tortious interference with contract, and misappropriation of confidential and proprietary business information claims are untimely and its unjust enrichment claim fails to state a cause of action. We address the causes of action in the sequence they appear in the complaint.

IDT’s first cause of action alleges that Morgan Stanley breached fiduciary duties it owed to IDT, by “providing] Telefonica with IDT’s confidential and proprietary business and financial information without IDT’s knowledge or consent,” thus inducing Telefonica to renege on the MOU, and by “devis[ing] a fraudulent scheme to dupe both IDT and the Arbitration Panel as to the ‘distinction’ between NewCo and Emergía and the valuation of these companies.” IDT alleges that the arbitration panel was misled into minimizing the amount of damages Telefonica owed to IDT. It seeks full compensatory damages—in an amount it describes at the outset of its complaint as “hundreds of millions of dollars”—as well as disgorgement of profits and punitive damages.

IDT submits that its breach of fiduciary duty claim is governed by a six-year statute of limitations and is therefore timely. Morgan Stanley asserts that a three-year limitations period applies.

New York law does not provide a single statute of limitations for breach of fiduciary duty claims. Rather, the choice of the applicable limitations period depends on the substantive remedy that the plaintiff seeks (Loengard v Santa Fe Indus., 70 NY2d 262, 266 [1987]). Where the remedy sought is purely monetary in nature, courts construe the suit as alleging “injury to property” within the meaning of CPLR 214 (4), which has a three-year limitations period (see e.g. Yatter v Morris Agency, 256 AD2d 260, 261 [1st Dept 1998]). Where, however, the relief sought is equitable in nature, the six-year limitations period of CPLR 213 (1) applies (Loengard, 70 NY2d at 266-267). Moreover, where an allegation of fraud is essential to a breach of fiduciary duty claim, courts have applied a six-year statute of limitations under CPLR 213 (8) (Kaufman v Cohen, 307 AD2d 113, 119 [1st Dept 2003]).

Here, IDT primarily seeks damages—in the amount of “hundreds of millions of dollars”—and the equitable relief it seeks, including the disgorgement of profits, is incidental to that relief. This is not an action in which it can reasonably be asserted that “the relief demanded in the complaint ... is equitable in nature and that a legal remedy would not be adequate” (Loengard, 70 NY2d at 267). Thus, looking to the reality, rather than the form, of this action (see Matter of Paver & Wildfoerster [Catholic High School Assn.], 38 NY2d 669, 674 [1976]), we conclude that IDT seeks a monetary remedy.

Moreover, we are not persuaded by IDT’s argument that its breach of fiduciary duty claim is essentially a fraud action and therefore governed by a six-year statute of limitations. The fiduciary relationship alleged by IDT exists between Morgan Stanley and IDT, not between Morgan Stanley and the arbitration panel. For us to conclude that IDT’s breach of fiduciary duty cause of action is a sufficiently pleaded fraud action, we would have to discern a claim that IDT acted in “justifiable reliance” (Lama Holding Co. v Smith Barney, 88 NY2d 413, 421 [1996]) on Morgan Stanley’s alleged misrepresentation or material omission. Although IDT asserts that Morgan Stanley attempted to deceive it in 2000, with regard to the relative values of Emergía and NewCo, IDT does not claim that it was actually duped. In fact, IDT refused to accept a modified MOU, contrary to Morgan Stanley’s recommendations. Consequently, we conclude that this is not a fraud allegation, and that the three-year limitations period of CPLR 214 (4) applies.

We now turn to the question of when IDT’s breach of fiduciary duty claim accrued. A tort claim accrues as soon as “the claim becomes enforceable, i.e., when all elements of the tort can be truthfully alleged in a complaint” (Kronos, Inc. v AVX Corp., 81 NY2d 90, 94 [1993]). As with other torts in which damage is an essential element, the claim “is not enforceable until damages are sustained” (id. at 94). To determine timeliness, we consider whether plaintiff’s complaint must, as a matter of law, be read to allege damages suffered so early as to render the claim time-barred (id. at 94-97). Here, the only reasonable inference to be drawn from IDT’s allegations is that it first suffered loss, as a result of Morgan Stanley’s alleged breach of fiduciary duty, after Telefonica refused to comply with the MOU. The exact date of the injury is not alleged but must have been before May 25, 2001, when IDT commenced the arbitration against Telefonica, alleging that it had sustained a loss of some $3.15 billion as a result of Telefonica’s breach of their binding agreement. More than three years passed, therefore, before IDT commenced this action, rendering IDT’s breach of fiduciary duty claim time-barred.

Turning to IDT’s second and fourth causes of action— intentional interference with existing contract and misappropriation of confidential and proprietary business information, respectively—the statute of limitations in each case is three years, under CPLR 214 (4), which the parties do not dispute. As with IDT’s first cause of action, the claims were not enforceable until IDT first suffered damages. The damages are those resulting from Telefonica’s refusal to comply with the MOU— intransigence that was allegedly induced by Morgan Stanley by means of the disclosure of confidential IDT business information. Again, we must conclude from IDT’s complaint that it first suffered loss—as a result of Morgan Stanley’s alleged interference with contractual relations and misappropriation of confidential business information—when Telefonica refused to comply with the MOU. And again, although the exact date of the injury is not alleged, it must have been before May 25, 2001, rendering the claims time-barred.

IDT argues that Morgan Stanley’s statute of limitations defenses should be barred by equitable estoppel. However, IDT fails to demonstrate that any action or inaction by Morgan Stanley caused IDT’s delay in bringing this action (see Zumpano v Quinn, 6 NY3d 666, 673-676 [2006]). According to its complaint, IDT learned in 2000 that Morgan Stanley was denigrating it in discussions with Telefonica. IDT, given its awareness that Telefonica’s financial adviser had disparaged it, should have made further inquiry before the statute of limitations expired (see Putter v North Shore Univ. Hosp., 7 NY3d 548, 553-554 [2006]).

Finally, IDT alleges that Morgan Stanley was unduly enriched by the investment banking fees it obtained from IDT and from Telefonica “and any other fees Morgan Stanley received for its ‘search’ for a replacement anchor tenant, as well as any other fees of any kind that Morgan Stanley has earned for additional, presently-unknown misappropriations and misuses of IDT’s confidential business and financial information.” On appeal, Morgan Stanley does not argue that the unjust enrichment claim is time-barred. Instead it contends that IDT’s fifth claim fails to state a cause of action. We agree.

“The theory of unjust enrichment lies as a quasi-contract claim” (Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572 [2005]). It is an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties concerned. Where the parties executed a valid and enforceable written contract governing a particular subject matter, recovery on a theory of unjust enrichment for events arising out of that subject matter is ordinarily precluded (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 388 [1987]).

It follows that the unjust enrichment claim cannot form the basis of IDT’s demand that Morgan Stanley return the $10,000,000 fee paid in relation to the Net2Phone, Inc. transaction, because that fee arose from services governed by an engagement letter signed by IDT on July 26, 2000. Nor can the unjust enrichment claim support the disgorgement of any profits Morgan Stanley obtained from Telefonica or other companies, in connection with SAm-1. An unjust enrichment claim “rests upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another” (Miller v Schloss, 218 NY 400, 407 [1916]; see also Restatement [First] of Restitution § 1). In seeking Morgan Stanley’s profits from SAm-1, IDT does not, and cannot, allege that Morgan Stanley has been unjustly enriched at IDT’s expense, because IDT did not pay the alleged fees.

Accordingly, the order of the Appellate Division should be reversed, with costs, defendants’ motion to dismiss the remaining causes of action granted, the complaint dismissed in the entirety, and the certified question answered in the negative.

Judges Ciparick, Graffeo, Read, Smith and Jones concur; Chief Judge Lippman taking no part.

Order reversed, etc.

      . The panel rejected IDT’s contention that NewCo and Emergía were one and the same. Rather, it found, NewCo was envisaged as a company holding the infrastructure assets of SAm-1, and did not encompass the marketing function and revenues of the enterprise. In reaching this conclusion, the arbitration panel relied on, among other things, minutes of a July 2000 IDT board meeting, indicating that IDT recognized that Emergía was a larger enterprise, with greater growth potential, than NewCo. The arbitration panel expressed skepticism about Morgan Stanley’s summer 2000 valuation of NewCo and Emergía, noting that its projections were “prepared by Telefonica and Morgan Stanley to be presented to IDT as part of the process of negotiating IDT’s ownership percentage in Emergía.”

      . After Supreme Court denied the motion to dismiss, the parties proceeded to discovery and Morgan Stanley produced documents that, according to IDT, reveal further wrongdoing by Morgan Stanley during the arbitration proceeding. IDT filed an amended complaint. Supreme Court granted Morgan Stanley’s motion to dismiss the new claims. That decision is under appeal.
      In June 2008, IDT moved to dismiss the present appeal as moot, on the ground that the original complaint had been significantly amended. We denied the mootness motion on September 4, 2008 (11 NY3d 750 [2008]).

      . Morgan Stanley contends that the breach of fiduciary duty claim fails on the merits, because there was no fiduciary relationship between IDT and Morgan Stanley on the transaction in suit, but this too is a question we need not reach because the claim, even if meritorious, is time-barred.

      . IDT did not appeal Supreme Court’s dismissal of its third claim.

      . IDT’s argument that it engaged Morgan Stanley under duress is unpersuasive, in that the coercion by Morgan Stanley that IDT alleged in its complaint occurred after IDT refused to pay the fee, not before the fee was agreed on.


author: Smith, J.

text:
    [905 NE2d 1159, 878 NYS2d 230]
    Larry Shulman, Respondent, v James Hunderfund, Appellant, et al., Defendant.
    Argued February 11, 2009;
    decided March 26, 2009

      POINTS OF COUNSEL

      Devitt Spellman Barrett, LLP, Smithtown (Diane K. Farrell of counsel), and Meyer, Suozzi, English & Klein, PC., Garden City (A. Thomas Levin and Michael A. Ciaffa of counsel), for appellant.
    I. The Appellate Division failed to undertake the required independent review to determine whether the content of the flyer was constitutionally protected as nonactionable opinion, or whether the public official plaintiff established with convincing clarity that defendant acted with actual malice. (New York Times Co. v Sullivan, 376 US 254; Bose Corp. v Consumers Union of United States, Inc., 466 US 485; Mahoney v Adirondack Publ. Co., 71 NY2d 31; Immuno AG. v Moor-Jankowski, 77 NY2d 235; Milkovich v Lorain Journal Co., 497 US 1; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369, 434 US 969; Mann v Abel, 10 NY3d 271; Brian v Richardson, 87 NY2d 46; Gross v New York Times Co., 82 NY2d 146; Prozeralik v Capital Cities Communications, 82 NY2d 466.) II. A campaign flyer statement that Larry Shulman, a candidate for public office, “BROKE THE LAW” was an expression of nonactionable opinion which may not be the subject of a private defamation action. (New York Times Co. v Sullivan, 376 US 254; Steinhilber v Alphonse, 68 NY2d 283; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Gertz v Robert Welch, Inc., 418 US 323; Immuno AG. v MoorJankowski, 77 NY2d 235; Mann v Abel, 10 NY3d 271; Brian v Richardson, 87 NY2d 46; Gross v New York Times Co., 82 NY2d 146; 600 W. 115th St. Corp. v Von Gutfeld, 80 NY2d 130; Greenbelt Cooperative Publishing Assn., Inc. v Bresler, 398 US 6.) III. An independent review of the factual record does not establish actual malice with convincing clarity. (New York Times Co. v Sullivan, 376 US 254; Prozeralik v Capital Cities Communications, 82 NY2d 466; Bose Corp. v Consumers Union of United States, Inc., 466 US 485; Gertz v Robert Welch, Inc., 418 US 323; St. Arnant v Thompson, 390 US 727; Harte-Hanks Communications, Inc. v Connaughton, 491 US 657; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Mahoney v Adirondack Publ. Co., 71 NY2d 31; Masson v New Yorker Magazine, Inc., 501 US 496; Greenbelt Cooperative Publishing Assn., Inc. v Bresler, 398 US 6.)

      Smith Mazure Director Wilkins Young & Yagerman, P.C., New York City (Mark S. Yagerman and Joel M. Simon of counsel), for respondent.
    I. The Appellate Division’s review was appropriate and its determination was rendered pursuant to the proper standard. (Gross v New York Times Co., 82 NY2d 146; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369; Prozeralik v Capital Cities Communications, 82 NY2d 466; Harte-Hanks Communications, Inc. v Connaughton, 491 US 657; Silsdorf v Levine, 59 NY2d 8; Immuno AG. v MoorJankowski, 77 NY2d 235.) II. Even if this Court gives credence to appellant’s argument regarding the scope of review that was rendered by the Appellate Division, a review of the full record establishes constitutional malice and defamation per se. (Immuno AG. v MoorJankowski, 77 NY2d 235; Brian v Richardson, 87 NY2d 46; Clark v Schuylerville Cent. School Dist., 24 AD3d 1162; Guerrero v Carva, 10 AD3d 105; Brach v Congregation Yetev Lev D’Satmar, 265 AD2d 360; Mann v Abel, 10 NY3d 271; Di Bernardo v Tonawanda Publ. Corp., 117 AD2d 1009; Silsdorf v Levine, 59 NY2d 8; Rinaldi v Holt, Rinehart & Winston, 42 NY2d 369.)
   OPINION OF THE COURT

Smith, J.

In this action for libel by a public figure, the record does not clearly and convincingly show that the statements in question were made with “actual malice,” as required by New York Times Co. v Sullivan (376 US 254 [1964]). We therefore hold that plaintiffs complaint against defendant James Hunderfund must be dismissed.

I

In May of 1999, plaintiff, Larry Shulman, a member of the Commack Board of Education, was a candidate for reelection. Hunderfund, the school superintendent, believed that Shulman wanted him fired and was opposed to his candidacy. On the eve of the election, Hunderfund participated with others in preparing and circulating an anonymous flyer attacking Shulman. The flyer made several accusations, said to be the result of “[a]n investigation of Mr. Shulman’s record” by “Concerned Citizens of Commack.” Only the first of the accusations is now at issue. In a paragraph bearing the caption “BROKE THE LAW,” the flyer said:

“Shulman flagrantly broke the law when he awarded a lucrative food service contract to one of his business associates. Concerned Citizens has verified the fact that Shulman NEVER revealed his business relationship with the food service company PRIOR to the awarding of this contract. Shulman’s disregard of ethical principles and conflict of interest laws has cost the District dearly.”

After losing the election, Shulman sued Hunderfund and another defendant for libel. The jury found for the codefendant, but awarded $100,000 in punitive damages against Hunderfund. Supreme Court set aside the verdict for Shulman and entered judgment in Hunderfund’s favor; the Appellate Division reversed and ordered that judgment be entered in accordance with the verdict (Shulman v Hunderfund, 48 AD3d 449 [2d Dept 2008]). We granted leave to appeal (10 NY3d 713 [2008]), and now reverse the Appellate Division’s order and reinstate so much of Supreme Court’s judgment as dismissed the complaint against Hunderfund.

II

Hunderfund argues that the statement that “Shulman flagrantly broke the law” is a statement of opinion, and therefore not actionable (see e.g. Steinhilber v Alphonse, 68 NY2d 283 [1986]). Shulman maintains that the statement was presented as one of fact, noting that the flyer purported to be the result of a careful investigation. We find it unnecessary to resolve this issue. Even assuming that the statement is one of fact, it cannot, under the circumstances of this case, support a recovery for libel.

It is undisputed that Shulman, a public official running for reelection, was a public figure and that this case is governed by the rule of New York Times Co. v Sullivan, which interpreted the First Amendment to the United States Constitution as embodying “the principle that debate on public issues should be uninhibited, robust, and wide-open, and that it may well include vehement, caustic, and sometimes unpleasantly sharp attacks on government and public officials” (376 US at 270). The Constitution, as interpreted in the New York Times case, bars Shulman “from recovering damages for a defamatory falsehood relating to his official conduct unless he proves that the statement was made with ‘actual malice’—that is, with knowledge that it was false or with reckless disregard of whether it was false or not” (id. at 279-280; see also Mahoney v Adirondack Publ. Co., 71 NY2d 31, 35-36 [1987]). Actual malice must be proved by “clear and convincing evidence” (Bose Corp. v Consumers Union of United States, Inc., 466 US 485, 511 n 30 [1984]; see also Freeman v Johnston, 84 NY2d 52, 56-57 [1994]).

Here, the jury found that Hunderfund’s statement was made with actual malice. The Appellate Division upheld the verdict on the ground that it was supported by “legally sufficient evidence in the record” (48 AD3d at 450). The Appellate Division, however, applied the wrong standard. The usual deference paid by courts to jury verdicts is inapplicable in cases subject to the New York Times Co. v Sullivan rule. The New York Times Court said:

“In cases where [the] line [between protected and unprotected speech] must be drawn, the rule is that we examine for ourselves the statements in issue and the circumstances under which they were made to see whether they are of a character which the principles of the First Amendment, as adopted by the Due Process Clause of the Fourteenth Amendment, protect. We must make an independent examination of the whole record, so as to assure ourselves that the judgment does not constitute a forbidden intrusion on the field of free expression.” (376 US at 285 [citations, internal quotation marks and ellipsis omitted].)

Therefore, in a case like this we are not limited, as we ordinarily are, to a review of legal issues (Mahoney, 71 NY2d at 39). “[W]e must scrutinize the evidence of actual malice for ‘convincing clarity’ ” (Prozeralik v Capital Cities Communications, 82 NY2d 466, 475 [1993] [citations omitted]). We find no such clarity here. The record does not convincingly show that Hunderfund knew the statements in issue to be false or that he made them with reckless disregard of whether they were false.

Ill

The incident on which Hunderfund’s accusation that Shulman “broke the law” was based occurred on July 2, 1998, some 10 months before the school board election. On that date, the school board decided to award a food service contract to a company called Whitsons—a contract that eventually went into default, and thus proved costly to the district. Shulman, as a board member, argued vigorously in favor of the award to Whit-sons, and succeeded in persuading his colleagues on the board to reverse a previous, unfavorable vote.

Shulman had a communications support business, and Whit-sons was a customer of that business—a “small” one, according to Shulman’s uncontradicted testimony. Shulman did not mention the relationship to his colleagues at the July 2 meeting because, he testified, it simply did not occur to him. It did occur to him a few days later, however, and he called the lawyer for the school board, Eugene Barnosky, to ask if the relationship was a problem. At the next meeting, on July 14, Shulman disclosed his relationship to the board, and Barnosky advised the board that the relationship did not render the vote illegal.

That assurance did not satisfy everyone. Hunderfund—who, as school superintendent, was present at school board meetings—testified that, having heard Barnosky’s opinion, he consulted his own lawyer, and got a “different” opinion. Also, the president of the board (who had been recused from the vote because his wife worked for a competing bidder) raised objections at the July 14 meeting and again at an August 20 meeting; and the competing bidder submitted a letter to the August 20 meeting, complaining that “one Board member” had a “direct or indirect” financial interest with Whitsons, which had not been disclosed. A copy of the letter was sent to Hunderfund.

The July and August discussions of Shuhnan’s alleged conflict occurred at executive sessions of the Board. The subject was again discussed, this time at a public meeting, on September 18. At the September meeting, Barnosky defended Shulman’s conduct. It is unclear from Barnosky’s trial testimony, however, whether he did so unequivocally. Initially, Barnosky answered “yes” to a question from Shulman’s lawyer: “You advised the Board and the public in September of 1998 that there was no evidence of any wrongdoing by Mr. Shulman, correct?” Later, however, Barnosky explained that by “wrongdoing” he meant “bid rigging, fraud, influence[ ] peddling or anything like that.”

Barnosky also testified that he had said at the September meeting that Shulman had complied with the standard of disclosure imposed by the General Municipal Law. But when asked if the same standard applied under the Commack Board of Education Code of Ethics, Barnosky replied: “No, I think the standard there is broader.” The gist of Barnosky’s testimony is that his September 18 statement to the public meeting did not exclude the possibility that Shulman had committed an Ethics Code violation.

Whatever its tenor, Barnosky’s statement did not end the controversy. The president of the board and another member continued to assert during the months preceding the May 1999 school board elections that Shulman’s nondisclosure violated, or raised serious questions under, the Code of Ethics, and Hunderfund knew of those assertions.

The claim that Shulman had violated the Ethics Code was a debatable one, but it was not obviously untenable. A distinction can be drawn, as Barnosky suggested in his testimony, between the Code of Ethics and the General Municipal Law. General Municipal Law § 801 says that no municipal officer “shall have an interest” (defined in General Municipal Law § 800 [3] as “a direct or indirect pecuniary or material benefit”) “in any contract with the municipality.” The Code of Ethics requires a member to disclose “any direct or indirect financial or other private interest he/she has” in any “matter before the Board of Education.” Though the requirements are similar, it could be argued that Shulman’s business relationship with Whitsons, while not a “direct or indirect” interest in the contract between Whitsons and the school board, was an “other private interest” in the “matter.”

We do not need to decide the meaning of either the General Municipal Law or the Code of Ethics. It is entirely possible that Shulman violated neither of them. But we cannot say it is proved, by clear and convincing evidence, that Hunderfund knew Shulman’s conduct to be lawful. That was a question on which Barnosky’s advice left some room for doubt—and, in any event, Hunderfund, who had his own lawyer, and who heard and read views that seemed less favorable to Shulman than Barnosky’s, did not have to take that advice as gospel.

Because the record does not clearly and convincingly show that Hunderfund knew Shulman to be innocent, or that he had no basis for thinking him guilty, of any legal transgression, Shulman’s case must fail. If Shulman (in Hunderfund’s mind) did violate the law in connection with the Whitsons transaction, then the paragraph challenged in this lawsuit was (in Hunderfund’s mind) substantially true.

Concededly, Hunderfund could not have believed every word in the statement “Shulman flagrantly broke the law when he awarded a lucrative food service contract to one of his business associates” to be literally true. The adverb “flagrantly” was no doubt a rhetorical extravagance; and Shulman did not award the Whitsons contract himself—he persuaded his fellow board members to do so, and joined with them in doing it. Also, there may be a distinction (though there is no evidence Hunderfund was conscious of it) between the Commack Code of Ethics and “the law.” But these details are unimportant to this case. The Constitution, which protects “vehement, caustic, and sometimes unpleasantly sharp attacks” in a political context, does not insist on complete verbal precision.

In this, the Constitution follows the common law of libel which, as the United States Supreme Court has observed, “overlooks minor inaccuracies and concentrates upon substantial truth” (Masson v New Yorker Magazine, Inc., 501 US 496, 516 [1991]). In Masson, the Supreme Court defined “actual malice” in accordance with this “historical understanding” of libel law, which “would absolve a defendant even if she cannot ‘justify every word of the alleged defamatory matter’ ” (id. at 516-517, quoting 5 Witkin, Summary of California Law § 495 [9th ed 1988]). It is understandable, of course, that Shulman did not like Hunderfund’s provocatively phrased, and anonymous, charges against him. But so long as Hunderfund did not substantially depart from what he believed to be the truth, the only remedy for Shulman—and for other public figures similarly situated—is, as Supreme Court said in its order setting aside the verdict in this case, to develop a thicker skin.

Accordingly, the order of the Appellate Division should be reversed, with costs, and so much of the judgment of Supreme Court as dismissed the complaint against defendant Hunderfund reinstated.

Judges Ciparick, Graffeo, Read, Pigott and Jones concur; Chief Judge Lippman taking no part.

Order reversed, with costs, and complaint against defendant Hunderfund dismissed.


text:
    [905 NE2d 1164, 878 NYS2d 235]
    The People of the State of New York, Appellant, v Amber Bauman and Charles Edward Lafler, Respondents.
    Argued February 17, 2009;
    decided March 26, 2009

      POINTS OF COUNSEL

      Michael C. Green, District Attorney, Rochester (Kelly Christine Wolford of counsel), for appellant.
    The indictment which charged defendants with two counts of assault in the first degree as a course of conduct is not duplicitous. (People v Klipfel, 160 NY 371; People v Sanchez, 84 NY2d 440; People v Keindl, 68 NY2d 410; People v Iannone, 45 NY2d 589; People v Davis, 72 NY2d 32; People v Wells, 7 NY3d 51; People v Shack, 86 NY2d 529; People v Beauchamp, 74 NY2d 639; People v Buckley, 75 NY2d 843; People v First Meridian Planning Corp., 86 NY2d 608.)

      Timothy P. Donaher, Public Defender, Rochester (William Clauss of counsel), for Amber Bauman, respondent.
    I. The depraved indifference assault count was properly dismissed because it charged more than one offense, it failed to give fair notice and it impermissibly jeopardized the jury’s obligation to render a unanimous verdict. (People v Iannone, 45 NY2d 589; People v Keindl, 68 NY2d 410; People v Okafore, 72 NY2d 81; People v Davis, 72 NY2d 32; People v Beauchamp, 74 NY2d 639; People v Sanchez, 84 NY2d 440; People v Morris, 61 NY2d 290; People v Shack, 86 NY2d 529; People v First Meridian Planning Corp., 86 NY2d 608; Matter of Johnson v Morgenthau, 69 NY2d 148.) II. The intentional assault count was properly dismissed. (People v Keindl, 68 NY2d 410.)

      Muldoon & Getz, Rochester (Gary Muldoon of counsel), for Charles Lafler, respondent.
    The indictment, which grouped together 10 different allegations of actions allegedly committed by three different people, is duplicitous. (People v Sedlock, 8 NY3d 535; People v Sanchez, 84 NY2d 440; People v Watt, 81 NY2d 772; People v Keindl, 68 NY2d 410; People v Morris, 61 NY2d 290; People v Payne, 241 AD2d 466; People v Pryce, 41 AD3d 983; People v Dunton, 30 AD3d 828; People v Del-Debbio, 244 AD2d 195; People v Hines, 39 AD3d 968.)
   OPINION OF THE COURT

Jones, J.

The issue before this Court is whether an indictment charging depraved indifference assault under Penal Law § 120.10 (3) which alleges 11 acts over an eight-month period under one count violates Criminal Procedure Law § 200.30 (1).

By indictment, defendants were charged with one count of intentional assault under Penal Law § 120.10 (1) (the first count) for allegedly causing injury to victim by means of “a baseball bat[,] and/or a frying pan[,] and/or a vacuum cleaner[,] and/or a hammer,” and one count of depraved indifference assault under Penal Law § 120.10 (3) (the second count) for allegedly

“striking [victim] about the head and body with fists and/or a baseball bat and/or a hammer; and/or burning said person with a frying pan; and/or scalding said person with hot water; and/or placing a vacuum cleaner hose on said person’s genital area; and/or providing inappropriate and/or inadequate nutrition; and/or subjecting said person to inadequate and/or inappropriate living conditions; and/or failing to seek medical attention” during a period from August 1, 2004 to April 7, 2005.

Supreme Court granted defendants’ motions to dismiss both counts of the indictment on the ground of duplicity and the Appellate Division, in a 3-2 decision, affirmed (51 AD3d 316 [2008]). The dissent below disagreed on the issue of duplicity only with respect to the second count (id. at 320). We agree with the majority below and now affirm.

CPL 200.30 (1) provides that “[e]ach count of an indictment may charge one offense only.” As this Court explained in People v Keindl (68 NY2d 410 [1986]), “acts which separately and individually make out distinct crimes must be charged in separate and distinct counts, and where one count alleges the commission of a particular offense occurring repeatedly during a designated period of time, that count encompasses more than one offense and is duplicitous” (id. at 417-418 [citations omitted]). Compliance with CPL 200.30 (1) is essential because “[t]he prohibition against duplicity furthers not only the functions of notice to a defendant and of assurance against double jeopardy, but also ensures the reliability of the unanimous verdict” (id. at 418).

Here, the second count of the indictment was pleaded in a manner which made it duplicitous. This count, alleging 11 incidents over an eight-month period, encompassed “such a multiplicity of acts ... as to make it virtually impossible to determine the particular act of [assault] ... as to which [a] jury [could] reach[ ] a unanimous verdict” (id. at 421). The first count is similarly defective. Were these counts to stand as pleaded, “individual jurors might vote to convict . . . defendant^] of [each] count on the basis of different offenses” and “defendant^] would thus stand convicted under [each] count even though the jury may never have reached a unanimous verdict as to any one of the offenses” (id. at 418).

Our decision in this case is not inconsistent with the People’s argument that depraved indifference assault can be a continuing crime and that the element of depravity can be alleged by establishing that defendant engaged in a course of conduct over a period of time. Notwithstanding this point, the indictment in this case was defectively pleaded and properly dismissed. The conclusion of the dissenting Justices below that April 7, 2005 should be the date “on which defendants’ conduct resulted in serious physical injury and a grave risk of death” (51 AD3d at 323) does not salvage the second count because setting this date amounts to an improper amendment to the indictment.

Our dissenting colleagues are of the view that some or all of defendants’ acts—and not any single act—could have created the grave risk of death and the jury could unanimously agree on this before convicting defendants of depraved indifference assault. However, the People’s use of the conjunction “and/or” between each act undercuts this position. Despite the possibility that a jury could find that the entire course of conduct created a grave risk of death, given the “and/or” language, a jury could just as easily find that defendants committed only one of the alleged acts; not only would a single act not be sufficient to establish a course of conduct but we still would not know on which particular act defendants were convicted.

In addition, the dissent, citing People v Suarez (6 NY3d 202 [2005]), analogizes the pleading of depraved indifference murder to that of depraved indifference assault and argues that “the only distinction between those crimes is that, under the former, the conduct must cause the death of another person as opposed to serious physical injury” (dissenting op at 157). We believe that the injury element is the precise point which distinguishes these crimes for the purpose of a duplicity analysis. Where the resulting injury is “death of another person” (Penal Law § 125.25 [2]), regardless of how many acts are alleged in a single count, there can always only be one completed offense— the victim can only die once. However, where, as here, the injury is “serious physical injury to another person” (Penal Law § 120.10 [3]), there can be (and might well have been in this case) multiple instances of serious physical injury and, consequently, multiple completed offenses.

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

Pigott, J. (dissenting in part). Although I agree with the majority that depraved indifference assault can be a continuing offense, I respectfully dissent because, in my view, the majority’s conclusion that count two “was pleaded in a manner which made it duplicitous” is inconsistent with its later statement “depraved indifference assault can be a continuing crime” (majority op at 155).

A person is guilty of depraved indifference assault in the first degree when, “[ujnder circumstances evincing a depraved indifference to human life, he recklessly engages in conduct which creates a grave risk of death to another person, and thereby causes serious physical injury to another person” (Penal Law § 120.10 [3]). Count two of this indictment lists the elements of that offense and then identifies the multiple acts allegedly engaged in by defendants while acting in concert. In my view, contrary to the majority’s opinion, the pleading of multiple acts under this one count does not threaten the reliability of a unanimous verdict, because it is defendants’ course of conduct, and whether that conduct is deemed to be reckless and to have created a grave risk of death—and not any singular act—upon which the jury must unanimously agree before defendants may be convicted of depraved indifference assault. Therefore, unlike the multiple intentional assault allegations charged in count one—which are indeed duplicative—it is the alleged multiple acts of defendants, over a period of eight months, that support count two, because some or all of those acts, if proven, could lead a jury to conclude that defendants’ conduct created a grave risk of death, resulting in serious physical injury to the victim.

In a related context, in People v Suarez (6 NY3d 202 [2005]), we stated that depraved indifference murder is “established when a defendant—acting with a conscious objective not to kill but to harm—engages in torture or a brutal, prolonged and ultimately fatal course of conduct against a particularly vulnerable victim” (Suarez, 6 NY3d at 212). Clearly, if more than one act may be alleged within the parameters of a depraved indifference murder count, so too may more than one act be alleged with respect to the crime of depraved indifference assault, because the only distinction between those crimes is that, under the former, the conduct must cause the death of another person as opposed to serious physical injury. Had the victim died in this case, under our jurisprudence, the People would have been able to allege multiple acts in a depraved indifference murder count. The same result should follow here.

In my view, the indictment sufficiently alleges that on April 7, 2005, the conduct of defendants had “resulted in serious physical injury and a grave risk of death” (People v Bauman, 51 AD3d 316, 323 [4th Dept 2008, Fahey, J., dissenting in part]), because it was at that time that the victim is alleged to have been found by emergency personnel in a hypothermic condition and near death.

Based on the foregoing, I would modify the order of the Appellate Division by reinstating the second count and would otherwise affirm.

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

Order affirmed.