author: Ciparick, J.

text:
    [802 NE2d 1084, 770 NYS2d 686]
    Stevens and Thompson Paper Company, Inc., Appellant, v Niagara Mohawk Power Corporation, Respondent.
    Argued October 16, 2003;
    decided November 25, 2003

      POINTS OF COUNSEL

      Read and Laniado, LLP, Albany (Howard J. Read and Steven D. Wilson of counsel), for appellant.
    I. The Stevens and Thompson Paper Company power purchase agreement is grandfathered under the 1992 amendment to Public Service Law § 66-c and is entitled to the six cents minimum rate for the remainder of the contract term. (Matter of Consolidated Edison Co. v Public Serv. Commn., 63 NY2d 424; Federal Deposit Ins. Corp. v Niagara Mohawk Power Corp., 102 F3d 671.) II. The court below ignored both the requirements of Public Service Law § 66-c and established Commission policy. (Matter of Long Lake Energy Corp. v Public Serv. Commn., 148 AD2d 84; Matter of Consolidated Edison Co. v Public Serv. Commn., 63 NY2d 424; Niagara Mohawk Power Corp. v Federal Energy Regulatory Commn., 162 F Supp 2d 107, 306 F3d 1264.)

      Kevin P. Glasheen, Albany, and Hiscock & Barclay, LLP (Michael J. Smith of counsel), for respondent.
    I. The Appellate Division decision is not adverse to the legislative goals associated with the 1992 amendment to Public Service Law § 66-c. (Matter of Consolidated Edison Co. v Public Serv. Commn., 63 NY2d 424, 470 US 1075; Norcon Power Partners v Niagara Mohawk Power Corp., 92 NY2d 458; Federal Deposit Ins. Corp. v Niagara Mohawk Power Corp., 102 F3d 671; Matter of Coastal Power Prod. Co. v New York State Pub. Serv. Commn., 153 AD2d 235.) II. The Appellate Division correctly determined that the grandfathering provisions of Public Service Law § 66-c (2) were not applicable to the 7.5 megawatts of new capacity at the Stevens and Thompson Paper Company plant. (Matter of F.W.E. Stapenhorst, Inc. v Public Serv. Commn., 75 NY2d 577.) III. The Appellate Division decision is not adverse to Public Service Commission policies. (American Cyanamid Co. [Lederele Labs. Div.] v Public Serv. Commn., 88 AD2d 1063; Matter of New York Tel. Co. v Public Serv. Commn., 179 Misc 2d 301; Matter of Campo Corp. v Feinberg, 279 App Div 302, 303 NY 995; Matter of Niagara Power Corp. v Public Serv. Commn., 69 NY2d 365; Matter of Central Hudson Gas & Elec. Corp. v Public Serv.

      Commn., 108 AD2d 266; Matter of Rochester Gas & Elec. Corp. v Public Serv. Commn., 135 AD2d 4; Matter of Long Lake Energy Corp. v Public Serv. Commn., 148 AD2d 84; Matter of Xiox Corp. v Public Serv. Commn., 190 AD2d 350; Matter of Long. Is. Light. Co. v Public Serv. Commn., 199 AD2d 831; Matter of F.W.E. Stapenhorst, Inc. v Public Serv. Commn., 75 NY2d 577.)
   OPINION OF THE COURT

Ciparick, J.

This appeal requires us to determine whether a power purchase agreement (PPA) between a utility, Niagara Mohawk (NIMO), and a generator of electricity, Stevens and Thompson (S&T), is subject to the grandfathering provisions of Public Service Law § 66-c (2) (a) (ii), and thus subject to the six cent per kilowatt hour minimum rate for the 7.5 megawatts of “new” capacity generated by S&T for the remainder of the agreement. We conclude that the grandfathering provision is not applicable to this PPA and that the appropriate payment rate for the “new” capacity is NIMO’s actual avoided cost.

Congress enacted the Public Utility Regulatory Policies Act of 1978 (PURPA) (Pub L 95-617) in order to help foster the development of alternative sources of energy (see Matter of Consolidated Edison Co. v Public Serv. Commn., 63 NY2d 424, 431 [1984]). New York Public Service Law § 66-c was enacted soon thereafter to fulfill the same purposes at the state level (Public Service Law § 66-c [1]). It provided for a minimum sales price of six cents per kilowatt hour for electricity purchased from qualifying facilities by utilities. The provision requiring the six cent minimum was removed from section 66-c (1) in 1992 and section 66-c (2) was added (L 1992, ch 519, §§ 3, 4).

Section 66-c (2) is a grandfathering provision allowing certain agreements to continue to function under the six cent minimum rate if the agreement was executed by the parties and filed with the Public Service Commission by June 26, 1992, and the agreement “provides] for the purchase of electricity at a utility tariff rate referencing a statutory minimum sales price . . . provided, however, that such minimum sales price shall be implemented in accordance with the policies and conditions established by the commission” (Public Service Law § 66-c [2] [a]). The six cent minimum rate was apparently repealed because the rate turned out to be an overestimate of the cost of production of electricity by the qualifying facilities, resulting in the imposition of overpayments on the utilities and their customers. The Governor’s Approval Memorandum in support of the repeal and the grandfathering provision stated “[c]onsumers are thereby relieved of the outdated minimum sales price while reasonable protection is provided to producers who relied on this minimum price provision” (Governor’s Mem approving L 1992, ch 519, 1992 McKinney’s Session Laws of NY, at 2898).

S&T owns and operates a small hydroelectric generating facility that had an original capacity of three megawatts (MW)— referred to as “old” capacity. The facility was replaced in 1986, increasing its capacity by an additional 7.5 MW of “new” capacity, for a total existing output of 10.5 MW. S&T and NIMO entered into a PPA pursuant to Public Service Law § 66-c (1) (a) in January 1987 whereby NIMO was required to purchase the entire 10.5 MW capacity of electricity generated by S&T.

The PPA was divided into three time periods—the first period ending December 31, 2000, the second December 31, 2008, and the third December 31, 2016. For purposes of this appeal, the only contract provisions at issue are those that relate to the rate that must be paid for the “new” capacity during the second and third periods. The PPA states that for the second period, in consideration for a longer contract term, NIMO will pay S&T 90% of its avoided cost and recognizes that the discount may result in payments that are below any applicable minimum rate. The PPA goes on to define avoided cost as

“such actual cost of electric production . . . avoided by reason of this agreement, as defined in Service Classification No. 6 of PSC No. 207 Electricity as the same may be from time to time changed, amended and/or supplemented, the tariff duly approved by the commission applicable for payments to qualifying on-site generation suppliers whose sales of capacity and energy to Niagara are made under the terms of such tariff.”

For the third period, NIMO would pay S&T 80% of its avoided cost at “the rate contained in Service Classification No. 6.”

NIMO’s tariff, Service Classification No. 6 (SC No. 6), sets forth a formula to be applied for determining the rate to be paid by NIMO to qualifying facilities. The tariff provides “[t]o the extent that a minimum unit rate applied under Section 66-c of the Public Service Law . . . the rate to be paid under this service classification shall be no less than 6.0 cents per kWh.”

Before the parties executed the PPA, the Commission issued an order directing certain terms (see Pub Serv Commn Case No. 29448, issued Dec. 3, 1986). The Commission determined that mere agreement between the parties to extend the PPA for longer than 15 years was insufficient consideration to allow NIMO to purchase the electricity at a discounted rate (see Pub Serv Commn Case No. 29448, issued Dec. 3, 1986). The Commission also

“direct[ed] Niagara Mohawk to enter into a [301-year contract that provides for payment at the settlement rates for the increase in capacity resulting from the proposed facility through the year 2000 and thereafter through the end of the [30]-year term at full avoided costs. With respect to the 3 MW representing existing capacity, the payment rate will be tariff-based avoided costs, subject to the statutory minimum, throughout the [30]-year term of the contract” (Pub Serv Commn Case No. 29448, issued Dec. 3, 1986).

S&T commenced this action in May 2001 after the expiration of the first payment period because, as of February 2001, NIMO stopped paying S&T at the six cent minimum rate for the entire capacity—instead paying only NIMO’s avoided costs. S&T sought declarations that the PPA was within the grandfathering provisions of section 66-c, and thus subject to the six cent minimum, and that NIMO could not legally pay S&T at a rate below the six cent minimum. S&T also sought damages for the difference between the rate it was actually paid—NIMO’s avoided costs—and the six cent rate, with interest, and further, to enjoin NIMO from paying it at a rate less than six cents per kilowatt hour. The parties cross-moved for summary judgment pursuant to CPLR 3212.

Supreme Court granted each party’s motion in part, finding the PPA was grandfathered because it was in effect prior to June 26, 1992, the effective date of the amendment, and incorporated the six cent minimum through the SC No. 6 tariff. The court then determined that, for the second and third periods, NIMO must pay its actual avoided costs for the “new” capacity and the tariff-based avoided costs subject to the six cent minimum for the “old” capacity. The court based its decision, in part, on the language in the Commission’s December 1986 order differentiating between “full avoided costs” for the “new” capacity—without mentioning the six cent minimum— and “tariff-based avoided costs, subject to the statutory minimum” for the “old” capacity.

The Appellate Division affirmed for different reasons. That Court found the PPA was not grandfathered because, while NI-MO’s tariff did refer to the six cent minimum, the reference was not in the context of the definition of avoided cost, and thus the PPA did not explicitly provide that the purchase of electricity would be at the utility tariff rate (299 AD2d 628, 630 [2002]). The former six cent statutory minimum was not applicable to the electric production for the 7.5 MW of “new” capacity. This Court granted S&T leave to appeal and we now affirm.

There is no dispute that the PPA at issue was signed by the parties and filed with the Commission prior to June 26, 1992, the effective date of the amendment. This fact alone does not result in automatic entitlement to the six cent minimum. The pertinent question here is whether the PPA “provid[es] for the purchase of electricity at a utility tariff rate referencing a statutory minimum sales price” (Public Service Law § 66-c [2] [a] [ii]). The PPA provides that S&T will be paid at NIMO’s “avoided cost,” which is described as the cost of the production of electricity NIMO would have incurred in the absence of the PPA, as defined in SC No. 6. NIMO’s tariff, SC No. 6, clearly references the six cent minimum as part of a section entitled “rate to be paid by company.” Although the PPA appears to fit within the grandfathering provision, the inquiry does not end there. The statute further specifies that the six cent minimum will continue to apply “provided, however, that such minimum sales price shall be implemented in accordance with the policies and conditions established by the commission” (Public Service Law § 66-c [2] [a]).

The Public Service Commission has not interpreted the “avoided cost” language at issue here since the six cent minimum was repealed and the grandfathering provision was enacted. In fact, the Commission has specifically declined to do so, stating

“[w]hile, under PURPA and PSL § 66-c, we supervise the . . . contract formation process, we have avoided involvement in contract disputes between utilities and [qualifying facilities] over the meaning of contract terms, arising after contract formation. Such contract disputes are better resolved according to commercial law principles, through negotiation, arbitration, or the courts” (Pub Serv Commn Case No. 02-E-0891, Orange and Rockland Utilities, Inc.—Tariff Filing to Update its Rates for Buyback Service Under S.C. No. 15, issued Dec. 20, 2002; see also Pub Serv Commn Case No. 01-E-0193, Niagara Mohawk Power Corporation—Tariff Filing to Clarify the Applicability of the 6 [Cent] Rate for Contracts with Independent Power Producers, issued June 6, 2001).

However, the Commission interpreted this specific PPA and the language at issue in its December 1986 order prior to the January 1987 execution of the agreement. That order, representing the “final” agreement between the parties, directed NIMO to pay S&T “full avoided costs” for its “new” capacity for the second and third periods of the agreement and to pay “tariff-based avoided costs, subject to the statutory minimum” for the “old” capacity for the entire term of the agreement. As such, the order drew a distinction between avoided costs and the tariff-based avoided costs subject to the six cent minimum. This policy interpretation was established by the Commission for this particular agreement. As the agency charged with the administration of the Public Service Law, the Commission’s interpretation of the agreement in this highly technical area of law is entitled to deference (see Matter of New York Tel. Co. v Public Serv. Commn., 95 NY2d 40, 48-49 [2000]; see also Matter of Niagara Mohawk Power Corp. v Public Serv. Commn., 69 NY2d 365, 369 [1987] [noting that the Public Service Commission “has been granted ‘the very broadest of powers’ ” in its rate-setting authority]). Thus, the “new” capacity is not entitled to the benefit of the grandfathering clause because, “in accordance with the policies and conditions established by the commission” (Public Service Law § 66-c [2] [a]), the December 1986 order reveals a policy that S&T would only be entitled to avoided costs for that capacity during the second and third periods of the PPA.

We reject S&T’s arguments that full avoided costs include the six cent minimum or that the Commission’s policy was to use the six cent minimum as a base price for the tariffs, in light of the Commission’s December 1986 order—the operative order— addressing this particular PPA. In addition, any argument that the parties contemplated the six cent minimum at the time of the agreement negates the purpose of the grandfathering clause, which limits application of the six cent minimum to those contracts that expressly provide for it. This PPA never did. The contractual pricing provisions conveyed an intent to base the price for the 7.5 MW of “new” capacity during the second and third periods on NIMO’s full avoided costs.

The parties’ remaining contentions are without merit.

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

Chief Judge Kaye and Judges G.B. Smith, Rosenblatt and Graffeo concur; Judge Read taking no part.

Order affirmed, with costs.

      . Avoided cost, also termed “incremental cost of alternative electric energy,” is defined as what the cost would have been to the utility to either produce or purchase from a different source the energy generated by the qualifying facility (Matter of Consolidated Edison Co. v Public Serv. Commn., 63 NY2d 424, 431 n 2 [1984], quoting 16 USC § 82a-3 [d]; 18 CFR 292.101 [b] [6]).

      . With respect to the 3 MW of “old” capacity, NIMO is required to continue to pay S&T at the Service Classification No. 6 tariff rate, subject to the six cent minimum for the balance of the agreement.

      . This 90% discount provision was later eliminated from the PPA by a December 1986 order of the Commission (see Pub Serv Commn Case No. 29448, issued Dec. 3, 1986).

      . The 80% discount provision was similarly eliminated from the PPA by the December 1986 Commission order (see Pub Serv Commn Case No. 29448, issued Dec. 3, 1986).

      . Although the PPA was never amended to reflect the changes directed by the December 1986 order, the parties have apparently abided by the terms of the order as if the PPA had been amended. As a result, it is necessary to look to the December 1986 order to ascertain the “final” agreement between the parties.

      . The agreement incorrectly stated that the term of the contract would be 40 years. An errata notice was later issued to clarify that the term of the contract would be 30 years (see Pub Serv Commn Case No. 29448, Errata Notice, issued Jan. 7, 1987).

      . S&T did not seek review by CPLR article 78 of the Commission’s December 1986 order or the denial of its petition for rehearing.


source: Caselaw Access Project

author: Chief Judge Kaye.

license: Public Domain

text:
    [802 NE2d 1100, 770 NYS2d 702]
    In the Matter of Gary Salino, Respondent, v Robert J. Cimino, as County Attorney of the County of Suffolk, et al., Appellants.
    Argued November 18, 2003;
    decided December 18, 2003

      POINTS OF COUNSEL

      Robert J. Cimino, County Attorney, Hauppauge (Theodore D. Sklar of counsel), for appellants.
    Suffolk County Code § 35-3 (A) impresses the County Attorney with the duty to make a factual determination “in the first instance” whether or not an employee must be provided with a defense in a civil action, and the County Attorney is not bound by the allegations in the complaint when making that determination. (Corning v Village of Laurel Hollow, 48 NY2d 348; Matter of Williams v City of New York, 64 NY2d 800; Bestafka v County of Suffolk, 121 AD2d 670, 68 NY2d 610; Matter of Vitucci v City of New York, 272 AD2d 620; Frontier Ins. Co. v State of New York, 87 NY2d 864; Mathis v State of New York, 140 Misc 2d 333; Sanchez v New York City Tr. Auth., 254 AD2d 345; Matter of DeRespiris v New York City Tr. Auth., 251 AD2d 503; Matter of Bolusi v City of New York, 249 AD2d 134; Weitman v City of New York, 222 AD2d 316, 87 NY2d 1055.)

      O’Brien & O’Brien, LLP, Nesconset (Stephen L. O’Brien and Daniel P. O’Brien of counsel), for respondent.
    I. Suffolk County Code § 35-3 (A) is inconsistent with General Municipal Law § 50-m and cannot be relied on to support the County Attorney’s capricious determination. (Consolidated Edison Co. of N.Y. v

      Town of Red Hook, 60 NY2d 99; Gregory v Town of Cambria, 69 NY2d 655; Walker v Town of Hempstead, 84 NY2d 360; Rooney v City of Long Beach, 42 AD2d 34; Matter of Board of Educ. of City School Dist. of City of N.Y. v Mills, 250 AD2d 122; Bloom v Town Bd. of Town of Yorktown, 80 AD2d 823; Board of Coop. Educ. Servs., Nassau County v Goldin, 38 AD2d 267; Ba Mar, Inc. v County of Rockland, 164 AD2d 605; Matter of Penny Lane/E. Hampton v County of Suffolk, 191 AD2d 19; Reinhart v Troy Parking Auth., 36 AD2d 654.) II. Petitioner is entitled to legal defense at the expense of the County of Suffolk. (Frontier Ins. Co. v State of New York, 87 NY2d 864; Matter of LoRusso v New York State Off. of Ct. Admin., 229 AD2d 995; Matter of Spitz v Abrams, 123 Misc 2d 446, 105 AD2d 904; Matter of Shannon v Introne, 80 AD2d 834, 53 NY2d 929; Matter of Hunt v Hamilton County, 235 AD2d 758; Mathis v State of New York, 140 Misc 2d 333; Hassan v Fraccola, 851 F2d 602; Matter of Williams v City of New York, 64 NY2d 800; Matter of Bigger v County of Orange, 293 AD2d 746; Beare v Byrne, 103 AD2d 814.)
   OPINION OF THE COURT

Chief Judge Kaye.

Suffolk County Code § 35-3 (A) obligates the County to provide a defense to its employees in any civil action “arising out of any alleged act or omission which occurred or is alleged in the complaint to have occurred while the employee was acting, or in good faith purporting to act, within the scope of his public employment or duties or which is brought to enforce any provisions of Sections 1981 through 1988 of Title 42 of the United States Code.” The County Code further provides that “[t]he determination of an issue of whether or not an employee was acting within the scope of his public employment or duties at the time of the occurrence, act or omission giving rise to a claim shall be made in the first instance by the County Attorney.” (Id.)

In this CPLR article 78 proceeding brought by a Suffolk County police officer, the issue is whether the County Attorney’s denial of petitioner’s request for a legal defense under Suffolk County Code § 35-3 (A)—on the ground that he was not acting within the scope of employment in connection with the incidents that formed the basis of the complaint—was arbitrary or capricious. We conclude, as did the trial court, that the County Attorney’s decision was not arbitrary or capricious.

The action for which petitioner seeks a taxpayer-paid defense grew out of a long feud between petitioner and his neighbor, Corey Kay, over Kay’s use of his property. Brought in the United States District Court for the Eastern District of New York under 42 USC §§ 1983, 1985 and 1986, Kay’s complaint, served in March 2000, was lodged against the County of Suffolk, and against petitioner and a fellow Suffolk County police officer, personally and in their official capacity. According to the complaint, in July 1996 Kay purchased property next door to petitioner in Mt. Sinai, New York, and leased two cottages on the premises for year-round occupancy to recipients of social services—to which petitioner objected. Kay charged that petitioner, who himself had attempted to purchase the property for similar purposes, persistently complained to town authorities and to the District Attorney that documents relating to year-round use of the cottages were forged or illegal, resulting in the arrest of Joan Van Middelem, the realtor on Kay’s purchase of the property.

After the realtor’s acquittal, and again at petitioner’s behest— the complaint continues—a warrant was issued for Kay’s arrest on similar charges; those charges also were dismissed. Kay alleged that the arrests were based on false statements provided by petitioner, and that as a police officer petitioner used his position and contacts to harass, annoy and alarm Kay and to “cause a reign of terror upon” him, including proceedings instituted before town boards and Supreme Court over use of his property. Kay asserted that petitioner’s actions constituted a deprivation of constitutional rights, malicious prosecution and false arrest, and other wrongdoing.

Kay’s lawsuit actually followed by months a similar action filed in the same court by the realtor (see Joan Van Middelem v County of Suffolk, Civil Action No. 99-2707). Shortly after the Van Middelem action was instituted, petitioner requested a taxpayer-paid defense under Suffolk County Code § 35-3 (A). After investigation by his Defense Evaluation Committee, the County Attorney concluded that petitioner had not acted in his capacity as a police officer in the alleged wrongdoing and denied his request for a defense. As the Committee reported:

“[T]he facts as presently known to the committee show that [petitioner] did not act in his capacity as a police officer in pursuing this matter. Rather, he acted as a concerned homeowner, and utilized resources, including FOIL, available to any private citizen, in bringing this matter to the attention of responsible authorities. Stated differently, [petitioner] did not act in the scope of his duties or authority as a police officer. He sought to protect his private interests as a homeowner in engaging in the course of conduct.”

The Committee noted its reliance on a Police Department Internal Affairs report which explained that, through his own FOIL requests, petitioner learned that there had been no zoning change for the cottages from summer to year-round occupancy, and that the Town’s certificate of zoning compliance had been based on affidavits (allegedly false) secured by the broker from two elderly neighbors. Petitioner’s persistence included commencing administrative proceedings and litigation. According to the Internal Affairs report, petitioner took the information he had learned to his codefendant fellow officer. Based in part on petitioner’s deposition, which did not indicate in any way that he was acting in an official capacity, that officer swore out a criminal complaint against the broker; those charges were dismissed on the death of one of the affiants. Other Internal Affairs documents, which are part of the record before us, include a variety of Kay and Van Middelem reports about petitioner to the Police Department reflecting escalating acrimony between the parties, such as petitioner’s alleged obscene gestures, inappropriate traffic stop and operation of an unlicensed business.

Petitioner did not pursue the County Attorney’s denial of his request for a legal defense in the Van Middelem action.

After Kay commenced his federal court action, petitioner asked that the County provide for his defense in that case because the Kay complaint alleges that he was acting as a police officer, and because Department directives required all off-duty officers to report suspected or observed unlawful activities to on-duty police personnel. Again the County Attorney denied petitioner’s request for a County-funded defense, finding that petitioner was not acting within the scope of employment in connection with the incidents that formed the basis of Kay’s complaint. Again the County Attorney relied on a Defense Evaluation Committee report, which rested in part on its earlier findings and concluded that

“[notwithstanding the boilerplate allegations in the complaint, the operative facts, as distinguished from the legal conclusions asserted in the complaint do not establish that [petitioner] was acting within the scope of his employment. For example, the complaint recites [petitioner’s] private litigation, which was clearly not brought by him in his official capacity.”

Petitioner then instituted this article 78 proceeding arguing that a plain reading of Suffolk County Code § 35-3 (A) obligates the County to provide him with a defense. Supreme Court agreed with the County’s determination that the acts attributed to petitioner were not committed while he was acting in furtherance of his public employment. The Appellate Division, however, reversed and found that the “clear and unambiguous language” contained in the legislation obligated the County to afford petitioner a defense because “[s]ome of the acts asserted in the complaint in the underlying federal civil rights action were alleged by the plaintiff to have been performed by the petitioner in his capacity as an employee of the County of Suffolk” (298 AD2d 589, 590 [2d Dept 2002]). We now reverse and reinstate Supreme Court’s dismissal of the petition.

Discussion

Suffolk County Code § 35-3 (A) was enacted in 1981 to provide for the defense of County employees who may be charged in civil actions with violating the law “in the performance of their duties” (Suffolk County Code § 35-1). The Legislature viewed the provision as a way to encourage qualified applicants to accept employment with the County, without burdening them with legal expenses incurred in defense of allegations of misconduct “in office” (id.).

As the Appellate Division noted, the Code provides for a defense, in clear and unambiguous language, for acts alleged in the complaint to have occurred while the employee was acting within the scope of his public employment, or actions brought to enforce any provisions of 42 USC §§ 1981-1988. But that is not the end of the matter, or the section. The Code goes on to provide, in equally clear and unambiguous language, that the County Attorney is to determine “in the first instance” whether an employee was acting within the scope of employment.

While the two provisions of section 35-3 (A) are seemingly at odds with each other, in fact they are fully reconcilable. Clearly, the Suffolk County Legislature by this provision did not commit public funds to an employee’s defense based solely on the words chosen by a plaintiff in framing a complaint. Allowing a plaintiff to dictate whether Suffolk County must provide an employee with a defense would indeed be an unintended result of section 35-3 (A) (see Bestafka v County of Suffolk, 121 AD2d 670, 671 [2d Dept 1986], Iv denied 68 NY2d 610 [1986]). The reconciling principle between the provision for a public defense protecting employees, and the provision for review by the County Attorney, is that the action of the County Attorney must not be arbitrary or capricious, or it will be set aside (see Matter of Williams v City of New York, 64 NY2d 800, 802 [1985]).

Here, the factual record supports the County Attorney’s determination that petitioner’s alleged acts of wrongdoing against Kay were the consequence of his private interest as a property owner, not his public responsibility as a police officer. That he was acting to protect and advance his private self-interest is demonstrated, for example, by his individual FOIL requests, by his statements submitted as a long-time community member, not as a police officer, in support of criminal charges against Kay, and by the proceedings in his name challenging Kay’s use of the property. Plainly, the County Attorney’s determination denying him a defense was neither arbitrary nor capricious.

Finally, we do not reach petitioner’s alternative argument that Suffolk County Code § 35-3 (A) is preempted by General Municipal Law § 50-m. Preemption was not raised in the petition, or before Supreme Court. Petitioner raised preemption for the first time in his motion for “reargument and/or renewal,” which Supreme Court denied. Neither court below having addressed preemption, we will not be the first to do so (see Bingham v New York City Tr. Auth., 99 NY2d 355, 359-360 [2003]).

Accordingly, the order of the Appellate Division should be reversed, with costs, and the judgment of Supreme Court, dismissing the petition, reinstated.

Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo and Read concur.

Order reversed, etc.

      . Winfield Properties, Ltd., is also a named plaintiff. Kay is its sole shareholder.

      . (See e.g. Matter of Gary Salino v Town of Brookhaven Bd. of Zoning Appeals et al., Sup Ct, Suffolk County, June 10, 1999, Seidell, J., Index No. 24221/98 [remitting the matter to the Town’s Zoning Board of Appeals for further hearing and findings of fact to determine the nonconforming status of the property].)

      . Though these complaints were for the most part ultimately found unsubstantiated, petitioner was relocated because of ongoing disputes with civilians in his patrol area. The Internal Affairs documents also show that petitioner and the arresting officer were exonerated by the Department for the arrests of Kay and Van Middelem, which were found to have been supported by probable cause.

      . Similar “first instance” clauses are found elsewhere (see e.g. General Municipal Law § 50-k [2] [as determined by Corporation Counsel]; Code of City of Buffalo § 35-28 [same]; Code of City of Albany § 38-7 [A] [same]).

      . So long as the County Attorney’s determination has a factual basis, it will be sustained. As counsel recognized at oral argument, however, should the factfinder in the federal action ultimately determine that petitioner was indeed acting within the scope of his public employment, as Kay alleges, an issue regarding petitioner’s right to indemnification might arise (see Jeffreys v Griffin, 1 NY3d 34 [2003] [collateral estoppel is a flexible doctrine]).

      . According to petitioner’s Memorandum of Law submitted in Supreme Court, his fellow officer was advised that Suffolk County would provide for his defense in the federal litigation.


author: Read, J.

text:
    [802 NE2d 1109, 770 NYS2d 711]
    The People of the State of New York, Respondent, v Davon Taylor, Appellant.
    Argued November 20, 2003;
    decided December 23, 2003

      POINTS OF COUNSEL

      Gould Fishbein Reimer & Gottfried, LLP, New York City (Susan J. Walsh and Norman L. Reimer of counsel), for appellant.
    Defendant was deprived of his constitutional right to the effective assistance of counsel by virtue of his counsel’s failure to object to, cure or preserve the error of manifest prosecutorial misconduct during the course of the summation and the cross-examination of the defense witness and by her failure to adequately challenge the sufficiency of the evidence. (McMann v Richardson, 397 US 759; Strickland v Washington, 466 US 668; People v Benevento, 91 NY2d 708; United States v Cronic, 466 US 648; People v Claudio, 83 NY2d 76; People v Hobot, 84 NY2d 1021; People v Flores, 84 NY2d 184; Murray v Carrier, 477 US 478; Kimmelman v Morrison, 477 US 365; People v Lauderdale, 295 AD2d 539.)

      Robert T. Johnson, District Attorney, Bronx (Lynetta M. St. Clair, Joseph N. Ferdenzi and Karen Swiger of counsel), for respondent.
    Defendant received the effective assistance of counsel, who provided him with a vigorous defense, made appropriate objections, and obtained curative relief from the trial court. (People v Baldi, 54 NY2d 137; People v Henry, 95 NY2d 563; Strickland v Washington, 466 US 668; Lockhart v Fretwell, 506 US 364; People v Rivera, 71 NY2d 705; People v Benn, 68 NY2d 941; People v Benevento, 91 NY2d 708; People v Flores, 84 NY2d 184, petition for habeas corpus granted sub nom. Flores v Demskie, 215 F3d 293; People v Bennett, 29 NY2d 462; People v Olivo, 52 NY2d 309.)
   OPINION OF THE COURT

Read, J.

A jury convicted defendant of intentional second-degree murder (Penal Law § 125.25 [1]) for his role in the killing of a rival drug dealer. Defendant now claims that he received ineffective assistance of trial counsel in contravention of the State and Federal Constitutions (US Const 6th Amend; NY Const, art I, § 6). We conclude that the constitutional standard has been met because, in light of the circumstances of this particular case, defense counsel’s actions were within the reasonably objective range of performance (see Strickland v Washington, 466 US 668, 687-688 [1984]), and she provided defendant with meaningful representation (People v Baldi, 54 NY2d 137, 147 [1981]).

At trial, the People relied primarily upon the testimony of defendant’s cousin, who informed the jury that she overheard defendant and his partner plan the murder; saw them carry it out; and was present when they discussed the crime immediately afterward. Defendant produced one alibi witness, the mother of his daughter. Choosing to believe the cousin rather than the alibi witness, the jury convicted defendant. The Appellate Division affirmed, and a Judge of this Court granted defendant leave to appeal.

Defendant claims ineffective assistance of counsel because his attorney failed to object to certain questions that the prosecutor asked when cross-examining the alibi witness, and also failed to object to part of the prosecutor’s summation. The record discloses, however, that “[d]efense counsel cross-examined key prosecution witnesses, presented ... an alibi defense, and gave a detailed summation highlighting potential infirmities in the People’s evidence” (People v Ryan, 90 NY2d 822, 823 [1997]). Further, while the prosecutor’s conduct was indefensible, defendant has failed “ ‘to demonstrate the absence of strategic or other legitimate explanations’ for counsel’s alleged shortcomings” (People v Benevento, 91 NY2d 708, 712 [1998], quoting People v Rivera, 71 NY2d 705, 709 [1988]; see also People v Tonge, 93 NY2d 838, 840 [1999]).

Defense counsel presented a coherent, cogent defense. In her opening remarks, she told the jury that the People’s main witness (defendant’s cousin) was not to be believed because she came forward more than three years after the murder and solely to curry favor with the police on an unrelated charge that had been lodged against her. Defense counsel carried this theme forward, cross-examining the witness so as to highlight her bad behavior and prior bad acts; she reprised the cousin’s suggested motive to lie on summation. Moreover, defense counsel participated actively in jury selection, consulting with defendant at various points; objected vigorously, and often successfully, during the testimony of all the People’s witnesses; cross-examined the People’s witnesses thoroughly; participated intelligently in numerous bench conferences and the jury charge conference; and made numerous objections during the prosecutor’s summation.

Defense counsel was not ineffective just because her efforts to discredit defendant’s cousin proved futile. “An attorney who presents a well-grounded but unsuccessful defense will not later be held to have provided ineffective assistance of counsel, and thus a defendant will not be entitled to a vacatur of his conviction on such basis” (People v Baldi, 54 NY2d at 140). In addition, “when viewed in light of the trial as a whole, the actions of defense counsel of which defendant now complains [the failure to raise objections] could be attributed to tactical trial decisions” (People v Ryan, 93 NY2d at 823-824). The decision not to object to prosecutorial actions may simply “reflect ‘a reasonable and legitimate strategy under the circumstances and evidence presented’ ” (People v Tonge, 90 NY2d at 840, quoting People v Benevento, 91 NY2d at 713). Defense counsel objected almost 50 times during the prosecutor’s cross-examination of the alibi witness. She may have concluded that further objections would serve only to annoy the trial court or—more importantly—the jury; perhaps she did not wish to risk focusing the jury’s attention further on unhelpful evidence. Additionally, to the extent the trial prosecutor’s acts were as offensive as defendant now claims (and some were), defense counsel might have reasonably calculated that, if allowed sufficient latitude, he would alienate the jury.

As we have repeatedly stated, “[t]o prevail on a claim of ineffective assistance of counsel, it is incumbent on defendant to demonstrate the absence of strategic or other legitimate explanations for counsel’s [supposed] failure[s]” (People v Rivera, 71 NY2d at 709). As defendant here has failed to carry his burden, “it will be presumed that counsel acted in a competent manner and exercised professional judgment” (id.) by not lodging objections at the points where defendant now claims they should have been raised.

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

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt and Graffeo concur.

Order affirmed.

       One of the bases of defendant’s complaint is that, prior to the testimony of the sole defense witness, the prosecutor, knowingly and falsely, told defense counsel that the witness had prior convictions for prostitution. Defense counsel later learned the truth, but only after the testimony of the witness, who had been upset by the prosecutor’s supposed revelation. The prosecutor attempted to pass his false statement off as a “joke,” explaining that he and defense counsel had a history of playing pranks on each other. The prosecutor then spent many pages of the trial transcript repeatedly berating defense counsel for having complained of the incident to the trial court. As the trial court aptly stated, such levity has no place in a murder trial. Nevertheless, the record does not indicate that the prosecutor’s “joke” affected counsel’s performance. Defendant also complains of the prosecutor’s summation remark that the witness had been “bought and paid for.” In the context of the entire summation, it is clear that the prosecutor was referring to the fact that the witness was receiving financial support from the defendant’s family for her child, the offspring of defendant. The choice of words was unfortunate and if taken literally, would violate the rule that a prosecutor’s comments must stay within the four corners of the evidence (People v Ashwal, 39 NY2d 105, 109 [1976]).


author: CIPARICK, J. G.B. Smith, J.

text:
    [802 NE2d 1071, 770 NYS2d 673]
    Maureen O’Connell, Respondent, v Ellen Corcoran, as Executrix of John J. O’Connell, Deceased, Appellant.
    Argued September 11, 2003;
    decided November 20, 2003

      POINTS OF COUNSEL

      Matthew J. Clyne, Albany, for appellant.
    I. The instant action is barred by principles of res judicata and collateral estoppel. (O’Connell v O’Connell, 226 AD2d 950; Matter of Reilly v Reid, 45 NY2d 24; O’Brien v City of Syracuse, 54 NY2d 353; Brooklyn Welding Corp. v City of New York, 198 AD2d 189; Boronow v Boronow, 71 NY2d 284; Viviano v Allard, 197 AD2d 210; Nikrooz v Nikrooz, 167 AD2d 334; Miller v Miller, 183 AD2d 395; Mahoney v Mahoney, 131 AD2d 822.) II. The court below applied an erroneous valuation date to the marital assets. (Anglin v Anglin, 80 NY2d 553; Majauskas v Majauskas, 61 NY2d 481.) III. Defendant’s decedent was not properly credited with his individual contributions toward the marital residence. (Heine v Heine, 176 AD2d 77; Cleary v Cleary, 171 AD2d 1076.) IV The courts below erroneously failed to balance the equities by failing to adequately consider the length of the parties’ separation. (Michalek v Michalek, 114 AD2d 655.) V Defendant’s decedent’s monthly disability payment from INA Life Insurance Company of New York is not subject to equitable distribution since it reflects compensation for personal injury. (Dolan v Dolan, 78 NY2d 463; Amara v Amara, 243 AD2d 433.)

      Friedman and Molinsek, P.C., Delmar (Michael P. Friedman of counsel), for respondent.
    I. Plaintiff-respondent’s claim is not barred by res judicata. (Nikrooz v Nikrooz, 167 AD2d 334; Braunstein v Braunstein, 114 AD2d 46; Mahoney v Mahoney, 131 AD2d 822; Erhart v Erhart, 226 AD2d 26.) II. The court appropriately set forth the factors it considered in reaching its determination. (Monette v Monette, 177 AD2d 802; Du Jack v Du Jack, 221 AD2d 712.) III. Supreme Court appropriately utilized the commencement of the action as the cutoff date for equitable distribution of plaintiffs pension. (Anglin v Anglin, 80 NY2d 553; McMahon v McMahon, 187 Misc 2d 364; Sullivan v Sullivan, 201 AD2d 417; Matter of Nicit v Nicit, 217 AD2d 1006, 86 NY2d 883.) IV The court appropriately distributed the marital property in spite of the length of the parties’ separation given the fact of the circumstances of the parties’ marriage. (Bisca v Bisca, 108 AD2d 773, 66 NY2d 741; Rizzuto v Rizzuto, 250 AD2d 829; Price v Price, 69 NY2d 8; Burns v Burns, 84 NY2d 369; Judson v Judson, 255 AD2d 656; Walasek v Walasek, 243 AD2d 851; Seidman v Seidman, 226 AD2d 1011.) V The court correctly determined that defendant’s decedent’s disability payment is marital property subject to equitable distribution. (Dolan v Dolan, 78 NY2d 463; Allwell v Allwell, 277 AD2d 789; Palazzolo v Palazzolo, 242 AD2d 688; Carney v Carney, 236 AD2d 574; Parrish v Parrish, 213 AD2d 928; Ferrugiari v Ferrugiari, 226 AD2d 498.)
   OPINION OF THE COURT

CIPARICK, J.

In 1959, plaintiff Maureen O’Connell and now-deceased John J. O’Connell were married in New York. Eight children were born of the marriage, all currently emancipated. In 1982, plaintiff moved out of the marital residence and commenced a New York divorce action based on cruel and inhuman treatment. After trial, Supreme Court dismissed the action for failure of proof and the Appellate Division affirmed (116 AD2d 823 [3d Dept 1986]). Thereafter, plaintiff and decedent continued to reside separately. The children lived with plaintiff, and decedent paid child support.

In 1993, plaintiff established residence in Vermont. Thereafter, in 1994, she commenced a divorce action in the Family Court of Vermont pursuant to Vermont’s no-fault divorce law, which permits divorce when “a married person has lived apart from his or her spouse for six consecutive months and the court finds that the resumption of marital relations is not reasonably probable” (Vt Stat Ann, tit 15, § 551 [7]). Decedent was served with a complaint seeking divorce, and by letter answer opposed the divorce. A final hearing was scheduled for December 21, 1994. Decedent received notice from the Vermont court, requesting that he appear at the hearing on the divorce and motion for property division. Decedent appeared pro se, although New York counsel accompanied him and was available in the courtroom.

During the hearing, plaintiffs counsel informed the Vermont court that plaintiff was seeking only a divorce. When the court inquired about property division, counsel explained that all of the parties’ marital assets were located in New York State and the Vermont court lacked jurisdiction to distribute the property. Neither the trial judge nor decedent contested plaintiffs statement. Decedent argued only that plaintiffs previous divorce action in New York barred her from maintaining a divorce action in Vermont. At the close of the hearing, the court rejected decedent’s argument and granted plaintiff a final judgment of divorce. It made no property distribution.

In 1995, plaintiff commenced this New York action against decedent seeking equitable distribution of the marital property, pursuant to Domestic Relations Law § 236 (B) (5) (a), which authorizes New York courts to distribute marital property subsequent to a foreign judgment of divorce. Decedent moved for dismissal on the ground that the complaint was barred by res judicata. He argued that, because Vermont Family Court had personal jurisdiction over both parties, the court could have rendered a judgment directing equitable distribution of their marital assets. He contended that plaintiffs failure to seek equitable distribution in the Vermont divorce action barred her from seeking subsequent equitable distribution in Vermont and, therefore, under the Full Faith and Credit Clause of the United States Constitution, New York was required to dismiss plaintiffs complaint.

Supreme Court denied decedent’s motion and the Appellate Division affirmed (226 AD2d 950 [3d Dept 1996], Iv dismissed 88 NY2d 963 [1996]). Noting that Domestic Relations Law § 236 (B) (5) (a) expressly permits parties to obtain equitable distribution following a foreign judgment of divorce, the Appellate Division concluded that the statute entitled plaintiff to proceed in this action. Additionally, the Court concluded that the Vermont divorce decree did not have res judicata effect in New York because the issue of equitable distribution was not resolved, addressed or litigated in the Vermont divorce proceeding, and it remitted the matter to Supreme Court for trial.

Following a bench trial, Supreme Court awarded plaintiff a distributive award of $186,670, representing approximately half of the marital estate, and directed decedent to pay $5,000 toward plaintiffs counsel fees. The Appellate Division affirmed (290 AD2d 774 [3d Dept 2002]) and this Court granted defendant leave to appeal, bringing up for review the prior Appellate Division order that denied defendant’s motion to dismiss the complaint. We now reverse.

Domestic Relations Law § 236 permits a New York proceeding to obtain the distribution of marital property following a foreign judgment of divorce. Lower courts differ as to whether a bilateral sister state divorce decree—one in which the sister state could have, but did not, distribute marital property—precludes a subsequent New York proceeding to obtain equitable distribution pursuant to section 236 (B) (2) and (5) (a) (compare 226 AD2d 950 [3d Dept 1996], Iv dismissed 88 NY2d 963 [1996], with Erhart v Erhart, 226 AD2d 26 [4th Dept 1996]; see also Scheinkman, Practice Commentaries, McKinney’s Cons Laws of NY, Book 14, Domestic Relations Law C236B:3, at 247-248). Er-hart held that the Full Faith and Credit Clause requires the courts of this state to give the same effect to a properly obtained sister state divorce decree that the sister state would give the decree. Therefore, where a divorced spouse would be precluded from commencing a separate action for distribution of marital property within the sister state granting the divorce decree, New York must also preclude a subsequent action for equitable distribution of marital property (see Erhart, 226 AD2d at 31). This approach is consistent with the requirements of full faith and credit and our own application of res judicata in matrimonial actions.

While section 236 (B) (2) and (5) (a) are broadly worded to permit parties to obtain postdivorce equitable distribution following a foreign divorce—with no mention of whether such a divorce results from either an ex parte or bilateral divorce proceeding—the statute should be interpreted to extend only as far as the Constitution permits. In accordance with the Full Faith and Credit Clause, a “judgment of a state court should have the same credit, validity, and effect, in every other court of the United States, which it had in the state where it was pronounced” (Underwriters Natl. Assur. Co. v North Carolina Life & Acc. & Health Ins. Guar. Assn., 455 US 691, 704 [1982], quoting Hampton v McConnel, 3 Wheat [16 US] 234, 235 [1818]; see also Vanderbilt v Vanderbilt, 354 US 416, 418 [1957]; Matter of Luna v Dobson, 97 NY2d 178, 183 [2001]). Thus, where a foreign divorce decree would serve as a bar to a subsequent action for equitable distribution brought in the courts of the decree-rendering state, the decree also has that effect in New York.

Giving a foreign divorce decree the same conclusive effect in New York as it would have in the decree-rendering state is consistent with our own application of res judicata in matrimonial actions (see Boronow v Boronow, 71 NY2d 284 [1988]). The decree-rendering state here being Vermont, we now turn to a review of its law.

Vermont Statutes Annotated, title 15, § 751 (a) provides that,

“[u]pon motion of either party to a [divorce] proceeding . . . the court shall settle the rights of the parties to their property, by including in its judgment provisions which equitably divide and assign the property. All property owned by either or both of the parties, however and whenever acquired, shall be subject to the jurisdiction of the court” (emphasis supplied).

Here, despite the erroneous statement of plaintiffs Vermont counsel, there is no question that the Vermont court had personal jurisdiction over both plaintiff and decedent and could have distributed the marital property, wherever situated. We reject plaintiffs contention and the dissent’s conclusion that decedent’s appearance was limited only to contesting the divorce and that the Vermont court had rendered itself powerless to decide the property issue (see dissenting op at 190).

In Vermont, as in New York, the common-law doctrine of res judicata “bars the litigation of a claim or defense if there exists a final judgment in former litigation in which the ‘parties, subject matter and causes of action are identical or substantially identical’ ” (Berlin Convalescent Ctr., Inc. v Stoneman, 159 Vt 53, 56, 615 A2d 141, 143 [1992]). This “doctrine covers claims that were actually litigated, as well as those which could have been litigated” in a previous action (Roddy v Roddy, 168 Vt 343, 347 n 2, 721 A2d 124, 127 n 2 [1998]).

Applying the principles of full faith and credit, plaintiff’s divorce action has the same conclusive effect in New York as it does in Vermont. We, therefore, hold that, notwithstanding Domestic Relations Law § 236 (B) (2) and (5) (a), this action is barred in New York. Public policy in New York and Vermont frowns upon forum shopping and the bifurcation of divorce and equitable distribution proceedings. In Boronow, this Court held that a party in a divorce action, who had a full and fair opportunity to contest title to the former marital home, was barred from raising the issue of title in a subsequent action (see 71 NY2d at 286). Applying a transactional analysis, we explained that, in a divorce action,

“questions pertaining to important ancillary issues like title to marital property are certainly intertwined and constitute issues which generally can be fairly and efficiently resolved with the core issue. The courts and the parties should ordinarily be able to plan for the resolution of all issues relating to the marriage relationship in the single action” (id. at 290).

The Vermont Supreme Court similarly has recognized a preference for a single action. As the court noted in Roddy v Roddy, “[n]o one is entitled to break a case down into a myriad of single issue actions to obtain the desired judgment. Judicial time schedules and fairness to one’s opponent prohibit this practice” (Roddy, 168 Vt at 347, 721 A2d at 127, quoting B & E Corp. v Bessery, 130 Vt 597, 601, 298 A2d 544, 546 [1972]). Thus, a party—who had a full and fair opportunity to litigate property issues in another state—would be precluded from litigating such issues in New York.

Finally, we do not agree with the dissent that the Vermont court “expressly declined to adjudicate the issue of equitable distribution” (dissenting op at 186). There is no language severing issues of property distribution, and nothing in the court’s order to indicate an intention to do so. The dissent rests entirely on a colloquy with counsel (quoted at 187-188), when counsel erroneously advised that the court lacked jurisdiction to divide New York assets. The court responded “All right. Mr. O’Connell, is there anything that you wish to put to the Court at this time?” This in no way constitutes a severance. Indeed, in a 12-page transcript of the Vermont hearing, the court used the words “All right” eight times, clearly as a means of moving the parties along.

Nor can we, as a court of law, agree with the dissent’s closing observation that, if equitable distribution is denied, plaintiff will receive nothing from a long term marriage. In fact, we do not know the true equities here, and must be guided by the law and the parties’ arguments to us.

Having determined that plaintiffs action for equitable distribution is barred, we need not address defendant’s remaining contentions as they are academic.

Accordingly, the order of the Appellate Division should be reversed, the motion granted and the complaint dismissed with costs.

G.B. Smith, J.

(dissenting). Because the Vermont court expressly declined to adjudicate the issue of equitable distribution, I would affirm the order of the Appellate Division.

Plaintiff Maureen O’Connell and defendant John J. O’Connell were married in 1959. She was a nurse and he was, as he described, a laborer at a beer brewing company. When the company closed in the early 1960s, defendant was vice-president of the company. Defendant then went to work for an energy company where he remained until his retirement in 1994. Plaintiff, by contrast, became a homemaker about a year after the marriage, raising the first of eight children. All the children were raised in a two-story five-bedroom colonial home constructed in 1968 and 1969. While defendant was primarily responsible for building the home, plaintiff maintained it. Plaintiff’s parents financed significant improvement of the home’s garage.

In 1982, the two separated. By then plaintiff had resumed her vocation as a nurse. Plaintiff moved to another home with all the children except for one who was away in school. Plaintiffs action for divorce that same year, based on cruel and inhuman treatment, was unsuccessful (O’Connell v O’Connell, 116 AD2d 823 [1986]). When plaintiff left with the children, she essentially took no marital property with her.

About a decade later, in December 1994, plaintiff succeeded in obtaining a divorce in Vermont where she was not required to establish that defendant was at fault. It was enough that they had been living apart for more than six months and reconciliation was unlikely. The defendant appeared at the court in Vermont to contest the divorce proceeding. The Vermont court would not allow his attorney, who was not admitted in Vermont, to participate in the proceeding. Defendant proceeded pro se and protested the proceeding only on the grounds of the prior New York divorce. The Vermont court stated that it would take defendant’s opposition to be an objection to the jurisdiction of the court, and it denied defendant’s assertion that the New York proceeding was determinative.

During the divorce proceeding in Vermont, the following discussion took place between plaintiffs counsel and the court after plaintiff testified:

“court: . . . am I to understand then, that questions of property division are conceded by you as to not appropriately being before this court?
“[counsel]: As far as I understand all of the property—
“court: You’re only asking at this point for a decree of divorce—
“[counsel]: Correct.
“court:—nothing ancillary to that?
“[counsel]: That’s it. Correct.
“court: And will you explain to the court why that is?
“[counsel]: Because as far as I know if any marital property exists, it exists in the State of New York and I don’t believe this court would have jurisdiction to make orders with regard to the division of marital property assets in the State of New York.
“court: All right.”

Plaintiff then commenced this action in New York Supreme Court seeking equitable distribution. Plaintiff relied on New York Domestic Relations Law § 236, which provides, as relevant, that “in proceedings to obtain a distribution of marital property following a foreign judgment of divorce,” the court “shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment.” (§ 236 [B] [5] [a].) Defendant moved to dismiss the action on the ground of res judicata and collateral estoppel. The trial court denied the motion and the Appellate Division affirmed, concluding, that in the Vermont action, “[n]o provision . . . was made for the distribution of marital property nor was the issue litigated or alluded to in any way” (226 AD2d 950, 951 [1996]). This Court dismissed the defendant’s motion for leave to appeal (88 NY2d 963 [1996]).

Thereafter, the court awarded plaintiff approximately one half of the marital estate, including a share of the marital residence, defendant’s pension benefits, and various money accounts. The Appellate Division once again affirmed (290 AD2d 774 [2002]). The Appellate Division noted that the parties were both 62 years old at the time of the trial and that “defendant challenged and successfully defeated the 1982 divorce action, and subsequently failed to demonstrate any unfairness in permitting plaintiff to share in property acquired in the ensuing years” (290 AD2d at 777). This appeal ensued.

By specifically granting courts the authority to make equitable distribution awards “following a foreign judgment of divorce,” section 236 contemplates that a party can obtain a divorce in one state while having property equitably distributed in New York. Nevertheless, section 236 is subject to article IV § 1 of the United States Constitution, which provides that “Full Faith and Credit shall be given in each State to the public Acts, Records, and judicial Proceedings of every other State” (see generally Matter of Luna v Dobson, 97 NY2d 178, 182-183 [2001]).

Although defendant references res judicata and collateral estoppel, collateral estoppel or issue preclusion is not applicable in this case because only the issue of divorce was resolved by a final judgment on the merits (see Farrell v Mountain Folk, Inc., 169 Vt 568, 568-569, 730 A2d 597, 598 [1999]). The Vermont court did not resolve the issue of equitable distribution. There is no doubt that the Vermont court could have resolved that issue. Vermont Statutes Annotated, title 15, § 751 (a) reads in part, “Upon motion of either party to a proceeding under this chapter, the court shall settle the rights of the parties to their property, by including in its judgment provisions which equitably divide and assign the property.”

The doctrine of res judicata, as articulated by the Vermont Supreme Court, “bars the litigation of a claim or defense if there exists a final judgment in former litigation in which the ‘parties, subject matter and causes of action are identical or substantially identical’ ” (Berlin Convalescent Ctr., Inc. v Stoneman, 159 Vt 53, 56, 615 A2d 141, 143 [1992], quoting Berisha v Hardy, 144 Vt 136, 138, 474 A2d 90, 91 [1984]). Unlike issue preclusion, “[i]t bars not only issues actually litigated but also those which ‘should have been raised in previous litigation’ ” (159 Vt at 56, 615 A2d at 143-144, quoting American Trucking Assns., Inc. v Conway, 152 Vt 363, 370, 566 A2d 1323, 1328 [1989]). The purpose of the judicially crafted rule is to “protect the courts and the parties against the burden of relitigation, encourage reliance on judicial decisions, prevent vexatious litigation and decrease the chances of inconsistent adjudication” (159 Vt at 57, 615 A2d at 144).

In Roddy v Roddy (168 Vt 343, 721 A2d 124 [1998]), the court precluded a mother from seeking supplemental maintenance after entry of divorce and maintenance and child support orders without having to show a change of circumstances. The court found that the mother “could have, and should have, sought the maintenance supplement in connection with the original divorce and child support proceeding” (168 Vt at 347, 721 A2d at 127).

In Grant v Grant (136 Vt 9, 383 A2d 627 [1978]), the parties appeared before the District Court of the Virgin Islands, which granted a divorce but did not award alimony although the decree provided the court would determine alimony upon motion. The former wife then commenced an action in Vermont seeking to modify the decree to provide for alimony although she did not allege a change of circumstances. The court noted that the record did not indicate why alimony was not awarded. It was clear, however, that “the failure to award alimony was not the result of a lack of power to do so; and secondly, all the evidence plaintiff presented to the Vermont trial court could have been presented to the Virgin Islands court” (136 Vt at 13, 383 A2d at 629).

It does not necessarily follow that the Vermont Supreme Court would reach the same result in this case as it did in Roddy and Grant. Plaintiffs counsel did not fail to raise the issue of equitable distribution in the Vermont proceeding. Rather, counsel contended that the court lacked jurisdiction over property located in New York. The argument went directly to the court’s power and counsel’s ability to raise the issue in Vermont. What is clear is that there was no litigation on the merits of any equitable distribution claims in Vermont and, in fact, the Vermont court specifically concluded that it would not address such claims.

In Ford v Franklin (129 Vt 114, 274 A2d 461 [1971]) a Nevada court with personal jurisdiction over the parties had granted a divorce decree which did not, among other things, dispose of jointly owned property located in Vermont. The court held that upon motion by either party, a Vermont court could distribute the property, which “was, and is located in Vermont, and under Vermont jurisdiction” (129 Vt at 122, 274 A2d at 466; cf. Poston v Poston, 161 Vt 591, 657 A2d 1076 [1993]; Avery v Bender, 124 Vt 309, 204 A2d 314 [1964]).

In this case, the issue of equitable distribution of property was raised in the Vermont proceeding and neither the Vermont trial court nor the defendant challenged the assertion of the plaintiffs attorney that the court lacked jurisdiction over property located in New York. By using the term “[a] 11 right,” without more, the court placed its seal of approval on the argument of plaintiffs counsel. Whether the court did so because it genuinely believed in the merits of the argument or “to move the parties along” is irrelevant. When the defendant argued that the court should not exercise jurisdiction because of the New York divorce judgment, the court responded with the term “[a]ll right,” but immediately ruled as follows:

“The court will treat your opposition which was filed by letter and your recitation today as a motion to dismiss for lack of jurisdiction. The court will deny the motion on the following grounds . . . .”

In contrast, when plaintiff’s counsel argued that the court lacked jurisdiction, the court stated only “[a] 11 right,” and did not otherwise challenge the assertion as it did when defendant objected to the court’s jurisdiction. Had the court disagreed with counsel’s statement, then it could be argued that plaintiff should have raised the issue in Vermont. In light of the court’s ruling, it cannot be said that plaintiff could have brought an equitable distribution claim in Vermont. Despite the expansive language of section 751, the court rendered itself powerless to decide the issue.

The majority is troubled by the fact that plaintiff engaged in so-called forum shopping by going to Vermont after unsuccessfully seeking a divorce in New York. There is no New York statute, however, prohibiting plaintiffs conduct. There is no statute that provides that a plaintiff who was unsuccessful in seeking a divorce in New York may not come back to New York to litigate any related issues after obtaining a divorce in a foreign jurisdiction. In fact, the opposite is true. Similarly, there is no statute prohibiting a plaintiff who failed to obtain a divorce in New York from trying to do so in another state.

The holding of the majority will do little to discourage another plaintiff who fails to obtain a divorce in New York from going to another state like Vermont. What it will do is ensure that plaintiffs will either seek equitable distribution of property in the foreign state (assuming the court has personal jurisdiction over the spouse), or make it clearer than the plaintiff did in this case that the court did not wish to exercise jurisdiction over the marital property.

Separately, while the Vermont Supreme Court applied res judicata in Grant and in Roddy, the court has recognized that the judge-made doctrine is flexible and should not be applied mechanically (see Tudhope v Riehle, 167 Vt 174, 179, 704 A2d 765, 768 [1997], citing Delahunty v Massachusetts Mut. Life Ins. Co., 236 Conn 582, 591, 674 A2d 1290, 1295 [1996]; see also Jones v Murphy, 172 Vt 86, 772 A2d 502 [2001]). Although the issue of equitable distribution was not adjudicated, this was not due to plaintiffs desire to engage in piecemeal and vexatious litigation. It is also not the case that plaintiff wished to avail herself of the equitable distribution statute in New York, rather than the one in Vermont. Rather, the issue was not adjudicated out of a belief, accepted by the court, that the issue could not be resolved in Vermont.

Vermont’s broadly worded equitable distribution statute evinces the importance Vermont attaches to ensuring that a former spouse receives his or her fair share of the marital property. A party may choose to forgo that right, but that is not what occurred here. This case would be different had the court instructed plaintiff to raise the issue of equitable distribution rather than failing to challenge the statement by plaintiff’s counsel that the court did not have jurisdiction.

Roddy involved supplemental maintenance, which was pegged to the need of the children. The former wife would have had a remedy in Vermont if she could have shown a change of circumstances. Grant involved alimony, and the former spouse would also have had a remedy in Vermont upon proof of a change of circumstances. In addition, she could have commenced an action in the Virgin Islands since the court there retained jurisdiction over alimony.

This case involves the outright disposition of property. If plaintiff is precluded from seeking her fair share of marital property, then she will receive no marital property from a long term marriage (she took almost no marital property when she left the marriage) in which she was primarily responsible for rearing eight children and maintaining the marital home. Plaintiff will not receive what the lower courts found she was entitled to—equal distribution of marital assets, including the marital home, defendant’s various investments and bank accounts, and his pension.

The Full Faith and Credit Clause should not preclude the current action seeking equitable distribution.

Accordingly, I would affirm the order of the Appellate Division.

Chief Judge Kaye and Judges Rosenblatt, Graffeo and Read concur with Judge Ciparick; Judge G.B. Smith dissents and votes to affirm in a separate opinion.

Order reversed, etc.

      . During the pendency of his motion for leave to appeal to this Court, John O’Connell died. Ellen Corcoran, as executrix of his estate, was substituted as the party defendant in this action.

      . Section 236 (B) provides in relevant part:
      “2. Matrimonial actions. Except as provided in subdivision five of this part, the provisions of this part shall be applicable to . . . proceedings to obtain maintenance or a distribution of marital property following a foreign judgment of divorce, commenced on and after the effective date of this part [July 19, 1980]. . . .
      “5. Disposition of property in certain matrimonial actions, a. Except where the parties have provided in an agreement for the disposition of their property . . . the court, ... in proceedings to obtain a distribution of marital property following a foreign judgment of divorce, shall determine the respective rights of the parties in their separate or marital property, and shall provide for the disposition thereof in the final judgment.”

      . The dissent’s reliance on Ford v Franklin (129 Vt 114, 118, 274 A2d 461, 463 [1971]) is misplaced as the plaintiff in that case had obtained an ex parte Nevada divorce decree, defendant having defaulted and “being neither present in person nor by attorney.” (Id.)

      . It bears noting that the dissent is predicated on an argument that is not being asserted by plaintiff.

      . Defendant died recently and the preliminary executrix proceeded with this action.

      . The majority asserts that reliance on this case is misplaced, quoting language from the opinion stating that neither defendant nor his attorney appeared at the proceedings. However, the sentence following the quoted language states that “Defendant was duly and regularly served with process in this action, and that more than twenty days have elapsed since the said service of Summons, and the default for said Defendant having failed to appear and answer having been duly and regularly entered herein” (129 Vt at 118, 274 A2d at 463).


author: G.B. Smith, J.

text:
    [802 NE2d 1090, 770 NYS2d 692]
    Shyron Bynog et al., Appellants-Respondents, v Cipriani Group, Inc., et al., Respondents-Appellants, et al., Defendants. (And Another Action.)
    Argued October 21, 2003;
    decided December 2, 2003

      POINTS OF COUNSEL

      Robert K. Erlanger, New York City, for appellants-respondents.
    I. Labor Law § 196-d applies, without qualification, to tips and any charges purported to be tips. (Matter of Auerbach v Board of Educ., 86 NY2d 198; Truelove v Northeast Capital & Advisory, 95 NY2d 220; Matter of Field Delivery Serv. v Roberts, 66 NY2d 516; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1; Daley v Related Cos., 179 AD2d 55; Lorillard Tobacco Co. v Roth, 99 NY2d 316; Matter of Richardson v Commissioner of N.Y. City Dept. of Social Servs., 88 NY2d 35; Matter of American Broadcasting Cos. v Roberts, 61 NY2d 244.) II. The Appellate Division abused its discretion by making factual findings on Cipriani’s CPLR 3213 motions. (Sillman v Twentieth Century-Fox Film Corp., 3 NY2d 395; Myers v Fir Cab Corp., 64 NY2d 806.)

      Robinson Brog Leinwand Greene Genovese & Gluck P.C., New York City (Christy L. Reuter, John D. D’Ercole and Marshall E. Bernstein of counsel), for respondents-appellants.
    I. The mandatory service charge is not a gratuity under Labor Law § 196-d. (Matter of Fineway Supermarkets v State Liq. Auth., 48 NY2d 464; State of New York v GTE Valeron Corp., 155 AD2d 166; Mechmet v Four Seasons Hotels, Ltd., 825 F2d 1173; Patrolmen’s

      Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d 205; Matter of Orens v Novello, 99 NY2d 180; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577; Matter of Auerbach v Board of Educ., 86 NY2d 198; Williams v Williams, 23 NY2d 592; Matter of Pell v Coveney, 37 NY2d 494; Matter of La Cascade, Inc. v State Tax Commn., 91 AD2d 784.) II. The temporary waiters waived any right under Labor Law § 196-d to be paid any portion of the mandatory service charge. (Matter of American Broadcasting Cos. v Roberts, 61 NY2d 244.) III. The temporary waiters are not Cipriani’s employees. (Akgul v Prime Time Transp., 293 AD2d 631; Bhanti v Brookhaven Mem. Hosp. Med. Ctr., 260 AD2d 334; Kirsch v Fleet St., Ltd., 148 F3d 149; Lazo v Mak’s Trading Co., 84 NY2d 896; Matter of Ted Is Back Corp. [Roberts], 64 NY2d 725; Matter of Doner v Comptroller of State of N.Y., 262 AD2d 750; Koren v Zazo, 262 AD2d 287; Matter of Cromer [Transworld Sys.—Sweeney], 248 AD2d 773; Matter of Monti Moving & Stor. [Sweeney], 241 AD2d 734; Irrutia v Terrero, 227 AD2d 380.)

      Proskauer Rose LLP, New York City (Stephen Rackow Kaye and Aaron J. Schindel of counsel), for The Fireman Group-Café Concepts, Inc., amicus curiae.
    I. Decisions of the New York Industrial Board of Appeals specifically hold that banquet service charges are not “gratuities.” II. Federal regulations and the Wage-Hour Administrator also authoritatively state that service charges belong to the employer. III. The position advanced by the Attorney General is wrong. (Federal Sec. Adm’r v Quaker Oats Co., 318 US 218; United States v 306 Cases Containing Sandford Tomato Catsup with Preservative, 55 F Supp 725, affd sub nom. Libby, McNeill & Libby v United States, 148 F2d 71; United States v McGuire, 64 F2d 485.)

      Eliot Spitzer, Attorney General, New York City (Caitlin J. Halligan, Michelle Aronowitz, M. Patricia Smith, Jean Lin and Seth Kupferberg of counsel), and Jerome Tracy, Albany, for State of New York, amicus curiae.
    I. Plaintiffs were “employed” by Cipriani within the meaning of the Labor Law, even if they were also employees of the staffing agency. (People ex rel. Price v Sheffield Farms-Slawson-Decker Co., 225 NY 25; Miller v North Hudson Contr. Co., 166 App Div 348; Rutherford Food Corp. v McComb, 331 US 722; Antenor v D & S Farms, 88 F3d 925; Lorillard, Div. of Lowes’s Theaters, Inc. v Pons, 434 US 575; Ansoumana v Gristede’s Operating Corp., 255 F Supp 2d 184; Gustafson v Bell Atl. Corp., 171 F Supp 2d 311; Lopez v Silverman, 14 F Supp 2d 405; Nationwide Mut. Ins. Co. v Darden,
      503 US 318; Walling v Portland Term. Co., 330 US 148.) II. Labor Law § 196-d. covers more than “voluntary gratuities.” (Federal Sec. Adm’r v Quaker Oats Co., 318 US 218; United States v 306 Cases Containing Sandford Tomato Catsup with Preservative, 55 F Supp 725, affd sub nom. Libby, McNeill & Libby v United States, 148 F2d 71; United States v McGuire, 64 F2d 485; Davis v United States Govt., 742 F2d 171; Matter of La Cascade, Inc. v State Tax Commn., 91 AD2d 784.) III. Rights conferred by the Labor Law cannot be implicitly waived. (Matter of American Broadcasting Cos. v Roberts, 61 NY2d 244; Matter of Consolidated Rail Corp. v Hudacs, 223 AD2d 289, 90 NY2d 958; Matter of Scotto v Giuliani, 243 AD2d 388.)
   OPINION OF THE COURT

G.B. Smith, J.

The primary issue before this Court is whether plaintiffs, professional banquet waiters, are entitled to recover, pursuant to Labor Law § 196-d, certain payments, alleged to be gratuities, made as part of catering contracts. We conclude that because plaintiffs were independent contractors and not employees of the defendants, they are not entitled to recover the payments. Accordingly, we modify the order of the Appellate Division insofar as it concludes that plaintiffs are employees of the Cipriani defendants, and thus dismiss the cause of action under Labor Law § 191 and the associated claim under Labor Law § 198.

Plaintiffs allege that they are professional banquet waiters employed by the Cipriani defendants at various catering facilities in New York City and that the Alexander defendants (M.J. Alexander & Co., Inc. [MJA] and Michael J. Alexander, individually) were the disclosed agents of the Cipriani defendants. Plaintiffs allege that as employees, they were entitled to receive, pursuant to Labor Law § 196-d, a mandatory 22% service charge paid by Cipriani’s customers under various banquet contracts, in addition to the $20-28 flat hourly rate paid by the Alexander defendants.

Plaintiffs also allege a violation of Labor Law § 191 in that they were not paid within seven days after work was performed and a violation of Labor Law § 193 in that the defendants improperly withheld a portion of their pay for workers’ compensation premiums.

Cipriani Fifth Avenue, LLC owns and operates both a banquet facility and two restaurants at 30 Rockefeller Plaza in New York City known as the “Rainbow Room.” Cipriani 42nd Street, LLC owns and operates a banquet facility in New York City known as “Cipriani 42nd Street.” Cipriani 55 Wall Street, LLC owned and operated a banquet facility in New York City known as “Cipriani 55 Wall” but is no longer in business.

In contrast to plaintiffs who are temporary workers pursuant to catering contracts, the Rainbow Room employs a unionized permanent wait staff pursuant to a negotiated collective bargaining agreement. Union waiters are comprised of two groups, union banquet waiters and union restaurant waiters. All unionized waiters are permanent employees of the Rainbow Room and work exclusively for them. Under their collective bargaining agreement, the union banquet waiters receive a salary plus a portion of the catering food and beverage contract charge as a gratuity.

At the Rainbow Room, banquet service is provided by the union banquet waiters. If business needs require, the collective bargaining agreement expressly permits the Rainbow Room to supplement the banquet staff, first by using union restaurant waiters, and then by hiring outside temporary banquet waiters. The Rainbow Room paid MJA $20 per hour for each temporary waiter, plus a $15 fee for each waiter regardless of the number of hours worked. Cipriani 42nd Street paid $20-22 per hour for each waiter and $28 per hour for each captain plus a $15 fee for each waiter or captain regardless of the number of hours worked. The Cipriani defendants never took deductions, including payroll taxes, from the amounts invoiced by MJA.

Cipriani 42nd Street is not bound by the collective bargaining agreement and does not have a unionized wait staff. For banquets there, Cipriani 42nd Street hires outside temporary banquet waiters.

One of the places from which the Cipriani defendants obtain temporary waiters is MJA, a temporary personnel agency. When the defendants have a particular need, they contact MJA with the time and location of the need, as well as the number of waiters needed.

The Cipriani defendants moved for summary judgment. Supreme Court granted the motion on the ground that the plaintiffs were independent contractors. The court also dismissed the plaintiffs’ Labor Law §§ 196-d and 191 claims against Alexander, individually.

The Appellate Division modified Supreme Court’s order, on the law, by reinstating the plaintiffs’ Labor Law §§ 191 and 198 claims against the Cipriani defendants, holding that summary judgment should not have been granted “on the ground that plaintiffs were not employees of’ the Cipriani defendants. (298 AD2d 164, 165 [2002].) The Appellate Division affirmed the dismissal of the Labor Law § 196-d claims, holding that the contractual 22% service charge was not “in the nature of a voluntary gratuity presented by the customer in recognition of the waiter’s service, and therefore need not be distributed to the waiters pursuant to Labor Law § 196-d, notwithstanding that the customer might believe that the charge is meant to be so distributed.” (Id.) The Appellate Division granted the separate motions of the plaintiffs and defendants for leave to appeal to this Court and certified the question of whether the Appellate Division order was “properly made.”

On this appeal plaintiffs, supported by the New York State Attorney General, continue to argue that they were employees of the Cipriani defendants and therefore entitled to the relief sued for. We disagree.

Article 6 of the Labor Law governs employers’ payment of wages and benefits to employees. The parties agree that the critical inquiry in determining whether an employment relationship exists pertains to the degree of control exercised by the purported employer over the results produced or the means used to achieve the results (see Matter of Ted Is Back Corp. [Roberts], 64 NY2d 725, 726 [1984]; Matter of 12 Cornelia St. [Ross], 56 NY2d 895, 897 [1982]; see also Matter of Morton, 284 NY 167 [1940]). Factors relevant to assessing control include whether the worker (1) worked at his own convenience, (2) was free to engage in other employment, (3) received fringe benefits, (4) was on the employer’s payroll and (5) was on a fixed schedule (see Lazo v Mak’s Trading Co., 84 NY2d 896, 897 [1994] [applying standard in tort context]; see also Bhanti v Brookhaven Mem. Hosp. Med. Ctr., 260 AD2d 334, 335 [2d Dept 1999]).

As stated by Supreme Court, plaintiffs were not employees of the Cipriani defendants because they (1) worked at their own discretion, (2) worked for other caterers, including Cipriani’s competitors, without restriction, and (3) were under the exclusive direction and control of MJA, the temporary service agency that interviewed, hired and compensated the plaintiffs and from whom the plaintiffs received federal tax form 1099. The Cipriani defendants did not provide uniforms (tuxedos) or any other necessary apparatus (wine bottle openers, etc.) to the temporary waiters from MJA.

Based upon the undisputed facts before us, MJA conducts interviews and hires temporary professional waiters. MJA furnishes each person it hires with an MJA handbook which tells them how they are to conduct themselves. Additionally, MJA provides any needed training of the individuals it hires. MJA pays each waiter directly and furnishes 1099’s for tax purposes.

In most cases Alexander attends the banquets and supervises the temporary waiters personally. If he is not in attendance, one of the temporary waiter captains supervises the others.

If a problem does arise, the MJA handbook states that the temporary waiter should inform either Michael Alexander, if he is present, one of his appointed captains if he is not, or simply wait until after the event and report the problems to Alexander. The handbook instructs the temporary waiters not to contact the “client” directly.

After the banquets, MJA sends an invoice to the Cipriani defendants for services rendered. The Cipriani defendants would not pay any of the temporary waiters directly. Instead, they would send a check to MJA, payable to MJA, to settle the accounts.

The only involvement that the Cipriani defendants have with the waiters is to meet with them on the day of the banquet to discuss the particular customer menu and the timing of the various courses being served. In sum, it is clear the plaintiffs, temporary waiters, were not employed by the Cipriani defendants but were independent contractors.

We also reject plaintiffs’ attempt to cast themselves as special employees of the Ciprianis. Even if we were to conclude that the special employment doctrine is applicable in this context and that plaintiffs were the general employees of MJA, the fact remains that the Ciprianis did not exert sufficient control over plaintiffs’ performance of their work to render them the special employer of plaintiffs (see Thompson v Grumman Aerospace Corp., 78 NY2d 553, 557 [1991]).

Accordingly, the order of the Appellate Division should be modified, with costs to defendants, in accordance with this opinion and, as so modified, affirmed! The certified question should be answered in the negative.

Judges Ciparick, Rosenblatt, Graffeo and Read concur; Chief Judge Kaye taking no part.

Order modified, etc.

      . Subsequent to the filing of an individual action, Bynog filed a putative class action complaint against Cipriani and MJA asserting the identical Labor Law § 196-d claims. The Supreme Court dismissed the class action. The Appellate Division affirmed and granted leave to appeal to this Court. The principles above govern this action as well.

      . The claim against MJA was withdrawn prior to a decision by the Supreme Court on the motion for summary judgment.

      . Form 1099 reports to the Internal Revenue Service amounts paid as compensation to persons such as independent contractors when withholding tax is not applicable.

      . Although we hold that the MJA waiters were not Cipriani employees, we reserve judgment as to whether those waiters would be entitled to a share of Cipriani’s service charge under Labor Law § 196-d if they were employees.