author: Chief Judge Lippman.

text:
    [924 NE2d 782, 897 NYS2d 674]
    The People of the State of New York, Respondent, v Homer Brown, Jr., Appellant.
    Argued January 14, 2010;
    decided February 18, 2010

      POINTS OF COUNSEL

      Timothy P. Donaher, Public Defender, Rochester (Janet C. Somes of counsel), for appellant.
    The record demonstrates that Mr. Brown’s guilty plea was not knowing and voluntary, and County Court abused its discretion in summarily denying Mr. Brown’s motion to withdraw his plea. (Boykin v Alabama, 395 US 238; People v Moissett, 76 NY2d 909; North Carolina v Alford, 400 US 25; People v Ford, 86 NY2d 397; People v Grant, 61 AD3d 177; People v Hill, 9 NY3d 189; People v White, 32 NY2d 393; People v Flowers, 30 NY2d 315; People v Hawkins, 271 AD2d 756; Matter of Bauer, 3 NY3d 158.)

      Michael C. Green, District Attorney, Rochester (Nicole M. Fantigrossi of counsel), for respondent.
    I. The promise of a furlough between plea and sentence is an appropriate subject of the plea bargaining process. (People v Selikoff, 35 NY2d 227, 419 US 1122; Santobello v New York, 404 US 257; Brady v United States, 397 US 742; Shelton v United States, 246 F2d 571; People v White, 32 NY2d 393; People v Montgomery, 27 NY2d 601; People v Pena, 50 NY2d 400, 449 US 1087; People v Vargas, 88 NY2d 363; People v Seaberg, 74 NY2d 1; People v Farrar, 52 NY2d 302.) II. Defendant’s plea was not rendered involuntary by duress under the circumstances. The court properly denied defendant’s motion to withdraw his guilty plea. (People v Nixon,
      21 NY2d 338, cert denied sub nom. Robinson v New York, 393 US 1067; People v Fiumefreddo, 82 NY2d 536; People v Alexander, 97 NY2d 482; People v Taylor, 65 NY2d 1; People v Green, 75 NY2d 902; People v Frederick, 45 NY2d 520; People v Tinsley, 35 NY2d 926; People v Baret, 11 NY3d 31; North Carolina v Alford, 400 US 25; Boykin v Alabama, 395 US 238.)
   OPINION OF THE COURT

Chief Judge Lippman.

Defendant, under indictment for one count of robbery in the third degree and one count of grand larceny in the fourth degree, was unable to post the $10,000 bail and was held in custody while awaiting prosecution. From the time of his arrest on April 11, 2005 until his June 29, 2005 guilty plea, defendant consistently maintained his innocence and so testified at the grand jury. Shortly after his indictment, the parties learned that defendant’s son was in the hospital and in a coma as a result of multiple gunshot wounds. At the outset of the next court appearance, the court informed defendant that a proposed plea bargain would require him to plead guilty to both counts of the indictment in exchange for a 2-to-4-year sentence, and then stated, “[y]our attorney told me [that] you were interested in taking the plea if I were to give you a furlough for three weeks to allow you to see your sick child,” who was still in the hospital. Defendant responded in the affirmative, and the court agreed to the furlough, warning defendant that if he did not appear on the scheduled date, he would receive an increased sentence.

During the ensuing colloquy, the court informed defendant of the rights he was forfeiting by pleading guilty, and confirmed that no threats or promises, other than the promised three-week furlough, had been made to defendant. The court never inquired whether defendant was pleading guilty voluntarily. After defendant admitted to the facts constituting the crimes charged, the court accepted the guilty plea, released defendant on his own recognizance, and ordered defendant to return after the promised furlough.

After surrendering himself on the scheduled date, and prior to the imposition of sentence, defendant moved to withdraw his plea on the ground that it had not been entered into voluntarily. The motion detailed that, while he had been in custody prior to pleading guilty, defendant requested a visit to the hospital to see his child, but jail officials denied the request on the apparently mistaken belief that his son’s condition was not serious.

Defendant contended that he entered the guilty plea “under conditions of duress” and “as a result of emotional and mental distress caused by his fear of his son’s death.” He further claimed that he “never would have entered into a guilty plea if his son had not been shot and lapsed into a coma.” The court denied the motion without a hearing, stating,

“I made it clear to [defendant] when he plead[ed] guilty that he wasn’t going to withdraw his plea...
“I’m not going to allow him to withdraw his plea.
He made an allocution before me that he committed this offense . . . That was an adequate allocution to the two charges that he plead[ed] guilty to.”

The court then sentenced defendant to the promised 2-to-4-year prison term.

The Appellate Division affirmed defendant’s conviction, concluding “defendant’s allegations of duress and coercion are belied by the statements of defendant during the plea colloquy, wherein he knowingly and voluntarily admitted that he committed the crimes to which he was pleading guilty” (59 AD3d 937, 937-938 [4th Dept 2009]). A Judge of this Court granted defendant’s application for leave to appeal (12 NY3d 814 [2009]), and we now reverse.

It is well settled that, in order to be valid and enforceable, a guilty plea must be entered voluntarily, knowingly and intelligently (see People v Hill, 9 NY3d 189, 191 [2007]). A guilty plea is voluntary only if it represents an informed choice freely made by defendant among other valid alternatives (see North Carolina v Alford, 400 US 25, 31 [1970]; People v Grant, 61 AD3d 177, 182 [2d Dept 2009]). When a defendant moves to withdraw a guilty plea, the nature and extent of the fact-finding inquiry “rest[s] largely in the discretion of the Judge to whom the motion is made” and a hearing will be granted only in rare instances (People v Tinsley, 35 NY2d 926, 927 [1974]). Where, however, the record raises a legitimate question as to the voluntariness of the plea, an evidentiary hearing is required.

We have not previously considered the voluntariness of a plea conditioned on defendant being granted a brief release to see a seriously ill family member. We have, however, addressed a plea allegedly influenced by concerns for a close relative. In People v Fiumefreddo (82 NY2d 536 [1993]), defendant moved to withdraw her guilty plea, arguing that it had been coerced because it was connected to the prosecutor’s acceptance of a plea bargain favorable to her codefendant father, who was elderly and ill. Although stating that connected pleas presented a matter “requir[ing] special care,” we rejected the defendant’s argument that her plea had been involuntary, noting that the plea had been subject to several months of negotiations; that the court engaged in a “lengthy and detailed colloquy”; and that she never denied her guilt (id. at 545-546). Moreover, on the motion to withdraw the plea, the defendant provided no information detailing her claim of coercion. Finally, we found doubtful the defendant’s claim that she was strongly influenced to accept the plea to secure leniency for her father because there was nothing to indicate her sentence would have been any less if not connected to her father’s plea (id. at 547). Thus, under the totality of the circumstances, we held that the trial court’s limited inquiry was sufficient to deny the motion without a formal hearing.

Unlike Fiumefreddo, there is no indication on the record that the specific terms of this plea were subject to extended discussion or that defendant had sufficient time to consider the alternatives to taking it. The court never inquired about the impact the promised furlough had on defendant’s decision to plead guilty or indeed whether defendant was pleading guilty voluntarily. The court’s statement that defendant was “interested in taking the plea if I were to give [him] a furlough” suggests that the court itself was aware of the central influence the furlough had on defendant’s decision to plead guilty. On the motion to withdraw the plea, defendant provided detailed allegations explaining the duress that he experienced based on his fear that his son might not survive. Rather than considering these allegations, the court simply relied on the fact that defendant made “an adequate allocution to the two charges.” But whether defendant admitted his guilt to the charged crimes does not inform the analysis of whether the plea was voluntary. Finally, the denial of defendant’s previous request to be released from jail to see his son in the hospital lends support to his contention that this desire influenced his decision to plead guilty. Under these particular circumstances, we conclude that County Court abused its discretion in failing to conduct a hearing to explore defendant’s allegations in order to make an informed determination.

We do not mean to suggest that a plea bargain granting a furlough is per se invalid. While we acknowledge that such pleas may require special scrutiny by the court prior to accepting it, we adhere to the general rule that so long as the totality of the circumstances reveals that the plea is voluntarily, knowingly and intelligently made, it will be upheld. Indeed, no abuse of discretion will be found where the court, recognizing the potentially coercive nature of the plea terms, conducts a thorough inquiry to establish that defendant is pleading guilty willingly after considering other legitimate alternatives. Moreover, where a careful scrutiny of the motion to withdraw reveals that defendant’s allegations fail to raise a legitimate question as to the voluntariness of the plea, the court may deny the motion without a hearing. Here, however, the circumstances raise a genuine factual issue as to the voluntariness of the plea that could only be resolved after a hearing.

Accordingly, the order of the Appellate Division should be reversed and the matter remitted to County Court for further proceedings consistent with this opinion.

Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur.

Order reversed and case remitted to County Court, Monroe County, for further proceedings in accordance with the opinion herein.


source: Caselaw Access Project

author: Chief Judge Lippman. Smith, J. (dissenting).

license: Public Domain

text:
    [924 NE2d 797, 897 NYS2d 689]
    In the Matter of New York City Transit Authority, Respondent, v Transport Workers Union of America, Local 100, et al., Appellants.
    Argued January 5, 2010;
    decided February 18, 2010

      POINTS OF COUNSEL

      Gladstein, Reif & Meginniss, LLP, New York City (Beth M. Margolis of counsel), for appellants.
    I. The court below improperly substituted its judgment for that of the arbitrator. (Matter of Sprinzen [Nomberg], 46 NY2d 623; Matter of Associated Teachers of Huntington v Board of Educ., Union Free School Dist. No. 3, Town of Huntington, 33 NY2d 229; Matter of Silverman [Benmor Coats], 61 NY2d 299; Matter of Dowleyne v New York City Tr. Auth., 3 NY3d 633; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72; Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321; Matter of Local Div. 1179, Amalgamated Tr. Union, AFL-CIO [Green Bus Lines], 50 NY2d 1007; Steelworkers v Warrior & Gulf Nav. Co., 363 US 574; Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 NY2d 132; Wien & Malkin LLP v Helmsley-Spear, Inc., 6 NY3d 471.) II. There is no basis for finding that the decision of the arbitrator was irrational. (Matter of Silverman [Benmor Coats], 61 NY2d 299; Matter of Peckerman v D & D Assoc., 165 AD2d 289; Matter of Sprinzen [Nomherg], 46 NY2d 623; Matter of Local 333, United Mar. Div., Intl. Longshoreman’s Assn., AFL-CIO v New York City Dept. of Transp., 35 AD3d 211; Matter of Campbell v New York City Tr. Auth., 32 AD3d 350.)

      Office of the General Counsel, New York City Transit Authority, Brooklyn (Baimusa Kamara and Richard Schoolman of counsel), for respondent.
    I. The Appellate Division did not substitute its judgment for that of the arbitrator but correctly affirmed vacatur of the arbitration award because the arbitrator had exceeded his power under the agreement between the New York City Transit Authority and Transport Workers Union of America, Local 100. (Matter of Town of Callicoon [Civil Serv. Empls. Assn., Town of Callicoon Unit], 70 NY2d 907; Matter of Local 345 of Retail Store Empls. Union [Heinrich Motors], 63 NY2d 985; Matter of Manhattan & Bronx Surface Tr. Operating Auth. [Transport Workers Union of Am., AFL-CIO, Local 100], 227 AD2d 995; Matter of New York City Tr. Auth. v Patrolmen’s Benevolent Assn. of N.Y. City Tr. Police Dept., 129 AD2d 708; Matter of Board of Educ. of N. Babylon Union Free School Dist. v North Babylon Teachers’ Org., 104 AD2d 594; Matter of Silverman [Benmor Coats], 61 NY2d 299; Matter of Local Union 1566, Intl. Bhd. of Elec. Workers, AFL-CIO v Orange & Rock-land Util., 126 AD2d 547; Matter of Dowleyne v New York City Tr. Auth., 3 NY3d 633; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72; Matter of New York State Correctional Officers & Police Benevolent Assn. v State of New York, 94 NY2d 321.) II. Appellants’ confusion about the statutory grounds for which an arbitration award can be vacated does not support reversal. (Pavilion Cent. School Dist. v Pavilion Faculty Assn., 51 AD2d 119; Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578; Matter of Local 342 v Town of Huntington, 52 AD3d 720.)

      James R. Sandner, Latham, Richard E. Casagrande and Marilyn Raskin-Ortiz for New York State United Teachers, amicus curiae.
    I. The decision of the court below should be reversed because it contravenes well-settled New York State law and policy that calls for deference toward arbitral decisions. (Steelworkers v Warrior & Gulf Nav. Co., 363 US 574; Steelworkers v Enterprise Wheel & Car Corp., 363 US 593; Matter of Town of Haverstraw [Rockland County Patrolmen’s Benevolent Assn.], 65 NY2d 677; Matter of Associated Teachers of Huntington v Board of Educ., Union Free School Dist. No. 3, Town of Huntington, 33 NY2d 229; Matter of Henneberry v ING Capital Advisors, LLC, 10 NY3d 278; Paperworkers v Misco, Inc., 484 US 29; Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72; Matter of New York State Correctional Officers & Police

      Benevolent Assn. v State of New York, 94 NY2d 321; Central Sq. Teachers Assn. v Board of Educ. of Cent. Sq. Cent. School Dist., 52 NY2d 918; Rochester City School Dist. v Rochester Teachers Assn., 41 NY2d 578.) II. The decision of the court below should be reversed because it undermines the public policy of promoting arbitral resolution of public sector labor disputes.
   OPINION OF THE COURT

Chief Judge Lippman.

The New York City Transit Authority (Transit Authority) sought to terminate an employee in connection with allegations that the employee assaulted a member of the public on a subway platform. Pursuant to the grievance procedures of the collective bargaining agreement (CBA) entered into by the Transit Authority and the employee’s union, Transport Workers Union of America, Local 100 (TWU), the matter was ultimately referred to an arbitrator. The arbitrator modified the penalty the Transit Authority sought to impose, and we are asked to determine whether the arbitrator’s award must be vacated on the ground that the arbitrator exceeded the power given to him by the CBA. We conclude that the arbitrator did not exceed his power.

The Transit Authority employee involved has been employed as a conductor since 1985. On April 14, 2006, the employee had a heated exchange with a member of the public regarding the availability of express train service on a particular subway train line. According to the arbitrator’s factual findings, during the course of this dialogue, “not without some provocation from the complainant,” the employee “forcefully ‘laid hands’ on the complainant.” The parties on this appeal do not dispute the arbitrator’s finding that the employee assaulted a Transit Authority customer.

That an assault was involved in the underlying grievance affects the arbitrator’s task under the CBA. Article II, § 2.1 (C) (19) (c) of the CBA provides, in relevant part:

“If there is presented to the [arbitrator] for decision any charge which, if proved in Court, would constitute a felony, or any charge involving assault, . . . the question to be determined by the [arbitrator] shall be with respect to the fact of such conduct. Where such charge is sustained by the [arbitrator], the action by the Authority, based thereon, shall be affirmed and sustained by the [arbitrator] except if there is presented to the [arbitrator] credible evidence that the action by the Authority is clearly excessive in light of the employee’s record and past precedent in similar cases. It is understood by the parties that this exception will be used rarely and only to prevent a clear injustice.”

As his written opinion demonstrates, the arbitrator plainly understood that article II, § 2.1 (C) (19) (c) applied given the nature of the allegations against the Transit Authority employee. The arbitrator explained that the Transit Authority presented to him as “past precedent” five prior arbitration awards where other arbitrators had upheld termination decisions, and he discussed each of those matters in his written opinion. The arbitrator also discussed the record of the employee before him whom the Transit Authority sought to terminate. At the close of his five-page opinion, the arbitrator concluded: “I find the substantive differences between this case, and those relied upon by the Authority as ‘precedent’ render the [employee] worthy of the ‘exception’, regarding which arbitrators have judgmental discretion under the Agreement provision cited [above].” Based on this finding, the arbitrator modified the employee’s penalty from termination to reinstatement without back pay.

The Transit Authority then commenced this CPLR article 75 proceeding seeking to vacate the arbitration award. Supreme Court concluded, inter alia, that the arbitrator had exceeded his power in modifying the penalty and granted the Transit Authority’s petition. The Appellate Division affirmed, with two Justices dissenting (60 AD3d 1 [2d Dept 2008]). This appeal as of right, pursuant to CPLR 5601 (a), followed.

Of the three “narrow grounds” that may form the basis for vacating an arbitrator’s award—that it violates public policy, is irrational, or “clearly exceeds a specifically enumerated limitation on the arbitrator’s power” (Matter of United Fedn. of Teachers, Local 2, AFT, AFL-CIO v Board of Educ. of City School Dist. of City of N.Y., 1 NY3d 72, 79 [2003], quoting Matter of Board of Educ. of Arlington Cent. School Dist. v Arlington Teachers Assn., 78 NY2d 33, 37 [1991])—only the last is argued on this appeal (see CPLR 7511 [b] [1] [iii]). The Transit Authority argues that the arbitrator exceeded his power because the “past precedent” prong of the article II, § 2.1 (C) (19) (c) exception was not met, thus the prerequisites necessary for the arbitrator to exercise discretion under that provision were not satisfied. The Transit Authority notes that the arbitrator distinguished each of the precedential awards it submitted to him and TWU’s submissions did not include any “past precedent”; thus, it posits, there was no “past precedent in similar cases” for the arbitrator to rely on in concluding that termination was a “clearly excessive” action by the Transit Authority warranting a modification pursuant to the exception. The courts below agreed with the Transit Authority. We do not.

The Transit Authority’s view overlooks the settled law in New York that it is “not for the courts to interpret the substantive conditions of the contract or to determine the merits of the dispute” (Matter of United Fedn. of Teachers, 1 NY3d at 82-83, quoting Board of Educ., Lakeland Cent. School Dist. of Shrub Oak v Barni, 51 NY2d 894, 895 [1980]; see CPLR 7501 [“In determining any matter arising under this article, the court shall not consider whether the claim with respect to which arbitration is sought is tenable, or otherwise pass upon the merits of the dispute”]). Under the subject provision of the CBA, after an arbitrator in a case involving assault allegations determines as a matter of fact that an assault did occur, the applicability of the provision’s exception is a question uniquely within the arbitrator’s power to decide. Of course, the CBA provides that the arbitrator in making that decision is to be guided by “past precedent” and the employee’s record, but it is certainly not the role of the courts to chart a course as to how the arbitrator is to apply “past precedent” or to determine if the arbitrator strayed from the best route in the guise of declaring that he exceeded his power (see Matter of Board of Educ. of Watertown City School Dist. [Watertown Educ. Assn.], 93 NY2d 132, 143 [1999] [“While some case records contain enough information for a court to make a penetrating analysis of the scope of the substantive provisions of the CBA, an undertaking of that kind is not the function of the court”]). Under the CBA, the arbitrator had the power to decide if the exception applied. Thus, vacating the arbitrator’s award on the ground asserted by the Transit Authority would not involve a determination that he exceeded his power; rather, it would entail the kind of “inapt flirtation with the merits, or . . . inappropriate use of the judicial scalpel to split the hairs that mark the perimeters of the contractual provisions” that “[h]istory, legislation, and experience,” not to mention our case law, dictate that we refrain from (id.).

Here, article II, § 2.1 (C) (19) (c) of the CBA required the arbitrator to first determine whether an assault occurred. If an assault did occur, the arbitrator was then to sustain the Transit Authority’s action unless an application of the arbitrator’s discretion was warranted under the provision’s exception. Having found that an assault occurred, whether an application of the exception was warranted was the very question submitted to arbitration under the CBA, and the arbitrator here concluded that the exception applied. Even when such “interpretations and factual findings appear highly debatable”—and we make no comment here on the merits of the arbitrator’s decision in this matter—“whether we agree with the arbitrator is beside the point” (Matter of United Fedn. of Teachers, 1 NY3d at 83).

The Appellate Division majority was correct in describing the CBA as a “direction to the arbitrator that reflects both the TWU’s and the TA’s intent that once an assault charge is sustained, the TA-imposed penalty must be upheld except in rare cases” (60 AD3d at 8). But, it was the arbitrator who was empowered to make the determination as to whether the matter submitted was one of those rare cases.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the petition dismissed.

Smith, J. (dissenting).

As I see it, this case turns on what standard of review applies. When an arbitrator interprets an ordinary term in a contract, a court may overturn his decision only if it is irrational, or contrary to public policy; if this were the standard of review here, I would agree with the majority that the arbitrator’s award should be upheld. But the contract clause now in issue is an express limitation on the arbitrator’s power. In such a case, under our precedents, the arbitrator’s ruling is reviewable for clear error, and I believe he clearly erred.

CPLR 7511 (b) (1) (iii) says that an arbitrator’s award “shall be vacated” if the arbitrator “exceeded his power.” This means, we have often said, that an award that “clearly exceeds a specifically enumerated limitation on the arbitrator’s power” must be set aside (e.g. Matter of Henneberry v ING Capital Advisors, LLC, 10 NY3d 278, 284 [2008], quoting Matter of New York City Tr. Auth. v Transport Workers’ Union of Am., Local 100, AFL-CIO, 6 NY3d 332, 336 [2005]). The clause at issue here is just such a “specifically enumerated limitation.” It is part of the section of the agreement dealing with arbitration, and says that, where a “charge involving assault” has been substantiated, the Authority’s disciplinary action “shall be affirmed and sustained by the [arbitrator]” in the absence of “credible evidence that the action by the Authority is clearly excessive in light of the employee’s record and past precedent in similar cases.” Thus, while as a general matter the parties to an arbitration agreement put themselves very largely at the arbitrator’s mercy, the parties here sought not to do that, but to disable the arbitrator from rejecting the penalty imposed by the Authority for an assault, in the absence of the extraordinary circumstances the agreement describes.

The question before us is whether the award the arbitrator rendered “clearly exceeds” the agreement’s limitation on his power. I conclude that it does. The “employee’s record” shows that he had previously been suspended for “a customer altercation.” This was 15 years before the incident now in question, but the Authority could surely find that repeated fights with customers, even once a decade, are unacceptable; most of its employees no doubt avoid such incidents for their whole careers. And no “past precedent in similar cases” imposing a punishment less severe than dismissal was shown to exist. The best the employee could do was to look for distinctions—sometimes rather thin ones—between this case and the many others in which the Authority dismissed employees who assaulted customers. The arbitrator was clearly wrong to find that the Authority’s punishment of this employee was “clearly excessive in light of the employee’s record and past precedent in similar cases.”

Because the arbitrator exceeded a limitation that the parties placed on his power, I would affirm the Appellate Division’s order vacating the award.

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

Order reversed, etc.


author: Read, J.

text:
    [924 NE2d 785, 897 NYS2d 677]
    Glacial Aggregates LLC, Appellant, v Town of Yorkshire, Respondent.
    Argued January 14, 2010;
    decided February 18, 2010

      POINTS OF COUNSEL

      Magavern Magavern Grimm LLP, Niagara Falls (Edward P. Perlman and James L. Magavern of counsel), and Hopkins & Sorgi, PLLC, Williamsville (Peter J. Sorgi of counsel), for appellant.
    I. The Town of Yorkshire’s actions deprived Glacial Aggregates LLC of a constitutionally vested right to the use of its land for mining, thereby rendering it liable for damages under 42 USC § 1983. (People v Miller, 304 NY 105; Matter of Ellington Constr. Corp. v Zoning Bd. of Appeals of Inc. Vil. of New Hempstead, 77 NY2d 114; Matter of Temkin v Karagheuzoff, 34 NY2d 324; Matter of Bayswater Health Related Facility v Karagheuzoff, 37 NY2d 408; Matter of Faymor Dev. Co. v Board of Stds. & Appeals of City of N.Y., 45 NY2d 560; Town of Orangetown v Magee, 88 NY2d 41; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Preble Aggregate v Town of Preble, 263 AD2d 849.) II. Glacial Aggregates LLC has a right to mine under the express terms of the Town of Yorkshire’s Zoning Law. (FGL & L Prop. Corp. v City of Rye, 66 NY2d 111; Stringfellow’s of N.Y. v City of New York, 91 NY2d 382; Matter of Toys “R” Us v Silva, 89 NY2d 411; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; People v Miller, 304 NY 105.)

      David J. Seeger, East Aurora, Anthony DiFilippo III and Richard Lam for respondent.
    I. Glacial Aggregates LLC failed to establish a nonconforming use to mine the subject property. (People v Miller, 304 NY 105; Matter of Rudolf Steiner Fellowship Found. v De Luccia, 90 NY2d 453; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278; Buffalo Crushed Stone, Inc. v Town of Cheektowaga, 13 NY3d 88; Matter of Toys “R” Us v Silva, 89 NY2d 411; Cooper v City of New York, 81 NY2d 584; Merrill v Albany Med. Ctr. Hosp., 71 NY2d 990; Matter of Lezette v Board of Educ., Hudson City School Dist. 35 NY2d 272; Matter of Skenesborough Stone v Village of Whitehall, 272 AD2d 674.) II. Glacial Aggregates LLC failed to establish that it acquired vested rights to mine its property. (Town of Orange-town v Magee, 88 NY2d 41; Matter of Smith v Spiegel & Sons, 31 AD2d 819; Matter of Temkin v Karagheuzoff, 34 NY2d 324; Matter of Bayswater Health Related Facility v Karagheuzoff, 37 NY2d 408; Matter of Faymor Dev. Co. v Board of Stds. & Appeals of City of N.Y., 45 NY2d 560; Matter of Pokoik v Silsdorf, 40 NY2d 769; Matter of Rudolf Steiner Fellowship Found, v

      DeLuccia, 90 NY2d 453; People v Bing, 76 NY2d 331; Matter of Higby v Mahoney, 48 NY2d 15; Matter of Ellington Constr. Corp. v Zoning Bd. of Appeals of Inc. Vil. of New Hempstead, 77 NY2d 114.) III. Glacial Aggregates LLC failed to establish a substantive due process claim under 42 USC § 1983. (Harlen Assoc. v Incorporated Vil. of Mineola, 273 F3d 494; Lisa’s Party City, Inc. v Town of Henrietta, 185 F3d 12; Bower Assoc. v Town of Pleasant Val., 2 NY3d 617; Cine SK8, Inc. v Town of Henrietta, 507 F3d 778; Town of Orangetown v Magee, 88 NY2d 41; Buffalo Crushed Stone, Inc. v Town of Cheektowaga, 13 NY3d 88; Natale v Town of Ridgefield, 170 F3d 258; Granada Bldgs. v City of Kingston, 58 NY2d 705; Bower Assoc. v Town of Pleasant Val., 2 NY3d 617; Ferran v Town of Nassau, 471 F3d 363.)

      Gilberti Stinziano Heintz & Smith, P.C., Syracuse (Kevin G. Roe, Adam J. Schultz and Michael A. Fogel of counsel), for New York Construction Materials Association, Inc., amicus curiae.
    I. Glacial Aggregates LLC’s investment in obtaining the Department of Environmental Conservation permit should be considered in determining whether Glacial acquired a vested right to mine the subject property. (Town of Orangetown v Magee, 88 NY2d 41; Matter of Chrysler Props. v Morris, 23 NY2d 515; Town of Somers v Camarco, 308 NY 537; People v Miller, 304 NY 105; Matter of Ellington Constr. Corp. v Zoning Bd. of Appeals of Inc. Vil. of New Hempstead, 77 NY2d 114; Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278.) II. Glacial Aggregates LLC’s activities on the subject property after issuance of the Department of Environmental Conservation mining permit constituted mining and established the use prior to the zoning change. (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278.) III. The Court should consider joining the growing number of states that hold that vested rights accrue at the time an application for a permit is made.
   OPINION OF THE COURT

Read, J.

Glacial Aggregates LLC (Glacial or the company) was formed in 1996 to conduct sand and gravel mining after John M. Clarey, one of its principals, learned that the Buffalo area needed additional sources of sand and aggregates. At the time, Clarey had 20 years of experience in oil and gas drilling in Western New York.

Glacial scouted out potential mining sites along Route 16 in Cattaraugus County, where receding glaciers had deposited vast amounts of aggregate materials, and ultimately settled on property within the Town of Yorkshire (the Town). The Town had no zoning law. As a result, a mining permit from the New York State Department of Environmental Conservation (DEC) was the only governmental permission required to mine sand and gravel in the Town. Glacial purchased or acquired options to purchase 375 acres of land (the property) in the Town for $250,000. Ninety-five acres were to be mined; the remaining land was intended as a buffer to shield the neighbors from the mining operation.

By the fall of 1996, Glacial had begun the time-consuming and costly process of fulfilling the requirements for a DEC mining permit (see ECL art 23, tit 27 [Mined Land Reclamation Law]). This entailed preparing a full environmental impact statement to comply with the State Environmental Quality Review Act (SEQRA); undertaking a hydrogeologic study of groundwater flow, a soil testing study, a traffic study, a wetlands analysis, and a human impact analysis to address issues such as noise and visual impacts; and developing a reclamation plan. The company ultimately spent about $500,000 in engineering and environmental expert fees to conduct these studies and create these plans.

In 1998, the Town Board (the Board) adopted a resolution declaring a moratorium on gravel mining, cell towers and automobile repair shops in the Town. Meanwhile, in September 1999, DEC handed down its SEQRA findings statement, and issued a five-year mining permit to Glacial. Among other things, the permit required the company to build and pave the last 500 feet of a haul road and install a bridge over a creek on the property before starting up commercial mining. On March 13, 2000, Glacial advised the Board of the issuance of the DEC permit. In response, the Board lifted the moratorium on gravel mining that same day.

In May 2000, Glacial excavated 20 truckloads of sand and gravel from the property, and sold this material to a potential purchaser and joint venturer for testing; the company excavated an additional 20 truckloads in October 2000, which was sold to another possible industry customer and business partner. In 2000 and 2001, Glacial dug approximately 40 pits on the property with an excavator, and 30 to 40 holes with a drill rig to figure out where the aggregate deposits were concentrated. Glacial also cut and cleared four acres of trees in preparation for extraction of materials and road construction.

With the exception of completing the bridge and haul road, then, Glacial had readied the property for commercial mining by the end of 2000. Over the next few years, the company continued to clear trees, monitor wells, submit quarterly reports to DEC, and make various required annual payments. Glacial designed and obtained steel for but did not finish either the bridge, estimated to cost $80,000 to $100,000, or the haul road, estimated to cost $10,000.

On June 11, 2001, the Town adopted its first Zoning Law, which generally prohibited gravel mining absent a special use permit. Section 10.1 expressly exempted prior nonconforming uses, though, by providing that “[e]xcept as otherwise provided herein, any lawfully established use of a building or land existing at the time of the enactment of this law, or any amendments thereto, may be continued although such use does not conform to the provisions of this law.” Clarey at first considered the new Zoning Law to be “good for [Glacial] because no new mines could have been established near ... or next to [it], and further, [the law] didn’t apply to [Glacial which] . . . spent all this money and got the permit and the moratorium was lifted before the zoning was passed.”

In late 2003 or early 2004, Glacial updated the Board about its activities, advising that it had attracted additional investors to supply capital, and that a new limited liability company headed by Clarey would acquire Glacial’s assets (the property and the permit) for $1,250,000. By June of that year, the company’s principals had invested roughly $840,000 in the business, and Clarey had secured a $2.9 million loan commitment from a Buffalo bank to finance full-scale mining operations.

Before closing on the loan, the bank required a letter from the Town confirming that local zoning restrictions did not prevent Glacial from mining the property. Accordingly, the Town Supervisor, at the company’s request, sent Clarey a letter dated July 8, 2004 verifying that

“it is the position of the Town . . . that Glacial has the right to operate the sand and gravel mine in the [Town], provided that actual mining operations are commenced prior to the expiration of the initial 5 year term of the New York State Department of Environmental Conservation Mining Permit.”

The original DEC permit, which was renewable for additional five-year periods, was set to expire in September 2004.

On July 12, 2004, however, the Board passed a motion

“authorizing [the Supervisor] to mail a new letter . . . [revoking] a letter dated July 8, 2004 . . . stating that the [Board] supported [Glacial’s] proposed mining operations in the town, and in the new letter stating that NYS DEC issued Mining Permits that were issued to presently inactive Mining Sites are subject to the 2001 Town of Yorkshire Zoning Laws.”

In a letter dated July 22, 2004, the Supervisor informed Clarey as follows:

“Please be advised that my letter of July 8, 2004 was issued in error.
“After consultation with the Town Attorney, Zoning Officer and members of the Town Board, we have determined that the proposed gravel mining operation in the Town of Yorkshire must comply with the Town Zoning Law, since actual mining operations were not commenced prior to the adoption of the Zoning Law.”

According to Clarey, this letter “absolutely decimated [him] because [he] had to call the bank and the partners and tell them we’re done. It just came as a shock.”

On August 22, 2004, Glacial commenced this action for a judgment declaring that it was entitled to operate a sand and gravel mine at the property pursuant to the DEC mining permit, and any extensions or renewals, without having to obtain a special use permit. The Town accepted a proposed settlement of the lawsuit by a Board resolution adopted on September 21, 2004, which specified that Glacial was allowed to mine; the Board then passed a second resolution, stating that Glacial could commence mining upon stipulations established by the Board. But then, on October 12, 2004 the Board reneged, passing a resolution rescinding the two September resolutions.

Glacial served an amended complaint on March 4, 2005, alleging a prior nonconforming use and deprivation of a vested right in contravention of the Due Process Clause of the Fourteenth Amendment to the United States Constitution, entitling the company to damages pursuant to 42 USC § 1983. A jury trial ensued on May 15, 2007. At the conclusion of Glacial’s case, the Town moved for a directed verdict declaring that the sand and gravel mining on the property was not a lawful nonconforming use, and that Glacial had not acquired a vested right to mine the property. Supreme Court denied the motion, and the jury subsequently returned a verdict in Glacial’s favor. The jury decided that Glacial had a preexisting, nonconforming right and a vested right to mine the property, and awarded the company $190,000 in damages for the deprivation of its federally secured vested right. The Town appealed.

On December 31, 2008, the Appellate Division reversed Supreme Court’s judgment upon the jury verdict; granted the Town’s motion for a directed verdict; and granted judgment in favor of the Town “declaring] that the mining of sand and gravel aggregate on the property ... is not a lawful nonconforming use and that [Glacial] did not acquire a vested right to mine the property” (Glacial Aggregates LLC v Town of Yorkshire, 57 AD3d 1362, 1363 [4th Dept 2008]). The court concluded that Glacial’s proof at trial “did not demonstrate that the property was actually being used for [a] nonconforming purpose at the time the zoning ordinance became effective” in 2001 (id. at 1364). This was so because none of the activities that Glacial undertook after issuance of the DEC mining permit constituted actual mining; rather, they were “performed merely in contemplation of mining” (id. at 1363).

The Appellate Division further decided that Glacial did not acquire a vested right to mine pursuant to a validly issued permit because it did not effect substantial construction or changes on the property, or incur substantial expenses; specifically, the company did not complete the haul road or the bridge, and its expenditures were principally made to acquire land and obtain the DEC mining permit. According to the court, because the bulk of Glacial’s expenditures were incurred “before it obtained the mining permit and were not incurred by plaintiff in reliance on the permit, they do not constitute the type of substantial expenditures that would entitle [the company] to a vested right to mine its property” (id. at 1365, citing Preble Aggregate v Town of Preble, 263 AD2d 849, 851-852 [3d Dept 1999], lv denied 94 NY2d 760 [2000] [landowner did not establish vested right to mine under circumstances where, despite knowledge of town’s amendment of zoning law to expand the existing limitation on mining to an outright prohibition, landowner “willingly proceeded with efforts and expenditures to gain (mining) permits from both the DEC and the Town” (id. at 851)]). Glacial now appeals as of right on constitutional grounds pursuant to CPLR 5601 (b) (1), and we reverse.

“[N]onconforming uses or structures, in existence when a zoning ordinance is enacted, are, as a general rule, constitutionally protected and will be permitted to continue, notwithstanding the contrary provisions of the ordinance” (People v Miller, 304 NY 105, 107 [1952]). Further, the decisions allowing continuation of an existing nonconforming land use after enactment of a zoning ordinance

“are sometimes put on the ground that the owner has secured a ‘vested right’ in the particular use— which is but another way of saying that the property interest affected by the particular ordinance is too substantial to justify its deprivation in light of the objectives to be achieved by enforcement of the provision” (id. at 108).

Hence, even the “advantage ... of more complete and effective zoning” does not justify the “destruction of substantial businesses or structures developed or built prior to the adoption of [the] zoning ordinance” (id.; see also Matter of Ellington Constr. Corp. v Zoning Bd. of Appeals of Inc. Vil. of New Hempstead, 77 NY2d 114, 122 [1990] [“(W)here a more restrictive zoning ordinance is enacted, an owner will be permitted to complete a structure or a development which an amendment (or new zoning ordinance) has rendered nonconforming only where the owner has undertaken substantial construction and made substantial expenditures prior to the effective date of the amendment”]).

In Town of Orangetown v Magee (88 NY2d 41 [1996]), we more recently considered whether a property owner possessed a vested right to continue a nonconforming use. There, the Magees, intending to erect a 184,000-square-foot industrial building on their property, acquired a building permit from the Town of Orangetown. After community opposition to the planned building emerged, the Town revoked the permit and amended the zoning code to preclude construction of commercial buildings on the Magees’ property. By the time the Town took these actions, however, the Magees had spent over $4 million on improvements for the land and building.

In an action brought by the Town to compel removal of a temporary building erected on the land for use during the preliminary stages of construction, the Magees counterclaimed. Contending that they possessed a vested right in the planned construction, the Magees sought reinstatement of the building permit and damages pursuant to 42 USC § 1983. Supreme Court concluded that the Magees had established a vested property interest, and had shown that the Town rescinded the permit “solely to satisfy political concerns” (id. at 47; see also Bower Assoc. v Town of Pleasant Val., 2 NY3d 617 [2004] [Town of Orangetown’s two-part test for substantive due process violations in the land-use context requires claimants to establish deprivation of a vested property interest and that the challenged governmental action was wholly without legal justification]). Accordingly, the trial court ordered the Town of Orangetown to reinstate the Magees’ building permit, and awarded them damages of $5,137,126, costs and attorneys’ fees. The Appellate Division affirmed, as did we.

We explained that a property owner obtains a vested right when “pursuant to a legally issued permit, the landowner demonstrates a commitment to the purpose for which the permit was granted by effecting substantial changes and incurring substantial expenses to further the development” (id. at 47). We emphasized, though, that “[n]either the issuance of a permit nor the landowner’s substantial improvements and expenditures, standing alone, will establish the right. The landowner’s actions relying on a valid permit must be so substantial that the municipal action results in serious loss rendering the improvements essentially valueless” (id. at 47-48 [citations omitted]).

When applying our vested-rights jurisprudence to the facts in this case, there are two significant considerations that must be kept in mind. First, the Town had no zoning laws when Glacial acquired the property in 1996—or, for that matter, when Glacial applied for the DEC mining permit in 1996, or even when DEC issued Glacial a mining permit in 1999 (cf. Preble Aggregate, supra). Relatedly, mining is a unique land use, which colors our analysis of vested rights and nonconforming use.

In Town of Orangetown and Matter of Ellington, the property owners spent considerable sums of money in reliance on a building permit and a subdivision approval respectively, which were subsequently revoked. Correspondingly, Glacial spent $500,000 in reliance upon local permission, subsequently retracted after the Town enacted the Zoning Law, to mine sand and gravel on its property as of right. Put another way, the issue is not whether Glacial gained a vested right by way of its DEC mining permit, but whether Glacial acquired a vested right by way of the unqualified Town permission it once enjoyed to mine its property. And when deciding whether a landowner has made substantial expenditures in reliance upon such local permission, we see no reason for the factfinder to disregard DEC permitting costs. Indeed, in light of the stringent requirements imposed by the Mined Land Reclamation Law, such costs frequently, if not invariably, run into the hundreds of thousands of dollars or more, and represent a significant portion of the investment necessary for a landowner to devote real property to quarrying.

Further, while substantial construction evidences substantial change or improvements, as was the case in Town of Orange-town and Matter of Ellington, little needed to be built for mining to take place at the property—i.e., the processing plant would have been a portable unit. The key requirement, of course, was the DEC mining permit. Moreover, any physical alteration of the land related to mining was prohibited until the SEQRA review was complete and the DEC mining permit was in hand (see 6 NYCRR 617.3 [a]; ECL 23-2711 [1] [anyone mining or proposing to mine “more than one thousand tons, or seven hundred fifty cubic yards, whichever is less, of minerals from earth within twelve successive calendar months” must first obtain article 23 permit]). Once that happened, Glacial

“allowed two sand and gravel companies to remove a total of 40 truckloads or 400 tons of material for testing; . . . removed timber throughout the property; . . . surveyed and staked out the locations of the mining areas and the haul road; . . . drilled many test holes, designed and obtained steel for a required bridge, and dug and monitored watertable wells” (Glacial Aggregates, 57 AD3d at 1363).

The only improvements to the land remaining to be completed were the haul road and the bridge. In view of this evidence, a rational jury could find that Glacial effected substantial changes or made substantial improvements to the property in reliance upon local permission to mine sand and gravel on its property as of right. Moreover, “the [Town’s] action resulted] in serious loss rendering [Glacial’s] improvements essentially valueless” (Town of Orangetown, 88 NY2d at 48).

Finally, the same evidence is sufficient for a rational jury to conclude that “the property was . . . used for [a] nonconforming purpose, as distinguished from a mere contemplated use, at the time the zoning ordinance became effective” (Matter of Syracuse Aggregate Corp. v Weise, 51 NY2d 278, 284-285 [1980]). In our recent decision in Buffalo Crushed Stone, Inc. v Town of Cheektowaga (13 NY3d 88 [2009]), we made clear that although mining permits are not “a prerequisite to establishing prior nonconforming use rights,” they are “Nevertheless . . . strong evidence of a manifestation of intent to mine a given area” (id. at 101-102). And “[a] party advancing a prior nonconforming use exception to a zoning ordinance must establish specific actions constituting an overt manifestation of its intent to utilize the property for the ascribed purpose [e.g., mining] at the time the zoning ordinance became effective” (id. at 98).

Actions that we found sufficient to exhibit an “overt manifestation of . . . intent” in Buffalo Crushed Stone are no more extensive than the activities pursued by Glacial. For example, we determined that the following undertakings established a preexisting nonconforming use at one parcel: preparation of maps to survey the potential materials to be extracted from the subparcel, putting 6,000 feet of pipe in place, negotiations to relocate a road, correspondence expressing an intent to mine the subparcel, preparations for removal of dirt, and drilling auger holes to identify areas for quarrying (id. at 100). We also concluded that two subparcels that had been cleared, grubbed, and stripped of topsoil—and which were the subject of mining permits before the zoning change—enjoyed nonconforming use status (id. at 103).

Accordingly, the order of the Appellate Division should be reversed, with costs, and the case remitted for consideration of issues raised but not determined on the appeal to that court.

Chief Judge Lippman and Judges Ciparick, Graffeo, Smith, Pigott and Jones concur.

Order reversed, etc.


author: Per Curiam.

text:
    [924 NE2d 812, 897 NYS2d 704]
    In the Matter of Robert T. Stewart, a Candidate for the Public Office of Chautauqua County Legislator, Seventh Legislative District, Respondent, v Chautauqua County Board of Elections et al., Respondents, and Leon H. Beightol et al., Appellants. In the Matter of Leon H. Beightol, a Candidate for the Public Office of Chautauqua County Legislator, Seventh Legislative District, Appellant, v Chautauqua County Board of Elections et al., Respondents, and Norman P. Green, Appellant. In the Matter of Leon H. Beightol, a Candidate for the Public Office of Chautauqua County Legislator, Seventh Legislative District, Appellant, v Chautauqua County Board of Elections et al., Respondents, and Norman P. Green, Appellant.
    Argued February 10, 2010;
    decided February 23, 2010

      POINTS OF COUNSEL

      Fessenden, Laumer & DeAngelo, Jamestown (Charles S. DeAngelo of counsel), for Leon H. Beightol, appellant.
    I. The two absentee ballots were the product of an improper procedure that culminated in the return of an application that served to unquestionably identify the voter. (Matter of Gross v Albany County Bd. of Elections, 3 NY3d 251; Matter of Altimari v Meisser, 15 NY2d 686.) II. The court should not validate unscannable ballots. III. J.K. was qualified to vote from the Town of Ellington residence. (Matter of Hosley v Curry, 85 NY2d 447, 1033; People v O’Hara, 96 NY2d 378; Matter of Willkie v Delaware County Bd. of Elections, 55 AD3d 1088; Matter of Fingar v Martin, 68 AD3d 1435; Friedman v State of New York, 67 NY2d 271; Matter of Johnson v Simpson, 43 AD3d 478; Matter of Gallagher v Dinkins, 41 AD2d 946; Matter of Bressler v Holt-Harris, 37 AD2d 898, 30 NY2d 529; Matter of Geller v Lasher, 196 AD2d 613; Matter of Umland v Board of Elections of City of N.Y., 143 AD2d 240.)

      Law Offices of Michael Robert Cerrie, Dunkirk (Michael Robert Cerrie of counsel), for Norman E Green, appellant.
    I. The Appellate Division incorrectly determined that the optical scanned ballots in question should be counted. (Matter of Alessio v Carey, 49 AD3d 1147, 10 NY3d 803; Matter of Gross v Albany County Bd. of Elections, 3 NY3d 251; Matter of Staber v Fidler, 65 NY2d 529.) II. The Appellate Division incorrectly determined that J.K. was unable to vote in the district in question. (Matter of Willkie v Delaware County Bd. of Elections, 55 AD3d 1088; Matter of Fingar v Martin, 68 AD3d 1435; Matter of Isabella v Hotaling, 207 AD2d 648, 84 NY2d 801; Matter of Ferguson v McNab, 60 NY2d 598; People v O’Hara, 96 NY2d 378; Matter of Gallagher v Dinkins, 41 AD2d 946, 32 NY2d 839; Matter of Stavisky v Koo, 54 AD3d 432; Matter of Fernandez v Monegro, 10 AD3d 429; Matter of Carney v Davignon, 289 AD2d 1096.) III. The Appellate Division improperly permitted absentee ballots to be counted despite the presence of extraneous identifying material. (People ex rel. Brown v Keller, 170 App Div 324, 216 NY 741; Matter of Alessio v Carey, 49 AD3d 1147, 10 NY3d 803.)

      Goodell & Rankin, Jamestown (Andrew W. Goodell of counsel), for Brian Abram, respondent.
    I. A party cannot appeal their own victory. (Roth v Michelson, 55 NY2d 278; Town of Massena v Niagara Mohawk Power Corp., 45 NY2d 482; Matter of Brown v Starkweather, 197 AD2d 840, 82 NY2d 653; Matter of Harry Y., 62 AD3d 892; DiMare v O’Rourke, 35 AD3d 346; Matter of Martin v C. A. Prods. Co., 8 NY2d 226; Matter of Hartsdale Fire Dist. v Eastland Constr., Inc., 65 AD3d 1345; Maas v

      Cornell Univ., 253 AD2d 1, 94 NY2d 87.) II. A party must raise known objections to a ballot before it is counted. (Matter of Gross v Albany County Bd. of Elections, 3 NY3d 251; Sheils v Flynn, 275 NY 446; Matter of Stevenson v Power, 27 NY2d 152; People v Buckley, 75 NY2d 843; People v Cook, 286 AD2d 917, 97 NY2d 680; People v Klavoon, 207 AD2d 979, 84 NY2d 908; People v Thompson, 59 AD3d 1115; Matter of City of Utica v Town of Frankfort, 10 NY3d 128.) III. The inclusion of the application in the same envelope as the ballot does not invalidate the ballot. (Cahen v Boyland, 1 NY2d 8; Matter of Altimari v Meisser, 22 AD2d 933, 15 NY2d 686, 847, 854; Matter of Pavlic v Haley, 40 Misc 2d 975, 20 AD2d 592, 13 NY2d 1111; People ex rel. Brown v Keller, 170 App Div 324, 216 NY 741; People v O’Hara, 96 NY2d 378; Matter of Palla v Suffolk County Bd. of Elections, 31 NY2d 36; Matter of Graziano v County of Albany, 3 NY3d 475; Matter of Ferguson v McNab, 60 NY2d 598; Matter of Isabella v Hotaling, 207 AD2d 648, 84 NY2d 801; Friedman v State of New York, 67 NY2d 271.)

      Michael J. Sullivan, Fredonia, for Robert T. Stewart, respondent.
    I. The optical scan ballots left by voters at the optical scan machine should be counted since the voters’ intent was clear and the chain of custody of the ballot was preserved. (Bingham v New York City Tr. Auth., 99 NY2d 355.) II. The ballot of J.K. was improperly counted, as she was not a resident qualified to vote in the Town of Ellington on November 3, 2009. (Palla v Suffolk County Bd. of Elections, 38 AD2d 84, 30 NY2d 481, 31 NY2d 36; People v O’Hara, 96 NY2d 378; Matter of Willkie v Delaware County Bd. of Elections, 55 AD3d 1088; Matter of Hosley v Curry, 85 NY2d 447; Matter of Markowitz v Gumbs, 122 AD2d 906; Matter of Fernandez v Monegro, 10 AD3d 429; Matter of Carney v Davignon, 289 AD2d 1096; Matter of Altimari v Meisser, 45 Misc 2d 1008, 23 AD2d 865, 16 NY2d 629.) III. Two absentee ballots cast and canvassed on November 30, 2009 should be counted. (Matter of Gross v Albany County Bd. of Elections, 3 NY3d 251; People ex rel. Brown v Keller, 170 App Div 324, 216 NY 741; Parochial Bus Sys. v Board of Educ. of City of N.Y., 60 NY2d 539.)
   OPINION OF THE COURT

Per Curiam.

I.

These three related proceedings were commenced pursuant to article 16 of the Election Law following the general election for the position of Chautauqua County Legislator for the Seventh District. Robert T. Stewart, the Republican and Independence Party candidate, commenced the first proceeding challenging, as relevant here, one affidavit ballot on the ground that the voter, J.K, was not a resident of the voting district. Stewart also challenged two absentee ballots, on the ground that the “absentee ballot applications submitted by [the two] voters were rejected by the . . . Board of Elections [and corrections were not received prior to sending the ballot or upon the return of the ballot.” At that point, the two absentee ballot envelopes at issue had not yet been opened. Leon H. Beightol, the incumbent Democratic and Working Families Party candidate, answered and asserted counterclaims. As relevant here, Beightol sought to have Supreme Court validate the affidavit ballot of J.K. and “open and count” the two absentee ballots.

At a hearing on the first petition on November 30, 2009, Supreme Court directed the Board of Elections to open the two absentee ballot envelopes to ascertain the contents of the envelopes. Each of the two envelopes contained one completed absentee ballot application and one completed absentee ballot. To the parties’ apparent surprise, both ballots were cast in favor of Stewart. Thereafter, Beightol commenced the second of these three proceedings. Altering the position he took in the first proceeding, Beightol sought to have Supreme Court invalidate the two absentee ballots on the ground that extrinsic material which could identify the voters, i.e., their absentee voter applications, was included along with the voters’ absentee ballots in the ballot envelopes. As relevant here, Beightol also sought the invalidation of two optical scan ballots—manually counted by the Board of Elections on November 18, 2009—that he claimed were “abandoned” at one polling site. In his answer, Stewart, also altering his original position, argued that the two absentee ballots should be counted. Stewart additionally argued that the optical scan ballots were properly counted during the hand count on December 8, 2009.

Shortly thereafter, Beightol commenced the third proceeding, challenging the optical scan ballots on the ground that they were abandoned. He also challenged whether chain of custody controls were properly used with respect to the two optical scan ballots.

After a December 9,. 2009 hearing, Supreme Court ordered that J.K.’s affidavit ballot and the two absentee ballots be counted and that the two optical scan ballots not be counted. As to the affidavit ballot, the court concluded that J.K. “properly . . . cast her ballot in the location where she had significant contacts ... of a kind and nature which would have allowed her to vote from that district on that date.” Addressing the two absentee ballots, the court first noted that “[a]n absentee ballot should not be mailed out [until] the [absentee ballot] application is complete.” By sending the two absentee ballots, the court concluded that the Board of Elections had “deemed the . . . application to be complete.” The court further concluded that the extrinsic materials included with the ballots in the absentee ballot envelopes were the result of a ministerial error by the Board of Elections. Finally, with respect to the optical scan ballots, the court concluded, without reaching Beightol’s chain of custody arguments, that the voters had abandoned their ballots by leaving the polling place without ensuring their votes had been counted. Supreme Court’s order resulted in a tie vote.

As relevant here, Stewart appealed from so much of Supreme Court’s order as directed the Board of Elections to count J.K.’s affidavit ballot and invalidated the Board of Elections’ hand count of the two optical scan ballots. Beightol cross-appealed from so much of Supreme Court’s order as directed the “opening and counting” of the two absentee ballots.

The Appellate Division, with two Justices dissenting in part, dismissed Beightol’s cross appeal from Supreme Court’s order “insofar as it directed the opening of the two absentee ballots,” modified the order, on the law, by invalidating J.K.’s affidavit ballot and validating the two optical scan ballots, and, as modified, affirmed (see Matter of Stewart v Chautauqua County Bd. of Elections, 69 AD3d 1298, 1299 [4th Dept 2010]). The Appellate Division majority agreed with Supreme Court’s factual findings on the issue of J.K.’s residency but held, as a matter of law, that J.K. resided at an address outside the voting district. With respect to the optical scan ballots, the court, relying on 9 NYCRR 6210.13 (A) (11), concluded that the ballots were not “abandoned” within the meaning of that regulation and were properly counted during the Board of Elections’ hand count.

As to the two absentee ballots, the court first characterized Beightol’s cross appeal as “contending] . . . that [Supreme C]ourt erred in ordering that the two absentee ballots ... be opened” (id. at 1302). Because the Appellate Division determined that Beightol had previously sought to have the absentee ballots opened, and Supreme Court had ordered the Board to open the ballots, the Appellate Division concluded that Beightol was not aggrieved by that part of Supreme Court’s order. The court further determined that Beightol was judicially estopped from taking the position in his two proceedings and on appeal that the absentee ballots should not be counted because that position was “contrary to his position in the proceeding commenced by Stewart” (id. at 1303). Finally, the court rejected Beightol’s argument that extrinsic materials included with the absentee ballots invalidated those ballots. After the Appellate Division decision, Stewart led by three votes.

Beightol appealed as of right, pursuant to CPLR 5601 (a), from the Appellate Division order of modification, and we now affirm.

II.

A. J.K.’s Affidavit Ballot

Election Law § 1-104 (22) defines “residence” as “that place where a person maintains a fixed, permanent and principal home and to which he [or she], wherever temporarily located, always intends to return.” To be a resident of a place within the meaning of the Election Law, we have held that “a person must be physically present with the intent to remain for a time” (People v O’Hara, 96 NY2d 378, 384 [2001], citing Matter of Palla v Suffolk County Bd. of Elections, 31 NY2d 36, 47 [1972]). While a voter may have more than one “bona fide residence,” he or she may not “create an address” merely to “circumvent[ ] residency requirements” (id. at 384, 385 [citations omitted]). In O’Hara, we explained:

“[A]n individual having two residences may choose one to which [he or] she has ‘legitimate, significant and continuing attachments as [his or] her residence for purposes of the Election Law.’ Generally, where there is no reason to assume that a residence has been asserted merely for the purposes of voting, where no fraud or deception has been practiced and where there is a history of the residence employed, the courts have upheld a fact-finder’s determination of residency” (96 NY2d at 385, quoting Matter of Ferguson v McNab, 60 NY2d 598, 600 [1983]; see also Matter of Gallagher v Dinkins, 41 AD2d 946, 947 [2d Dept 1973], affd 32 NY2d 839 [1973]).

The record here establishes that J.K. did not have dual residences in Chautauqua and Cattauragus Counties. Although J.K. testified that she stayed at the Chautauqua County house for three consecutive summers and hoped to return for a fourth, she further testified that she did not own the home, did not pay rent, might not be permitted to return because her aunt could decide to sell the property before the next summer, that the electrical supply was shut off as of August 2009, and that the house had no running water or heat source. The record also establishes that J.K. resided in the Cattaraugus County apartment. Notably, when asked how long she intended to reside at the Cattaraugus County apartment, J.K. testified that she hoped to stay there ‘‘permanently].’’ As a matter of law, J.K.’s physical presence at her Cattaraugus County apartment, coupled with her expressed intent to remain there permanently, sufficed to establish that as her residence. Moreover, J.K. lacked “significant and continuing” attachments to the Chautauqua County address sufficient to create a bona fide second residence for the purpose of voting. Accordingly, we conclude, as a matter of law, that J.K. was not a resident of the voting district and the affidavit ballot must be invalidated.

B. Optical Scan Ballots

Chautauqua County was one of several counties statewide that used new optical scan voting machines for the first time in the November 2009 general election in conformance with federal mandates. Under this system, the voter completes a paper ballot in a privacy booth by using a pen or pencil to identify the chosen candidates. The voter then brings the ballot to an optical scan machine and the ballot is fed into the device, which “reads” the document and records the vote. The technology is not foolproof, however, and the machine is sometimes unable to record the votes identified on the ballot for various reasons, including deviation by the voter from the recommended manner of marking the boxes on the form, causing some ballots to be rejected by the machine as unreadable.

In this case, at the end of the general election day, there were two ballots at a polling place that had been completed by voters but were rejected as unreadable by the optical scan machine. Testimony given by one election inspector from that polling site established that one voter left immediately after feeding his ballot into the machine, before learning of the machine’s rejection of the ballot. The voter who filled out the second ballot was aware that his ballot was not scanned by the machine but he declined to fill out a new ballot. The election inspector’s testimony nonetheless made clear that the voter did not intend to abandon his vote. For both ballots, a bipartisan team of inspectors attempted to rescan the ballot. When the attempt was unsuccessful, an election inspector then secured the ballot in the emergency slot of the optical scan machine. At the end of the day, the ballots were delivered to the Board of Elections in a specially designated envelope.

We agree with the Appellate Division that the Board of Elections properly hand-counted the two unscanned optical scan ballots. The applicable regulation, which “appl[ies] in determining whether a ballot has been properly voted and whether a vote should be counted,” provides: “If a voter leaves the voting machine or system without casting their ballot, a bipartisan team of election inspectors shall cause the ballot to be cast as the voter left it, without examining the ballot” (9 NYCRR 6210.13 [A] [11] [a]). If the voter leaves a ballot “in a privacy booth” without casting the ballot, the ballot is spoiled (9 NYCRR 6210.13 [A] [11] [b]). But, if a ballot is “non-machine processable as submitted by the voter, [it] shall be manually counted by a bipartisan team of election inspectors and such vote totals shall be added to the canvass” (9 NYCRR 6210.13 [A] [8]).

Here, no party contends that the ballots were left in a “privacy booth.” Rather, the voters left their completed ballots at the machines without ensuring that their ballots had been scanned. Pursuant to the express language of the applicable regulations, because the ballots were “non-machine processable as submitted by the voter[s],” the votes were required to be manually counted and added to the canvass. The process utilized by the election inspectors here, which ultimately culminated in a manual count of the ballots by the Board of Elections, complied with the provisions of the applicable regulations and was, therefore, proper.

Beightol’s argument that the optical scan ballots could not be hand-counted because the voters’ marks overran the squares for designating a candidate lacks merit. One ballot contained check marks inserted within the squares instead of completely penciled-in squares. The other optical scan ballot contained some marks that overran the squares. However, the applicable regulations specifically provide:

“A vote for any candidate or ballot measure shall not be rejected solely because the voter failed to follow instructions for marking the ballot. . .
“A mark is considered valid when it is clear that it represents the voter’s choice and is the technique consistently used by the voter to indicate his or her selections. Such marks may include, but are not limited to, properly filled in voting position targets, cross mark ‘X’, a checkmark ‘[Checkmark]’, circles, completed open arrow ‘[Left Pointing Arrow]’, or any other clear indication of the voter’s choice” (9 NYCRR 6210.13 [A] [2], [3]).

Here, the ballots clearly indicate the voters’ selections for candidates and, therefore, should be counted. Accordingly, we conclude that the two optical scan ballots were valid and should be counted.

C. Absentee Ballots

As a preliminary matter, we agree with the Appellate Division that Beightol was not aggrieved by so much of Supreme Court’s determination as directed the opening of the absentee ballot envelopes. In the first proceeding, Stewart sought a determination that the two absentee ballot envelopes should not be opened or the ballots counted. In response, Beightol argued that the ballot envelopes should be opened. Given that Supreme Court ordered the ballot envelopes opened, Beightol is not aggrieved by that part of the determination. He is aggrieved, however, by so much of the order as directed that the ballots be counted, and we therefore consider his objections to that ruling.

Beightol was not judicially estopped from adopting the position that the absentee ballots were invalid. We note that Stewart, like Beightol, adopted a different position once the absentee ballot envelopes were opened, in both the first proceeding and in the subsequent proceedings; Stewart can hardly assert that he was prejudiced when Beightol merely adopted Stewart’s original position (see generally Shepardson v Town of Schodack, 195 AD2d 630, 632 [3d Dept 1993], affd 83 NY2d 894 [1994]). Further, it is not clear on this record that Beightol was successful in persuading Supreme Court to adopt his initial position (see Zedner v United States, 547 US 489, 504 [2006]). Thus, we conclude that the doctrine of judicial estoppel is inapplicable, and we turn to the merits of Beightol’s argument that the two absentee ballots submitted by R.Y. and W.Y. are invalid and should not be counted.

On the merits, Beightol first argues that the absentee ballots should not be counted because the Board did not receive completed absentee ballot applications prior to sending the absentee ballots to these two voters. Relying on Matter of Gross v Albany County Bd. of Elections (3 NY3d 251 [2004]), Beightol contends that the Board of Elections’ error was not merely technical or ministerial, and its failure to adhere to the provisions of the Election Law requires the invalidation of the two absentee ballots. We disagree.

The Election Law describes in detail the appropriate procedure for the issuance of absentee ballots (see Election Law § 8-400; see also Gross, 3 NY3d at 256). Before a voter may cast an absentee ballot, he or she must complete an absentee ballot application (see Election Law § 8-400 [2]). The application must include certain information; for example, the voter must specify the reason for his or her absence from the voting district, the duration of that absence, and that he or she is qualified and registered to vote in the election district for which the absentee ballot is sought (see § 8-400 [3] [b], [c]). Applications for absentee ballots “must be mailed to the board of elections not later than the seventh day before the election for which a ballot is first requested or delivered to such board not later than the day before such election” (§ 8-400 [2] [c]). When a local board of elections receives an application for an absentee ballot, the board determines “upon such inquiry as it deems proper whether the applicant is qualified to vote and to receive an absentee ballot” (§ 8-402 [1], [2]), and, if it is satisfied by its inquiry, the absentee ballot is then forwarded to the voter (see Gross, 3 NY3d at 256).

In Gross, we emphasized the need for compliance with the framework specified in the absentee ballot provisions (see id. at 258). In that case, the Board of Elections, rather than following the particularized requirements of the Election Law, forwarded an absentee ballot for an April 2004 special general election to any voter who had requested one in the November 2003 general election without requiring an absentee ballot application from each voter (see id. at 254). We concluded that the Board’s mistake could not be “characterized as technical, ministerial or inconsequential because it was central to the substantive process by which voters are determined to be qualified to cast absentee ballots” (id. at 258-259). Specifically, we observed that the Board’s error resulted in an uneven application of the Election Law, because some voters were required to comply with the absentee voter application process, while others were not. We were also particularly concerned that the challenged absentee votes were cast by voters who were never made to “ articulate [ ] why they were not able to vote at the polls” (id. at 259). Thus, because of the Board of Elections’ failure to ascertain whether the voters were duly qualified to cast absentee ballots, we concluded that the Board’s mistake warranted the invalidation of the challenged absentee ballots.

The concerns that motivated our holding in Gross are not present here. In this case, the record indicates that the Board received applications for absentee ballots from both voters within the applicable time period before the election. However, the applications did not contain necessary information; specifically, the applications failed to state where the voters would be at the time of the election and the dates of their absence from the district. The Board thereafter mailed absentee ballots to both voters with instructions to return the completed application together “with [the absentee] ballot or [the] ballot will not be counted.” Both voters did, in fact, return their completed absentee ballot applications with their absentee ballots. The applications were examined separately to ascertain the qualification of each voter to cast an absentee ballot. Thus, the Board here, unlike the Board of Elections in Gross, did have a basis upon which to determine that the two voters were entitled to vote as absentee voters.

The Board has conceded that the procedure it utilized here was not the best method of complying with the requirements of the Election Law and that it will not use these procedures again in the future. However, unlike the mistakes committed by the Board of Elections in Gross, the slight deviation from the prescribed procedure utilized by the Board “can be viewed as substantial compliance with statutory directives” (Gross, 3 NY3d at 259). The defect in the procedure was not a “substantive deficiency implicating voter qualification” (id. at 259 n 3).

Finally, Beightol’s argument that the absentee ballots were void because the absentee ballot envelopes contained extrinsic materials identifying the voters lacks merit. We agree with the Appellate Division that the absentee ballots were not invalidated by the presence of the absentee ballot applications, because no marks on the ballots themselves identified the voters (see Election Law § 9-112 [1]; see also Matter of Altimari v Meisser, 15 NY2d 686, 687 [1965], modfg 22 AD2d 933 [2d Dept 1964], rearg denied and remittitur amended 15 NY2d 847 [1965]).

III.

In sum, we hold that J.K.’s affidavit ballot was invalid, the two optical scan ballots were valid and should be counted, and the two absentee ballots were valid and should be counted. Accordingly, the order of the Appellate Division should be affirmed, without costs.

Chief Judge Lippman and Judges Ciparick, Graffeo, Read, Smith, Pigott and Jones concur in per curiam opinion.

Order affirmed, without costs.

      . We denied Beightol’s motion for leave to appeal as unnecessary and granted his motion for a stay of enforcement of the Appellate Division order (see 14 NY3d 740 [2010]).

      . Each of the three proceedings named as respondents, in addition to the opposing candidate, the Board of Elections, Brian Abram, the Republican member of the Board, and Norman Green, the Democratic member of the Board. At Supreme Court and on appeal, the Republican member of the Board asserted arguments identical to Stewart’s position; the Democratic member of the Board asserted arguments identical to Beightol’s position. Green sought leave to appeal and appealed as of right from the Appellate Division order. Assuming without deciding that Green has standing to appeal without Abram’s permission (see Matter of Graziano v County of Albany, 3 NY3d 475 [2004]), our holdings with respect to Beightol’s arguments apply equally to Green’s arguments.


author: Ciparick, J.

text:
    [924 NE2d 792, 897 NYS2d 684]
    The People of the State of New York, Respondent, v Tatyana Kisina, Appellant.
    Argued January 14, 2010;
    decided February 18, 2010

      POINTS OF COUNSEL

      Stillman, Friedman & Shechtman, P.C., New York City (Nathaniel Z. Marmur and Paul Shechtman of counsel), for appellant.
    I. The convictions on the falsifying business records counts should be set aside because Dr. Kisina’s reports are not records of State Farm Mutual Automobile Insurance Company. (People v Mahboubian, 74 NY2d 174; People v Mezon, 80 NY2d 155; People v Hawkins, 11 NY3d 484; People v Ford, 11 NY3d 875; People v Jean-Baptiste, 11 NY3d 539; People v Papatonis, 243 AD2d 898; People v Argus, 17 AD3d 1155; Hall v Brown, 489 F Supp 2d 166; People v Smithtown Gen. Hosp., 93 Misc 2d 736; People v Banks, 150 Misc 2d 14.) II. The trial court erred in excluding testimony that Dr. Kisina had treated the undercover officer properly. (Crane v Kentucky, 476 US 683; People v Alvino, 71 NY2d 233; Matter of Brandon, 55 NY2d 206; Sattler v City of New York Commn. on Human Rights, 147 Misc 2d 189; United States v Shavin, 287 F2d 647; United States v Thomas, 32 F3d 418.)

      Andrew M. Cuomo, Attorney General, New York City (Hannah Stith Long, Barbara D. Underwood and Roseann B. MacKechnie of counsel), for respondent.
    I. A person commits the crime of falsifying business records where she provides an insurance company with false information in support of a fraudulent claim, and the company keeps the information to evidence its legal obligation to pay her. (People v Hawkins, 11 NY3d 484; People v Gray, 86 NY2d 10; People v Mahboubian, 74 NY2d 174; Consedine v Portville Cent. School Dist., 12 NY3d 286; Matter of Greenberg [Ryder Truck Rental], 70 NY2d 573; People v Brown, 140 App Div 591; People ex rel. Isaacson v Fallon, 202 NY 456; People v Bloomfield, 6 NY3d 165; People v Boothe, 68 AD3d 402; People v Myles, 58 AD3d 889.) II. The trial court properly precluded defendant from presenting evidence that she declined to treat another patient and did not bill for treating him. (People v Williams, 6 NY2d 18; People v Arroyo, 77 NY2d 947; United States v Walker, 191 F3d 326; Sattler v City of New York Commn. on Human Rights, 147 Misc 2d 189; United States v Shavin, 287 F2d 647; People v Kuss, 32 NY2d 436; People v Van Gaasbeck, 189 NY 408.)
   OPINION OF THE COURT

Ciparick, J.

The principal question presented in this appeal is whether a physician can be found guilty of falsifying business records in the first degree (Penal Law § 175.10) for submitting fraudulent medical documentation to a no-fault insurance carrier for the purpose of receiving payments for treatments that were unnecessary or unperformed. We hold that the submitted documents are “business records” for the purpose of this statute.

In 2002, defendant, a specialist in physical medicine and rehabilitation, treated accident victims at IK Medical P.C., a clinic in Queens. The facility reportedly provided comprehensive medical care to motor vehicle accident victims eligible for no-fault insurance coverage. In 2003, the Attorney General investigated the clinic for insurance fraud and other related crimes, and subsequently procured an indictment against defendant for engaging in a scheme to defraud in the first degree (Penal Law § 190.65 [1] [b]), two counts of insurance fraud in the third degree (Penal Law § 176.20) and two counts of falsifying business records in the first degree. The falsifying business records charges were based upon false consultation reports that defendant submitted to State Farm Mutual Automobile Insurance Company (State Farm), along with verification of treatment forms seeking recompense for procedures she purportedly performed on two motor vehicle accident victims.

Supreme Court denied defendant’s pretrial motion to dismiss the falsifying business records counts, stating that “[f]alse records resulting from false information submitted to support a fraudulent claim [are] a sufficient basis for an indictment charging Falsifying Business Records.”

At trial, the People introduced as evidence two $3,823.24 insurance claims for nerve testing purportedly performed on two accident victims. Defendant signed the claim forms—entitled “New York Motor Vehicle No-Fault Insurance Law Verification of Treatment by Attending Physician”—and submitted them to State Farm. Along with these forms, defendant sent the insurance carrier “consultative reports,” indicating that defendant had conducted electrodiagnostic testing on 26 nerves and muscles for each patient.

Defendant stipulated as to testimony from a representative from State Farm that, if called, she would testify that the company is a provider of no-fault insurance in New York, and that she was a custodian of records, familiar with its record-keeping practices and obligations. The stipulation agreement explained that the “Verification of Treatment Forms” and accompanying medical reports defendant submitted to State Farm are intended to evidence its “obligation to pay the attending physician or other provider of health service for treatment or healthcare services rendered,” and that State Farm relies on the accuracy of such statements. The stipulation agreement further noted that such documents became part of State Farm’s permanent business records.

The People presented an expert witness who described the electrodiagnostic tests for which defendant billed, including electromyography (EMG) and nerve conduction velocity (NCV).

The expert testified that one of the tests involves placing a needle into the muscle and causing pain, and that the “F-wave” test that defendant claimed to have performed on one of the two patients 16 times was not a standard test and is “rarely done.”

The two accident victims that defendant allegedly treated testified for the People. One testified that she had not received any of the EMG tests reportedly performed by defendant and only 2 of the 26 NCV tests billed by defendant; the other stated that he received just 2 of 4 EMG tests and just 6 of 26 NCV tests that defendant billed.

In addition to evidence specifically relating to defendant’s conduct, the People offered evidence of a pattern of fraud by the clinic in which, they claimed, defendant was involved. Two of the owners of IK Medical testified for the prosecution under cooperation agreements that the clinic existed from 2001 to 2003 for the sole purpose of improperly billing no-fault insurance companies for medical treatment reportedly performed on accident victims. The clinic allegedly recruited motor vehicle accident victims by paying “runners” or “steerers” to locate and usher them to the clinic for treatment. Irrespective of a particular patient’s medical needs, the clinic administered treatment from a general practitioner, a neurologist, a psychologist, a physical therapist and other medical professionals, and then billed no-fault insurance carriers. The two owners stated that the clinic sought to exhaust the $50,000 no-fault coverage allotted to each motor vehicle accident victim for medical treatment, even if the patients did not require such extensive care. The owners further noted that defendant worked ¿t the facility from June 2002 until June 2003, for two to three days per month.

Defendant presented three character witnesses, a private investigator who interviewed one of the two patients, and a medical expert of her own. Defendant then requested that the court permit her to present evidence that the Attorney General’s Office sent an undercover investigator to the clinic and that defendant provided proper medical treatment and did not inflate her bill for such services. Supreme Court precluded the evidence, stating “[t]here is no requirement that the People prove that defendant’s treatment of all of her patients was fraudulent in order to prove this scheme to defraud.”

The jury found defendant guilty of two counts of insurance fraud in the third degree and two counts of falsifying business records in the first degree. The jury acquitted defendant of scheme to defraud in the first degree. The Appellate Division affirmed (60 AD3d 695, 696 [2d Dept 2009]). A Judge of this Court granted defendant leave to appeal (12 NY3d 917 [2009]), and we now affirm.

Defendant primarily contests her conviction of two counts of falsifying business records in the first degree. She raises two arguments that the false business records submitted to State Farm fall outside of the purview of Penal Law § 175.10. First, she claims that the statute is not violated when an outsider or third party submits false information to a company to induce it to take action in reliance upon that information; second, she argues that the medical reports that she submitted to State Farm are not “business records” because they do not reflect the “condition” or “activity” of the recipient enterprise, but rather falsely evidence her activities and the condition of her patients. We disagree.

We begin by turning to the language of the statute in order to “give effect to the intention of the Legislature” (Consedine v Portville Cent. School Dist., 12 NY3d 286, 290 [2009]). “Where the language of a statute is clear and unambiguous, courts must give effect to its plain meaning” (Matter of Tall Trees Constr. Corp. v Zoning Bd. of Appeals of Town of Huntington, 97 NY2d 86, 91 [2001]). Falsifying business records in the first degree is committed when a “person,” with the requisite intent, makes or causes a false entry in the “business records” of an enterprise (Penal Law § 175.05 [1]; § 175.10). The “person” must act with an “intent to defraud,” which includes “an intent to commit another crime or to aid or conceal the commission thereof” (Penal Law § 175.10; see also Donnino, Practice Commentary, McKinney’s Cons Laws of NY, Book 39, Penal Law § 175.05, at 65-66). A “business record” is “any writing or article . . . kept or maintained by an enterprise for the purpose of evidencing or reflecting its condition or activity” (Penal Law § 175.00 [2]; cf. CPLR 4518 [admissibility of business records at trial as an exception to the hearsay rule]).

Regarding defendant’s first claim, the Penal Law prescribes no limitation or preconditions on the types of persons who may fall within the ambit of this crime. Nowhere does the Penal Law state that “outsiders” or “third parties” not employed by or agents of the recipient enterprise are immune from prosecution under this statute. Indeed, in People v Bloomfield (6 NY3d 165, 170-171 [2006]), we rejected the “insider/outsider distinction” for the purpose of defining a false business record under the current business record statutes. We sustained a lawyer’s conviction for falsifying business records of a company of which he was not an employee or agent, notwithstanding that he maintained the records in an outside location (cf. People v Cratsley, 86 NY2d 81, 88-91 [1995] [in a rape prosecution, IQ tests performed by an “outsider” were properly admitted as a business record of a social service agency pursuant to CPLR 4518]).

Many other courts have similarly held that a third party’s submission of fraudulent records may fall within the scope of the statute (see e.g. People v Myles, 58 AD3d 889, 890-892 [3d Dept 2009] [a consumer of electricity could be guilty of falsifying business records for bypassing the electric meter, causing it to falsely record the amount of electricity used]; People v Johnson, 39 AD3d 338, 339 [1st Dept 2007] [a codefendant of public assistance applicant could be guilty of falsifying business records of the agency]; People v Smith, 300 AD2d 1145, 1146 [4th Dept 2002] [defendant could be convicted for falsifying the records of the public defender’s office for erroneously stating his income]). We agree with the interpretation of these courts, and find that the People’s position better comports with the plain language of the statute.

The second and most prominent component of defendant’s argument is that the records submitted to State Farm do not reflect the “condition” or “activity” of that enterprise as required by Penal Law § 175.00, but rather falsely evidence defendant’s own activity and the condition of her patients. Here, the stipulated testimony from the State Farm representative supports the necessary elements of a “business record.” The stipulation explains that State Farm was obligated to keep and maintain records submitted by physicians seeking payments for medical services rendered. Further, the stipulation establishes that State Farm’s financial condition is affected by these false submissions, as they give rise to liabilities under its policies.

Defendant seeks support from People v Papatonis (243 AD2d 898, 900 [3d Dept 1997]) in arguing that the false medical reports she submitted do not reflect the “condition” of the receiving enterprise. In that case, the court held that misrepresentations on an employment application, wherein the defendant falsely denied having been convicted of a crime, did not fall within the ambit of the statute (see id. at 900-901). However, the falsifications in the job application did not, as here, relate to any rights or obligations on the part of the recipient agency.

Here, by contrast, there exists sufficient evidence establishing that State Farm “kept or maintained” the consultation reports along with the claim forms, and that they evidence or reflect “its condition”—specifically its legal obligation to reimburse medical providers for services. The falsifying business records conviction was, therefore, sustainable under the circumstances presented.

Finally, defendant asserts that Supreme Court committed reversible error by improperly precluding evidence that an investigator from the Attorney General’s Office went to IK Medical, posing as a motor vehicle accident victim, and that defendant did not administer any unnecessary procedures or submit false claims. At trial, defendant proffered this evidence to negate fraudulent intent. She claims that its preclusion prejudiced her defense.

While this proffered testimony may have been relevant to show a lack of intent to perpetrate the scheme to defraud charge (see United States v Thomas, 32 F3d 418, 421 [9th Cir 1994] [a defendant “should be permitted to offer any evidence which bears directly and not too remotely on his intention (to defraud)”]), no possible prejudice is apparent as a result of Supreme Court’s ruling. Defendant was acquitted of the scheme to defraud charge, and this evidence would not have related to the fraudulent submission of claims for unnecessary or unperformed medical treatments regarding the two accident victims.

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

Chief Judge Lippman and Judges Graffeo, Read, Smith, Pigott and Jones concur.

Order affirmed.

       The indictment contained 100 counts, charging the owners of IK Medical, several licensed doctors who reportedly practiced at the clinic, three personal injury lawyers, and a steerer. The charges included engaging in a scheme to defraud in the first degree, attempted grand larceny in the third degree, insurance fraud in the third degree, falsifying business records in the first degree, and other related crimes.