author: Graffeo, J.

text:
    [861 NE2d 69, 828 NYS2d 254]
    Madison Avenue Leasehold, LLC, Appellant, v Madison Bentley Associates LLC, et al., Respondents.
    Argued November 16, 2006;
    decided December 19, 2006

      POINTS OF COUNSEL

      Kucker & Bruh LLP, New York City (Catherine A. Helwig, Nativ Winiarsky, Alan D. Kucker and Patrick K. Munson of counsel), for appellant.
    I. The Appellate Division majority opinion improperly focused on the legal consequences of Madison Bentley Associates LLC’s monetary defaults under the lease instead of the separate legal consequence of such defaults expressly stated in the guaranty. (Fifty States Mgt. Corp. v Pioneer Auto Parks, 46 NY2d 573; American Trading Co. v Fish, 42 NY2d 20; Raven El. Corp. v Finkelstein, 223 AD2d 378, 88 NY2d 1016; Anderson Credit & Leasing Corp. v McEvoy, 236 AD2d 569; Pollina v Blatt, 262 AD2d 384; Chemical Bank v PIC Motors Corp., 58 NY2d 1023; United States v Beardslee, 562 F2d 1016.) II. Contrary to the Appellate Division majority opinion, the guaranty was in full force and effect during the first three years. III. The Appellate Division majority wrongly speculated as to the intent of the parties and then considered that speculative intent in interpreting the terms of the unambiguous guaranty. (South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272; Matter of Wallace v 600 Partners Co., 86 NY2d 543.) IV The Appellate Division majority improperly considered factual matters outside the unambiguous guaranty to interpret its meaning and effect. (South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272.) V. The Appellate Division’s finding that Madison Bentley Associates LLC’s monetary defaults were “extinguished” or nullified by waiver is without support under New York law. (Jefpaul Garage Corp. v Presbyterian Hosp. in City of N.Y., 61 NY2d 442; Louis Dreyfus Energy Corp. v MG Ref. & Mktg., Inc., 2 NY3d 495.) VI. The courts below should have granted Madison Avenue Leasehold, LLC (Madison) permission to amend its complaint to make clear that Madison had distinct claims against Madison Bentley Associates LLC and Arthur and Brian Miller. (Cooper v Met Merchandising, 75 AD2d 519; McCaskey, Davies & Assoc. v New

      York City Health & Hosps. Corp., 59 NY2d 755; Igbara Realty Corp. v New York Prop. Ins. Underwriting Assn., 104 AD2d 258.)

      David Vanderpool, New York City, and Seymour I. Hurwitz for respondents.
    I. The majority correctly found that Madison Avenue Leasehold, LLC could not proceed against Arthur and Brian Miller under the limited guaranty due to the absence of default by Madison Bentley Associates LLC. (Terwilliger v Terwilliger, 206 F3d 240; Weissman v Sinorm Deli, 88 NY2d 437; Bankers Trust Hudson Val., N.A. v Christie, 68 AD2d 969; South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272; Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470; National Union Fire Ins. Co. of Pittsburgh, Pa. v Christopher Assoc., 257 AD2d 1; Jefpaul Garage Corp. v Presbyterian Hosp. in City of N.Y., 61 NY2d 442; Montant v Moore, 135 App Div 334; Lee v Wright, 108 AD2d 678; Atkin’s Waste Materials v May, 34 NY2d 422.) II. The parties intended the limited guaranty to terminate after the first three years of the lease. (Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470; Community Natl. Bank & Trust Co. of N.Y. v Cognetta, 88 AD2d 897; Chase Manhattan Bank, N.A. v American Natl. Bank & Trust Co. of Chicago, 93 F3d 1064; Louis Dreyfus Energy Corp. v MG Ref. & Mktg., Inc., 2 NY3d 495.) III. The majority opinion properly considered the terms of the lease in interpreting the limited guaranty. (Matter of Wallace v 600 Partners Co., 86 NY2d 543; Port Distrib. Corp. v Pflaumer, 880 F Supp 204; National Union Fire Ins. Co. of Pittsburgh, Pa. v Christopher Assoc., 257 AD2d 1; Greene’s Ready Mixed Concrete Co. v Fillmore Pac. Assoc. Ltd. Partnership., 808 F Supp 307; Jefpaul Garage Corp. v Presbyterian Hosp. in City of N.Y., 61 NY2d 442.)
   OPINION OF THE COURT

Graffeo, J.

In this action brought by a landlord to collect on a personal guaranty signed by two individuals, the issue is whether a tenant who paid monthly rent but did so in an untimely manner was in “monetary default” under the terms of the lease and guaranty. Based on the particular language chosen by the parties in these documents, we conclude that the late payment of rent in this case did not constitute a “monetary default.”

Plaintiff, Madison Avenue Leasehold, LLC, is the owner of a building at 437 Madison Avenue in New York City. Through an agent, plaintiff entered into a lease agreement, dated March 29,

2000, with the assignor of defendant, Madison Bentley Associates LLC. The lease was for a 10-year term to commence as soon as the landlord completed specified renovation work. The lease authorized the tenant to use the premises only for a Rolls Royce and Bentley automobile dealership. A rider to the lease provided for graduated increases in rent on an annual basis, with “rent . . . payable in equal monthly installments in advance on the first day of each calendar month, without notice or demand.”

On the same day the lease was signed, the principals of the tenant — defendants Arthur and Brian Miller — executed a personal guaranty in favor of the landlord. The obligation of the Millers as guarantors would arise

“if Tenant should default in the performance and observance of any of the terms, covenants, provisions or conditions contained in the Lease, and if such default shall not be cured within ten (10) days after notice of such default shall have been given to Guarantor, then the Guarantor shall and will forthwith pay such rent to Landlord and any arrears thereof.”

Although the total value of the 10-year lease was about $5.6 million, the liability of the guarantors was limited to close to $1.7 million unless the tenant remained on the premises after the lease term expired, in which case the guarantors would also be liable for holdover costs. Thus, absent a holdover at the end of the 10-year term, the personal guaranty covered approximately 30% of the total lease value.

The guaranty further contained an early termination clause, which provided that the obligations of the guarantors would cease at the conclusion of three years “in the event Tenant shall not have been in monetary default under the Lease at any time during the first three (3) years of the term of the Lease.” According to the Millers, they agreed to sign the personal guaranty because they anticipated that their obligations under the agreement would expire after three years. They maintain that the three-year primary guaranty period was intended to correspond with the term of a separate rent subsidy agreement between the tenant and Rolls Royce and Bentley Motor Cars Inc., by which the latter agreed to reimburse about 50% of the tenant’s rent for three years if the tenant opened and operated a Rolls Royce and Bentley showroom at 437 Madison Avenue.

The landlord completed the agreed-upon work in June 2000 and the tenant took occupancy on June 15, 2000. Pursuant to a lease provision, the tenant was reheved of its obligation to pay rent for the first 31/2 months and therefore began paying rent in October 2000. For the next three years, the tenant paid rent each month but routinely did not do so by the first of the month as the lease required. The landlord accepted the rent without objection, neither complaining about the timeliness of payments nor seeking rent from the Millers under the personal guaranty. In August 2003, with the rent subsidy from Rolls Royce and Bentley about to expire, the tenant met with the landlord and requested either a rent reduction or permission to sell other makes of automobiles from the Madison Avenue showroom. Unable to obtain either concession, the tenant vacated the leased premises in September 2003 and did not pay rent for October 2003 or any month thereafter.

The landlord commenced this action against the tenant and the Millers in January 2004, asserting that the tenant’s vacatur of the leased premises after only 31/4 years breached the 10-year lease and that it was entitled to damages in the amount of the rent that would have been due from October 2003 to the end of the lease term in June 2010, reduced to present value. The tenant and the Millers answered, denying the allegations. Before discovery, the landlord moved for permission to file an amended complaint. Although relying on the same facts and essentially raising the same claims as the original pleading, the amended complaint separated the causes of action against the tenant from those against the Millers, clarifying that the landlord was claiming that the tenant breached the lease and that the Millers were liable under the guaranty for the tenant’s defaults, both past and present. The landlord cited the prior untimely payments of rent as constituting monetary defaults under the lease, which prevented the early termination of the guaranty after three years. Hence, the landlord argued that the Millers remained liable under the guaranty when the tenant prematurely vacated the premises.

The Millers opposed the motion to amend and cross-moved for summary judgment dismissing the complaint, contending that they could not be held personally liable because the guaranty expired at the conclusion of three years under the early termination clause and the Millers’ obligations thereunder ceased in June 2003 — 31/2 months before the tenant breached the lease. Objecting to the landlord’s characterization of the tenant’s rent payments as untimely, the Millers maintained that the tenant was never in default under the lease, or in monetary default under the guaranty, during the first three years of the lease term. In the alternative, the Millers argued that, by repeatedly accepting the rent without raising late payment as an issue, the landlord waived the right to later declare the tenant to have been in default based on the untimely payments.

Responding to the Millers’ cross motion, the landlord asserted that the untimely payments of rent amounted to numerous defaults under the lease and monetary defaults as described in the guaranty, precluding expiration of the guaranty pursuant to the early termination clause. The landlord denied that it had waived the right to demand payment on the first of every month but, even if it had, it claimed that various “no waiver” provisions in the lease and guaranty precluded a course of conduct between the landlord and tenant from resulting in waiver of the landlord’s right to strictly enforce the terms of the guaranty.

Supreme Court granted the Millers’ cross motion for summary judgment dismissing the complaint and denied plaintiffs motion to amend the complaint as academic. The court reasoned that, by accepting the tenant’s rent payments when they were made without objecting to tenant’s payment practices, the landlord had acquiesced in the late payment of rent and waived its right to declare the payments to be untimely or a default under the terms of the lease. As a result, the court concluded that there was no “monetary default” within the first three years of the lease term and, by operation of the early termination clause, the Millers were relieved of any obligation under the guaranty before the tenant breached the lease by vacating the premises.

A majority at the Appellate Division affirmed, concluding that, even assuming that a default under the lease is synonymous with a “monetary default,” the landlord’s repeated acceptance of late payments extinguished or waived any default as a matter of law. One Justice dissented, primarily relying on the “no waiver” clause in the guaranty in, determining that no course of conduct between the landlord and tenant could have waived the landlord’s right to extend the guaranty to the full 10-year term in the event that conduct on the part of the tenant amounted to a “monetary default” during the first three years of the lease. Finding the late payments during that time frame equivalent to monetary defaults, the dissent would have denied the Millers’ motion for summary judgment and granted the landlord’s motion to amend the complaint. The Appellate Division granted the landlord’s motion for leave to appeal and we now affirm, although our analysis differs from that of the Appellate Division majority.

It is undisputed that the tenant’s vacatur of the premises in the fall of 2003 breached the lease. Because this breach occurred more than three years into the lease term, the landlord could not rely on it to defeat the early termination clause in the guaranty. Instead, the landlord cited the tenant’s repeated failure during the first three years of the lease to pay rent by the first of the month as the lease required as grounds for declaring a monetary default that occurred during the first three years of the guaranty.

An agreement to pay rent on a certain date is generally a material term of a lease. As we explained in Fifty States Mgt. Corp. v Pioneer Auto Parks (46 NY2d 573, 578 [1979]):

“A covenant to pay rent at a specified time ... is an essential part of the bargain as it represents the consideration to be received for permitting the tenant to remain in possession of the property of the landlord. Often the landlord relies on timely payment of rent to meet its own outstanding obligations, such as a mortgage on the demised premises.”

Thus, in Fifty States, where the tenant failed to pay rent for two months and did not promptly cure this deficiency even after the landlord gave notice of default, we found an acceleration clause to be enforceable, noting that the tenant might have been entitled to equitable relief if it had timely cured the default by paying the rent.

But here the issue is not whether the tenant’s failure to pay rent breached a material term of the lease. Rather, the salient inquiry is whether the conduct constituted a “monetary default” that defeated the early termination clause in the guaranty. The early termination clause provides:

“Landlord hereby agrees that in the event Tenant shall not have been in monetary default under the Lease at any time during the first three (3) years of the term of the Lease, this Guaranty and Guarantor’s obligations hereunder shall cease and terminate upon the third (3rd) anniversary of the Commencement Date” (emphasis added).

The guaranty does not define the term “monetary default.” However, another provision of the guaranty declares that “[a]ll terms in this Guaranty which are defined in the Lease shall have the same meanings when used in this Guaranty.” Although the landlord urges that the guaranty and lease are separate documents with distinct obligations and that we should not rely on terms in the lease to determine whether the guaranty is enforceable, the fact remains that the guaranty cross-references the lease and, by its plain language, the early termination clause in the guaranty is triggered by the absence of a “monetary default under the Lease.” To assess whether the early termination clause was defeated, as the landlord contends, we must determine whether the tenant’s repeated failure to pay rent on the first of the month amounted to a “monetary default under the Lease.”

When interpreting language in a commercial lease, we apply our well-established precedent concerning the construction of commercial contracts, where we have explained that

“when parties set down their agreement in a clear, complete document, their writing should ... be enforced according to its terms . . . This principle is particularly important in the context of real property transactions, where commercial certainty is a paramount concern, and where . . . the instrument was negotiated between sophisticated, counseled business people negotiating at arm’s length . . .
“[E]xtrinsic and parol evidence is not admissible to create an ambiguity in a written agreement which is complete and clear and unambiguous upon its face” (South Rd. Assoc., LLC v International Bus. Machs. Corp., 4 NY3d 272, 277-278 [2005] [internal quotation marks and citations omitted]; see also Vermont Teddy Bear Co. v 538 Madison Realty Co., 1 NY3d 470, 475 [2004]).

Although the lease here does not expressly define the phrase “monetary default,” this terminology appears in lease paragraph 17, crafted by the parties, entitled “Default,” which provides:

“If Tenant defaults in fulfilling any of the covenants of this lease including the covenants for the payment of rent or additional rent . . . and if such default or omission shall continue for seven (7) days in the event of a default in the payment of fixed rent, additional rent or other charges payable hereunder and twenty (20) days in the event of any other default. . . after Owner shall have given to Tenant a written notice specifying such default or omission, or in the case of a happening of a default or omission . . . which cannot with due diligence be completely cured or remedied within said twenty (20) day or such shorter specified period, and if Tenant shall not have diligently commenced curing such default within such twenty (20) day period, and shall not thereafter with reasonable diligence and in good faith proceed to remedy or cure such default, then Owner may serve a written three (3) days notice of cancellation of this lease upon Tenant, and upon the expiration of said three (3) days, this lease and the term thereunder shall end and expire as fully and completely as if the expiration of such three (3) day period were the day herein definitely fixed for the end and expiration of this lease and the term thereof and Tenant shall then quit and surrender the demised premises to Owner but Tenant shall remain liable as hereinafter provided.
“Notwithstanding the foregoing, in the event that a default in the payment of fixed rent, additional rent or other charges payable hereunder shall remain uncured after the expiration of the aforesaid seven (7) day period, Owner may not serve the aforementioned written three (3) day notice unless and until Owner shall have served a second notice of such monetary default, and such monetary default shall remain uncured for three (3) days after Owner shall have served such second notice” (lease paragraph 17, including inserts 4 and 4A from lease attachment [emphasis added]).

In the event of a default in the payment of rent, paragraph 17 requires the landlord to notify the tenant of the default and, after receipt of the notice, the tenant will have seven days to cure the deficiency. Even if the default is not cured within seven days of the notice, the lease provides that the landlord must send another notice giving the tenant three additional days to cure, meaning that the tenant has 10 days after it receives the first notice from the landlord to remedy any deficiency relating to the payment of rent. This provision clearly distinguishes between a default in the payment of rent and other types of defaults, with the former referred to at the end of the provision as a “monetary default” under certain circumstances.

Nothing in the language of the lease suggests that rent that was paid in full each month, albeit in an untimely manner, would nonetheless fall within the category of “monetary default.” To the contrary, it appears that a default in the payment of rent does not ripen into a “monetary default” until the landlord has first served a notice of default and the default has “remain[ed] uncured” for at least seven days because it is only in that context that a default in the payment of rent is characterized as a “monetary default.”

This interpretation is consistent with a commonsense reading of the phrase for, absent an explicit definition to the contrary, the use of the modifier “monetary” to describe the type of default that would trump the early termination clause suggests that the parties contemplated a deficiency that involves a loss of money. When monthly rent was tendered in full and the landlord accepted it without declaring a default and before any cure period was initiated, we have no basis to presume that the landlord has suffered economic loss.

In this case, despite the tenant’s failure to meet its obligation to forward the rent by the first of the month, the rent was paid each month and the landlord accepted the rent without issuing a single notice of default complaining of late payment. As a result, the tenant’s initial seven-day opportunity to cure was never triggered and the deficiency never rose to the level of a “monetary default” under the terms of the lease. The parties surely could have constructed a lease or guaranty that would have deemed any late payment a “monetary default,” but they did not do so here.

This construction of the lease is also consistent with the cure provisions in the guaranty. There, the Millers guaranteed “the full and prompt payment of all rent” and agreed “that if default shall at any time be made by Tenant in the payment of any rent . . . and if such default shall not be cured within ten (10) days after notice of such default shall have been given to Guarantor, then the Guarantor shall and will forthwith pay such rent to Landlord.” In accordance with the guaranty, even after the landlord notifies the guarantors of the deficiency, the tenant would have 10 days to forward the rent — thereby curing the default — before the guarantors would be obligated to pay rent on the tenant’s behalf. Interpreting late rent payments as “monetary defaults” under the lease would allow the landlord, in effect, to avoid giving either the tenant or the Millers the benefit of the contractual opportunities to cure which they were entitled to under the lease and guaranty. It would render the late payment of rent an incurable “monetary default” despite the fact that it is clear from the lease and guaranty that there is a distinction between a “default” and a “monetary default” and that defaults in the payment of rent are curable if remedied within the appropriate cure period.

Because there was no “monetary default under the Lease,” the early termination clause of the guaranty remained in full force and effect such that the guaranty expired by its terms on the third anniversary of the commencement of the lease term in June 2003. Since the tenant did not prematurely vacate the premises until 31/2 months later, the Millers could not be held liable for that breach and were therefore entitled to summary judgment dismissing the complaint.

Our conclusion that there was no “monetary default” by the tenant renders academic the landlord’s argument based on the “no waiver” clauses in the lease and guaranty.

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

Chief Judge Kaye and Judges Ciparick, Rosenblatt, Read, Smith and Pigott concur.

Order affirmed, etc.

      . In this regard, we deviate from the analytical path of the Appellate Division, which assumed for purposes of argument that late payment of rent was a default under the lease and that such a default was the equivalent of a “monetary default.”

      . The parties crafted this lease by combining the Standard Form of Store Lease created by The Real Estate Board of New York with numerous amendments, an attachment, a rider, several schedules and other documents. Lease paragraph 17 was itself an amalgam of elements of the form lease, with substantial amendments and the addition of language set forth in an attachment drafted by the parties.

      . This factor, among others, distinguishes this case from HK New Plan Marwood Sunshine Cheyenne LLC v Onofrey Food Servs., Inc. (846 NE2d 318 [Ind 2006]), on which the landlord relies. The efficacy of the early termination clause in the guaranty at issue in HK New Plan did not turn on whether the tenant had been in “monetary default.” Rather, the early termination clause could be defeated by any “default” on the part of the tenant and the lease explicitly defined the late payment of rent as a “default.” The court in HK New Plan therefore had no occasion to interpret the phrase “monetary default” in a guaranty or lease comparable to this one.


source: Caselaw Access Project

author: Read, J.

license: Public Domain

text:
    [861 NE2d 75, 828 NYS2d 260]
    The People of the State of New York, Respondent, v Michael Barton, Appellant.
    Argued November 14, 2006;
    decided December 19, 2006

      POINTS OF COUNSEL

      Donald M. Thompson, Rochester, for appellant.
    The motion court correctly found Rochester City Code § 44-4 (H) to be unconstitutional. (Acorn v City of Phoenix, 798 F2d 1260; Schaumburg v Citizens for a Better Environment, 444 US 620; Loper v New York City Police Dept., 999 F2d 699; Hill v Colorado, 530 US 703; Madsen v Women’s Health Center, Inc., 512 US 753; Carey v Brown, 447 US 455; People v Foley, 94 NY2d 668; Broadrick v Oklahoma, 413 US 601; Perry Ed. Assn. v Perry Local Educators’ Assn., 460 US 37; International Socy. for Krishna Consciousness of New Orleans, Inc. v City of Baton Rouge, 876 F2d 494.)

      Michael C. Green, District Attorney, Rochester (William Taylor of counsel), for respondent.
    County Court properly held that the ordinance is constitutional. (United States v O’Brien, 391 US 367; Perry Ed. Assn. v Perry Local Educators’ Assn., 460 US 37; Ward v Rock Against Racism, 491 US 781; Clark v Community for Creative Non-Violence, 468 US 288; Heffron v International Soc. for Krishna Consciousness, Inc., 452 US 640; People v Foley, 94 NY2d 668; Matter of Rogers v New York City Tr. Auth., 89 NY2d 692; Renton v Playtime Theatres, Inc., 475 US 41; Virginia Bd. of Pharmacy v Virginia Citizens Consumer Council, Inc., 425 US 748; Acorn v City of Phoenix, 798 F2d 1260.)

      Thomas S. Richards, Corporation Counsel, Rochester (Jeffrey Eichner of counsel), for City of Rochester, intervenor.
    I. Section 44-4 (H) of the Rochester City Code is constitutional. (Cornelius

      v NAACP Legal Defense & Ed. Fund, Inc., 473 US 788; United States v O’Brien, 391 US 367; Perry Ed. Assn. v Perry Local Educators’ Assn., 460 US 37; Frisby v Schultz, 487 US 474; Ward v Rock Against Racism, 491 US 781; Clark v Community for Creative Non-Violence, 468 US 288; Members of City Council of Los Angeles v Taxpayers for Vincent, 466 US 789; Heffron v International Soc. for Krishna Consciousness, Inc., 452 US 640; Renton v Playtime Theatres, Inc., 475 US 41; Virginia Bd. of Pharmacy v Virginia Citizens Consumer Council, Inc., 425 US 748.) II. Section 44-4 (H) of the Rochester City Code is valid under the New York Constitution. (Matter of Town of Islip v Caviglia, 73 NY2d 544; Stringfellow’s of N.Y. v City of New York, 91 NY2d 382.) III. Section 44-4 (H) of the Rochester City Code is not overbroad. (Broadrick v Oklahoma, 413 US 601; Coates v Cincinnati, 402 US 611; Alderman v United States, 394 US 165; Houston v Hill, 482 US 451; Boos v Barry, 485 US 312; Chicago v Morales, 527 US 41; International Socy. for Krishna Consciousness of New Orleans, Inc. v City of Baton Rouge, 876 F2d 494; Hill v Colorado, 530 US 703; People v Scott, 26 NY2d 286; People v Clark, 71 NY2d 376.)

      Palyn Hung, New York City, Jeffrey E. Fogel and Arthur N. Eisenberg for New York Civil Liberties Union, amicus curiae.
    I. The ordinance, even if content-neutral, is not a reasonable time, place, or manner regulation because it is not narrowly tailored to a significant government interest and does not leave open ample alternative avenues of communication. (Watchtower Bible & Tract Soc. of N. Y, Inc. v Village of Stratton, 536 US 150; Schaumburg v Citizens for a Better Environment, 444 US 620; Loper v New York City Police Dept., 999 F2d 699; Hague v Committee for Industrial Organization, 307 US 496; Frisby v Schultz, 487 US 474; Houston v Hill, 482 US 451; Nichols v Village of Pelham Manor, 974 F Supp 243; Loper v New York City Police Dept., 802 F Supp 1029.) II. The ordinance constitutes a content-based enactment that is not narrowly tailored to the pursuit of a compelling state interest. (Police Dept., of Chicago v Mosley, 408 US 92; Cincinnati v Discovery Network, Inc., 507 US 410; Los Angeles v Alameda Books, Inc., 535 US 425; Perry Ed. Assn. v Perry Local Educators’ Assn., 460 US 37; Ashcroft v American Civil Liberties Union, 542 US 656.) III. The ordinance is facially overbroad. (Houston v Hill, 482 US 451; New York v Ferber, 458 US 747; Members of City Council of Los Angeles v Taxpayers for Vincent, 466 US 789.)
   OPINION OF THE COURT

Read, J.

On August 4, 2004, defendant Michael Barton was ticketed for violating section 44-4 (H) of the Code of the City of Rochester when he allegedly waded into traffic on a highway exit ramp in downtown Rochester, soliciting money from motorists. Section 44-4 of the Code addresses aggressive panhandling, and subsection (H) specifies that “[n]o person on a sidewalk or alongside a roadway shall solicit from any occupant of a motor vehicle that is on a street or other public place.” The Code defines “solicit” as “the spoken, written, or printed word or such other acts or bodily gestures as are conducted in furtherance of the purposes of immediately obtaining money or any other thing of value” (Rochester City Code § 44-4 [B]). Violations are punishable by fines ranging from $25 to $250, or an appropriate alternative sentence; a second conviction within a year could result in imprisonment for up to 15 days (Rochester City Code § 44-4 [I]).

Section 44-4, approved by the City Council and the Mayor of the City of Rochester in the spring of 2004, was nearly a decade in the making, spurred by the increasing incidence of panhandling in the downtown area and attendant citizen complaints. Subsection (A) of section 44-4, entitled “Legislative intent,” states that this provision was

“adopted in order to protect persons from threatening, intimidating or harassing behavior, to keep public places safe and attractive for use by all members of the community and to maintain and preserve public places where all of the community can interact in a peaceful manner. This legislation is also intended to provide for the free flow of pedestrian and vehicular traffic on the streets and sidewalks in the City, to promote tourism and business and preserve the quality of urban life” (emphasis added).

The Council loosely patterned section 44-4 after panhandling ordinances adopted in other cities, including Atlanta, Baltimore, Cincinnati, New Haven, New York City, Philadelphia, Portland, San Francisco, Seattle and Washington, D.C.

As the Council’s President explained, subsection (H) of section 44-4 was “aimed at specific conduct, and not at any type of speech or expression,” because “[t]he conduct itself is offensive, for it leads to an interference with the free flow of vehicular traffic and raises traffic safety and traffic congestion concerns.” In particular,

“[slolicitation of contributions from occupants of motor vehicles is disruptive to the drivers of those vehicles and diverts their attention from the traffic on the street. Even if the vehicle is stopped, the driver is not paying attention to potential hazards in the road, observing traffic control signals, or preparing to move along the street or through the intersection.”

Further, section 44-4 (H) treats all solicitation “the same whether it be for an individual or a charity, and whether the cause may be deemed by some to be favored or disfavored.”

On August 31, 2004, defendant moved to dismiss the accusatory instrument lodged against him. He contended that section 44-4 (H) was overbroad in violation of the Free Speech clauses of the federal and New York State constitutions. Defendant did not argue that section 44-4 (H) was unconstitutional as applied to him. Rather, he complained that this provision impermissibly “impact [ed] activities beyond its intended reach” as it applied not only to aggressive panhandling, but “to anyone who would solicit” motorists from the sidewalk, including an individual holding up a sign simply stating “Food,” or participating in the city firefighters’ annual “Fill-the-Boot” fundraising campaign.

City Court agreed, declaring section 44-4 (H) unconstitutional and dismissing the accusatory instrument. The court cited Perry Ed. Assn. v Perry Local Educators’ Assn. (460 US 37, 45 [1983]) for the relevant constitutional standard: “The state may . . . enforce regulations of the time, place, and manner of expression which are content-neutral, are narrowly tailored to serve a significant government interest, and leave open ample alternative channels of communication.” In City Court’s view, section 44-4 (H) was content-neutral, but lacked narrow tailoring because it “allow[ed] for the prosecution of those . . . guilty of nothing more than peacefully asking for assistance” (8 Misc 3d 291, 298 [Rochester City Ct 2004]).

County Court reversed, concluding that section 44-4 (H) was content-neutral, sufficiently narrowly tailored, and left open ample alternative channels of communication. The court observed that section 44-4 (H) was “aimed specifically at a certain type of conduct engaged in at a certain location” — the “use [of] spoken or written words or acts, for the purpose of immediately obtaining money or any other thing of value from an occupant of a motor vehicle that is on a street or other public place” (12 Misc 3d 322, 330 [Monroe County Ct 2006]). The court further pointed out that section 44-4 (H) was not over-broad because it applied to bona fide charitable canvassing as well as to defendant’s soliciting. “Because a statute is evenhanded and applies equally to all persons conducting the same unwanted conduct does not make a statute overbroad” (id.) In short, section 44-4 (H)’s “overbreadth, if any, [was] not substantial when judged in relation to the [provision’s] plainly legitimate sweep” (id.). Upon defendant’s application, a Judge of this Court granted leave to appeal. We now affirm.

As an initial matter, for purposes of this appeal the People do not contest, and we therefore assume, that panhandling is speech or expressive conduct safeguarded by the First Amendment, entitled to protection tantamount to that afforded eleemosynary appeals by organized charities (see Schaumburg v Citizens for a Better Environment, 444 US 620 [1980] [holding that there is sufficient nexus between solicitation by organized charities and a variety of speech interests to implicate First Amendment]). The United States Supreme Court has yet to rule on this issue, and lower courts have expressed differing views (e.g. compare Young v New York City Tr. Auth., 903 F2d 146, 154 [2d Cir 1990], cert denied 498 US 984 [1990] [sustaining prohibition on begging in subways, reasoning that panhandling is not constitutionally protected speech or expressive conduct analogous to solicitation by organized charities: “Whether with or without words, the object of begging and panhandling is the transfer of money. Speech simply is not inherent to the act; it is not of the essence of the conduct”], with Loper v New York City Police Dept., 999 F2d 699, 704 [2d Cir 1993] [enjoining enforcement of statute prohibiting public loitering for purposes of begging, concluding that there is “little difference between those who solicit for organized charities and those who solicit for themselves in regard to the message conveyed,” and that “(t)he distinction is not a significant one for First Amendment purposes”]). Second, even though defendant’s own conduct may be unshielded by the First Amendment, he nonetheless may challenge section 44-4 (H) as over-broad on behalf of others whose constitutionally-protected expression is potentially “chilled” by the provision’s very existence (Broadrick v Oklahoma, 413 US 601, 610-613 [1973]).

The test for determining overbreadth is whether the law on its face prohibits a real and substantial amount of constitutionally protected conduct (see Houston v Hill, 482 US 451, 458 [1987]; Broadrick, 413 US at 615). “[T]he mere fact that one can conceive of some impermissible applications of a statute is not sufficient to render it susceptible to an overbreadth challenge” (Members of City Council of Los Angeles v Taxpayers for Vincent, 466 US 789, 800 [1984]). Here, section 44-4 (H) reaches any solicitation intended to obtain immediate funds or things of value from occupants of motor vehicles in Rochester’s streets or other public places. Defendant claims that because section 44-4 (H) on its face concededly reaches “passive” panhandling targeting motorists — specifically, someone standing mute on the sidewalk, facing traffic in the street and holding a sign requesting immediate money or food — it is unconstitutionally over-broad. According to defendant, section 44-4 (H) thus runs afoul of the First Amendment because it is not limited to panhandlers who act aggressively, or solicit motorists successfully or actually walk into a lane of stopped or moving traffic. As this appeal is presented to us then, the parties dispute whether section 44-4 (H) is a reasonable time, place and manner restriction once it sweeps defendant’s hypothetical passive panhandler within its coverage.

“ [C]ontent-neutral regulations of time, place, and manner of expression are enforceable if they are narrowly tailored to serve a significant government interest, and leave open ample alternative channels of communication” (International Socy. for Krishna Consciousness of New Orleans, Inc. v City of Baton Rouge, 876 F2d 494, 497 [5th Cir 1989] [citing Perry, 460 US at 45]; see also Matter of Rogers v New York City Tr. Auth., 89 NY2d 692 [1997] [indicating that public forum analysis under article I, § 8 of State Constitution mirrors federal standard]). In this case, the governmental interests served by section 44-4 (H) — to eliminate a source of distraction for motorists and thus promote the free and safe flow of traffic — are significant. Further, section 44-4 (H) is not a blanket ban (cf. Loper, 999 F2d at 705). This provision does not prohibit requests seeking something other than a handout. Moreover, section 44-4 (H) does not proscribe nonaggressive soliciting directed at pedestrians on the sidewalk; therefore, it leaves open ample alternative avenues to communicate any message of indigency or need through begging.

In determining whether a regulation is content neutral, the principal inquiry is

“whether the government has adopted a regulation of speech because of disagreement with the message it conveys. The government’s purpose is the controlling consideration. A regulation that serves purposes unrelated to the content of expression is deemed neutral, even if it has an incidental effect on some speakers or messages but not others. Government regulation of expressive activity is content neutral so long as it is justified without reference to the content of the regulated speech” (Ward v Rock Against Racism, 491 US 781, 791 [1989] [internal quotation marks and citations omitted]).

Content neutrality is not negated because a sign must be read by the police in order to determine whether section 44-4 (H) has been violated (i.e., whether the sign’s message seeks to obtain money or any other thing of value on the spot), as defendant argues. The Council’s reason for adopting section 44-4 (H) — to promote the free and safe flow of traffic — is the relevant consideration, and the ban covers all those asking motorists for immediate donations, regardless of their message (see Heffron v International Soc. for Krishna Consciousness, Inc., 452 US 640, 648-649 [1981] [speech restriction applying impartially to all persons or organizations, whether charitable or commercial, is content neutral]). Section 44-4 (H) does not attempt to silence one particular message; it does not frown on any particular viewpoint. Nor is it important that section 44-4 (H) may not reach every speech-related side-of-the-road distraction or source of traffic disruption in downtown Rochester; i.e., that it has “an incidental effect on some speakers or messages but not others.” Next, although “a regulation of the time, place, or manner of protected speech must be narrowly tailored to serve the government’s legitimate, content-neutral interests ... it need not be the least restrictive or least intrusive means of doing so” (Ward, 491 US at 798). Instead,

“the requirement of narrow tailoring is satisfied so long as the . . . regulation promotes a substantial government interest that would be achieved less effectively absent the regulation. ... So long as the means chosen are not substantially broader than necessary to achieve the government’s interest . . . the regulation will not be invalid simply because a court concludes that the government’s interest could be adequately served by some less-speech-restrictive alternative. The validity of [time, place, or manner] regulations does not turn on a judge’s agreement with the responsible decisionmaker concerning the most appropriate method for promoting significant government interests or the degree to which those interests should be promoted” {id. at 799-800 [internal quotation marks and citations omitted]).

Section 44-4 (H) was designed to address a specific problem brought to the Council’s attention: individuals seeking handouts from occupants of motor vehicles on a public thoroughfare or place, thereby creating a hazard and slowing or snarling traffic. Because section 44-4 (H) focuses on specific conduct that the City has an interest in controlling in order to further a significant content-neutral government interest, it is narrowly tailored.

Accordingly, the order of County Court should be affirmed.

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

Order affirmed.


author: Smith, J.

text:
    [861 NE2d 95, 828 NYS2d 280]
    Richard Laratro et al., Respondents, v City of New York et al., Appellants, et al., Defendants.
    Argued November 16, 2006;
    decided December 21, 2006

      POINTS OF COUNSEL

      Michael A. Cardozo, Corporation Counsel, New York City (Deborah A. Brenner, Julie Steiner and Barry E Schwartz of counsel), for appellants.
    I. The Appellate Division majority erroneously reinstated plaintiffs’ complaint as against the City of New York by finding a question of fact as to whether plaintiffs coworker and friend who called 911 on his behalf could be his supposed “agent” to satisfy the “direct contact” element of the “special relationship” exception to municipal immunity from liability. The majority’s ruling is contrary to this Court’s precedent as it has dangerously expanded the “direct contact” prong to include a category of individuals who do not have a “close relationship of interests” with the injured party. Expanding the exception in this manner will very likely increase a municipality’s exposure to liability, could discourage municipalities from providing vital public services, and could practically render the “special relationship” exception a nullity by opening the door to an endless number of individuals who may claim “direct contact.” (Cuffy v City of New York, 69 NY2d 255; Pelaez v Seide, 2 NY3d 186; Lauer v City of New York, 95 NY2d 95; Kircher v City of Jamestown, 74 NY2d 251; O’Connor v City of New York, 58 NY2d 184; Sorichetti v City of New York, 65 NY2d 461; Adderley v City of New York, 304 AD2d 485, 100 NY2d 511; Stata v Village of Waterford, 225 AD2d 163; Merced v City of New York, 75 NY2d 798; Baez v City of New York, 309 AD2d 679.) II. In any event, and notwithstanding the Appellate Division majority’s belief, there was no question of fact as to whether the City of New York’s supposed voluntary undertaking lulled plaintiff’s coworker into a false sense of security causing her to forgo other available avenues of relief. First, the Emergency Medical Service operator only told the coworker that help would be there “as soon as possible,” with no specific time given. Second, although the coworker claimed that, had she known an ambulance would not arrive for 30 to 35 minutes, she would have taken plaintiff to the hospital herself, she should have known that her speculative and self-serving estimate that the ambulance would arrive in 10 minutes was incorrect at the time the second call for help was made over 16 minutes after her initial call. Finally, the coworker unreasonably remained in the office for another 14 minutes after the second call, during which time any further reliance on the City’s purported assurances could no longer be deemed justified. (Cuffy v City of New York, 69 NY2d 255; Kircher v City of Jamestown, 74 NY2d 251; Apostolakis v Centereach Fire Dist., 300 AD2d 516; Sandstrom v Rodriguez, 221 AD2d 513; Grieshaber v City of Albany, 279 AD2d 232, 96 NY2d 719; Clark v Town of Ticonderoga, 291 AD2d 597, 98 NY2d 604.)

      Walter G. Alton, Jr. & Associates, New York City (Walter G. Alton, Jr. and Richard J. Montes of counsel), and Mauro Goldberg & Lilling LLP, Great Neck (Kenneth Mauro of counsel), for respondents.
    I. This Court should affirm the First Department’s decision to reinstate plaintiffs’ complaint as it is consistent with the purpose of the special relationship exception and does not expand liability any further than originally intended. (De Long v County of Erie, 60 NY2d 296; Cuffy v City of New York, 69 NY2d 255; Riss v City of New York, 22 NY2d 579; Kircher v City of Jamestown, 74 NY2d 251; Florence v Goldberg, 44 NY2d 189; S.C. Freidfertig Bldrs. v Spano Plumbing & Heating, 173 AD2d 454; Greene v City of New York, 205 AD2d 584; Adderley v City of New York, 304 AD2d 485; Stata v Village of Waterford, 225 AD2d 163; Yearwood v Town of Brighton, 101 AD2d 498.) II. Alternatively, this Court should affirm the First Department’s decision for reasons other than those stated by the First Department. (Sorichetti v City of New York, 65 NY2d 461; Cuffy v City of New York, 69 NY2d 255; Kovit v Estate of Hallums, 4 NY3d 499; Kircher v City of Jamestown, 74 NY2d 251; Kromer v County of Onondaga, 26 AD3d 792; Riss v City of New York, 22 NY2d 579; Yearwood v Town of Brighton, 101 AD2d 498.) III. The First Department properly held that a reasonable jury could find that Ms. Edelson justifiably relied upon the City of New York’s assurances of help. (Adderley v City of New York, 304 AD2d 485; Stata v Village of Waterford, 225 AD2d 163.)
   OPINION OF THE COURT

Smith, J.

Protecting health and safety is one of municipal government’s most important duties. Since municipalities are run by human beings, they sometimes fail in that duty, with harmful, even catastrophic, consequences. When that happens, as a general rule, the municipality is not required to pay damages to the person injured. The rationale for this rule is that the cost to municipalities of allowing recovery would be excessive; the threat of liability might deter or paralyze useful activity; and thus the net result of allowing recovery would be to make municipal governments less, not more, effective in protecting their citizens.

We have recognized a narrow exception to the general rule of nonliability where the injured person had a “special relationship” with representatives of the municipality. We hold that this case, in which it is claimed that the City of New York was slow in responding to a 911 call placed by plaintiffs coworker, does not fit within the exception.

Facts and Procedural History

Plaintiff suffered a stroke at his office. Carol Edelson, his coworker and friend, found him sitting at his desk with his head in his hands, unable to respond to questions. Edelson told him she would call an ambulance, and dialed 911 from a telephone a few feet away.

A 911 operator employed by New York City told Edelson that an “ambulance will be there to help you as soon as possible.” The ambulance did not come until 35 minutes later, however, allegedly because the operator, when he transmitted Edelson’s request, negligently understated the seriousness of plaintiffs condition, describing him only as “sick.” Edelson testified that, if she had known that the ambulance would take half an hour or more to arrive, she would have arranged to have plaintiff driven to the hospital in a private car.

Plaintiff suffered brain damage, made worse, according to expert testimony he submitted, by the delay in getting him to a hospital for treatment. He brought this action for damages against the City of New York and its agencies (collectively the City) and other defendants. Supreme Court granted the City’s motion for summary judgment dismissing the complaint. The Appellate Division reversed, one Justice dissenting. We now reverse and reinstate Supreme Court’s order.

Discussion

In Cuffy v City of New York (69 NY2d 255 [1987]), we explained the “special relationship” exception to the well-established rule that a municipality is not liable to a person injured by the breach of a duty — like the duty to provide police protection, fire protection or ambulance service — that the municipality owes to the general public. We said in Cuffy:

“There exists ... a narrow class of cases in which we have recognized an exception to this general rule and have upheld tort claims based upon a ‘special relationship’ between the municipality and the claimant. The elements of this ‘special relationship’ are: (1) an assumption by the municipality, through promises or actions, of an affirmative duty to act on behalf of the party who was injured; (2) knowledge on the part of the municipality’s agents that inaction could lead to harm; (3) some form of direct contact between the municipality’s agents and the injured party; and (4) that party’s justifiable reliance on the municipality’s affirmative undertaking.” (Id. at 260 [citations omitted].)

Plaintiff here does not satisfy either the third or the fourth requirement of the Cuffy test, because plaintiff did not have direct contact with, and did not rely on any undertaking by, the City’s 911 operator. We decide the case on that ground, and do not reach the issue of whether the 911 operator’s statement (“The ambulance will be there to help you as soon as possible”) was specific enough to be an “affirmative undertaking” on which a party could justifiably rely.

Our decision is controlled by Kircher v City of Jamestown (74 NY2d 251 [1989]). In Kircher, the plaintiff was abducted in a car. The abduction was witnessed by two people; they got the car’s license number and gave it to a police officer, who told them he would “call it in” (id. at 254). Relying on the officer’s assurance, the witnesses stopped their efforts to help the plaintiff, but the officer did not report the incident, and the plaintiff was not rescued until after she had been brutally assaulted and raped. We held that the plaintiff could not recover against the city for the officer’s negligence.

We decided that the plaintiff in Kircher could not show either direct contact or reliance, as Cuffy requires, because she “could not even communicate with the police, much less rely on any promise of protection the police might have offered” (74 NY2d at 258). We rejected the suggestion of a dissenting judge that the contact and reliance by the witnesses who reported the crime “be transferred to the plaintiff’s benefit” (id. at 258, 265). A similar analysis applies here. Plaintiff, unable to communicate by reason of his stroke, could not either contact or rely upon the 911 operator, and Edelson’s contact and reliance cannot be “transferred” to plaintiffs benefit.

Plaintiff argues that Kircher is distinguishable on two grounds: Edelson was a longtime friend and coworker of plaintiff here, while the witnesses in Kircher were strangers to the plaintiff in that case; and plaintiff here was physically near to Edelson when she called 911, while the plaintiff in Kircher was far away when the witnesses reported her abduction to the police. We find neither distinction persuasive. To adopt either would undermine an important reason for the direct contact and reliance requirements, which serve “as a basis for rationally limiting the class of citizens to whom the municipality’s ‘special duty’ extends” (Cuffy, 69 NY2d at 261).

Our cases have accepted direct contact and reliance by someone other than the plaintiff as sufficient to create a special relationship only where the person making the contact was acting on behalf of his or her immediate family. Thus in Sorichetti v City of New York (65 NY2d 461 [1985]) we found a special relationship where a mother had sought the help of the police to protect her six-year-old daughter; and in Cuffy we found a special relationship where a man sought police protection for his wife and the children who lived with him — but we rejected a claim made on behalf of an adult child who was not a member of his household. To hold, as plaintiff here asks, that direct contact and reliance by a friend or a person standing nearby can create a special relationship would unacceptably dilute the general rule of municipal nonliability. The exception is reserved for a few, “special” cases of which this is not one.

Accordingly, the order of the Appellate Division should be reversed with costs, and the order of Supreme Court granting the City’s motion for summary judgment should be reinstated. The question certified should be answered in the negative.

Chief Judge Kaye and Judges Ciparick, Rosenblatt, Graffeo, Read and Pigott concur.

Order reversed, etc.


author: Pigott, J. Smith, J.

text:
    [861 NE2d 92, 828 NYS2d 277]
    The People of the State of New York, Respondent, v Dennis Gillian, Appellant.
    Argued November 15, 2006;
    decided December 21, 2006

      POINTS OF COUNSEL

      Feldman and Feldman, Uniondale (Steven A. Feldman and Arza Feldman of counsel), for appellant.
    I. Appellant should be granted a new trial because, notwithstanding a timely and unequivocal pretrial request to proceed pro se, he was deprived of his Sixth Amendment right to represent himself. (Faretta v California, 422 US 806; People v Henriquez, 3 NY3d 210; People v Arroyo, 98 NY2d 101; Daye v Attorney Gen. of State of N.Y., 696 F2d 186; People v McIntyre, 36 NY2d 10; Adams v United States ex rel. McCann, 317 US 269; People v Smith, 68 NY2d 737; People v Slaughter, 78 NY2d 485; People v Vivenzio, 62 NY2d 775; People v Kaltenbach, 60 NY2d 797.) II. In doubling the plea offer at sentence, an inference arises that the County Court punished appellant for exercising his Sixth Amendment right to a jury trial. (People v Cosme, 203 AD2d 375; People v Pena, 50 NY2d 400, 449 US 1087; People v Williams, 46 AD2d 783; People v Pluff, 58 AD2d 1023; People v Brown, 70 AD2d 505; People v Durkin, 132 AD2d 668; United States v Hutchings, 757 F2d 11; United States v Araujo, 539 F2d 287, 429 US 983; United States v Duffy, 479 F2d 1038, 414 US 978.)

      Francis D. Phillips, II, District Attorney, Goshen (David R. Huey of counsel), for respondent.
    I. Defendant abandoned any challenge to the court’s decision denying defendant’s request to. act as his own attorney. (Faretta v California, 422 US 806; People v Belge, 41 NY2d 60; People v Hogya, 56 NY2d 602; People v Hallman, 92 NY2d 840; People v Glover, 87 NY2d 838; People v McIntyre, 36 NY2d 10; People v Rodriguez, 95 NY2d 497; Brown v Wainwright, 665 F2d 607; People v Sawyer, 57 NY2d 12; People v LaValle, 3 NY3d 88.) II. Defendant has failed to preserve his claim that the court penalized defendant for exercising his right to trial, and the court may not reach this issue absent preservation. (People v Belge, 41 NY2d 60; People v Hurley, 75 NY2d 887.)
   OPINION OF THE COURT

Pigott, J.

On January 29, 2004, defendant was arraigned on a four-count indictment charging him with two counts of criminal sale of a controlled substance in the third degree and two counts of criminal possession of a controlled substance in the third degree and was assigned counsel. One month later, he moved to discharge assigned counsel alleging a conflict of interest and “difference in strategy.” In a written decision and order, dated March 10, 2004, County Court denied that motion because defendant had not articulated the conflict, and defendant’s allegations about the attorney’s strategy were conclusory.

On April 13, 2004, defendant once again appeared with his assigned counsel for a pretrial hearing and advised the court that he wanted to proceed pro se because assigned counsel had “done nothing” for him and had failed to make certain motions. County Court denied that application as well because it was “not convinced” that defendant would be able to represent himself. In response to that ruling, defendant expressed his distrust of assigned counsel, stating “[y]ou can’t allow a man who is going to sell me out to represent me.”

Two days later, defendant once again moved in writing for reassignment of counsel or, in the alternative, the opportunity to proceed pro se, citing assigned counsel’s “incompetence” and purported retaliatory conduct against defendant for requesting new counsel. On April 28, 2004, the prosecutor informed the court that assigned counsel did indeed have a conflict and County Court appointed another attorney to represent defendant. However, this time defendant objected to the appointment asserting that the new attorney had represented an individual who had previously testified against defendant in an unrelated matter. County Court therefore assigned a third attorney to represent defendant. Defendant did not object to that appointment nor did he reassert his desire to proceed pro se. Rather, defendant simply asked if his third assigned counsel would be present at the next calendar call.

Following a jury trial, defendant was convicted of one count of criminal sale of a controlled substance in the third degree and one count of criminal possession of a controlled substance in the third degree and acquitted of the remaining counts. Defendant was adjudicated a second felony offender and sentenced to indeterminate terms of imprisonment of 9 to 18 years on each count, with both sentences to run concurrently.

Defendant appealed his conviction, asserting that County Court deprived him of his Sixth Amendment right to represent himself. The Appellate Division held that County Court improperly denied defendant’s timely and unequivocal request to proceed pro se, but nevertheless affirmed defendant’s conviction because defendant, by proceeding to trial with his third assigned counsel and not expressing a further desire to proceed pro se, abandoned his request to represent himself. We now affirm defendant’s conviction on the ground that defendant’s request to represent himself was not clear and unequivocal.

We have long recognized that a defendant “may insist on foregoing the benefits associated with the right to counsel and proceeding on a pro se basis,” but have also cautioned that waiver of the “fundamental right to counsel requires that a trial court must be satisfied that a defendant’s waiver is unequivocal, voluntary and intelligent” (People v Smith, 92 NY2d 516, 520 [1998]). “Regardless of his lack of expertise and the rashness of his choice,” a defendant may “choose to waive counsel if he [does] so knowingly and voluntarily” (People v Vivenzio, 62 NY2d 775, 776 [1984], citing Faretta v California, 422 US 806 [1975]).

A defendant’s request to represent himself “must be invoked clearly and unequivocally” (People v LaValle, 3 NY3d 88, 106 [2004], citing Faretta, 422 US 806 [1975]). In order to ensure that convicted defendants do not “pervert the system by subsequently claiming a denial of their pro se right, the pro se request must be clearly and unconditionally presented to the trial court” (People v McIntyre, 36 NY2d 10, 17 [1974]).

While defendant’s conditioning of his request for new counsel with a request for self-representation did not necessarily render the latter request equivocal, here defendant raised the argument for self-representation as a way of obtaining the dismissal of his first assigned counsel. Moreover, defendant’s initial requests to proceed pro se were made in the alternative; he sought to represent himself only because County Court refused to replace the first assigned counsel who had displeased him. After County Court appointed a second attorney, defendant did not ask to proceed pro se, but merely objected to the appointment because of a perceived conflict of interest. Thus, defendant’s objections to his first two assigned counsel were made not because defendant wanted to proceed pro se, but because he was dissatisfied with them. When County Court announced the appointment of a third attorney, defendant simply asked if his third assigned counsel would be present at the next calendar call. Even if it could be argued that defendant did not equivocate at the outset of the proceedings, any error was cured when the court assigned defendant’s third counsel. Defendant voiced no dissatisfaction with that appointment, and remained silent thereafter. Upon the appointment of his third assigned counsel, “[t]he issue of self-representation was closed,” with defendant seemingly satisfied with that appointment (LaValle, 3 NY3d at 107).

We have considered defendant’s remaining argument and find that it has not been preserved for review. Accordingly, the order of the Appellate Division should be affirmed.

Smith, J.

(concurring). I am unable to join the majority opinion, because I see no equivocation in defendant’s request to proceed pro se. It is true that his request was made in the alternative; he wanted to act as his own lawyer only if his request for a new lawyer was denied, as it was. But a request made in the alternative can still be unequivocal. Indeed, many if not most defendants who choose to represent themselves probably do so because they are displeased with the counsel the court appointed, and would be happy to proceed with a lawyer if they could get one who satisfied them. That does not mean that they cannot exercise their right under Faretta v California (422 US 806 [1975]) to be pro se.

Thus I conclude that the trial court erred when it refused defendant’s request to proceed pro se. I would vote to reverse defendant’s conviction, but for the fact that, after his request was denied, a conflict of interest led to the replacement of his lawyer by a new one — the result he had preferred all along. This fortuitous event effectively cured the trial court’s error in denying defendant’s Faretta request. If, having obtained the remedy he originally preferred, defendant still wanted to represent himself, he should have said so.

Chief Judge Kaye and Judges Ciparick, Rosenblatt, Graffeo and Read concur with Judge Pigott; Judge Smith concurs in result in a separate opinion.

Order affirmed.


author: Pigott, J. Ciparick, J. Chief Judge Kaye

text:
    [861 NE2d 81, 828 NYS2d 266]
    In the Matter of MERSCORP., Inc., et al., Respondents, v Edward P. Romaine, as Clerk of the County of Suffolk, et al., Appellants, et al., Defendant.
    Argued November 15, 2006;
    decided December 19, 2006

      POINTS OF COUNSEL

      Cahn & Cahn, LLP, Melville (Richard C. Cahn and Daniel K. Cahn of counsel), for appellants.
    I. MERS instruments are not “conveyances” within the meaning of Real Property Law §§ 290 and 291, because no interest in the subject property or in the underlying loan is conveyed to MERS, although it is designated as the “mortgagee.” (Mortgage Elec. Registration Sys., Inc. v Burek, 4 Misc 3d 1030[A], 2004 NY Slip Op 51135[U]; Kluge v Fugazy, 145 AD2d 537; Merritt v Bartholick, 36 NY 44; Flyer v

      Sullivan, 284 App Div 697; Beak v Walts, 266 App Div 900; Manne v Carlson, 49 App Div 276; Chimart Assoc. v Paul, 66 NY2d 570; Nau v Vulcan Rail & Constr. Co., 286 NY 188, 287 NY 630.) II. MERS does not qualify as a “mortgagee.” Therefore, the duty of respondent Edward E Romaine to record mortgages, which is ministerial only to the extent that such instruments are presented “as a conveyance perfect in form,” was not breached. (Putnam v Stewart, 97 NY 411; Baccari v De Santi, 70 AD2d 198; Jones v Beame, 45 NY2d 402; Matter of Abrams v New York City Tr. Auth., 39 NY2d 990.) III. MERS mortgages are not “mortgages” under New York law because they do not give notice of the identity of the true mortgagee, they falsely identify the mortgagee, and they circumvent the public recording system. (Coco v Ranalletta, 189 Misc 2d 535; V & D Realty USA Corp. v Mitso Group, 240 AD2d 562; Federal Natl. Mtge. Assn. v Levine-Rodriguez, 153 Misc 2d 8; Andy Assoc. v Bankers Trust Co., 49 NY2d 13.) IV Naming a nominee for the original lender “and lender’s successors and assigns” is ineffective and against public policy. (Weltman v Kotlar, 124 App Div 494; Moore v Leaseway Transp. Corp., 65 AD2d 697; Andy Assoc. v Bankers Trust Co., 49 NY2d 13.) V. The county clerk can properly index MERS mortgages under the name of the original lender. (People ex rel. Oaklawn Corp. v Donegan, 226 NY 84.) VI. MERS’s procedures inhibit consumers seeking to exercise their remedies under federal and state statutes as victims of “high cost loans.” VII. The MERS system deprives the public of revenues intended by the Legislature for the benefit of the public. VIII. MERS’s discharges of assigned mortgages and discharges of mortgages where ownership of the loans has been transferred are not entitled to be recorded; MERS’s standing in foreclosure proceedings is also questionable. (Mortgage Elec. Registration Sys., Inc. v Burek, 4 Misc 3d 1030[A], 2004 NY Slip Op 51135[U]; Mortgage Elec. Registration Sys., Inc. v Estrella, 390 F3d 522.)

      Hiscock & Barclay, LLP, Buffalo (Charles C. Martorana and Samuel J. Burruano, Jr., of counsel), for respondents.
    I. MERS instruments are conveyances under New York law. (Gibson v Thomas, 180 NY 483; Finn v Wells, 135 Misc 53; W.L. Dev. Corp. v Trifort Realty, 44 NY2d 489; People v Prince, 110 Misc 2d 55; Williams v Wisner Bldg. Co., Inc., 121 Misc 32, 208 App Div 783; Merritt v Bartholick, 36 NY 44; Kluge v Fugazy, 145 AD2d 537; Kellogg v Smith, 26 NY 18; Syracuse Sav. Bank v Merrick, 182 NY 387; Fryer v Rockefeller, 63 NY 268.) II. MERS is a proper “mortgagee” and county clerks are obligated to record MERS instruments. (Putnam v Stewart, 97 NY 411.) III. The MERS system complies with the New York Real Property Law and provides public notice of liens on property. (Witter v Taggart, 78 NY2d 234; Andy Assoc. v Bankers Trust Co., 49 NY2d 13; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471; Albany County Sav. Bank v McCarty, 149 NY 71; Matter of Wadsworth, 27 Misc 264.) IV. The designation of MERS as nominee is effective and does not violate public policy. (Schuh Trading Co. v Commissioner of Internal Revenue, 95 F2d 404; Munoz v Wilson, 111 NY 295; Wood v Travis, 231 App Div 331; Preston v Albee, 120 App Div 89; In re Cushman Bakery, 526 F2d 23, cert denied sub nom. Agger v Seaboard Allied Milling Corp., 425 US 937; Fairbanks Capital Corp. v Nagel, 289 AD2d 99; Amherst Factors v Koehenburger, 4 NY2d 203; Mutual Life Ins. Co. v Nicholas, 144 App Div 95; In re Fried Furniture Corp., 293 F Supp 92, 407 F2d 360; In re Lehrenkrauss, 6 F Supp 687.) V. New York law compels county clerks to index MERS as a party to the MERS instruments. (Tomlinson v Board of Educ. of Lakeland Cent. School Dist. of Shrub Oak, 223 AD2d 636, 88 NY2d 808; Federal Natl. Mtge. Assn. v Levine-Rodriguez, 153 Misc 2d 8; Baccari v De Santi, 70 AD2d 198.) VI. The MERS system respects the rights of consumers. VII. The MERS system does not impact appellants’ revenues. VIII. Appellants’ diversionary reference to alleged issues in foreclosure proceedings misstates governing New York law, interjects issues which are dehors the record, and misstates or presents incomplete information regarding foreclosure proceedings venued in the state of Florida. (Fryer v Rockefeller, 63 NY 268; Andy Assoc. v Bankers Trust Co., 49 NY2d 13; Airlines Reporting Corp. v S & N Travel, 238 AD2d 292; Fairbanks Capital Corp. v Nagel, 289 AD2d 99; Mortgage Elec. Registration Sys., Inc. v Burek, 4 Misc 3d 1030[A], 2004 NY Slip Op 51135[U]; Mortgage Elec. Registration Sys., Inc. v Estrella, 390 F3d 522; Indiana Gas Co., Inc. v Home Ins. Co., 141 F3d 314; Northern Trust Co. v Bunge Corp., 899 F2d 591.)

      Bainton McCarthy LLC, New York City {John G. McCarthy of counsel), for Mortgage Bankers Association, amicus curiae.
    I. MERS instruments enhance efficiency in the primary and secondary markets for residential, multifamily and commercial mortgages. (Leader v Dinkier Mgt. Corp., 20 NY2d 393; Amherst Factors v Koehenburger, 4 NY2d 203; Mutual Life Ins. Co. v Nicholas, 144 App Div 95; In re Fried Furniture Corp., 293 F Supp 92, 407 F2d 360.) II. To afford the County Clerk discretion to block the recording and indexing of MERS instruments would deprive the primary and secondary mortgage markets of the benefits of the MERS system.

      Bainton McCarthy LLC, New York City (J. Joseph Bainton of counsel), for American Land Title Association, amicus curiae.
    I. MERS instruments are entitled to be recorded. The MERS system is not unorthodox. II. To afford county clerks discretion to reject MERS instruments presented for recording will adversely affect mortgage markets. (Putnam v Stewart, 97 NY 411; Matter of Westminister Hgts. Co., 107 App Div 577, 185 NY 539; People ex rel. Title Guar. & Trust Co. v Grifenhagen, 209 NY 569; People ex rel. Frost v Woodbury, 213 NY 51; Matter of Natural Resources Defense Council v New York City Dept. of Sanitation, 83 NY2d 215.) III. This case involves the statutory duty to record MERS instruments. (Airlines Reporting Corp. v S & N Travel, 238 AD2d 292; Fairbanks Capital Corp. v Nagel, 289 AD2d 99.)

      Kenneth M. Scott, Washington, D.C., and Kenton Hambrick, McLean, Virginia, for Federal National Mortgage Association and another, amici curiae.
    I. Reversing the Appellate Division’s decision and order would create inefficiency in the mortgage industry, increase costs of credit and impair federal housing policy. II. MERS generates significant benefits for borrowers. III. Granting county clerks discretion to refuse to record MERS instruments would disrupt the New York mortgage market and harm all interested parties. (Putnam v Stewart, 97 NY 411; Matter of Westminster Hgts. Co., 185 NY 539; People ex rel. Title Guar. & Trust Co. v Grifenhagen, 209 NY 569; People ex rel. Frost v Woodbury, 213 NY 51; W.L. Dev. Corp. v Trifort Realty, 44 NY2d 489.)

      Meghan Faux, Brooklyn, Josh Zinner, Nina F. Simon, Washington, D.C., admitted pro hac vice, Seth Rosebrock, Washington, D.C., admitted pro hac vice, Fishman & Neil, LLP, New York City (James B. Fishman of counsel), Bromberg Law Office, P.C. (Brian L. Bromberg of counsel), April Carrie Charney, Jacksonville, Florida, admitted pro hac vice, Ruhi Maker, Rochester, Donna Dougherty, Rego Park, Dianne Woodburn, Diane Houk, New York City, Pamela Sah, Sara Ludwig, Oda Friedheim, Kew Gardens, Margaret Becker, Staten Island, and Treneeka Cusack, Buffalo, for South Brooklyn Legal Services and others, amici curiae.
    I. The MERS system was designed without regard to consumers’ rights. II. MERS’s claims that the MERS system is beneficial to consumers are unsupported. III. Homeowners have a right to know who owns their loans. (Miguel v Country Funding Corp., 309 F3d 1161; Mortgage Elec. Registration Sys., Inc. v Estrella, 390 F3d 522.) IV. The MERS system causes significant confusion among borrowers and has a particularly detrimental impact on the elderly and other vulnerable borrowers frequently victimized by predatory lenders. V. The public has a significant and enduring interest in preserving and protecting the free public databases created by the land and court records of this nation. VI. MERS’s subversion of the public policy behind public recordings costs county and city clerks over a billion dollars. VII. MERS lacks standing to bring foreclosure actions in its name. (Kluge v Fugazy, 145 AD2d 537.)

      Hamburger, Maxson, Yaffe, Wishod & Knauer, LLP, Melville (Richard Hamburger, David N. Yaffe and Eugene L. Wishod of counsel), for County Clerk of the County of Albany and others, amici curiae.
    County clerks are required by statute to reject instruments presented for recording which fail to comply with all governing statutory requirements. (Witter v Taggart, 78 NY2d 234; Andy Assoc. v Bankers Trust Co., 49 NY2d 13; Putnam v Stewart, 97 NY 411; Hartwell v Riley, 47 App Div 154; Olmsted v Dennis, 77 NY 378; Bryant v Town of Randolph, 133 NY 70; People ex rel. Welch v Nash, 62 NY 484; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451.)
   OPINION OF THE COURT

Pigott, J.

We are asked to decide on this appeal whether the Suffolk County Clerk is compelled to record and index mortgages, assignments of mortgage and discharges of mortgage, which name Mortgage Electronic Registration Systems, Inc. the lender’s nominee or mortgagee of record.

Petitioners, MERSCORP, Inc. and Mortgage Electronic Registration Systems, Inc. (collectively MERS), commenced this hybrid proceeding in the nature of mandamus to compel the Clerk to record and index the instruments, and to declare them acceptable for recording and indexing.

Supreme Court denied in part petitioners’ motion for summary judgment and granted in part the cross motion of respondents, the Suffolk County Clerk and the County of Suffolk (collectively the County), holding that although the Clerk must record and index the MERS mortgage when presented, the Clerk may refuse to record a MERS assignment and discharge, because those instruments violate the “factual mandates” of section 321 (3) of the Real Property Law.

The Appellate Division reversed so much of Supreme Court’s ruling as relates to the assignments and discharges, finding “no valid distinction between MERS mortgages and MERS assignments or discharges for the purpose of recording and indexing” (24 AD3d 673, 674-675 [2d Dept 2005]). This Court granted leave and we now affirm.

In 1993, the MERS system was created by several large participants in the real estate mortgage industry to track ownership interests in residential mortgages. Mortgage lenders and other entities, known as MERS members, subscribe to the MERS system and pay annual fees for the electronic processing and tracking of ownership and transfers of mortgages. Members contractually agree to appoint MERS to act as their common agent on all mortgages they register in the MERS system.

The initial MERS mortgage is recorded in the County Clerk’s office with “Mortgage Electronic Registration Systems, Inc.” named as the lender’s nominee or mortgagee of record on the instrument. During the lifetime of the mortgage, the beneficial ownership interest or servicing rights may be transferred among MERS members (MERS assignments), but these assignments are not publicly recorded; instead they are tracked electronically in MERS’s private system. In the MERS system, the mortgagor is notified of transfers of servicing rights pursuant to the Truth in Lending Act, but not necessarily of assignments of the beneficial interest in the mortgage.

In April 2001, in response to an informal opinion of the Attorney General, which concluded that recording a MERS instrument violates Real Property Law § 316 and frustrates the legislative intent of the recording provisions (2001 Ops Atty Gen No. 2001-2), the Suffolk County Clerk ceased recording the MERS instruments. This proceeding ensued.

The County contends that the MERS mortgage is improper because that mortgage names MERS, an entity that has no interest in the property or loan, as the “nominee” for the lender. Thus, the County contends MERS is not a proper “mortgagee” and the document created cannot be considered a proper “conveyance” for purposes of the recording statute. We disagree.

Section 291 of the Real Property Law provides, in pertinent part, that:

“[a] conveyance of real property, within the state, on being duly acknowledged by the person executing the same, or proved as required by [the Real Property Law], and such acknowledgment or proof duly certified when required by [such law], may be recorded in the office of the clerk of the county where such real property is situated, and such county clerk shall, upon the request of any party, on tender of the lawful fees therefor, record the same in his said office” (emphasis added).

Real Property Law § 316-a, which pertains exclusively to Suffolk County, provides that

“[e]very instrument affecting real estate or chattels real, situated in the county of Suffolk, which shall be, or which shall have been recorded in the office of the clerk of said county on and after the first day of January, nineteen hundred fifty-one, shall be recorded and indexed pursuant to the provisions of this act” (§ 316-a [1] [emphasis added]).

Thus, sections 291 and 316-a of the Real Property Law impose upon the Suffolk County Clerk the ministerial duty of recording and indexing instruments affecting real property (see Real Property Law § 290 [3]; §§ 291, 316-a [1], [2]; § 321 [1]; County Law § 525 [1]). The Clerk lacks the statutory authority to look beyond an instrument that otherwise satisfies the limited requirements of the recording statute (see Putnam v Stewart, 97 NY 411 [1884]). Therefore, the County Clerk must accept the MERS mortgage when presented for recording.

With respect to the MERS assignments and discharges of mortgage, the County argues that by requiring the Clerk to record the instrument, the Clerk is recording a document that ignores the mandates prescribed by Real Property Law § 321.

Section 321 (1) (a) provides that where it does not appear from the record that any interest in a mortgage has been assigned, a certificate of satisfaction must be signed by the mortgagee or the mortgagee’s personal representative in order for the recording officer to mark the record of the mortgage as “discharged.” Where it appears from the record that a mortgage has been assigned, the recording officer cannot mark the record of that mortgage with the word “discharged” unless a certificate is signed by “the person who appears from the record to be the last assignee” of the mortgage, or his or her personal representative (Real Property Law § 321 [1] [b]). As the nominee for the mortgagee of record or for the last assignee, MERS acknowledges the instrument and therefore, the County Clerk is required to file and record the instruments.

Other provisions are not to the contrary. Under section 321 (2) (b), the Clerk is required to record “every other instrument relating to a mortgage,” if that instrument is properly acknowledged or proved in a manner entitling a conveyance to be recorded. Such instrúments include “certificates purporting to discharge a mortgage” that are signed by persons other than those specified in Real Property Law § 321 (1).

Further, section 321 (3) of the Real Property Law provides:

“Every certificate presented to the recording officer shall be executed and acknowledged or proved in like manner as to entitle a conveyance to be recorded. If the mortgage has been assigned, in whole or in part, the certificate shall set forth the date of each assignment in the chain of title of the person or persons signing the certificate, the names of the assignor and assignee, the interest assigned, and, if the assignment has been recorded, the book and page where it has been recorded or the serial number of such record; or if the assignment is being recorded simultaneously with the certificate of discharge, the certificate of discharge shall so state. If the mortgage has not been assigned of record, the certificate shall so state” (emphasis added).

Notably, section 321 (3) does not call for the unrecorded MERS assignments to be listed on the MERS discharge. Rather, under the statute, the discharge is required either to list the assignment by the name of the assignor and assignee, the interest assigned, and the book and page number, where recorded, or, if the assignment has not been recorded, to “so state.”

The legislative history of the statute supports this interpretation. In 1951, Real Property Law § 321 (3) was amended to, among other things, insert the term “of record” (L 1951, ch 159, § 1). The relevant memoranda submitted to the Legislature in connection with the amendment indicate that the term was inserted to “correct a difficulty” in complying with the statute (see e.g. Mem in Support of Exec Secretary and Director of Research of Law Rev Commn, Bill Jacket, L 1951, ch 159). Prior to the amendment, the statute required that a discharge certificate presented to the County Clerk either list all of the assignments in the chain of title or state that the mortgage was unassigned. However, problems developed when an assignment, known to the person executing the discharge, was not in the chain of title. In those situations, the person executing the discharge would make the untrue statement that the mortgage was unassigned. Thus, the Legislature amended the statute allowing the discharge certificate to either list the assignments in the chain of title or to state that the assignment has not been made “of record.” The MERS discharge complies with the statute by stating that the “mortgage has not been further assigned of record” (emphasis added) and, therefore, the County Clerk is required to accept the MERS assignments and discharges of mortgage for recording.

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

Ciparick, J.

(concurring). I am constrained to agree with the result reached by the majority opinion. However, I write independently to highlight the narrow breadth of this holding and to point out that this issue may be ripe for legislative consideration.

I concur with the majority that the Clerk’s role is merely ministerial in nature and that since the documents sought to be recorded appear, for the most part, to comply with the recording statutes, MERS is entitled to an order directing the Clerk to accept and record the subject documents. I wish to note, however, that to the extent that the County and various amici argue that MERS has violated the clear prohibition against separating a lien from its debt and that MERS does not have standing to bring foreclosure actions, those issues remain for another day (see e.g. Merritt v Bartholick, 36 NY 44, 45 [1867] [“a transfer of the mortgage without the debt is a nullity, and no interest is acquired by it”]).

In addition to these substantive issues, a plethora of policy arguments have surfaced during the pendency of this proceeding. For instance, if MERS succeeds in its goal of monopolizing the mortgage nominee market, it will have effectively usurped the role of the county clerk that inevitably would result in a county’s recording fee revenue being substantially diverted to a private entity. Additionally, MERS’s success will arguably detract from the amount of public data available concerning mortgage ownership that otherwise offers a wealth of statistics that are used to analyze trends in lending practices. Another concern raised is that, once an assignment of the mortgage is made, it can be difficult, if not impossible, for a homeowner to find out the true identity of the loan holder. Amici who submitted briefs in favor of the County argue that this can effectively insulate a noteholder from liability and further that it encourages predatory lending practices.

Unquestionably there is considerable public value in allowing seamless assignments of mortgages in a secondary market. However, whether this benefit will outweigh the negative consequences cannot be ascertained by this Court. Thus, as the recording act, which as relevant here has not been substantially amended in the last 50 years, could not have envisioned such a system nor its ancillary impacts, I feel that such a decision is best left in the hands of the Legislature.

Chief Judge Kaye

(dissenting in part). In 1993, members of the real estate mortgage industry created MERS, an electronic registration system for mortgages. Its purpose is to streamline the mortgage process by eliminating the need to prepare and record paper assignments of mortgage, as had been done for hundreds of years. To accomplish this goal, MERS acts as nominee and as mortgagee of record for its members nationwide and appoints itself nominee, as mortgagee, for its members’ successors and assigns, thereby remaining nominal mortgagee of record no matter how many times loan servicing, or the mortgage itself, may be transferred. MERS hopes to register every residential and commercial home loan nationwide on its electronic system.

But the MERS system, developed as a tool for banks and title companies, does not entirely fit within the purpose of the Recording Act, which was enacted to “protect the rights of innocent purchasers . . . without knowledge of prior encumbrances” and to “establish a public record which would furnish potential purchasers with notice, or at least ‘constructive notice’, of previous conveyances” (Andy Assoc. v Bankers Trust Co., 49 NY2d 13, 20 [1979]; see Witter v Taggart, 78 NY2d 234, 238 [1991]). It is the incongruity between the needs of the modern electronic secondary mortgage market and our venerable real property laws regulating the market that frames the issue before us.

I

The Suffolk County Clerk, pursuant to the Recording Act, has a duty to record conveyances that are “entitled to be recorded” (Real Property Law § 316-a [5]), and to discharge mortgages when presented with a validly executed and acknowledged certificate of discharge (Real Property Law § 321). Thus, as part of this ministerial duty, the Clerk is called upon to examine an instrument to see that it is, facially, a “conveyance” of real property or to see that the certificate of discharge complies with the statutory mandates.

“The performance of his uniform clerical duty requires him to compare the instruments which come to his possession for record . . . and certify as to the identity of their physical contents. Such a certificate does not involve the expression of an opinion, but calls for the statement of a fact capable of absolute demonstration” (Putnam v Stewart, 97 NY 411, 418 [1884]).

When presented with a MERS mortgage to record, the Clerk is able to discern from the face of the instrument that MERS has been appointed, as nominee, “mortgagee of record.” As the instrument appears to reflect a valid conveyance (Real Property Law § 290 [3]), the Clerk is required to record the instrument in MERS’ name “as a nominee for Lender” (Real Property Law § 291). Given that the identity of the actual lender is ascertainable from the mortgage document itself — indeed, the use of a nominee as the equivalent of an agent for the lender is apparent, and not unusual — I concur with the majority that the Clerk is obligated to record MERS mortgages.

When presented with a certificate of discharge, however, the Clerk has the duty to examine the mortgage’s prior assignments. The Clerk collects fees precisely for this purpose (Real Property Law § 321 [3] [“the fee or fees which the recording officer is entitled to receive for filing and entering a certificate of discharge of a mortgage and examining assignments of such mortgage shall be payable with respect to each mortgage”]). Section 321 (3) of the Real Property Law further provides:

“Every certificate presented to the recording officer shall be executed and acknowledged or proved in like manner as to entitle a conveyance to be recorded. If the mortgage has been assigned, in whole or in part, the certificate shall set forth the date of each assignment in the chain of title of the person or persons signing the certificate, the names of the assignor and assignee, the interest assigned, and, if the assignment has been recorded, the book and page where it has been recorded or the serial number of such record; or if the assignment is being recorded simultaneously with the certificate of discharge, the certificate of discharge shall so state. If the mortgage has not been assigned of record, the certificate shall so state” (emphasis added).

“[W]here the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used” (Matter of Raritan Dev. Corp. v Silva, 91 NY2d 98, 107 [1997] [emphasis and citations omitted]). Plainly, the statute requires all assignments of the mortgage to be listed on the certificate of discharge, whether recorded or not. The statute first sets out this general requirement, then it addresses each possible scenario in turn: if the assignment was recorded, the Clerk must enter the book and page; if the assignment of mortgage is being recorded simultaneously, the certificate shall so state; if the assignment was not recorded, the certificate similarly shall so state. To read the statute as providing that the certificate “either” list the recorded mortgage “or” simply state that the assignment has not been recorded renders the language of the preceding sentences superfluous and the clause regarding the listing of recording details “if recorded” nonsensical.

“[T]he clearest indicator of legislative intent is the statutory text” (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998]). The Court need not look to legislative history when the plain meaning of the statute is clear, and surely should not look to legislative history to override the plain meaning of the statute, as the majority now does.

Here, moreover, the legislative history of section 321 is inapposite. Real Property Law § 321 was amended in 1951 to ameliorate the situation “where assignments are known by the signing party to have existed but such assignments are not in his chain of title because the mortgage has been reassigned to the assignor,” such as when “a mortgage has been pledged to secure a loan and on repayment. . . has been reassigned to the mortgagee without the assignment ever having been recorded” (Recommendation of Law Rev Commn, Bill Jacket, L 1951, ch 159, at 20; see also Mem by Exec Secretary and Director of Research of Law Rev Commn, Bill Jacket, L 1951, ch 159, at 11). Thus, the situation the amendment addressed was when a mortgagee’s assigned, unrecorded mortgage was reassigned back to the mortgagee, and the mortgage was then transferred by the mortgagee to a subsequent holder or discharged by the original mortgagee himself. In such a case, “there appears to be no reason for requiring a statement that the mortgage has not been assigned [as] the certificate is executed by the original mortgagee” (Recommendation of Law Rev Commn, Bill Jacket, L 1951, ch 159, at 20 [emphasis added]), or transferred by the original assignor after it had been assigned back to him (see Report of Comm on Real Property Law, Bill Jacket, L 1951, ch 159, at 9).

Under the MERS system, by contrast, assignments are made from one lender, to another lender, to another lender, and so on down the line. The 1951 amendment, which assumed that the mortgagee would be discharging the reassigned mortgage, or that a subsequent holder would discharge it unaware that the previous owner had assigned away and been reassigned the mortgage, is thus inapplicable to the issue under review.

II

The MERS system raises additional concerns that should not go unnoticed.

The benefits of the system to MERS members are not insubstantial. Through use of MERS as nominee, lenders are relieved of the costs of recording each mortgage assignment with the County Clerk, instead paying minimal yearly membership fees to MERS. Transfers of mortgage instruments are faster, allowing for efficient trading in the secondary mortgage market; a mortgage changes hands at least five times on average.

Although creating efficiencies for its members, there is little evidence that the MERS system provides equivalent benefits to home buyers and borrowers — and, in fact, some evidence that it may create substantial disadvantages. While MERS necessarily opted for a system that tracks both the beneficial owner of the loan and the servicer of the loan, its 800 number and Web site allow a borrower to access information regarding only his or her loan servicer, not the underlying lender. The lack of disclosure may create substantial difficulty when a homeowner wishes to negotiate the terms of his or her mortgage or enforce a legal right against the mortgagee and is unable to learn the mortgagee’s identity. Public records will no longer contain this information as, if it achieves the success it envisions, the MERS system will render the public record useless by masking beneficial ownership of mortgages and eliminating records of assignments altogether. Not only will this information deficit detract from the amount of public data accessible for research and monitoring of industry trends, but it may also function, perhaps unintentionally, to insulate a noteholder from liability, mask lender error and hide predatory lending practices. The county clerks, of course, are concerned about the depletion of their revenues — allegedly over one million dollars a year in Suffolk County alone.

Admittedly we do not know, at this juncture, the extent to which these concerns will be realized. But it would seem prudent to call to the attention of the Legislature what is at least a disparity between the relevant statute — now 55 years old — and the burgeoning modern-day electronic mortgage industry.

Judges Rosenblatt, Graffeo, Read and Smith concur with Judge Pigott; Judge Cipabick concurs in result in a separate opinion; Chief Judge Kaye dissents in part in another opinion.

Order affirmed, with costs.

      . Edward E Romaine resigned as County Clerk December 31, 2005. Judith A. Fascale is currently the Acting County Clerk.

      . Among the entities creating MERS were the Federal National Mortgage Association, the Federal Home Loan Mortgage Corporation, the Government National Mortgage Association, and the Mortgage Bankers Association of America.

      . Members of the MERS system also include entities such as insurance companies, title companies and banks.

      . If a MERS member transfers ownership interest or servicing rights in a mortgage loan to a non-MERS member, an assignment from the MERS member to the non-MERS member is recorded in the County Clerk’s office and the loan is deactivated within the MERS system.

      . The purpose of such requirement was to facilitate the work of the recording officer in marking the record of the mortgage.

       I also agree that the issues concerning the underlying validity of the MERS mortgage instrument — in particular, whether its failure to transfer beneficial interest renders it a nullity under real property law, whether it violates the prohibition against separating the note from the mortgage, and whether MERS has standing to foreclose on a mortgage — are best left for another day. Although MERSCORP initially requested a declaratory judgment that the MERS instruments were “lawful in all respects” (which Supreme Court denied) the instruments’ validity has not yet been addressed.