text:
    [842 NE2d 466, 808 NYS2d 568]
    In the Matter of Beechwood Restorative Care Center et al., Appellants, v John Signor, as Records Access Appeals Officer of New York State Department of Health, et al., Respondents.
    Argued September 13, 2005;
    decided October 25, 2005

      POINTS OF COUNSEL

      McConville, Considine, Cooman & Morin, P.C., Rochester (Kevin S. Cooman, Jason S. DiPonzio and Peter J. Weishaar of counsel), for appellants.
    I. Beechwood Restorative Care Center met the Freedom of Information Law’s three criteria for an award of attorney’s fees, and the courts below improperly denied Beechwood’s request for fees. (Matter of Powhida v City of Albany, 147 AD2d 236; Matter of Banchs v Coughlin, 168 AD2d 711; Village of Brockport v Calandra, 191 Misc 2d 718, 305 AD2d 1030; Matter of M. Farbman & Sons v New York City Health & Hosps. Corp., 62 NY2d 75; Matter of Gould v New York City Police Dept., 89 NY2d 267; Matter of John P. v Whalen, 54 NY2d 89; Matter of City of Newark v Law Dept. of City of N.Y., 305 AD2d 28; Mitchum v Foster, 407 US 225; Monroe v Pape, 365 US 167; Matter of Capital Newspapers Div. of Hearst Corp. v Burns, 67 NY2d 562.) II. Attorney’s fees should be available under the Equal Access to Justice Act to a Freedom of Information Law petitioner. (Matter of Thomas v Coughlin, 194 AD2d 281; Birkland v Rotary Plaza, Inc., 643 F Supp 223; Crooker v E.P.A., 763 F2d 16; Matter of Sutherland v Glennon, 256 AD2d 984; Matter of Mitchell v Bane, 218 AD2d 537, 88 NY2d 1003; Matter of Cross-Sound Ferry Servs., 219 AD2d 346;
      Matter of Leeds v Burns, 205 AD2d 540, 84 NY2d 811; Matter of Tall Trees Constr. Corp. v Zoning Bd. of Appeals of Town of Huntington, 97 NY2d 86; Matter of New York State Clinical Lab. Assn. v Kaladjian, 85 NY2d 346; Pierce v Underwood, 487 US 552.)

      Eliot Spitzer, Attorney General, Albany (Frank K. Walsh, Caitlin J. Halligan, Daniel Smirlock and Andrea Oser of counsel), for respondents.
    I. There is no basis for disturbing the lower courts’ discretionary determination to deny petitioners’ request for attorney’s fees under the Freedom of Information Law. (Matter of Wurster v LeFevre, 152 AD2d 810; Matter of Niagara Envtl. Action v City of Niagara Falls, 100 AD2d 742, 63 NY2d 651; Matter of Todd v Craig, 266 AD2d 626, 94 NY2d 760; Matter of McAndrew v Board of Educ. for City School Dist. of City of Port Jervis, 120 AD2d 591; Holterman v Holterman, 3 NY3d 1; O’Brien v O’Brien, 66 NY2d 576; Dalton v Educational Testing Serv., 87 NY2d 384; Humphrey v State of New York, 60 NY2d 742; Matter of Rothko, 43 NY2d 305; Matter of Grace v Chenango County, 256 AD2d 890.) II. The lower courts correctly rejected petitioners’ request for attorney’s fees under the Equal Access to Justice Act on the ground that Public Officers Law § 89 (4) (c) is the sole vehicle for the recovery of attorney’s fees under the Freedom of Information Law. (Matter of John P. v Whalen, 54 NY2d 89; Matter of Branford House v Michetti, 81 NY2d 681; Sanders v Winship, 57 NY2d 391; Matter of Lower Manhattan Loft Tenants v New York City Loft Bd., 66 NY2d 298; Delaware Midland Corp. v Incorporated Vil. of Westhampton Beach, 79 Misc 2d 438, 48 AD2d 681, 39 NY2d 1029; Alweis v Evans, 69 NY2d 199; Matter of Cross-Sound Ferry Servs. v Department of Transp., 219 AD2d 346; Martin v City of Cohoes, 37 NY2d 162; Matter of New York, Lackawanna & W. R.R. Co., 98 NY 447; Burke v Crosson, 85 NY2d 10.)

      McNamee, Lochner, Titus & Williams, PC., Albany (Michael J. Grygiel of counsel); Jerome L. Wilson; Stephen Kimatian, East Syracuse; Bond, Schoeneck & King, LLP, Syracuse (S. Paul Battaglia of counsel); Sabin, Bermant & Gould LLP, New York City (Richard A. Bernstein and Neil M. Rosenhouse of counsel); David Tomlin; Anne B. Carroll; Eve B. Burton, Jonathan R. Donnellan; Kay Murray; and David E. McCraw for New York Newspaper Publishers Association, Inc. and others, amici curiae.
    I. A de novo standard of review applies to the statutory construction issue raised on this appeal. (J.C. v Regional School Dist. 10, Bd. of Educ., 278 F3d 119; Doyle v Kamenkowitz, 114 F3d 371; Mautner v Hirsch, 32 F3d 37; Weingarten v Board of Trustees of N.Y. City Teachers’ Retirement Sys., 98 NY2d 575; Matter of Guido v New York State Teachers’ Retirement Sys., 94 NY2d 64.) II. Section 89 (4) (c) of the Public Officers Law’s dual purposes of encouraging agency compliance with the Freedom of Information Law and providing a remedy to citizens forced to litigate the unlawful withholding of records require an award of attorneys’ fees as a matter of law on this appeal. (Matter of Herald Co. v Feurstein, 3 Misc 3d 885; Matter of Capital Newspapers Div. of Hearst Corp. v Burns, 67 NY2d 562; Matter of Fink v Lefkowitz, 47 NY2d 567; Village of Brockport v Calandra, 191 Misc 2d 718; Matter of William J. Kline & Son v Fallows, 124 Misc 2d 701; Matter of Powhida v City of Albany, 147 AD2d 236; Matter of Friedland v Maloney, 148 AD2d 814; Matter of Cross-Sound Ferry Servs. v Department of Transp., 219 AD2d 346; Miller v U.S. Dept. of State, 779 F2d 1378; Anderson v Secretary of Health & Human Servs., 80 F3d 1500.)
   OPINION OF THE COURT

Graffeo, J.

The main issue in this case is whether the courts below erred as a matter of law in denying attorneys’ fees to petitioners under the Freedom of Information Law (Public Officers Law art 6). We are also asked whether the counsel fee provision in the New York State Equal Access to Justice Act (CPLR art 86) applies to these proceedings. We conclude that the courts below did not err in denying petitioners’ request for counsel fees and hold that the Equal Access to Justice Act is not applicable to Freedom of Information Law proceedings.

Petitioner Beechwood Restorative Care Center is a general partnership that operated a skilled nursing facility in the Rochester area for many years. In June 1999, respondent New York State Department of Health (DOH) commenced a license revocation proceeding against Beechwood based on allegations of substandard care of its residents. A hearing was held before an administrative law judge (ALJ), who sustained DOH’s allegations involving a number of residents and determined that Beechwood had committed serious violations of multiple regulations, resulting in a pattern of inadequate care. Upon the Commissioner’s adoption of the ALJ’s recommendation, in December 1999 DOH revoked Beechwood’s operating certificate, closed the facility and imposed a $54,000 civil penalty.

Between August 1999 and January 2001, Beechwood submitted 17 separate Freedom of Information Law (FOIL) requests to DOH seeking documents pertaining to DOH procedures in general and Beechwood’s license revocation in particular. Each of the requests contained numerous itemized demands. In response, DOH produced hundreds of pages of documents, largely relating to five of the requests.

Beechwood and petitioner Brook Chambery, a general partner of Beechwood (collectively Beechwood), commenced this CPLR article 78 proceeding in April 2001 alleging that DOH had failed to respond to 12 of their FOIL requests (containing 78 itemized demands) and seeking attorneys’ fees under both FOIL and the New York State Equal Access to Justice Act (EAJA). Before Supreme Court issued its ruling, DOH delivered over 350 pages of additional records to Beechwood and thereafter claimed that the proceeding was moot.

In its first of a succession of orders, Supreme Court held that the proceeding was not moot and directed DOH to provide affidavits by responsible individuals articulating the diligent search efforts undertaken by the Department to locate documents responsive to the FOIL requests and certifying whether the remaining requested records existed. For documents found to exist, the court ordered DOH either to produce them or indicate the reasons they should be exempt from disclosure under FOIL. As a result of this directive, DOH produced the affidavits of three employees explaining their efforts and asserted various exemptions for 90 pages of documents, which were submitted to the court for in camera review.

Supreme Court upheld all of the exemptions claimed by DOH but ordered the Department to further probe for records responsive to 48 demands, concluding that Beechwood had “rebutted [DOH’s] certification that a diligent search has been conducted and all responsive documents have been located.” Subsequently, DOH filed three additional affidavits that identified close to 400 pages of documents pertaining to 17 of the 48 items sought by Beechwood. The affidavits explained that DOH employees could not locate records in connection with the outstanding 31 requests.

Beechwood then moved to compel DOH to provide further affidavits relating to the procedures it had instigated to locate the requested documents. DOH replied with affidavits from 20 employees from various bureaus, divisions and offices of DOH, who had searched their files and discovered 74 pages of additional documents. Supreme Court directed DOH to search for records pertaining to one final item, which was eventually discovered. After the completion of production of records, Beechwood moved for attorneys’ fees premised on both the FOIL and EAJA statutes.

Supreme Court denied Beechwood’s application for counsel fees, concluding that Beechwood had failed to meet its burden of establishing that the particular records disclosed were clearly of significant interest to the general public, a prerequisite to recovery of attorneys’ fees under FOIL. The court also indicated that it would have denied the request in the exercise of its discretion even if Beechwood had satisfied all of the FOIL counsel fee requirements. Finally, the court denied the fee request under the EAJA, finding that provision inapplicable to FOIL cases.

The Appellate Division affirmed. The Court agreed that Beechwood did not establish that the records obtained were of significant interest to the general public, observing that Beechwood sought to use the documentation in its federal litigation against DOH employees. The Court further determined that Beechwood had failed to show that DOH lacked a reasonable basis for withholding the records. Assuming for the sake of argument that Beechwood had met the FOIL standard, the Court held that Supreme Court did not abuse its discretion in declining to award attorneys’ fees based on the voluminous amount of records sought, the need for clarification of various items requested and the fact that Beechwood already possessed a number of documents it had requested. The Court also rejected Beechwood’s argument that it could seek legal fees pursuant to the EAJA. We granted Beechwood leave to appeal and now affirm the denial of its request for counsel fees.

“The Legislature enacted FOIL to provide the public with a means of access to governmental records in order to encourage public awareness and understanding of and participation in government and to discourage official secrecy” (Matter of Alderson v New York State Coll. of Agric. & Life Sciences at Cornell Univ., 4 NY3d 225, 230 [2005] [internal quotation marks and citation omitted]). An agency’s records “are presumptively open to public inspection, without regard to need or purpose of the applicant” (Matter of Buffalo News v Buffalo Enter. Dev. Corp., 84 NY2d 488, 492 [1994]). When faced with a FOIL request, an agency must either disclose the record sought, deny the request and claim a specific exemption to disclosure, or certify that it does not possess the requested document and that it could not be located after a diligent search (see Public Officers Law § 87 [2]; § 89 [3]; Matter of Corvetti v Town of Lake Pleasant, 239 AD2d 841, 843 [3d Dept 1997]).

Although DOH acknowledged receipt of the 12 FOIL requests and indicated that it would take approximately 30 to 60 days to process each request and determine the availability of responsive documents, DOH initially supplied documents in connection with only three of them. DOH’s failure to follow FOIL’S requirements necessitated this lawsuit, a result that could have been avoided had DOH discharged its statutorily-mandated disclosure obligations in a more thorough and timely fashion. DOH’s delay in conducting a comprehensive search for the requested records triggered the question whether Beechwood could recover attorneys’ fees expended in this litigation.

Pursuant to FOIL’S fee-shifting provision, a court may award reasonable counsel fees and litigation costs to a party that “substantially prevailed” in the proceeding if the court finds that (1) “the record involved was, in fact, of clearly significant interest to the general public,” and (2) “the agency lacked a reasonable basis in law for withholding the record” (Public Officers Law § 89 [4] [c]). Only after a court finds that the statutory prerequisites have been satisfied may it exercise its discretion to award or decline attorneys’ fees. Where, as here, a court determines that one of the requirements has not been met, we review whether the court erred as a matter of law in reaching that conclusion (see Matter of Niagara Envtl. Action v City of Niagara Falls, 63 NY2d 651, 652 [1984]).

Beechwood’s principal argument on appeal is that Supreme Court and the Appellate Division erroneously concluded that the general public did not clearly have a significant interest in the records it obtained. Specifically, Beechwood relies on the broad assertion that closure of the facility was significant to the public and, as such, documents relating to that closure meet the statutory test.

The specific language of the statute, however, emphasizes that the records themselves must be of significant interest to the public, not just the event to which they relate (see Public Officers Law § 89 [4] [c] [i]). The legislative history underlying this provision further demonstrates that it is not enough that the records be of potential or speculative interest to the public. Governor Hugh Carey vetoed a prior version of this legislation that contained a less stringent public interest test and, in his approval of the current provision, noted that “the bill clarifies and tightens the public interest standard by requiring that the record be of ‘clearly significant interest to the general public’ and not just ‘potentially’ so” (Governor’s Mem approving L 1982, ch 73, 1982 NY Legis Ann, at 47). Therefore, the public’s interest in closure of the facility does not by itself establish that any records relating to DOH’s actions are also of interest to society.

Among the hundreds of pages of responsive documents produced here were general agency records such as job descriptions of DOH employees and documents related to employee training, correspondence between DOH and various advocacy groups, portions of both the 1999 State Medicaid Plan and State Operations Manual, a listing of nursing home patient admissions and records from the federal Health Care Financing Agency (HCFA) regarding DOH’s survey performance. More specific to Beechwood’s license revocation proceeding, DOH also disclosed monitoring sheets and time sheets relating to DOH’s on-site activities, documents pertaining to the process of transferring patients from Beechwood, a voucher for the services of an expert witness retained by DOH, a complaint report generated as a result of a patient’s allegations, a statement of deficiencies, surveyor notes and worksheets relating to an incident of substandard care at Beechwood, other surveyor notes from monitoring visits in April and May 1999 and documentation regarding DOH’s decision to charge Beechwood in an administrative enforcement action. Beechwood offered no reason why the general public would have a significant interest in any of these documents.

Under the circumstances, we agree with the determinations of the courts below that the records Beechwood obtained, which included general agency documents as well as closure-related records, are not “of clearly significant interest to the general public.” Inasmuch as the courts below did not err as a matter of law in reaching this conclusion, we have no reason to disturb their denial of counsel fees. Hence, even assuming Beechwood met the other FOIL requirements—it “substantially prevailed” and DOH did not have a reasonable basis for withholding the records—Beechwood’s claim for attorneys’ fees fails under FOIL.

Beechwood alternatively seeks counsel fees under New York’s EAJA. Enacted in 1989, seven years after the adoption of FOIL’S attorneys’ fee provision, the EAJA authorizes “the recovery of counsel fees and other reasonable expenses in certain actions against the state” (CPLR 8600). As relevant here, CPLR 8601 (a) reads:

“except as otherwise specifically provided by statute, a court shall award to a prevailing party, other than the state, fees and other expenses incurred by such party in any civil action brought against the state, unless the court finds that the position of the state was substantially justified or that special circumstances make an award unjust” (emphasis added).

The introductory proviso of subdivision (a) demonstrates that the EAJA applies to actions against the State only where another statute does not specifically provide for counsel fees. Section 89 (4) (c) of the Public Officers Law is just such a statute—it contains a counsel fee provision applicable to FOIL proceedings against the government. Because FOIL is a statute that “otherwise specifically provide[s]” an attorneys’ fee standard to be applied, Beechwood may not seek counsel fees pursuant to the EAJA.

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

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

Order affirmed, with costs.

      . Although we agree with Beechwood that the use of disclosed documents in litigation against the government does not automatically preclude a finding of public interest, neither does such use necessarily establish public interest.

      . Similar to the FOIL standard, the EAJA only provides fees to “prevailing” parties where the government’s actions were not justified. The statutes differ, however, in other critical respects. The EAJA does not include the public interest component that petitioners in FOIL proceedings must satisfy. Moreover, fees under the EAJA are mandatory if a party establishes that it has satisfied the elements; in contrast, fees under FOIL are discretionary even if the statute’s prerequisites are met.


source: Caselaw Access Project

author: Graffeo, J. G.B. Smith, J.

license: Public Domain

text:
    [840 NE2d 107, 806 NYS2d 138]
    In the Matter of Susan McGuire, Respondent, v David Gamache et al., Constituting the Dutchess County Board of Elections, Respondents, and Alison E. MacAvery, Appellant.
    Argued October 20, 2005;
    decided October 24, 2005

      APPEARANCES OF COUNSEL

      Feeney Centi & Mackey, Albany (L. Michael Mackey of counsel), for appellant.

      John Ciampoli, Albany, for respondents.
   OPINION OF THE COURT

Graffeo, J.

As a candidate for the office of member, Dutchess County Legislature, District 16, petitioner Susan McGuire commenced this Election Law § 16-102 proceeding seeking to invalidate the independent petitions nominating respondent Alison E. Mac-Avery as a candidate of the Senior Citizens Party for the same office. Finding a defect on several pages of the petitions, Supreme Court invalidated the petitions. The Appellate Division affirmed, as do we.

Independent petitions nominating Alison E. MacAvery as a candidate of the Senior Citizens Party were timely filed with the Dutchess County Board of Elections. Susan McGuire commenced this proceeding asserting, among other claims, that the independent nominating petitions were invalid because several pages of signatures were obtained by a subscribing witness who was not a resident of District 16 and who had struck some of the language in the statement of witness that appears at the bottom of preprinted petition sheets. The signature pages included a witness statement containing language prescribed in Election Law § 6-140 (1) (b). The subscribing witness, John Bailo, struck a phrase that appeared in the witness statement, which read “and I am also duly qualified to sign the petition,” by drawing a line through these words, substituting the word “OMIT” and initialing the change. No explanation for the alteration was included on the petitions.

At an appearance before Supreme Court, MacAvery’s counsel conceded that Bailo did not reside in District 16, representing that this fact explained the omission of language in the subscribing witness affidavit. MacAvery contended that, despite the fact that Bailo did not live in District 16, he had a constitutional right to circulate independent nominating petitions on behalf of MacAvery based on this Court’s decision in Matter of La Brake v Dukes (96 NY2d 913 [2001]), which held that nonresidents have a constitutional right to circulate designating petitions (see Lerman v Board of Elections in City of N.Y., 232 F3d 135 [2d Cir 2000], cert denied 533 US 915 [2001]). McGuire’s counsel argued that the subscribing witness affidavit was nevertheless facially inadequate due to the unexplained alteration of the witness statement.

In La Brake we declared the provision in Election Law § 6-132 (2) that required a subscribing witness to a designating petition to be “a resident of the political subdivision in which the office or position is to be voted for” an unconstitutional restriction on core political expression in violation of the First Amendment of the United States Constitution. Although we determined that the State had a compelling interest in ensuring that subscribing witnesses be residents of New York State, it failed to provide a compelling justification for insisting that they reside in the political units to which the petitions pertain. Since the residency mandate prevented out-of-district qualified voters from circulating designating petitions, it impermissibly impeded the rights guaranteed them under the First Amendment.

The residency requirement we struck in La Brake also appears in the Election Law statutes governing the circulation of independent nominating petitions. Election Law § 6-140 (1) (b) states that a witness who circulates an independent nominating petition must be “qualified to sign the petition.” And an individual cannot sign an independent nominating petition unless he or she is a “registered voter[ ] of the political unit for which a nomination is made” (Election Law § 6-138 [1]). Thus, under the statutory scheme, as was the case with witnesses to designating petitions, subscribing witnesses must reside in the same political subdivision as the office sought by the candidates supported by the nominating petitions.

Since the statutory provisions governing subscribing witnesses to nominating and designating petitions are equivalent, the rationale of La Brake applies with equal force to the political speech rights of persons circulating independent nominating petitions. A subscribing witness who is otherwise qualified to circulate a nominating petition for independent candidates cannot be disqualified under Election Law § 6-140 (1) (b) because the witness resides outside the political subdivision that corresponds to the office or position sought by the candidate. Our conclusion is consistent with that of the other federal and state courts that have examined this issue (see Chou v New York State Bd. of Elections, 332 F Supp 2d 510 [US Dist Ct, ED NY 2004]; Matter of Bray v Marsolais, 21 AD3d 1143 [2005]).

We therefore agree with MacAvery that Bailo, a New York resident, was not precluded from circulating the independent nominating petitions at issue by virtue of his residency outside District 16. This conclusion, however, does not end the inquiry in this case. Bailo may have had a legitimate reason for striking the phrase that indicated he was qualified to sign the petition— since he did not live in District 16, he was not qualified to sign MacAvery’s Senior Citizens Party petition. But the petition sheets themselves do not indicate this was actually his motivation, nor was any testimony or affidavit offered during the Supreme Court proceeding establishing that Bailo struck the language in the statement of witness for this reason.

We have long recognized that the witness statement is “[e]ssential to the integrity of the petition process” and have “consistently held that alteration of the statement which is unexplained and uninitialed will result in the invalidation of the petition sheet” even if the alterations “resulted in the manifestation of correct information” (Matter of Jonas v Velez, 65 NY2d 954, 955 [1985] [citations omitted]). In this case, Mac-Avery’s argument depended on the assertion that Bailo—an individual MacAvery’s counsel did not represent and who was not a party to this proceeding—altered his witness statement purely in the exercise of his First Amendment rights and not because he was disqualified for some other reason. Supreme Court offered to conduct an evidentiary hearing at which MacAvery could have proven why Bailo crossed out the phrase at issue. MacAvery did not avail herself of that opportunity. An assertion by MacAvery’s counsel does not constitute admissible evidence. As Supreme Court and the Appellate Division found, no proof was offered to substantiate the candidate’s claim. Due to this lack of explanation for the alteration of the witness statement, McGuire’s application to invalidate MacAvery’s nominating petition was properly granted (cf. Matter of Roman v Sharpe, 42 NY2d 986, 987 [1977] [where printed form of statement of subscribing witness failed to implement provision that a newly registered voter could witness petitions in the year of first registration, insertion of the words “new voter” in the statement was sufficiently informative to comply with the Election Law]).

The dissent describes the issue before Supreme Court as whether the subscribing witness was entitled to exercise his constitutional right to witness nominating petitions. But the preliminary issue in this Election Law § 16-102 proceeding is whether MacAvery properly interposed a constitutional claim. In answering the petition, MacAvery did not join Bailo as a party respondent or plead any counterclaim or affirmative defense raising a First Amendment issue. McGuire supported her challenge to the independent nominating petition by offering proof—the petition pages themselves—demonstrating an unexplained alteration of the subscribing witness statement. MacAvery failed to rebut this proof with evidence in admissible form explaining Ballo’s alteration and substantiating her argument that this alteration stemmed from the exercise of First Amendment rights. In the absence of record evidence, we may not speculate as to what Ballo’s motivations were or whether he was or was not otherwise qualified to circulate the independent nominating petition.

We are mindful of the dilemma facing otherwise qualified subscribing witnesses who cannot attest that they are qualified to sign the petition they are circulating because they do not reside in the candidate’s district. In light of our holding, the statutorily-mandated subscribing witness statements in Election Law §§ 6-132 and 6-140 need to be revised for nonresident witnesses who wish to circulate designating or nominating petitions. We urge the State Board of Elections to take whatever action is necessary to determine how best to amend the preprinted witness statement and to issue new petition forms.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

G.B. Smith, J.

(dissenting). The issue here is whether a subscribing witness to a nominating petition may be denied his First Amendment rights because he struck an unconstitutional provision from the subscribing portion of the petition before he signed it. Because the deletion was consistent with and even compelled by decisions of this Court and a federal appellate court, I dissent.

This is a proceeding by Susan McGuire, the Republican and Conservative candidate for the office of Dutchess County legislator, to invalidate the independent petition nominating respondent Alison E. MacAvery as a candidate of the Senior Citizens Party for the Dutchess County Legislature. The petition claims that a subscribing witness to a number of petitions made material alterations to the witness statement. Specifically, it claims that John Bailo struck the following phrase in the witness statement: “and I am also duly qualified to sign the petition.”

Supreme Court granted the application to invalidate the petition and the Appellate Division affirmed. This Court granted leave to appeal.

The requirement of the Election Law that a subscribing witness to a nominating petition live in the district of the candidate on the nominating petition has been declared unconstitutional. Election Law § 6-132 (2) required that a subscribing witness to a designating petition be “a resident of the political subdivision in which the office or position is to be voted for.” In the year 2000, the United States Court of Appeals for the Second Circuit declared Election Law § 6-132 (2) unconstitutional as a severe burden on speech (Lerman v Board of Elections in City of N.Y., 232 F3d 135 [2000], cert denied 533 US 915 [2001]). In 2001, in Matter of La Brake v Dukes (96 NY2d 913 [2001]), this Court, citing the Lerman decision, also declared that requirement unconstitutional. This Court stated:

“We agree with the courts below and with the United States Court of Appeals for the Second Circuit that the circulation of designating petitions on behalf of a candidate is ‘core political speech’ . . . and that the residency requirement at issue constitutes a severe burden on such expression” (id. at 914 [citations omitted]).

Election Law § 6-140 (1) (b) requires that a witness who circulates an independent nominating petition must be “qualified to sign the petition.” It is undisputed that the subscribing witness, Bailo, does not live in the district. Thus, to swear that he is a person duly qualified to sign the petition, that is that he lives in the district, would amount to perjury. The fact that the Board of Elections or the State Legislature has not changed the form during several years after a declaration that a portion of it is unconstitutional is not an adequate reason to deny the subscribing witness his constitutional rights.

The majority argues that even though the residency requirement for subscribing to a petition has been struck as unconstitutional, the petition must be invalidated because the subscribing witness struck the language without giving a reason. The free speech right to support the candidate of one’s choice does not in any way depend upon a statement giving the reasons for striking the phrase. It has not been established on this record that Bailo was disqualified from signing the petition for any reason other than nonresidency. He did not delete from the form the statement “I am a duly qualified voter of the State of New York,” and it can hardly be seriously contended that the State had any other valid reason for interfering with the exercise of his First Amendment right. Even if such a reason did exist, it was the State’s burden to prove it, not Ballo’s to disprove it. He was within his right to strike the unconstitutional provision of the form.

Accordingly, I would dismiss the application to invalidate, declare the nominating petitions valid and permit the candidate’s name to appear on the ballot.

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

Order affirmed, without costs.

      . Election Law § 6-140 (1) (b) requires that there be appended to each sheet of a nominating petition a signed statement of a witness who is a duly qualified voter of the state and who is qualified to sign the petition. The statement of witness provides:
      “I,_(name of witness) state: I am a duly qualified voter of the State of New York and I am also duly qualified to sign the petition. I now reside at_(residence address).
      “Each of the individuals whose names are subscribed to this petition sheet containing_(fill in number) signatures, subscribed the same in my presence on the dates above indicated and identified himself to be the individual who signed this sheet.
      “I understand that this statement will be accepted for all purposes as the equivalent of an affidavit and, if it contains a material false statement, shall subject me to the same penalties as if I had been duly sworn” (Election Law § 6-140 [1] [b]).

      . Lest there be any doubt that the Legislature adopted parallel requirements for nominating and designating petitions, Election Law § 6-138 (2) further provides that “the rules for a nominating petition shall conform to the rules and requirements for designating petitions.”


author: Chief Judge Kaye. G.B. Smith, J.

text:
    [839 NE2d 878, 805 NYS2d 525]
    In the Matter of Red Hook/Gowanus Chamber of Commerce, Appellant, v New York City Board of Standards and Appeals et al., Respondents.
    Argued September 8, 2005;
    decided October 25, 2005

      POINTS OF COUNSEL

      Weiss & Hiller, PC, New York City (Michael S. Hiller and Nikol A. Gruning of counsel), for appellant.
    I. The Second Department committed clear error of law by wrongfully ignoring the statutorily-required five factors of CPLR 1001 (b). (Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801, 540 US 1017; Airco Alloys Div., Airco, Inc. v Niagara Mohawk Power Corp., 65 AD2d 378; Peterman v Pataki, 4 Misc 3d 1028[A]; Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y.,
      302 AD2d 155; Matter of The Herald Co. v Feurstein, 3 Misc 3d 885; Matter of Martin v Ronan, 47 NY2d 486; Matter of Basha Kill Area Assn. v Town Bd. of Town of Mamakating, 302 AD2d 662; Matter of Cassidy v New York City Dept. of Correction, 95 AD2d 733; Spector v Toys “R” Us, 2 Misc 3d 1006[A]). II. Had the Second Department properly applied the required five factors, as the First Department did in Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y. (302 AD2d 155 [2002]), dismissal would have been denied. (Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801.) III. The failure by respondents to seek a stay pending appeal, coupled with their participation in the underlying CPLR article 78 proceeding on the merits, constitutes a waiver of the necessary-party defense. (Matter of Commerce & Indus. Ins. Co. v Nester, 90 NY2d 255; Matter of Buffalo Professional Firefighters Assn. Local 282 [City of Buffalo], 12 AD3d 1087; Matter of One Beacon Ins. Co. v Bloch, 298 AD2d 522; Lofthouse v Paragon Capital Corp., 253 AD2d 365.) IV The relation-back doctrine should be applied in such a manner that achieves its underlying objective. (Matter of Commerce & Indus. Ins. Co. v Nester, 90 NY2d 255; Buran v Coupal, 87 NY2d 173; Shaw v Cock, 78 NY 194; Harriss v Tams, 258 NY 229; Schiavone v Fortune, 477 US 21; Duffy v Horton Mem. Hosp., 66 NY2d 473; Vanderburg v Brodman, 231 AD2d 146; Messina v County of Nassau, 147 Misc 2d 889; Valmon v 4 M & M Corp., 291 AD2d 343; Pappas v 31-08 Café Concerto, 5 AD3d 452.) V The 30-day statute of limitations is unconstitutionally arbitrary, capricious and unreasonably short. (Wilson v Iseminger, 185 US 55; Ross v Artuz, 150 F3d 97; M.L. Improvement Corp. v State of New York, 204 App Div 733; Kentucky Union Co. v Kentucky, 219 US 140; Gilbert v Ackerman, 159 NY 118; A. Soloff & Son, Inc. v Asher, 594 F Supp 724; Fitzpatrick & Weller v Miller, 309 AD2d 1273; Planet Constr. Corp. v Board of Educ. of City of N.Y., 7 NY2d 381; South & Cent. Am. Commercial Co. v Panama R.R. Co., 237 NY 287; Matter of Brown & Guenther [North Queensview Homes], 18 AD2d 327.)

      Michael A. Cardozo, Corporation Counsel, New York City (Pamela Seider Dolgow, Leonard Koerner and Louise Moed of counsel), for New York City Board of Standards and Appeals and another, respondents.
    I. The Appellate Division properly dismissed the petition where petitioner failed to name a necessary party to the proceeding before the statute of limitations expired. (Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y., 302 AD2d 155; Matter of Ayres v New York State Commr. of Taxation & Fin., 252 AD2d 808; Matter of Martin v

      Ronan, 47 NY2d 486; Joanne S. v Carey, 115 AD2d 4; Hitchcock v Boyack, 256 AD2d 842; Matter of Long Is. Pine Barrens Socy. v Town of Islip, 286 AD2d 683, 97 NY2d 606; Matter of Karmel v White Plains Common Council, 284 AD2d 464; Matter of Save Our-Open Space v Planning Bd. of Vil. of S. Nyack, 256 AD2d 581, 93 NY2d 808; Matter of Artrip v Incorporated Vil. of Piermont, 267 AD2d 457; Matter of New York City Audubon Socy. v New York State Dept. of Envtl. Conservation, 262 AD2d 324.) II. Petitioner’s challenge to the constitutionality of the 30-day limitation period contained in Administrative Code of the City of New York § 25-207 is not preserved. In any event, the statute is constitutional in all respects. (People v Oliver, 63 NY2d 973; Matter of Anonymous v Codd, 40 NY2d 860; Matter of Shavon H., 1 AD3d 123; Gardner v Continuing Dev. Servs., 292 AD2d 838; Hotel Dorset Co. v Trust for Cultural Resources of City of N.Y., 46 NY2d 358; Matter of Department of Social Servs. v Thomas J.S., 100 AD2d 119; Matter of West Flushing Civic Assn. v New York City Bd. of Stds. & Appeals, 273 AD2d 17; Matter of Larabe Realty Co. v Silva, 234 AD2d 297; Matter of Eberhart v La Pilar Realty Co., 45 AD2d 679; Matter of Neubourg v Glass, 41 AD2d 833.)

      Bryan Cave LLP, New York City (Robert S. Davis, Philip E. Karmel and Edward D. Greim of counsel), and Goldberg & Cohn, LLP, Brooklyn (Elliott S. Martin of counsel), for 160 Imlay Street Real Estate LLC, respondent.
    I. The Appellate Division properly granted the City of New York’s motion to dismiss under CPLR 3211 (a) (10) because petitioner failed to name a necessary party within the limitations period. (Matter of Mount Pleasant Cottage School Union Free School Dist. v Sobol, 78 NY2d 935; Matter of Ferrando v New York City Bd. of Stds. & Appeals, 12 AD3d 287; Matter of Cybul v Village of Scarsdale, 17 AD3d 462; Matter of East Bayside Homeowners Assn., Inc. v Chin, 12 AD3d 370; Matter of Manupella v Troy City Zoning Bd. of Appeals, 272 AD2d 761; Matter of O’Connell v Zoning Bd. of Appeals of Town of New Scotland, 267 AD2d 742; Matter of Amodeo v Town Bd. of Town of Marlborough, 249 AD2d 882; Matter of Llana v Town of Pittstown, 245 AD2d 968; Matter of Bianchi v Town of Greece Planning Bd., 300 AD2d 1043; Matter of Spence v Cahill, 300 AD2d 992.) II. 160 Imlay Street Real Estate LLC did not waive its statute of limitations defense. (Matter of Commerce & Indus. Ins. Co. v Nester, 90 NY2d 255; Matter of Salino v Cimino, 1 NY3d 166; State of New York v Wolowitz, 96 AD2d 47; Green v County of Fulton, 123 AD2d 88.) III. The 30-day statute of limitations does not violate due process. (Mastronardi v Mitchell, 109 AD2d 825; Bingham v New York City Tr. Auth., 99 NY2d 355; Matter of Salino v Cimino, 1 NY3d 166; Brothers v Florence, 95 NY2d 290; Matter of Moran Towing Corp. v Urbach, 99 NY2d 443; Matter of West Flushing Civic Assn. v New York City Bd. of Stds. & Appeals, 273 AD2d 17; Matter of Larabe Realty Co. v Silva, 234 AD2d 297; Matter of Long Is. Pine Barrens Socy. v Planning Bd. of Town of Brookhaven, 78 NY2d 608; Matter of Kennedy v Zoning Bd. of Appeals of Vil. of Croton-on-Hudson, 78 NY2d 1083; Matter of King v Chmielewski, 76 NY2d 182.)
   OPINION OF THE COURT

Chief Judge Kaye.

Petitioner is a nonprofit organization composed of 85 local business owners in the Red Hook and Gowanus neighborhoods of Brooklyn. In 2000, respondent 160 Imlay Street Real Estate LLC, through a predecessor entity, acquired a 220,000 square foot warehouse and manufacturing facility in Red Hook. Claiming that it could not find a sufficient number of commercial tenants, in September 2002 Imlay applied to the New York City Board of Standards and Appeals (BSA) for a variance to permit conversion of the building from industrial to residential use. Following four days of hearings between March and November 2003—petitioner appeared and opposed the variance—on December 24, 2003 the BSA granted Imlay a hardship variance.

Under Administrative Code of the City of New York § 25-207 (a), petitioner had 30 days in which to challenge the decision. On the thirtieth day—January 23, 2004—petitioner filed its CPLR article 78 petition naming only the BSA and the City as respondents, omitting Imlay. On January 27, 2004, petitioner hand-delivered a courtesy copy of the papers to Imlay’s attorney.

Three weeks later the City moved to dismiss the petition on the ground that petitioner had failed to name a necessary party within the statute of limitations period. Petitioner cross-moved to amend its petition to add Imlay as a respondent. Supreme Court denied the City’s motion to dismiss and granted petitioner’s motion to file an amended petition, adding Imlay as an additional party. The Appellate Division reversed “on the law” and dismissed the proceeding. In full, its relevant ruling reads: petitioner’s “failure to adequately explain why it did not include the landowner, who was subject to the jurisdiction of the court, as a respondent in a timely manner, despite being aware of its identity, precludes it from proceeding in the landowner’s absence” (18 AD3d 558, 559 [2d Dept 2005] [citations omitted]). We now reverse.

Discussion

Plainly, Imlay was a necessary party, and should have been joined in the proceeding at its inception. Having invested significant resources in pursuing its plan to convert the commercial space to luxury apartments, the developer “might be inequitably affected by a judgment” overturning the variance that permitted residential conversion (CPLR 1001 [a]).

Further, while both Imlay and the City had the same immediate purpose in opposing the article 78 petition—maintaining the status of the variance—that, in and of itself, does not create a unity of interest such that an action against Imlay relates back to the filing date of the petition (see CPLR 203 [c]; see also Matter of Emmett v Town of Edmeston, 2 NY3d 817 [2004]). The status of Imlay’s property represented a potential loss of millions of dollars to the developer, while the City is necessarily concerned with regulatory and administrative consequences. Such divergent long-term interests cannot be guaranteed to protect Imlay from future prejudice in the case (Buran v Coupal, 87 NY2d 173, 178 [1995]). The trial court therefore erred in treating Imlay as united in interest with the City.

While Supreme Court granted petitioner’s request to amend its petition to name Imlay, the Appellate Division rested its decision on CPLR 1001, concluding that the action could not proceed without the necessary party. For the Appellate Division, the fact that petitioner had offered no adequate explanation for its failure to name Imlay prior to expiration of the statute of limitations was as a matter of law determinative. That was error.

Under CPLR 1001 (b), when a necessary party

“has not been made a party and is subject to the jurisdiction of the court, the court shall order him summoned. If jurisdiction over him can be obtained only by his consent or appearance, the court, when justice requires, may allow the action to proceed without his being made a party. In determining whether to allow the action to proceed, the court shall consider:
“1. whether the plaintiff has another effective remedy in case the action is dismissed on account of the nonjoinder;
“2. the prejudice which may accrue from the nonjoinder to the defendant or to the person not joined;
“3. whether and by whom prejudice might have been avoided or may in the future be avoided;
“4. the feasibility of a protective provision by order of the court or in the judgment; and
“5. whether an effective judgment may be rendered in the absence of the person who is not joined.”

This provision has deep roots in New York statutory law, dating to the Field Code, which declared that “[w]hen a complete determination of the controversy cannot be had without the presence of other parties, the court may order them to be brought in, by an amendment of the complaint, or by a supplemental complaint, and a new summons” (former Code Pro § 102 [1848]). While the joinder provision was amended several times between 1848 and 1963, most recently as part of the adoption of the Civil Practice Law and Rules, the provision for joinder when complete determination of the case required the presence of an additional party remained unaltered (see Code Pro §§ 119, 122 [1851]; Civ Prac Act § 193 [1946]; CPLR 1001 [1963]; 1st Preliminary Report of Advisory Comm on Prac and Proc, at 233-256 [1957]). Indeed, bringing necessary parties into the litigation whenever possible has been the common thread of New York’s joinder statutes.

Joinder rules serve an important policy interest in guaranteeing that absent parties at risk of prejudice will not be “embarrassed by judgments purporting to bind their rights or interests where they have had no opportunity to be heard” (First Natl. Bank of Amsterdam v Shuler, 153 NY 163, 170 [1897]). They also protect against multiple lawsuits and inconsistent judgments (3 Weinstein-Korn-Miller, NY Civ Prac ¶ 1001.01 [2d ed]). When enacted in 1963, the CPLR eliminated the Civil Practice Act’s distinction between “indispensable” and “conditionally necessary” parties, affording the courts greater discretion in permitting cases to go forward after weighing the interests of the litigants, the absent party and the public (see David Siegel, Introducing: A Biannual Survey of New York Practice, 38 St John’s L Rev 190, 417 [1964]). Indeed, in its present incarnation, the joinder provision is to be employed to avoid dismissal (3 Weinstein-Korn-Miller, NY Civ Prac ¶ 1001.08 [2d ed]).

While a court, then, must use every effort to join a necessary party, there are situations when such a party may be beyond the reach of the court. CPLR 1001 distinguishes between a necessary party “subject to the jurisdiction of the court” and one over whom jurisdiction can be obtained only by consent or appearance. The statute directs that a party subject to the court’s jurisdiction shall be summoned, while continuance of the action without a necessary party beyond the court’s jurisdiction lies within its discretion. Was Imlay, by virtue of the lapsed statute of limitations, subject to, or beyond, the “jurisdiction” of the court as the term is used in CPLR 1001 (compare Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801 [2003])? We do not answer that question in this case because that issue was not timely, or seriously, raised before us. Rather, both the petitioner and the landowner assumed that jurisdiction over Imlay could only have been obtained by consent or appearance. We will do the same.

When a necessary party can be joined only by consent or appearance, a court must engage in the CPLR 1001 (b) analysis to determine whether to allow the case to proceed without that party. Though CPLR 1001 (b) protects the absent party who might be inequitably affected by a judgment in the action, it also treats dismissal for failure to join a necessary party as a last resort (see Siegel, NY Prac § 133, at 227 [4th ed]). Thus, under the statute a court has the discretion to allow a case to continue in the absence of a party, as justice requires. To assist in reaching this decision, the Legislature has set forth five factors a court must consider. Of those five factors, no single one is determinative; and while the court need not separately set forth its reasoning as to each factor, the statute directs it to consider all five. One of the factors a court must consider—“whether and by whom prejudice might have been avoided” (CPLR 1001 [b] [3])—obviously includes inquiry into why a litigant failed to name a necessary party prior to the expiration of the statute of limitations.

Though article 78 challenges generally must be brought within four months, that limitations period may be shortened by law (CPLR 217). In this case, New York City’s Administrative Code shortened the limitations period to 30 days. Short limitations periods are not unusual in municipal zoning (see e.g. General City Law § 38; Town Law § 195). The City’s legislative determination to impose a 30-day period by which to file a challenge to a zoning decision balances powerful competing interests—allowing for citizen challenges on the one hand, while recognizing the urgency of private interests involving substantial financial investment on the other.

Certainly, 30 days is a brief period, but a challenger need only commence the action within that time, awaiting further proceedings to flesh out the parties’ positions. Indeed, even here, both sides have impressed on the Court the urgency of the matter, citing the costs involved in a large-scale development project in a desirable Brooklyn waterfront neighborhood. Except in rare cases, CPLR 1001 (b) should not circumvent the balance struck, and protections offered, by the statute of limitations (Matter of Mount Pleasant Cottage School Union Free School Dist. v Sobol, 163 AD2d 715, 716 [3d Dept 1990] [joining a necessary party as respondent after expiration of statute of limitations is “disfavored” by the courts] [citations omitted], affd 78 NY2d 935 [1991]).

Forceful though the concerns underlying the statutory limitations period are, however, a court nonetheless must have the opportunity to exercise its discretion in weighing the statutory factors. Lack of an adequate explanation for failing to timely join a necessary party does not as a matter of law in every case divest a court of the statutory directive to consider the enumerated factors (see Matter of 27th St. Block Assn. v Dormitory Auth. of State of N.Y., 302 AD2d 155 [1st Dept 2002] [proceeding allowed to continue]).

In this case, the trial court granted petitioner’s motion to amend and join Imlay, therefore not reaching the CPLR 1001 (b) question whether the action should proceed in Imlay’s absence. Having not reached that question, the tried court had no occasion to address the discretionary factors, nor did it. The Appellate Division, similarly, gave no indication that it had considered the CPLR 1001 (b) factors. The Court not only explicitly rested its decision on the law but also found “preclusive” petitioner’s failure to timely include the landlord without adequate explanation (see also Matter of East Bayside Homeowners Assn., Inc. v Chin, 12 AD3d 370 [2d Dept 2004] [same language], lv denied 4 NY3d 704 [2005]; see also Matter of Lodge v D'Aliso, 2 AD3d 525 [2d Dept 2003] [same language], lv denied 2 NY3d 702 [2004]). We thus cannot conclude, as the dissent does, that the Appellate Division really did exercise its discretion, or that it did not abuse its discretion.

While the City and Imlay point to the factual strength of their position under the statute, it is not for this Court in the first instance to weigh the factors. Moreover, we are persuaded by the profusion of cases raising the same or an analogous issue that, for now as well as for the future, it is prudent to reverse and remit this case to the trial court to review the existing record and do what the statute says (see e.g. Matter of Llana v Town of Pittstown, 234 AD2d 881, 884 [3d Dept 1996] [“(w)e are consequently faced with a question that was not addressed by Supreme Court—whether, because the four-month Statute of Limitations has run, petitioners should be permitted to proceed in the absence of necessary parties pursuant to CPLR 1001 (b). Supreme Court did not consider the factors enumerated in this section, and so we withhold decision on this appeal and remit this case to Supreme Court to undertake an analysis pursuant to CPLR 1001 (b) as to whether petitioner in this case should be permitted to proceed in the absence of necessary parties”], upon remand 245 AD2d 968, 969 [3d Dept 1997] [affirming trial court’s order dismissing under CPLR 1001 (b)], lv denied 91 NY2d 812 [1998]). Thus, while an unexplained expired statute of limitations is very strong indication that an action should be dismissed, it is a factor in, not preclusion of, the requisite analysis.

Accordingly, the order of the Appellate Division should be reversed, with costs, and the matter remitted to Supreme Court, for further proceedings in accordance with this opinion.

G.B. Smith, J.

(dissenting). CPLR 1001 (b) is a provision that allows judges the discretion to permit litigation to continue without a necessary party, over whom the court lacks jurisdiction, if “justice [so] requires.” As the majority says, this statute should not be used except in “rare cases” to “circumvent the balance struck, and protections offered, by the statute of limitations” (majority op at 460). It is clear, as a matter of law, that this is not one of those “rare cases.” The allowed lapse of a statute of limitations by a party that offers no good excuse does not outweigh the prejudice to the missing necessary party, and in such a case, the trial court need not weigh the CPLR 1001 (b) factors to determine whether petitioner’s case can proceed.

The Red Hook/Gowanus Chamber of Commerce (Chamber) commenced a proceeding against the New York City Board of Standards and Appeals (Board) on January 23, 2004 challenging the Board’s grant of a zoning variance, filed December 24, 2003, to Imlay, the owner of a warehouse that wished to convert the building to residential use. Inexplicably, the Chamber never added Imlay as a respondent in its original suit.

When the Board moved to dismiss the petition pursuant to CPLR 3211 (a) (10), 1001, 1003, and 7804 (f) for failure to join Imlay as a necessary party, the Chamber sought to amend its petition to add Imlay. Supreme Court allowed Imlay’s joinder, even though the statute of limitations period had expired. The Appellate Division reversed Supreme Court, citing CPLR 1001 (b) and stating Chamber’s failure to adequately explain why it did not include Imlay, which had been subject to the jurisdiction of the court, precluded it from proceeding in Imlay’s absence. (Matter of Red Hook/Gowanus Chamber of Commerce v New York City Bd. of Stds. & Appeals, 18 AD3d 558 [2d Dept 2005].)

The issue here is whether CPLR 1001 (b) applies when jurisdiction has not been obtained over the necessary party because the statute of limitations expired. Stated another way, did the Appellate Division err, as a matter of law, by refusing to allow the proceeding to continue given petitioner’s failure to join landowner/developer Imlay within the statute of limitations without good reason? My conclusion is that there was no error. Indeed, as the Appellate Division implicitly found in reversing Supreme Court “on the law” (18 AD3d at 559), it would have been an abuse of discretion to permit the case to proceed.

Compulsory joinder rules exist as “protection of the opportunity and right to be heard in connection with a judicial determination that may affect a party’s personal or property rights” (1 Weinstein-Korn-Miller, CPLR Manual § 7.01). CPLR 1001 (b) states in part, “If jurisdiction over him can be obtained only by his consent or appearance, the court, when justice requires, may allow the action to proceed without his being made a party.” The determination of whether to dismiss or permit the case to continue in the absence of joinder rests within the court’s sound discretion (see Saratoga County Chamber of Commerce v Pataki, 100 NY2d 801 [2003]). CPLR 1001’s Advisory Committee Notes explain, “The considerations enumerated [in CPLR 1001 (b)] are those emphasized in the case law, which, on analysis, indicates that the subject defies definitive statement and that decision must rest in the sound discretion of the court.” (Reprinted in NY Cons Law Serv, Book 4B, at 267.)

Discretion about how to apply the factors does not imply an obligation to list and discuss them in every case. Courts should not have to go through each CPLR 1001 (b) factor unless there is a good excuse for the allowed lapse of statutes of limitations, i.e., justice requires the court look at the matter further. Applying such a rule to the case at bar, we must ask, “Does justice require that litigation proceed without a necessary party when the necessary party’s identity was known to petitioner, who has no excuse for the party’s exclusion?” The answer is no.

Judicial discretion is “the exercise of judgment by a judge or court based on what is fair under the circumstances and guided by the rules and principles of law; a court’s power to act or not act when a litigant is not entitled to demand the act as a matter of right” (Black’s Law Dictionary 479 [7th ed 1999]). To force the courts to analyze the CPLR 1001 (b) factors when petitioners are plainly not entitled to prevail is to require a purposeless exercise. What petitioner Chamber terms resort to a “gatekeeper” question is actually the court using its discretion in the only appropriate way, considering that a primary focus of CPLR 1001 (b) is the protection of absent necessary parties (see generally 1 Weinstein-Korn-Miller, CPLR Manual § 7.02 [“the general policy of the (CPLR is) to limit the scope of indispensable parties to those cases and only those cases where the determination of the court will adversely affect the rights of non-parties”]).

“Statutes of limitation, like the equitable doctrine of laches, in their conclusive effects are designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them.” (Railroad Telegraphers v Railway Express Agency, Inc., 321 US 342, 348-349 [1944].)

Under Appellate Division case law, joinder is greatly disfavored where the statute of limitations has expired (see Matter of Mount Pleasant Cottage School Union Free School Dist. v Sobol, 163 AD2d 715, 716 [1990], affd for reasons stated below 78 NY2d 935 [1991]; see also Matter of Fagelson v McGowan, 301 AD2d 652, 652-653 [2d Dept 2003], lv denied 100 NY2d 503 [2003]; Matter of Ogbunugafor v New York State Educ. Dept., 279 AD2d 738, 739-740 [3d Dept 2001], lv denied 96 NY2d 712 [2001]). The dismissal of a proceeding will generally be upheld where the petitioner (1) knew of the necessary party’s identity prior to the expiration of the statute of limitations (see Matter of Chalian v Malone, 307 AD2d 619, 620 [3d Dept 2003]; Matter of Manupella v Troy City Zoning Bd. of Appeals, 272 AD2d 761, 763-764 [3d Dept 2000]; Matter of O’Connell v Zoning Bd. of Appeals of Town of New Scotland, 267 AD2d 742, 743-744 [3d Dept 1999], lv denied 94 NY2d 938 [2000]) or (2) failed to offer any adequate excuse for his or her failure to join a necessary party (see Matter of Lodge v D’Aliso, 2 AD3d 525, 526 [2d Dept 2003]; Matter of Bianchi v Town of Greece Planning Bd., 300 AD2d 1043, 1044 [4th Dept 2002]; Matter of Spence v Cahill, 300 AD2d 992, 993 [4th Dept 2002], lv denied 1 NY3d 508 [2004]), presumably because, in such cases, the petitioner was in the best position, but failed, to avoid prejudice to the absent party (see CPLR 1001 [b] [3]).

If the factors are explicitly weighed, as the majority advocates, the result will not change: the Chamber’s case could not proceed. Aside from factor 1, “whether the plaintiff has another effective remedy in case the action is dismissed on account of the nonjoinder” (CPLR 1001 [b] [1]), the remaining factors weigh in Imlay’s favor. Factor 2 asks about the prejudice which may accrue from nonjoinder. Imlay would suffer prejudice if it is not joined because it has a proprietary interest in the warehouse and its future development. Factor 3 asks whether and by whom prejudice might have been avoided or may be avoided in the future. The prejudice could have been avoided by the Chamber naming Imlay as a party, or could be avoided in the future if Imlay joined the litigation voluntarily. However, expecting Imlay to voluntarily appear and bear the expense of defending the issuance of its variance is unfair since it is not at fault for petitioner’s laxness. Factor 4 questions the feasibility of a protective provision by order or in the judgment. There does not appear to be any purpose to a protective provision by order or in the judgment because if the Chamber wins its suit against the Board, the variance will be repealed and Imlay’s economic interests will be directly affected. Factor 5 asks whether an effective judgment may be rendered in the absence of a person who is not joined. It is questionable that an effective judgment could be rendered without Imlay’s participation because its interests are directly impacted.

It should not be presumed that in the absence of an explicit weighing of factors, courts from the four appellate departments, over the years, have been abusing their discretion. The majority concludes that Supreme Court must consider all five factors even though jurisdiction was inexcusably lost through petitioner’s actions. If a party is necessary but was never subject to the court’s jurisdiction, then the court should consider the CPLR 1001 (b) factors before issuing a dismissal. When the statute of limitations has expired without an adequate excuse, however, courts need not recite the CPLR 1001 (b) factors in issuing a dismissal.

Accordingly, I dissent.

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

Order reversed, etc.

      . Having concluded that Imlay and the City were not united in interest, we need not address whether petitioner’s failure to name Imlay was merely mistake or attributable to something else (see Buran, 87 NY2d at 181).

      . The federal analogue to New York’s statute is rule 19 of the Federal Rules of Civil Procedure (“Joinder of Persons Needed for Just Adjudication”). (See Provident Tradesmens Bank & Trust Co. v Patterson, 390 US 102, 109 [1968] [under rule 19, dismissal for failure to join a needed party is error unless based on the rule’s pragmatic considerations; a court must examine the four elements of the rule “to determine whether, in equity and good conscience, the court should proceed without a party whose absence from the litigation is compelled”].)

      . As petitioner did not preserve its constitutional challenge to the 30-day statute of limitations by raising it before the trial court, we do not address it here.

      . See Matter of East Bayside Homeowners Assn., Inc. v Chin, 12 AD3d 370 (2d Dept 2004), lv denied 4 NY3d 704 (2005); Matter of Ferrando v New York City Bd. of Stds. & Appeals, 12 AD3d 287 (1st Dept 2004); Matter of Lodge v D’Aliso, 2 AD3d 525 (2d Dept 2003), lv denied 2 NY3d 702 (2004); Matter of Chalian v Malone, 307 AD2d 619 (3d Dept 2003); Matter of Basha Kill Area Assn. v Town Bd. of Town of Mamakating, 302 AD2d 662 (3d Dept 2003); Matter of Fagelson v McGowan, 301 AD2d 652 (2d Dept 2003), lv denied 100 NY2d 503 (2003); Matter of Bianchi v Town of Greece Planning Bd., 300 AD2d 1043 (4th Dept 2002); Matter of Spence v Cahill, 300 AD2d 992 (4th Dept 2002), lv denied 1 NY3d 508 (2004); Matter of Long Is. Pine Barrens Socy. v Town of Islip, 286 AD2d 683 (2d Dept 2001), lv denied 97 NY2d 606 (2001); Matter of Karmel v White Plains Common Council, 284 AD2d 464 (2d Dept 2001); Matter of Ogbunugafor v New York State Educ. Dept., 279 AD2d 738 (3d Dept 2001), lv denied 96 NY2d 712 (2001); Matter of Manupella v Troy City Zoning Bd. of Appeals, 272 AD2d 761 (3d Dept 2000); Matter of O’Connell v Zoning Bd. of Appeals of Town of New Scotland, 267 AD2d 742 (3d Dept 1999), lv denied 94 NY2d 938 (2000); Matter of Artrip v Incorporated Vil. of Piermont, 267 AD2d 457 (2d Dept 1999); Matter of New York City Audubon Socy. v New York State Dept. of Envtl. Conservation, 262 AD2d 324 (2d Dept 1999); Hitchcock v Boyack, 256 AD2d 842 (3d Dept 1998); Matter of Amodeo v Town Bd. of Town of Marlborough, 249 AD2d 882 (3d Dept 1998); Matter of Mount Pleasant Cottage School Union Free School Dist. v Sobol, 163 AD2d 715 (3d Dept 1990), affd 78 NY2d 935 (1991).
      Several of the foregoing cases involve—like the present case—an omitted landowner, a land-use challenge and a lapsed statute of limitations, leading us to conclude with the obvious lesson: omitting the landowner from the litigation may be fatal.


author: ClPARICK, J. Rosenblatt, J.

text:
    [839 NE2d 886, 805 NYS2d 533]
    Marsha Maroney, Individually and as Parent and Natural Guardian of Mark Maroney, an Infant, Appellant, v New York Central Mutual Fire Insurance Company, Respondent. (And a Third-Party Action.)
    Argued September 15, 2005;
    decided October 27, 2005

      POINTS OF COUNSEL

      Powers & Santola, LLP, Albany (Michael J. Hutter of counsel), for appellant.
    I. New York Central Mutual Fire Insurance Company (NYCM) may properly be found, as a matter of law to have a duty to defend and indemnify its insured, the Morrises, with respect to the underlying negligence action on this summary judgment motion as there is no possible factual or legal basis upon which it may be concluded that the underlying incident and claim is encompassed by the policy’s “business pursuits” and “owned premises” exclusions, the only bases upon which NYCM seeks to avoid coverage. (Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640; Seaboard Sur. Co. v Gillette Co., 64 NY2d 304; Ace Wire & Cable Co. v Aetna Cas. & Sur. Co., 60 NY2d 390; Breed v Insurance Co. of N. Am., 46 NY2d 351; Lewis v Ocean Acc. & Guar. Corp., Ltd., of London, England, 224 NY 18; Smith v Pennsylvania Gen. Ins. Co., 32 AD2d 854, 27 NY2d 830; Vargas v Insurance Co. of N. Am., 651 F2d 838; Neuwirth v Blue Cross & Blue Shield of Greater N.Y., Blue Cross Assn., 62 NY2d 718; International Paper Co. v Continental Cas. Co., 35 NY2d 322; Prashker v United States Guar. Co., 1 NY2d 584.) II. The “owned premises” exclusion does not as a matter of law apply. (State of New York v Home Indem. Co., 66 NY2d 669; New York Dock Co. v Brown, Inc., 272 NY 176; Caporino v Travelers Ins. Co., 62 NY2d 234; Sea Ins. Co., Ltd. v Westchester Fire Ins. Co., 849 F Supp 221, 51 F3d 22; Bianco v Travelers Ins. Co., 99 AD2d 629; Sanabria v American Home Assur. Co., 68 NY2d 866; RJC Realty Holding Corp. v Republic Franklin Ins. Co., 2 NY3d 158; Brabender v Northern Assur. Co. of Am., 65 F3d 269; Eagle Ins. Co. v Butts, 269 AD2d 558; Lumbermen’s Mut. Cas. Co. v Logan, 88 AD2d 971.) III. New York Central Mutual Fire Insurance Company has waived any right it may have to disclaim coverage under its policy’s “business pursuits” exclusion by reason of the Morrises’ horse-boarding business. (General Acc. Ins. Group v Cirucci, 46 NY2d 862; Benjamin Shapiro Realty Co. v Agricultural Ins. Co., 287 AD2d 389; 2540 Assoc. v Assicurazioni Generali, 271 AD2d 282; Appell v Liberty Mut. Ins. Co., 22 AD2d 906, 17 NY2d 519; Allstate Ins. Co. v Moon, 89 AD2d 804; Jefferson Ins. Co. of N.Y. v Travelers Indem. Co., 92 NY2d 363; Agoado Realty Corp. v United Intl. Ins. Co., 260 AD2d 112, 95 NY2d 141; Cain v Allstate Ins. Co., 234 AD2d 775; Seaboard Sur. Co. v Gillette Co., 64 NY2d 304; Allstate Ins. Co. v Noorhassan, 158 AD2d 638.) IV The “business pursuits” exclusion does not as a matter of law apply. (Velleman v Continental Ins. Co., 162 Misc 2d 95; Frontier Insulation Contrs. v Merchants Mut. Ins. Co., 91 NY2d 169; Graphic Arts Mut. Ins. Co. v Bakers Mut. Ins. Co. of N.Y., 45 NY2d 551; Neuwirth v Blue Cross & Blue Shield of Greater N.Y., Blue Cross Assn., 62 NY2d 718; Lamb v Security Mut. Ins. Co., 278 AD2d 855; Baron v Home Ins. Co., 112 AD2d 391; Utica Mut. Ins. Co. v Prudential Prop. & Cas. Ins. Co., 103 AD2d 60; Gulf Ins. Co. v Tilley, 280 F Supp 60, 393 F2d 119; Gallo v Grosvenor, 175 AD2d 454; Baron v Home Ins. Co., 112 AD2d 391.)

      Flink Smith LLC, Latham {Jeffrey D. Wait and Edward B. Flink of counsel), for respondent.
    I. New York Central Mutual Fire Insurance Company met its burden with respect to both the “owned premises” and “business pursuits” exclusions. (Bleckner v General Acc. Ins. Co. of Am., 713 F Supp 642; Seaboard Sur. Co. v Gillette Co., 64 NY2d 304; Breed v Insurance Co. of N. Am., 46 NY2d 351; Zandri Constr. Co. v Firemen’s Ins. Co. of Newark, 81 AD2d 106, 54 NY2d 999.) II. The “owned premises” exclusion applies to the facts presented. (Bianco v Travelers Ins. Co., 99 AD2d 629; Kappes v Cohoes Bowling Arena, 2 AD3d 1034; Stickles v Fuller, 2 Misc 3d 954; Sea Ins. Co., Ltd. v Westchester Fire Ins. Co., 849 F Supp 221, 51 F3d 22; St. Paul Fire & Mar. Ins. Co. v Insurance Co. of N. Am., 501 F Supp 136; Murdock v Dinsmoor, 892 F2d 7; Aetna Cas. & Sur. Co. v Liberty Mut. Ins. Co., 91 AD2d 317; United States Fire Ins. Co. v New York Mar. & Gen. Ins. Co., 268 AD2d 19.) III. The injuries arose out of the insureds’ horse-boarding business, thereby triggering the business pursuits exclusion. (United Food Serv. v Fidelity & Cas. Co. of N.Y., 189 AD2d 74.) IV The exception to the business pursuits exclusion does not apply. (United

      States Fire Ins. Co. v New York Mar. & Gen. Ins. Co., 268 AD2d 19; Lamb v Security Mut. Ins. Co., 278 AD2d 855; Gallo v Grosvenor, 175 AD2d 454; United Food Serv. v Fidelity & Cas. Co. of N.Y., 189 AD2d 74; Bianco v Travelers Ins. Co., 99 AD2d 629; Bowman v Allstate Ins. Co., 238 F3d 468; Outwater v Ballister, 253 AD2d 902; Salimbene v Merchants Mut. Ins. Co., 217 AD2d 991; Kennedy v Lumbermans Mut. Cas. Co., 152 Misc 2d 491.) V New York Central Mutual Fire Insurance Company’s disclaimer provided clear and sufficient notice of the grounds for denying coverage. (Newin Corp. v Hartford Acc. & Indem. Co., 62 NY2d 916; General Acc. Ins. Group v Cirucci, 46 NY2d 862; Mutual Redevelopment Houses v Greater N.Y. Mut. Ins. Co., 204 AD2d 145; Waxman v Providence Washington Ins. Co., 207 AD2d 882; John v Centennial Ins. Co., 91 AD2d 1104; Adams v Perry’s Place, 168 AD2d 932; Hall v Kemper Natl. Cos., 208 AD2d 679; Abreu v Huang, 300 AD2d 420.) VI. New York Central Mutual Fire Insurance Company did not waive its right to rely on the business pursuits exclusion. (General Acc. Ins. Group v Cirucci, 46 NY2d 862; Lugo v AIG Life Ins. Co., 852 F Supp 187; Matter of Worcester Ins. Co. v Bettenhauser, 95 NY2d 185; Waxman v Providence Washington Ins. Co., 207 AD2d 882; John v Centennial Ins. Co., 91 AD2d 1104; Adams v Perry’s Place, 168 AD2d 932; Hall v Kemper Natl. Cos., 208 AD2d 679.)
   OPINION OF THE COURT

ClPARICK, J.

The issue presented by this appeal is the meaning of the words “arising out of ’ in an “uninsured premises” exclusion contained in a homeowners insurance policy. Here we hold that “arising out of’ includes use of the premises (as urged by the insurer), and is not limited to the physical condition of the premises (as urged by the insured).

On June 19, 1997, a horse being led by Deborah Morris kicked the six-year-old plaintiff, Mark Maroney, in the forehead. Deborah Morris was an owner of Soft Meadow Stables, a business that boarded horses for a fee. The barn and stable had been built on property owned by the Morrises, located across the road from their residence. Before the establishment of Soft Meadow Stables, that property had been insured as part of a homeowners policy secured from defendant, New York Central Mutual Fire Insurance Company (NYCM). In May 1997, once the Morrises began boarding horses for a fee, the policy was amended to remove coverage for the property where the barn and stable were located. The Morrises obtained a separate property and liability policy covering the barn and stable from Broome County Cooperative Fire Insurance Company (BCC). The agent who placed the insurance was Deborah Morris’s mother; she testified that the change was made because of the horse-boarding business on the property, explaining that NYCM does “not do that type of insurance.”

Fourteen-year-old Ashley Hoke, daughter of insured Deborah Morris, had agreed to care for the infant plaintiff during the summer of 1997. On the day of his injury, coincidentally the first day Ashley was to care for the child, Mark and his mother arrived at the Morris residence at about 6:30 a.m. While Ashley was getting herself ready for the day, Deborah Morris took the child across the road to the barn and stable where she proceeded to feed and turn out two boarded horses. As Deborah Morris was leading one of the horses to pasture, the horse kicked the infant plaintiff in the forehead, causing serious injury.

After the accident, Deborah Morris notified both BCC and NYCM of the injury. NYCM subsequently disclaimed coverage based on the policy’s “business pursuits,” “uninsured premises” and “home day care services” exclusions. The infant plaintiff, represented by his mother, Marsha Maroney, initiated a personal injury action against the Morrises. Marsha Maroney then brought suit against NYCM seeking a declaration that NYCM had a duty to defend and indemnify the Morrises in the underlying personal injury action. NYCM counterclaimed and commenced a third-party action against the Morrises, also seeking a declaration of its obligations under the policy.

Supreme Court held that the exclusions did not apply, and ordered NYCM to defend and indemnify the Morrises. A divided Appellate Division reversed, concluding that the injury “arose out of’ the uninsured premises and, therefore, the exclusion was applicable. We granted plaintiffs leave to appeal and now affirm.

Initially, “ ‘in policies of insurance ... if any one exclusion applies there can be no coverage’ ” (Monteleone v Crow Constr. Co., 242 AD2d 135, 140-141 [1st Dept 1998], quoting Zandri Constr. Co. v Firemen’s Ins. Co. of Newark, 81 AD2d 106, 109 [3d Dept 1981], affd sub nom. Zandri Constr. Co. v Stanley H. Calkins, Inc., 54 NY2d 999 [1981]). Here, the homeowners policy’s “uninsured premises” exclusion provides in pertinent part that coverage for personal liability does not apply “to bodily injury or property damage . . . arising out of a premises . . . owned by an insured . . . that is not an insured location.”

Plaintiff argues that the uninsured premises exclusion applies only to injuries that are causally connected to the physical condition of the premises. Under such a reading, the exclusion would be inapplicable here because the allegedly tortious conduct of Deborah Morris, not the physical condition of the premises, caused plaintiffs injuries. Defendant, by contrast, argues that the term “arising out of’ is broader and pertains to both the physical condition of the premises and conduct related to the use of the uninsured premises that is causally connected to the injury. In this case of first impression, we agree with defendant insurer.

As used in a homeowners liability policy’s automobile exclusion clause, “[t]he words ‘arising out of have ‘broader significance . . . and are ordinarily understood to mean originating from, incident to, or having connection with’ ” (Aetna Cas. & Sur. Co. v Liberty Mut. Ins. Co., 91 AD2d 317, 320-321 [4th Dept 1983]; see also 8 Couch on Insurance 3d § 119:33, at 50). We conclude that, in the uninsured premises realm, the phrase “arising out of’ similarly requires only that there be some causal relationship between the injury and the risk for which coverage is provided (see e.g. St. Paul Fire & Mar. Ins. Co. v Insurance Co. of N. Am., 501 F Supp 136, 139 [WD VA 1980]; see also National Farmers Union Prop. & Cas. Co. v Western Cas. & Sur. Co., 577 P2d 961, 963 [Utah 1978]). That interpretation allows an insurer to reasonably define the “universe of possibilities to which it can apply its risk analysis methods . . . and determine a premium” (7 Couch on Insurance 3d § 101:40, at 101-127).

An insurer does not wish to be liable for losses arising from risks associated with a premises for which the insurer has not evaluated the risk and received a premium—or, as in this case, for a premises that contained risks the insurer when underwriting the homeowners insurance policy declined to accept. Thus, when injury-causing conduct is causally related to the purposes for which the premises are used, then the injury is deemed to “arise” from the premises. If the injurious conduct is so causally related to the use of the premises, and deemed to “arise” from the premises, then it is likely that the conduct would be insured by a policy that contemplated the risk.

When reviewing the injurious conduct and its causal relationship to the premises in this case, it is clear that the infant plaintiffs injury, the consequence of a horse’s kick, was not a bargained-for risk. This injury was causally related to the purpose for which the uninsured premises were being used—the care and boarding of horses in the barn and stable. The NYCM homeowners policy as amended in May 1997 was intended to exclude coverage for bodily injury (or property damage) “arising out of’ the barn and stable premises. The Morrises had removed the barn and stable from the NYCM policy and rewrote them into the BCC policy. Only one policy, the BCC policy, covered the risk here, not two, as the plaintiff contends, and we cannot create coverage where none was intended by the insured or insurer. As there exists a sufficient causal connection between the injury to the child and the purpose for which the premises were used, the injury “ar[ose] out of’ such premises, and the “uninsured premises” exclusion precludes coverage.

The narrow interpretation of “arising out of’ urged by the plaintiff and the dissent would extend coverage beyond the fair intent and meaning of the insurance contract. The lack of supervision of the child, and the injury, all of which gave rise to the underlying claim, occurred on the uninsured premises and were directly related to the activities carried on at premises specifically excluded from coverage.

Nor can the language of the policy be deemed ambiguous. If the insurer intended to limit the exclusion to injury resulting from a condition of the uninsured premises, it could have done so explicitly, as it does in the very same policy’s medical payments coverage provisions. There, the policy limits the coverage to injury that “arises out of a condition” on the insured location and injury “caused by the activities of an insured.” By not identifying “condition” and “activities” in the liability coverage provisions, NYCM indicated an intent not to limit the term “arising out of’ but rather give it a broader meaning that would encompass losses incurred as a result of both a condition of the uninsured premises and conduct related to the purpose for which the uninsured premises are utilized. The conduct of Deborah Morris on the uninsured premises—allegedly failing to adequately supervise the child while she was tending to the horses—certainly “arises out of’ the uninsured premises.

Neither is it significant that the care of the child commenced in the Morris residence, the insured premises. Here there is no direct causal connection between the injury and the insured premises. Rather, the direct connection is between the injury and the uninsured location, the barn and stable (see Bianco v Travelers Ins. Co., 99 AD2d 629, 630 [3d Dept 1984]).

We conclude that no defense or indemnification is owed the insured as the language of the policy exclusion is clear and unambiguous and subject to no other reasonable interpretation. Since the uninsured premises exclusion operates to deny coverage to plaintiffs, we need reach no other issue.

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

Rosenblatt, J.

(dissenting). An insurance carrier invoking a policy exclusion must “establish that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case” (Continental Cas. Co. v Rapid-American Corp., 80 NY2d 640, 652 [1993]). To my mind, the phrase “arising out of a premises” does not, without strain, refer to the conduct of the insured. It is more easily read to refer to injuries causally connected to a dangerous condition of the premises. While I grant that the issue is debatable, the phrase is at least ambiguous and the exclusion should be construed against the carrier.

In deciding that the “arising out of’ exclusion applies, the Court does not reach the “business pursuits” exclusion that the carrier invokes. However, I agree with Supreme Court and the dissent of the Presiding Justice at the Appellate Division that the carrier waived the business pursuits exclusion because of its insufficient notice of disclaimer.

The notice of disclaimer, in which a carrier seeks to activate the exclusion, must be highly specific (General Acc. Ins. Group v Cirucci, 46 NY2d 862, 864 [1979]). Here, the disclaimer specifically referred only to a home day care business, making no mention of the horse-boarding business. The carrier thus created an ambiguity that could lead an insured to believe that a home day care business was the only basis on which the carrier was relying in order to deny coverage under the business pursuits exclusion. The ambiguity should be construed against the carrier and result in waiver.

Moreover, on the merits of the business pursuits issue, the carrier has also not met its burden of specificity. The business pursuits exclusion contains an exception for “activities which are usual to non-business pursuits.” Here, the plaintiff alleged that Morris was negligent in supervising her child, a nonbusiness activity. Again, where the policy’s language could reasonably be interpreted in favor of the plaintiff, it is the carrier rather than the plaintiff who should bear the consequences of ambiguity.

I would therefore reverse the order appealed from and reinstate Supreme Court’s order denying summary judgment to NYCM and granting it to Maroney.

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

Order affirmed, with costs.

       Because the insurer joined the insured in seeking a declaration of its rights, the Maroneys’ failure to obtain a judgment in the underlying personal injury action prior to suing the tortfeasor’s insurer as required by Insurance Law § 3420 does not preclude consideration of the coverage issues in this case (see Lang v Hanover Ins. Co., 3 NY3d 350 [2004]).

       The business pursuits exclusion denies coverage for “bodily injury or property damage . . . arising out of business pursuits of an insured or the rental or holding for rental of any part of any premises by an insured.”