text:
    [864 NE2d 1288, 832 NYS2d 889]
    The People of the State of New York, Respondent, v Racky Ramchair, Appellant.
    Argued February 8, 2007;
    decided March 29, 2007

      POINTS OF COUNSEL

      Frank Handelman, New York City, for appellant.
    Appellate counsel provided ineffective assistance to appellant by failing to argue that the trial court should have granted a mistrial when the prosecution elicited testimony that unfairly made defense counsel a witness. (Jones v Barnes, 463 US 745; People v Chipp, 75 NY2d 327; People v Breitenbach, 260 AD2d 389; Ramey v District 141, Intl. Assn. of Machinists & Aerospace Workers, 378 F3d 269; United States v Arrington, 867 F2d 122; People v Adams, 90 AD2d 1.)

      Richard A. Brown, District Attorney, Kew Gardens (Jennifer Hagan and John M. Castellano of counsel), for respondent.
    The Appellate Division correctly held that defendant received the effective assistance of appellate counsel. (People v Stultz, 2 NY3d 277; People v Turner, 5 NY3d 476; People v Benevento, 91 NY2d 708; People v Modica, 64 NY2d 828; People v Baldi, 54 NY2d 137; People v Ortiz, 76 NY2d 652; People v Ford, 86 NY2d 397; People v Flores, 84 NY2d 184; People v Rivera, 71 NY2d 705; People v Satterfield, 66 NY2d 796.)
   OPINION OF THE COURT

Pigott, J.

The issue presented on this appeal is whether defendant was denied meaningful representation when his appellate counsel failed to argue that the trial court should have granted his motion for a mistrial. We conclude that he was not and therefore affirm the order of the Appellate Division.

In 1995, defendant was arrested on suspicion of robbery of a cabdriver in Queens, New York. A lineup was held, with counsel for defendant present. The cabdriver identified defendant in the lineup as one of the persons who had robbed him. Defendant was charged with robbery in the first and second degrees.

During his first trial, defendant was assaulted in jail and, because he was unable to assist in his own defense, the trial court granted defendant’s motion for a mistrial. During his second trial, one of the jurors became ill and, over defendant’s objection, the trial court declared another mistrial. During a third trial, as in the prior two, defense counsel challenged the cabdriver’s identification of defendant. In rebuttal, the prosecutor elicited testimony from a detective that defense counsel was present during the lineup and made no objection to its composition. The detective further testified that, had defense counsel objected to the lineup, he would have considered a change in the composition or at least noted the objection. Defense counsel promptly objected, arguing that such testimony placed him in the position of being a witness at the trial. The trial court overruled the objection.

Following the court’s ruling, and outside the presence of the jury, defense counsel sought permission to testify as to his conduct during the lineup, including objections he had raised at that time and why other objections had not been raised. The trial court summarily denied that request, ruling that in order to testify, defense counsel should have withdrawn as the attorney for defendant prior to the commencement of trial.

At the end of the detective’s testimony, defense counsel moved for a mistrial on the grounds that it was improper to allow the prosecution to imply through the testimony of the detective that defense counsel approved of the lineup procedure, and that defense counsel should have been afforded the opportunity to testify in rebuttal. The trial court denied that motion as well.

On appeal from a conviction of all charges, appellate counsel raised two claims. First, appellate counsel argued that defendant’s double jeopardy rights were violated because the trial court retried defendant after it declared a mistrial at the second trial over defense counsel’s objection. Second, and relevant to this appeal, appellate counsel argued that defendant’s constitutional right to present a defense was violated when the trial court precluded defense counsel from testifying in rebuttal to the testimony that counsel was present at the lineup and had not objected to its composition. Significant for purposes of this appeal, appellate counsel did not argue that the trial court should have granted defendant’s mistrial motion. The Appellate Division affirmed defendant’s conviction (308 AD2d 601 [2003]), and a Judge of this Court denied leave to appeal.

Defendant thereafter filed a pro se petition for federal habeas corpus relief raising the same arguments made by his appellate counsel on the direct appeal. The United States District Court for the Eastern District of New York denied defendant relief on those claims, but opined that defendant may have a meritorious claim that his appellate counsel was ineffective for not specifically raising the trial court’s failure to grant a mistrial. Thus, the District Court held the petition in abeyance pending defendant’s exhaustion of state remedies with regard to that claim (Ramchair v Conway, 2005 WL 2786975, 2005 US Dist LEXIS 25852 [ED NY 2005]). Defendant then filed a petition for a writ of error coram nobis with the Appellate Division asserting that his appellate counsel had been ineffective for failing to argue that the trial court erred in not granting defendant’s motion for a mistrial. The Appellate Division denied defendant’s application without comment (27 AD3d 668 [2006]) and a Judge of this Court granted defendant leave to appeal. We now affirm.

Defendants in criminal cases have both a state and a federal constitutional right to effective assistance of appellate counsel (see e.g. People v Turner, 5 NY3d 476 [2005]). We have previously declared that the “meaningful representation” criterion set forth in People v Baldi (54 NY2d 137, 147 [1981]) is the standard for evaluating the effectiveness of appellate counsel in this state’s courts (see People v Stultz, 2 NY3d 277 [2004]). In defining meaningful representation, this Court has stated:

“Appellate advocacy is meaningful if it reflects a competent grasp of the facts, the law and appellate procedure, supported by appropriate authority and argument. Effective appellate representation by no means requires counsel to brief or argue every issue that may have merit. When it comes to the choice of issues, appellate lawyers have latitude in deciding which points to advance and how to order them.” (Id. at 285.)

Here, appellate counsel submitted a comprehensive brief to the Appellate Division raising two strong claims on defendant’s behalf. Indeed, had the first claim raised by appellate counsel relating to defendant’s double jeopardy rights been successful, defendant would have been entitled to the dismissal of the indictment. Nevertheless, defendant now argues that appellate counsel should have argued the additional claim that the court erred in denying his motion for a mistrial. The substantive grounds upon which that motion was based, however, were noted by counsel in the second claim raised in the appellate brief filed on behalf of the defendant. Counsel chronicled the facts that formed the basis of the claimed error in the context of the objections made by defense counsel and the court’s rulings in response thereto.

We recognize that the underlying issue concerning the admissibility of proof relating to defense counsel’s presence at the lineup has never been addressed by this Court or the United States Supreme Court, and this case does not provide us with an occasion to do so. Because the issue before us is solely whether appellate counsel was effective, we cannot and do not reach the merits of any issue that could or might have been raised on the original appeal. However, viewing the issue from the perspective of appellate counsel, we note that there is Appellate Division authority suggesting that such evidence is sometimes admissible (see e.g. People v Foulks, 143 AD2d 1038 [2d Dept 1988}; People v Valentine, 271 AD2d 245 [1st Dept 2000]). Under the circumstances, appellate counsel might have determined as a matter of reasonable appellate strategy that there was a greater likelihood of success pursuing the right to present a defense argument, rather than focusing on the mistrial application. The fact that the specific motion for a mistrial was not highlighted and argued in greater detail does not, on this record, amount to ineffective assistance of appellate counsel as a matter of law. Therefore, because we cannot say from this record that there was no solid legal basis for appellate counsel’s strategy, we conclude that the Appellate Division did not err in denying defendant’s petition for a writ of error coram nobis.

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

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

Order affirmed.


source: Caselaw Access Project

author: Chief Judge Kaye. Smith, J.

license: Public Domain

text:
    [865 NE2d 1210, 834 NYS2d 44]
    Beal Savings Bank, Appellant, v Viola Sommer et al., as Trustees of a Trust under the Will of Sigmund Sommer, Deceased, Respondents.
    Argued February 7, 2007;
    decided March 22, 2007

      POINTS OF COUNSEL

      Hawkins, Parnell & Thackston, LLP (.Robert B. Gilbreath, of the Texas bar, admitted pro hac vice, of counsel), Schulte Roth & Zabel LLP, New York City (Michael L. Cook and Curtis J. Weidler of counsel), and Jenkens & Gilchrist, Dallas, Texas (:Theodore W. Daniel of counsel), for appellant.
    I. The Sommer Trust’s theories cannot survive under the standard of review or basic contract construction principles. (AG Capital Funding Partners, L.P. v State St. Bank & Trust Co., 5 NY3d 582; R/S Assoc. v New York Job Dev. Auth., 98 NY2d 29; Matter of Salvano v Merrill Lynch, Pierce, Fenner & Smith, 85 NY2d 173; Levenberg v Skouras, 248 App Div 629; Goodison v Goodison, 66 AD2d 923; Gaultney-Klineman Art v Hughes, 227 AD2d 221.) II. Because the Credit Agreement was a syndicated loan, Beal Savings Bank had the right to individually enforce the Keep-Well Agreement. III. The Credit Agreement does not override the Keep-Well Agreement’s “enforceable ... by each Lender” clause. (Levenberg v Skouras, 248 App Div 629; Security-First Natl. Bank of Los Angeles v Lloyd-Smith, 259 App Div 220; Salomon v Angsten, 19 AD3d 143; Matter of Lahm, 179 App Div 757; Congress Factors Corp. v Meinhard Commercial Corp., 129 Misc 2d 726; Riback v Prudence Co., 152 Misc 331; General Inv. Co. v Interborough R.T. Co., 200 App Div 794; Arnoff v Metropolitan Cas. Ins. Co. of N.Y., 160 Misc 209; Townsend v Colorado Fuel & Iron Co., 16 App Div 314; Shire Realty Corp. v Schorr, 55 AD2d 356.) IV. Other provisions in the Loan Documents give Beal Savings Bank the absolute right to enforce the Keep-Well Agreement. (New Bank of New England, N.A. v Toronto-Dominion Bank, 768 F Supp 1017; In re Owens Corning, 419 F3d 195; Chase Manhattan Bank v Motorola, Inc., 136 F Supp 2d 265.)

      Skadden, Arps, Slate, Meagher & Flom LLP, New York City (Scott D. Musoff, Preeta D. Bansal and Jay B. Kasner of counsel), for respondents.
    I. The Loan Documents specifically and unambiguously preclude Beal Savings Bank from suing individually to recover a judgment under the Keep-Well Agreement. (Matter of Westmoreland Coal Co. v Entech, Inc., 100 NY2d 352; New Bank of New England, N.A. v Toronto-Dominion Bank, 768 F Supp 1017; Carondelet Sav. & Loan Assn. v Citizens Sav. & Loan Assn., 604 F2d 464; South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272; Muzak Corp. v Hotel Taft Corp.,
      1 NY2d 42; God’s Battalion of Prayer Pentecostal Church, Inc. v Miele Assoc., LLP, 6 NY3d 371; Hooper Assoc. v AGS Computers, 74 NY2d 487; Two Guys from Harrison-N.Y. v S.F.R. Realty Assoc., 63 NY2d 396; Corhill Corp. v S.D. Plants, Inc., 9 NY2d 595; First Natl. Bank of Louisville v Continental Ill. Natl. Bank & Trust Co. of Chicago, 933 F2d 466.) II. Beal Savings Bank’s citation to irrelevant provisions in the Loan Documents does not affect interpretation of the unambiguous language in the Credit Agreement. (South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272; Matter of Westmoreland Coal Co. v Entech, Inc., 100 NY2d 352; First Natl. Bank of Louisville v Continental Ill. Natl. Bank & Trust Co. of Chicago, 933 F2d 466; Mark Twain Bank v Continental Bank, N.A., 817 F Supp 792; Credit Francais Intl. v Sociedad Fin. de Comercio, 128 Misc 2d 564; A.7. Credit Corp. v Government of Jamaica, 666 F Supp 629; New Bank of New England, N.A. v Toronto-Dominion Bank, 768 F Supp 1017; Chase Manhattan Bank v Motorola, Inc., 136 F Supp 2d 265.) III. Beal Savings Bank’s interpretation undermines the collective lender action scheme set forth in the Loan Documents. (Credit Francais Intl. v Sociedad Fin. de Comercio, 128 Misc 2d 564; New Bank of New England, N.A. v Toronto-Dominion Bank, 768 F Supp 1017; Goldsmith v Metromedia Fiber Network, 293 AD2d 383; A.7. Credit Corp. v Government of Jamaica, 666 F Supp 629; In re Kristal, 758 F2d 454; Commercial Bank of Kuwait v Rafidain Bank, 15 F3d 238; General Inv. Co. v Interborough R.T. Co., 200 App Div 794, 235 NY 133; Riback v Prudence Co., Inc., 152 Misc 331; Arnoff v Metropolitan Cas. Ins. Co. of N.Y., 160 Misc 209; Townsend v Colorado Fuel & Iron Co., 16 App Div 314.) IV. Even were Beal Savings Bank permitted to bring suit unilaterally under the Keep-Well Agreement, the Sommer Trust’s liability would be limited to 4.5% of whatever amount is allegedly owed. (Nichols v Hartford Fire Ins. Co., 61 AD2d 555; Zivian v McNulty, 136 AD2d 547; Amaducci v Metropolitan Opera Assn., 33 AD2d 542; A.7. Credit Corp. v Government of Jamaica, 666 F Supp 629; Noise In The Attic Prods., Inc. v London Records, 10 AD3d 303; Alpha Auto Brokers v Continental Ins. Co., 286 AD2d 309.)
   OPINION OF THE COURT

Chief Judge Kaye.

We are asked to determine whether one lender in a syndicated loan arrangement has standing to sue for breach of contract, contrary to the will of the other 36 lenders to forbear from taking action. The specific, unambiguous language of several provisions, read in the context of the agreements as a whole, convinces us that, in this instance, the lenders intended to act collectively in the event of the borrower’s default and to preclude an individual lender from disrupting the scheme of the agreements at issue.

Facts

On February 26, 1998, a lending syndicate, originally comprised of 13 institutions (the Lenders), invested in the construction of Aladdin Gaming, LLC (the Borrower), to develop the Aladdin Resort and Casino in Las Vegas, Nevada. The Lenders advanced 410 million dollars through the Bank of Nova Scotia (succeeded by BNY Asset Solutions, LLC), the Administrative Agent. A Credit Agreement was the primary loan document governing the loan. A Keep-Well Agreement, which plaintiff-appellant Beal Savings Bank alleges was breached, was one of the many ancillary instruments evidencing the loan. Both the Credit Agreement and the Keep-Well were dated February 26, 1998.

The Credit Agreement

The title page of the Credit Agreement shows Aladdin Gaming, LLC, as the Borrower, “Various Financial Institutions” as the Lenders, the Bank of Nova Scotia as the Administrative Agent and two other institutions, the syndication agent and the documentation agent. The Lenders are not individually named.

Under section 9.1 of the Credit Agreement, the Lenders authorize the Administrative Agent to act on their behalf pursuant to the Loan Documents and, “in the absence of other written instructions from the Required Lenders ... to exercise such powers ... as are specifically delegated to or required of the Administrative Agent by the terms [of the Loan Documents], together with such powers as may be reasonably incidental thereto.” The term “Required Lenders” is defined as those holding at least 662/3% of the outstanding principal and the participation interests in the outstanding Letters of Credit (Credit Agreement § 1.1). Among those powers delegated to the Administrative Agent are that it set the Base Rate of interest and the London Interbank Offer (LIBO) Rate (Credit Agreement §§ 1.1, 3.2), collect payments from the Borrower for the pro rata account of the Lenders (§ 4.7), and review financial statements of the Borrower and other Aladdin Parties (§§ 5.1.4, 6.5).

Article 8 of the Credit Agreement addresses Events of Default. Section 8.1.4 provides that the Borrower defaults if, after the Administrative Agent gives notice, the nonperformance continues for 30 days. Section 8.3 states that the Administrative Agent, at the direction of the Required Lenders, may “exercise any or all rights and remedies at law or in equity,” including the right to recover judgment on the Keep-Well. The Credit Agreement includes a section providing that if a Lender receives any payment, such as by setoff, it must share any excess of its pro rata share of payments with the other Lenders (§ 4.8). Section 10.20 is a cumulative remedies provision that “[n]o right or remedy conferred upon the Administrative Agent or the Lenders in this Agreement is intended to be exclusive” and “every such right and remedy shall be cumulative ... to every other right or remedy contained in the other Loan Documents . . . .”

The Keep-Well Agreement

The Keep-Well Agreement was made, as the title pages state, “in favor of each of the Administrative Agent and the Lenders and their respective successors, transferees and assigns.” The Sponsors agreed in section 2 of the Keep-Well to make Equity Contributions to the Borrower if the financial ratio fell below a certain minimum. Section 4 states that in the event of acceleration under section 8.2 and section 8.3 of the Credit Agreement the Sponsors guarantee payment of the accelerated amount to the Administrative Agent for the benefit of the Lenders.

The Keep-Well is not a stand-alone document but is to be read in accordance with the Credit Agreement. Section 18, “Miscellaneous Provisions,” provides in subsection (a) that the Keep-Well is a “Loan Document executed pursuant to the Credit Agreement and shall (unless otherwise expressly indicated herein) be construed, administered and applied in accordance with the terms and provisions thereof.” The next subsection, 18 (b), states that the Keep-Well is binding upon the Sponsors and their successors and shall “be enforceable by the Administrative Agent and each Lender” and their assigns. Section 18 (e), like section 10.20 of the Credit Agreement, is a cumulative remedies provision.

Enter the Plaintiff

In July 2000, the Borrower obtained a 50 million dollar increase in loan funds, and the Sommer Trust, one of the Borrower’s parent companies, agreed to become a Sponsor along with other organizations under the Keep-Well Agreement. The Aladdin casino began operations, but just after September 11, 2001, the Borrower sought bankruptcy protection. Neither plaintiff-appellant Beal nor its assignor, BFC Capital, Inc., was an original Lender, and neither held any interest in the loan when the Borrower petitioned for bankruptcy protection. BFC acquired a 4.5% interest in the bank debt after the Borrower filed for bankruptcy.

On September 30, 2002, the Administrative Agent and all of the Lenders — holding 95.5% of the outstanding principal amount — except BFC entered into a Settlement Agreement with the Sommer Trust and two other sponsors. The Settlement Agreement directed the Administrative Agent to forbear from enforcing any obligations that the Trust had under the Keep-Well. In addition, the Lenders would turn over to the Trust any amounts they collected from BFC under a sharing clause in the Credit Agreement. As consideration, the Trust transferred “to the Administrative Agent for the benefit of the Prepetition Lenders and BFC” (Settlement Agreement § 1) the Trust’s interest in a shopping mall and the benefit of the Trust’s facilitating the sale of the Borrower’s property. BFC, Beal’s predecessor, received its pro rata share from this consideration. The Settlement Agreement also provided for the distribution of 6.5 million dollars to the Prepetition Lenders, not including BFC.

At the time of the execution of the Settlement, 37 Lenders were members of the syndicate. Thirty-six Lenders (all but BFC, Beal’s assignor) agreed that the terms of the settlement were of greater benefit to the consortium than an attempt to recover under the Keep-Well.

The Litigation

On April 6, 2005, Beal filed a claim under section 4 of the Keep-Well and sought 90 million dollars to share with the other Lenders or, in the alternative, Beal’s pro rata share. The Trust, moving to dismiss, contended that Beal lacked standing, for no individual member of the consortium was empowered to enforce the agreements in the event of default, and only the Administrative Agent, at the behest of a supermajority of Lenders, could do so. Beal argued that while the agreements authorized the Agent to act administratively, no provision in the agreements precluded a Lender from otherwise proceeding individually. The Supreme Court granted the Trust’s motion under CPLR 3211 (a) (1) and (7) to dismiss the complaint on the grounds that the Loan Documents explicitly and implicitly precluded Beal from recovering a judgment under the Keep-Well. Affirming, the Appellate Division concluded that the Keep-Well is to be administered in accordance with the terms of the Credit Agreement, which sets forth the procedures in the event of default, and that those procedures provide for collective action. We agree with the trial court and Appellate Division, and now affirm.

Analysis

The governing principles are familiar. On a motion to dismiss pursuant to CPLR 3211, the court may grant dismissal when “ ‘documentary evidence submitted conclusively establishes a defense to the asserted claims as a matter of law’ ” (Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 571 [2005], quoting Held v Kaufman, 91 NY2d 425, 430-431 [1998]). Construction of an unambiguous contract is a matter of law, and the intention of the parties may be gathered from the four corners of the instrument and should be enforced according to its terms (see Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]; W.W.W. Assoc. v Giancontieri, 77 NY2d 157, 162 [1990]). The court should “construe the agreements so as to give full meaning and effect to the material provisions” (Excess Ins. Co. Ltd. v Factory Mut. Ins. Co., 3 NY3d 577, 582 [2004]). A reading of the contract should not render any portion meaningless (see God’s Battalion of Prayer Pentecostal Church, Inc. v Miele Assoc., LLP, 6 NY3d 371, 374 [2006]; Excess Ins. Co., 3 NY3d at 582). Further, a contract should be “read as a whole, and every part will be interpreted with reference to the whole; and if possible it will be so interpreted as to give effect to its general purpose” (Matter of Westmoreland Coal Co. v Entech, Inc., 100 NY2d 352, 358 [2003] [citations omitted]).

In Credit Francais Intl. v Sociedad Fin. de Comercio (128 Misc 2d 564 [Sup Ct, NY County 1985]), the court analyzed a situation similar to the one presented here. A syndicate of banks lent money to a Venezuelan financial institution. When the government of Venezuela called on financial institutions to suspend payments of principal, the borrower sought to delay its payments. The majority of the banks in the consortium chose to allow delayed payment, and only one member sought to proceed against the borrower. The court noted that the loan transaction was between the borrower and a consortium, not individual banks. Even the title page — that the lenders were not named but were called “Depositors” — indicated that the nature of the agreement was that the lenders act collectively. The agent was authorized to act on behalf of the lenders collectively by its own initiative or at the direction of a majority of lenders: the agent determined the rate of interest, collected repayments for the pro rata account of each depositor, collected advances to be made to the borrower and received the borrower’s financial statements to provide to the lenders. Concerning the provision on acceleration, the court wrote:

“The actual acceleration of the entire amount due does not occur, however, until the agent, ‘with the consent or at the direction of the Majority Depositors’, declares the entire amount due and payable .... Thus, while the agent has the power to declare the entire amount due if an event of acceleration occurs, he also has the power to refrain from accelerating the entire amount unless otherwise directed by the majority depositors. No individual bank is given those rights” (id. at 578).

The court also noted that a sharing provision was included to prevent a bank from obtaining an undue preference so that were an individual institution to obtain any payment, that bank would act as agent on behalf of all the depositors. The parties thus contemplated that the agent take collective action on behalf of all members pursuant to the direction of the majority depositors. Such a plan was intended to prevent the possibility of a multiplicity of suits by individual banks perhaps working at cross-purposes — a situation that could be chaotic.

A cumulative remedy clause, the court said, was “merely” to “assure[ ] the parties that the election of one remedy does not preclude another” (id. at 579). Nothing in that section justified departure from the overall scheme to have the agent act for the consortium. Finally, the court found that other sections including the terms “any Depositor” or “Depositors” were not blanket authorizations for individual action. An agreement that intends to have individual depositors proceed independently should so provide explicitly.

Similarly, in New Bank of New England, N.A. v Toronto-Dominion Bank (768 F Supp 1017 [SD NY 1991]), the majority of lenders in a syndicate wished to negotiate with the defaulting borrower, and one lender refused to consent to a waiver of default. An Intercreditor Agreement provided that “the agent may act in certain circumstances in accordance with the directions of the majority lenders” (id. at 1020). The court determined that the discretionary language allowed a majority to direct acceleration but also authorized it to refrain from doing so. No provision permitted a minority lender to compel acceleration. The meaning of the agreement between sophisticated parties was unambiguous, even if one party asserted a different interpretation (id. at 1021, 1022; see also In re Enron Corp., 302 BR 463, 473 [Bankr SD NY 2003], affd 2005 WL 356985, 2005 US Dist LEXIS 2134 [SD NY 2005]).

Here, of course, neither the Credit Agreement nor the Keep-Well contains an explicit provision stating that a Lender may — or may not — take individual action in the event of default, and thus we are compelled to look to other specific clauses and the agreements as a whole to ascertain the parties’ intent. The examination leads us to conclude that the agreements have an unequivocal collective design.

Section 18 (a) of the Keep-Well states that it was “executed pursuant to the Credit Agreement” and, unless otherwise expressly indicated, must be “construed, administered and applied” in accordance with the Credit Agreement. No express provision in the Keep-Well sets forth the actions to be taken in the event of default. Only article 8 of the Credit Agreement articulates these procedures. Section 8.3 provides:

“If any Event of Default . . . shall occur for any reason, whether voluntary or involuntary, and be continuing, the Administrative Agent, upon the direction of the Required Lenders, shall by notice to the Borrower declare all or any portion of the outstanding principal amount of the Loans and other Obligations . . . to be due and payable or the Commitments ... to be terminated, whereupon . . . the Borrower shall automatically and immediately be obligated to deposit with the Administrative Agent cash collateral in an amount equal to all Letter of Credit Outstandings .... In addition to the foregoing, the Administrative Agent upon direction of the Required Lenders may, without further notice of default, presentment or demand for payment, protest or notice of non-payment or dishonor, or other notices or demands of any kind . . . , exercise any or all rights and remedies at law or in equity (in any combination or order that the Lenders may elect, subject to the foregoing), including, without prejudice to the Lenders’ other rights and remedies, the following: . . .
“(h) recover judgment on the Completion Guaranty or the Keep-Well Agreement either before, during or after any proceedings for the enforcement of the Lenders’ rights and remedies hereunder or under the other Loan Documents.”

Thus, under section 8.3, the Administrative Agent acts upon the direction of the Required Lenders — a two-thirds majority — to give notice to the Borrower and, if required, the Borrower must deposit the outstanding principal with the Administrative Agent. In addition, it is the Administrative Agent that, upon direction of the Required Lenders, may exercise any or all rights and remedies as the Lenders elect, including recovering judgment on the Keep-Well Agreement “for the enforcement of the Lenders’ rights and remedies.”

Section 18 (b) of the Keep-Well, on which Beal relies to assert standing, is a general section that provides:

“This Agreement shall be binding upon the Sponsors and their permitted successors, transferees and assigns and shall inure to the benefit of and be enforceable by the Administrative Agent and each Lender and their respective successors, transferees and assigns; provided, however, that the Sponsors may not assign any of their obligations hereunder without the prior written consent of the Required Lenders.”

The language of section 18 (b) that the Keep-Well is enforceable by the Administrative Agent and each Lender does not expressly override the specific language of section 8.3 that in the event of default the Administrative Agent at the direction of the Required Lenders may or may not attempt to recover judgment. Moreover, section 18 (b) addresses the issue of “successors, transferees and assigns” to ensure that Lenders’ assignees would not be left out of the collective enforcement mechanism, and that the Sponsors do not assign their obligation without the written consent of the Required Lenders.

An interpretation favoring Beal’s view would render section 8.3 meaningless because there would be no reason to provide that the Required Lenders could enforce the agreements by a supermajority directing the Administrative Agent to act (see Excess Ins. Co., 3 NY3d at 582). Nor does the language of section 8.3 support Beal’s contention that, if the Administrative Agent does not move to enforce the Keep-Well, any individual Lender may do so. As the court in Credit Francois construed a similar provision, the Administrative Agent, at the direction of the Required Lenders, has the power to declare the entire amount due and the power to refrain from accelerating — no individual institution is given those rights (128 Misc 2d at 578). Here, the Required Lenders — with 95.5% of the interest, well over a supermajority — made an election by directing the Administrative Agent not to pursue legal action (see New Bank of New England, 768 F Supp at 1020). Section 18 (b) of the Keep-Well, as analyzed in the context of an event of default, does not contravene the Required Lenders’ decision to act collectively (see Westmoreland Coal, 100 NY2d at 358).

Beal brings this suit under section 4 of the Keep-Well:

“In the event that the Obligations of the Borrower under the Credit Agreement shall be accelerated pursuant to the provisions of Section 8.2 or 8.3 thereof, the Sponsors guarantee and agree to pay the Accelerated Payment Amount to the Administrative Agent for the benefit of the Lenders not later than forty (40) days following the date of such acceleration.”

The only entity section 4 mentions as having the right to pursue default remedies is the Administrative Agent. Thus, this section actually underscores the collective enforcement scheme envisioned by the signatories of the Loan Documents.

Besides these specific provisions, other language in the agreements confirms that the Lenders contemplated unified action by the Administrative Agent. The Agent does not perform merely mechanical or technical functions but rather has a broad grant of power. Section 9.1 of the Credit Agreement provides that “[e]ach Lender authorizes the Administrative Agent to act on behalf of such Lender” under the Loan Documents and to exercise the powers delegated to it, in the absence of written instructions from the Required Lenders. The Agent may, among other things, set rates of interest and review the Borrower’s financial statements. Even the title page of the Credit Agreement names the Administrative Agent but refers to the Lenders as “Various Financial Institutions” without naming them. Although Beal argues that an Administrative Agent generally should have only ministerial powers, in these Loan Documents the parties specified that the Agent have both discretionary power and power under the direction of the Required Lenders.

Beal contends that section 4.8 of the Credit Agreement, the sharing provision, supports the agreements’ enforceability by each Lender individually. The section states that if any Lender obtains payment by “setoff or otherwise” in excess of its pro rata share, that Lender must share the excess ratably with the other Lenders. Beal’s interpretation is that if one bank can receive money, then that bank must be able to sue for judgment. We conclude, on the contrary, that this provision — under which each Lender who receives moneys is deemed to have received on behalf of all Lenders — underscores the collective design of the agreements that Lenders share the risks of potentially unequal treatment (see Credit Francais, 128 Misc 2d at 578 [sharing provision prevented one bank from obtaining an undue preference over another]; see also Enron, 2005 WL 356985 at *7, 2005 US Dist LEXIS 2134 at *29 [while an individual lender might exercise a right of setoff or counterclaim, there was no basis to conclude that the parties intended rights against pledged collateral]).

Nor do the cumulative remedies provisions support individual action. Section 10.20 of the Credit Agreement grants the Administrative Agent or the Lenders remedies at law and in equity “in addition to every other right or remedy” contained in all Loan Documents. Section 18 (e) of the Keep-Well Agreement states that “[n]o failure on the part of the Administrative Agent or any Lender to exercise, and no delay in exercising, any right” will be deemed a waiver, and that the remedies are cumulative, not exclusive, to remedies provided by law. The purpose of section 18 (e) is to assure that the Agent’s or a Lender’s failure or delay in enforcing rights is not a waiver of those rights. Both these provisions — intended to preserve alternate remedies — do not provide to each Lender express grants of enforcement in the event of default (see Credit Francois, 128 Misc 2d at 579; Enron, 302 BR at 475).

To support its interpretation that it has standing to sue, Beal points to section 10.1 (f) of the Credit Agreement, which provides that no amendment, modification or waiver can be made to the Loan Documents so as to “release the Sponsors under the Keep-Well Agreement . . . without the consent of all Lenders.” Beal contends that the Prepetition Lenders who completed the Settlement with the Trust constructively waived Beal’s rights under the Keep-Well because the Lenders did not have Beal’s required consent. Beal also refers to section 7 of the Keep-Well, which states that “the obligations of the Sponsors under it shall be absolute and unconditional under any and all circumstances.” Section 7 specifies that the Sponsors “shall not be released from their obligations . . . because of. . . (b) [a]ny waiver . . . , modification, forbearance, delay or other act or omission of the Administrative Agent or the Lenders, or any failure to proceed promptly . . . against the Borrower [or] any Sponsor.”

The Trust acknowledges that the unanimous consent clause ensures that the terms of the loan cannot be altered in a manner inconsistent with what other Lenders originally agreed to. However, here, the Settlement did not release the Trust of its obligations by amending, modifying or waiving any provision in the agreements. Nor did the Trust breach the Keep-Well Agreement. Rather, the issue concerns a default and, under the Credit Agreement, even if the Settlement has a “similar effect” to a release, the supermajority of Lenders exercised their rights by restructuring the debt of a financially troubled Borrower (see First Natl. Bank of Louisville v Continental Ill. Natl. Bank & Trust Co. of Chicago, 933 F2d 466 [7th Cir 1991] [agent did not breach contract when it acted collectively with other lenders not to accelerate notes despite borrower’s default and over objection of individual bank]; Howard J. Kashner, Majority Clauses and Non-Bankruptcy Corporate Reorganizations — Contractual and Statutory Alternatives, 44 Bus Law 123, 125-126 [Nov. 1988] [better practice, when agreement has waiver and supermajority clauses, is to allow supermajority to elect action before bankruptcy to avoid preferential treatment of one institution over others]). Thus, the provisions concerning amendment, modification and waiver of the agreements do not preclude the Administrative Agent and 95.5% of the Lenders from attempting to recover on as much of the Trust’s obligations as they could.

Moreover, language in other provisions referring to actions by the Administrative Agent and “any Lender” is found in general provisions, for example, stating that the Sponsors waive certain defenses and rights, and does not provide a source for individual Lenders to enforce the Keep-Well Agreement. For example, under section 9.6 of the Credit Agreement, each Lender, without reliance on the Administrative Agent or any other Lender, acknowledges making its own credit decisions. This provision “addresses the concerns of the Administrative Agent” that banks do not rely on it for assessing risks (Enron, 302 BR at 475). The provision does not, as advocated by Beal, authorize individual enforcement of the Keep-Well.

Beal’s reliance on Commercial Bank of Kuwait v Rafidain Bank (15 F3d 238 [2d Cir 1994]), in which the court concluded that an individual lender did have standing to sue, is unavailing. In Commercial Bank, the agent’s grant of authority was limited to suing “only if requested to do so by the Majority Banks,” and this provision did “not abrogate the rights of participating banks to sue on their own” {id. at 243). Unlike the finding in Credit Francais, the court said that provisions regarding the pro rata distributions of proceeds recovered by individual banks supported one bank’s standing to sue. This case, however, is distinguishable from Credit Francais, New Bank and Enron in that the ruling was based on English law that an undisclosed principal can sue on a contract except when “the terms of the contract expressly or impliedly confine it to the parties to it” (Commercial Bank, 15 F3d at 243).

In another case cited by Beal, A.I. Credit Corp. v Government of Jamaica (666 F Supp 629 [SD NY 1987]), the court held that individual lenders could sue to enforce the borrower’s obligations. The court noted certain provisions including pro rata and waiver sections such as those described here to support the finding. However, the agreement there expressly provided:

“The amounts payable at any time hereunder to each Bank shall be a separate and independent debt and each Bank shall be entitled to protect and enforce its rights arising out of this Agreement, and it shall not be necessary for any other Bank to be joined as an additional party in any proceedings for such purpose” (666 F Supp at 631).

In addition, the agreement specified that the agent “shall perform the mechanical and clerical functions” and have a strictly limited role (id.).

In this case the parties decided not to include a specific statement that each Lender individually may enforce its rights in the event of default. Had the parties intended that an individual have a right to proceed independently, the Credit Agreement or the Keep-Well should have expressly so provided. In an event of default, the lenders’ “rights to payment of principal and interest have, as a financial matter, already been impaired” (Kashner, Majority Clauses and Non-Bankruptcy Corporate Reorganizations, 44 Bus Law at 125). Here, the supermajority vote is meant to protect all Lenders in the consortium from a disaffected Lender seeking financial benefit perhaps at the expense of other debtholders. Therefore, the Required Lenders, rather than initiating separate, multiple lawsuits, chose not to jeopardize the interests of each institution. We conclude, based on the explicit language of the agreements and the provisions read as a whole, that the parties intended for collective action in the event that the obligations of the Borrower could be accelerated.

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

Smith, J.

(dissenting). A bank that lends money to a borrower and is not repaid is entitled to sue to get its money back. That is, at least, the assumption that most banks surely make when they enter into loan agreements. A bank that is part of a lending group can, of course, agree that no suit will be brought unless a majority or supermajority of the lenders agree to take action, but if that agreement is made, it should be stated in plain language in the document. It is not hard to say: “No suit shall be brought except by the Administrative Agent, acting upon the written instructions of the Required Lenders.” No such language, or anything that can fairly be read as its equivalent, appears in this Credit Agreement or Keep-Well Agreement, and I dissent from the majority’s decision to read it in.

This transaction was a number of separate loans, on identical terms, made by lenders including Beal’s predecessor directly to the borrower. Section 2.1, the first substantive term of the Credit Agreement, says so: “each Lender severally agrees to make Loans . . . .” (§ 2.1 [a] [emphasis added].) The normal expectation of the parties to such a transaction is that each lender may sue separately to recover its loan, if the agreement does not say otherwise (see Commercial Bank of Kuwait v Rafidain Bank, 15 F3d 238, 243 [2d Cir 1994]; New Bank of New England, N.A. v Toronto-Dominion Bank, 768 F Supp 1017, 1023 [SD NY 1991]).

The majority holds that this Credit Agreement does say otherwise, relying on “[t]he specific, unambiguous language of several provisions” (majority op at 321), but it never identifies any “specific, unambiguous” surrender of individual lenders’ rights to sue. The majority gives primary importance to section 8.3 of the Credit Agreement {id. at 326-327), but nothing in that section says or implies that a single lender may not bring suit. The section says that “the Administrative Agent upon direction of the Required Lenders may . . . exercise any or all rights and remedies at law or in equity,” including the right to recover under the Keep-Well Agreement; but it does not say that no lender may exercise its own rights. A statement that an agent may act on a principal’s behalf does not mean that the principal has disabled itself from acting on its own.

The majority is incorrect in saying that Beal’s interpretation of section 8.3 would “render [it] meaningless” (majority op at 328). Section 8.3 means what it says — that certain powers may be exercised by the Administrative Agent at the direction of a supermajority, not that those powers are surrendered by the lenders. Indeed, the majority’s reading of section 8.3 to say that only the Administrative Agent, and not an individual lender, may act is impossible when applied to some of that section’s subdivisions, notably section 8.3 (c), authorizing the Administrative Agent to “commence, appear in and/or defend any action . . . brought by or against the Borrower or the Lenders.”

Similarly, section 9.1 of the Credit Agreement, saying that “[e]ach Lender authorizes the Administrative Agent to act on behalf of such Lender,” means just what it says: it is an authorization, not an exclusion. If the authors of the document meant the authorization to be exclusive, the words with which to say so were readily available. Nor is it significant that, in an obvious attempt to avoid reciting a lengthy list, the Credit Agreement “names the Administrative Agent but refers to the Lenders as ‘Various Financial Institutions’ without naming them” (majority op at 329).

In short, I think it clear that nothing in these agreements deprives the lenders of their rights to sue separately. I would reach this conclusion even if the Credit Agreement did not say, as it does in section 10.20: “No right or remedy conferred upon the Administrative Agent ... in this Agreement is intended to be exclusive of any other right or remedy contained in the other Loan Documents or at law and equity.” Surely this language should remove all doubt about the matter.

The Commercial Bank and New Bank cases, cited above, show that a provision in a loan agreement authorizing an agent to act upon direction of a specified number of lenders does not defeat the rights of lenders to act for themselves to collect their loans. The Second Circuit Court of Appeals said in Commercial Bank: “While the participation agreement . . . authorizes the ‘Confirming Bank’ to sue ‘only if requested to do so by the Majority Banks,’ this provision does not abrogate the rights of participating banks to sue on their own” (15 F3d at 243). That observation is squarely applicable here; the majority has identified no important distinction between the language at issue in Commercial Bank and the language it relies on.

The majority mistakenly cites New Bank as supporting its position (majority op at 326), because New Bank held that a right under a loan agreement to accelerate loan payments was enforceable only by collective action; but that issue is not the one we have in this case. A right of acceleration, unlike the basic right to sue for money that is already due, does not exist except to the extent that a contract provides for it. The New Bank court itself pointed out this distinction: “although acceleration and foreclosure are contractual remedies which may not be exercised without a majority vote of the Lenders, NBNE is free to pursue its own remedies at law by suing Noble to collect on its debt to NBNE” (768 F Supp at 1023). Beal should be no less free to pursue its own collection remedy here.

The majority relies on two decisions by trial-level courts, Credit Francais Intl. v Sociedad Fin. de Comercio (128 Misc 2d 564 [Sup Ct, NY County 1985]) and In re Enron Corp. (302 BR 463 [Bankr Ct SD NY 2003], affd 2005 WL 356985, 2005 US Dist T.FXTfi 2134 [SD NY 2005]). To the extent these decisions are relevant to our case, I do not find either convincing; I agree with Justice Klein’s, rather than Justice Greenfield’s, interpretation of the contract in Credit Francais (see 128 Misc 2d at 575), and I think Judge Gonzalez’s conclusion in Enron is more strongly supported by his alternative holding (see 302 BR at 476). (Indeed, the successful parties in Enron conceded on appeal that the lenders in that case retained some rights to sue under their loan agreement, and Judge Gonzalez’s ruling was affirmed on grounds not relevant here [see 2005 WL 356985 at *7-8 and n 36, 2005 US Dist LEXIS 2134 at *30-33 and n 36].) But even if both Justice Greenfield and Judge Gonzalez were correct, that would not mean Beal cannot sue in this case. Both judges relied on contractual language giving rights to the agent that is stronger than any language we have here (see 128 Misc 2d at 578 [“Each Depositor . . . irrevocably authorizes the Agent . . .”]; 302 BR at 471-472 [referring to several instances in which the agent was “irrevocably authorized” to act]).

The majority’s reading of the Credit Agreement here is less plausible than those given to the agreements in Credit Francais and Enron for another reason: while the agreements in those cases permitted the agent to act with the approval of a majority in interest of the lenders, the Credit Agreement here requires two thirds. Thus if, as the majority holds, the Credit Agreement and the Keep-Well Agreement are enforceable only by the Administrative Agent, dissenting lenders holding 33.4% of the loan can render those agreements unenforceable. It is most unlikely that the lenders who signed the Credit Agreement thought that they would be powerless to recover their loans if a minority of lenders were unwilling to take action.

Of course, in this case, the lenders unwilling to sue are not a dissident faction. They hold, as the majority mentions repeatedly, 95.5% of the debt, and have made an arrangement that every lender except Beal is willing to go along with. It is this fact that makes the result the majority reaches attractive: intuitively, it seems that if 36 out of 37 lenders are satisfied with a deal, the 37th should not be allowed to upset the applecart.

But Beal would fare no better under the majority’s reasoning if it were one of a group with a 66.6% interest. There is no possible distinction, under the agreements in suit, between Beal and any other holder or holders who have less than two thirds of the loan. Thus the majority’s decision, while reaching a pragmatically appealing result, essentially reads into the loan documents language that would compel results far less appealing. These agreements are complex, and were no doubt negotiated by experienced counsel. Fairness to these parties, and the confidence with which future parties enter similar transactions, would be better served by reading the agreements as they are written.

Judges Ciparick, Graffeo and Pigott concur with Chief Judge Kaye; Judge Smith dissents in a separate opinion; Judges Read and Jones taking no part.

Order affirmed, with costs.

      . Loan Documents, as defined in Credit Agreement § 1.1, include the Credit Agreement, the Keep-Well, Notes, Letters of Credit, Pledge Agreements, a Completion Guaranty and a Deed of Trust, among others. A Keep-Well Agreement is a contract by a parent company promising financial assistance and management support for its subsidiary. This agreement confirms the parent company’s obligation to maintain the subsidiary’s favorable finances (see Securities and Exchange Commission, Disclosure in Management’s Discussion and Analysis about Off-Balance Sheet Arrangements and Aggregate Contractual Obligations, RIN 3235-A170 n 77 [Jan. 28, 2003]; Don Wiesner, Keep-well letters: the elusive contingency, The CPA Journal Online <http://www.nysscpa.org/cpajournal/old/07950746.htm> [Nov. 1989] [accessed Feb. 23, 2007]).

      . Both the Credit Agreement (§ 10.14) and the Keep-Well (§ 18 [h]) provide that they will be “governed by and construed in accordance with the internal laws of the State of New York.”

      . We recognize that the contrary argument also can be made: had the parties intended to preclude the right to proceed individually, they should have said so explicitly. And surely, for the future, parties should expressly state their intention in this regard. It goes without saying, however, that if parties behaved precisely as they should, there would be no ground for litigation; cases reach us only because question can be raised. Though question can be raised, here we are satisfied that the answer given by the trial court and Appellate Division, based on the language and purport of the agreements, is the correct one.


author: Smith, J.

text:
    [865 NE2d 840, 833 NYS2d 423]
    In the Matter of Palm Management Corporation, Respondent, v Andrew Goldstein et al., Constituting the Zoning Board of Appeals of the Village of East Hampton, et al., Appellants, et al., Respondents.
    Argued February 7, 2007;
    decided March 27, 2007

      POINTS OF COUNSEL

      Esseks, Hefter & Angel, LLP, Riverhead (William W. Esseks and Anthony C. Pasca of counsel), and Pachman & Pachman, PC., Commack (Matthew E. Pachman of counsel), for appellants.
    This Court should reject the Second Department’s new preclusion rule and reinstate the annulled portions of the Zoning Board of Appeals’ decision. (Matter of B & G Constr. Corp. v Board of Appeals of Vil. of Amityville, 309 NY 730; City of Buffalo v Roadway Tr. Co., 303 NY 453; Matter of Cowger v Mongin, 87 AD2d 932; Matter of Midas Muffler v City of Albany, 186 AD2d 856; Matter of Besthoff v Zoning Bd. of Appeals of Town of Clarkstown, 34 AD2d 782; Matter of Cortodd Homes v Misiakiewicz, 45 AD2d 1008; Matter of Parkview Assoc. v City of New York, 71 NY2d 274; Matter of Kaltenbach v Board of Stds. & Appeals, 274 NY 34; Matter of Timm v Van Buskirk, 17 AD3d 686; Matter of Lee v Zoning Bd. of Appeals of Town of Putnam Val., 1 AD3d 600.)

      Twomey, Latham, Shea, Kelley, Dubin & Quartararo, LLP, Riverhead (David M. Dubin, John F. Shea, III, and Jennifer A. Andaloro of counsel), for Palm Management Corporation, respondent.
    The Second Department correctly held that the claims challenging the help’s quarters and the patio awning were barred by res judicata. (Ryan v New York Tel. Co., 62 NY2d 494; Capital Tel. Co. v Pattersonville Tel. Co., 56 NY2d 11; Town of Wallkill v Lachmann, 27 AD3d 724; Matter of Waylonis v Baum, 281 AD2d 636; Matter of Kennedy v Zoning Bd. of Appeals of Vil. of Hastings-on-Hudson, 145 AD2d 490; Jensen v Zoning Bd. of Appeals of Vil. of Old Westbury, 130 AD2d 549; Matter of Freddolino v Village of Warwick Zoning Bd. of Appeals, 192 AD2d 839; O’Brien v City of Syracuse, 54 NY2d 353; Matter of Miller v Kozakiewicz, 300 AD2d 399; Smith v Russell Sage Coll., 54 NY2d 185.)
   OPINION OF THE COURT

Smith, J.

Village Law § 7-712-a (5) (b) provides a 60-day time limit for appeals to a zoning board of appeals (ZBA) from a determination by a village administrative official. The issue here is whether a new determination occurs, and a new 60-day period runs, when the administrative official issues a new certificate of occupancy that is unchanged, in relevant respects, from an earlier certificate relating to the same property. We hold that in such a case there is no new determination, and therefore no new opportunity for an appeal to the ZBA.

Palm Management Corporation owns an inn in the Village of East Hampton. The inn is located in an area zoned for residences. It is undisputed that the property was used as an inn before the zoning ordinance was enacted, and that the inn is therefore a lawful nonconforming use. This case centers on two disputed features of the inn: a former barn that is used as a staff dormitory, and an awning over the patio. Two of the inn’s neighbors contend, and the ZBA found, that these uses of the property are unlawful, both because they have not been shown to predate the existing zoning and because they were abandoned for a period of more than one year after the zoning was in force.

However, the Village’s Division of Building Inspection authorized both uses more than a decade before the present litigation began. A building permit for the awning was issued in 1987. More important for present purposes, certificates of occupancy issued in 1989 and 1993 approved the dormitory and the awning. The 1989 certificate provides that the inn “may be occupied as a legal preexisting nonconforming . . . building occupied as a hotel with ... a detached two-story frame building occupied as help’s quarters.” The 1993 certificate includes the same language, and adds a reference to a “slate patio partially covered with an awning.” No timely appeal was taken to the ZBA from the issuance of either the 1989 or the 1993 certificate.

In 1999, several of the inn’s neighbors complained to the Village’s Office of Code Enforcement about a number of features of the inn, including the dormitory and the awning. Replying to the neighbors in 2000, a Code Enforcement Officer declined to disturb either use, relying on the 1987 building permit and the 1993 certificate of occupancy. Two of the neighbors appealed to the ZBA, which found that the Code Enforcement Officer had made no new determination, but had merely acknowledged the existence of previous determinations. The ZBA ruled in 2001 that any challenge to those determinations was barred by “what is essentially a sixty-day statute of limitations” in Village Law § 7-712-a.

In 2003, apparently as a result of Palm Management’s need to refinance the inn, a new certificate of occupancy was issued. The new certificate, as it related to the dormitory and the awning, was unchanged in substance from its predecessors, though it described both structures in more detail. Within 60 days of the public filing of the 2003 certificate, several neighbors appealed to the ZBA, which granted the appeal and annulled several portions of that certificate, including those relating to the dormitory and the awning.

Palm Management brought this CPLR article 78 proceeding to annul the ZBA’s determination. Supreme Court dismissed the proceeding, but the Appellate Division modified Supreme Court’s order, holding that the petition should have been granted as it related to the dormitory and the awning, on the ground that “the 2001 determination of the ZBA was entitled to res judicata effect with regard to those matters” (29 AD3d 801, 803 [2006]). We granted leave to appeal and now affirm, not on res judicata grounds, but on the ground that the issuance of the 2003 certificate, as it related to the dormitory and awning, was not a determination appealable to the ZBA under Village Law § 7-712-a (5).

Village Law § 7-712-a specifies procedures to be followed by village zoning boards of appeal. Section 7-712-a (5) (a) provides for the public filing of each “order, requirement, decision, interpretation or determination of the administrative official charged with the enforcement of the zoning local law,” and section 7-712-a (5) (b) provides that any appeal to the ZBA from such a ruling “shall be taken within sixty days” of its filing. Here, the ZBA treated the neighbors’ appeal as timely because it was taken within 60 days of the filing of the 2003 certificate of occupancy. This was no doubt correct as to those parts of the neighbors’ appeal — no longer in issue — that challenged uses that had not been authorized by a certificate of occupancy before 2003. But the mere repetition, in words or substance, of an authorization contained in the old certificate of occupancy should not be treated as a newly appealable “order, requirement, decision, interpretation or determination.” The village official who issued the new certificate of occupancy in 2003 did not decide or determine anything about the dormitory or the awning, except that they had already been approved years before.

Any other result would be unfair. The obvious purpose of the 60-day limitation in Village Law § 7-712-a is to provide repose for property owners and those who might buy or lend money on the property; they should be able to rely on the fact that the time to appeal from the issuance of a certificate of occupancy has run. We do not decide that the existence of a certificate of occupancy to which no timely challenge was made will always render the uses described in that certificate immune from challenge. We need not now consider when that is and is not true. But the mere issuance of a new, substantially identical, certificate should not permit a new challenge to an owner’s use of its property when, as the parties here do not dispute, no such challenge was permissible before the new certificate was issued.

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

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

Order affirmed, with costs.


author: Smith, J. Graffeo, J.

text:
    [865 NE2d 1224, 834 NYS2d 58]
    The People of the State of New York, Respondent, v John N. Rowland, Appellant.
    Argued February 15, 2007;
    decided March 29, 2007

      POINTS OF COUNSEL

      Paul J. Connolly, Delmar, for appellant.
    The promise that the aggregate sentence on defendant’s present convictions would be concurrent with the sentence on the prior criminal possession in the fourth degree conviction became unfulfillable upon vacatur of that prior conviction, and County Court was therefore required to grant defendant’s motion to vacate the present judgment of conviction. (Boykin v Alabama, 395 US 238; Brady v United States, 397 US 742; Shelton v United States, 246 F2d 571; Santobello v New York, 404 US 257; Johnson v Lumpkin, 769 F2d 630; People v Frederick, 45 NY2d 520; People v Pichardo, 1 NY3d 126; People v Puckett, 270 AD2d 364; People v Panetta, 250 AD2d 710, 92 NY2d 903; People v Boyle, 164 AD2d 938.)

      Nicholas E. Tishler, Special Prosecutor, and James A. Murphy, III, District Attorney, Ballston Spa, for respondent.
    I. On his direct appeal defendant was not entitled to vacatur of the greater sentence ordered to run concurrently with an earlier imposed sentence that was vacated. (People v Pichardo, 1 NY3d 126; People v Boston, 75 NY2d 585; People v Frederick, 45 NY2d 520.) II. On his collateral appeal, it was not an abuse of discretion to deny defendant’s motion pursuant to Criminal Procedure Law article 440 to vacate his plea. (People v Pichardo, 1 NY3d 126; People v Clark, 45 NY2d 432; People v Fuggazzatto, 62 NY2d 862; People v Boston, 75 NY2d 585; People v Hooper, 302 AD2d 894; People v Walker, 224 AD2d 781; People v Catu, 4 NY3d 242; People v Coles, 62 NY2d 908; People v Van Deusen, 7 NY3d 744.)
   OPINION OF THE COURT

Smith, J.

We held in People v Pichardo (1 NY3d 126 [2003]) that a defendant was entitled to withdraw his guilty plea where the plea had been induced by a promise that the defendant’s prison sentence would be concurrent with his sentence on a previous conviction and where, because the previous conviction was overturned, the promise could not be kept. In Pichardo, the earlier sentence was much the longer of the two, so that the promise of concurrent sentencing meant that the second sentence, entered on the plea, carried no additional jail time. In this case, we hold that the rule of Pichardo applies even where the second sentence is longer, and thus the promise of concurrent sentencing does not mean that no additional time will result from the guilty plea.

Defendant was indicted in August of 2003 for murder and a number of other crimes as a result of the shooting of Anthony Tagliarino. This indictment was not defendant’s only legal problem. In early 2004, while the murder case was pending, he was sentenced on his convictions for two other crimes, apparently unrelated to the Tagliarino shooting: he received 1 to 3 years for a violation of probation, and 2 to 4 years for possession of stolen property. These two sentences ran consecutively to each other, and therefore defendant was already facing a minimum of three and a maximum of seven years in prison when the murder case came to trial in June of 2004.

On the fifth day of the murder trial, a plea bargain was reached: Defendant entered an Alford plea to a count of criminally negligent homicide and a count of weapons possession. It was part of the plea bargain that defendant’s sentences for these crimes would run consecutively to one another and would total 4 to 8 years, but that they “would run concurrent with the previously imposed sentences.” Thus it seems that the anticipated effect of the plea bargain in the murder case was to add a year to the total time defendant was facing.

Defendant’s possession of stolen property conviction was reversed in early 2005, and he later made a plea bargain on that charge resulting in a one-year sentence — a reduction of 1 to 3 years from the sentence that had been in effect at the time of his guilty plea. Defendant then moved to vacate the conviction entered on his Alford plea, asserting that he would not have entered the plea but for the existence of the 2-to-4-year sentence for possession of stolen property, and his expectation that the sentence resulting from that plea would be concurrent with that preexisting sentence. County Court denied the motion, and the Appellate Division affirmed the denial, as well as defendant’s conviction and sentence on the Alford plea. A Judge of this Court granted leave to appeal, and we now reverse.

This case is controlled by Pichardo. There, the defendant pleaded guilty to criminal sale of a controlled substance, on the understanding that he would receive a l-to-3-year sentence that would be concurrent with an existing 20-years-to-life sentence for murder. The murder conviction was vacated, and the defendant was acquitted of murder after a retrial. He then moved to withdraw his plea to the drug sale charge. We held that the motion should have been granted, saying: “[W]hen a guilty plea is induced by the court’s explicit promise that the defendant will receive a lesser sentence to run concurrently with a sentence in another case, and that conviction is overturned, the defendant may withdraw his plea and face the indictment, since the promise cannot be kept” (1 NY3d at 129).

This case differs from Pichardo only in that the preexisting sentence here was a year shorter than the one agreed to in the plea bargain; in Pichardo, where the preexisting sentence was longer, we observed that the agreement to concurrent sentencing amounted to an “understanding that, by virtue of the plea, there would be no additional prison time” (id. [emphasis added]). But the difference between no extra time and only a year’s extra time is not decisive. The critical question is whether the removal or reduction of the preexisting sentence nullified a benefit that was expressly promised and was a material inducement to the guilty plea. The basis for our decision in Pichardo was that “we cannot say that defendant would have . . . pleaded guilty to the [drug sale charge] had it not been for the . . . conviction for murder, of which he now stands acquitted” (id. at 130). So here, we cannot say defendant would have accepted the plea bargain in the murder case had it not been for his 2-to-4-year sentence in the stolen property case, now reduced to a year.

We acknowledge that this application of the Pichardo rule will present a practical problem. It imposes no small burden on the People to require them to prepare for another trial in a murder case that was resolved by a plea almost three years ago. In the future, however, such problems should not be hard to avoid — and, indeed, they could have been avoided here. The solution, as we said in Pichardo, is for the parties, at the time of the plea, “to spell out, on the record, the consequences that will follow upon the vacatur of the [previous] conviction” (id.).

Accordingly, the order of the Appellate Division should be reversed, defendant’s motion to vacate the judgment of conviction and sentence granted and the case remitted to County Court for further proceedings on the indictment.

Graffeo, J.

(dissenting). I would affirm the order of the Appellate Division because this case is easily distinguished from People v Pichardo (1 NY3d 126 [2003]) and the record of these proceedings disclosed that defendant had a different motivation for entering into a negotiated plea than that presumed by the majority in setting aside defendant’s plea. The vacatur of the plea in Pichardo was predicated on two factors: that the guilty plea had been induced by the sentencing court’s express promise that the defendant would receive a lesser sentence to run concurrently with the sentence from a previous conviction, and the parties had agreed that the defendant would not be required to serve any additional prison time as a result of the plea. Neither of these incentives are apparent in this case because defendant agreed to a concurrent sentence that was longer than the prison term he was already serving.

Here, contrary to the majority’s view, there is ample record support for the conclusion that defendant would have accepted the plea offer even if he had not been previously convicted of criminal possession of stolen property. Defendant was facing a grand jury indictment that charged him with nine counts, including two counts of murder in the second degree (a class A-I felony), carrying a term of imprisonment of up to 25 years to life. After four days of trial testimony from 16 prosecution witnesses, the People offered defendant a plea to the class E felony of criminally negligent homicide and to the class D felony of criminal possession of a weapon in the third degree, with a recommended term of imprisonment of 4 to 8 years. The People’s decision to offer a reduced plea may have been motivated by doubts about the strength of their case. Nevertheless, the fact remains that, at the time of the plea, defendant agreed to enter a plea of guilty because he ‘‘believe[d] that there may be sufficient evidence to convict [him] at a trial and [he did not] want to risk being found guilty after trial and receiving a more severe sentence.” At no time during these proceedings did defendant indicate that the acceptance of the plea offer was induced by the fact that it would result in him serving one additional year of imprisonment.

An accused who is already serving jail time for a prior conviction may well consider the period of additional imprisonment tied to a plea offer when weighing the risks of proceeding to trial. That was the case in Pichardo where the defendant entered a negotiated plea to a drug charge only a week after he was convicted of murder in the second degree and sentenced to a prison term of 20 years to life. On those facts, it was arguable that Pichardo — who faced the real prospect of a life sentence— may have believed that his plea to the drug charge with a concurrent sentence of 1 to 3 years in prison was of little consequence. But there is an undeniable and critical difference when a defendant is on trial and confronting a jury verdict. The exigency of a possible guilty verdict will overshadow most other concerns, particularly here, where defendant could have received a sentence of 25 years to life if found guilty.

Aside from the facts presented in this case, I have serious concerns regarding the application of the majority’s rule in future cases. The majority concludes that the distinction between Pichardo and this case — no additional prison time versus one more year — is “not decisive” (majority op at 345). But how much additional time will make a difference? Should a defendant serving a sentence of 1 to 3 years for grand larceny in the fourth degree, who subsequently pleads guilty to robbery in the first degree in exchange for a concurrent sentence of 20 years in prison, and later obtains a vacatur of the grand larceny conviction be entitled to withdraw the robbery plea? The better standard to apply, in my view, is a rule that will produce consistent and fair results: when a guilty plea is induced by a court’s promise that the defendant will receive a longer sentence to run concurrently with a sentence in another case, and that prior conviction is overturned, the defendant should not be allowed to withdraw the plea because the promise of a total term of aggregate imprisonment has been kept.

The majority suggests that these problems can be averted if a defendant explicitly waives the consequences of vacatur of a prior conviction as part of a negotiated plea agreement. But even absent such a waiver, I believe that under Pichardo a defendant should be entitled to have a subsequent guilty plea set aside only if the record clearly demonstrates that the defendant was motivated to enter that plea because the term of imprisonment was less than or equal to the prior concurrent sentence.

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

Order reversed, defendant’s motion, pursuant to CPL 440.10, to vacate the judgment of conviction and sentence granted and case remitted to County Court, Saratoga County, for further proceedings on the indictment.


author: Chief Judge Kaye.

text:
    [866 NE2d 1004, 834 NYS2d 676]
    In the Matter of Marie LaCroix, Respondent, v Syracuse Executive Air Service, Inc., et al., Appellants. Workers’ Compensation Board, Respondent.
    Argued February 14, 2007;
    decided March 29, 2007

      POINTS OF COUNSEL

      Susan B. Marris, Liverpool, James S. Fiedler and Gregory J. Allen for appellants.
    I. Workers’ Compensation Law § 25 (1) (a), (b) mandate periodic payments of compensation. (Matter of Lynch v Board of Educ. of City of N Y., 1 AD2d 362, 3 NY2d 871; Lauritzen v Terry & Tench Co., 193 App Div 809; Matter of Linger v Anchor Motor Frgt., 124 AD2d 350; Matter of Landgrebe v County of Westchester, 57 NY2d 1; Matter of Marhoffer v Marhoffer, 220 NY 543; Matter of Wilkosz v Symington Gould Corp., 14 AD2d 408, 14 NY2d 739; Wozneak v Buffalo Gas Co., 175 App Div 268; Matter of Jensen v Southern Pac. Co., 215 NY 514, 244 US 205; Iacone v Cardillo, 208 F2d 696; Dietrick v Kemper Ins. Co. [American Motorists Ins. Co.], 76 NY2d 248.) II. Workers’ Compensation Law § 25 (5) (b) provides that compensation is to be paid in a lump sum only when justice so requires; and only when the award is first commuted to its present value. (Bell v Fraser, 210 App Div 560; Matter of Sayres v August Feine & Sons Co., 283 App Div 547; Matter of Rolle v General Foods Corp., Birds Eye Div., 19 AD2d 188; Matter of Reid v Arkansas Co., Inc., 233 App Div 451; Matter of Snyder v Union Mills, Inc., 220 App Div 786; Mandelblatt v Auswaks, 207 App Div 73; Wozneak v Buffalo Gas Co., 175 App Div 268.) III. In affirming a lump-sum payment of a schedule loss of use award, the Third Department violated canons of statutory construction. (Matter of Smith v Certain Teed Prods. Corp., 85 AD2d 820; Matter of M.B., 6 NY3d 437; Matter of OnBank & Trust Co. [Hartnett], 90 NY2d 725; Matter of Estate of Allen v Colgan, 190 AD2d 939; Matter of Albano v Kirby, 36 NY2d 526; Matter of Dinette v Workshop, Inc., 181 AD2d 969; Matter of Freeland v Endicott Forging & Mfg. Co., 233 App Div 440; Matter of Miller v North Syracuse Cent. School Dist., 1 AD3d 691; Matter of Porter v D.A. Collins Constr., 28 AD3d 951; Matter of Salvet v Union Carbide Linde Div., 135 AD2d 965.) IV. Matter of Miller v North Syracuse Cent. School Dist. (1 AD3d 691 [2003]) does not support payment of a schedule loss of use award in a lump sum. V. Public policy militates against paying a schedule loss of use award in a lump sum. (Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516; Matter of Medress v Bond Clothes Co., 107 AD2d 71; Matter of Riley v Syracuse Univ., 56 AD2d 163; Matter of Healey v Carroll, 282 App Div 969, 283 App Div 676; Dietrick v Kemper Ins. Co. [American Motorists Ins. Co.], 76 NY2d 248; Matter of Lansberry v Carbide/Graphite Group, Inc., 28 AD3d 1031.)

      Oot & Stratton, East Syracuse {Michael P. Oot of counsel), for Marie LaCroix, respondent.
    I. Schedule awards under the Workers’ Compensation Law are merely a method of calculating the benefits due to a claimant and are unrelated to and not allocable to any particular period of disability and lacking such allocation are logically and legally payable in full and at once. (Matter of Lynch v Board of Educ. of City of N. Y., 1 AD2d 362, 3 NY2d 871; Matter of Landgrebe v County of Westchester, 57 NY2d 1; Matter of Miller v North Syracuse Cent. School Dist., 1 AD3d 691; Matter of Fox v Crosbie-Brownlie, Inc., 284 AD2d 42.) II. The citations to the statute by the State Insurance Fund, contending that Workers’ Compensation Law § 25 would bar the payments ordered to claimant by the Workers’ Compensation Board, are inapposite. III. The decisions of the Workers’ Compensation Board and the Appellate Division in this matter are entirely consistent with other sections of the Workers’ Compensation Law. (Matter of Soper v Gouverneur Talc Co., 243 AD2d 1001; Matter of Freeland v Endicott Forging & Mfg. Co., 233 App Div 440; Tolloid v Hopeman & Sons Co., 209 App Div 719, 240 NY 550; Matter of Alber v Tobin, 33 AD2d 607.)

      Andrew Cuomo, Attorney General, Albany (Patrick Barnett-Mulligan, Caitlin J. Halligan and Daniel Smirlock of counsel), for Workers’ Compensation Board, respondent.
    I. Because a schedule award is payment for a permanent partial disability, and does not reflect compensation for a particular period of lost wages, the Workers’ Compensation Board may direct that the award be made in a single payment. (Matter of Lynch v Board of Educ. of City of N. Y, 1 AD2d 362, 3 NY2d 871; Matter of Ott v Green-Wood Cemetery, 262 NY 532; Matter of Landgrebe v County of Westchester, 57 NY2d 1; Matter of Miller v North Syracuse Cent. School Dist., 1 AD3d 691; Matter of Fox v Crosbie-Brownlie, Inc., 284 AD2d 42; Matter of Briggs v Village of Hamilton, 136 AD2d 442; Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516; Matter of Wilkosz v Symington Gould Corp., 14 NY2d 739; Matter of Salvet v Union Carbide Linde Div., 135 AD2d 965.) II. Payment of a Workers’ Compensation Law § 15 schedule award in a single payment is consistent with the other provisions of the Workers’ Compensation Law and with public policy. (Matter of Hoffman v Chatham Elec. Light, Heat & Power Co., 249 NY 433; Matter of Marhoffer v Marhoffer, 220 NY 543; Matter of Sokolowski v Bank of Am., 261 NY 57; Matter of Gefers v New York Window Cleaning Co., 224 App Div 792; Matter of Sienko v Bopp & Morgenstern, 248 NY 40; Matter of Ehrhardt v Eloge, Inc., 247 App Div 919; Dietrich v Kemper Ins. Co. [American Motorists Ins. Co.], 76 NY2d 248.)
   OPINION OF THE COURT

Chief Judge Kaye.

The question before us is whether, as a matter of policy under the Workers’ Compensation Law, compensation for loss of use of a body part due to permanent partial disability — known as a “schedule loss of use” award — is payable as a lump sum, or must be made over time. We conclude that the statute’s directive that payments be made “periodically” precludes a policy of lump-sum payment of schedule loss of use awards.

In November 2002, claimant Marie LaCroix, a Delta baggage handler employed by Syracuse Executive Air Service, slipped and fell on an iced-over ramp while attempting to load a last-minute bag. As a result, she fractured her left wrist and tore her left rotator cuff, and later filed a claim for compensation with the Workers’ Compensation Board. In a February 2003 determination, the Board found the injury to be work related, and claimant’s average weekly wage to be $415.83. While her claim was pending, she was awarded permanent partial disability payments for 72 weeks and three days, and temporary total disability payments for 24 weeks at $277.22 per week, amounting to $26,724.01.

On October 1, 2004, the Workers’ Compensation Board held a hearing on Ms. LaCroix’s claim for a schedule award for permanent partial disability. The parties stipulated to a 75% loss of use of claimant’s left arm. Claimant’s lawyer requested that “the entire schedule be paid, less, of course, prior payments, all at once rather than spreading it all out in the future as the old decisions used to do.” In an October 8, 2004 decision, the Board determined that Ms. LaCroix’s 75% schedule loss of use entitled her to 234 weeks of benefits at $277.22, or $64,869.48, less payments already made, and directed the employer’s insurance carrier “to pay schedule loss of use award in a lump sum.”

Upon review, a panel of the Board affirmed the lump-sum payment. It found that, although Workers’ Compensation Law § 25 (1) (b) specified biweekly payments, it also provided that “the board may determine that any payments may be made monthly or at any other period, as it may deem advisable.” Quoting Matter of Miller v North Syracuse Cent. School Dist. (1 AD3d 691, 692 [3d Dept 2003]), the panel explained that “[w]hen an award is based on a finding of permanent disability, the benefit is intended to recompense a claimant for the loss of all of his or her earning capacity on a permanent basis — i.e., without respect to any particular time frame” (Mem of Board Panel Decision of Dec. 28, 2004 [citation omitted]). The panel acknowledged that the assignment of a number of weeks to a specific injury was used to calculate the amount of the compensation award, but pointed out that this number did not otherwise correspond to payment for loss of use, as “even if no time is lost, [the schedule loss of use] is payable in full.” Thus, it held that “the Board may direct payments of a schedule loss of use presently, in full, without regard to a set period of calendar weeks,” and that a lump-sum award did not require compliance with the commutation procedures of Workers’ Compensation Law § 25 (5) (b) as “there are no allocated future payments that could be subject to a commutation.”

The Appellate Division unanimously affirmed. It determined that the contentions of claimant’s employer were

“based upon two erroneous assumptions — namely, that a schedule award is allocable to a particular period of disability and, hence, constitutes compensation in lieu of wages, which must, in turn, be paid periodically, and, further, that the foregoing statutory provisions expressly require a schedule award to be paid out over a particular period of time” (25 AD3d 967, 968 [2006]).

Dismissing the employer’s arguments as to the Board’s past practice, the Appellate Division concluded that “regardless of whether the Board previously may have treated a schedule award as one to be paid out over time, we are satisfied that the case law, as it subsequently has evolved, coupled with the general powers granted to the Board” supported its decision to make such payments payable in one lump sum (id. at 969). We now reverse.

Analysis

Where the interpretation of a statute or its application involves “knowledge and understanding of underlying operational practices or entails an evaluation of factual data and inferences to be drawn therefrom,” we regularly defer to the agency responsible for its administration, unless that determination is irrational or unreasonable (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459 [1980]). The issue before us here, however, is primarily one of statutory interpretation for the courts. Indeed, the Board itself notes that its shift in policy rested on the Third Department’s opinion in Miller, signaling “little basis to rely on any special competence or expertise of the administrative agency” (id. at 459).

Contrary to the Appellate Division, we conclude that the Board’s interpretation contravenes the plain language of Workers’ Compensation Law § 25.

Enacted in 1913 as the Workmen’s Compensation Law, the statute provides compensation for four different types of injury: permanent total disability, temporary total disability, permanent partial disability and temporary partial disability (Workers’ Compensation Law § 15 [1], [2], [3], [5]). In the case of permanent total disability, an employee is awarded payment of a percentage of wages during the continuance of the disability; the same is true for temporary total disability and temporary partial disability (see Workers’ Compensation Law § 15 [1], [2], [5]). Permanent partial disability, however, is called a schedule loss of use award because the statute assigns — as by a “schedule” — a fixed number of lost weeks’ compensation according to the bodily member injured (see Workers’ Compensation Law § 15 [3]).

While the general purpose of permanent and temporary disability awards pursuant to section 15 (1), (2) and (5) is to “compensat[e] for disability to work made on the basis of average weekly wages,” a schedule loss of use award is to “compensate for loss of earning power” (Matter of Marhoffer v Marhoffer, 220 NY 543, 546, 547 [1917]). Nevertheless, all compensation awards are intended to provide a “limited and certain, not full but uncertain” remedy regardless of the fault of the employer (see id. at 547), and to “continue the wage income as nearly uniform as the provisions of the law would permit” after the employee’s injury (Matter of Lauritzen v Terry & Tench Co., 193 App Div 809, 810 [3d Dept 1920]).

Section 25 directs the method of payment of such compensation. Prior to 1921, section 25 provided that compensation be paid “periodically, in accordance with the method of payment of the wages of the employee at the time of his injury or death” (see L 1913, ch 816). In 1921, the Legislature amended this section to require that it be paid “periodically and promptly in like manner as wages” and on accrual that it be paid “directly to the person entitled thereto without waiting for an award” (see L 1921, ch 540, § 1 [emphasis added]). The additional language was intended to expedite the award process. Whereas injured workers previously were not entitled to any payment of an award prior to a hearing, regardless of the employee’s undisputed right to compensation, following the amendment most injured workers were receiving compensation within three weeks of injury (see Rep to Legislature of Joint Comm on Labor and Indus, Bill Jacket, L 1922, ch 615, at 5).

Section 25 (1) (b) provides that

“[t]he first payment of compensation shall become due on the fourteenth day of disability on which date or within four days thereafter all compensation then due shall be paid, and the compensation payable bi-weekly thereafter; but the board may determine that any payments may be made monthly or at any other period, as it may deem advisable” (emphasis added).

Section 25 (5) (b) further permits the Board, “whenever it shall so deem advisable,” to “commute such periodical payments to one or more lump sum payments to the injured employee . . . provided the same shall be in the interests of justice” (Workers’ Compensation Law § 25 [5] [b]). The purpose of this section was not to “destroy the general scheme of the statute establishing periodical payments . . . , [r]ather it was ... to provide for particular and exceptional instances” where such a deviation would be desirable (annotation to Workmen’s Compensation Law § 25, Cons Laws of NY Ann of 1918). Periodic payments commuted pursuant to this section must, however, be reduced to present value (see Workers’ Compensation Law § 25 [5] [b]; § 27 [2]).

Reading these provisions harmoniously, we conclude that section 25 provides for payment of compensation at the time the injured worker would normally receive his or her wages and continued biweekly payments, unless the Board determines that payments should be made at different intervals, but it does not contemplate a policy of payment as one lump sum. “Period” plainly means a division or portion of time. “Periodic payment” means “[o]ne of a series of payments made over time instead of a one-time payment for the full amount” (Black’s Law Dictionary 1165 [8th ed 2004]). Section 25 explicitly requires periodic payment of compensation, even if such compensation is payable at a period other than biweekly or as wages customarily accrue (see Workers’ Compensation Law § 25 [1] [a], [b]), and we cannot read “at any other period” in Workers’ Compensation Law § 25 (1) (b) to include a one-time payment. Although other provisions of the Workers’ Compensation Law grant the Board considerable discretion in determining “the time for the payment of compensation” (see Workers’ Compensation Law § 142 [1]), section 142 is limited by section 25 (1), which explicitly requires periodic payment.

As the statute limits commutation of such periodic payments to individual situations in which the Board determines that the interests of justice so require — and then only upon an actuarial reduction — the Board was without authority to direct the full-value lump-sum payment ordered here. Neither the general purpose of the Workers’ Compensation Law in ensuring uniform continuation of an injured worker’s income flow, nor the specific purpose of the Legislature in amending section 25 to prevent delay in commencement of payments, establishes an intent to permit payment of schedule loss of use awards to fall outside of the statute’s direct prescription.

Other provisions of the Workers’ Compensation Law, while ancillary to the issue presented here, support our reading of the statute. Section 15 (3) (u), for example, provides that two or more schedule loss of use awards for permanent partial disabilities “shall run consecutively”; section 15 (3) (v) states that an employee may be eligible for additional compensation for impairment of wage earning capacity “after the termination” of a permanent partial disability schedule award for a 50% or more loss of an arm, leg, hand or foot. Subdivision (4) provides for discontinuation of a schedule loss of use award upon the death of a claimant with no heirs (with the exception of reasonable funeral expenses) if claimant dies from causes unrelated to the compensable injury (Workers’ Compensation Law § 15 [4] [d]). The plain language of these provisions contemplates payment of an award over a period of time. Although literal application is possible, these provisions would be substantially compromised in meaning and effect — payments to run consecutively would simply be made back to back, options available after termination of an award would immediately accrue, and cancellation of benefits upon death would have even more limited application — were we to read section 25 as the Board did.

Nor are we compelled to interpret section 25 differently based on a sequence of cases that delineate the conceptual distinction between schedule loss of use and other compensation awards. In fact, we do not agree with claimant that the case law is at odds with our statutory analysis. In Matter of Lynch v Board of Educ. of City of N Y. (1 AD2d 362 [1956], affd 3 NY2d 871 [1957]), the court considered whether section 25 permitted an employer to be reimbursed by its carrier for the full amount of weekly wages paid following injuries that caused claimant’s total disability. It found that the statute permitted reimbursement from the nonschedule award for up to the statutorily prescribed weekly compensation rate, but no more. In distinguishing Matter of Ott v Green-Wood Cemetery (262 NY 532 [1933]), in which we held that a schedule loss of use award would permit such full reimbursement, the Lynch court noted that

“[i]n the case of a schedule award, the weekly rate and the number of weeks specified in the schedule are simply the measure by which the total amount of the award is to be determined. The payment is not analogous to the payment of weekly compensation for temporary disability. Liability for the schedule award comes into existence on the date of the accident. The payment of the schedule award is not allocable to any particular period of disability” (Matter of Lynch, 1 AD2d at 365).

Whereas the nonschedule award was limited to the specified weekly rate, the schedule award, untethered to a period of weekly compensation, was not so limited.

We considered a similar question in Matter of Landgrebe v County of Westchester (57 NY2d 1 [1982]). Asked to determine whether an employer who had paid full wages to an employee during a period of temporary disability was entitled to full reimbursement out of a later schedule award for a different (though consequential) injury, we held that the employer was entitled only to the amount of the maximum weekly total disability rate. As the award of weekly compensation for the previous nonschedule injury was not comparable to the schedule loss of use award for the subsequent injury, and each injury constituted a “distinct physical occurrence and impairment” (id. at 11), reimbursement for the former could not be made from the latter. We explained that — as opposed to a section 15 award for any other type of disability — a schedule award was “independent of the time an employee actually loses from work” even though computation of such award required multiplication of the applicable weekly rate by “a statutorily prescribed number of weeks” (id. at 6).

More recently, in Miller, the court considered whether a schedule loss of use award overlapped with a temporary total disability award to violate the statutory maximum. Relying in part on Lynch and Landgrebe, the Appellate Division determined that no violation had occurred, as the losses each award was intended to reimburse were distinct — one to compensate for earning capacity, the other for temporary loss of wages during a specific period of time — and the schedule loss of use was not allocable to any particular time frame (Miller, 1 AD3d at 693).

The Board bases its decision on Miller. Assuming that Miller is correct, we do not agree that Miller or its predecessors dictate that result. The conceptual framework for a schedule award as unallocable to a particular period of lost wages is separate and distinct from the award’s method of payment. Neither Lynch, nor Landgrebe, nor Miller addresses the method of payment of a schedule loss of use award, much less overrides a statutory payment mechanism that has been in place for close to a century.

We recognize that arguments have long been made on both sides of the issue. Some have said that lump-sum payments fail to account for recipients who spend their awards up front and then turn to state resources for support, putting the community “right back where it would have been if there had been no compensation system at all” (see 4 Larson’s Workers’ Compensation Law § 80.05 [5], at 80-28 [2006]). Others have reasoned that, as a schedule loss equates to a fixed award calculable upon injury, the state should not delay full payment over a period of years, effectively preventing a claimant from choosing how to invest these funds (see Gellhorn and Lauer, Administration of the New York Workmen’s Compensation Law [Part II], 37 NYU L Rev 204, 229 [1962]). One thing is clear: any departure from the method of periodic payment of schedule loss of use awards specified in the Workers’ Compensation Law must come from the Legislature.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the case remitted to the Appellate Division, with directions to remand to the Workers’ Compensation Board for further proceedings in accordance with this opinion.

Judges Cipabick, Gbaffeo, Read, Smith, Pigott and Jones concur.

Order reversed, etc.

      . These provisions apply equally to commutation of a periodic payment to a lump sum pursuant to section 25 (5). Lump-sum payments, however, would be the exception rather than the rule, and such considerations would presumably factor into an interests of justice analysis.

      . We distinguish Matter of Charles A. Field Delivery Serv. (Roberts) (66 NY2d 516 [1985]), in which we noted that an agency must provide an explanation for its departure from agency precedent adequate for a reviewing court to ascertain whether it has done so for valid reasons. Here, the Board provided no reasons of its own for its change in policy. Field, in any event, is inapposite, as this case concerns not a policy or precedent within the agency's purview but the interpretation of a statute.