text:
    [28 NE3d 15, 4 NYS3d 581]
    Front, Inc., Plaintiff, v Philip Khalil et al., Defendants. Philip Khalil, Third-Party Plaintiff-Appellant, v Jeffrey A. Kimmel et al., Third-Party Defendants-Respondents.
    Argued January 14, 2015;
    decided February 24, 2015

      POINTS OF COUNSEL

      The Marantz Law Firm, Rye (Neil G. Marantz of counsel), for third-party plaintiff-appellant.
    I. The First Department, without explanation, has erroneously departed from settled law. (Block v First Blood Assoc., 691 F Supp 685; Reeves v American Broadcasting Cos., Inc., 580 F Supp 84, 719 F2d 602; Park Knoll Assoc. v Schmidt, 59 NY2d 205; Kenny v Cleary, 47 AD2d 531; Uni-Service Risk Mgt. v New York State Assn. of School Bus. Officials, 62 AD2d 1093; Andrews v Gardiner, 224 NY 440; Rosen v Brandes, 105 Misc 2d 506; Sexter & Warmflash, P.C. v Margrabe, 38 AD3d 163; Vodopia v Ziff-Davis Publ. Co., 243 AD2d 368.) II. There is no rationale — and none articulated by the First Department — for departing from settled law and disregarding this Court’s expressed reluctance to expand application of the absolute privilege doctrine. (Toker v Pollak, 44 NY2d 211; Park Knoll Assoc. v Schmidt, 59 NY2d 205; Stukuls v State of New York, 42 NY2d 272; Garson v Hendlin, 141 AD2d 55; Gold v Intersoft Corp., 128 Misc 2d 198; Kenny v Cleary, 47 AD2d 531; Uni-Service Risk Mgt. v New York State Assn. of School Bus. Officials, 62 AD2d 1093.) III. The perils of the appellate order’s disregard of long-established policy and equitable safeguards are underscored by the facts at bar. (Lacher v Engel, 33 AD3d 10; Youmans v Smith, 153 NY 214; Martirano v Frost, 25 NY2d 505; Simon v Stim, 11 Misc 2d 653; Andrews v Gardiner, 224 NY 440; Park Knoll Assoc. v Schmidt, 59 NY2d 205; Mintz & Gold LLP v Zimmerman, 17 Misc 3d 972, 56 AD3d 358; The Savage Is Loose Co. v United Artists Theatre Circuit, Inc., 413 F Supp 555; Sexter & Warmflash, P.C. v Margrabe, 38 AD3d 163; Rinaldi v Viking Penguin, 52 NY2d 422.)

      Traub Lieberman Straus & Shrewsberry LLP, Hawthorne (Lisa L. Shrewsberry of counsel), for third-party defendants-respondents.
    I. Third-party plaintiff failed to state a claim for defamation. (Park Knoll Assoc. v Schmidt, 59 NY2d 205; Lacher v Engel, 33 AD3d 10; Sexter & Warmflash, P.C. v Margrabe, 38 AD3d 163; Martirano v Frost, 25 NY2d 505; Black v Green Harbour Homeowners’ Assn., Inc., 19 AD3d 962; Vodopia v Ziff-Davis Publ. Co., 243 AD2d 368; Lieberman v Hoffman, 239 AD2d 273; Officemax Inc. v Cinotti, 966 F Supp 2d 74; Kenny v Cleary, 47 AD2d 531; Orenstein v Figel, 677 F Supp 2d 706.) II. Third-party plaintiff failed to state a claim for tortious interference with business relations. (Carvel Corp. v Noonan, 3 NY3d 182; Posner v Lewis, 18 NY3d 566.)
   OPINION OF THE COURT

Abdus-Salaam, J.

This appeal requires this Court to answer the open question of whether statements made by attorneys prior to the commencement of litigation are privileged. We hold that such statements are protected by a qualified privilege. If the statements are pertinent to a good faith anticipated litigation, no cause of action for defamation can be based on those statements.

I

Defendant/third-party plaintiff Philip Khalil was employed as director of engineering for plaintiff Front, Inc. (Front), an American architectural and engineering design and consulting firm, from June 2003 through March 2011. During his employment, Khalil, a citizen of the United Kingdom, applied for and obtained resident alien status. Front sponsored Khalil’s application. In March 2011, Khalil orally resigned from his position at Front, informing the firm that he intended to take a position with defendant Eckersley O’Callaghan Structural Design (EOC), a United Kingdom firm and one of Front’s competitors. Khalil subsequently tendered a written letter of resignation to Front.

Shortly thereafter, an engineer employed by Front observed an external hard drive connected to Khalil’s work computer. Upon investigation, Front allegedly discovered that Khalil had downloaded to the device the firm’s entire network drive directory, which allegedly included all projects Front worked on, client contact information, and other proprietary information. Front confronted Khalil, who apparently admitted that he had intended to save Front’s files to his hard drive. Front immediately terminated Khalil’s employment. Upon further investigation, Front allegedly discovered that Khalil worked on approximately 40 side projects for Front’s competitors, including EOC, in violation of the terms of his employment contract. Front also asserted that Khalil, with assistance from defendant James O’Callaghan, diverted work away from Front to EOC— namely, a project for the Apple Store on Broadway in New York City.

Front retained Meister Seelig & Fein LLP (MSF), and, in April 2011, Jeffrey A. Kimmel, an MSF attorney, sent a letter to Khalil. The letter stated that Khalil attempted to steal Front’s confidential and proprietary information, that he conducted an illegal competing side business which unlawfully diverted business opportunities from Front, misappropriated trade secrets, and violated applicable ethical and professional codes of conduct as well as the duty of loyalty owed to Front. Additionally, the letter stated that Khalil may be subject to punishment under the Economic Espionage Act of 1996, stating in a footnote that he “violated the terms of [his] application and immigrant status” and “several codes of conduct and ethics of the various boards of licensure and professional associations to which [he is] a member.” The letter demanded, among other things, that Khalil cease and desist from using Front’s confidential and proprietary information, return the proprietary information he had taken, and refrain from contacting Front’s clients.

Thereafter, Kimmel sent a letter to O’Callaghan and EOC, enclosing and referencing the earlier letter to Khalil, and stating that Khalil conspired with EOC to breach his fiduciary duty to Front, that EOC was aware that Khalil was a full-time employee of Front, and that EOC was diverting business away from Front to itself. The letter made demands that were nearly identical to those made in the letter to Khalil. Kimmel copied O’Callaghan and Brian Eckersley, EOC partners, on the letter.

After Khalil and EOC failed to comply with Front’s demands, Front commenced an action against Khalil, O’Callaghan, and EOC. As to all defendants, Front sought damages for claims including civil conspiracy, misappropriation of trade secrets, and common-law unfair competition. As to Khalil, Front asserted causes of action for breach of contract, the implied covenant of good faith and fair dealing, and fiduciary duty.

Khalil commenced a third-party action against Kimmel and MSF, asserting a cause of action for libel per se based upon the statements made by Kimmel in his April 2011 letter to Khalil. Specifically, Khalil asserted that the allegations made in the letter were expressed as “statement[s] of fact, not based upon information and belief or otherwise qualified in any manner.” Additionally, Khalil alleged interference with a prospective business relationship, and tortious interference with business relations. Khalil, O’Callaghan, and EOC collectively moved to dismiss the complaint, pursuant to CPLR 3211 (a) (5) and (7) and CPLR 3016 (b), on the ground that it was time-barred, failed to state a cause of action, and lacked the requisite specificity. Kimmel and MSF moved to dismiss the third-party complaint for failure to state a cause of action.

As concerns this appeal, Supreme Court, New York County determined “that the letter to Khalil is absolutely privileged” and that it therefore did “not need to reach the question of malice,” citing First Department precedent as support. (Front, Inc. v Khalil, 2012 NY Slip Op 31404[U], *24 [2012].) The court reasoned that the letter to Khalil “clearly relate[d] to the litigation initiated by Front” and “the demands made in the letters to Khalil and to O’Callaghan and EOC . . . substantially reflect the causes of action and relief requested” in the main action. (2012 NY Slip Op 31404[U], *23.) The court added: “The fact that the litigation was not initiated until approximately six months after the letters were sent does not alter the court’s conclusion.” (2012 NY Slip Op 31404[U], *23-24.) Khalil appealed, and Front cross-appealed.

The Appellate Division upheld the dismissal of the third-party action against Kimmel and MSF, concluding that “an absolute privilege attaches to the statements made by [Front]’s counsel in the April 2011 letters, because they were issued in the context of ‘prospective litigation’ ” (Front, Inc. v Khalil, 103 AD3d 481, 483-484 [2013], citing Sexter & Warmflash, P.C. v Margrabe, 38 AD3d 163, 174 [1st Dept 2007]; Vodopia v Ziff-Davis Publ. Co., 243 AD2d 368, 368 [1st Dept 1997]). This Court granted Kahlil’s motion for leave to appeal.

II

Commencing with this Court’s 1897 decision in Youmans v Smith (153 NY 214 [1897]), we have held that absolute immunity from liability for defamation exists for oral or written statements made by attorneys in connection with a proceeding before a court “when such words and writings are material and pertinent to the questions involved” {id. at 219). There we stated that to allow such statements to be a basis for a defamation action “would be an impediment to justice, because it would hamper the search for truth and prevent making inquiries with that freedom and boldness which the welfare of society requires” (id. at 220). We also noted that where an attorney’s statements are “so needlessly defamatory as to warrant the inference of express malice” the privilege has been abused and “protection is withdrawn” (id.). Nearly a century later in Park Knoll Assoc. v Schmidt (59 NY2d 205 [1983]), this Court held that relevant statements made in judicial or quasi-judicial proceedings are afforded absolute protection so that those discharging a public function may speak freely to zealously represent their clients without fear of reprisal or financial hazard (see id. at 209). The privilege attaches to such statements irrespective of an attorney’s motive for making them (see Wiener v Weintraub, 22 NY2d 330, 331 [1968]).

Although it is well-settled that statements made in the course of litigation are entitled to absolute privilege, this Court has not directly addressed whether statements made by an attorney on behalf of his or her client in connection with prospective litigation are privileged. Three Appellate Division Departments, however, have addressed this issue directly and have come to differing conclusions. The First Department has held that an absolute privilege attaches to statements made by an attorney in connection with prospective litigation (Sexier & Warmflash, 38 AD3d at 174 [“a letter among parties and counsel on the subject of pending or prospective litigation . . . enjoys the protection of the absolute privilege”]; Vodopia, 243 AD2d at 368 [absolute privilege applied to “a letter written . . . during the course of negotiations to settle a copyright lawsuit threatened by plaintiffs client”]; Lieberman v Hoffman, 239 AD2d 273, 273 [1st Dept 1997]). Although the Second Department had held in Kenny v Cleary (47 AD2d 531, 532 [2d Dept 1975]) that absolute privilege did not apply to statements made prior to litigation, it has recently held in Sklover v Sack (102 AD3d 855, 856 [2d Dept 2013]) that statements made pertinent to a settlement of a prospective malpractice litigation were afforded an absolute privilege. In contrast to the First and Second Departments, the Third Department has held that a statement made prior to litigation should not be afforded absolute privilege (Uni-Service Risk Mgt. v New York State Assn. of School Bus. Officials, 62 AD2d 1093, 1094 [3d Dept 1978] [the “statement was made before the commencement of (the) (a)ction . . . and thus an absolute privilege did not attach”]).

Alternatively, a statement is “subject to a qualified privilege when it is fairly made by a person in the discharge of some public or private duty, legal or moral, or in the conduct of his [or her] own affairs, in a matter where his [or her] interest is concerned” (Rosenberg v MetLife, Inc., 8 NY3d 359, 365 [2007] [internal quotation marks omitted]). In general, if the privilege is “qualified, it can be lost by plaintiffs proof that defendant acted out of malice” (Park Knoll, 59 NY2d at 209).

m

The rationale supporting the application of privileged status to communication made by attorneys during the course of litigation is also relevant to pre-litigation communication. When litigation is anticipated, attorneys and parties should be free to communicate in order to reduce or avoid the need to actually commence litigation. Attorneys often send cease and desist letters to avoid litigation. Applying privilege to such preliminary communication encourages potential defendants to negotiate with potential plaintiffs in order to prevent costly and time-consuming judicial intervention. Communication during this pre-litigation phase should be encouraged and not chilled by the possibility of being the basis for a defamation suit.

Nonetheless, “[a]s a matter of policy, the courts confine absolute privilege to a very few situations” (Park Knoll, 59 NY2d at 210). We recognize that extending privileged status to communication made prior to anticipated litigation has the potential to be abused. Thus, applying an absolute privilege to statements made during a phase prior to litigation would be problematic and unnecessary to advance the goals of encouraging communication prior to the commencement of litigation. To ensure that such communications are afforded sufficient protection the privilege should be qualified. Rather than applying the general malice standard to this pre-litigation stage, the privilege should only be applied to statements pertinent to a good faith anticipated litigation. This requirement ensures that privilege does not protect attorneys who are seeking to bully, harass, or intimidate their client’s adversaries by threatening baseless litigation or by asserting wholly unmeritorious claims, unsupported in law and fact, in violation of counsel’s ethical obligations. Therefore, we hold that statements made prior to the commencement of an anticipated litigation are privileged, and that the privilege is lost where a defendant proves that the statements were not pertinent to a good faith anticipated litigation.

IV

The letters at issue here were written in the preliminary stages of an anticipated action. MSF and specifically Kimmel, acting on behalf of their client Front, sent a letter to Khalil informing him of Front’s investigation in an attempt to avoid litigation by requesting, among other things, that Khalil return the allegedly stolen proprietary information and cease and desist his use of that information. A copy of that letter was then forwarded to EOC. Thus, at the time the letters were sent, Kimmel and MSF had a good faith basis to anticipate litigation and the statements in the letters were pertinent to that anticipated litigation. Therefore, the letters at issue were properly found to be subject to a privilege; however, rather than the absolute privilege applied by the courts below, a qualified privilege applied because they were written prior to litigation. Nevertheless, because the letters are privileged the third-party action was properly dismissed.

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

Chief Judge Lippman and Judges Read, Pigott and Rivera concur; Judges Stein and Fahey taking no part.

Order affirmed, with costs.

      . The Appellate Division order is final as against Kimmel and MSP.

      . In holding that privilege applies to these pre-litigation statements, we note that attorneys should exercise caution when corresponding with unrepresented potential parties who may be particularly susceptible to harassment and unequipped to respond properly even to appropriate communications from an attorney.


source: Caselaw Access Project

author: Chief Judge Lippman. Read, J. Rivera, J.

license: Public Domain

text:
    [28 NE3d 515, 5 NYS3d 336]
    Eugene Margerum et al., Appellants-Respondents, v City of Buffalo et al., Respondents-Appellants.
    Argued January 6, 2015;
    decided February 17, 2015

      POINTS OF COUNSEL

      Chiacchia & Fleming, LLP, Hamburg (Andrew P Fleming and Christen Archer Pierrot of counsel), for appellants-respondents.
    I. Any uncertainties that exist as to damages suffered by victims of illegal discrimination are to be resolved as against the wrongdoer and the trial court’s determination to resolve any lingering uncertainties as against defendants is amply supported by evidence. (Spitz v Lesser, 302 NY 490; Flynn v Allstate Indem. Co., 22 Misc 3d 1138[A], 2009 NY Slip Op 50503[U]; Contemporary Mission, Inc. v Famous Music Corp., 557 F2d 918; Entis v Atlantic Wire & Cable Corp., 335 F2d 759; Hirschfeld v IC Sec., 132 AD2d 332; Dunkel v McDonald, 272 App Div 267; I. H. P Corp. v 210 Cent. Park S. Corp., 16 AD2d 461; Wakeman v Wheeler & Wilson Mfg. Co., 101 NY 205; Bagley v Smith, 10 NY 489; MacGregor v Watts, 254 App Div 904.) II. The trial court’s conclusions regarding plaintiffs’ economic damages are supported by a fair interpretation of the evidence and should not have been disturbed. (Matter of St. James Nursing Home v DeBuono, 12 AD3d 921; Silverman v Mergentime Corp./J.F. White, Inc., 252 AD2d 925; Osterhout v Mesivta Sanz of Hudson County, 226 AD2d 893; Thoreson v Penthouse Intl., 80 NY2d 490; Warm v State of New York, 308 AD2d 534; Mechwart v Mechwart, 292 AD2d 354; DiBruno v Abrams, 208 AD2d 672; A & S Trucking Serv. v New York State Thruway Auth., 268 AD2d 493; Greenberg v Behlen, 220 AD2d 720; Brant v Barreto, 24 Misc 3d 145[A], 2009 NY Slip Op 51859[U].)

      Hodgson Russ LLP, Buffalo {Jason E. Markel, Adam W. Perry, Stephen W. Kelkenberg and Joshua Feinstein of counsel), for respondents-appellants.
    I. The plaintiffs’ Human Rights Law claims should have been dismissed as a matter of law due to their failure to file notices of claim in accordance with General Municipal Law § 50-i. (Picciano v Nassau County Civ. Serv. Commn., 290 AD2d 164; Sebastian v New York City Health & Hosps. Corp., 221 AD2d 294; State Div. of Human Rights v Kilian Mfg. Corp., 35 NY2d 201; Matter of Gould v Board of Educ. of Sewanhaka Cent. High School Dist., 81 NY2d 446; Matter of Briggins v McGuire, 67 NY2d 965; Matter of Economico v Village of Pelham, 50 NY2d 120; Cleveland Bd. of Ed. v Louder-

      mill, 470 US 532; Matter of Prue v Hunt, 78 NY2d 364; 1455 Washington Ave. Assoc. v Rose & Kiernan, 260 AD2d 770; Henrickson v City of New York, 285 AD2d 529.) II. New York should adopt and apply Ricci v DeStefano (557 US 557 [2009]) “strong basis in evidence” standard in New York Human Rights Law cases. (Forrest v Jewish Guild for the Blind, 3 NY3d 295; Bennett v Health Mgt. Sys., Inc., 92 AD3d 29; Rainer N. Mittl, Ophthalmologist, P.C. v New York State Div. of Human Rights, 100 NY2d 326; Ferrante v American Lung Assn., 90 NY2d 623; Matter of Laverack & Haines v New York State Div. of Human Rights, 88 NY2d 734; Matter of Miller Brewing Co. v State Div. of Human Rights, 66 NY2d 937; Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21; Weissman v Dawn Joy Fashions, Inc., 214 F3d 224; People v New York City Tr. Auth., 59 NY2d 343; Mete v New York State Off. of Mental Retardation & Dev. Disabilities, 21 AD3d 288.) III. The City of Buffalo is entitled to protection under the safe harbor created by Ricci v DeStefano (557 US 557 [2009]). (United States v City of Buffalo, 457 F Supp 612; Albemarle Paper Co. v Moody, 422 US 405; Gulino v New York State Educ. Dept., 460 F3d 361; Bridgeport Guardians, Inc. v City of Bridgeport, 933 F2d 1140; Hayden v County of Nassau, 180 F3d 42; United States v Brennan, 650 F3d 65; M.O.C.H.A. Socy., Inc. v City of Buffalo, 689 F3d 263.) IV Plaintiffs failed to carry their burden of establishing their alleged economic damages with “reasonable certainty,” and thus the Appellate Division should have reduced the plaintiffs’ damages award to zero. (Haughey v Belmont Quadrangle Drilling Corp., 284 NY 136; Lodato v Greyhawk N. Am., LLC, 39 AD3d 494; Karwacki v Astoria Med. Anesthesia Assoc., P.C., 23 AD3d 438; Henderson v Holley, 112 AD2d 190; Charles Hyman, Inc. v Olsen Indus., 227 AD2d 270; City of New York v State of New York, 27 AD3d 1, 6 NY3d 711.) V The Appellate Division properly concluded that plaintiffs’ expert offered incompetent proof grounded in unsupportable and speculative assumptions that failed to establish damages to a reasonable degree of certainty. (Friedman v State of New York, 67 NY2d 271; Matter of Nathaniel T., 67 NY2d 838; Weiss v Karch, 62 NY2d 849; Matter of Marine Midland Props. Corp. v Srogi, 60 NY2d 885; Mittl v New York State Div. of Human Rights, 307 AD2d 881; Matter of Wantagh Union Free School Dist. v New York State Div. of Human Rights, 122 AD2d 846; Clanton v Agoglitta, 206 AD2d 497; Burdick v Bratt, 203 AD2d 950; Bailey v Jamaica Buses Co., 210 AD2d 192; Fiederlein v New York City Health & Hosps. Corp., 56 NY2d 573.) VI. The evidence at trial most closely comports with the factual findings of the Appellate Division. (Thomas v iStar Fin., Inc., 508 F Supp 2d 252; Hybert v Hearst Corp., 900 F2d 1050; Alexander v City of Milwaukee, 474 F3d 437; Biondo v City of Chicago, Ill., 382 F3d 680; Forrest v Jewish Guild for the Blind, 3 NY3d 295; Mittl v New York State Div. of Human Rights, 307 AD2d 881; Rios v Smith, 95 NY2d 647; Snyder v Wetzler, 84 NY2d 941; Clanton v Agoglitta, 206 AD2d 497; Bailey v Jamaica Buses Co., 210 AD2d 192.)

      Latino Justice PRLDEF, New York City {Jackson Chin, Juan Cartagena and Jose Perez of counsel), for National Association of Hispanic Firefighters, amicus curiae.
    I. Widespread discrimination in fire departments motivated Congress to amend title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.) shortly after its enactment to include state and local employers. (Ricci v DeStefano, 557 US 557; Dozier v Chupka, 395 F Supp 836; Boston Ch., NAACP, Inc. v Beecher, 371 F Supp 507; McNamara v City of Chicago, 959 F Supp 870; Association Against Discrimination in Empl., Inc. v City of Bridgeport, 479 F Supp 101; Hailey v City of Camden, 631 F Supp 2d 528; League of United Latin Am. Citizens v City of Santa Ana, 410 F Supp 873; Peightal v Metropolitan Dade County, 940 F2d 1394; Hammon v Barry, 813 F2d 412; Firefighters Inst. for Racial Equality v City of St. Louis, 549 F2d 506.) II. The lower court’s cramped reading of the strong basis in evidence standard contravenes Civil Rights Act of 1964 title VII’s purpose and intent. (Ricci v DeStefano, 557 US 557; M.O.C.H.A. Socy., Inc. v City of Buffalo, 689 F3d 263; United States v Brennan, 650 F3d 65; National Assn. for the Advancement of Colored People v North Hudson Regional Fire & Rescue, 665 F3d 464; Johnson v Transportation Agency, Santa Clara Cty., 480 US 616; Faragher v Boca Raton, 524 US 775; Firefighters v Cleveland, 478 US 501; Kirkland v New York State Dept. of Corr. Servs., 711 F2d 1117; Wygant v Jackson Bd. of Ed., 476 US 267.)

      Creighton Johnsen & Giroux, Buffalo {Jonathan G. Johnsen of counsel), for Buffalo Professional Firefighters Association, Local 282, IAFF, AFL-CIO, amicus curiae.
    The City of Buffalo engaged in intentional discrimination in discarding the results of the civil service exams based upon the race of the candidates who would have been promoted and the City did not have a strong basis in evidence to believe that it faced disparate impact liability because of such civil service exams. (Ricci v DeStefano, 557 US 557; Matter of Grossman v Rankin, 43 NY2d 493; AT&T Corp. v Hulteen, 556 US 701; Biondo v City of Chicago, Ill., 382 F3d 680; Matter of Buffalo Professional Firefighters Assn., Inc., IAFF Local 282 [City of Buffalo], 79 AD3d 1737.)

      National Association for the Advancement of Colored People, Baltimore, Maryland (Anson C. Asaka, Marshall W. Taylor and Kyhla D. Craine of counsel), for The National Association for the Advancement of Colored People, amicus curiae.
    I. The City of Buffalo’s history of past discrimination warrants their race-conscious action and ensures equal opportunity for all in the City’s hiring and promotional practices. (United States v City of Buffalo, 457 F Supp 612, 633 F2d 643; Ricci v DeStefano, 557 US 557.) II. Preventing employers from quickly and efficiently remedying discriminatory practices will frustrate Congress’ purpose for enacting title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.). (Griggs v Duke Power Co., 401 US 424; Ricci v DeStefano, 557 US 557.) III. Positive reinforcement of employer action to prevent discrimination in the civil sector promotes race-based equality, socioeconomic mobility and inspires future generations to strive and achieve success. (Godfrey v City of Chicago, 973 F Supp 2d 883.)

      Law Offices of Prathima Reddy LLC, Buffalo (Prathima Reddy of counsel), and Amanda Keller, International Municipal Lawyers Association, Bethesda, Maryland, for International Municipal Lawyers Association and others, amici curiae.
    I. Unless reversed by this Court, the decision below will create an unjustified disparity between state and federal law, subject New York public employers to increased litigation, hamper the delivery of vital public services, and discourage voluntary action to avoid discrimination. (Ricci v DeStefano, 557 US 557; Griggs v Duke Power Co., 401 US 424; United States v Brennan, 650 F3d 65; Rainer N. Mittl, Ophthalmologist, P.C. v New York State Div. of Human Rights, 100 NY2d 326; Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21; People v New York Tr. Auth., 59 NY2d 343; Lewis v Chicago, 560 US 205; Guardians Assn. of N.Y. City Police Dept., Inc. v Civil Serv. Commn. of City of N.Y., 633 F2d 232; Solo Cup Co. v Federal Ins. Co., 619 F2d 1178; United States v City of New York, 717 F3d 72.) II. Human Rights Law claims against cities should be subject to notice of claim requirements. (Picciano v Nassau County Civ. Serv. Commn., 290 AD2d 164; Matter of Town of Brookhaven v New York State Div. of Human Rights, 282 AD2d 685; Munro v Ossining Union Free School Dist., 55 AD3d 697; Mompoint v City of New York, 299 AD2d 527; Estate of Kalis v City of Buffalo, 100 NY2d 515; Melia v City of Buffalo, 306 AD2d 935, 100 NY2d 516; 423 S. Salina St. v City of Syracuse, 68 NY2d 474, 481 US 1008; Pierce v Village of Horseheads Police Dept., 107 AD3d 1354; Phelps Steel v City of Glens Falls, 89 AD2d 652; Matter of Briggins v McGuire, 67 NY2d 965.)

      Pacific Legal Foundation, Sacramento, California (Theodore Hadzi-Antich, Meriem L. Hubbard and Joshua P. Thompson of counsel), for Pacific Legal Foundation and others, amici curiae.
    Disparate impact liability raises serious equal protection concerns. (Adarand Constructors, Inc. v Pena, 515 US 200; Hirabayashi v United States, 320 US 81; Shaw v Reno, 509 US 630; Richmond v J. A. Croson Co., 488 US 469; Ricci v DeStefano, 557 US 557; Briscoe v City of New Haven, 654 F3d 200; Teamsters v United States, 431 US 324; Washington v Davis, 426 US 229; Watson v Fort Worth Bank & Trust, 487 US 977; Regents of Univ. of Cal. v Bakke, 438 US 265.)
   OPINION OF THE COURT

Chief Judge Lippman.

We hold that a notice of claim need not be filed for a Human Rights Law claim against a municipality and that plaintiffs should not have been granted summary judgment on the issue of liability involving discrimination as to civil service lists for Buffalo firefighters. We therefore remit for further proceedings.

In 1974, the United States sued the City of Buffalo in the Western District of New York. Among other things, the suit alleged that the written civil service examination developed by the New York State Department of Civil Service and used by the City to select entry-level firefighters and police officers had a discriminatory adverse impact against minorities. The District Court found that the City’s continued use of the State’s examination was part of a pattern or practice of discrimination against African-Americans, Hispanics and women in the fire and police departments (see United States v City of Buffalo, 457 F Supp 612 [WD NY 1978]). The District Court issued a “Remedial Decree” designed to remedy the effects of past discrimination, which imposed interim hiring ratios and affirmative recruitment efforts to increase the percentages of underrepresented classes. The decree was, for the most part, affirmed by the Second Circuit (633 F2d 643 [2d Cir 1980]).

In 1998, Members of Color Helping All (MOCHA), a not-for-profit organization of African-American firefighters, brought a putative class action against the City of Buffalo in the Western District of New York, alleging racially discriminatory practices by the Buffalo Fire Department in violation of title VII of the Civil Rights Act of 1964 (42 USC § 2000e et seq.) and the New York Human Rights Law (MOCHA I). Among other things, the plaintiffs claimed that the 1998 examination used to select firefighters for promotion had an illegal disparate impact against African-American firefighters. MOCHA filed a second putative class action in 2003. This second suit alleged that the 2002 administration of the exam had the same discriminatory disparate impact as the 1998 exam {MOCHA II). About two years after the MOCHA II commencement, the City’s then Human Resources Commissioner, Leonard Matarese, decided to allow the promotion eligibility lists to expire between September 2005 and February 2006, before the four-year maximum duration had elapsed.

Thereafter, while MOCHA I and MOCHA II were still pending, this action was commenced. The 12 white firefighter plaintiffs on this appeal alleged that the City engaged in reverse, disparate treatment racial discrimination by permitting the promotion eligibility lists to expire before their maximum legal duration, thereby violating the Human Rights Law, the Civil Service Law, and the New York State Constitution. Plaintiffs allege that had the lists been extended to their maximum duration of four years, in accordance with historical practice, they would have received promotions.

Prior to answering, the City moved to dismiss the complaint pursuant to CPLR 3211, raising, among other grounds, plaintiffs’ undisputed failure to file a General Municipal Law § 50-i notice of claim. The City argued that the statutory provision required the plaintiffs, as a precondition to commencing suit, to provide prior notice of their claims in order to permit timely investigation and opportunity for early resolution. Plaintiffs cross-moved for partial summary judgment on liability. Supreme Court denied the City’s motion to dismiss and granted plaintiffs’ motion for summary judgment on liability. The litigation was then stayed pending resolution of the MOCHA I litigation.

The federal District Court then issued an order dismissing the title VII claims to the extent the MOCHA plaintiffs sought relief based on the City’s 1998 administration of the exam (M.O.C.H.A. Socy., Inc. v City of Buffalo, 2009 WL 604898, 2009 US Dist LEXIS 20070 [WD NY Mar. 9, 2009, No. 98-CV-99C]). A year later, the District Court dismissed the MOCHA II litigation as well, finding that the MOCHA plaintiffs were collaterally estopped from challenging the 2002 administration of the exam because there was a “substantial identity of the dispositive issues and proof regarding the validity of the Lieutenant’s Exams litigated in M.O.C.HA. I and M.O.C.H.A. II” (M.O.C.H.A. Socy., Inc. v City of Buffalo, 2010 WL 1930654, *4, 2010 US Dist LEXIS 46628, *11 [WD NY May 12, 2010, No. 03-CV-580-JTC]).

In the present action, the Appellate Division, in June 2009, affirmed Supreme Court’s denial of the City’s motion to dismiss, holding that dismissal was not warranted based on plaintiffs’ failure to file a notice of claim under the General Municipal Law (63 AD3d 1574 [2009]). The Court further concluded that plaintiffs were not entitled to summary judgment because they had failed to establish as a matter of law that the City’s actions were not narrowly tailored to meet a compelling interest.

Three weeks later, the United States Supreme Court issued its decision in Ricci v DeStefano (557 US 557 [2009]). In ruling for the petitioners, the Court concluded that an employer could not act based on mere statistical disparity alone — “[w]ithout some other justification, . . . race-based decisionmaking violates Title VII’s command that employers cannot take adverse employment actions because of an individual’s race” (id. at 579). The Court held that “before an employer can engage in intentional discrimination for the asserted purpose of avoiding or remedying an unintentional disparate impact, the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action” (id. at 585).

At the direction of the Appellate Division, both sides renewed their arguments at the Supreme Court and cross-moved for summary judgment. Supreme Court granted plaintiffs’ motion for summary judgment on the issue of liability. The court concluded that the City had failed to meet the strong basis in evidence standard set forth in Ricci.

The Appellate Division affirmed stating:

“We agree with the court that the City defendants did not have a strong basis in evidence to believe that they would be subject to disparate-impact liability if they failed to take the race-conscious action, i.e., allowing the eligibility lists to expire, inasmuch as the examinations in question were job-related and consistent with business necessity” (Margerum v City of Buffalo, 83 AD3d 1575, 1576 [4th Dept 2011]).

With liability established, the trial court proceeded with a bench trial on damages culminating in a judgment awarding plaintiffs $2,510,170 in economic damages and $255,000 in emotional distress damages. The Appellate Division reduced the economic damages, yielding a final judgment of $1,621,607 (108 AD3d 1021 [2013]). This Court granted leave to appeal to both plaintiffs and the City.

Preliminarily, we reject the City’s argument for dismissal on the basis of plaintiffs’ failure to file a notice of claim prior to commencement of this action. General Municipal Law § 50-e (1) (a) requires service of a notice of claim within 90 days after the claim arises “[i]n any case founded upon tort where a notice of claim is required by law as a condition precedent to the commencement of an action or special proceeding against a public corporation.” General Municipal Law § 50-i (1) precludes commencement of an action against a city “for personal injury, wrongful death or damage to real or personal property alleged to have been sustained by reason of the negligence or wrongful act of such city,” unless a notice of claim has been served in compliance with section 50-e. The Appellate Division departments addressing the issue have determined that the General Municipal Law does not encompass a cause of action based on the Human Rights Law and “[s]ervice of a notice of claim is therefore not a condition precedent to commencement of an action based on the Human Rights Law in a jurisdiction where General Municipal Law §§ 50-e and 50-i provide the only notice of claim criteria” (Picciano v Nassau County Civ. Serv. Commn., 290 AD2d 164, 170 [2d Dept 2001]; see Sebastian v New York City Health & Hosps. Corp., 221 AD2d 294, 294 [1st Dept 1995]; Palmer v City of New York, 215 AD2d 336, 336 [1st Dept 1995]). Human rights claims are not tort actions under section 50-e and are not personal injury, wrongful death, or damage to personal property claims under section 50-i. Nor do we perceive any reason to encumber the filing of discrimination claims. Accordingly, we conclude that there is no notice of claim requirement here.

As to liability, we do not believe that this is an issue that should have been decided at the summary judgment stage. In Ricci v DeStefano, the United States Supreme Court held that before taking race-based action, “the employer must have a strong basis in evidence to believe it will be subject to disparate-impact liability if it fails to take the race-conscious, discriminatory action” (557 US at 585 [emphasis added]). As both parties agree, the Ricci standard governs. We have consistently held that the standards for recovery under the New York Human Rights Law are in nearly all instances identical to title VII and other federal law (see e.g. Forrest v Jewish Guild for the Blind, 3 NY3d 295, 305 n 3 [2004]; Rainer N. Mittl, Ophthalmologist, P.C. v New York State Div. of Human Rights, 100 NY2d 326, 330 [2003]).

In United States v Brennan (650 F3d 65 [2d Cir 2011]), the Second Circuit cautioned against allowing a defendant to rely on after-acquired evidence to buttress a race-based decision, noting that the Ricci Court “considered only what the city knew at the time it made its decision,” and explaining:

“The rationale underlying Ricci, moreover, confirms that the evidence is to be gauged at the time of the race- or sex-conscious employer action. The strong-basis-in-evidence standard is intended to ‘ strike [ ] a . . . balance’ between the Title VII provisions concerning disparate treatment and disparate impact, so that employers make the right decisions in the first place” {id. at 111).

In this case, the issue of liability turns on the factual circumstances behind the City’s actions, the strength of its justifications and its motivations. It is undisputed that the plaintiffs here made out a prima facie case of discrimination, as the City chose not to promote white candidates from the eligibility list. The burden then shifted to the City to prove that it had “a strong basis in evidence” to justify its race conscious action (see Christopher v Adam’s Mark Hotels, 137 F3d 1069, 1071 [8th Cir 1998] [“We proceed with caution when deciding whether summary judgment is appropriate in employment discrimination cases because intent is usually a central issue”]; and see St. Mary’s Honor Center v Hicks, 509 US 502, 507-508 [1993]; McDonnell Douglas Corp. v Green, 411 US 792, 802 [1973]; Forrest, 3 NY3d at 328 [“Whether or not these changes occurred as a result of the grievances filed by appellant would arguably be a question of fact for the jury. Further, whether or not appellant was terminated as a result of her grievances and for filing a complaint in September 1994 with the EEOC and New York City Human Rights Commission would also arguably be questions for the jury”]).

Given the nature of the matter, the City’s litigation posture in the MOCHA court cannot be taken at face value. There must be a credibility assessment of the City’s position as to the validity of the examinations, the prospects in the federal litigation, and the reasons for its decision to expire the promotion eligibility lists. We know that Matar ese decided to let the promotion eligibility lists expire in 2005 and 2006. What we do not know is why. There are differences between Matarese’s testimony from 2006 and his testimony from 2010. The October 25, 2006 testimony, given while the MOCHA litigation was pending, is vague, and mostly focuses on his desire to undo the racial imbalance in the fire department. Matarese’s affidavit, dated January 20, 2010, explicitly cites the advice of the City’s expert, Dr. Nancy Abrams — that there was a substantial risk that the MOCHA plaintiffs would prevail in federal court — as the City’s reason for allowing the lists to expire. In light of Brennan (650 F3d at 111), the facts thus far ascertained are insufficient to determine what the City’s intentions were at the time that the lists were expired.

Based on the record before us, we conclude that whether the City had “a strong basis in evidence to believe it [would] be subject to disparate-impact liability” at the time that it terminated the promotion eligibility lists while the MOCHA litigation was still pending raises issues of fact that cannot be determined on motions for summary judgment.

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

Read, J.

(concurring). The threshold question on this appeal is whether a timely notice of claim was a condition precedent to plaintiffs’ lawsuit alleging that the City of Buffalo violated the Human Rights Law. I agree with my colleagues that sections 50-e and 50-i of the General Municipal Law are more naturally read to exclude plaintiffs’ claims from the notice-of-claim requirements generally applicable to suits against governmental entities. I write separately simply to highlight an inconsistency in New York law, which the legislature might choose to address.

We have held that an employment discrimination claim brought against a county under the Human Rights Law is subject to County Law § 52 (l)’s notice-of-claim requirement (Mills v County of Monroe, 89 AD2d 776 [4th Dept 1982], affd 59 NY2d 307, 309 [1983], cert denied 464 US 1018 [1983], overruled in part on other grounds by Felder v Casey, 487 US 131 [1988]; see also Matter of Freudenthal v County of Nassau, 99 NY2d 285, 292-293 [2003]). Section 52 (1) is worded similarly, but not identically, to section 50-i.

In Mills, we observed that

“the State’s notice requirements are [not] antithetical to the policy underlying the civil rights laws . . .
“[N]otice of claim requirements in this State serve an important State interest. Requiring notice allows a governmental subdivision a meaningful opportunity to investigate in a timely manner the circumstances that gave rise to a claim” (59 NY2d at 310).

There are certainly reasons why the legislature might nonetheless choose to treat civil rights actions differently, as this opinion suggests; however, it is hard to believe that the legislature ever intended to create a situation where an action brought against the County of Erie alleging violations of the Human Rights Law would require a notice of claim as a condition precedent to suit, while the same type of action brought against the City of Buffalo would not.

Rivera, J.

(concurring in part and dissenting in part). I agree, albeit for different reasons, that plaintiffs are not entitled to summary judgment on the issue of liability under the New York State Human Rights Law. In my opinion, an employer’s rejection of employment criteria in order to avoid disparate impact does not constitute statutorily proscribed intentional discrimination. As a consequence, the plaintiffs’ disparate treatment claims are without merit and should be dismissed, and the case remitted for consideration of the plaintiffs’ remaining claims. Moreover, I disagree with the majority that the “strong basis in evidence” standard set forth in Ricci v DeStefano (557 US 557 [2009]) applies to the parties’ dispute. That standard undermines the legislative purpose and stated equal opportunity goals of our Human Rights Law and we should reject it outright. I write separately to explain what I consider to be the proper approach to plaintiffs’ Human Rights Law claims.

New York State is a pioneer in addressing discrimination at the workplace. In 1945, two decades before the effective date of title VII, New York enacted the Ives-Quinn Anti-Discrimination Law, prohibiting discrimination on the basis of race, creed, color or national origin (L 1945, ch 118). After its enactment as the first state statute to ban employment discrimination in the private sector, the law was renamed in 1968 to the New York State Human Rights Law (L 1968, ch 958; see also Susan D. Carle, How Myth-Busting About the Historical Goals of Civil Rights Activism Can Illuminate Future Paths, 7 Stan J Civ Rts & Civ Liberties 167, 173 [2011]). Over time the legislature expanded the law’s coverage to provide maximum protection to New Yorkers, by prohibiting discrimination on the basis of age, sexual orientation, military status, sex, disability, predisposing genetic characteristics, marital status, and domestic violence victim status (L 1975, ch 803; L 1996, ch 204; L 2002, ch 2; L 2003, ch 106; L 2005, ch 75; L 2009, ch 80; L 2010, ch 196).

The legislature intended for the Human Rights Law to protect “the public welfare, health and peace of the people” of the State of New York, “in fulfillment of the provisions of the constitution of this state concerning civil rights” (Executive Law § 290 [2]). As part of the legislative findings and statutory purpose, the Human Rights Law declares

“the state has the responsibility to act to assure[,] [inter alia,] that every individual within this state is afforded an equal opportunity to enjoy a full and productive life and that the failure to provide such equal opportunity . . . not only threatens the rights and proper privileges of its inhabitants but menaces the institutions and foundation of a free democratic state and threatens the peace, order, health, safety and general welfare of the state and its inhabitants” (Executive Law § 290 [3]; see also State Div. of Human Rights v Kilian Mfg. Corp., 35 NY2d 201, 207 [1974]).

From its original enactment, the legislature adopted the lexicon of “rights-based guarantees” and declared “[t]he opportunity to obtain employment without discrimination ... to be a civil right” (Executive Law § 291 [1]). Since 1945, the legislature has amended the civil rights provision of the Human Rights Law several times, and on each occasion extended the provision’s anti-discrimination protections (see L 1975, ch 803 [extending the prohibition against discrimination to include discrimination on the basis of age or marital status]; L 2002, ch 2 [extending the prohibition against discrimination to include discrimination on the basis of sexual orientation]; L 2003, ch 106 [extending the prohibition against discrimination to include discrimination on the basis of military status]; L 2010, ch 196 [extending the prohibition against discrimination to include discrimination on the basis of disability]).

Further amendments to the Human Rights Law have expanded rather than contracted its scope, another indicator of the legislative intent to ensure broad coverage of the protections generally afforded under the statute (see e.g. Executive Law § 296 [1] [a], as amended by L 1975, ch 803 [adding prohibition against employment discrimination on the basis of marital status]; Executive Law § 292 [21], as amended by L 1979, ch 594 [expanding scope of Human Rights Law protection by broadening range of disabilities within coverage]; Executive Law § 298-a, as added by L 1975, ch 662 [amending the Human Rights Law to reach acts of discrimination occurring outside the state]).

Undeniably, the statute is an expression of New York State’s commitment to equality within society, based on anti-discrimination principles. It reflects what this Court has recognized is the “State’s strong and important public policy against discrimination” (New York Inst. of Tech. v State Div. of Human Rights, 40 NY2d 316, 324-325 [1976]).

The Court has broadly interpreted the Human Rights Law consistent with the statutory mandate that “[t]he provisions of [the Human Rights Law] shall be construed liberally for the accomplishment of [its] purposes” (Executive Law § 300; see e.g. 300 Gramatan Ave. Assoc. v State Div. of Human Rights, 45 NY2d 176, 183 [1978] [liberal construction of Human Rights Law guided determination of whether substantial evidence supported decision of New York Division of Human Rights]; City of Schenectady v State Div. of Human Rights, 37 NY2d 421, 428 [1975] [relying on liberal construction of the Human Rights Law to reject argument that City and Police Department should not be liable where independent board they created discriminated on the basis of sex]; New York Inst. of Tech., 40 NY2d at 324-325 [liberal construction supported granting Division of Human Rights power to grant professor tenure]). Indeed, it is “the duty of courts to make sure that the Human Rights Law works and that the intent of the Legislature is not thwarted by a combination of strict construction of the statute and a battle with semantics” (City of Schenectady, 37 NY2d at 428). To that end, the Court has held that “an employment practice neutral on its face and in terms of intent which has a disparate impact upon a protected class of persons violates the Human Rights Law unless the employer can show justification for the practice in terms of employee performance” (People v New York City Tr. Auth., 59 NY2d 343, 348-349 [1983], citing Matter of Sontag v Bronstein, 33 NY2d 197, 201 [1973]; City of Schenectady, 37 NY2d at 429, citing New York State Div. of Human Rights v New York-Pa. Professional Baseball League, 36 AD2d 364, 367 [4th Dept 1971]).

As a precursor to the 1964 Civil Rights Act, the Human Rights Law is not modeled on title VII, and has certain significant distinctions that extend its coverage beyond that of title VII. For example, the Human Rights Law prohibits employment discrimination on additional grounds of sexual orientation, predisposing genetic characteristics, marital status, domestic violence victim status, and certain arrest or criminal accusation records (compare Executive Law § 296 [1] [a]; [16] with 42 USC § 2000e-2). In addition, the Human Rights Law applies to more employers than does title VII. The Human Rights Law covers employers with at least four employees, while title VII is limited to employers with at least 15 employees (compare Executive Law § 292 [5] with 42 USC § 2000e [b]). However, title VII affords greater financial relief than the Human Rights Law by providing for punitive damages and attorney’s fees (42 USC § 1981a [b] [1] [providing for punitive damages]; 42 USC § 2000e-5 [k] [providing for attorney’s fees]).

Nevertheless, the Human Rights Law and title VII are generally consistent, with similar language and goals. Indeed, the Court has recognized that “[t]he standards for recovery under [the Human Rights Law] are in accord with Federal standards under title VII” (Ferrante v American Lung Assn., 90 NY2d 623, 629 [1997]). The Court has concluded that “[b]ecause both the Human Rights Law and title VII address the same type of discrimination, afford victims similar forms of redress, are textually similar and ultimately employ the same standards of recovery, federal case law in this area also proves helpful” (Forrest v Jewish Guild for the Blind, 3 NY3d 295, 305 n 3 [2004], citing Matter of Aurecchione v New York State Div. of Human Rights, 98 NY2d 21, 26 [2002]).

Here, however, we are not presented with a federal standard recognized previously by our courts as “in accord” with the Human Rights Law (Ferrante, 90 NY2d at 629). Rather, the question in this appeal is what standard applies to the plaintiffs’ state law claims. Relying on the Court’s prior application of federal law, but without significant analysis of the propriety of doing so in this case, the majority agrees with the courts below that the “strong basis in evidence” standard applicable under title VII as announced in Ricci should also apply to the plaintiffs’ Human Rights Law claims (majority op at 730-731). However, before adopting this standard we must carefully scrutinize the text and intended purpose of the Human Rights Law to ensure that the federal approach under title VII is best suited to further our State’s law and policy.

In the past, the Court has “attempted to resolve federal and state employment discrimination claims consistently” (Aurecchione, 98 NY2d at 25, citing Ferrante, 90 NY2d at 629). In light of the federal and state statutory alignment and our Court’s past treatment of federal law, any departure from federal analysis requires close consideration. Our rejection of the federal approach should be limited to those rare cases where federal interpretations of title VII are at odds with, or undermine, the text or legislative goals of the Human Rights Law. For example, where the federal standard contracts rather than expands the application of the statute, or places the well-established legislative goal of equal opportunity in jeopardy, federal case law provides little guidance. Moreover, if the federal standard is a significant break from our prior approach we must consider if avoidance of the federal analysis is warranted as a matter of state law.

In my opinion, the instant appeal presents the rare case where we must reject the federal “strong basis in evidence” standard because it is in contravention of the legislative intent and goals of the Human Rights Law to ensure equal opportunity at the workplace. The federal approach essentially subordinates the interests of plaintiffs alleging disparate impact to those of plaintiffs claiming disparate treatment. According to the majority and dissent in Ricci, the standard conceives of a contest between individual claims of intentional discrimination, i.e. disparate treatment claims, and efforts to avoid liability for employment practices with disparate effects, i.e. disparate impact claims (see Ricci, 557 US at 580-582 [Kennedy, J.]). As the dissent in Ricci argues, this is an incorrect view of title VII and federal case law (Ricci, 557 US at 624 [Ginsburg, J., dissenting] [“Neither Congress’ enactments nor this Court’s Title VII precedents . . . offer even a hint of ‘conflict’ between an employer’s obligations under the statute’s disparate-treatment and disparate-impact provisions”]). I too find that there is no contest between these two branches of discrimination theory, and therefore would find that the standard has no place in our interpretation of the Human Rights Law.

Anti-discrimination law posits just the opposite of the standard as conceived in Ricci, because Ricci treats the choice to reject criteria that has discriminatory results as an exercise in wrongful discrimination, while anti-discrimination law focuses on a society free of the mechanisms and tools which would result in disparate outcomes. Anti-discrimination laws and statutes aimed at achieving equal opportunity in employment, like the Human Rights Law, are based on the foundational principle that a workplace conceived and established in accordance with practices that result in disparate effects is harmful and unlawful. Hence, claims that rely on the reenforcement of employment criteria that results in a disparate impact are devoid of a sound legal or public policy grounding.

Under the Human Rights Law, no individual has a stake in a work force selected and maintained through the use of criteria that result in proscribed disparities. A work force so constituted is antithetical to the statute’s concept of equal opportunity, and the right to employment purged of discrimination (Executive Law § 296). Moreover, a workplace structured to further inequality violates the Human Rights Law because it “threatens the rights and proper privileges of [New York State’s] inhabitants [and] menaces the institutions and foundation of a free democratic state and threatens the peace, order, health, safety and general welfare of the state and its inhabitants” (Executive Law § 290 [3]). Since an employer does not commit statutorily proscribed intentional discrimination when the employer seeks to reduce and eliminate the causes of inequality at the workplace, the Ricci standard cannot guide our resolution of the issues presented in this appeal.

Another reason why we should reject the federal approach is because it discourages an employer’s voluntary compliance out of fear the employer will be unable to establish “the strong basis in evidence” necessary to avoid liability for disparate treatment claims. By requiring more than prima facie evidence of disparate impact established by statistical disparities at the workplace, the standard imposes a heavy burden on employers, which ultimately leads to employer inaction. Obviously, the costs of litigation and the impact on municipal functions puts significant pressure on a municipal employer to avoid litigation. As amici argue in support of the City, “[p]rotracted employment litigation . . . has a highly disruptive effect on the provision of vital public services that goes well beyond the havoc [wreaked] on the public fisc” (brief for International Municipal Lawyers Association as amicus curiae at 20). Thus, the federal approach incentivizes employers to maintain the status quo, and retain employment criteria regardless of the disparate effects, in contravention of the Human Rights Law’s goals of ensuring “that every individual within this state is afforded an equal opportunity to enjoy a full and productive life” (Executive Law § 290 [3]), and discrimination-free employment (Executive Law § 291 [1]). Rather than encourage employers to adopt tests and employment practices which ensure equal access to jobs, the federal standard does just the opposite.

The appeal before us is an example of why the federal standard is ill-suited to ensure compliance with the Human Rights Law. As the majority points out, the City of Buffalo has historically discriminated in employment for jobs within the fire and police departments (majority op at 727-728). The consequences of its actions were so severe and obvious that the United States government sued to bring it in line with federal anti-discrimination laws. The remedial order enjoined the City

“from engaging in any . . . practice with respect to hiring, assignment, promotion, transfer, training or compensation which has the purpose or effect of discriminating against any employee . . . with . . . the Buffalo . . . Fire Department because of such individual’s race, sex or national origin, nor will they engage in any other acts or practices which deny to blacks, [Hispanics] or women equal employment opportunities” (final decree and order of Nov. 23, 1979 ¶ 1).

When the City applied tests which resulted in racial and ethnic disparities in promotional practices, it was sued by Members of Color Helping All (MOCHA). In the course of defending these practices and tests, the City was presented with opinions from its own expert and the plaintiffs’ expert that the method used to validate the examinations was flawed. The City’s expert concluded that “the scientific evidence supporting the validity of [the examination] was limited” and “it might not be in the City’s best interest to call [her] to testify.” She further concluded that there was a substantial risk that the MOCHA plaintiffs would prevail. Faced with a choice to continue using a promotion tool criticized as flawed, or abandoning a test whose methodology was contested even by the City’s own expert, the Commissioner chose to forgo any further use of the eligibility list created based on the invalid examination.

The Commissioner’s actions were in full compliance with the Human Rights Law and disparate impact theory as adopted by this Court (see Executive Law § 296; New York City Tr. Auth., 59 NY2d at 348-349; City of Schenectady, 37 NY2d at 429; Bronstein, 33 NY2d at 201). Yet, under the federal standard, the City would be liable for employment discrimination if it fails to establish “a strong basis in evidence that, had it not taken the action, it would have been liable” for disparate impact discrimination under title VII (Ricci, 557 US at 563). This is a real possibility given the majority concludes that, despite the existence of expert evidence of actionable disparate impact, the City may be unable to establish the Commissioner’s motives were nondiscriminatory in nature. Thus, even though the City did not incur liability in the MOCHA federal action, it is unclear whether it will prevail in this case.

As a last point, I note that the federal standard has the potential to create an untenable situation for employers sued by different parties, under different theories, seeking conflicting outcomes. An employer could find itself taking positions in litigation which appear contradictory, to its detriment. For example, here, the City defended the use of the eligibility examinations in the federal lawsuit, even after it had evidence from its own expert that the examination was flawed. Nevertheless, the City argued in the instant case, in reliance on that very same expert evidence, that the Commissioner allowed the eligibility lists to expire because he believed the tests were invalid. The plaintiffs in the state action understandably sought to exploit these facially divergent positions, and challenged the Commissioner’s credibility based on the content of his statements in the two lawsuits. Indeed, the majority accepts that the differences in the Commissioner’s testimony in 2006 from that provided in 2010 raises a question as to his motives.

Aside from whether as a legal matter the City’s positions in the two lawsuits can be justified and harmonized, it is difficult to see how adoption of a standard that creates such potential conflict is within the spirit of the Human Rights Law. It seems a disservice to the goal of equal opportunity to expend municipal and judicial resources in litigation that apparently lacks legal merit.

The Court has historically considered federal case law in deciding questions regarding the proper interpretation and application of the Human Rights Law. We should continue to do so in the future, except in the rarest of cases where the federal approach undermines the clearly stated and well-established purpose and goals of the Human Rights Law. I believe the federal standard adopted by the majority is not in accord with the anti-discrimination equality principles upon which the Human Rights Law is based, and, in contravention of the law, encourages employers to retain invalid, discriminatory employment criteria.

Judges Read, Pigott and Abdus-Salaam concur; Judge Read in a separate concurring opinion; Judge Rivera concurs in part and dissents in part in an opinion; Judges Stein and Fahey taking no part.

Order modified, without costs, by remitting to Supreme Court, Erie County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed.

       There were originally 13 plaintiffs in this case; the trial court dismissed the claims of one plaintiff, Anthony Hynes, on February 8, 2012, finding that the City’s actions had not harmed him. He did not appeal; thus, this appeal involves 12 plaintiffs.

      . Plaintiffs’ challenges under the State Constitution are not at issue in this appeal and I express no opinion on the merits of those claims.

      . Under the Human Rights Law, it is an unlawful discriminatory practice
      “[f]or an employer or licensing agency, because of an individual’s age, race, creed, color, national origin, sexual orientation, military . status, sex, disability, predisposing genetic characteristics, marital status, or domestic violence victim status, to refuse to hire or employ or to bar or to discharge from employment such individual or to discriminate against such individual in compensation or in terms, conditions or privileges of employment” (Executive Law § 296 [1] [a]).

      . The civil rights provision of the Human Rights Law also recognizes as a civil right “[t]he opportunity to obtain education, the use of places of public accommodation and the ownership, use and occupancy of housing accommodations and commercial space” (Executive Law § 291 [2]). It further declares that “[t]he opportunity to obtain medical treatment of an infant prematurely born alive in the course of an abortion shall be the same as the rights of an infant born spontaneously” (Executive Law § 291 [3]).

      . The federal district court concluded that the City established that the 1998 examination was “job-related . . . and consistent with business necessity” (M.O.C.H.A. Socy., Inc. v City of Buffalo, 2009 WL 604898, *18, 2009 US Dist LEXIS 20070, *55-56 [WD NY Mar. 9, 2009, No. 98-CV-99C], affd 689 F3d 263 [2d Cir 2012]).


author: Rivera, J.

text:
    [28 NE3d 527, 5 NYS3d 348]
    Graham Court Owners Corp., Appellant, v Kyle Taylor, Respondent.
    Argued January 14, 2015;
    decided February 19, 2015

      POINTS OF COUNSEL

      Kucker & Bruh, LLP, New York City (Nativ Winiarsky and Patrick K. Munson of counsel), for appellant.
    I. The lease in this matter does not provide for an award of attorneys’ fees to the petitioner and it was error for the Appellate Division to find that the reciprocal provisions of Real Property Law § 234 required the award of attorneys’ fees to the respondent. (Matter of Duell v Condon, 84 NY2d 773; Holy Props. v Cole Prods., 87 NY2d 130; Rios v Carrillo, 53 AD3d 111; Gordon v Eshaghoff, 60 AD3d 807; Whitehouse Estates v Post, 173 Misc 2d 558; 930 Fifth Corp. v King, 42 NY2d 886; Matter of Casamento v Juaregui, 88 AD3d 345; Gottlieb v Kenneth D. Laub & Co., 82 NY2d 457; Mighty Midgets v Centennial Ins. Co., 47 NY2d 12.) II. The lease does not provide that the respondent should pay additional rent to cover the petitioner’s legal fees. (Matter of Duell v Condon, 84 NY2d 773.) III. According to established precedent a statute which provides for attorneys’ fees in a manner contrary to the American rule should be strictly construed. (Hooper

      Assoc. v AGS Computers, 74 NY2d 487; Bunny Realty v Miller, 180 AD2d 460; Gottlieb v Kenneth D. Laub & Co., 82 NY2d 457; Oxford Towers Co., LLC v Wagner, 58 AD3d 422; Madison-68 Corp. v Malpass, 65 AD3d 445; Gannett Suburban Newspapers v El-Kam Realty Co., 306 AD2d 312; 303 E. 37th Sponsors Corp. v Goldstein, 29 Misc 3d 131 [A], 2010 NY Slip Op 51880[U]; Hamilton v Menalon Realty, LLC, 14 Misc 3d 13; Eastern Consol. Props. v Adelaide Realty Corp., 95 NY2d 785; People v Hobson, 39 NY2d 479.) IV Even if Real Property Law § 234 does apply the respondent would not be entitled to an award of attorneys’ fees due to his substantial breach of lease. (Nestor v McDowell, 81 NY2d 410; 433 Sutton Corp. v Broder, 107 AD3d 623, 22 NY3d 1161; Haberman v Hawkins, 170 AD2d 377; Rumiche Corp. v Eisenreich, 40 NY2d 174; Freehold Invs. v Richstone, 34 NY2d 612; Ram I v Stuart, 248 AD2d 255; 350 E. 62nd St. Assoc. v Vecilla, 182 Misc 2d 68; First Ave. Vil. Corp. v Harrison, 17 Misc 3d 20; Matter of Stepping Stones Assoc. v Seymour, 48 AD3d 581.)

      Bierman & Palitz LLP, New York City (Mark H. Bierman of counsel), for respondent.
    I. The order of the Appellate Division holding that tenant is entitled to an award of attorneys’ fees under the lease between the parties and the provisions of Real Property Law § 234 should be affirmed. (Matter of Duell v Condon, 84 NY2d 773; W.W.W. Assoc. v Giancontieri, 77 NY2d 157; Bailey v Fish & Neave, 8 NY3d 523; J.W. Mays, Inc. v Snyder Fulton St. LLC, 69 AD3d 572; People v Taylor, 9 NY3d 129; K2 Inv. Group, LLC v American Guar. & Liab. Ins. Co., 22 NY3d 578; Holy Props. v Cole Prods., 87 NY2d 130; 245 Realty Assoc. v Sussis, 243 AD2d 29; Underhill v Collins, 132 NY 269; Maplewood Mgt. v Best, 143 AD2d 978.) II. Landlord’s argument that plaintiff is not entitled to attorneys’ fees under Real Property Law § 234 because he purportedly breached his lease is improperly raised and otherwise baseless. (Matter of Darryl Clayton T. [Adele L.], 95 AD3d 562; Kermanshah Oriental Rugs, Inc. v Gollender, 47 AD3d 438; People v Watson, 245 AD2d 87; People v Torres, 108 AD3d 474; Burke v Crosson, 85 NY2d 10; Community Counseling & Mediation Servs. v Chera, 115 AD3d 589; Board of Mgrs. of 55 Walker St. Condominium v Walker St., 6 AD3d 279; Senfeld v I.S.T.A. Holding Co., 235 AD2d 345, 91 NY2d 956, 92 NY2d 818; Jacreg Realty Corp. v Barnes, 284 AD2d 280; Symphony Space v Pergola Props., 214 AD2d 66.) III. Tenant is entitled to an award of attorneys’ fees and costs as an element of compensation for damages under Real Property Law § 223-b and common law. (Mayfair York v Zimmerman, 183 Misc 2d 282; 601 W. 160 Realty Corp. v Henry, 183 Misc 2d 666, 189 Misc 2d 352; Kumble v Windsor Plaza Co., 161 AD2d 259; Matter of Green [Potter], 51 NY2d 627; Braithwaite v 409 Edgecombe Ave. HDFC, 294 AD2d 233; United Pickle Co. v Omanoff, 63 AD2d 892; Fugazy Travel Bur. v Ernst & Ernst, 31 AD2d 924; Broughton v State of New York, 37 NY2d 451; Avildsen v Prystay, 204 AD2d 154; Coopers & Lybrand v Levitt, 52 AD2d 493.)
   OPINION OF THE COURT

Rivera, J.

We hold that Real Property Law § 234, which imposes a covenant in favor of a tenant’s right to attorneys’ fees, applies to a lease that authorizes the landlord to cancel the lease upon tenant’s default, repossess the premises and then collect attorneys’ fees incurred in retaking possession. Such lease permits the landlord to recover fees that result from the tenant’s breach, and therefore serves as the basis for the tenant’s statutorily implied rights to attorneys’ fees. Here, we agree with the Appellate Division that Real Property Law § 234 applies to the parties’ lease and that the tenant is entitled to attorneys’ fees as the prevailing party in this summary holdover proceeding.

L

The parties’ current dispute arose from a holdover proceeding commenced by the landlord, appellant Graham Court, against tenant, respondent Kyle Taylor. The apparent basis for the holdover proceeding can be traced back to the tenant’s successful rent overcharge complaint filed with the New York State Division of Housing and Community Renewal (DHCR). There, the landlord denied the overcharge, contending that the apartment was properly deregulated under the law, based on various renovations allegedly conducted by the landlord. Tenant, in turn, asserted that it was he who had performed electrical upgrade work on the premises for which the landlord sought to take credit. DHCR eventually found that the landlord misrepresented the facts, and concluded that the apartment was subject to regulation, and the landlord had overcharged the tenant. By way of relief, DHCR ordered a rent reduction and repayment for the overcharges, and awarded the tenant treble damages in accordance with Administrative Code of the City of New York § 26-516. The Appellate Division subsequently affirmed Supreme Court’s dismissal of the landlord’s CPLR article 78 challenge to DHCR’s determination (Matter of Graham Ct. Owners Corp. v Division of Hous. & Community Renewal, 71 AD3d 515 [1st Dept 2010]).

Approximately four months after DHCR rendered its decision in favor of the tenant, and while the landlord’s article 78 was pending in Supreme Court, the landlord commenced the underlying summary holdover action against the tenant seeking to evict the tenant and regain possession of the premises, and demanding rent arrears and $3,000 in legal fees. In support of its claims, the landlord alleged that the tenant breached the lease by failing to obtain the required prior written consent to install a new electrical system in the kitchen — the same electric upgrade work disputed by the parties in the matter before DHCR. When the tenant failed to cure the breach or vacate the premises, the landlord commenced the holdover proceeding.

For his part, the tenant denied that he breached the lease, and asserted a defense of retaliatory eviction under Real Property Law § 223-b seeking all appropriate relief under that provision. Tenant also counterclaimed for attorneys’ fees and damages under sections 234 and 223-b. The landlord responded in a posttrial memorandum that Real Property Law § 234 did not apply because the statute only recognized a tenant’s implied right to attorneys’ fees if the lease provided for landlord’s fees incurred in an action for the tenant’s breach, and that the parties’ lease lacked such a provision.

Civil Court dismissed the proceeding, finding the tenant had not breached the lease because the landlord’s agents authorized the tenant’s electrical work. Moreover, the court concluded the landlord’s principal lied repeatedly during the course of the nonjury trial, and the proceeding was commenced in retaliation for the tenant’s successful DHCR rent overcharge claim. Thus, the court awarded the tenant attorneys’ fees as part of the damages for the retaliatory eviction under Real Property Law § 223-b (5), but denied fees under section 234. Both parties thereafter appealed. Appellate Term modified, denying the tenant attorneys’ fees under Real Property Law § 223-b, and otherwise affirmed (Graham Ct. Owners Corp. v Taylor, 34 Misc 3d 153[A], 2012 NY Slip Op 50324[U] [2012]).

In a split decision, the Appellate Division modified, on the law, by granting the tenant’s claim for attorneys’ fees pursuant to Real Property Law § 234 and remanding for a hearing on the fee amount, and otherwise affirmed (Graham Ct. Owner’s Corp. v Taylor, 115 AD3d 50 [1st Dept 2014]). The Court concluded that the lease provides that in any action or summary proceeding the landlord may recover attorneys’ fees incurred as a result of the tenant’s failure to perform a covenant or agreement contained in such lease, and therefore fits within the statute’s coverage. The dissent argued that section 234 should be strictly construed, and as such could not be extended to apply to the lease which merely allows for an offset of rents collected when the landlord relets the premises.

The Appellate Division subsequently granted the landlord’s motion for leave to appeal, certifying a question whether its order was properly made. We now hold that Real Property Law § 234 applies to the lease and answer the question in the affirmative.

IL

Under Real Property Law § 234,

“Whenever a lease of residential property shall provide that in any action or summary proceeding the landlord may recover attorneys’ fees and/or expenses incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease, or that amounts paid by the landlord therefor shall be paid by the tenant as additional rent, there shall be implied in such lease a covenant by the landlord to pay to the tenant the reasonable attorneys’ fees and/or expenses incurred by the tenant as the result of the failure of the landlord to perform any covenant or agreement on its part to be performed under the lease or in the successful defense of any action or summary proceeding commenced by the landlord against the tenant arising out of the lease.”

In order for the tenant to be eligible for attorneys’ fees under this section, the parties’ lease must permit the landlord, in any action or summary proceeding, to recover attorneys’ fees as a result of the tenant’s breach. Where a lease so provides, the court must interpret the lease to similarly permit the tenant to seek fees incurred as a result of the landlord’s breach or the tenant’s successful defense of a proceeding by the landlord. Here, we hold that paragraph 15 provides the basis for the tenant’s claim for reciprocal rights to attorneys’ fees within the meaning of Real Property Law § 234.

Paragraph 15 of the lease, titled “Tenant’s default,” sets forth the landlord’s remedies and the tenant’s liabilities upon the tenant’s failure to comply with a term or rule in the lease. According to this paragraph, where a properly notified tenant fails to cure a default the landlord may cancel the lease and retake possession of the premises, if necessary, by way of an eviction proceeding or other lawsuit. Upon cancellation of the lease and the landlord’s repossession of the premises the tenant is liable for rent for the unexpired term. The landlord’s rights to attorneys’ fees are set forth in clause (D) (3) of this paragraph, which states, in part,

“D. If this Lease is canceled, or Landlord takes back the Apartment, the following takes place: ....
“(3) Any rent received by Landlord for the re-renting shall be used first to pay Landlord’s expenses and second to pay any amounts Tenant owes under this Lease. Landlord’s expenses include the costs of getting possession and re-renting the Apartment, including, but not only reasonable legal fees, brokers fees, cleaning and repairing costs, decorating costs and advertising costs.”

Thus, clause (D) (3) anticipates that after a tenant’s default leads to the reletting of the premises, the landlord is entitled to collect attorneys’ fees incurred in gaining possession. Under these circumstances, clause (D) (3) complies with the requirements of Real Property Law § 234 that the lease provide “in any action or summary proceeding” for the landlord’s recovery of attorneys’ fees “incurred as the result of the failure of the tenant to perform any covenant or agreement contained in such lease.”

The landlord argues that the lease is outside the coverage of Real Property Law § 234 because under clause (D) (3) the landlord may collect attorneys’ fees from rents received by re-renting the premises to another tenant, and not from the original defaulting tenant as fees incurred in an action for the tenant’s violations of the lease. In essence the landlord seeks to distinguish the attorneys’ fees provision on two grounds: the fees permitted under the lease constitute costs for reletting of the premises and not for litigating the tenant’s breach; and the amount recouped as fees is applied as an offset of the amount owed by the tenant, and thus serves to beneficially mitigate the tenant’s debt. We find unpersuasive these arguments which seek to avoid the application of Real Property Law § 234 by ignoring the terms of paragraph 15, and the practical implications of clause (D) (3).

Here, the lease provides for the landlord’s right to cancel the lease, retake possession and relet the premises only upon the tenant’s failure to cure a default. Thus, the landlord’s attorneys’ fees under paragraph 15 (D) (3) for “getting possession and re-renting” are incurred as a result of the tenant’s breach. The issue is not whether the attorneys’ fees are available in the landlord’s underlying proceeding against the tenant for the breach of the lease. There is no such limitation found in the text of Real Property Law § 234 (see Matter of Duell v Condon, 84 NY2d 773, 783 [1995] [“Real Property Law § 234 contains no limitation, stating that its terms apply ‘(w)henever a lease of residential property’ includes an attorneys’ fees and expenses clause in favor of the landlord”]). Rather, the issue is whether the lease provides that “in any action or summary proceeding” the landlord may recover attorneys’ fees incurred as the result of the tenant’s breach of a leasehold covenant or agreement. That is what the lease here provides by permitting recovery of attorneys’ fees for getting possession and reletting only when the tenant breaches the lease.

The landlord’s other contention that the statute should be treated as a form of mitigation that reduces the amount owed by the tenant to the landlord disregards the import of clause (D) (3). That clause states that “[a]ny rent received by Landlord for the re-renting shall be used first to pay Landlord’s expenses and second to pay any amounts Tenant owes under this Lease.” By its language, clause (D) (3) must be read to assume that, but for this sequenced payment of attorneys’ fees, the tenant would be entitled to demand credit for the full rent collected by the landlord for reletting the premises, and to have that credit applied against any amount the tenant owed under the lease. Thus, because the amounts received are initially used to pay the landlord’s attorneys’ fees, less money remains for reducing the tenant’s outstanding debt. The landlord argues otherwise, but the tenant is effectively paying the landlord’s attorneys’ fees by way of this “relet and collect” lease provision.

We are mindful that Real Property Law § 234 is a remedial statute intended to “equalize the power of landlords and tenants” (Duell, 84 NY2d at 783). As this Court stated in Duell v Condon,

“[t]he overriding purpose of Real Property Law § 234 was to level the playing field between landlords and residential tenants, creating a mutual obligation that provides an incentive to resolve disputes quickly and without undue expense. The statute thus grants to the tenant the same benefit the lease imposes in favor of the landlord” (id. at 780).

The Court also identified an additional purpose of section 234 “to discourage landlords from engaging in frivolous litigation” intended to “harass tenants, particularly tenants without the resources to resist legal action, into terminating legal occupancy” (id.). With this understanding, the Court broadly interpreted Real Property Law § 234, giving expansive meaning to the definition of tenants and the types of landlord actions covered under the statute, and applying the statute retroactively to preexisting leases to extend the reach of the statute.

Of particular relevance to the parties’ dispute in this appeal, the Court in Duell rejected a challenge analogous in kind to that asserted by the landlord herein. In Duell, the landlord argued that the underlying eviction proceeding fell outside the scope of Real Property Law § 234 because the proceeding was based on the tenant’s failure to occupy the premises as a primary residence, a requirement mandated by law, not by the terms of the lease. The Court found that violation of the statutory residency requirement terminated the tenancy, and obligated the tenant, pursuant to a covenant in the lease, to quit and surrender the premises (Duell, 84 NY2d at 782). Since the tenant’s failure to quit resulted in the landlord’s proceeding to evict, the Court concluded that the eviction proceeding constituted litigation arising out of the lease, within the meaning of Real Property Law § 234 (id. at 782-783). Similarly, here, the provisions of paragraph 15 permit the landlord to cancel and relet based on the tenant’s default, and provide the nexus between the specific authorization for the landlord’s recovery of attorneys’ fees by re-renting and the tenant’s breach.

Our interpretation of paragraph 15, and clause (D) (3) in particular, furthers the legislative purposes that favor the tenant’s right to attorneys’ fees. In contrast, acceptance of the landlord’s interpretation of Real Property Law § 234 and clause (D) (3) requires that we approve language in this lease whereby the landlord is allowed to recover attorneys’ fees that result from the tenant’s breach, while at the same time denying the tenant a similar right of recovery, merely because the landlord will recoup the fees by reletting the premises. This construction of the statute and the lease agreement would once again favor the landlord, in contravention of the legislative intent to place the parties on an equal footing (see Duell, 84 NY2d at 783).

Moreover, this interpretation permits a landlord to escape the statute’s coverage by recharacterizing the landlord’s attorneys’ fees as costs incurred by reletting, contracting the statute’s coverage by limiting its scope. It also encourages creative ways to structure recovery of fees so as to appear attenuated from the tenant’s breach. As the Appellate Division recognized, this would “reward ‘artful draftsmanship’ and undermine the salutary purpose of section 234” (Graham Ct. Owner’s Corp., 115 AD3d at 59, quoting Matter of Casamento v Juaregui, 88 AD3d 345, 357 [2d Dept 2011], quoting Bunny Realty v Miller, 180 AD2d 460, 463 [1st Dept 1992]).

The landlord argues, like the Appellate Division dissent, that we must interpret Real Property Law § 234 narrowly because it is in derogation of the common-law rule that disfavors attorneys’ fees for prevailing parties. In support, the landlord relies on this Court’s decision in Gottlieb v Kenneth D. Laub & Co. (82 NY2d 457, 464 [1993]). We disagree that Gottlieb requires an outcome in favor of the landlord.

The Court in Gottlieb held that Labor Law § 198 did not authorize recovery of attorneys’ fees for a common-law contractual claim. In reaching this conclusion, the Court held that the statute’s terms and cumulative legislative history evinced an intent to limit its application to “actions for wage claims founded on the substantive provisions of Labor Law article 6” (id,.). Then, only two years after Gottlieb, this Court interpreted Real Property Law § 234 broadly in Duell, citing the statutory language, purpose and history, for example, in support of extending the statute’s coverage to include as “tenants” nonsignatories to the lease (84 NY2d at 779-782). Notably the Court made no mention of Gottlieb, presumably because, unlike Labor Law § 198, the statutory language and the legislative history of Real Property Law § 234 demonstrate an intent to abrogate the common law. Thus, Gottlieb does not constrain us from recognizing the tenant’s implied right to attorneys’ fees based on the language in the lease.

The landlord fares no better by pointing to a statutory construction rule that limits judicial expansion of a remedial statute to the “fairly expressed provisions of the act” (McKinney’s Cons Laws of NY, Book 1, Statutes § 321, Comment at 492 [1971 ed]). As the Court held in Duell, section 234 requires the landlord and tenant be placed on equal footing, a task made easier in this case by the simple fact that paragraph 15 (D) (3) explicitly provides for attorneys’ fees. Moreover, this rule of construction is inapplicable here where the parties themselves have adopted a provision allowing for attorneys’ fees. Having agreed to this provision, the landlord cannot now complain that Real Property Law § 234 imposes an unwelcome displacement of the common-law rule.

Turning to the landlord’s alternative argument that the tenant is not a prevailing party, we conclude that the courts below properly determined that the tenant did not substantially breach the lease because the landlord’s agent authorized the tenant’s conduct (see Nestor v McDowell, 81 NY2d 410, 415-416 [1993] [only a prevailing party, who has achieved “the central relief sought,” is entitled to attorneys’ fees]; cf. Ram I v Stuart, 248 AD2d 255, 256 [1st Dept 1998] [attorneys’ fees denied where outcome of litigation was not substantially favorable to either side]). Since the tenant succeeded in his defense against the landlord’s holdover proceeding, he is entitled to fees under Real Property Law § 234.

Accordingly, the order should be affirmed, with costs, and the certified question answered in the affirmative.

Chief Judge Lippman and Judges Read, Pigott and AbdusSalaam concur; Judges Stein and Fahey taking no part.

Order affirmed, with costs, and certified question answered in the affirmative.

       The Appellate Division did not address whether, in the alternative, the tenant is entitled to attorneys’ fees under Real Property Law § 223-b.


text:
    The People of the State of New York, Respondent, v Diane Wells, Appellant.
    Submitted September 3, 2014;
    decided September 3, 2014
   Motion for assignment of counsel granted and Seymour James, Jr., Esq., The Legal Aid Society, 199 Water Street, New York, NY 10038 assigned as counsel to the appellant on the appeal herein.


text:
    [17 NE3d 1134, 993 NYS2d 538]
    In the Matter of Joseph D. Candino, Jr., Appellant, v Starpoint Central School District et al., Respondents.
    Decided September 4, 2014

      APPEARANCES OF COUNSEL

      Lipsitz Green Scime Cambria LLP, Buffalo {John A. Collins of counsel), for appellant.

      Baxter Smith & Shapiro, PC., Buffalo {Louis B. Dingeldey, Jr., of counsel), for Starpoint Central School District and others, respondents.

      Sugarman Law Firm LLP, Syracuse (Jenna W. Klucsik of counsel), for Iroquois Central School District and others, respondents.

      Webster Szanyi LLP, Buffalo (<Jeremy A. Colby of counsel), for West Seneca Central School District and others, respondents.
   OPINION OF THE COURT

On review of submissions pursuant to section 500.11 of the Rules of the Court of Appeals (22 NYCRR 500.11), order affirmed, with costs. The Appellate Division did not abuse its discretion in denying claimant’s application to file and serve a late notice of claim (see General Municipal Law § 50-e [5]; Williams v Nassau County Med. Ctr., 6 NY3d 531 [2006]).

Concur: Chief Judge Lippman and Judges Graffeo, Read, Smith, Pigott, Rivera and Abdus-Salaam.


text:
    Christopher Basile, Appellant, v Sherry Wiggs, Respondent.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of Eleanor Braun, Respondent, v Lacey DeCicco, Appellant, et al., Respondent. In the Matter of Robin Hellinger, Respondent, v Lacey DeCicco, Appellant, et al., Respondent.
    Submitted June 9, 2014;
    decided September 4, 2014
   Motion, insofar as it seeks leave to appeal from those portions of the Appellate Division orders dismissing appellant’s appeals insofar as taken from Family Court’s orders concerning the best interests of the children, dismissed upon the ground that appellant is not a party aggrieved {see CPLR 5511); motion for leave to appeal otherwise denied.


text:
    Cellino & Barnes, P.C., Respondent, v Martin, Lister & Alvarez, PLLC, Appellant.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of Darrell Clinton, Appellant, v Brian Fischer, Commissioner, New York State Department of Corrections and Community Supervision, Respondent.
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for reargument of motion for leave to appeal denied [see 22 NY3d 1192 (2014)].


text:
    In the Matter of the Claim of Chester J. Cohen, Respondent. Just Energy Marketing Corporation, Appellant; Commissioner of Labor, Respondent. (And Seven Other Related Proceedings.)
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the proceeding within the meaning of the Constitution.


text:
    In the Matter of Laura DeGregorio, Doing Business as DGL & Grace, Appellant, v New York State Department of Labor Unemployment Insurance Division, Respondent.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for leave to appeal etc. denied.


text:
    Alice Laraine Dimery, Appellant, v Ulster Savings Bank, Respondent.
    Submitted June 30, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that the order appealed from does not finally determine the action within the meaning of the Constitution. Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of ELG Utica Alloys, Inc., as Successor by Merger to Universal Waste, Inc., Appellant, v Department of Environmental Conservation et al., Respondents.
    Submitted July 21, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for an order sealing appellant’s corporate disclosure statement etc. denied.


text:
    Hillcrest Homes, LLC, Appellant, v Albion Mobile Homes, Inc., Doing Business as Heritage Estates, et al., Respondents.
    Submitted June 2, 2014;
    decided September 4, 2014
   Appeal dismissed, without costs, by the Court of Appeals, sua sponte, upon the ground that the order appealed from does not finally determine the action within the meaning of the Constitution.


text:
    Barbara Kulig Hochmuller, Appellant, v Bellwest Management Corporation et al., Respondents.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for reargument of motion for leave to appeal denied [see 23 NY3d 939 (2014)].


text:
    Marita E. Hyman, Appellant, v Arthur Schwartz et al., Respondents, et al., Defendants.
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of Victor Jordan, Appellant, v Katherine A. Levine, a Judge of the New York City Civil Court, Kings County, et al., Respondents.
    Decided September 4, 2014
   Appeal dismissed, without costs, by the Court of Appeals, sua sponte, upon the ground that no substantial constitutional question is directly involved.


text:
    In the Matter of Gloria P. Margary, Respondent, v Gilbert M. Martinez, Appellant.
    Submitted July 28, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for a stay and for poor person relief dismissed as academic.


text:
    In the Matter of Reginald McFadden, Appellant, v Albert Prack, as Director of Special Housing and Inmate Disciplinary Programs, Respondent.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the proceeding within the meaning of the Constitution and is not an order of the type provided for in CPLR 5602 (a) (2). Motion for poor person relief dismissed as academic.


text:
    Seth Mitchell, Appellant, v Cantor Fitzgerald, L.P., et al., Respondents.
    Submitted July 14, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for leave to appeal denied. Motion for ancillary relief denied.


text:
    Seth Mitchell, CFA, Appellant, v New York University et al., Respondents.
    Submitted July 14, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that the order appealed from does not finally determine the action within the meaning of the Constitution. Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution. Motion for ancillary relief denied.


text:
    167 LLC, Respondent, v Nicholae Calinescu, Appellant.
    Submitted June 16, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the Court of Appeals does not have jurisdiction to entertain the motion for leave to appeal from the order of the Appellate Division entered in this proceeding commenced in Civil Court (see NY Const, art VI, § 3 [b] [7]; CPLR 5602 [a]).


text:
    The People of the State of New York, Respondent, v Raphael Golb, Appellant.
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for reargument denied [see 23 NY3d 455 (2014)].


text:
    The People of the State of New York, Respondent, v Pamela Hanson, Appellant.
    Submitted August 11, 2014;
    decided September 4, 2014
   Motion for leave to file a supplemental brief granted and the proposed brief is accepted as filed. Three copies of the brief must be served and an original and nine copies filed within seven days. Any responsive brief must be served and filed by September 29, 2014.


text:
    The Preserve Homeowners’ Association, Inc., Acting by and through its Board of Directors, Respondent, v Sonny Z. Zhan et al., Appellants.
    Decided September 4, 2014
   Appeal dismissed, without costs, by the Court of Appeals, sua sponte, upon the ground that the order appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of Akhtar Ali Sheikh, Appellant, v New York City Taxi and Limousine Commission, Respondent.
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for reargument of motion for leave to appeal denied [see 23 NY3d 902 (2014)].


text:
    In the Matter of Victor Sowell, Appellant, v Brian Fischer, as Commissioner of Corrections and Community Supervision, Respondent.
    Submitted June 2, 2014;
    decided September 4, 2014
   On the Court’s own motion, appeal dismissed, without costs, upon the ground that no substantial constitutional question is directly involved. Motion for leave to appeal denied. Motion for poor person relief dismissed as academic.


text:
    In the Matter of State of New York, Respondent, v John S., Appellant.
    Submitted June 23, 2014;
    decided September 4, 2014
   Motion for reargument denied [see 23 NY3d 326 (2014)].


text:
    Mario Velardo et al., Appellants, v Ludwig Tomescu et al., Respondents.
    Submitted June 9, 2014;
    decided September 4, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    Debra Weissman, Appellant, v Ronald Weissman, M.D., et al., Respondents.
    Submitted June 9, 2014;
    decided September 4, 2014
   Motion to strike respondents’ affidavit in opposition to the motion for leave to appeal denied.


text:
    Susan Angel, Appellant, v Christopher O’Neill, Respondent.
    Submitted June 23, 2014;
    decided September 11, 2014
   Motion, insofar as it seeks leave to appeal from so much of the Appellate Division order as affirmed the order of Supreme Court denying appellant’s motion for certain postjudgment relief in the matrimonial action, dismissed upon the ground that such portion of the order does not finally determine the action within the meaning of the Constitution; motion for leave to appeal otherwise denied.


text:
    Susan Aranoff, Respondent, v Gerald Aranoff, Appellant.
    Submitted July 14, 2014;
    decided September 11, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution. Motion for poor person relief dismissed as academic.


text:
    Kelly Coffey, Respondent, v CRP/Extell Parcel I, L.P., et al., Appellants, et al., Defendant.
    Submitted July 7, 2014;
    decided September 11, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.


text:
    In the Matter of Judith N. Doman, Deceased. Cynthia Schneider, as Successor Executor of Judith N. Doman, Deceased, Respondent; Alexander Doman, Appellant; Alice Green, as Executor of Paul Green, Deceased, Respondent.
    Submitted June 23, 2014;
    decided September 11, 2014
   Motion for reargument of motion for leave to appeal denied with $100 costs and necessary reproduction disbursements [see 23 NY3d 903 (2014)].


text:
    Eastside Exhibition Corp., Respondent, v 210 East 86th Street Corp., Appellant.
    Submitted July 21, 2014;
    decided September 11, 2014
   Motion for leave to appeal dismissed upon the ground that the order sought to be appealed from does not finally determine the action within the meaning of the Constitution.

Judge Rivera taking no part.