author: Jones, J.

text:
    [896 NE2d 61, 866 NYS2d 578]
    AG Capital Funding Partners, L.P., et al., Appellants, v State Street Bank and Trust Company, Respondent. (And Other Actions.)
    Argued May 28, 2008;
    decided June 25, 2008

      POINTS OF COUNSEL

      Kasowtiz, Benson, Torres & Friedman LLP, New York City (James J. Stricker and David M. Friedman of counsel), for appellants.
    I. The First Department erred in interpreting the indentures to require indemnification for liability caused by State Street Bank and Trust Company’s own misconduct. (Caplin v Marine Midland Grace Trust Co., 406 US 416; New York State Med. Care Facilities Fin. Agency v Bank of Tokyo Trust Co., 216 AD2d 126; Two Guys from Harrison-N.Y. v S.F.R. Realty Assoc., 63 NY2d 396; 150 Broadway N.Y. Assoc., L.P. v Bodner, 14 AD3d 1; Weissman v Sinorm Deli, 88 NY2d 437; Dunham v Weissman, 281 AD2d 220; Cassidy v County of Nassau, 182 AD2d 608.) II. The First Department erred in holding that the noteholders could not assert tort claims against the indenture trustee in addition to their contract claims. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382; Mandelblatt v Devon Stores, 132 AD2d 162; Sergeants Benevolent Assn. Annuity Fund v Renck, 19 AD3d 107; Sally Lou Fashions Corp. v Camhe-Marcille, 300 AD2d 224; Davis v Dime Sav. Bank of N.Y., 158 AD2d 50; Bouquet Brands Div. of J & D Food Sales v Citibank, 97 AD2d 936; LNC Invs., Inc. v First Fid. Bank, N.A., 935 F Supp 1333; New York State Med. Care Facilities Fin. Agency v Bank of Tokyo Trust Co., 163 Misc 2d 551; Williams v Continental Stock Transfer & Trust Co., 1 F Supp 2d 836; Hazzard v Chase Natl. Bank of City of N.Y., 159 Misc 57, 257 App Div 950, 282 NY 652.)

      Kelley Drye & Warren LLP, New York City (Steven P. Caley, Robert S. Friedman and Kevin J. Smith of counsel), for respondent.
    I. The First Department correctly affirmed the trial court’s dismissal of plaintiffs’ breach of contract and trust indenture act claims based on plaintiffs’ release of those claims. (Stoll v Gottlieb, 305 US 165; Jerome J. Steiker Co. v Eccelston Props., 156 Misc 2d 308; Truesdell v Donaldson, Lufkin & Jenrette Sec. Corp., 281 AD2d 334; New York State Med. Care Facilities Fin. Agency v Bank of Tokyo Trust Co., 216 AD2d 126; Two Guys from Harrison-N.Y. v S.F.R. Realty Assoc., 63 NY2d 396; Jacobson v Sassower, 66 NY2d 991.) II. The First Department correctly dismissed plaintiffs’ tort claims against State Street Bank and Trust Company. (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382; Papa v New York Tel Co., 72 NY2d 879; Brown v Wyckoff Hgts. Med. Ctr., 28 AD3d 412; Brown v Brown, 12 AD3d 176; Roklina v Skidmore Coll., 268 AD2d 765; Non-Linear Trading Co. v Braddis Assoc., 243 AD2d 107; North Shore Bottling Co. v Schmidt & Sons, 22 NY2d 171; Luxonomy Cars v Citibank, N.A., 65 AD2d 549; Hazzard v Chase Natl. Bank of City of N.Y., 159 Misc 57, 257 App Div 950, 282 NY 652; Elliott Assoc. v J. Henry Schroder Bank & Trust Co., 838 F2d 66.) III. Plaintiffs’ claims should be dismissed because State Street Bank and Trust Company was entitled to rely conclusively on opinions, certificates and other documents from Loewen Group International, Inc. and Loewen Group, Inc. (Loewen), the underwriters and Loewen’s counsel stating that the pass-through asset trust securities and Series 6 and 7 Notes were secured by the Collateral Trust Agreement collateral upon issuance. (Caplin v Marine Midland Grace Trust Co., 406 US 416; Cruden v Bank of N.Y., 957 F2d 961.) IV. Under no circumstances would plaintiffs be entitled to summary judgment. (Ugarriza v Schmieder, 46 NY2d 471; Londa v Dougbay Estates, 40 NY2d 1001; Donohue v Copi

      ague Union Free School Dist., 64 AD2d 29; Gleason v Reynolds Leasing Corp., 227 AD2d 375; Derdiarian v Felix Contr. Corp., 51 NY2d 308; Doolittle v Conklin Brass & Copper Co., 103 AD2d 722; Resource Fin. v National Cas. Co., 219 AD2d 627.)

      C. Dawn Causey, General Counsel, American Bankers Association, Washington, D.C. (Gregory F. Taylor, Jill M. Goldman and Cristeena Naser of counsel), for American Bankers Association, amicus curiae.
    Imposing liability based upon a common-law duty would be inconsistent with the Trust Indenture Act and would have a negative impact upon the industry. (Zeffiro v First Pennsylvania Banking & Trust Co., 623 F2d 290, 456 US 1005; Bluebird Partners, L.P. v First Fid. Bank, N.A. N.J., 85 F3d 970.)
   OPINION OF THE COURT

Jones, J.

In this appeal arising out of the issuance of a series of debt securities by nonparties Loewen Group International, Inc. and Loewen Group, Inc. (collectively Loewen), the question before us is whether plaintiffs have viable claims against defendant State Street Bank and Trust Company (State Street) for breach of contract, violation of the federal Trust Indenture Act of 1939 (see 15 USC § 77aaa et seq.), breach of fiduciary duty and negligence based on its alleged failure to deliver debt transaction registration statements arguably required to secure the debt. We conclude that plaintiffs’ contract and Trust Indenture Act claims are barred by a release previously executed by plaintiffs as part of a bankruptcy settlement with Loewen and that no fiduciary duties exist. However, because negligence claims are not barred by the release, and because there is an issue of fact as to whether State Street owed and violated a duty of care to plaintiffs, we reinstate the cause of action for negligence brought by plaintiffs against State Street.

Facts

In May 1996, Loewen and collateral trustee Bankers Trust entered into a Collateral Trust Agreement (CTA). As relevant here, the CTA permitted holders of future debt offerings to acquire secured-creditor status with respect to the same pool of collateral. Specifically, the CTA provided that future

“trustees or like representatives acting on behalf of Holders of any proposed Additional Secured Indebtedness . . . may become Secured Party Representatives under this Collateral Trust Agreement and be entitled to the benefits of the security interests in the Collateral as set out herein and in the other Collateral Documents. To become a Secured Party Representative hereunder each such representative or Holder must deliver to the Trustee, for acceptance and registration in the Secured Indebtedness Register, an Additional Secured Indebtedness Registration Statement” (emphasis added).

In the late 1990s, in an effort to raise capital, Loewen issued a series of debt securities. Three of the debt securities, the pass-through asset trust securities (PATS), issued in September 1997, and the Series 6 and 7 Notes (Notes), issued in May 1998, are relevant here. Under the indenture for each transaction, Loewen engaged State Street to serve as indenture trustee and administer the debt issue. Plaintiffs—various insurance companies, mutual funds and investment funds—are holders of the PATS and Notes, which were valued at approximately $750 million when issued. For each transaction, Loewen and State Street executed an additional secured indebtedness registration statement (ASIRS) as set forth in the CTA. Each ASIRS, incorporating by reference the CTA between Loewen and Bankers Trust, provided:

“By executing and delivering this Additional Secured Indebtedness Registration Statement and, upon the acceptance and recordation hereof by the Trustee in accordance with Section 2.3 of the Collateral Trust Agreement, State Street ... as trustee under the indenture . . . hereby agrees on behalf of itself and the Holders it represents to be bound by all the terms and provisions of the [CTA] applicable to a Holder and a Secured Party Representative” (emphasis added).

It is undisputed that no ASIRS for the PATS or the Notes was ever delivered to or received by Bankers Trust.

In June 1999, Loewen filed for chapter 11 bankruptcy protection. Because no ASIRS was delivered for the subject debt securities, uncertainty arose as to whether the holders of those instruments had secured-creditor status. In the bankruptcy proceeding, plaintiffs approved Loewen’s fourth reorganization plan and settled their claims against Loewen by accepting a discounted value for the Notes and PATS. Plaintiffs also agreed to “release” State Street in accordance with Loewen’s reorganization plan, which provided that

“each holder of a CTA Note Claim, each Indenture Trustee and each Principal CTA Creditor will be deemed to forever release, waive and discharge [State Street] . . . from any claims, demands, rights, causes of action[ ] or liabilities that, if enforced against [State Street], entitle [State Street] to an Allowed Claim for indemnification from [Loewen].”

The indentures for the subject transactions required that Loewen

“shall indemnify [State Street] for, and hold it harmless against, any loss or liability incurred by it arising out of or in connection with the administration of this trust and its rights or duties hereunder, including the costs and expenses of defending itself against any claim or liability in connection with the exercise or performance of any of its powers or duties hereunder. . . . [Loewen] need not reimburse any expense or indemnify against any loss or liability to the extent incurred by [State Street] through its negligence, bad faith or willful misconduct” (emphasis added).

Thus, State Street was not indemnified by Loewen, and therefore not released by plaintiffs, as to any claim based on its negligence.

Procedural History

In 2002, plaintiffs commenced this action against State Street, alleging six causes of action: (1) breach of the PATS ASIRS and the Notes ASIRS, (2) breach of the PATS indenture and the Notes indenture, (3) violation of the federal Trust Indenture Act, (4) breach of fiduciary duty as an indenture trustee, (5) breach of fiduciary duty as a secured party representative and (6) negligence. In sum, plaintiffs alleged that State Street’s failure to deliver the ASIRS to Bankers Trust for registration as required under the CTA and the ASIRS caused plaintiffs to settle their claims in Loewen’s bankruptcy for “tens of millions of dollars” less than if State Street had delivered the ASIRS. In its answer, State Street denied the complaint’s allegations and asserted various affirmative defenses, including release. State Street further countered that the subject notes were secured, whether or not they were registered. In January 2005, State Street moved for summary judgment dismissing the complaint, and plaintiffs moved for partial summary judgment on their contract claims (i.e., breach of the ASIRS and breach of the indentures), as well as their breach of fiduciary duty as indenture trustee and negligence claims. Plaintiffs also sought an award of damages.

In July 2005, Supreme Court (1) granted State Street’s motion to the extent of dismissing plaintiffs’ claims for breach of contract and violation of the Trust Indenture Act, (2) granted plaintiffs’ motion to the extent of granting them summary judgment as to liability on their breach of fiduciary duty as indenture trustee and negligence claims and (3) otherwise denied the motions. Specifically, the court held that the release plaintiffs executed as part of the Loewen bankruptcy settlement barred their contract and violation of the Trust Indenture Act claims, but did not affect their breach of fiduciary duty and negligence claims.

Further, the court, relying on the Appellate Division’s 2004 decision dismissing State Street’s third-party claims, held that plaintiffs were entitled to summary judgment as to liability on their breach of fiduciary duty as indenture trustee and negligence claims. However, in our November 2005 decision reversing the dismissal of the third-party negligence and contribution claims, we noted that the Appellate Division’s comments on the merits of the main claim were “premature and beyond the scope of the appeal” (5 NY3d at 590 n 3).

After our November 2005 decision, State Street moved to vacate certain portions of Supreme Court’s July 2005 decision and to renew its summary judgment motion as to the remaining claims, arguing that this Court rejected the Appellate Division’s conclusion that plaintiffs could predicate tort claims on State Street’s failure to perform ministerial tasks. In May 2006, Supreme Court (1) vacated so much of its prior order that granted plaintiffs summary judgment on the breach of fiduciary duty as indenture trustee and negligence claims, (2) granted State Street’s motion to renew and (3) upon renewal, denied State Street’s motion for summary judgment dismissing plaintiffs’ breach of fiduciary duty (as indenture trustee and secured party representative) claims and their negligence claim. The parties appealed from Supreme Court’s July 2005 and May 2006 orders to the extent they were aggrieved.

The Appellate Division dismissed plaintiffs’ claims for breach of contract and violation of the Trust Indenture Act, explaining that because these claims were not predicated upon State Street’s negligence, bad faith or willful misconduct, they are clearly barred by the release (40 AD3d 392, 393-394 [1st Dept 2007]). The court further concluded that the remaining claims for breach of fiduciary duty and negligence “should have been dismissed since they are essentially duplicative of the claims for breach of contract” (id. at 394). The court stated that, “[notwithstanding the wording of’ such claims, “it is apparent that plaintiffs have not alleged the breach of an extracontractual duty redressable in tort” (id.). We granted plaintiffs leave to appeal and now modify and reinstate the negligence claim against State Street.

Discussion

Plaintiffs argue that the Appellate Division decision immunizes State Street’s failure to perform its most basic and fundamental obligations as an indenture trustee. Specifically, plaintiffs contend that: (1) Loewen’s indemnification obligations to State Street, consistent with the Trust Indenture Act, did not relieve State Street from any claims or liability resulting from its own misconduct or failure to perform its express contractual obligations; as such, the release has no effect on plaintiffs’ breach of contract claims; and (2) prior to the issuer’s default, State Street owed plaintiffs an extracontractual duty to perform basic, nondiscretionary ministerial tasks (e.g., delivery of the ASIRS) and that breach of such duty supports a tort claim against State Street. State Street counters that (1) plaintiffs’ breach of contract and Trust Indenture Act claims are barred by the release; (2) plaintiffs have not alleged the breach of an extracontractual duty redressable in tort; and (3) in any event, plaintiffs’ tort claims are duplicative of the breach of contract claims.

Under the plain terms of the release, its scope is based on the terms of the indemnification provision set forth in each indenture. In short, the indentures provide that Loewen shall indemnify State Street for and hold it harmless against all claims except those based on State Street’s negligence, bad faith or willful misconduct. As plaintiffs’ breach of contract and Trust Indenture Act claims against State Street are not based on State Street’s negligence, bad faith or willful misconduct, these claims fall under the category of “Allowed Claim for indemnification” and are barred pursuant to the release. Therefore, the Appellate Division properly concluded that, based on the release, State Street is entitled to summary judgment dismissing plaintiffs’ first three claims.

We turn next to plaintiffs’ contention that State Street may be held liable in tort for its failure to perform the basic, nondiscretionary ministerial function of delivering the ASIRS (prior to the event of default) and that, accordingly, plaintiffs’ fourth and fifth claims, sounding in breach of fiduciary duty as an indenture trustee and as a secured party representative, respectively, should be reinstated.

The Trust Indenture Act of 1939, which is applicable “to notes, bonds, debentures, and other evidences of indebtedness, whether or not secured, and to all certificates representing such an interest” (5 Hazen, Securities Regulation § 19.2, at 261 [5th ed]), was enacted because “previous abuses by indenture trustees had adversely affected the national public interest and the interest of investors in notes, bonds [and] debentures, 15 U.S.C. § 77bbb (a), and Congress sought to address this national problem in a uniform way, S.Rep. No. 248, 76th Cong., 1st Sess. 3 (1939)” (Bluebird Partners, L.P. v First Fid. Bank, N.A. N.J., 85 F3d 970, 974 [2d Cir 1996] [internal quotation marks omitted]). In short, “[t]he Act is designed to vindicate a federal policy of protecting investors” (id. [internal quotation marks and emphasis omitted]). As relevant here, the Act states that an indenture “shall automatically be deemed (unless it is expressly provided therein that any such provision is excluded) to provide that, prior to default. . . the indenture trustee shall not be liable except for the performance of such duties as are specifically set out in such indenture” (15 USC § 77000 [a] [1] [emphasis added]).

New York state and federal case law are consistent with section 77ooo (a) (1) of the Act. In Hazzard v Chase Natl. Bank of City of N.Y., Supreme Court, New York County explained that

“[t]he corporate trustee has very little in common with the ordinary trustee .... The trustee under a corporate indenture . . . has his [or her] rights and duties defined, not by the fiduciary relationship, but exclusively by the terms of the agreement. His [or her] status is more that of a stakeholder than one of a trustee” (159 Misc 57, 83-84 [1936], affd without op 257 App Div 950 [1st Dept 1939], affd without op 282 NY 652 [1940], cert denied 311 US 708 [1940]; see Elliott Assoc. v J. Henry Schroder Bank & Trust Co., 838 F2d 66, 71 [2d Cir 1988] [holding that as long as trustee fulfills obligations under the express terms of indenture, no pre-default duties owed to debt holders except to avoid conflicts of interest]; Meckel v Continental Resources Co., 758 F2d 811, 816 [2d Cir 1985] [same as Hazzard]; Craig v Bank of N.Y., 2002 WL 1543893, 2002 US Dist LEXIS 12721 [SD NY 2002]; Magten Asset Mgt. Corp. v Bank of N.Y., 15 Misc 3d 1132[A], 2007 NY Slip Op 50951[U] [Sup Ct, NY County 2007] [same as Hazzard]; AMBAC Indem. Corp. v Bankers Trust Co., 151 Misc 2d 334, 338-339 [Sup Ct, NY County 1991] [same as Hazzard and Elliott Assoc.]).

We further note that a number of courts have held that prior to default, indenture trustees owe note holders an extracontractual duty to perform basic, nondiscretionary, ministerial functions redressable in tort if such duty is breached (see LNC Inv., Inc. v First Fid. Bank, N.A., 935 F Supp 1333, 1347 [SD NY 1996]; Philip v L.F. Rothschild & Co., 1999 WL 771354, *1, 1999 US Dist LEXIS 14967, *3-4 [SD NY 1999]; Dresner Co. Profit Sharing Plan v First Fid. Bank, N.A., N.J., 1996 WL 694345, *4, 1996 US Dist LEXIS 17913, *12-13 [SD NY 1996]; Williams v Continental Stock Transfer & Trust Co., 1 F Supp 2d 836, 840 [ND Ill 1998]). These decisions are consistent with section 77ooo (a) (1) of the Trust Indenture Act, Elliott Assoc. and Hazzard.

Based on the foregoing, we hold that an indenture trustee owes a duty to perform its ministerial functions with due care, and if this duty is breached the trustee will be subjected to tort liability. However, contrary to plaintiffs’ arguments, the alleged breach of such duty neither gives rise to fiduciary duties nor supports the reinstatement of plaintiffs’ fourth and fifth causes of action.

Plaintiffs’ fourth cause of action alleging that State Street had a fiduciary duty as an “Indenture Trustee” is not viable. First, they cannot point to any provision in the indentures that places fiduciary obligations on State Street prior to an event of default. Second, as will be made clear below, fiduciary obligations are wholly different from the performance of ministerial functions with due care. Finally, mere allegations that a fiduciary duty exists, with nothing more, are insufficient to withstand summary judgment.

Plaintiffs’ fifth cause of action alleging that State Street had a fiduciary duty as a “Secured Party Representative” is not viable under the general principles governing fiduciary relationships. “A fiduciary relationship ‘exists between two persons when one of them is under a duty to act for or to give advice for the benefit of another upon matters within the scope of the relation’ ” (EBC I, Inc. v Goldman, Sachs & Co., 5 NY3d 11, 19 [2005], quoting Restatement [Second] of Torts § 874, Comment a). Determining whether a fiduciary relationship exists necessarily involves a fact-specific inquiry (see id.). “[E]ssential elements of a fiduciary relation are . . . ‘reliance, . . . de facto control and dominance’ ” (Northeast Gen. Corp. v Wellington Adv., 82 NY2d 158, 173 [1993, Hancock, J., dissenting] [citations omitted]). Stated differently, “[a] fiduciary relation exists when confidence is reposed on one side and there is resulting superiority and influence on the other” (id.).

Here, State Street never became a secured party representative, as defined by the CTA, in the first instance. Accordingly, State Street never undertook “a duty to act for or to give advice for the benefit of another” in that capacity.

Finally, we conclude that the Appellate Division erred in dismissing plaintiffs’ negligence claim as duplicative of plaintiffs’ breach of the ASIRS (contract) claim. At the outset, we reiterate that the release executed by plaintiffs only applied to claims for which Loewen would have to indemnify State Street under the respective indentures, which specifically exclude acts of negligence from Loewen’s indemnification obligations. Therefore, the release does not shield State Street from its own acts of negligence.

Here, it is undisputed that State Street and Loewen executed the ASIRS, that the ASIRS called for State Street to deliver same to Bankers Trust and that State Street failed to deliver the ASIRS or ensure that the ASIRS were delivered to Bankers Trust. Accordingly, there are issues of fact as to whether State Street, separate and apart from its contractual duty under the ASIRS, undertook and breached a duty of care, “connected with and dependent upon the [ASIRS.]” (Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382, 389 [1987] [citation omitted]), to act in accordance with the ASIRS and the CTA registration requirements to protect plaintiffs’ security rights in the CTA collateral and whether plaintiffs sustained significant losses as a result of this alleged breach. These questions should be resolved at trial.

State Street’s reliance on various representations and opinions of Loewen’s counsel (Thelen) stating that the PATS and the Notes were, or would be, entitled to secured status is misplaced and, in any event, does not alter our holding on plaintiffs’ negligence claim. Because State Street did not advise Thelen that it had failed to deliver the ASIRS as it agreed to do, State Street cannot, in good faith, rely upon Thelen’s representations.

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

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

Order modified, etc.

      . The facts concerning the transactions at issue are largely set forth in a prior decision of this Court (see AG Capital Funding Partners, L.P v State St. Bank & Trust Co., 5 NY3d 582 [2005] [In a related third-party action commenced by State Street, the Court reinstated its claims for negligence and contribution]). We restate and augment the facts only to the extent necessary to resolve the instant appeal (which concerns the main action).

      . The document setting the terms and conditions of a debt issuance is a corporate indenture (see Black’s Law Dictionary 784 [8th ed 2004]).

      . UBS Warburg LLC (UBS) was lead underwriter in the PATS transaction, and its counsel, Skadden, Arps, Slate, Meagher & Flom LLR hosted and ran the closing. Salomon Smith Barney, Inc. (Salomon) was lead underwriter in the Notes transaction, and its counsel, Davis Polk & Wardwell, hosted and ran the .closing. Thelen Reid & Priest LLP (Thelen) represented Loewen and drafted the ASIRS for both transactions. Our prior decision provides a detailed exposition of the foregoing (see AG Capital, 5 NY3d at 588-589). State Street alleges that after the respective closings, Thelen made numerous representations through, among other things, the issuance of opinion letters to Bankers Trust, that the subject debt was fully secured and ranked equally with the other secured debt previously issued by Loewen.

      . In 2003, State Street commenced a third-party action asserting claims for common-law indemnification, contribution and unjust enrichment against third-party defendants Salomon, UBS and Thelen, and negligent misrepresentation and attorney malpractice against Thelen. State Street alleged that if it is liable to plaintiffs in the main action, the third-party defendants should ultimately be held liable to it because they assumed State Street’s delivery obligation and breached that duty by failing to deliver the ASIRS. The third-party defendants moved to dismiss the third-party complaint under CPLR 3211 (a) (7). Supreme Court dismissed the unjust enrichment, indemnification, attorney malpractice and negligent misrepresentation claims. However, the court let State Street’s negligence and contribution claims go forward. In August 2004, the Appellate Division granted third-party defendants’ motions in their entirety and dismissed State Street’s third-party complaint, holding that “State Street assumed the contractual obligation to deliver to Bankers Trust a registration statement for any additional secured indebtedness” (10 AD3d 293, 294 [2004]). We reinstated the contribution and negligence claims (5 NY3d 582 [2005]). In so holding, we “expressed] no opinion on the merits of the underlying claims against State Street” (id. at 590).

      . This provision is consistent with the Trust Indenture Act, which states: a corporate indenture “shall not contain any provisions relieving the indenture trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct” (15 USC § 77000 [d]).

      . In support of its holding in LNC Inv., the Southern District cited New York State Med. Care Facilities Fin. Agency v Bank of Tokyo Trust Co. (163 Misc 2d 551 [Sup Ct, NY County 1994], affd on different grounds 216 AD2d 126 [1st Dept 1995], lv dismissed 87 NY2d 892 [1995]). In that case, as here, the ministerial task defendant trustee was required to perform was set forth in an agreement executed by the debt issuer and the indenture trustee. Put differently, the duty to perform the required ministerial task clearly arose under the terms of the agreement.

      . This is consistent with the Trust Indenture Act, which distinguishes between an indenture trustee’s pre- and post-default duties. Thus, while an indenture trustee, prior to default, is liable for obligations specifically set forth in the indenture, once the issuer defaults, the trustee “shall exercise . . . such of the rights and powers vested in it by such indenture, and . . . use the same degree of care and skill in their exercise, as a prudent [person] would exercise or use under the circumstances in the conduct of his [or her] own affairs” (15 USC § 77000 [c]).


source: Caselaw Access Project

author: Jones, J. Ciparick, J.

license: Public Domain

text:
    [896 NE2d 69, 866 NYS2d 586]
    In the Matter of Ronnie Ramroop, Appellant, v Flexo-Craft Printing, Inc., et al., Respondents. Workers’ Compensation Board, Respondent.
    Argued June 3, 2008;
    decided June 26, 2008

      POINTS OF COUNSEL

      Joel M. Gluck, Brooklyn, for appellant.
    I. The decision of the Workers’ Compensation Board affirmed by the Appellate Division is proscribed by Workers’ Compensation Law § 17 and this state’s historical refusal to bar compensation based on immigration status. (Matter of LaCroix v Syracuse Exec. Air Serv., Inc., 8 NY3d 348; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; O’Rourke v Long, 41 NY2d 219; Noreen v Vogel & Bros., 231 NY 317; Matter of Sackolwitz v Hamburg & Co., 295 NY 264; Matter of Davison v Holder, 137 AD2d 899; Matter of Testa v Sorrento Rest., 10 AD2d 133; Matter of Hernandez v Excel Recycling Corp., 31 AD3d 1091; Matter of Richardson v Fiedler Roofing, 112 AD2d 551, 67 NY2d 246; Balbuena v IDR Realty LLC, 6 NY3d 338.) II. The Workers’ Compensation Board’s decision rests on an erroneous interpretation of Workers’ Compensation Law § 15 (3) (v). (Matter of Fortuna v Pfizer, Inc., 91 AD2d 1083; Matter of Landgrebe v County of Westchester, 57 NY2d 1; Matter of Porter v D.A. Collins Constr., 28 AD3d 951; Matter of Marcera v Delco Prods., Div. of Gen. Motors Corp., 218 AD2d 888; Matter of Graham v Pathways, Inc., 305 AD2d 830; Matter of Bremner v New Venture Gear, 31 AD3d 848; Matter of Nye v IBM Corp., 2 AD3d 1164; Matter of Carbonaro v Chinatown Sea Food, 55 AD2d 756; Matter of Scatty v Ravena Coeymans Selkirk Cent. School Dist., 31 AD3d 836; Matter of Lane v Rotodyne, Inc., 66 AD2d 153.)

      Gregory J. Allen, General Attorney, State Insurance Fund, New York City (Rudolph Rosa Di Sant of counsel), for respondents.
    I. Denial of “additional compensation” under Workers’ Compensation Law § 15 (3) (v) based upon treatment of claimant’s illegal status as an additional impairment of his earning capacity is supported by the language of the statute, case law and the principles of statutory construction. (Balbuena v IDR Realty LLC, 6 NY3d 338; Matter of Sackolwitz v Hamburg & Co., 295 NY 264; Matter of Richardson v Fiedler Roofing, 67 NY2d 246; Matter of Howard v Wyman, 28 NY2d 434; Matter of

      Tall Trees Constr. Corp. v Zoning Bd. of Appeals of Town of Huntington, 97 NY2d 86; Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577; Meltzer v Koenigsberg, 302 NY 523; Patrolmen’s Benevolent Assn. of City of N.Y. v City of New York, 41 NY2d 205; Matter of Porter v D.A. Collins Constr., 28 AD3d 951; Matter of Graham v Pathways, Inc., 305 AD2d 830, 1 NY3d 564.) II. Denial of “additional compensation” under Workers’ Compensation Law § 15 (3) (v) based upon claimant’s ineligibility for vocational rehabilitation is supported by the language of the statute and is consistent with federal immigration policy. (Matter of Murphy v Office of Vocational & Educ. Servs. for Individuals with Disabilities, N.Y. State Educ. Dept., 92 NY2d 477; Hoffman Plastic Compounds, Inc. v NLRB, 535 US 137; Matter of Lane v Rotodyne, Inc., 66 AD2d 153; Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516.) III. Workers’ Compensation Law § 17 does not exempt immigration status from consideration in determining eligibility under Workers’ Compensation Law § 15 (3) (v); alternatively, relief under Workers’ Compensation Law § 15 (3) (v) is not unconditional. (Matter of Fogorty v Young, 1 AD2d 751; Matter of Spaduccino v Hayes & Co., 180 App Div 37, 223 NY 681; Matter of Testa v Sorrento Rest., 10 AD2d 133, 8 NY2d 705; Matter of Iannone v Radory Constr. Corp., 285 App Div 751; Matter of Kinkela v Crimmins Contr. Co., 263 App Div 770; Matter of Serrano v M. A. Gammino Constr. Co., 281 App Div 736; Matter of Rolle v General Foods Corp., Birds Eye Div., 19 AD2d 188; AP Propane v Sperbeck, 157 AD2d 27, 77 NY2d 886; Williamson v 16 W. 57th St. Co., 256 AD2d 507.)

      MFY Legal Services, Inc., New York City (Anne Marie O’Donovan and Jeanette Zelhof of counsel), for Sameer M. Ashar and others, amici curiae.
    I. The history of New York’s Workers’ Compensation Law demonstrates the Legislature’s powerful commitment to protecting all workers, irrespective of immigration status. (Shanahan v Monarch Eng’g Co., 219 NY 469; Matter of Post v Burger & Gohlke, 216 NY 544; Ives v South Buffalo Ry. Co., 201 NY 271; Matter of Spaduccino v Hayes & Co., 180 App Div 37, 223 NY 681.) II. The term immigrants in Workers’ Compensation Law § 17 is best understood as including undocumented immigrants given the Legislature’s deep familiarity with immigration status distinctions and its intent that coverage under the Workers’ Compensation Law be broad and exclusive. (Shanahan v Monarch Eng’g Co., 219 NY 469; Sliosberg v New York Life Ins. Co., 244 NY 482; Alfson v Bush Co. [Ltd.], 182 NY 393; Noreen v Vogel & Bros., 231 NY 317.) III. The Legislature, by adding Workers’ Compensation Law § 15 (3) (v) in 1970, intended to strengthen protections for injured immigrant workers and did not exclude workers based on immigration status. (Matter of Testa v Sorrento Rest., 10 AD2d 133.) IV The Legislature’s decision to expand workers’ compensation coverage for injured immigrant workers in the 1980s makes even more explicit its commitment to protecting all workers, irrespective of immigration status.

      Urban Justice Center, New York City (E. Tammy Kim of counsel), and Legal Aid Society (Steven Banks, Adriene Holder, Richard E. Blum, Christopher Lamb and Hollis V. Pfitsch of counsel), for New York City Central Labor Council, AFL-CIO and others, amici curiae.
    I. This Court has already held that it is the law and policy of the State of New York to protect all workers by providing wage replacement to injured workers regardless of immigration status. (Balbuena v IDR Realty LLC, 6 NY3d 338; Hoffman Plastic Compounds, Inc. v NLRB, 535 US 137; Madeira v Affordable Hous. Found., Inc., 469 F3d 219.) II. New York’s Worker’s Compensation Law enshrines the same principles that this Court articulated in Balbuena v IDR Realty LLC (6 NY3d 338 [2006]) and therefore requires that workers’ compensation benefits be equally available to all regardless of immigration status. (Matter of Sackolwitz v Hamburg & Co., 295 NY 264; Matter of Post v Burger & Gohlke, 216 NY 544; Matter of Testa v Sorrento Rest., 10 AD2d 133; Matter of Richardson v Commissioner of N.Y. City Dept. of Social Servs., 88 NY2d 35; Matter of Charles A. Field Delivery Serv. [Roberts], 66 NY2d 516; Gardebring v Jenkins, 485 US 415; Matter of Paolucci v Capital Newspapers, 197 AD2d 811; Matter of Caldas v 86 Alda Rest., 167 AD2d 594; Matter of Fogorty v Young, 1 AD2d 751.) III. As the Workers’ Compensation Board’s decision is not entitled to deference, the Court should make its own determination of the meaning of Workers’ Compensation Law § 15 (3) (v) and reverse the Third Department’s ruling. (Matter of De Mayo v Rensselaer Polytech Inst., 74 NY2d 459; Matter of LaCroix v Syracuse Exec. Air Serv., Inc., 8 NY3d 348; O’Rourke v Long, 41 NY2d 219; Noreen v Vogel & Bros., 231 NY 317; Matter of Davison v Holder, 137 AD2d 899; Matter of Smith v Tompkins County Courthouse, 60 NY2d 939; Matter of Porter v D.A. Collins Constr., 28 AD3d 951; Matter of Eimers v Lee’s Rest., 162 AD2d 850; Matter of Marcera v Delco Prods., Div. of Gen. Motors Corp., 218 AD2d 888; Matter of Graham v Pathways, Inc., 305 AD2d 830.) IV. The Court should reject the Workers’ Compensation Board’s determination because it is an unreasoned departure from the Board’s own decisions on the meaning of Workers’ Compensation Law § 15 (3) (v)’s “due solely thereto” requirement.. (Matter of Richardson v Commissioner of N.Y. City Dept. of Social Servs., 88 NY2d 35; Matter of Marcera v Delco Prods., Div. of Gen. Motors Corp., 218 AD2d 888.) V. The Workers’ Compensation Board erred in concluding that appellant did not meet the vocational rehabilitation requirement of Workers’ Compensation Law § 15 (3) (v). (Matter of American Tel. & Tel. Co. v State Tax Commn., 61 NY2d 393; Matter of Lane v Rotodyne, Inc., 66 AD2d 153; Madeira v Affordable Hous. Found., Inc., 469 F3d 219.) VI. The policies of workers’ compensation and federal immigration law compel reversal of the Third Department’s ruling. (Matter of Jensen v Southern Pac. Co., 215 NY 514, 244 US 205; Balbuena v IDR Realty LLC, 6 NY3d 338; Commercial Cleaning Servs., L.L.C. v Colin Serv. Sys., Inc., 271 F3d 374.)
   OPINION OF THE COURT

Jones, J.

The question before us is whether claimant may recover “additional compensation” under Workers’ Compensation Law § 15 (3) (v). We conclude that he may not.

On March 28, 1995, claimant, then employed and working as a printer for respondent Flexo-Craft Printing, Inc., sustained a severe crush injury involving four fingers when he caught his right hand in a printing press. After claimant’s March 8, 1996 workers’ compensation hearing (where his claim for a compensable injury to the right hand was established), the Workers’ Compensation Board awarded claimant temporary disability benefits that were paid by respondent employer’s workers’ compensation carrier, the State Insurance Fund (Fund). The Board ultimately ordered a 75% schedule loss of use award. In sum, under the Board’s awards, claimant received primary compensation benefits from March 29, 1995 until January 18, 2000, when the award was fully paid. Claimant’s case was subsequently closed.

In 1997, claimant was interviewed and evaluated by the Board’s Rehabilitation Bureau for vocational purposes. Claimant was eventually referred to the New York State Education Department’s Office of Vocational and Educational Services for Individuals with Disabilities (VESID), but the agency found that he was ineligible for services because he is an undocumented alien who cannot be legally employed in the United States.

In July 2002, more than two years after the schedule award had been fully paid, claimant requested that the case be reopened and restored, and that he receive “additional compensation” pursuant to Workers’ Compensation Law § 15 (3) (v). After a hearing in October 2003, a Workers’ Compensation Law Judge (WCLJ) awarded claimant section 15 (3) (v) benefits in the amount of $200 per week from September 2002 through October 2003 and ordered the Fund to make such payments. The Fund appealed the decision to a Board panel based on VESID’s finding that claimant was ineligible for training for non-work-related reasons. A Board panel rescinded the WCLJ’s decision and ordered further hearings regarding whether claimant’s impairment of earning capacity was due “solely” to his work-related injury, as required by section 15 (3) (v). At a subsequent hearing held in September 2004, the Board’s rehabilitation counselor testified that claimant was ineligible for VESID training due to his undocumented status. The WCLJ reinstated the additional compensation award and the carrier appealed the decision to a Board panel.

In November 2005, the Board panel that originally rescinded the WCLJ’s first decision reversed the decision rendered at the subsequent hearing. The Board panel concluded that claimant did not meet the requirements of section 15 (3) (v) and that Workers’ Compensation Law § 17 should not change this result. Claimant appealed to the Appellate Division, which affirmed. The court held that “the Board quite properly found that because claimant was an undocumented alien, he was ineligible for employment in the United States and, thus, his loss of earning capacity was not solely attributable to his compensable injury” and that “Workers’ Compensation Law § 17 [did] not compel a contrary result” (41 AD3d 1055 [2007]). We granted claimant leave to appeal and now affirm, albeit on different grounds.

Claimant and amici seek reversal of the Appellate Division order and argue, among other things, that the decision of the Board, affirmed by the Appellate Division, runs counter to the legislative history of Workers’ Compensation Law § 15 (3) (v) and § 17. We disagree.

Because this appeal involves a question of statutory interpretation, we must discern and give effect to the Legislature’s intent:

“As the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must always be the language itself, giving effect to the plain meaning thereof. ... In construing statutes, it is a well-established rule that resort must be had to the natural signification of the words employed, and if they have a definite meaning, which involves no absurdity or contradiction, there is no room for construction and courts have no right to add to or take away from that meaning” (Majewski v Broadalbin-Perth Cent. School Dist., 91 NY2d 577, 583 [1998] [citations and internal quotation marks omitted]).

Section 15 (3) (v) (added by L 1970, ch 286, § 1), entitled “Additional compensation for impairment of wage earning capacity in certain permanent partial disabilities,” states, in relevant part:

“[Additional compensation shall be payable for impairment of wage earning capacity for any period after the termination of an award under paragraphs a, b, c, or d[ ] of this subdivision for the loss or loss of use of [50%] or more of a[n arm, leg, hand or foot], provided such impairment of earning capacity shall be due solely thereto. ... As soon as practicable after the injury, the worker shall be required to participate in a board approved rehabilitation program; or shall have demonstrated cooperation with efforts to institute such a board approved program and shall have been determined by the board not to be a feasible candidate for rehabilitation.” (Emphasis added.)

Contrary to claimant’s argument that the legislative history of section 15 (3) (v) controls, the statute clearly and unambiguously provides that claimant must fulfill two requirements. With this in mind and assuming, without deciding, claimant can establish that the impairment of his wage-earning capacity is due solely to the compensable injury he sustained, we hold that he does not meet the second requirement under the statute. That is, because claimant was ineligible for work in the United States, claimant did not, and could not, participate in a “board approved rehabilitation program.” Moreover, even if we assume that claimant cooperated to the extent he could, his inability to participate was not because rehabilitation was not feasible—the Board never made a feasibility determination—but because no rehabilitation program is available to those who are not legally employable.

This appeal puts into clear focus the tension between the statute’s vocational rehabilitation objective to return an injured worker to the marketplace, and the reemployment of a worker, as in this case, who is not authorized to so participate in the first instance. Section 15 (3) (v)’s legislative history underscores this tension:

“A key feature of the bill [that became section 15 (3) (v)] is the requirement that the worker receiving additional compensation participate in Board approved programs of retraining and rehabilitation. This helps both the worker and the employer since it will tend to reduce the effects of the injury, restore the worker to re-employment and help him achieve his optimum earning capacity” (Governor’s Program Bill Mem, Bill Jacket, L 1970, ch 286 [emphasis added]).

Simply put, it cannot have been the Legislature’s goal to “restore ... to re-employment” a worker who may not be lawfully employed. Reversal of the Appellate Division order would not only promote such restoration, it would effectively place the instant claimant, and others similarly situated, in a more favorable position than claimants who must meet all statutory requirements. This would amount to our directing the Board to put its imprimatur on an “additional compensation” award in contravention of its statutory mandate, a result which the law compels against.

Additionally, claimant’s reliance on section 17 is misplaced. Section 17, as amended in 1985 (see L 1985, ch 538), provides, in pertinent part, that ‘‘ [c]ompensation ... to aliens not residents or about to become nonresidents of the United States or Canada, shall be the same in amount as provided for residents” (emphasis added). By its plain terms, section 17 is concerned solely with the treatment of aliens (not just undocumented aliens) who reside, or are about to reside, somewhere other than the United States or Canada. Under section 17, as originally enacted, the Board had the authority to commute in half all death and disability compensation awarded to such aliens; thus, such aliens were paid only half of the compensation they would have otherwise received. This practice was eliminated when the Legislature amended section 17 in 1985. This amendment was intended to “delete[ ] the provision from the Workers’ Compensation Law which provides that upon an alien becoming a non-resident alien, the benefits to which he is entitled under the Workers’ Compensation Law are reduced by 50%” and “restore the amount of compensation paid to nonresident aliens to 100%” (Sponsor’s Mem, Bill Jacket, L 1985, ch 538). Put differently, section 17, as amended, is meant to ensure that an alien’s relocation outside the country (or Canada) will not result in diminished “compensation” to that alien. Based on the legislative purpose of section 17 and because claimant, according to the record, resides in New York State, section 17 is inapplicable here.

Although some workplace protections and primary workers’ compensation benefits have been held to be available to injured workers who cannot demonstrate legal immigration status, the terms of section 15 (3) (v) are clear and we are constrained to give effect to their plain meaning.

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

Ciparick, J.

(dissenting in part). I agree with the majority that section 17 of the Workers’ Compensation Law is not applicable to the facts of this case. However, because the record fails to establish whether a Workers’ Compensation Board approved rehabilitation program is available to those persons who are not legally employable, I respectfully dissent.

The majority today holds that the claimant’s “inability to participate was not because rehabilitation was not feasible—the Board never made a feasibility determination—but because no rehabilitation program is available to those who are not legally employable” (majority op at 167). The record reveals otherwise. At an October 25, 2005 hearing before the Workers’ Compensation Board, Commissioner Mona Bargnesi asked whether there was a rehabilitation service that did not require the participant to have a green card. Neither Mr. Hilfer (counsel for Mr. Ramroop) nor Mr. Zenkewich (counsel for Flexo-Craft Printing and the State Insurance Fund) knew whether such a program was available. Indeed respondents’ counsel replied:

“He went where they generally send them. They sent him to the VESID program . . .
“Well, I would think that . . . since it has to be a Board approved program that if there was another program that he could have done. I—Personally, I would have hoped that the VESID people could say we can’t handle you because of your status but you should go someplace else if there was another place, so I don’t know” (Oct. 25, 2005 hearing held before State of New York Workers’ Compensation Board, transcript at 14).

Because the question of whether there exists a Workers’ Compensation Board approved rehabilitation program willing to enroll a person with an immigration status impairment has not been answered, I would reverse the order of the Appellate Division and remit for further proceedings to determine the availability of an alternative program.

All workers, whether or not they are authorized to work in this country, are eligible for workers’ compensation benefits as such benefits are available.

“To further the claimant’s ability to establish his [or her] right to benefits, the statute creates a presumption that the injuries are compensable. The statute was enacted for humanitarian purposes, framed, in the words of Chief Judge Cardozo, to insure that injured employees might be saved from becoming one of the derelicts of society, a fragment of human wreckage. To further that purpose, we have held that the statutory obligation to compensate injuries sustained in the course of employment which are causally related to it does , not depend on the equities of a particular case, nor may it be avoided because of the workers’ fraud or wrongdoing: it is absolute” (Matter of Richardson v Fiedler Roofing, 67 NY2d 246, 251 [1986] [citations and internal quotation marks omitted]).

Furthermore, I cannot agree with the majority’s conclusion that

“it cannot have been the Legislature’s goal to restore to reemployment a worker who may not be lawfully employed. Reversal of the Appellate Division order would not only promote such restoration, it would effectively place the instant claimant, and others similarly situated, in a more favorable position than claimants who must meet all statutory requirements” (majority op at 167 [ellipsis and internal quotation marks omitted]).

The legislative history of Workers’ Compensation Law § 15 (3) (v) demonstrates that only health-related restrictions on eligibility were contemplated. This intent is articulated in the Governor’s program bill memorandum which notes that compensation is available “if the worker continues to suffer loss of earnings because of the injury” (Governor’s Program Bill Mem, Bill Jacket, L 1970, ch 286, at 2). Nowhere within the legislative history does it state that in order to qualify the worker must be legally authorized to work within the United States. What is stated is that the purpose of the bill is “[t]o provide additional compensation benefits to certain workers suffering impairment of earning capacity because of a job-connected loss of an arm, hand, leg, or foot” (id.).

Section 15 (3) (v) of the Workers’ Compensation Law has two requirements: (1) that the worker suffer an injury involving 50% or more loss, or loss of use of an arm, hand, leg or foot; and (2) that the worker participate in a retraining and rehabilitation program approved by the Workers’ Compensation Board or cooperate with such efforts and be deemed not to be a feasible candidate. Here, claimant has suffered a 75% loss to his right hand. However, this record is devoid as to whether there exists an alternative rehabilitation program approved by the Workers’ Compensation Board that could provide the necessary services to help this claimant to return to the workplace or to determine that rehabilitation is not feasible, as the Workers’ Compensation Law intended.

Providing claimant, and others similarly situated, with additional compensation will not effectively place them in a more favorable position than claimants who must meet all statutory requirements because it has yet to be established that VESID is the only rehabilitation program approved by the Workers’ Compensation Board. As stated by Workers’ Compensation Board Commissioner Michael Berns during the October 25, 2005 hearing:

“I have a suspicion . . . that everybody is hanging on the letter of the law here. In the meantime, we have a claimant who may have other alternatives. We don’t know because the State Insurance Fund is not doing anything ... In the meantime, the claimant has not been given any alternatives for service how he could conceivably get back into the workplace” (transcript at 13).

As we stated in Matter of Smith v Tompkins County Courthouse, it is a “fundamental principle that the Workers’ Compensation Law is to be liberally construed to accomplish the economic and humanitarian objects of the act” (60 NY2d 939, 941 [1983]). The purpose of section 15 (3) (v) is to reemploy the worker and maximize the worker’s earning capacity (see Governor’s Program Bill Mem, Bill Jacket, L 1970, ch 286, at 3). For this Court to now hold that a worker’s earning capacity is diminished because of a lack of authorization to work in this country—when the lack of authorization existed preinjury— defeats this legislative purpose.

The majority today forecloses the availability of additional compensation for severely injured workers solely because they may lack permanent residency status or authorization to work in this country, ignoring the history of our Workers’ Compensation Law and this State’s commitment to protect all workers, irrespective of immigration status (see Balbuena v IDR Realty LLC, 6 NY3d 338, 358-359 [2006]).

Therefore, I would reverse the order of the Appellate Division and remit to the Workers’ Compensation Board for a hearing in order to establish whether there exists such an alternative rehabilitation program.

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

Order affirmed, with costs.

      . Enacted in 1913 as Workmen’s Compensation Law § 15 (see L 1913, ch 816), the statute provides compensation for four different types of injury: permanent total disability, temporary total disability, permanent partial disability and temporary partial disability (see Matter of LaCroix v Syracuse Exec. Air Serv., Inc., 8 NY3d 348, 353 [2007], citing Workers’ Compensation Law § 15 [1], [2], [3], [5]). “Permanent partial disability ... is called a schedule loss of use award because the statute assigns—as by a ‘schedule’—a fixed number of lost weeks’ compensation according to the bodily member injured” (LaCroix, 8 NY3d at 353, citing Workers’ Compensation Law § 15 [3]). As claimant here injured his hand, the number of weeks assigned by statute is 244 (see Workers’ Compensation Law § 15 [3] [c]). Schedule loss of use awards “compensate for loss of earning power” and, like all other compensation awards, “are intended to provide a limited and certain, not full but uncertain remedy regardless of the fault of the employer, and to continue the wage income as nearly uniform as the provisions of the law would permit after the employee’s injury” (LaCroix, 8 NY3d at 353 [citations and internal quotation marks omitted]).

      . Claimant underwent seven surgical procedures. His right third and fourth fingers were so severely injured that they required amputation.

      . See e.g. Balbuena v IDR Realty LLC, 6 NY3d 338 (2006) (holding that our state Labor Law protections are not preempted by the federal Immigration Reform and Control Act of 1986 [8 USC § 1324a et seq.], which is designed to deter the employment of aliens who are not lawfully present in the United States and those who are lawfully present, but not authorized to work).

      . See e.g. Matter of Testa v Sorrento Rest., 10 AD2d 133 (3d Dept 1960), lv denied 8 NY2d 705 (1960).


author: Graffeo, J.

text:
    [896 NE2d 662, 867 NYS2d 27]
    Lorraine Goldman, Appellant, v White Plains Center for Nursing Care, LLC, et al., Respondents.
    Argued September 2, 2008;
    decided October 16, 2008

      POINTS OF COUNSEL

      Law Offices of Annette G. Hasapidis, South Salem (Annette G. Hasapidis of counsel), and Samuel J. Landau, New York City, for appellant.
    I. The Appellate Division erred in ruling that the contract expired by its own terms on March 31, 1992 and that the common-law presumption of renewal for one-year implied-in-fact contracts did not apply. (Cinefot Intl. Corp. v Hudson Photographic Indus., 13 NY2d 249; Adams v Fitzpatrick, 125 NY 124; Borne Chem. Co. v Dictrow, 85 AD2d 646; Carter v Bradlee, 245 App Div 49, 269 NY 664; Perlick v Tahari, Ltd., 293 AD2d 275; Shenn v Fair-Tex Mills, 26 AD2d 282; Capital Med. Sys. v Fuji Med. Sys., U.S.A., 239 AD2d 743; Watts v Columbia Artists Mgt., 188 AD2d 799; Town of Webster v Village of Webster, 280 AD2d 931; New York Tel. Co. v Jamestown Tel. Corp., 282 NY 365.) II. The lower court erred in ruling that appellant failed to even raise a question of fact whether the agreement was renewed annually by the creation of an implied-in-fact contract. (McNulty v City of New York, 100 NY2d 227; Winegrad v New York Univ. Med. Ctr., 64 NY2d 851; Ayotte v Gervasio, 81 NY2d 1062; Alvarez v Prospect Hosp., 68 NY2d 320; Zuckerman v City of New York, 49 NY2d 557; Tjoa v Butterfield Mem. Hosp., 205 AD2d 526.)

      Abrams, Fensterman, Fensterman, Eisman, Greenberg, Formato & Einiger, LLP, Lake Success (Sarah C. Lichtenstein of counsel), for respondents.
    I. The Appellate Division applied the proper standard in concluding that Lorraine Goldman’s employment agreement was not renewed. (Adams v Fitzpatrick, 125 NY 124; Cinefot Intl. Corp. v Hudson Photographic Indus., 13 NY2d 249; Innophos, Inc. v Rhodia, S.A., 10 NY3d 25; Greenfield v Philles Records, 98 NY2d 562; Chimart Assoc. v Paul, 66 NY2d 570; Teitelbaum Holdings v Gold, 48 NY2d 51; West, Weir & Bartel v Mary Carter Paint Co., 25 NY2d 535; Town of Webster v Village of Webster, 280 AD2d 931; Computerized Med. Imaging Equip. v Diasonics Ultrasound, 303 AD2d 962; Shenn v Fair-Tex Mills, 26 AD2d 282.) II. Lorraine Goldman presented no evidence that the parties to the employment agreement intended the agreement to be renewed. (Mallad Constr. Corp. v County Fed. Sav. & Loan Assn., 32 NY2d 285; Modell's N.Y. v

      Noodle Kidoodle, 242 AD2d 248; Zanghi v Laborers’ Intl. Union of N. Am., AFL-CIO, 21 AD3d 1370; Maas v Cornell Univ., 253 AD2d 1, 94 NY2d 87; Chase v United Hosp., 60 AD2d 558.) III. White Plains Center for Nursing Care, LLC’s purported assumption of the employment agreement does not defeat summary judgment dismissing the petition. (Wald v Marine Midland Bus. Loans, 270 AD2d 73; Matter of International Ribbon Mills [Arjan Ribbons], 36 NY2d 121; Tanbro Fabrics Corp. v Beering Milliken, 35 AD2d 469, 29 NY2d 690; Negron v JP Morgan Chase/Chase Manhattan Bank, 14 AD3d 673; Lobosco v New York Tel. Co.|NYNEX, 96 NY2d 312; Thawley v Turtell, 289 AD2d 169; Grebinar v Consolidated Edison of N.Y., Inc., 12 AD3d 277.)
   OPINION OF THE COURT

Graffeo, J.

In this case we must decide whether the expiration of a two-year employment contract gives rise to successive one-year implied contracts when the employee continues working for the employer without a new agreement. Based on the language of the contract before us, we conclude that plaintiff became an at-will employee at the end of the two-year period.

Plaintiff Lorraine Goldman entered into a written employment agreement to become the administrative director of two skilled nursing facilities for a two-year period commencing on April 1, 1990. The contract specified that the parties would “enter into good faith negotiations . . . with respect to renewal of th[e] Agreement on mutually agreeable terms” no less than nine months before the contract was due to expire. The agreement could be terminated by the mutual consent of the parties or “[b]y either party giving notice to the other at least six (6) months prior to the end of the Employment Period of its intention not to renew this Agreement.” At expiration of the contract or termination of employment, the employer would “be released of any responsibility or obligation hereunder, except for payment of salary and benefits accrued to the effective date of such expiration or termination.” Finally, the contract represented the “entire Agreement and understanding” of the parties and could “not be changed, modified or amended, except by a writing signed by” plaintiff and the employer.

During the course of the two-year term, plaintiff and her employer did not discuss renewal of the agreement and neither sent a notice of termination. After the contract expired on March 31, 1992, plaintiff continued to serve as administrative director and received annual salary adjustments until the facilities were purchased by defendants White Plains Center for Nursing Care, LLC and NMC Acquisition, LLC (collectively White Plains Center) in October 2004. In conjunction with that transaction, White Plains Center executed an assignment and assumption of contracts, which listed plaintiffs 1990 employment contract among the documents provided to the purchasers. Three months later, White Plains Center terminated plaintiffs employment.

Plaintiff initiated this breach of contract action, seeking summary judgment and money damages against White Plains Center. Supreme Court granted plaintiffs motion, ruling that her continued employment following the expiration of the original two-year agreement gave rise to a presumption that the parties intended to renew the contract for successive one-year terms (2006 NY Slip Op 30264[U]). The Appellate Division disagreed, concluding that the application of an implied contractual arrangement after expiration of the two-year term was inconsistent with the express language of the original employment agreement (43 AD3d 251 [2007]). We now affirm.

A fundamental tenet of contract law is that agreements are construed in accordance with the intent of the parties and the best evidence of the parties’ intent is what they express in their written contract (see e.g. Innophos, Inc. v Rhodia, S.A., 10 NY3d 25, 29 [2008]). “Thus, a written agreement that is complete, clear and unambiguous on its face must be enforced according to the plain meaning of its terms,” without reference to extrinsic materials outside the four corners of the document (Greenfield v Philles Records, 98 NY2d 562, 569 [2002]).

Here, the agreement included a provision requiring the parties to negotiate a renewal of the employment arrangement before the contract was set to expire. The contract also specified that its terms would end when a party stated its “intention not to renew” the employment arrangement “at least six (6) months prior to the end of the Employment Period,” or when the parties failed to reach an agreement extending the term of employment. If the agreement was allowed to expire at the conclusion of the two-year term, the contract provided that the employer would have no further obligations to plaintiff other than compensating her for accrued salary and benefits. The parties also made clear that the language of the contract reflected their entire understanding and that the terms of the agreement could be modified only in a written instrument signed by both plaintiff and her employer. These provisions unambiguously indicate that the parties understood that the employment contract would end at the conclusion of the two-year period unless an extension was agreed upon.

Plaintiff nevertheless maintains that a one-year implied contract on the same terms as set forth in the original agreement was created each year that her employment continued after the expiration of the written contract. Aside from the fact that this position is contrary to the renewal provisions of the agreement, this contention conflicts with the well-established rule that, “absent an agreement establishing a fixed duration, an employment relationship is presumed to be a hiring at will, terminable at any time by either party” (Sabetay v Sterling Drug, 69 NY2d 329, 333 [1987]; see e.g. Murphy v American Home Prods. Corp., 58 NY2d 293, 300 [1983]). Plaintiff therefore relies on a common-law rule that recognizes an inference that parties intend to renew an employment agreement for an additional year where the employee continues to work after expiration of an employment contract (see Cinefot Intl. Corp. v Hudson Photographic Indus., 13 NY2d 249, 252 [1963], citing Adams v Fitzpatrick, 125 NY 124 [1891]). This common-law presumption—developed in the nineteenth century before the establishment of the employment-at-will doctrine—can be rebutted by demonstrating that the parties did not intend to allow a contract to renew automatically (see Cinefot, 13 NY2d at 252).

Decisions such as Cinefot (13 NY2d 249 [1963]) and Adams (125 NY 124 [1891]) are distinguishable from this case. In Cinefot, the parties orally agreed that the plaintiff would be hired as the defendant’s employee for one year and there was no indication that they agreed that the contract could not be renewed unless future negotiations occurred and a new agreement extending the term of employment was reached. Adams similarly involved an oral employment contract for approximately one year that also did not require negotiations for contract renewal. Since neither of these cases incorporated terms dealing with contract extension similar to those in the case at issue, the common-law evidentiary presumption was appropriate because its application did not contradict any express provision of the agreements. But in this case—where the employer and employee agree that the contract memorializes their understanding, can be modified only in writing and expires on a specified date absent additional negotiations for a new agreement—application of the common-law presumption would be contrary to principles of contract interpretation and the employment-at-will doctrine. In such a situation, the evidentiary presumption must yield—and this should be the result regardless of whether the contract is oral or written. We therefore hold that the common-law rule cannot be used to imply that there was mutual and silent assent to automatic contract renewal when an agreement imposes an express obligation on the parties to enter into a new contract to extend the term of employment. Hence, plaintiffs employment became an at-will arrangement upon the expiration of the agreement on March 31, 1992 and defendants were entitled to summary judgment dismissing the breach of contract claim.

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

Chief Judge Kaye and Judges Cipabick, Read, Smith, Pigott and Jones concur.

Order affirmed, with costs.

      . The parties settled a cause of action alleging age discrimination.

      . A notice of intent not to renew can serve varying purposes. A party can use the notice to advise the other that both the contract and the employment would discontinue. However, an employee can also use the notice to inform an employer of a desire not to extend the terms of the contract but to keep working for the employer on an at-will basis without being contractually obligated te) serve for a definite period of time. Similarly, an employer can issue notice after deciding that it wants the employment arrangement to continue but does not want to commit to a particular time frame.

      . The common law created a presumption of a new term of employment of only one year to avoid a statute of frauds problem (see e.g. Borne Chem. Co. v Dictrow, 85 AD2d 646, 648 [2d Dept 1981]; General Obligations Law § 5-701 [a] [1]).

      . Parties to future contracts can avoid uncertainty regarding application of the common-law rule simply by specifying that continuation of the employment relationship after the expiration of the contractual period will result in either successive one-year extensions of employment or at-will employment status.