author: Rosenblatt, J. Ciparick, J. (dissenting).

text:
    [812 NE2d 291, 779 NYS2d 801]
    In the Matter of Notre Dame Leasing, LLC, Respondent, v Alexandra Rosario et al., Appellants.
    Argued March 23, 2004;
    decided May 11, 2004

      POINTS OF COUNSEL

      Queens Legal Services Corporation, Jamaica (Carl O. Cal-lender and Randolph Petsche of counsel), for appellant.
    I. The Appellate Division erred in holding that the plain language of Social Services Law § 143-b (5) precludes a tenant from interposing it as a defense against entry of a judgment in a proceeding for nonpayment of rent unless the public welfare agency has previously withheld the rental payments demanded by the landlord. (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577; Crystal Apts. Group v Hubbard, 178 Misc 2d 333; People v Finnegan, 85 NY2d 53, 516 US 919; Desiderio v Ochs, 100 NY2d 159; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1; Matter of Auerbach v Board of Educ. of City School Dist. of City of N.Y., 86 NY2d 198; Town of Amherst v County of Erie, 260 NY 361; McKuskie v Hendrickson, 128 NY 555; Bender v Jamaica Hosp., 40 NY2d 560; Patrolmen’s Benevolent Assn, of City of N.Y. v City of New York, 41 NY2d 205.) II. The public policy considerations that prompted enactment of Social Services Law § 143-b (5) permit the tenant to interpose it without prior suspension of rental payments to a landlord by public welfare officials. (Matter of Farrell v Drew, 19 NY2d 486; Matter of Schaeffer v Montes, 37 Mise 2d 722; Matter of Long v Adirondack Park Agency, 76 NY2d 416; Sanders v Winship, 57 NY2d 391; Matter of New York Life Ins. Co. v State Tax Commn., 80 AD2d 675, 55 NY2d 758; Matter of Grand Jury Subpoena Duces Tecum [Museum of Modern Art], 93 NY2d 729; Majewski v

      Broadalbin-Perth Cent. School Dist., 91 NY2d 577; Matter of Radich v Council of City of Lackawanna, 93 AD2d 559, 61 NY2d 652; Johnson v Hudson Riv. R.R. Co., 49 NY 455.) III. The Appellate Division erred in finding that permitting tenants to interpose Social Services Law § 143-b (5) without prior withholding of rent by public welfare officials was an unconstitutional impairment of a landlord’s rights in contract. (Matter of Farrell v Drew, 19 NY2d 486; Crane Neck Assn. v New York City/Long Is. County Servs. Group, 61 NY2d 154, 469 US 804; Matter of Department of Bldgs. of City of N.Y. [Philco Realty Corp.J, 14 NY2d 291; Home Bldg. & Loan Assn. v Blaisdell, 290 US 398.)

      Pennisi, Daniels & Norelli, LLP, Rego Park (Denise M. May of counsel), for respondent.
    I. The language of Social Services Law § 143-b is clear and unambiguous in its intention to be a defense against an action to collect welfare monies, paid by welfare on behalf of a tenant, withheld by the agency, due to violations within a welfare recipient’s building. (Matter of Auerbach v Board of Educ. of City School Dist. of City of N.Y., 86 NY2d 198; Matter of Albano v Kirby, 36 NY2d 526; Cummings v Board of Educ. of City of N.Y., 275 App Div 577, 300 NY 611; Matter of Long v Adirondack Park Agency, 76 NY2d 416; People v Mobil Oil Corp., 48 NY2d 192; Heard v Cuomo, 80 NY2d 684; Matter of Aaron J., 80 NY2d 402; Matter of Branford House v Michetti, 81 NY2d 681; People v Finnegan, 85 NY2d 53; Dearie v Hunter, 183 Misc 2d 336.) II. Permitting a tenant to invoke Social Services Law § 143-b without prior action by the welfare official, as a defense to the tenant’s withheld portion of the rent, is an impermissible impairment to the contract between landlord and tenant. (Matter of Farrell v Drew, 19 NY2d 486; Heard v Cuomo, 80 NY2d 684.)

      Michael A. Cardozo, Corporation Counsel, New York City (Marta Ross, Edward F.X. Hart and Tayo Kurzman of counsel), for City of New York, amicus curiae. The Appellate Division erred in holding that a public assistance recipient may not invoke Social Services Law § 143-b (5) as a defense to a summary nonpayment proceeding unless a public welfare official has first withheld the recipient’s rent. (Matter of Farrell v Drew, 19 NY2d 486.)

      Legal Aid Society, Kew Gardens (Susan Gibson O’Gara, Josephine C. Flores, Alan Conner and April Newbauer of counsel), amicus curiae.
    I. The decision below undermines the remedial nature of the Spiegel Law and misapprehends the public policy implications of construing the law to be available only if a public official has withheld rent. (Dearie v Hunter, 183 Mise 2d 336.) II. Both the plain meaning of the statute and the legislative history support appellant’s position that tenants are authorized to enforce the Spiegel Law. (Matter of Farrell v Drew, 19 NY2d 486; Desiderio v Ochs, 100 NY2d 159; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1.) III. The Spiegel Law’s authorization of rent withholding by welfare recipients does not unconstitutionally impair the contractual rights of landlords. (Matter of Farrell v Drew, 19 NY2d 486; Nordred Realties v Langley, 169 Misc 659, 279 NY 636; Matter of Department of Bldgs. of City of N.Y. [Philco Realty Corp.], 20 AD2d 851, 14 NY2d 291; Crane Neck Assn, v New York City/Long Is. County Servs. Group, 61 NY2d 154, 469 US 804; Crystal Apts. Group v Hubbard, 178 Misc 2d 333; Bender v Jamaica Hosp., 40 NY2d 560.)

      Community Service Society of New York, New York City (Juan Cartagena and Risa E. Kaufman of counsel), amicus curiae.
    I. Consistent with its literal meaning, the Spiegel Law was intended to ensure that public assistance recipients live in safe and decent housing. (People v Finnegan, 85 NY2d 53; New Amsterdam Cas. Co. v Stecker, 3 NY2d 1; Matter of Long v Adirondack Park Agency, 76 NY2d 416; Ferres v City of New Rochelle, 68 NY2d 446; People v Ryan, 274 NY 149; Rust v Reyer, 91 NY2d 355; Matter of Farrell v Drew, 19 NY2d 486; Matter of Capital Newspapers v Whalen, 69 NY2d 246.) II. The plain meaning of the Spiegel Law advances the Legislature’s intended remedial purpose by inducing landlords to make necessary repairs and protecting tenants from substandard and unsafe housing conditions. (Matter of Farrell v Drew, 19 NY2d 486.)
   OPINION OF THE COURT

Rosenblatt, J.

On this appeal, we must determine the circumstances under which Social Services Law § 143-b (5) (a) (the Spiegel Law) allows a social services tenant to withhold rent based on dangerous violations in the building.

L

Alexandra Rosario (tenant) resides with her husband and children in a Queens apartment owned by Notre Dame Leasing, LLC (landlord). The tenant, who receives public assistance, pays only a portion of her monthly rent, with the Human Resources Administration (HRA) paying the balance.

On January 4, 2000, the landlord commenced a summary proceeding against the tenant in Civil Court to recover $1,454.43 in unpaid rent for October 1999 through January 2000. Relying on Social Services Law § 143-b (5), the tenant moved for summary judgment dismissing the proceeding. She asserted that because conditions in her building were “dangerous, hazardous or detrimental to life or health,” the law excused her from paying rent. In support, she submitted records from the New York City Department of Housing Preservation and Development (HPD) indicating that there were 33 class B and C violations in the building.

Notwithstanding these violations, the HRA did not withhold rent from the landlord, although it could have, pursuant to its powers under section 143-b (2). The tenant contended, however, that under section 143-b (5) of the Social Services Law the mere presence of such violations justified her nonpayment of rent, even without previous withholding by the HRA. In response, the landlord introduced proof that HPD had reinspected the building, dismissed 13 of the violations and marked others as “pending.” As the pivotal issue on this appeal, the landlord argued that the tenant could not invoke section 143-b (5) unless the HRA first withheld its share of the rent payments.

Civil Court found that the tenant had made a prima facie showing that section 143-b (5) authorized her to withhold rent, but stayed the matter until the landlord submitted proof that it had remedied the violations. The landlord appealed to the Appellate Term, which reversed Civil Court and denied the tenant’s motion for summary judgment. The Appellate Term concluded that a tenant could not invoke the section 143-b (5) defense because the “public welfare department”—here, the HRA—had not withheld its share of rent payments to the landlord, pursuant to its authority under Social Services Law § 143-b (2). The Appellate Term later granted the tenant’s motion for reargument and, following reargument, reaffirmed its earlier decision and granted the tenant leave to appeal to the Appellate Division.

By a divided Court, the Appellate Division affirmed the Appellate Term’s reading of section 143-b (5). Two Justices, however, concluded that the language of section 143-b (5) supported the tenant’s claim. The Appellate Division granted the tenant permission to appeal to this Court. We now affirm.

II

Social Services Law § 143-b (5) (a) provides that it “shall be a valid defense in any action or summary proceeding against a welfare recipient for non-payment of rent to show existing violations in the building wherein such welfare recipient resides which relate to conditions which are dangerous, hazardous or detrimental to life or health as the basis for non-payment.” The tenant contends that she should be able to invoke this defense whenever there is a qualifying violation in her building, regardless of whether the “appropriate social services agency”—here the HRA—has first withheld rent on that basis. We conclude that the structure, language, history and legislative intent of the Spiegel Law negate the tenant’s interpretation of section 143-b (5).

As we stated in People v Mobil Oil Corp. (48 NY2d 192, 199 [1979]), “[i]t is a well-settled principle of statutory construction that a statute or ordinance must be construed as a whole and that its various sections must be considered together and with reference to each other” (see also McKinney’s Cons Laws of NY, Book 1, Statutes § 97). Although section 143-b (5) might be read to allow a defense untethered to the actions of the public welfare department, such an interpretation undermines the statutory scheme. Section 143-b (5) is a constituent provision of a statute that primarily addresses the rights and responsibilities of the “public welfare department” and “public welfare officials],” and is best read that way.

Thus, section 143-b (1) authorizes the public welfare department to make direct rent payments to the landlord. Subdivision (2) authorizes public welfare officials to

“withhold the payment of any such rent in any case where he has knowledge that there exists or there is outstanding any violation of law in respect to the building containing the housing accommodations occupied by the person entitled to such assistance which is dangerous, hazardous or detrimental to life or health.”

The statute further obligates the “department or agency having jurisdiction over violations” to report them to the “appropriate public welfare department.” (Id.) Subdivision (3) empowers public welfare officials to initiate rent reduction proceedings “whenever such official has knowledge that essential services . . . are not being maintained by the landlord or have been substantially reduced by the landlord.” Subdivision (4), in turn, permits the public welfare department to “obtain and maintain current records of violations in buildings where welfare recipients reside.” Finally, subdivision (6) allows the public welfare department to pay withheld rent “upon proof satisfactory to it that the condition constituting a violation was actually corrected.”

The dissent argues that the public welfare departments are apparently not using their powers under the Spiegel Law to withhold rent when violations are present. But it is for those agencies, not for us, to decide when their powers should be used. And if, indeed, the agencies are not doing enough, the proper remedy is for them to do more, not for us to rewrite the statute.

The dissent’s reading of section 143-b (5) is incompatible with the Spiegel Law’s framework. Section 143-b designates the public welfare department and its officials as the principal enforcement actors under the statute. It would be anomalous for the Legislature to fashion subdivision (5) as a private defense that tenants could invoke, independent of any agency action. Rather, section 143-b (5) is best understood as a means of shielding tenants from eviction when the public welfare department chooses to withhold rent, pursuant to its discretion under section 143-b (2). Indeed, the language of subdivision (5) itself suggests that agency action under section 143-b (2) is a condition precedent to a tenant’s invoking the section 143-b (5) defense. The Spiegel Law defense applies only when a building violation relating to “conditions which are dangerous, hazardous or detrimental to life or health” is the “basis for non-payment.” For the purposes of the Spiegel Law, however, agency action is required to determine the existence of a violation. Section 143-b (5) (c) provides that the “defenses provided herein . . . shall apply only with respect to violations reported to the appropriate public welfare department by the appropriate department or agency having jurisdiction over violations.”

The tenant’s interpretation of section 143-b (5) not only conflicts with the complex statutory scheme but also ignores the Spiegel Law’s history and purpose. According to amicus Legal Aid Society, at the time the Spiegel Law was enacted, public welfare department payments covered a tenant’s entire rent. In promulgating Social Services Law § 143-b the Legislature intended to end the State’s “subsidizing slumlords who abuse and exploit welfare tenants, but nevertheless receive guaranteed monthly rent checks . . . from the Dept, of Welfare” (Letter to Honorable Robert MacCrate from Assemblyman Samuel A. Spiegel, dated Apr. 6, 1962, Bill Jacket, L 1962, ch 997, at 61). In the words of section 143-b’s sponsor, the Legislature sought to “attack[ ] the ‘jugular vein’ of the slumlord by temporarily withholding payments of rent until hazardous and dangerous violations are cleared” {id. at 62). Elsewhere, Assemblyman Spiegel explained that, under the proposed law, “it would be a good defense in any action for non-payment of rent that there are dangerous or hazardous violations on a building and that public funds should not be permitted to be used to further the continuance of any building which is substandard” (Statement by Assemblyman Samuel A. Spiegel, dated Mar. 31, 1962, Bill Jacket, L 1962, ch 997, at 58-59 [emphasis added]).

In enacting section 143-b, the Legislature wanted to end government subsidies to landlords who failed to provide safe and habitable housing. As part of this effort, it created a defense that tenants could invoke when the public welfare department identified a violation in the building and withheld rent accordingly. The Legislature did not intend, however, to make this defense available to individual tenants when public welfare officials themselves recognized no imperative to suspend payment.

Although the tenant’s interpretation of section 143-b would, in certain instances, promote the Legislature’s objective of encouraging landlords to curb substandard conditions, it would also permit tenants to avoid paying rent for violations having no effect on them. As amended in 1997, RPAPL 745 (2) (a) requires tenants seeking to adjourn an eviction proceeding to “deposit with the court within five days sums of rent or use and occupancy accrued from the date the petition and notice of petition are served upon the respondent, and all sums as they become due for rent and use and occupancy.” Section 745 (2) exempts from this undertaking provision tenants who claim actual eviction, actual partial or constructive eviction, as well as those who interpose a defense pursuant to the Spiegel Law.

Thus, as the tenant would have it, public assistance tenants subject to eviction proceedings could cite any violation in their buildings—even those having no effect whatsoever on them—as a basis for interposing a Social Services Law § 143-b (5) defense and would not pay rent (or deposit any with the court) during the pendency of the proceedings. By contrast, in actions for eviction or unpaid rent, tenants claiming a breach of warranty of habitability under Real Property Law § 235-b (l) 5or who seek an abatement of rent under Multiple Dwelling Law § 302-a for a “rent impairing” violation must nevertheless deposit with the court the amount of rent sought to be recovered. We note that both Real Property Law § 235-b and Multiple Dwelling Law § 302-a permit tenants to withhold or abate rent for deficient conditions that, while outside their individual apartments, impair their occupancy and enjoyment of the building generally.

The Legislature designed Social Services Law § 143-b as a “weapon in the fight against slum housing in general” (Matter of Farrell v Drew, 19 NY2d 486, 490 [1967]). While we share the dissent’s concern over the importance of the Spiegel Law as a means of remedying substandard housing conditions, it would be improvident for us to rewrite the statute to reach that goal.

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

Ciparick, J. (dissenting).

Because a plain reading of Social Services Law § 143-b (5)—the Spiegel Law—allows a recipient of public assistance, under certain circumstances, to interpose a defense to an action or summary proceeding for the nonpayment of rent, where a “public welfare” agency has not previously withheld its share of the rent, I respectfully dissent.

The statute provides that “[i]t shall be a valid defense in any action or summary proceeding against a welfare recipient for non-payment of rent to show existing violations in the building wherein such welfare recipient resides which relate to conditions which are dangerous, hazardous or detrimental to life or health as the basis for non-payment” (Social Services Law § 143-b [5] [a]). It also provides that a landlord will not be entitled to a monetary award against the tenant or to possession of the premises where these types of hazardous violations are present (see Social Services Law § 143-b [5] [b]).

It is well-established that statutory interpretation begins with the plain language of the statute (see Leader v Maroney, Ponzini & Spencer, 97 NY2d 95, 104 [2001]; Majewski v BroadalbinPerth Cent. School Dist., 91 NY2d 577, 583 [1998]). “As the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof’ (Majewski, 91 NY2d at 583). This primary rule of statutory interpretation has been eschewed by the majority in favor of a construction that considers the statute as a whole and sets forth some “equivocal evidence of legislative intent” (Desiderio v Ochs, 100 NY2d 159, 169 [2003]). I prefer a literal reading and look to the unambiguous language of the statute.

The unambiguous language of Social Services Law § 143-b (5) makes no mention of the public welfare official or agency. There is nothing in the provision requiring that the agency must act first to withhold rent on the tenant’s behalf. Thus, the plain language of the statute permits a tenant to invoke the Spiegel Law defense for nonpayment of rent, regardless of whether there has been a prior withholding of rent by the public welfare agency, here the New York City Human Resources Administration. Further, as this Court has previously noted, section 143-b is remedial in nature (see Matter of Farrell v Drew, 19 NY2d 486, 493-494 [1967]). As such, it must be liberally construed to accomplish its intended purpose (see Matter of New York County DES Litig., 89 NY2d 506, 514 [1997]). The statute should not be read to imply a restriction that does not appear on its face.

However, even construing the statute as a whole and applying the canon of construction urged by the majority, does not lead to the conclusion that it is the public welfare agency who must first withhold rent in order for the tenant to be able to invoke the Spiegel Law defense. As the dissenting Appellate Division Justices most aptly observed, the absence of any reference to public welfare officials in subdivision (5) lends itself equally well to the interpretation that the Legislature—which referenced either the public welfare department or public welfare official in subdivisions (1) through (4)—intentionally omitted such reference and intended to allow tenants to withhold their own rent where appropriate in subdivision (5) (308 AD2d 164, 175-176 [2003] [Luciano, J., dissenting]).

Generally, the purpose for reading provisions of a statute as a whole is to accurately determine the legislative intent (see McKinney’s Cons Laws of NY, Book 1, Statutes § 97). But here, the legislative intent was clear—to attempt to ameliorate the poor housing conditions faced by many tenants receiving public assistance. The “Declaration of purpose and necessity” states that:

“[t]he legislature hereby finds and declares that certain evils and abuses exist which have caused many tenants, who are welfare recipients, to suffer untold hardships, deprivation of services and deterioration of housing facilities because certain landlords have been exploiting such tenants by failing to make necessary repairs and by neglecting to afford necessary services in violation of the laws of the state” (L 1962, ch 996, § 1; see also Farrell, 19 NY2d at 490 [indicating that the legislation was intended to combat “slum housing”]).

The provision was clearly enacted because existing remedies were insufficient to combat the problems faced by tenants receiving public assistance. Allowing tenants to withhold rent themselves continues to further the purpose of the statute, especially in light of the present situation where public welfare officials apparently are not using their statutory power to withhold rent when violations are present. Welfare officials typically do not withhold payments before an action or a special proceeding is commenced (see Lebovits, Nonpayment Proceedings: The So-Called Spiegel Defense, 2 Landlord-Tenant Prac Rep 1, 5 [May 2001]). In light of this inaction, the majority’s interpretation of the statute essentially thwarts its purpose—taking away the threat of nonpayment of rent to offending landlords and the incentive to make repairs. A plain reading of the statute is neither an attempt to undermine the statutory scheme nor to rewrite it (see majority op at 465, 467), but preserves for all recipients of public assistance a defense conferred by the Legislature.

The prevailing practice at the time the statute was enacted was for a public welfare agency to pay the entire amount of the tenant’s rent. The rent payments would ordinarily be made to the tenant, who would then pay the landlord, in the absence of habitual delinquency or certain other circumstances (see Joint Legis Comm on Hous and Multiple Dwellings Mem in Support, Bill Jacket, L 1962, ch 997, at 12). For this reason, it is not surprising that the legislative history reflects a desire to stop the use of public funds to support substandard housing (see majority op at 465-466). This is in contrast to the current practice, where the agency pays only a portion of the rent in the form of a shelter grant and the tenant pays the difference. However, the broad language of section 143-b (5) (a) has remained unchanged.

In addition, a statutory safeguard is in place to protect against abuses. Section 143-b (5) (c) requires that the Spiegel Law defense will only be available where the existing violations have been reported to the welfare officials by an appropriate agency, here the New York City Department of Housing Preservation and Development. Thus, only documented violations would qualify. This dispels the concern that the defense can be abused by tenants attempting to avoid paying rent (see majority op at 467). It is perhaps debatable whether hazardous conditions or conditions harmful to one’s life or health existing in the building—although not in the tenant’s own apartment—would have no effect on the tenant. However, as the majority observes in a footnote, the statute allows for the defense where violations exist in a building “regardless of the given apartment’s nexus with the violation” (majority op at 467 n 3).

Further support for the position that a tenant does not have to await action by a public welfare official to invoke the Spiegel Law defense can be found in Real Property Actions and Proceedings Law § 745. This relatively recent 1997 enactment—part of the Rent Regulation Reform Act of 1997 (L 1997, ch 116, § 36)— requires a tenant in a summary proceeding wherein an adjournment is requested by the tenant to deposit a sum with the court sufficient to cover the amount of rent or use and occupancy from the date of the commencement of the action unless, among other things, the tenant can demonstrate that he or she has properly interposed a Spiegel Law defense (see RPAPL 745 [2] [a] [iii]). The provision does not differentiate between sums paid by the tenant and sums paid by a public welfare agency. It makes clear only that the tenant is not required to deposit any portion of the rent. Certainly if the intent was otherwise, the Legislature could have said so. Neither does the availability of other remedies such as Real Property Law § 235-b—the warranty of habitability statute—or Multiple Dwelling Law § 302-a—which defines a rent impairing violation—lead to the conclusion that the Legislature intended a requirement of prior withholding of rent by a public welfare agency as a precondition to a tenant’s invocation of the Spiegel Law defense.

In conclusion, the plain language of section 143-b does not require a public welfare agency to withhold rent before a tenant can assert the Spiegel Law defense in an action or summary proceeding for nonpayment of rent. In light of the remedial nature of the statute and the broad legislative purpose to correct the unique problems faced by tenants receiving public assistance living in substandard housing, such a restriction should not be read into the provision. The legislative intent is best served by a plain reading of the statute, authorizing tenants receiving public assistance to withhold rent when documented hazardous violations exist on the premises that are dangerous to life or health. If the public policy in this area has changed over the last 40 years, then it is for the Legislature to redraft the statute to reflect it. It cannot be done by ignoring the plain language of the statute and its overriding purpose and intent “which is to ensure decent housing for economically fragile individuals” (308 AD2d at 176 [Luciano, J., dissenting]).

Therefore, I would reverse the order of the Appellate Division and grant appellant’s motion for summary judgment dismissing the petition.

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

Order affirmed, etc.

      . A class B violation is “hazardous,” whereas a class C violation is “immediately hazardous” (Administrative Code of City of NY § 27-2115 [c] [2], [3]).

      . See also Attorney General’s Memorandum for the Governor, dated April 21, 1962 (Bill Jacket, L 1962, ch 997, at 7), which states, “[t]his bill seeks to correct the anomalous condition wherein one municipal department seeks to prevent slum and dangerous conditions from being maintained at the same time that another governmental unit is financially rewarding such maintenance.”

      . We note, however, that section 143-b (2) does give the public welfare department discretion to withhold rent for any apartment in a building with a qualifying violation, regardless of the given apartment’s nexus with the violation.

      . In pertinent part, Real Property Law § 235-b (1) provides that a “landlord or lessor shall be deemed to covenant and warrant that the premises so leased or rented and all areas used in connection therewith in common with other tenants or residents are fit for human habitation and for the uses reasonably intended by the parties and that the occupants of such premises shall not be subjected to any conditions which would be dangerous, hazardous or detrimental to their life, health or safety.” We note that the tenant has raised breach of warranty of habitability as an affirmative defense in this case.

      . Multiple Dwelling Law § 302-a (2) (a) defines a “rent impairing” violation as “a condition in a multiple dwelling which . . . constitutes, or if not promptly corrected, will constitute, a fire hazard or a serious threat to the life, health or safety of occupants thereof.”

       It certainly is an anomaly to have two different groups of welfare tenants, one where the public welfare agency has previously withheld the payment of rent, with access to a Spiegel Law defense, and a second group where this “condition precedent” has not been met, without the benefit of such defense.


source: Caselaw Access Project

author: Graffeo, J.

license: Public Domain

text:
    [812 NE2d 298, 779 NYS2d 808]
    In the Matter of ATM One, LLC, Appellant, v Ana Landaverde, Respondent.
    Argued April 29, 2004;
    decided June 3, 2004

      POINTS OF COUNSEL

      Wolfson & Grossman, Westbury (Paula Schwartz Frome of counsel), for appellant.
    The court below erred in its interpretation of the controlling regulations. (People v Cypress Hills Cemetery, 208 AD2d 247; Matter of Nicit v Regan, 199 AD2d 606; Matter of American Motors Sales Corp. v Brown, 152 AD2d 343; Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98; Pajak v Pajak, 56 NY2d 394; Prego v City of New York, 147 AD2d 165; Village of Webster v Town of Webster, 270 AD2d 910; Department of Fin. of City of N.Y. v New York Tel. Co., 262 AD2d 96; Matter of Lanthier v Department of Transp., 183 AD2d 1083; Lewis v Clothes Shack, 67 Misc 2d 621.)

      Community Legal Assistance Corp., Hempstead (Stefan H. Krieger of counsel), for respondent.
    I. The narrow issue in this case is when service by mail is deemed complete for a notice to cure under the Emergency Tenant Protection Regulations. (En-gel v Lichterman, 62 NY2d 943.) II. Since the language of Emergency Tenant Protection Regulations (9 NYCRR) § 2504.1 (d) (1) is silent as to the time when service of a notice to cure by mail is deemed complete, the Appellate Division properly did not adhere to plain language analysis. (Sorrento v Rice Barton Corp., 286 AD2d 873; Pardi v Barone, 257 AD2d 42; Matter of Thomas v Bethlehem Steel Corp., 95 AD2d 118, 63 NY2d 150; Matter of Knickerbocker Ins. Co. [Gilbert], 28 NY2d 57; Matter of Finest Rest. Corp. [L & A Music Co.], 52 Misc 2d 87; Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98; People v Cypress

      Hills Cemetery, 208 AD2d 247; Matter of McCulloch v New York State Ethics Commn., 285 AD2d 236; Matter of Nicit v Regan, 199 AD2d 606; Matter of American Motor Sales Corp. v Brown, 152 AD2d 343.) III. Because the Emergency Tenant Protection Regulations are silent as to the time when service is deemed complete, the Appellate Division properly borrowed from the procedural scheme for termination of commercial leases. (Matter of David L., 119 Misc 2d 477; Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98; N.Y.A.A.D., Inc. v State of New York, 1 NY3d 245; NL Indus., Inc. v PaineWebber, Inc., 720 F Supp 293; Lewis v Clothes Shack, 67 Misc 2d 621; Grabino v Howard Stores Corp., 110 Misc 2d 591; Nestor v McDowell, 81 NY2d 410; People v Garland, 69 NY2d 144; Warren St. Assoc. v City Hall Tower Corp., 202 AD2d 200.) IV. The Appellate Division’s interpretation that service is complete upon receipt is supported by the language of other provisions within the Emergency Tenant Protection Regulations. (Anglin v Anglin, 80 NY2d 553; Matter of Roballo v Smith, 99 AD2d 5, 63 NY2d 485; Monarch Ins. Co. v Pollack, 32 AD2d 819; Matter of Finest Rest. Corp. [L & A Music Co.], 52 Misc 2d 87; Matter of Medical Socy. of State of N.Y. v State of N.Y. Dept. of Health, 83 NY2d 447.) V The Appellate Division’s interpretation that service is complete upon receipt is consistent with other statutory service schemes in New York that compensate for additional time when service is made by mail. (New York State Assn. of Counties v Axelrod, 78 NY2d 158; Matter of Biondo v New York State Bd. of Parole, 60 NY2d 832; Matter of Knickerbocker Ins. Co. [Gilbert], 28 NY2d 57.) VI. If mailing of a notice to cure is completion of service, Emergency Tenant Protection Regulations (9 NYCRR) § 2504.1 (d) (1) (i) (c) violates respondent’s right to equal protection. (Schweiker v Wilson, 450 US 221; Lindsey v Normet, 405 US 56; Logan v Zimmerman Brush Co., 455 US 422.)
   OPINION OF THE COURT

Graffeo, J.

In this appeal, the owner of a building challenges the dismissal of its holdover proceeding against a tenant allegedly violating the maximum occupancy provision of the parties’ lease. We conclude that the proceeding was properly dismissed because the tenant was not afforded 10 days written notice to cure the alleged violation.

Section 2504.1 of the Division of Housing and Community Renewal’s Emergency Tenant Protection Regulations sets forth restrictions regarding the removal of a tenant in a rent-stabilized housing accommodation. Prior to commencing a proceeding to recover possession based on a tenant’s wrongful act, an owner must give the tenant written notice to cure (9 NYCRR 2504.1 [d] [1] [i]). The notice must state the wrongful acts of the tenant, the facts necessary to establish such acts and “the date certain by which the tenant must cure said wrongful acts or omission, which date shall be no sooner than 10 days following the date such notice to cure is served upon the tenant” (id. subcl [c] [emphasis added]). A proceeding may not be maintained if the tenant cures the specified wrongful act “by or before the date specified” (§ 2504.1 [d] [1] [ii]). At the time relevant to this appeal, the regulations also provided that

“[n]otices, orders, protests, answers and other papers may be served personally or by mail. When service is made personally or by mail, an affidavit by the person making the service or mailing shall constitute sufficient proof of service. When service is by registered or certified mail, the return post office receipt shall constitute sufficient proof of service” (9 NYCRR 2508.1 [a]).

Respondent tenant leases a one-bedroom apartment in Free-port, New York from petitioner owner. On September 8, 2000, owner served tenant with a “Notice of Default; Ten Days’ Notice to Cure; Thirty Days’ Notice of Cancellation,” alleging overcrowding in violation of the lease. The notice was sent by certified and regular mail on September 8, 2000, and set a “date certain” of September 18, 2000 for cure. It is undisputed that tenant received the notice on September 9, 2000, thus affording her only nine days to cure.

After expiration of the 30-day cancellation period, owner commenced this holdover proceeding against tenant. Tenant moved to dismiss the petition on the basis that she did not receive the mandated 10-day opportunity to cure. Owner opposed the motion, arguing that the 10-day period commenced upon mailing of the notice on September 8 and that tenant therefore received the requisite time to cure.

District Court dismissed the petition. In order to address the failure of the regulations to define when a mailed notice to cure shall be deemed served, the court “borrow[ed] the concept embodied in” CPLR 2103 by requiring owners to add five days to the prescribed period when serving by mail. Upon granting reargument, District Court adhered to its determination. Appellate Term affirmed. Although it agreed with District Court’s rationale “that the regulatory purpose was to afford a tenant the full 10 days prescribed in which to cure a breach,” the court rejected the addition of five days for service by mail in favor of a rule that service is complete upon delivery (190 Misc 2d 76, 77 [2001]). Owner appealed.

The Appellate Division also affirmed the dismissal of owner’s petition. The Court defined service under the regulations “in terms of receipt rather than in terms of mailing” to effectuate the underlying policies and avoid “the possibility that, in a case involving an abnormally extended delay in the delivery of the mail, a tenant might not be told of the date within which he or she may cure a violation until after that date has actually passed” (307 AD2d 922, 923, 924 [2d Dept 2003]). Two Justices dissented and voted to reinstate the petition. The dissenting Justices viewed the plain meaning of the regulations as establishing that “the date of service is the date [the notice] was mailed as evidenced by a contemporaneous affidavit of service” and expressed concern that the Court’s holding rendered the provision permitting service by mail ineffective because the owner “will never be able to know when the notice is actually received” (id. at 925). The Appellate Division granted owner leave to appeal to this Court.

Owner urges that, under the plain meaning of the regulations, service of the notice to cure was complete on September 8, the date the notice was mailed. Owner thus contends that the notice’s September 18 date certain complied with the regulations, notwithstanding that once tenant received the notice she had only nine days to rectify her alleged lease violation. In contrast, tenant asserts that because the regulations are silent with respect to when service of a mailed notice to cure is deemed complete, the courts below properly looked to the policies and intent underlying the regulations to resolve the issue. In light of these considerations, tenant argues that the regulation entitles her to the full 10-day cure period before a holdover proceeding may be maintained and that this Court should adopt District Court’s approach and require owners who mail notices to add five days when calculating the date certain by which tenants must cure. We agree with tenant and therefore affirm.

In matters of statutory and regulatory interpretation, we have repeatedly recognized that

“legislative intent is the great and controlling principle, and the proper judicial function is to discern and apply the will of the [enactors]. Generally, inquiry must be made of the spirit and purpose of the legislation, which requires examination of the statutory context of the provision as well as its legislative history” (Mowczan v Bacon, 92 NY2d 281, 285 [1998] [internal quotation marks and citations omitted]; see Matter of Sutka v Conners, 73 NY2d 395, 403 [1989]).

We are further guided by the tenet that regulations—like statutes—should be construed to avoid objectionable results (see People v Dozier, 78 NY2d 242, 250 [1991]; McKinney’s Cons Laws of NY, Book 1, Statutes § 141; see also 2 NY Jur 2d, Administrative Law § 184 [administrative regulations generally subject to same canons of construction as statutes]).

The Division of Housing and Community Renewal (DHCR) adopted the regulations at issue in this case pursuant to its powers under the Emergency Tenant Protection Act of 1974 (ETPA [L 1974, ch 576, § 4, as amended]; see 9 NYCRR 2500.1). The Legislature enacted the ETPA to address the “serious public emergency” in housing across New York State as evidenced by “an acute shortage of housing accommodations” (McKinney’s Uncons Laws of NY § 8622 [ETPA § 2]). In the legislative finding for the most recent extension of the Act, the Legislature determined that “preventive action . . . continues to be imperative in order to prevent exaction of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices tending to produce threats to the public health, safety and general welfare” (id.).

As every court to consider this case thus far has recognized, the regulation that purports to answer the question of when service of a notice is complete does not actually do so. It identifies permissible service methods and what constitutes proof of service but fails to specify when such service is deemed to have occurred if service by mail is utilized. Reading the service provision (9 NYCRR 2508.1 [a]) together with the notice to cure regulation (9 NYCRR 2504.1 [d]), we conclude that District Court’s approach best effectuates the regulatory purpose to afford tenants a 10-day cure period before they may be subject to lease termination for designated violations. We therefore hold that owners who elect to serve by mail must compute the date certain by adding five days to the 10-day minimum cure period (see e.g. CPLR 2103 [b] [2]). In this manner, service will be deemed complete upon mailing, and a properly executed affidavit of service will raise a presumption that proper mailing occurred (see Kihl v Pfeffer, 94 NY2d 118, 122 [1999]; Engel v Lichterman, 62 NY2d 943, 944-945 [1984]). “[M]ere denial of receipt is not enough to rebut this presumption” (Kihl, 94 NY2d at 122). By its terms, of course, CPLR 2103 applies to pending actions, and we therefore do not extend its applicability to the commencement of summary proceedings. We agree with District Court, however, that the addition of a definite number of days is necessary for service by mail to ensure that tenants are not disadvantaged by an owner’s choice of service method, and that such an addition provides a practical and fair solution to this regulatory ambiguity.

The rule advocated by owner—which would define the act of mailing as completion of service and permit owners to calculate the “date certain” from that starting point—is inconsistent with regulatory purpose to provide tenants a 10-day opportunity to cure and would lead to unpredictable results. The Appellate Division and Appellate Term rule, deeming service complete upon a tenant’s receipt of the notice, is similarly flawed because an owner could not reliably compute and insert the date certain on the notice as required by the regulations. Instead, the rule we adopt balances the need for orderly and efficient resolution of lease violations with the stated legislative purposes of the ETPA. Here, the subject notice did not form a valid predicate for terminating the lease because the date certain as established by owner, when paired with the chosen service method, did not provide tenant the minimum 10-day cure period. Thus, owner’s holdover proceeding was properly dismissed on this ground. We encourage DHCR to amend its regulations consistent with this determination in order to provide better guidance to parties who elect to serve notices to cure by mail.

Accordingly, the order of the Appellate Division should be affirmed, with costs. The certified question should not be answered upon the ground that it is unnecessary.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Read and R.S. Smith concur.

Order affirmed, etc.

      . The regulation was subsequently amended to permit electronic service, among other changes.

      . Indeed, the amended version of section 2508.1 (a) expressly provides that “[o]nce sufficient proof of service has been submitted to the division, the burden of proving nonreceipt shall be on the party denying receipt.”


author: Per Curiam.

text:
    [812 NE2d 932, 780 NYS2d 106]
    In the Matter of Joseph J. Cerbone, a Justice of the Mount Kisco Town Court, Westchester County, Petitioner. State Commission on Judicial Conduct, Respondent.
    Argued April 29, 2004;
    decided June 3, 2004

      POINTS OF COUNSEL

      Richard E. Grayson, White Plains, for petitioner.
    I. The conduct alleged to have occurred is not so egregious as to warrant the ultimate sanction of removal. (Matter of Cunningham, 57 NY2d 270; Matter of Kiley, 74 NY2d 364; Matter of Boulanger, 61 NY2d 89; Matter of Tamsen, 100 NY2d 19; Matter of Embser, 90 NY2d 711; Matter of Ponzini, 259 AD2d 142; People v Moreno, 70 NY2d 403; People v Smith, 63 NY2d 41; Matter of Murphy, 82 NY2d 491; Matter of Duckman, 92 NY2d 141.) II. This Court has a history of rejecting the State Commission on Judicial Conduct’s determination of removal, and this case fits within the criteria to reject the sanction of removal. (Matter of Kiley, 74 NY2d 364; Matter of Shilling, 51 NY2d 397; Matter of Skinner, 91 NY2d 142; Matter of Watson, 100 NY2d 290; Matter of LaBelle, 79 NY2d 350; Matter of Edwards, 67 NY2d 153; Matter of Kelso, 61 NY2d 82; Matter of Cunningham, 57 NY2d 270; Matter of Quinn v State Commn. on Jud. Conduct, 54 NY2d 386; Matter of Kuehnel v State Commn. on Jud. Conduct, 49 NY2d 465.)

      Robert H. Tembeckjian, New York City, for respondent.
    I. Petitioner’s conversion of a client’s funds constituted egregious misconduct. (Matter of Boulanger, 61 NY2d 89; Matter of Tam-sen, 100 NY2d 19; Matter of Embser, 90 NY2d 711; Matter of Kelso, 61 NY2d 82.) II. Petitioner’s misuse of judicial office to retaliate against the District Attorney and otherwise to pursue a personal agenda was prejudicial to the administration of justice. III. Petitioner’s egregious misconduct warrants his removal from judicial office.
   OPINION OF THE COURT

Per Curiam.

Petitioner, a Justice of the Mount Kisco Town Court, Westchester County, seeks review of a determination of the State Commission on Judicial Conduct. The Commission decided that petitioner should be removed from office because of (1) conduct as an attorney in converting funds from an escrow account and (2) conduct as a judge which, the Commission found, was intended to retaliate against the Westchester County District Attorney for making a previous complaint to the Commission about petitioner. In view of the conduct of petitioner that led to this and five previous Commission proceedings, we accept the sanction as determined by the Commission.

Petitioner’s Previous History with the Commission

In 1993, the Commission sent petitioner a Letter of Dismissal and Caution addressing two instances of petitioner’s misuse of his judicial position. He had directed some defendants who appeared before him “to attend a village board meeting to complain about snow emergency regulations” and thus to “advance [petitioner’s] personal position on . . . snow emergency signs.” He had also made, from the bench, a complaint to an attorney for a carting company that was a defendant in a criminal proceeding before him; petitioner had expressed unhappiness with the company’s operation of trucks on a Mount Kisco street. The Commission dismissed the complaint against petitioner that was based on these incidents, but cautioned him to adhere to the relevant provisions of the Rules of Judicial Conduct.

In 1996, the Commission admonished petitioner on the basis of two separate series of events. The first of these occurred during a criminal case before petitioner in which the defendant was the son of people petitioner had represented. Petitioner telephoned the complaining witness ex parte and made favorable remarks about the defendant that persuaded the witness to withdraw the complaint. Petitioner then dismissed the charges, over the prosecution’s objection, without disclosing either his prior relationship with the defendant’s family or his conversation with the witness. The Commission found that petitioner’s telephone call and his failure to disclose it created an “appearance of favoritism.” The other basis for the 1996 admonition was a practice followed by petitioner for a few months in late 1993 and early 1994 of conducting arraignments in the Mount Kisco police station, rather than in a public courtroom.

In 1997, petitioner received two more Letters of Dismissal and Caution from the Commission. The first of these related to a lawsuit by petitioner’s sister against the Village of Mount Kisco, in which petitioner had listed himself as his sister’s attorney and engaged in settlement discussions with counsel for the insurance carrier. The Commission told petitioner that “[a] part-time judge should not act as an attorney in a lawsuit against the municipality in which the judge sits.”

Later in 1997, the Commission again cautioned petitioner, this time on the basis of a letter petitioner had written on judicial stationery to a former public official “concerning files that [the recipient] had supposedly kept on [petitioner] and others.” Petitioner had “demanded a list of all those upon whom such files were maintained.” The Commission told petitioner that “[b]y using judicial stationery in connection with what was essentially a private, political dispute, you used the prestige of your office to further your personal interests.” The Commission added: “It is troubling that even on reflection you insist that the use of judicial stationery under these circumstances was appropriate.”

In 1999, petitioner received his last Letter of Dismissal and Caution. This one concerned an attorney who had appeared before him. The Commission’s 1999 letter stated that “in several cases, you advised clients of [the attorney] that he had made a complaint to the Commission against you and inquired as to whether they would seek your recusal.” The Commission said that by taking this approach—i.e., by making the attorney’s clients aware of the problem, rather than simply deciding for himself whether he should be recused—petitioner was “interfering with attorney-client relationships in apparent retaliation for the complaint made against you.” The Commission also noted that, in one case where the attorney was defense counsel, petitioner “restored the case to the court calendar a day after it had been disposed of so that [he] could discuss an advisory opinion concerning disqualification with [the attorney].” This conduct, the Commission’s letter stated, “constituted abuse of your judicial powers” because petitioner had placed the defendant again in jeopardy in order to “make a point” with her attorney. The Commission added that this “extraordinary procedure . . . created the reasonable impression that you were retaliating against [the attorney].”

The Present Proceeding

A. The Escrow

The first of the two charges against petitioner that the Commission sustained in this proceeding arose out of petitioner’s private law practice. In 1999, while petitioner was representing the executrix of an estate, a tax refund check, made out to the executrix, was sent to petitioner. Without his client’s knowledge or consent, petitioner deposited the check in his escrow account and then wrote a check on that account to himself for his attorney’s fee.

As a result of this action, petitioner was suspended from the practice of law for one year. (Matter of Cerbone, 295 AD2d 66 [2d Dept 2002].) In choosing to suspend petitioner rather than to disbar him the Appellate Division relied upon “the totality of circumstances, including the absence of venality.” (Id. at 68.)

B. The Dispute with the District Attorney

The second charge sustained by the Commission in this proceeding is based on petitioner’s inappropriate expressions of displeasure with the Westchester County District Attorney during 2001 and 2002. This displeasure apparently grew out of the proceeding which led the Commission to admonish petitioner in 1996. As noted above, the Commission found that petitioner had acted improperly by having an ex parte conversation with a complaining witness that led her to withdraw a criminal complaint. Petitioner evidently blamed the District Attorney for bringing this incident to the Commission’s attention, and as a result, the Commission found in the present case, he engaged in the following conduct:

1. He “prepared and distributed to defense attorneys who appeared before him in criminal cases a form letter which he asked them to complete and mail to the office of the District Attorney.” The form letter disclaimed any professional or social relationship between the defendant in the criminal case and petitioner.
2. When distributing the form letter, petitioner “frequently made remarks to the effect that the District Attorney had previously filed a complaint against him which had cost him half a million dollars to defend against and that due to illnesses in his family he had neither the time or money to defend himself against future complaints.” These remarks were made in open court, in the hearing of an assistant district attorney and of defense lawyers and defendants present for the call of the criminal calendar.
3. Petitioner “recused himself sua sponte from four shoplifting cases while stating that he was doing so because the District Attorney had failed to prosecute former Mount Kisco employees for their private use of computers belonging to the Town, despite clear evidence of their crimes.” As a result of petitioner’s recusal, the cases had to be reassigned to petitioner’s co-justice, who would not sit until the following month, thus necessitating an extra court appearance for defendants and their lawyers.
4. Petitioner stated on several occasions to those present in his court “that his office telephone was ‘tapped,’ that the District Attorney was keeping ‘dossiers’ on him, and that he was ‘being watched.’ ”

C. The Commission’s Ruling

Based on its findings of fact, the Commission concluded that petitioner had violated eight provisions of the Rules of Judicial Conduct (22 NYCRR part 100): sections 100.1 (general requirement of “high standards of conduct”); 100.2 (A) (obligation to “respect and comply with the law and . . . act at all times in a manner that promotes public confidence in the integrity and impartiality of the judiciary”); 100.3 (B) (2) (obligation to “require order and decorum in proceedings”); 100.3 (B) (3) (obligation to be “patient, dignified and courteous” to litigants and others); 100.3 (B) (4) (obligation to perform duties “without bias or prejudice”); 100.3 (B) (7) (obligation to “dispose of all judicial matters promptly, efficiently and fairly”); 100.4 (A) (2) (prohibition on extrajudicial activities that “detract from the dignity of judicial office”); and 100.4 (A) (3) (prohibition on extrajudicial activities that “interfere with the proper performance of judicial duties” or are “incompatible with judicial office”). The Commission also determined that, because petitioner “converted funds entrusted to his care” and “used his courtroom as a forum for expressing his personal grievances against the District Attorney,” he “lacks the judgment and temperament to sit on the bench and is unfit for judicial office.”

Discussion

Our role in this proceeding is to review the Commission’s findings of fact and conclusions of law, and to decide whether the sanction determined by the Commission, or another sanction or no sanction, should be imposed. (NY Const, art VI, § 22 [d].)

Petitioner does not challenge the Commission’s findings of fact. We agree with those findings and with the Commission’s conclusions that petitioner violated sections 100.1, 100.2 (A) and 100.3 (B) (3), (4) and (7) of the Rules of Judicial Conduct. It is not necessary to consider the other sections relied on by the Commission.

Petitioner’s sole argument is that the sanction of removal is too severe for this case. In making this argument, he relies on our statement in Matter of Cunningham (57 NY2d 270, 275 [1982]): “Removal is an extreme sanction and should be imposed only in the event of truly egregious circumstances .... Indeed, we have indicated that removal should not be ordered for conduct that amounts simply to poor judgment, or even extremely poor judgment ...” (citations omitted).

Petitioner points out that we have sometimes rejected the sanction of removal where we found misconduct to be based on failings of judgment rather than on more profound flaws of character. (See Matter of Kelso, 61 NY2d 82 [1984] [judge who, as a private lawyer, mishandled a case and misled his client about it, but did not receive any fee or other sum from his client]; Matter of LaBelle, 79 NY2d 350, 363 [1992] [improper rulings that were “motivated primarily by compassion”]; Matter of Kiley, 74 NY2d 364, 370 [1989] [improper actions at the request of friends with no “element of venality, selfish or dishonorable purpose”].) The Commission stresses that the present case, unlike those cited above, involved the conversion of client funds, and relies on Matter of Boulanger (61 NY2d 89 [1984]), Matter of Tamsen (100 NY2d 19 [2003]) and Matter of Embser (90 NY2d 711 [1997]) as holding that financial improprieties are the sort of egregious conduct that warrant removal. Petitioner responds that in Boulanger, Tamsen and Embser there was an element of “venality,” which the Appellate Division, in suspending petitioner from the practice of law for one year, found to be absent here.

In deciding the appropriate sanction we consider both the severity of the misconduct involved in this proceeding and petitioner’s extensive prior history. This is his sixth encounter with judicial discipline, and several of the prior proceedings were, as this one is, based on more than one incident. While the facts of the cases differ greatly, many of them involve a common theme: petitioner seems incapable of understanding, despite repeated warnings, that a judge performing judicial duties must both act and appear to act as an impartial arbiter serving the public interest, not someone with an axe to grind. A judge who does not know this, and is not capable of learning it, should not be on the bench.

Accordingly, the determined sanction should be accepted without costs.

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo, Read and R.S. Smith concur in per curiam opinion.

Determined sanction accepted, without costs, and Joseph J. Cerbone removed from the office of Justice of the Mount Kisco Town Court, Westchester County.

       Petitioner asserted at the hearing before the Commission in this case that his telephone had indeed been “tapped” from 1993 to 1997. The basis for this allegation was that, until 1997, two lines used by petitioner’s court were linked to the telephone system of the police department (which was in the same building), so that the police department’s recording equipment could record calls originating from those two lines. After petitioner became aware of and complained about this situation, the District Attorney conducted an investigation and concluded that, while the connection between the court and police lines did exist, neither court nor police personnel had been aware of it.
      Evidence before the Commission also established that the District Attorney had in her file four documents relating to the matter that resulted in the 1996 admonition. These documents, in petitioner’s view, constituted a “dossier.”


text:
    [812 NE2d 302, 779 NYS2d 812]
    Sarah Wolinsky et al., Appellants, et al., Plaintiff, v Kee Yip Realty Corp., Respondent.
    Argued May 4, 2004;
    decided June 8, 2004

      POINTS OF COUNSEL

      David E. Frazer, New York City, for appellants.
    I. The Emergency Tenant Protection Act of 1974 is, as this Court has repeatedly held, “all-inclusive” and, as such, includes these residential lofts. (Matter of Salvati v Eimicke, 72 NY2d 784; 520 E. 81st St. Assoc. v Lenox Hill Hosp., 38 NY2d 525; Axelrod v Starr, 52 AD2d 232, 41 NY2d 942; Matter of Zeitlin v New York City Conciliation & Appeals Bd., 46 NY2d 992; Matter of Gracecore Realty Co. v Hargrove, 90 NY2d 350; Matter of Mott v New York State Div. of Hous. & Community Renewal, 211 AD2d 147; Matter of Ruskin v Miller, 172 AD2d 164; Mandel v Pitkowsky, 102 Mise 2d 478, 76 AD2d 807; Farnham v Kittinger, 83 NY2d 520; Walker v Town of Hempstead, 84 NY2d 360.) II. The zoning resolution does not preclude the Emergency Tenant Protection Act of 1974. (Asian Ams. for Equality v Koch, 128 AD2d 99; Tan Holding Corp. v Wallace, 187 Misc 2d 687; Jordan Mfg. Corp. v Lledos, 153 Misc 2d 296; 111 on 11 Realty Corp. v Norton, 189 Misc 2d 389; Matter of Lansdown Entertainment Corp. v New York City Dept. of Consumer Affairs, 74 NY2d 761; Matter of S.H. Kress & Co. v Department of Health of City of NY., 283 NY 55; Jancyn Mfg. Corp. v County of Suffolk, 71 NY2d 91; City of New York v State of New York, 171 AD2d 629, 78 NY2d 951; Oelbermann Assoc. v Borov, 141 Misc 2d 838; Hudsoncliff Bldg. Co. v Chandler, 279 AD2d 423.) III. The Loft Law does not preclude the Emergency Tenant Protection Act of 1974. (J & M Real Estate Co. v Kam Chew Lim, 191 AD2d 345; Tan Holding Corp. v Wallace, 187 Misc 2d 687; Axelrod v Starr, 52 AD2d 232, 41 NY2d 942; Matter of Zeitlin v New York City Conciliation & Appeals Bd., 46 NY2d 992; Mandel v Pitkowsky, 102 Misc 2d 478; 182 Fifth Ave. v Design Dev. Concepts, 300 AD2d 198.)

      Kolodny PC., New York City (Peter Kolodny of counsel), for respondent.
    I. The Emergency Protection Tenant Act of 1974 does not apply to commercial units first used residentially after the enactment and effective dates of the Loft Law. (J & M Real Estate Co. v Kam Chew Lim, 191 AD2d 345; Adrico Realty Corp. v City of New York, 250 NY 29; Dali v Time, Inc., 252 App Div 636, 278 NY 635; Wilson v One Ten Duane St. Realty Co., 123 AD2d 198; Matter of Korn v Batista, 131 Misc 2d 196, 123 AD2d 526; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298.) II. The Emergency Tenant Protection Act of 1974 was never intended to apply to commercial space converted to residential use after January 1, 1974. (Matter of Zeitlin v New York City Conciliation & Appeals Bd., 46 NY2d 992; Wilson v One Ten Duane St. Realty Co., 123 AD2d 198; Sega v State of New York, 60 NY2d 183; Pajak v Pajak, 56 NY2d 394.) III. The New York City Zoning Resolution prohibits residential use of and issuance of a residential certificate of occupancy for the building, and, thereby, precludes tenants residentially occupying commercial loft space in the building from claiming rent stabilization protection under the Emergency Tenant Protection Act of 1974. (Tan Holding Corp. v Wallace, 187 Misc 2d 687; Little Joseph Realty v Town of Babylon, 41 NY2d 738; Mandel v Pitkowsky, 102 Misc 2d 478, 76 AD2d 807; East 82 v O’Gormley, 295 AD2d 173; Matter of Bella Vista Apt. Co. v Bennett, 89 NY2d 465.) IV The New York City zoning resolution is not preempted by the Emergency Tenant Protection Act of 1974 and, therefore, is controlling. (Matter of Ibero-American Action League v Palma, 47 AD2d 998; DJL Rest. Corp. v City of New York, 96 NY2d 91; Little Joseph Realty v Town of Babylon, 41 NY2d 738; Stringfellow’s of N.Y. v City of New York, 91 NY2d 382; Jancyn Mfg. Corp. v Suffolk County, 71 NY2d 91; Vatore v Commissioner of Consumer Affairs of City of N.Y., 83 NY2d 645.)

      Robert Petrucci, New York City, for Lower Manhattan Loft Tenants, amicus curiae.
    I. The Emergency Tenant Protection Act of 1974’s reach includes loft tenants. (Matter of Salvati v Eimicke, 72 NY2d 784, 73 NY2d 995; Matter of Gracecor Realty Co. v Hargrove, 90 NY2d 350; Wilson v One Ten Duane St. Realty Co., 123 AD2d 198; Matter of Knight-Ridder Broadcasting v Greenberg, 70 NY2d 151.) II. The Emergency Tenant Protection Act of 1974’s coverage is not automatically precluded from zones where residential use is not permitted as of right. (Brusco v Armstrong, 191 Misc 2d 272; Pajak v Pajak, 56 NY2d 394; City of New York v State of New York, 171 AD2d 629, 78 NY2d 951; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298; BLF Realty Holding Corp. v Kasher, 299 AD2d 87.) III. The Loft Law does not preclude the Emergency Tenant Protection Act of 1974’s coverage. IV The possibility of legalizing residential use in a manufacturing zone is not “mere speculation,” and owners of loft buildings should be required to demonstrate that legalization is not possible before the Emergency Tenant Protection Act of 1974’s coverage is denied. (McDonnell v Sir Prize Contr. Corp., 32 AD2d 660; Matter of K&G Co., v Reyes, 52 Misc 2d 606; Tan Holding Corp. v

      Wallace, 187 Misc 2d 687; Nirco Invs. Corp. v New York City Loft Bd., 131 AD2d 325; Little Arfn Annie v New York City Loft Bd., 121 AD2d 852.)
   OPINION OF THE COURT

Graffeo, J.

In 1982, the Legislature enacted the Loft Law to address the proliferation of illegal residential conversions of manufacturing premises in New York City. Plaintiff tenants, who converted their commercially-leased units over a decade after the Loft Law’s eligibility period ended, ask this Court to extend the protections of the Emergency Tenant Protection Act of 1974 (ETPA [L 1974, ch 576, § 4, as amended]) to their conversions. We conclude, as did the courts below, that ETPA protections are not available under these circumstances.

Defendant landlord Kee Yip Realty Corp. owns a seven-story commercial building located at 135 Grand Street in Manhattan. The building is situated in a M1-5B zoning district, which permits use of the property for light manufacturing and joint living-work space for artists. New residential development is excluded in this district, except for joint living-work quarters for artists, to ensure adequate area for industrial growth (see New York City Zoning Resolution § 41-11).

Over an 11-month period beginning in July 1997, landlord entered into commercial leases with tenants individually for the rental of raw loft space on the second through seventh floors of the building. The leases provided for monthly rental payments of approximately $1,700. Tenants renovated their rental units at their own expense, converting the loft space for personal residential use. There is no residential certificate of occupancy for the building, and landlord has apparently made no attempt to obtain a variance or other relief from the zoning restriction. Tenants do not dispute that they occupy the units illegally, in violation of the City Zoning Resolution, as they are not artists.

As the expiration of their commercial leases approached, tenants commenced this action seeking injunctive relief and a declaration that, notwithstanding their illegal use of the space, they are protected by the Rent Stabilization Law and Rent Stabilization Code through the ETPA. Landlord answered and moved for summary judgment solely on the basis that the building could not legally be converted to residential use and that tenants therefore were not entitled to any relief.

Supreme Court granted landlord’s motion and dismissed the complaint. Noting the inapplicability of the Loft Law (see Multiple Dwelling Law art 7-C) to the facts of this case, the court held that the ETPA did not provide a mechanism for converting commercially-zoned property to residential use and thus tenants could not legalize their conversions.

On tenants’ appeal, the Appellate Division modified, only to the extent of declaring that the tenancies are not covered by the ETPA, and otherwise affirmed. The Court rejected tenants’ request for ETPA protection, holding that the Act “does not extend to tenancies that are illegal and incapable of becoming legal” (302 AD2d 327, 328 [1st Dept 2003]). This Court granted tenants leave to appeal and we now affirm.

This appeal involves the interplay of two statutory schemes— the ETPA and the Loft Law—both enacted to address a “serious public emergency” in housing (McKinney’s Uncons Laws of NY § 8622 [ETPA § 2]; Multiple Dwelling Law § 280 [Loft Law]). The ETPA, adopted in 1974, was necessary “to prevent exaction of unjust, unreasonable and oppressive rents and rental agreements and to forestall profiteering, speculation and other disruptive practices tending to produce threats to the public health, safety and general welfare” (McKinney’s Uncons Laws of NY § 8622 [ETPA § 2]). To that end, where a locality has declared a housing emergency, the Act applies to regulate residential rents “of all housing accommodations which it does not expressly except, including previously unregulated accommodations” (Matter of Salvati v Eimicke, 72 NY2d 784, 791 [1988]; see Matter of Gracecor Realty Co. v Hargrove, 90 NY2d 350, 355 [1997]; McKinney’s Uncons Laws of NY §§ 8623, 8625 [ETPA §§ 3, 5]).

The Legislature passed the Loft Law—Multiple Dwelling Law article 7-C (L 1982, ch 349, § 1)—in 1982 in response to the “emergency . . . created by the increasing number of conversions of commercial and manufacturing loft buildings to residential use without compliance with applicable building codes and laws and without compliance with local laws regarding minimum housing maintenance standards” and in recognition of the fact “that illegal and unregulated residential conversions undermine the integrity of the local zoning resolution and threaten loss of jobs and industry” (Multiple Dwelling Law § 280; see Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298, 302 [1985]). As the final component of a six-part plan for utilization of loft space in New York City, the Loft Law is designed

“to finally balance the equities of the conflicting interests in the development and use of loft space. The bill when enacted will take a ‘snap shot’ of those people eligible for protection under this article. . . . This bill recognizes the important impact that those in the creative arts have on the cultural and economic life of New York City and the need for the protection of loft space suitable for their working and living purposes. At the same time the bill upholds the commitments of the City to the business and labor community to protect areas dominated by business activity and to provide a favorable business climate” (Mem of Legis Rep of City of NY, 1982 McKinney’s Session Laws of NY, at 2484).

The law relies on a “building by building approach to resolve the illegal residential status of loft buildings formerly or presently used as manufacturing, warehousing, or commercial space . . . [and] provides a framework for the legalization of these dwellings consistent with the local zoning resolution of the City of New York” (id. at 2479).

The Loft Law therefore permits conversions of “Interim Multiple Dwellings,” which are defined as buildings or portions of buildings that were occupied at any time for manufacturing, commercial, or warehouse purposes and lack a residential certificate of occupancy (see Multiple Dwelling Law § 281 [1]). Critically, the statutory definition established a window period for eligibility encompassing only those units that, on December 1, 1981, were occupied for residential purposes since April 1, 1980 by three or more families living independently of one another (see id.). By adopting an eligibility period that was closed at the time of the enactment, the Legislature demonstrated its intent to provide the benefits of the Loft Law only to existing residential tenancies, not to encourage new conversions of loft space.

It is clear that tenants’ residential occupancies of the commercially-leased units are not within the purview of the Loft Law. The units were first used for residential purposes in 1997, almost two decades after expiration of the Loft Law eligibility window period. Tenants nevertheless urge that their illegal conversions are entitled to protection under the ETPA, relying on the broad language and scope of that Act.

Reading the ETPA and Loft Law together, we agree with the courts below that tenants’ illegal conversions do not fall under the ambit of the ETPA. As reflected in the legislative history and intent of the Loft Law, the fixed eligibility period was designed to address the public safety and municipal zoning emergency caused by the expansion of illegal conversions at that time (see id. § 280; Lower Manhattan Loft Tenants, 66 NY2d at 305). The statute was not intended to foster future illegal conversions or undermine legitimate municipal zoning prerogatives. If the prior-enacted ETPA already protected illegal residential conversions of manufacturing space, significant portions of the Loft Law would have been unnecessary (see e.g. Multiple Dwelling Law § 286 [3]). Thus, although such illegal conversions are not expressly exempted from ETPA coverage, it is evident that the Legislature did not view the ETPA as safeguarding the interests of the “loft pioneers” (see Mem of Legis Rep, supra at 2484).

Notably, the City has not acted to amend the Zoning Resolution to include purely residential use of M1-5B zoned space or to rezone tenants’ neighborhood. Similarly, the Legislature has not adopted a new eligibility period that would confer Loft Law protections on later conversions. Such steps could make residential loft units like tenants’ legal or capable of being legalized, if such a change were deemed necessary or desirable. We therefore conclude that the ETPA cannot be extended to these illegally converted lofts.

We have considered tenants’ remaining arguments and conclude that they are without merit.

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

Chief Judge Kaye and Judges G.B. Smith, Ciparick, Rosenblatt, Read and R.S. Smith concur.

Order affirmed, with costs.

      . The Zoning Resolution restricts the definition of “artist” to include only those persons so certified by the City Department of Cultural Affairs.

      . Given its posture on the summary judgment motion, landlord did not raise the alternative argument that the units were, in any event, exempt from ETPA coverage under one of the statutory exceptions (see McKinney’s Uncons Laws of NY § 8625 [ETPA § 5]). As such, any argument to that effect is not preserved for this Court’s review.

      . The Loft Law has been amended several times to extend its termination date. Currently, the law is set to expire on June 30, 2004 (see L 2004, ch 98 [amending L 1982, ch 349, § 3]).

      . The statute requires owners of qualified units to take specific steps to legalize the residential uses or be subject to penalties (see Multiple Dwelling Law § 284). Once compliance with safety and fire protection standards is achieved, owners may recover rents payable from residential occupants (see id. § 285). In addition, the article provides numerous protections to tenants, including ETPA coverage where appropriate (see id. § 286).


author: R.S. Smith, J.

text:
    [812 NE2d 936, 780 NYS2d 110]
    Louis Dreyfus Energy Corp. et al., Appellants, v MG Refining and Marketing, Inc., Defendant, and MG Holdings North America, Inc., Formerly Known as Metallgesellschaft Capital Corp., Respondent.
    Argued May 5, 2004;
    decided June 8, 2004

      POINTS OF COUNSEL

      Williams & Connolly, LLP, Washington, D.C. {John J. Buckley, Jr., Kenneth C. Smurzynski and Andrew W. Rudge of counsel), and Heller Ehrman White & McAuliffe, LLP, New York City {Lawrence J. Zweifach and Samuel L. Barkin of counsel), for appellants.
    I. New York law has been settled for nearly a century that a guarantor remains liable for obligations incurred prior to the end date of the guaranty. (Corn Exch. Bank Trust Co. v Gifford, 268 NY 153; H. Muehlstein & Co. v Sternberg, 111 AD2d 635.) II. Accepted rules of contract interpretation dictate that Metallgesellschaft Capital Corp. remained obligated under the guaranty for the September 27, 1993 contracts. (Catskill Natl. Bank v Dumary, 206 NY 550; Schmitz v Langhaar, 88 NY 503; Gates v McKee, 13 NY 232; Chemical Bank v Meltzer, 93 NY2d 296; William C. Atwater & Co. v Panama R.R. Co., 246 NY 519; Eighth Ave. Coach Corp. v City of New York, 286 NY 84; Corn Exch. Bank Trust Co. v Gifford, 268 NY 153.) III. The applicability of the guaranty does not turn on plaintiff s election of remedies. (Hermanowski v Acton Corp., 580 F Supp 140, 729 F2d 921.)

      Kaye Scholer LLP, New York City (Michael D. Blechman and Robert B. Bernstein of counsel), for respondent.
    I. The Appellate Division correctly held that the guaranty did not cover the sums at issue because they did not become due and payable until after the guaranty expired. (H. Muehlstein & Co. v Sternberg, 111 AD2d 635; Corn Exch. Bank Trust Co. v Gifford, 268 NY 153; Chemical Bank v PIC Motors Corp., 87 AD2d 447; United States Trust Co. of N.Y. v Securities Planners, 238 AD2d 114; Scars-dale Natl. Bank & Trust Co. v S.E.W. Prods., 151 AD2d 657.) II. Plaintiffs’ authorities fully support the Appellate Division’s decision. (Corn Exch. Bank Trust Co. v Gifford, 268 NY 153; H. Muehlstein & Co. v Sternberg, 111 AD2d 635.) III. Plaintiffs’ other arguments are without merit. {Chemical Bank v Meltzer, 93 NY2d 296.)
   OPINION OF THE COURT

R.S. Smith, J.

The issue in this case is whether a continuing guaranty containing an expiration date requires the guarantor to pay obligations that were contractually binding, but were not yet due and payable, at the time the guaranty expired. We hold that the guaranty does require payment of such obligations, where it does not express a contrary intention.

Facts

The essential facts can be very briefly summarized. Metallgesellschaft Capital Corp. (MG Capital) issued a continuing guaranty on July 28, 1993, guaranteeing payment by its indirect subsidiary, MG Refining and Marketing, Inc. (MGRM), under contracts that MGRM had entered or would enter with Louis Dreyfus Energy Corp. (LDEC). On September 27, 1993, MGRM and LDEC entered into two contracts that were within the scope of the guaranty, in which MGRM became contractually bound to obligations that were conditional on futures prices for petroleum products reaching a particular level. On September 30, 1994, MG Capital’s guaranty expired. In 1996, the futures prices reached the specified level, and MGRM’s contractual obligations were triggered. The question presented is whether MG Capital is liable for those obligations.

To help in understanding the question, we will state the facts in more detail. LDEC, an energy trading firm, and MGRM, a marketer of petroleum products, had a business relationship going back to at least 1989. During much if not all of the relationship, each party’s obligations to the other were backed by a guaranty from the party’s corporate parent or affiliate. As of September 1993, LDEC’s parent, Louis Dreyfus Corporation (LDC), was guaranteeing LDEC’s obligations to MGRM under a guaranty dated May 18, 1992 (the LDC Guaranty), while MG Capital was guaranteeing MGRM’s obligations to LDEC under a guaranty dated July 28, 1993 (the MG Capital Guaranty). The MG Capital Guaranty is the one at issue on this appeal.

The LDC Guaranty and the MG Capital Guaranty were largely identical in wording. Each guarantor stated that it “absolutely and unconditionally guarantees . . . the prompt, faithful and full payment of all sums that now are or may hereafter become due and payable . . . under the Contracts.” Each guaranty defined “Contracts” as “contracts for the sale, purchase or exchange of crude oil, oil products, natural gas, or natural gas products.” Each guaranty provided that it could be revoked in writing, and each set forth the specific consequences of such a revocation. Each provided that the revocation must specify an “Effective Date” and that the revocation “shall . . . apply only to” contracts entered into “on or after the Effective Date” and “shall not affect the liability of [the guarantor] in respect of any of the Contracts that were entered into before the Effective Date.”

One difference between the two guaranties is at the center of this appeal. The LDC Guaranty did not contain an expiration date, but the MG Capital Guaranty did—and the consequences of expiration, unlike the consequences of revocation, were not explicitly stated. Thus, the MG Capital Guaranty provided:

“This Guaranty is intended to be and shall be a continuing guarantee of payment and not of collection, and shall remain in full force and effect until the earlier of September 30, 1994 and the date on which it is revoked in writing by MGCC, which revocation shall (a) not be effective until the written notice setting out an effective date of revocation (the ‘Effective Date’) has been received by the Contractor and (b) apply only to those of the Contracts that were entered into by the Contractor on or after the Effective Date, and (c) shall not affect the liability of MGCC in respect of any of the Contracts that were entered into before the Effective Date.”

The seven words underscored above—“the earlier of September 30, 1994 and”—had no counterpart in the corresponding paragraph in the LDC Guaranty.

Most of the “Contracts” to which the guaranties applied were short term (30-to-90-day) agreements involving between 25,000 and 100,000 barrels of petroleum products. In 1993, however, LDEC and MGRM entered into three much larger and longer-term contracts—10-year arrangements, each involving a million barrels or more. The first of these three contracts was made in June 1993 and is not in dispute in this case. The remaining two, which are in dispute, were entered into on September 27, 1993.

The two September 27 contracts provided that LDEC would purchase from MGRM 42 million gallons (one million barrels) of gasoline and 42 million gallons of fuel oil no later than September 30, 2003. The price of each product was set at 62 cents per gallon. Delivery was to be in the amounts and at the times of LDEC’s choosing. Each contract gave LDEC an option, in the event the market moved in LDEC’s favor, to take its profit in cash. Thus at any time when the price of petroleum futures on the New York Mercantile Exchange exceeded the price fixed in the contract, LDEC could elect to receive from MGRM a cash payment reflecting the difference between the market price and the contract price.

In January 1994, MGRM repudiated its obligations under the September 1993 contracts. LDEC did not sue immediately, but began this action in 1995 against MGRM, seeking a declaration that the contracts were “valid and existing.” LDEC was presumably hoping that sometime during the 10-year term of the contracts the market price would go up and generate a large claim in LDEC’s favor. This happened in 1996. On April 12, 1996, LDEC exercised its option under the gasoline contract, and on December 16, 1996 it exercised its option under the fuel oil contract. MGRM rejected LDEC’s first demand for payment and ignored the second.

On April 9, 1998, LDEC demanded that MG Capital make payment of MGRM’s obligations under the two contracts. MG Capital rejected the demand on the ground that it was “unaware of any liability of MGRM to LDEC.” MG Capital did not then assert that it was free from liability because its guaranty had expired.

LDEC amended its complaint to add MG Capital as a defendant and to sue under the MG Capital Guaranty. MG Capital moved for summary judgment, and Supreme Court granted its motion on the ground that the MG Capital Guaranty had expired before LDEC suffered any damages. The Appellate Division affirmed on the same ground. We granted leave to appeal, and now reverse.

Discussion

A guaranty is a contract, and in interpreting it we look first to the words the parties used (see Chemical Bank v Sepler, 60 NY2d 289, 293 [1983]). But on the question here—whether the parties intended the MG Capital Guaranty to cover obligations that became binding before, but due and payable after, its expiration date—the document is silent. The consequences of revocation, as distinct from expiration, are spelled out: revocation “shall not affect the liability of MGCC in respect of any of the Contracts that were entered into before the Effective Date [of the revocation].” Thus if the MG Capital Guaranty had contained no expiration date, but had been revoked effective September 30, 1994, there would be no issue. MG Capital would unquestionably be liable under the September 27, 1993 contracts, even for obligations that were not triggered until 1996.

MG Capital contends that, since the parties did not provide that expiration would have the same consequences as revocation, they must have intended different consequences. It is true that a careful drafter who intended the effect of expiration and revocation to be identical would have said so in the document. A minor revision of the relevant paragraph (quoted above at 498) would have been sufficient. But it is also true that a careful drafter who intended expiration to have different consequences would have spelled out those consequences in the document. This, too, would not have been difficult. The conclusion is inescapable that the drafter was not careful in this respect, and as a result the document does not make the parties’ intention clear on its face.

It is possible, however, to discern the parties’ intention from the circumstances in which the MG Capital Guaranty was issued. LDEC and MGRM had a multiyear relationship, and there is no indication that they ever dealt with each other in the absence of parent guaranties. The LDC and MG Capital Guaranties, issued in 1992 and 1993 respectively, were preceded by similar documents. The only logical inference supported by this record is that neither LDEC nor MGRM wanted to take the risk of relying on the other’s unsupported credit.

This risk could be eliminated only if the termination of a guaranty—whether by expiration or revocation—left the parent-guarantor liable for obligations (due or to become due in the future) to which its subsidiary was already bound. As long as the guarantor remained liable on preexisting contracts, the opposite party could, if it chose, protect itself against future risks by refusing to enter into any new contracts until a new guaranty was provided. But if the termination of the guaranty protected the guarantor against obligations not yet due under existing contracts, the opposite party would be left with exactly the problem the guaranty was designed to avoid—a debt from the subsidiary, unsupported by the parent-guarantor’s credit.

In the case of revocation, the parties used express language to assure that this did not occur. They limited the effect of revocation to contracts entered into on or after the revocation’s “Effective Date,” and provided that liability under contracts entered into before the Effective Date would be unchanged. We conclude that the parties must have intended expiration to be limited in the same way, for an expiration that is not limited to future contracts can create the same risk as a revocation that is not so limited.

It is true that, since the parties knew the expiration date in advance, LDEC could—if it believed the expiration of the guaranty would affect existing contracts—have insisted on an extension of the expiration date, or a new guaranty, before entering into any contracts that extended beyond the MG Capital Guaranty’s expiration. LDEC’s behavior shows, however, that it did not believe the expiration would affect existing contracts.

On June 23, 1993, LDEC and MGRM entered into a 10-year agreement under which LDEC was to purchase from MGRM 50,400,000 gallons of fuel oil over a 10-year period beginning September 1, 1993. At the time the agreement was signed, the MG Capital Guaranty involved in this case had not yet been issued. The guaranty that was in force was a predecessor document, issued by a different corporation but identical in relevant respects, with an expiration date of September 30, 1993—29 days after the inception of the 10-year contract. Thus, if the expiration date eliminated the guarantor’s obligations on existing contracts, LDEC would be unprotected for 9 years and 11 months; there is no evidence that LDEC was willing to accept, or thought that it was accepting, such a risk. Nor is there any indication that, when it entered into the September 27, 1993 contracts now in suit, LDEC thought it would be unprotected by the MG Capital Guaranty for the last 9 years of these 10-year agreements. If LDEC had thought that, it would logically be expected at least to ask for an extension of the expiration date before it committed itself. There is no indication that it did so.

Thus the purpose of the MG Capital Guaranty, and the parties’ course of dealing, show that expiration was understood to have the same effect as revocation—i.e., to have no effect on contracts entered into prior to the expiration date. That conclusion is reinforced by comparing the MG Capital Guaranty to the LDC Guaranty. The relevant paragraph of the MG Capital Guaranty is a virtual duplicate of the corresponding paragraph in the LDC Guaranty, except for seven words appearing only in the MG Capital Guaranty—“the earlier of September 30, 1994 and.” It is plain that the parties intended their guaranties to be largely identical, but that at some point, in some prior version of the MG Capital Guaranty, language 'creating an expiration date was added. It is improbable that the parties understood this difference between the two guaranties to be of vast significance—to leave LDEC at risk, while MGRM remained protected, on contracts extending beyond the expiration date. We conclude that the parties assumed expiration would have the same effect as revocation, and that the expiration date was no more than a kind of “Effective Date” of the revocation fixed in advance. On this reading, putting the expiration date into the guaranty was no more than a convenience; if it had not been there, MG Capital could have accomplished the same result by sending a notice of revocation with a September 30, 1994 Effective Date.

A close reading of the relevant paragraph also suggests that the parties thought expiration and revocation were interchangeable. The MG Capital Guaranty was to remain in effect “until the earlier of’ the expiration date and the Effective Date of the revocation. This wording implies that there would be only one event—expiration or revocation, whichever came earlier—that could bring MG Capital’s obligation to an end. On this understanding, it would not make sense if expiration and revocation had substantially different consequences. MG Capital would harm its own interest by revoking the guaranty, and leaving itself hable on existing contracts, if it could escape such liability by waiting for the expiration date.

There are not many authorities that consider the impact of terminating a guaranty on obligations that may arise in the future under preexisting contracts. The authorities that do exist, however, support the view that the guarantor should be held liable for such obligations, unless the guaranty expressly shields it from liability. It will normally be true, as we think it is in this case, that the purpose of a continuing guaranty is to enable parties who enter into contracts to be secure in the knowledge that whatever debts become due them under the contracts will be protected by the guaranty. This purpose is best served by a general rule as we have stated it. A similar rule is stated in section 16 of Restatement (Third) of Suretyship and Guaranty:

“Upon termination of a continuing guaranty, the continuing guarantor remains a secondary obligor with respect to obligations of the principal obligor incurred prior to termination and becomes a secondary obligor with respect to obligations of the principal obligor incurred by extensions of credit to the principal obligor after termination pursuant to a commitment that became binding before termination.”

The first half of the above sentence is arguably ambiguous, because it is not clear what “incurred” means in this context: Is an obligation “incurred” when it is contracted for, or when it becomes due and payable? However, the second half of the sentence (after the “and”) has no such ambiguity. It says that if a creditor extends credit “after termination” of a guaranty, “pursuant to a commitment that became binding before termination,” the guarantor is liable to make good (“becomes a secondary obligor with respect to”) the resulting obligations. While this portion of the Restatement is most obviously applicable to a revolving credit agreement or other loan agreement, in which a lender commits to lend money before termination and honors the commitment afterwards, it can apply to a fact pattern like the present one also. Here there were commitments that became binding before termination—the contracts of September 27, 1993—and when MGRM’s obligations to make payments under those contracts became due in 1996, LDEC became MGRM’s creditor as a result of its pretermination commitments. Whether or not LDEC literally “extended credit” to MGRM, there is no apparent reason why the principle underlying the Restatement section should not apply. Under the approach of the Restatement, MG Capital should be bound to pay MGRM’s obligations.

While we have found no New York case directly in point, our decision in Corn Exch. Bank Trust Co. v Gifford (268 NY 153 [1935]) offers support for our conclusion here. That case involved a loan by the bank to a corporate borrower, secured by the guaranty of Gifford, the father-in-law of the corporation’s treasurer. The guaranty stated that it “shall remain in force until duly revoked . . . and shall extend to and cover all renewals of any claims or demands guaranteed ... or the extensions of time of payment thereof’ (id. at 157). The loan was evidenced by a promissory note of the corporate borrower that was repeatedly renewed and extended. Gifford revoked his guaranty, and after his revocation the bank and the borrower again renewed and extended the note, though the indebtedness was not increased. The question before us was whether the posttermination renewals discharged Gifford from his obligation under his guaranty. We held that they did not, basing that conclusion on the guaranty’s language covering “all renewals.” We said:

“These words are broad enough to cover the renewals of an indebtedness existing at the time of revocation. The words used are ‘all renewals.’ The parties could easily have said ‘or the extension of time of payment thereof prior to revocation’ if such a meaning were intended. The words ‘prior to revocation’ are not used.” (268 NY at 159.)

Corn Exchange thus stands for the proposition that the words “prior to revocation” will not automatically be read into every commitment made by a guarantor; a guarantor who wishes to limit his obligations in this way should do so expressly. Here, MG Capital guaranteed payment of “all sums that now are or may hereafter become due and payable . . . under the Contracts.” If it meant “all sums that may become due and payable prior to the expiration date” it should have said so.

So far as we are aware, the only case that addresses the issue we have here is Bandag, Inc. v National Acceptance Co. of Am. (855 F2d 491 [7th Cir 1988]). In that case, National Acceptance Company of America (NAC) had issued a guaranty to Bandag promising to “make payments to you of invoices for merchandise” shipped by Bandag to a purchaser known as McCord (id. at 492). The guaranty had an expiration date of December 31, 1985. Bandag’s invoices called for payment in 90 days from shipment; it shipped some goods in late 1985, so that although McCord’s obligation to pay existed before the guaranty expired, its payments were not due until early 1986, after the expiration date. The court, applying Illinois law, held that NAC must pay the invoices. The court relied on the specific language of the guaranty in question, but also on the business purpose served by the guaranty. The court said:

“[T]he construction urged by NAC would invalidate the guaranty as the termination date approached. Ordinarily, Bandag provided goods to McCord on ninety days’ credit. NAC and Bandag entered into the guaranty because Bandag would not continue to do this without security. . . . Therefore, the obvious purpose of the letter of guaranty was to allow Ban-dag to continue to sell goods to McCord without suffering insecurity (due to lack of legal recourse). . . . However, under the construction urged by NAC, Bandag’s sales to NAC would be guaranteed during the final ninety days of the guaranty period only if Bandag changed the terms of its invoices so that they would become due before the termination date. Otherwise, all of Bandag’s sales to McCord in the last ninety days of the guaranty period would be unsecured by the guaranty.” (Id. at 495.)

A similar analysis applies here. The “obvious purpose” of the MG Capital Guaranty was to allow LDEC to continue to deal with MGRM “without suffering insecurity (due to lack of legal recourse).” But under MG Capital’s reading of the guaranty, LDEC would become insecure to the extent that MGRM’s contractual commitments extended beyond the expiration date. Since certain of those commitments extended nine years beyond the expiration date, the guaranty, if read as MG Capital urges, would fail to serve its purpose.

In short, we conclude that the MG Capital Guaranty must be read as requiring MG Capital to pay obligations of MGRM under contracts that were entered into before the expiration date of the guaranty, even where the obligations became due and payable after the guaranty expired.

Accordingly, the order of the Appellate Division should be reversed, with costs, and MG Capital’s motion for summary judgment denied.

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

Order reversed, etc.

      . In identifying and describing the September 27 “contracts,” we state the version of the facts most favorable to LDEC, the party against which summary judgment was granted below. MG Capital and MGRM contend, among other things, that the September 27 communications between LDEC and MGRM did not constitute contracts, but offers that were subsequently revoked; and that, if they were contracts, they were illegal and unenforceable. We express no view on these issues, or on any issue other than the effect of the expiration date on the MG Capital Guaranty.

      . MG Capital apparently changed its name at some point to either MG North America Holdings Inc. (the name that appears on its 1998 rejection of LDEC’s demand) or MG Holdings North America, Inc. (the name used in recent court papers). For ease of reference, we use “MG Capital” throughout this opinion.

      . LDEC later assigned its claims to its parent, LDC, which joined the action as a coplaintiff.

      . At oral argument, MG Capital suggested that there could be both a revocation and an expiration, because a revocation would be ineffective as to obligations under existing contracts. As to those contracts, on MG Capital’s theory, the guaranty would remain in effect after revocation until, but only until, the expiration date. But this theory does not fit the contractual language; the language gives effect to the expiration date only if it is “earlier” than revocation, not if it is later but the revocation has left some obligations in force.