author: Smith, J. Pigott, J.

text:
    [15 NE3d 329, 991 NYS2d 574]
    IDT Corp. et al., Respondents, v Tyco Group, S.A.R.L., et al., Appellants.
    Argued April 29, 2014;
    decided June 5, 2014

      POINTS OF COUNSEL

      Dewey Pegno & Kramarsky LLP, New York City (Thomas E.L. Dewey of counsel), for appellants.
    I. This Court’s opinion ended, this case. (MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640; Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106; HGCD Retail Servs., LLC v 44-45 Broadway Realty Co., 37 AD3d 43; N.F.L. Ins. Ltd. by Lines v B & B Holdings, Inc., 874 F Supp 606; Rotella v Rotella, 178 AD2d 755; Hall v People to People Health Found., Inc., 493 F2d 311; Colonial Pac. Leasing Corp. v Brown, 28 Misc 3d 1214[A], 2010 NY Slip Op 51322[U]; Preferred Mtge. Brokers v Byfield, 282 AD2d 589; Stanton v Power, 254 AD2d 153; Levy v Friedman, 216 AD2d 18.) II. Plaintiffs’ complaint is barred by res judicata and collateral estoppel. (Matter of Hunter, 4 NY3d 260; Matter of Reilly v Reid, 45 NY2d 24; Sandhu v Mercy Med. Ctr., 54 AD3d 928; Baldo v Marine Midland Bank, 219 AD2d 807; Smith v Russell Sage Coll., 54 NY2d 185; Elias v Rothschild, 29 AD3d 448; NAS Electronics, Inc. v Transtech Electronics PTE Ltd., 262 F Supp 2d 134; Dorli, Inc. v RGA Accessories, 136 AD2d 465; Aviles v Liberty Mut. Ins. Co., 300 AD2d 70; Sterngass v Soffer, 27 AD3d 549.) III. The documentary evidence establishes that plaintiffs’ complaint fails. (Beal Sav. Bank v Sommer, 8 NY3d 318; O’Donnell, Fox & Gartner v R-2000 Corp., 198 AD2d 154; Beat-tie v Brown & Wood, 243 AD2d 395; Mode Contempo, Inc. v Raymours Furniture Co., Inc., 80 AD3d 464; Venture Assoc. Corp. v Zenith Data Sys. Corp., 96 F3d 275; Ga Nun v Palmer, 202 NY 483; Tenavision, Inc. v Neuman, 45 NY2d 145; Allbrand Discount Liqs. v Times Sq. Stores Corp., 60 AD2d 568; Rachmani Corp. v 9 E. 96th St. Apt. Corp., 211 AD2d 262; Dingley v Oler, 117 US 490.)

      Robins, Kaplan, Miller & Ciresi L.L.P., New York City (Hillel I. Parness, Richard A. Mescon and Oren D. Langer of counsel), for respondents.
    I. Plaintiffs have alleged facts sufficient to support their claims for breach of contract and breach of the duty to negotiate in good faith. (Lawrence v Graubard Miller, 11 NY3d 588; Quesada v Global Land, Inc., 35 AD3d 575.) II. Plaintiffs have sufficiently pleaded claims for breach of contract and breach of the duty to negotiate in good faith, and nothing defendants raise in their opening brief changes that. (MHR Capital Partners LP v Presstek, Inc., 12 NY3d 640; Teachers Ins. & Annuity Assn. of Am. v Tribune Co., 670 F Supp 491; HGCD Retail Servs., LLC v 44-46 Broadway Realty Co., 37 AD3d 43; Merritt Hill Vineyards v Windy Hgts. Vineyard, 61 NY2d 106; N.F.L. Ins. Ltd. by Lines v B & B Holdings, Inc., 874 F Supp 606; Perna v Desai, 101 AD2d 857; Rotella v Rotella, 178 AD2d 755; Snakepit Auto., Inc. v Superformance Intl., LLC, 19 Misc 3d 1114[A], 2008 NY Slip Op 50683[U]; Levy v Friedman, 216 AD2d 18; Stanton v Power, 254 AD2d 153.)
   OPINION OF THE COURT

Smith, J.

For the last 15 years, the parties to this case have alternately negotiated and litigated over the development and use of a telecommunications system. This lawsuit is the second to come to us in which IDT Corp. claims that Tyco International, Ltd. breached its obligation under a 2000 settlement agreement to negotiate additional agreements in good faith. In the previous lawsuit, we held IDT’s claim to be unsupported by the record (IDT Corp. v Tyco Group, S.A.R.L., 13 NY3d 209, 215 [2009]). More negotiations took place after our decision, and IDT sued Tyco again in 2010.

We again reject IDT’s claim. Parties who agree to negotiate are not bound to negotiate forever. It is clear on this record that the parties have reached an impasse and that IDT has no valid cause of action.

I

The relationship between the parties goes back at least to 1999, when IDT and Tyco (terms we use to include the parent corporations, IDT Corp. and Tyco International, Ltd., and their subsidiaries and affiliates) signed a memorandum of understanding relating to a joint venture that would develop an undersea fiber optic telecommunications system. Three lawsuits arising out of this proposed transaction were brought in 2000, and were settled by a Settlement Agreement dated October 10, 2000. Two later lawsuits, the one we decided in 2009 and the one we decide today, arose out of the Settlement Agreement.

As we explained in our earlier opinion:

“The settlement agreement, among other things . . . called for Tyco to provide IDT with an ‘indefeasible right of use’ (IRU) of certain fiber optic capacity free of charge for a 15-year period. The capacity was to be on Tyco’s TyCom Global Network (TGN), a subsea cable system planned to connect North America, Asia and Europe. At the time of the settlement, the TGN was not yet constructed. The agreement states that ‘[t]he IRU shall be documented pursuant to definitive agreements to be mutually agreed upon and, in any event, containing terms and conditions consistent with those described herein.’ These further definitive agreements, and the IRU, were to be in writing and consistent with Ty-co’s standard agreements with similarly situated customers. Tyco’s standard agreements were not in existence at the time the settlement was made” (IDT Corp., 13 NY3d at 212 [footnote omitted]).

In a round of negotiations stretching from 2001 to 2004, the parties failed to reach the “definitive agreements” by which the IRU was to be “documented.” In the course of the negotiations, Tyco proposed terms that were, in IDT’s view, inconsistent with the terms of the Settlement Agreement. We said in our previous opinion, summarizing the record before us: “Negotiations continued to be active, but flagged after a sharp drop in the market greatly reduced the value of the capacity Tyco had agreed to supply. The negotiations finally came to an end in March 2004” (id.). IDT sued Tyco in May of that year.

We affirmed a grant of summary judgment dismissing IDT’s 2004 complaint. We agreed with IDT that the 2000 Settlement Agreement “was a fully enforceable contract” (id. at 213), but held that Tyco’s obligation under that contract to furnish IDT with capacity was subject to conditions — most important among them the negotiation and execution of the IRU — that were never met. We recognized the parties’ obligation “to negotiate the terms of the IRU and other agreements in good faith” (id. at 214), but held that Tyco had not breached its obligation merely by proposing (as distinct from insisting upon) terms allegedly inconsistent with the Settlement Agreement. We concluded that “the record does not support a finding that Tyco breached any of its obligations” (id. at 215).

Five weeks after our decision, counsel for IDT sent a letter to Tyco demanding that Tyco “immediately comply with [its] obligations” under the 2000 Settlement Agreement by providing fiber optic capacity to IDT. Tyco replied that it had no further obligations under the Settlement Agreement — a position that it reaffirmed several times in the following months — but nevertheless agreed to negotiate. This round of negotiations was no more successful than the previous one, and IDT brought the present case in November of 2010, asserting separate causes of action for breach of contract and for breach of Tyco’s duty to negotiate in good faith.

IDT’s new complaint recounts a series of written and oral communications between IDT and Tyco in 2009 and 2010. This narrative concludes with the allegation that in an October 13, 2010 telephone conversation:

“Tyco continued to insist on terms that conflicted with the Settlement Agreement and made a definite and final communication to IDT of Tyco’s intent to forgo its obligations under the Settlement Agreement, including its obligation to provide to IDT the use of the Wavelengths described in the Settlement Agreement for fifteen years and in a manner fully consistent with that described in the Settlement Agreement.”

The complaint is not more specific about what Tyco representatives allegedly said on October 13. The only document in the record that purports to summarize the October 13 conversation is an email sent the following day by Tyco’s counsel. The email does not support the complaint’s description of the conversation; it neither makes any nonnegotiable demands nor suggests that Tyco is unwilling to continue negotiating.

On Tyco’s motion pursuant to CPLR 3211, Supreme Court, interpreting our previous decision to mean “that Tyco has no further obligations under the Settlement Agreement,” dismissed IDT’s 2010 complaint for failure to state a cause of action (2011 NY Slip Op 33843[U], *6 [2011]). The Appellate Division reversed, concluding that Tyco’s “obligations . . . did not have an expiration date” and that “the parties were obligated to continue to negotiate until either side insisted that the open terms be as set forth in [Tyco’s] standard agreements” (IDT Corp. v Tyco Group, S.A.R.L., 104 AD3d 170, 176 [1st Dept 2012]). The Appellate Division also held that “the defendants’ statements that they had no further obligations to negotiate” were “an anticipatory breach of the contract” (id. at 176-177), and that the result of the previous action did not bar IDT’s present claims under the doctrine of res judicata or collateral estoppel (id. at 178). Two Justices concurred in the result, agreeing that our decision in the previous action did not bar the present one and finding IDT’s allegation, quoted above, that Tyco had insisted on terms in conflict with the Settlement Agreement to be sufficient “at this pre-discovery stage of the proceeding” to withstand a motion to dismiss (id. at 179 [Friedman, J., concurring]).

The Appellate Division granted Tyco leave to appeal, certifying to us the question of whether its order was properly made (2013 NY Slip Op 74325[U] [2013]). We answer in the negative, reverse and reinstate Supreme Court’s dismissal of the complaint.

II

As our 2009 decision makes clear, parties may enter into a binding contract under which the obligations of the parties are conditioned on the negotiation of future agreements. In such a case, the parties are obliged to negotiate in good faith. But that obligation can come to an end without a breach by either party. There is such a thing as a good faith impasse; not every good faith negotiation bears fruit. As then-District Judge Leval explained in Teachers Ins. & Annuity Assn. of Am. v Tribune Co. (670 F Supp 491, 505 [SD NY 1987]):

“[I]f, through no fault on either party, no final contract were reached, either because the parties in good faith failed to agree on the open secondary terms, or because, as often happens in business, the parties simply lost interest in the transaction and by mutual tacit consent abandoned it without having reached final contract documents, no enforceable rights would survive based on the preliminary commitment.” (See also Adjustrite Sys., Inc. v GAB Bus. Servs., Inc., 145 F3d 543, 548 [2d Cir 1998] [if the parties “fail to reach ... a final agreement after making a good faith effort to do so, there is no further obligation”]; Snakepit Auto., Inc. v Superformance Intl., LLC, 19 Misc 3d 1114[A], 2008 NY Slip Op 50683[U], *5 [Sup Ct, Nassau County 2008] [finding that the parties “have negotiated in good faith” but “were unable to reach an agreement”].)

Tyco says that in this case its obligation to negotiate came to an end in 2004. It relies on our 2009 decision, and the facts underlying it, as establishing that the negotiations reached impasse, or were abandoned by both parties, in 2004, without bad faith on Tyco’s part at least.

We did indeed hold in 2009 that IDT had failed to show bad faith by Tyco. We also said that, after adverse developments in the marketplace, negotiations “flagged” and “finally came to an end in March 2004” (13 NY3d at 212). IDT is technically correct that this last statement does not bind it as a matter of res judicata or collateral estoppel; whether the negotiations had “finally” ended in 2004 was not directly in issue in the earlier case. Our statement that they did end then, however, was supported by the record before us, and no fact alleged by IDT in the present case is inconsistent with it.

But even on the assumption that Tyco’s obligation under the 2000 Settlement Agreement to negotiate additional agreements in good faith still existed in 2009-2010, IDT’s complaint does not sufficiently allege any breach of the obligation. It is true, as the concurring Justices in the Appellate Division pointed out, that courts normally give a generous reading to pleadings that are attacked as insufficient on their face. But it is not too much to ask that a pleading filed after more than a decade of back and forth between the parties contain some specific facts supporting the claim of bad faith — not just the bald conclusions, contradicted by the only relevant document referred to, that Tyco insisted “on terms that conflicted with the Settlement Agreement” and “made a definite and final communication” of its intent to violate its obligations.

While some specific details of the 2009-2010 negotiations are contained in IDT’s 2010 complaint, none of them, in our view, support an inference that Tyco failed to negotiate in good faith. IDT seems to rely heavily on Tyco’s repeated insistence, while continuing to negotiate with IDT, that it was not bound by the 2000 Settlement Agreement to do so. But this mere statement of Tyco’s legal position — whether or not the position was meritorious — is not in itself a refusal to negotiate.

Accordingly, the order of the Appellate Division should be reversed, with costs, the order of Supreme Court reinstated, and the certified question answered in the negative.

Pigott, J.

(dissenting). While I agree with the majority that parties may sometimes reach an “impasse” during contract negotiations (majority op at 500), neither party claims that is what happened here. Rather, IDT alleges that Tyco insisted that it had no obligation to negotiate and when Tyco did entertain negotiations, it did so in bad faith. Tyco admits that it took the position that it had no obligation to negotiate after this Court’s 2009 decision. Because Tyco had not been discharged of its obligations, either by this Court’s 2009 decision or by operation of law, I would affirm the order of the Appellate Division.

The obligation for Tyco to supply IDT with the wavelengths capacity arises out of the parties “valid settlement agreement” from 2001 (IDT Corp. v Tyco Group, S.A.R.L., 13 NY3d 209, 214 [2009]). In 2009, this Court held that IDT could not be successful on a claim for an anticipatory breach of the agreement for Tyco’s failure to turn over the wavelengths because the terms of that turnover were not yet completed and, at that juncture, there was no record support for the claim that Tyco had acted in bad faith during the negotiations of the turnover (id. at 214-215). We did not say, contrary to Tyco’s interpretation of our decision, that the parties were no longer bound to negotiate the terms of the turnover contemplated by the agreement. Rather, we expressly recognized that additional good faith negotiations were to . proceed as required by the settlement agreement (id. at 214 [“under the settlement agreement, the parties were required to negotiate the terms of the IRU and other agreements in good faith”]).

The current lawsuit concerns Tyco’s actions, and inaction, after our 2009 decision. While the majority criticizes the lengthy history of the parties’ dispute and IDT’s failure to include more documentary support for its allegation (see majority op at 503-504), this is a pre-pleading CPLR 3211 motion to dismiss the complaint. IDT was simply required to state a valid cause of action and, in my view, it did.

Judges Read, Rivera and Abdus-Salaam concur with Judge Smith; Judge Pigott dissents in an opinion in which Judge Graffeo concurs; Chief Judge Lippman taking no part.

Order reversed, with costs, order of Supreme Court, New York County, reinstated and certified question answered in the negative.


source: Caselaw Access Project

author: Smith, J.

license: Public Domain

text:
    [15 NE3d 1178, 992 NYS2d 169]
    The People of the State of New York, Respondent, v Patricia Fratangelo, Appellant.
    Argued May 6, 2014;
    decided June 5, 2014

      POINTS OF COUNSEL

      James A. Baker, Ithaca, for appellant.
    The court erred by refusing to instruct the jury that evidence that the defendant’s blood alcohol content was less than .08% was prima facie evidence that the defendant was not intoxicated. (People v Watts, 57 NY2d 299; People v Zona, 14 NY3d 488; People v Mertz, 68 NY2d 136; People v Blair, 98 NY2d 722.)

      Barry L. Prosch, District Attorney, Waterloo, for respondent.
    The court’s jury instruction on the common-law driving while intoxicated count was proper. (Heard v Cuomo, 80 NY2d 684; People v Finnegan, 85 NY2d 53; People v Mertz, 68 NY2d 136.)
   OPINION OF THE COURT

Smith, J.

We hold that, in a prosecution for drunken driving, the opinion of a defense expert that the defendant’s blood alcohol content (BAC) was below the statutory threshold is not “prima facie evidence” that the defendant was not intoxicated. A defendant is nevertheless entitled, upon request, to an instruction that if the jury finds that the BAC was as the expert testified, it may find that the defendant was not intoxicated. Defendant here requested only the “prima facie evidence” instruction to which she was not entitled, and we therefore affirm her conviction.

I

Defendant was stopped for speeding. She was given a breath test approximately an hour and 20 minutes after she was stopped, and was found to have a BAC of .09%. She was prosecuted for driving while intoxicated (DWI) under two different theories — so-called “per se” and “common law” DWI. Both names can be confusing. The “per se” crime is defined by Vehicle and Traffic Law § 1192 (2) as driving while the driver “has .08 of one per centum or more by weight of alcohol in the person’s blood as shown by chemical analysis.” Despite the per se label, a valid blood test showing a result of .08% or more does not require conviction under this section; a defendant may try to show that her BAC was lower when she was driving than at the time she took the test (People v Mertz, 68 NY2d 136 [1986]).

The “common law” crime is actually statutory, as all crimes are today, but the statute creating it, Vehicle and Traffic Law § 1192 (3), says only that “[n]o person shall operate a motor vehicle while in an intoxicated condition,” and case law has provided the definition of “intoxicated.” A person is intoxicated within the meaning of section 1192 (3) when

“he is incapable of employing the physical and mental abilities which he is expected to possess in order to operate a vehicle as a reasonable and prudent driver” (People v Cruz, 48 NY2d 419, 428 [1979]).

At defendant’s trial in Town Court, the People presented evidence of her breathalyzer test and also the testimony of the arresting officer that when she was stopped defendant smelled of alcohol, had glassy eyes, and failed four field sobriety tests (involving such things as standing on one leg and following a moving object with one’s eyes). Defendant called several witnesses, including herself and an expert pharmacologist. The expert testified that in his opinion, based on defendant’s testimony as to when she last consumed alcohol and the rate at which alcohol is absorbed into the bloodstream, her BAC at the time she was stopped was between .03% and .04%.

Defendant asked the court to charge the jury in the following language, taken from the pattern jury instruction used in common law DWI cases:

“Under our law, evidence that there was less than .08 of one per centum by weight of alcohol in the defendant’s blood is prima facie evidence that the defendant was not in an intoxicated condition” (see CJI2d[NY] Vehicle and Traffic Law § 1192 [3] [driving while intoxicated]).

The court refused to give the instruction.

The jury acquitted defendant of per se DWI, but convicted her of the common law crime. County Court affirmed, concluding that “any instructions regarding prima facie evidence that can be presented as a result of v & T Section 1195, must be based upon chemical analysis, and not the opinion testimony of a defense expert” (footnote omitted). A Judge of this Court granted leave to appeal (21 NY3d 1004 [2013]), and we now affirm.

II

The decisive issue in this case is whether the defense expert’s testimony was “[e]vidence” entitled to the “[probative value” specified by Vehicle and Traffic Law § 1195 (2). This question can best be answered by reading the first two subdivisions of section 1195:

“1. Admissibility. Upon the trial of any action or proceeding arising out of actions alleged to have been committed by any person arrested for a violation of any subdivision of section eleven hundred ninety-two of this article, the court shall admit evidence of the amount of alcohol or drugs in the defendant’s blood as shown by a test administered pursuant to the provisions of section eleven hundred ninety-four of this article.
“2. Probative value. The following effect shall be given to evidence of blood-alcohol content, as determined by such tests, of a person arrested for violation of section eleven hundred ninety-two of this article:
“(a) Evidence that there was .05 of one per centum or less by weight of alcohol in such person’s blood shall be prima facie evidence that the ability of such person to operate a motor vehicle was not impaired by the consumption of alcohol, and that such person was not in an intoxicated condition;
“(b) Evidence that there was more than .05 of one per centum but less than .07 of one per centum by weight of alcohol in such person’s blood shall be prima facie evidence that such person was not in an intoxicated condition, but such evidence shall be relevant evidence, but shall not be given prima facie effect, in determining whether the ability of such person to operate a motor vehicle was impaired by the consumption of alcohol; and
“(c) Evidence that there was .07 of one per centum or more but less than .08 of one per centum by weight of alcohol in such person’s blood shall be prima facie evidence that such person was not in an intoxicated condition, but such evidence shall be given prima facie effect in determining whether the ability of such person to operate a motor vehicle was impaired by the consumption of alcohol” (emphasis added).

A “test administered pursuant to” Vehicle and Traffic Law § 1194 is “a chemical test of . . . breath, blood, urine, or saliva” (Vehicle and Traffic Law § 1194 [2] [a]). Section 1195 (2) is expressly limited to evidence of BAC “as determined by such tests.” Since the evidence of her BAC that defendant presented here was not determined by a chemical test but was contained in the opinion of a defense expert, that evidence did not have the “prima facie” effect specified by the statute and defendant was not entitled to the charge she sought.

What has been said is enough to dispose of the case. It should not be thought, however, that the BAC thresholds specified in Vehicle and Traffic Law § 1195 (2) must be entirely omitted from a jury charge in a common law DWI case or in a driving while ability impaired (DWAI) case brought under Vehicle and Traffic Law § 1192 (1) (“No person shall operate a motor vehicle while the person’s ability to operate such motor vehicle is impaired by the consumption of alcohol”). It is obvious from Vehicle and Traffic Law §§ 1192 (2) and 1195 (2) that the legislature has made judgments about the significance of certain statistical thresholds — i.e., that a BAC of .08% or more justifies an inference of intoxication; that a BAC below .08% justifies an inference of non-intoxication; that a BAC of .07% or more justifies an inference of impairment; and that a BAC equal to or less than .05% justifies an inference that the driver was neither intoxicated nor impaired in her ability to drive. There is no reason why juries should remain unaware of these legislative judgments.

Thus, in this case Town Court should, if it had been requested to do so, have charged the jury in words or substance: If you find that there was less than .08 of one percent by weight of alcohol in defendant’s blood while she was operating the motor vehicle, you may, but are not required to, find that she was not in an intoxicated condition. Similarly, in a DWAI case where the defendant proffers evidence other than chemical tests of a BAC at or below .05%, it would be proper to charge: If you find that there was .05 of one percent or less by weight of alcohol in the defendant’s blood while she was operating a motor vehicle, you may, but are not required to, find that her ability to operate the motor vehicle was not impaired by the consumption of alcohol. And the People are entitled to a corresponding charge when they rely on evidence other than chemical tests to show that a defendant’s BAC was at or above .08% in a DWI case, or .07% in a DWAI case.

The difference between our “if you find” formulation and the “prima facie evidence” charge that defendant here requested is substantive, not just verbal. The “prima facie” charge instructs the jury on the weight to be given certain evidence — an instruction that is appropriate only when the evidence consists of chemical tests. The “if you find” charge allows the jury to evaluate the evidence for itself — i.e., lets it choose to believe the expert or not — but instructs it as to the inferences it may draw after it has made that evaluation.

Accordingly, the order of County Court should be affirmed.

Chief Judge Lippman and Judges Graffeo, Read, Pigott, Rivera and Abdus-Salaam concur.

Order affirmed.


author: Pigott, J.

text:
    [15 NE3d 1175, 992 NYS2d 166]
    In the Matter of Antwaine T., a Person Alleged to be a Juvenile Delinquent, Respondent. Presentment Agency, Appellant.
    Argued May 8, 2014;
    decided June 5, 2014

      POINTS OF COUNSEL

      Michael A. Cardozo, Corporation Counsel, New York City (Dona B. Morris, Pamela Seider Dolgow and Jeffrey D. Friedlander of counsel), for appellant.
    The petition was sufficient to establish the elements of unlawful possession of a dangerous weapon by persons under sixteen (Penal Law § 265.05) because a machete with a 14-inch blade is inherently a dangerous knife. (Matter of Jahron S., 79 NY2d 632; Matter of Jamie D., 59 NY2d 589; People v Campos, 93 AD3d 581; Ash v Reilly, 433 F Supp 2d 37; United States v Massey, 461 F3d 177; United States v Introcaso, 506 F3d 260; United States v Masciandaro, 638 F3d 458; United States v Burling, 420 F3d 745; Matter of Ricci S., 34 NY2d 775; Matter of Edwin O., 91 AD3d 654.)

      Steven Banks, The Legal Aid Society, New York City (John A. Newbery, Tamara Steckler and Briana Fedele of counsel), for respondent.
    Where this Court in Matter of Jamie D. (59 NY2d 589 [1983]), required the prosecution, in order to make out a charge brought under Penal Law § 265.05 for possession of a “dangerous knife,” to show that a utilitarian knife either had been modified so as to convert it into a weapon or that the circumstances of its possession were such as to indicate that it was possessed as a weapon, the Appellate Division correctly held that an allegation that respondent simply possessed an unmodified knife with a 14-inch blade, summarily described as a “machete,” was, without more, facially insufficient to show that the knife was a “dangerous knife” within the meaning of the statute. (Matter of Jahron S., 79 NY2d 632; Matter of Michael M., 3 NY3d 441; Matter of Neftali D., 85 NY2d 631; Matter of Rodney J., 83 NY2d 503; Matter of Detrece H., 78 NY2d 107; Matter of David T., 75 NY2d 927; People v Thomas, 4 NY3d 143; People v Casey, 95 NY2d 354; People v Alejandro, 70 NY2d 133; People v Almodovar, 62 NY2d 126.)
   OPINION OF THE COURT

Pigott, J.

The issue in this juvenile delinquency proceeding is whether the petition was facially sufficient to charge respondent Antwaine T. with a violation of Penal Law § 265.05, which proscribes a juvenile’s possession of “any dangerous knife.” We conclude that the petition was facially sufficient.

On November 23, 2010, a petition was filed in Family Court against respondent, then 15 years old, charging him with criminal possession of a weapon in the fourth degree (Penal Law § 265.01 [2]) and unlawful possession of weapons by persons under sixteen (Penal Law § 265.05). The two counts of the petition were supported by a sworn statement of the arresting officer. In the statement, the officer recounted that at approximately 11:23 p.m. in Brooklyn, respondent,

“a person under the age of [16], possessed a dangerous instrument or deadly . . . weapon, to wit: a machete, with the intent to use the same unlawfully against another; in that:
“At the above date, time and location, I was working in my official capacity as a police officer, when I recovered a machete from [respondent]. The blade of the machete was approximately 14 inches in length. I then vouchered the machete using New York Property Clerk Invoice Number R648888.
“Later, [respondent’s] mother informed me that [he] was born on January 30, 1995 and that he is 15 years old. The . . . mother also provided me with a photocopy of [respondent’s] birth certificate, which confirmed this information.”

Respondent initially entered a denial of the petition, but later withdrew that denial and made an admission to the count of unlawful possession of weapons by persons under sixteen. Specifically, he admitted that at the pertinent time and place, he was 15 years old and he “[was] in possession of a dangerous knife, and more specifically a machete that had a blade of approximately [14] inches.” Family Court granted respondent an adjournment in contemplation of dismissal (ACD).

On June 3, 2011, the case was restored to the Family Court’s calendar because respondent had not complied with the terms of his ACD. Family Court placed him under enhanced probation supervision for a period of nine months. Later, upon finding that respondent had violated the conditions of his probation, the court revoked the earlier order of disposition, adjudicated respondent a juvenile delinquent, and placed him on probation for six months.

On appeal, the Appellate Division found the petition facially insufficient “because it did not contain allegations which, if true, would have established that the knife he possessed was a ‘dangerous knife’ ” pursuant to section 265.05 (105 AD3d 859, 860 [2d Dept 2013], citing Matter of Neftali D., 85 NY2d 631, 635 [1995]). Rather, the arresting officer’s account “merely described the unmodified, utilitarian knife which [respondent] possessed, and contained no allegations as to the ‘circumstances of its possession’ ” (105 AD3d at 860, quoting Matter of Jamie D., 59 NY2d 589, 593 [1983]). Thus, it held, there were insufficient allegations to permit a finding that, when respondent was arrested, the knife served as “a weapon rather than a utensil” (id.).

This Court granted the presentment agency leave to appeal and we now reverse.

A petition commencing a juvenile delinquency proceeding must contain “a plain and concise factual statement in each count which . . . asserts facts supporting every element of the crime charged and the respondent’s commission thereof with sufficient precision to clearly apprise the respondent of the conduct which is the subject of the accusation” (Family Ct Act §311.1 [3] [h]). The petition is sufficient on its face when “nonhearsay allegations of the factual part of the petition or of any supporting depositions establish, if true, every element of each crime charged and the respondent’s commission thereof’ (id. § 311.2 [3]). The absence of factual allegations supporting each element of the crimes alleged constitutes a nonwaivable jurisdictional defect (Matter of David T., 75 NY2d 927 [1990]).

Penal Law § 265.05 provides, in relevant part:

“It shall be unlawful for any person under the age of sixteen to possess any air-gun, spring-gun or other instrument or weapon in which the propelling force is a spring or air, or any gun or any instrument or weapon in or upon which any loaded or blank cartridges may be used, or any loaded or blank cartridges or ammunition therefor, or any dangerous knife-, provided that the possession of rifle or shotgun or ammunition therefor by the holder of a hunting license or permit issued pursuant to article eleven of the environmental conservation law and used in accordance with said law shall not be governed by this section” (emphasis added).

The statute does not define the term “dangerous knife.” In Matter of Jamie D. (59 NY2d 589 [1983]), however, this Court held that the term, as used in the statute, “connotes a knife which may be characterized as a weapon” (id. at 592). We explained that certain knives may fall within the scope of the statute based solely on the knife’s particular characteristics. For instance, “a bayonet, a stiletto, or a dagger” would come within the meaning of “dangerous knife” because those instruments are “primarily intended for use as a weapon” (id. at 592-593).

We also explained that other knives, which are designed and primarily intended for use as “utilitarian utensils,” may also come within the statutory language in at least two ways (id. at 593). First, a knife may be converted into a weapon, and second, “the circumstances of its possession, although there has been no modification of the implement, may permit a finding that on the occasion of its possession it was essentially a weapon rather than a utensil” (id. at 593).

A “machete” is generally defined as “a large, heavy knife that is used for cutting plants and as a weapon” (Merriam-Webster Online Dictionary, http://www.merriam-webster.com/ dictionary/machete). While a machete has utilitarian purposes, under the circumstances of this case, it would be unreasonable to infer from the statement supporting the petition that respondent was using the machete for cutting plants. Rather, the arresting officer’s description of the “machete,” with its 14-inch blade, being carried by respondent late at night on a street in Brooklyn, adequately states “circumstances of. . . possession” (Jamie D. at 593) that support the charge that defendant was carrying a weapon.

Accordingly, the order of the Appellate Division should be reversed, without costs, and the order of Family Court reinstated.

Chief Judge Lippman and Judges Graffeo, Read, Smith, Rivera and Abdus-Salaam concur.

Order reversed, without costs, and order of Family Court, Kings County, reinstated.


author: Rivera, J. Pigott, J.

text:
    [16 NE3d 1150, 992 NYS2d 672]
    The People of the State of New York, Respondent, v Joseph Dumay, Appellant.
    Argued May 1, 2014;
    decided June 5, 2014

      POINTS OF COUNSEL

      Steven Banks, The Legal Aid Society, New York City (Amy Donner of counsel), for appellant.
    The accusatory instrument charging appellant with second-degree obstructing governmental administration was jurisdictionally defective because it failed to allege evidentiary facts to support its conclusory allegation that appellant intentionally physically interfered with the police officers’ attempt to patrol. (People v Dreyden, 15 NY3d 100; People v Alejandro, 70 NY2d 133; People v Jackson, 18 NY3d 738; People v Casey, 95 NY2d 354; People v Dumas, 68 NY2d 729; People v Kalin, 12 NY3d 225; People v Case, 42 NY2d 98; Matter of Davan L., 91 NY2d 88; People v Roman, 23 Misc 3d 56; People v Rodriquez, 19 Misc 3d 302.)

      Charles J. Hynes, District Attorney, Brooklyn (Adam M. Koelsch and Leonard Joblove of counsel), for respondent.
    The count of obstructing governmental administration in the second degree was facially sufficient. (People v Maldonado, 86 NY2d 631; People v Mercado, 68 NY2d 874; People v McRay, 51 NY2d 594; People v Suber, 19 NY3d 247; People v Alejandro, 70 NY2d 133; People v Keizer, 100 NY2d 114; People v Weinberg, 34 NY2d 429; People v Fernandez, 20 NY3d 44; People v Herbert, 31 Misc 3d 131 [A], 2011 NY Slip Op 50588[U]; People v Wilson, 30 Misc 3d 138[A], 2011 NY Slip Op 50221[U].)
   OPINION OF THE COURT

Rivera, J.

On appeal, defendant Joseph Dumay challenges the facial sufficiency of the People’s accusatory instrument, which charged him with, inter alia, obstructing governmental administration in the second degree by preventing a police officer from patrolling the neighborhood. We hold that defendant waived prosecution by information, and the accusatory instrument met the factual sufficiency requirements of a misdemeanor complaint.

Defendant was arrested on a public street in Brooklyn, New York, for obstructing a police officer’s exercise of his official duties. According to the accusatory instrument, defendant “slammed the trunk of [the police officer’s] radio mounted patrol vehicle with an open hand and prevented said vehicle from moving by standing behind it and preventing [the police officer] from patrolling the neighborhood.”

Defendant agreed to plead guilty to obstructing governmental administration in exchange for a 15 day sentence. The court asked defense counsel if defendant waived prosecution by information, and defense counsel replied, “So waive.” During the subsequent plea allocution, defendant admitted the facts as alleged in the accusatory instrument, and the court sentenced defendant to 15 days in accordance with the plea agreement.

Thereafter, defendant unsuccessfully appealed his conviction to the Appellate Term. Defendant maintained that, notwithstanding his counsel’s statement, he did not waive prosecution by information, and as a consequence the accusatory instrument was subject to the legal standards applicable to a misdemeanor information, rather than a complaint. Under those standards, defendant maintained that the accusatory instrument was jurisdictionally defective because the charge of obstructing governmental administration was only supported by conclusory statements.

The Appellate Term affirmed defendant’s conviction. Initially, the Court found that defendant’s challenge was jurisdictional and therefore did not require preservation. On the merits, the Court found that defendant expressly waived his right to prosecution by information, requiring the instrument to be evaluated as a misdemeanor complaint. Under that standard, the Court concluded, the allegations were sufficient to support a charge of obstructing governmental administration (People v Dumay, 36 Misc 3d 159[A], 2012 NY Slip Op 51809[U] [App Term, 2d Dept, 2d, 11th & 13th Jud Dists 2012]). A Judge of this Court granted leave to appeal (21 NY3d 1004 [2013]) and we now affirm.

“A valid and sufficient accusatory instrument is a nonwaivable jurisdictional prerequisite to a criminal prosecution” (People v Dreyden, 15 NY3d 100, 103 [2010], citing People v Case, 42 NY2d 98, 99 [1977], and People v Hansen, 95 NY2d 227, 230 [2000]). Under the CPL, a court must use one of two instruments to take jurisdiction over a defendant accused of a misdemeanor: a misdemeanor complaint or a misdemeanor information. A misdemeanor complaint authorizes jurisdiction over an accused, and can commence a criminal action and allow the state to jail the defendant for up to five days, but it cannot serve as a basis for prosecution, unless the defendant waives prosecution by information (see CPL 100.10 [4]; 120.20 [1] [a]; 170.65 [1], [3]; 170.70; People v Kalin, 12 NY3d 225, 228 [2009]). Concomitantly, unless waived, a valid information is a jurisdictional requirement for a misdemeanor prosecution (see CPL 100.10 [4]; Kalin, 12 NY3d at 228).

A misdemeanor information must set forth “nonhearsay allegations which, if true, establish every element of the offense charged and the defendant’s commission thereof” (Kalin, 12 NY3d at 228-229, citing People v Henderson, 92 NY2d 677, 679 [1999], and CPL 100.40 [1] [c]). We have called this “the prima facie case requirement” (Kalin, 12 NY3d at 229 [internal quotation marks omitted]). An information serves the same role in a misdemeanor prosecution as a grand jury indictment does in a felony case: it ensures that a legally sufficient case can be made against the defendant (see People v Alejandro, 70 NY2d 133, 138-139 [1987]). A misdemeanor complaint, in comparison, need only set forth facts that establish reasonable cause to believe that the defendant committed the charged offense (see Kalin, 12 NY3d at 228).

A defendant may knowingly and intelligently waive prosecution by misdemeanor information, as demonstrated by an affirmative act (see People v Casey, 95 NY2d 354, 359 [2000]; People v Weinberg, 34 NY2d 429, 431 [1974]). When the defendant waives prosecution by information, he or she declines the protection of the statute, and the accusatory instrument must only satisfy the reasonable cause requirement (see CPL 170.65 [1], [3]; Kalin, 12 NY3d at 228).

Here, defendant argues that he never effectuated a lawful waiver of his right to prosecution by information, and, therefore, the accusatory instrument is an information that is subject to the prima facie case requirement. This argument is completely without factual record support. Defense counsel replied “So waive” in open court, in defendant’s presence, and in response to Criminal Court’s direct inquiry as to whether defendant waived prosecution by information. This statement communicated, in no uncertain terms, defendant’s choice to waive his right.

To avoid the obvious consequences of the facts as found in the record, defendant argues that his waiver was a legal nullity because the People charged and arraigned him by information. This argument is based on the flawed premise that a defendant cannot waive prosecution by information when the People have initiated the case by information, rather than by complaint. Nothing in the CPL or our case law supports this idea. Indeed, CPL 170.65 specifically allows a defendant to waive prosecution by information, which necessarily entails forgoing the statutory protections required of an information and submitting to prosecution by complaint. A defendant’s knowing and voluntary waiver is valid regardless of whether the criminal action commences by information or complaint.

Defendant seeks to draw support for his argument from our opinion in People v Fernandez (20 NY3d 44 [2012]). In that case, the defendant was charged with aggravated unlicensed operation of a motor vehicle by an accusatory instrument titled “complaint/information” (id. at 47). The defendant argued that the instrument was a facially insufficient misdemeanor complaint (id. at 48). We held that an accusatory instrument should be evaluated based on its substance and not its label, and concluded that the accusatory instrument was sufficient to serve as a simplified traffic information because it was substantially in the form prescribed by the Commissioner of Motor Vehicles, thus meeting all applicable legal requirements (id. at 51-53).

Defendant’s reliance on Fernandez is misplaced. Here, we are not asked to give the proper name to an ambiguously titled accusatory instrument. Instead, we must decide which legal standard to use for evaluating the instrument’s sufficiency. Despite defendant’s assertions to the contrary, the record leads to the inevitable conclusion that he validly waived his right to prosecution by information. Thus, the proper legal standard is that required of a complaint. Absent any claim or proof that the defendant’s waiver was not intelligent, knowing, and voluntary, he cannot now seek the statutory protections that he waived.

Moreover, adopting defendant’s interpretation of the statute would allow defendants to manipulate the plea bargaining system. By pleading guilty and waiving prosecution by information, a defendant signals an end to any challenge to an information’s factual sufficiency. If a defendant can later appeal a knowing and voluntary plea by resuming the same sufficiency argument the defendant had forsaken in the trial court, it would undermine the finality of the conviction. The unintended result could be prosecutors who are no longer willing to broker plea bargains in misdemeanor cases for fear of endless litigation over the accusatory instrument.

Having rejected defendant’s waiver argument we must measure the facial sufficiency of the accusatory instrument by the standard required of misdemeanor complaints. A misdemeanor complaint is adequate if it provides the defendant “with sufficient notice of the charged crime to satisfy the demands of due process and double jeopardy” (Dreyden, 15 NY3d at 103, citing Kalin, 12 NY3d at 231-232, and Casey, 95 NY2d at 366). As we have said, the instrument’s factual allegations must establish “ ‘reasonable cause’ to believe that the defendant committed the charged offense” (Kalin, 12 NY3d at 228).

Defendant challenges the sufficiency of the instrument in two respects. First, he argues that the instrument fails to support the intent element of the crime. Second, he argues that the instrument does not allege sufficient facts to show that he actually interfered with the officer’s patrol.

A person is guilty of obstructing governmental administration when that person “intentionally obstructs, impairs or perverts the administration of law or other governmental function or prevents or attempts to prevent a public servant from performing an official function, by means of intimidation, physical force or interference” (Penal Law § 195.05). The interference must be “in part at least, physical in nature” (People v Case, 42 NY2d 98, 102 [1977]), but “criminal responsibility should attach to minimal interference set in motion to frustrate police activity” (Matter of Davan L., 91 NY2d 88, 91 [1997]).

Here, the factual part of the instrument consists of averments by the arresting officer setting forth the elements of obstructing governmental administration in the second degree. It provides the date, time, and location of this offense. It states that defendant committed the crime when he slammed the trunk of the officer’s patrol vehicle with his open hand and prevented the officer from patrolling the neighborhood by standing behind the police car. Thus, the accusatory instrument supplies enough evidentiary facts to provide reasonable cause to believe that defendant obstructed a police officer from performing an official function.

Defendant asserts that the instrument lacks sufficient facts to establish his intent. While a bare assertion that defendant was merely standing behind the police vehicle would be insufficient to establish reasonable cause to believe he was intending to prevent the officer from patrolling the neighborhood, the instrument asserts more. The fact that defendant struck a “radio mounted patrol vehicle” — i.e., a marked police car — shows his awareness that the vehicle was used for official governmental business. He intentionally struck the vehicle with that awareness. Further, the allegation that defendant was “standing behind” the police vehicle indicates that defendant intentionally stood stationary behind the car and did not merely walk past it or innocently cross between it and other parked cars. A reasonable person can conclude that standing still behind a police car will impede its movements.

Nevertheless, defendant argues that the instrument does not provide enough facts to support the intent element of the crime because it does not specifically state that defendant knew the officer was trying to patrol the neighborhood. However, intent may be inferred “from the act itself" (People v Bracey, 41 NY2d 296, 301 [1977]). A reasonable person could infer from the facts alleged that defendant struck the vehicle’s trunk and blocked its backward movements in order to stop the officer from backing up.

Defendant also argues that the instrument does not allege enough facts to support the obstruction element of the charged crime. According to defendant, the instrument does not show that he actually obstructed the police vehicle because it does not make clear that the vehicle’s only possible egress was to back up. Defendant’s argument would require the accusatory instrument to negate every possible way by which the police officer could have moved the vehicle in order to patrol. Defendant would also require the complaint to allege facts sufficient for a conviction after trial, but the CPL only requires the People to show reasonable cause to believe that the defendant committed the crime charged (see e.g. Kalin, 12 NY3d at 228-229; People v Dumas, 68 NY2d 729, 731 [1986]).

Finally, defendant argues that the instrument does not provide enough information to put him on notice of the crime. However, the obvious implication of the factual recitation is that when defendant stood behind the police vehicle, he blocked the police from moving it, and, thus, he prevented the police officer from patrolling. The instrument states the time, date, and location of these events, and this information is sufficient to prevent defendant from facing double jeopardy on the same charges.

The order of the Appellate Term should be affirmed.

Pigott, J.

(dissenting). The majority states the correct standard for whether a misdemeanor complaint is jurisdictionally defective, but then misapplies the rule in this case. Therefore, I dissent.

Under the Criminal Procedure Law, “[t]he factual part of a misdemeanor complaint must allege ‘facts of an evidentiary character’ (CPL 100.15 [3]) demonstrating ‘reasonable cause’ to believe the defendant committed the crime charged (CPL 100.40 [4] [b])” (People v Dreyden, 15 NY3d 100, 102-103 [2010], quoting People v Dumas, 68 NY2d 729, 731 [1986]). “[T]he charge must be supported by evidentiary facts showing the basis for the conclusion” that a crime was committed (Dreyden, 15 NY3d at 103 [internal quotation marks omitted], quoting Dumas, 68 NY2d at 731), rather than merely accompanied by a “conclusory statement” (Dreyden, 15 NY3d at 103, quoting People v Kalin, 12 NY3d 225, 229 [2009]) alleging the crime.

The mens rea of the crime of second-degree obstructing governmental administration (Penal Law § 195.05) is the intent to obstruct governmental function, here the intent to prevent a police officer from performing his patrol duties (see generally People v Case, 42 NY2d 98, 102 [1977]). The only pertinent actions by defendant alleged in the accusatory instrument are slamming the trunk of the patrol vehicle while standing behind it. Such behavior is consistent with the actions of a confused, disturbed individual who displays short-lived anger towards a police officer, but fails to imply that the defendant possessed the requisite intent to prevent the officer “from patrolling the neighborhood.”

Had the accusatory instrument stated that a police officer directed defendant to move, or that the police told defendant that he should not remain standing behind the patrol car, or that the officer was actually attempting to drive the vehicle at the time defendant was standing behind it, one might infer that defendant intended to impede the officer. But no such evidentiary facts are present in this accusatory instrument. Indeed the instrument does not assert that the police officer spoke to defendant at all or was attempting to drive the patrol car. While it may be assumed that defendant was aware that the vehicle in question was a patrol car, used by a police officer, this awareness “cannot be equated with [understanding] a direct order of an officer to a defendant to do or not do something” (People v Berdini, 18 Misc 3d 221, 224 [Crim Ct, NY County 2007]).

The test of whether a flaw in an accusatory instrument is a jurisdictional defect “is, simply, whether the accusatory instrument failed to supply defendant with sufficient notice of the charged crime to satisfy the demands of due process and double jeopardy” (Dreyden, 15 NY3d at 103, citing Kalin, 12 NY3d at 231-232, and People v Casey, 95 NY2d 354, 366 [2000]). Here, the factual allegations in the accusatory instrument failed to give defendant notice sufficient to enable preparation of a defense. A reasonable person would not readily infer from the accusatory instrument that he stood accused of a crime involving the intent to prevent a police officer from carrying out his official duties.

Therefore, I would reverse the Appellate Term’s order and, since defendant has already served his sentence for this relatively minor crime (People v Allen, 39 NY2d 916, 917-918 [1976]; see Dreyden, 15 NY3d at 104; see also e.g. People v Hightower, 18 NY3d 249, 253 [2011]; People v Simmons, 32 NY2d 250, 253 [1973]; People v Scala, 26 NY2d 753, 754 [1970]), I would dismiss the accusatory instrument.

Chief Judge Lippman and Judges Graffeo, Read and Smith concur with Judge Rivera; Judge Pigott dissents in an opinion in which Judge Abdus-Salaam concurs.

Order affirmed.

       At defendant’s arraignment, defense counsel orally challenged the facial sufficiency of the accusatory instrument, but failed to put the motion in writing, as directed by the court. Instead, at the following court date, defendant pleaded guilty.


author: Chief Judge Lippman. Pigott, J.

text:
    [15 NE3d 1187, 992 NYS2d 178]
    Morpheus Capital Advisors LLC, Respondent, v UBS AG, Defendant, and UBS Real Estate Securities, Inc., Appellant.
    Argued May 6, 2014;
    decided June 10, 2014

      POINTS OF COUNSEL

      White & Case LLP, New York City (Kenneth A. Caruso and Patrick M. Wilson of counsel), and Herrick, Feinstein LLP (Jeffrey I. Wasserman of counsel), for appellant.
    Morpheus Capital Advisors LLC has no cause of action for a Success Fee. (Slattery v Cothran, 210 App Div 581; Gaillard Realty Co., Inc. v Rogers Wire Works, Inc., 215 App Div 326; Werner v Eurich, 263 App Div 744; Levy v Isaacs, 285 App Div 1170; Barnet v Cannizzaro, 3 AD2d 745; Ackman v Toren, Inc., 6 AD2d 427, 6 NY2d 720; Hammond, Kennedy & Co. v Servinational, Inc., 48 AD2d 394; Solid Waste Inst. v Sanitary Disposal, 120 AD2d 915; Audrey

      Balog Realty Corp. v East Coast Real Estate Devs., 202 AD2d 529; Harvard Assoc. v Hayt, Hoyt & Landau, 264 AD2d 814.)

      Kornstein Veisz Wexler & Pollard, LLP, New York City (William B. Pollard, III, and Amy C. Gross of counsel), for respondent.
    I. Morpheus Capital Advisors LLC has a valid claim for breach of its exclusivity rights because its agreement with UBS Real Estate Securities, Inc. created an exclusive right to sell. (CV Holdings, LLC v Artisan Advisors, LLC, 9 AD3d 654; Beal Sav. Bank v Sommer, 8 NY3d 318; Matter of Westmoreland Coal Co. v Entech, Inc., 100 NY2d 352.) II. Parol evidence may be used to establish that the agreement between Morpheus Capital Advisors LLC and UBS Real Estate Securities, Inc. is an exclusive right to sell contract. (Greenfield v Philles Records, 98 NY2d 562; Brandwein v Provident Mut. Life Ins. Co. of Phila, 3 NY2d 491; New York Auction Co. v United States Fid. & Guar. Co., 260 NY 186; Schlenger v 310 Canal St. Corp., 272 App Div 761; Riverside S. Planning Corp. v CRP/Extell Riverside, L.P., 60 AD3d 61; Baird v Erie R.R. Co., 210 NY 225; Kass v Kass, 91 NY2d 554; Evans v Famous Music Corp., 1 NY3d 452; State of New York v Home Indem. Co., 66 NY2d 669; Lopez v Consolidated Edison Co. of N.Y., 40 NY2d 605.) III. Exclusive agency does not foreclose Morpheus Capital Advisors LLC’s breach of contract claims. (Oppenheimer & Co. v Oppenheim, Appel, Dixon & Co., 86 NY2d 685; Abiele Contr. v New York City School Constr. Auth., 91 NY2d 1; Board of Educ. of Hudson City School Dist. v Sargent, Webster, Crenshaw & Folley, 71 NY2d 21; Carnes Communications v Dello Russo, 305 AD2d 332; Solid Waste Inst. v Sanitary Disposal, 120 AD2d 915; Hammond, Kennedy & Co. v Servinational, Inc., 48 AD2d 394; Matter of Clairol Dev., LLC v Village of Spencerport, 100 AD3d 1546; Shaw v Bluepers Family Billiards, 94 AD3d 858; Shia v McFarlane, 46 AD3d 320.) IV. UBS Real Estate Securities, Inc.’s other arguments are unavailing. (407 E. 61st Garage v Savoy Fifth Ave. Corp., 23 NY2d 275; General Elec. Co. v Metals Resources Group, 293 AD2d 417; Warner v Kaplan, 71 AD3d 1; International Mins. & Chem. Corp. v Llano, Inc., 770 F2d 879; Mawhinney v Millbrook Woolen Mills, Inc., 231 NY 290; The Kronprinzessin Cecilie, 244 US 12; L. N. Jackson & Co. v Royal Norwegian Govt., 177 F2d 694.)
   OPINION OF THE COURT

Chief Judge Lippman.

We are asked to decide in this appeal whether a financial brokerage agreement gave plaintiff broker the right to a commission when defendant owner transferred certain distressed assets to a fund created by the Swiss National Bank as part of a 2008 bailout. We hold that the contract gave plaintiff a standard exclusive agency, not an exclusive right to sell the assets, and therefore no commission was due on the transaction at issue. Accordingly, the complaint should be dismissed.

I

In September 2008, plaintiff Morpheus Capital Advisors LLC (Morpheus) entered into an agreement with defendant UBS Real Estate Securities, Inc. (UBSRE). The contract provided that Morpheus would serve as “financial advisor and investment banker in the proposed sale” of certain student loan assets owned by UBSRE. The assets had a face value of $510 million, though the parties agree that the economic climate at the time had devalued the assets considerably, rendering them “toxic.”

In a section entitled “Scope of Engagement,” the agreement set forth 10 services that Morpheus would provide during the contract term. These included identifying, introducing and assessing potential investors, negotiating terms, and providing advice regarding valuation of the assets and the development of “alternative transaction structures.” In addition, UBSRE agreed that Morpheus “shall have the exclusive right to solicit counterparties for any potential Transaction involving the Student Loan Assets during the term of this Agreement.” The contract would automatically expire, unless renewed, on December 31, 2008. The term “Transaction” was left undefined. However, in a provision dealing with Morpheus’ commission— called a “Success Fee” — the contract defined a related term— “Transaction Amount” — as “the agreed value of the Student Loan Assets which are transferred or sold to a third party, or in respect to which the risk of first loss is assumed by a third party, in one or a series of transactions.” Morpheus’ Success Fee was to be calculated as a percentage of the Transaction Amount according to certain formulas. In addition, the contract required UBSRE to pay Morpheus a $150,000 signing fee and a retainer of $50,000 per month, neither of which is at issue here.

Finally, section five of the contract, entitled “Termination of Engagement — Exclusivity,” provided as follows:

“It is expressly agreed that following the expiration or termination of this Agreement, [Morpheus] will continue to be entitled to receive fees as described above that have accrued prior to such expiration or termination but are unpaid. It is also expressly agreed that if [UBSRE] completes any Transaction with a party or parties (‘Investor’) (1) introduced to [UBSRE] by [Morpheus], (2) introduced to [UBSRE] by another party other than [Morpheus], but [Morpheus] performed substantially all the services set forth herein in Section 1 prior to the termination of this Agreement, then [Morpheus] shall be entitled to its full fees as described above, until March 31, 2009.”

In June 2009 Morpheus commenced this action against UB-SRE and its parent company for breach of contract and breach of the covenant of good faith and fair dealing. The complaint alleged that in mid-October 2008 UBSRE reached an agreement with the Swiss National Bank (SNB), Switzerland’s central bank, to transfer up to $60 billion in illiquid assets to a special purpose vehicle called the Stabilization Fund. The SNB issued a press release explaining that the asset transfer would “relieve [ ] [UBS] from all relevant remaining risks stemming from problem-ridden segments of credit markets.” The complaint further alleged that in UBSRE’s financial disclosures to shareholders for the first quarter of 2009, the company stated that it had transferred toxic student loan assets to the SNB fund valued at $39.1 billion in three transactions that occurred, respectively, in December 2008, March 2009 and on April 3, 2009. In late 2008 or early 2009, UBSRE informed Morpheus that the student loan assets that were the subject of their brokerage agreement were included in the deal with the Stabilization Fund. Thereafter, Morpheus demanded a commission of $2,887,500, claiming that the transfer to the SNB triggered UBSRE’s duty to pay a Success Fee under the contract. UBSRE refused to pay and this action ensued.

After some initial discovery, UBSRE filed a pre-answer motion to dismiss pursuant to CPLR 3211 (a) (1) and (7). As relevant here, UBSRE contended that the purpose of the agreement was frustrated because the bailout from the SNB was an unforeseen event that excused UBSRE from performing on the contract. In the alternative, UBSRE argued that no breach had occurred because Morpheus had an exclusive agency, not an exclusive right to sell the assets. Therefore, defendant said, Morpheus was only entitled to a commission if Morpheus introduced UBSRE to the buyer or if UBSRE effectuated a transaction using a competing broker; because the bailout did not fall into either of these scenarios, no commission was due.

Morpheus opposed the motion, arguing that the documentary evidence was insufficient to establish entitlement to dismissal as a matter of law. Specifically, Morpheus contended that there were factual disputes regarding the nature of the transfer to the Stabilization Fund as well as the availability of the defenses of frustration of purpose and impossibility. Morpheus also argued that the plain language of the agreement entitled Morpheus to collect a Success Fee upon the closing of any transaction involving the student loan assets within the applicable time period, a right that was not contingent on Morpheus introducing UBSRE to a buyer. In the event the court found the agreement ambiguous on this point, Morpheus submitted parol evidence in the form of emails between the parties and earlier drafts of the agreement in an attempt to demonstrate that the parties had intended to establish an exclusive right to sell.

Supreme Court granted the motion to dismiss on the ground that the 2008 financial crisis and the bailout by the SNB “constituted an unforeseeable event which undermined the basic assumption and purpose of the [agreement], i.e., the introduction of UBSRE by Morpheus to a third party buyer” (Morpheus Capital Advisors LLC v UBS AG, 2011 NY Slip Op 34096[U], *7 [Sup Ct, NY County 2011]).

The Appellate Division reversed, with one Justice dissenting, and, insofar as relevant here, reinstated the complaint as against UBSRE (105 AD3d 145 [1st Dept 2013]). The majority held that UBSRE had not established its frustration of purpose defense because the documentary evidence failed to conclusively show that the creation of the Stabilization Fund, rather than UBSRE’s “decision to avail [itself] of it, rendered plaintiffs performance under the agreement . . . ‘virtually worthless’ ” (id. at 149 [citation omitted]). With regard to the rights conferred by the contract, the majority and the dissent agreed that “the agreement only confers an exclusive agency to plaintiff insofar as it does not expressly prohibit UBSRE from finding a buyer for its toxic assets and thereafter engaging in a self-brokered sales transaction” (id. at 150). However, the majority nevertheless determined that Morpheus had pleaded a cause of action for breach of contract because “the agreement required UBSRE to give plaintiff the opportunity to solicit a counterparty prior to transferring its assets into the Fund” (id. at 150-151). In the majority’s view, plaintiffs allegations that UBSRE failed to afford Morpheus such an opportunity were sufficient to assert a cause of action for breach of contract.

By contrast, the dissent would have affirmed on the ground that the contract conferred on Morpheus an exclusive agency, not an exclusive right to sell. Therefore, Morpheus’ concession that “the subject property was transferred without the intervention of any broker” made it “unnecessary to reach the issue of whether the purpose of the brokerage agreement was frustrated” (id. at 154-155 [Tom, J., dissenting]). Moreover, the dissent disagreed with the majority’s conclusion that the contract’s plain terms imposed on UBSRE a duty to wait before transferring the assets. The majority’s interpretation, the dissent reasoned, “[e]ngrafted onto the parties’ agreement ... an ill-defined right akin to an augmented right of first refusal in favor of a counterparty yet to be located by [Morpheus]” (id. at 161). The dissent felt that “such a right cannot be left to implication but must, of necessity, be incorporated into an express agreement” (id. [citations omitted]). The Appellate Division granted leave to appeal to this Court on the certified question of whether the order below was properly made. We now reverse and answer in the negative.

II

The distinction between an exclusive agency and an exclusive right to sell is well established in a body of Appellate Division case law (see e.g. Far Realty Assoc. Inc. v RKO Del. Corp., 34 AD3d 261, 262 [1st Dept 2006]; Harvard Assoc. v Hayt, Hayt & Landau, 264 AD2d 814, 815 [2d Dept 1999]; Solid Waste Inst. v Sanitary Disposal, 120 AD2d 915, 916 [3d Dept 1986]; Hammond, Kennedy & Co. v Servinational, Inc., 48 AD2d 394, 397 [1st Dept 1975]; Levy v Isaacs, 285 App Div 1170, 1170-1171 [2d Dept 1955], decision amended 286 App Div 855 [2d Dept 1955]; Werner v Eurich, 263 App Div 744, 744 [2d Dept 1941]; Slattery v Cothran, 210 App Div 581 [4th Dept 1924]). As stated nearly a century ago,

“The general rule is that where an exclusive right of sale is given a broker, the principal cannot make a sale [herself] without becoming liable for the commissions. But where the contract is merely to make the broker the sole agent, the principal may make a sale [herself] without the broker’s aid, if such sale is made in good faith and to some purchaser not procured by the broker” (Slattery, 210 App Div-at 583 [citations omitted]).

Put differently, “[a] broker is entitled to a commission upon the sale of the property by the owner only where the broker has been given the exclusive right to sell; an exclusive agency merely precludes the owner from retaining another broker in the making of the sale” (Far Realty, 34 AD3d at 262). We have endorsed this dichotomy implicitly in the past (see Ackman v Toren, Inc., 6 NY2d 720 [1959], affg 6 AD2d 427 [1st Dept 1958]; McClave v Paine, 49 NY 561, 561 [1872]; Moses v Bierling, 31 NY 462, 462 [1865]), and now do so explicitly.

Furthermore, we agree with the case law of the lower courts holding that a contract giving rise to an exclusive right of sale must “clearly and expressly provide[ ] that a commission [is] due upon sale by the owner or exclude [ ] the owner from independently negotiating a sale” (Solid Waste, 120 AD2d at 916; see also e.g. Far Realty, 34 AD3d at 262). Requiring an affirmative and unequivocal statement to establish a broker’s exclusive right to sell is consistent with the general principle that an owner’s freedom to dispose of her own property should not be infringed upon by mere implication.

Conceding that the contract here lacks a provision expressly conferring an exclusive right of sale, Morpheus argues that no magic words are necessary; instead, Morpheus urges us to examine the contract as a whole to deduce the parties’ intent to create an exclusive right to sell or, if the agreement is ambiguous, to examine parol evidence. We decline these invitations in favor of a rule that, “[w]ithout an unequivocal expression of intent by its own terms or by necessary implication from its terms, the . . . contract is at most considered to create an exclusive agency, not excluding the owner’s inherent right to sell his or her own property” (11 NY Jur 2d, Brokers § 169).

Nor are we persuaded by Morpheus’ argument that a rule requiring a clear statement in order to confer an exclusive right of sale should apply only to real estate brokerage agreements. While it is true that much of the relevant Appellate Division case law arises in the context of the lease or sale of real property, we see no reason to apply a different rule to brokerage contracts concerning the sale of financial instruments in the investment banking context. In both cases, the governing principles arise from the law of agency and contract, not from the law of real property. Accordingly, in both cases the owner must expressly agree to forfeit the right to directly convey its own property to a third party without incurring a broker’s fee.

Having concluded that the contract gave Morpheus an exclusive agency, and not an exclusive right to sell the student loan assets, the remaining issue is whether the complaint nevertheless states a claim for breach of contract. The Appellate Division concluded that it did based on the provision giving Morpheus the “exclusive right to solicit counterparties for any . . . Transaction” (emphasis added). The plain meaning of this language, in the majority’s view, was that “the agreement required UBSRE to give plaintiff the opportunity to solicit a counterparty prior to transferring its assets into the Fund” (105 AD3d at 150-151).

That interpretation is flawed for several reasons. First, the court ascribed too much weight to the language giving Morpheus the exclusive right to solicit counterparties for “any . . . [transaction.” This language does not lead to the conclusion that UBSRE had a corollary duty to give Morpheus a chance to seek a buyer before UBSRE consummated an independent sale. Section five of the agreement illustrates that Morpheus’ entitlement to a commission was contingent on Morpheus introducing an investor to UBSRE or another broker facilitating such an introduction. Moreover, the consequence of the purported “duty to wait” would fundamentally change the nature of the exclusive agency, wherein the owner and broker are essentially in competition with one another to locate a buyer (see e.g. Restatement [Second] of Agency § 449, Comment c [“A contract to give an ‘exclusive agency’ to deal with specified property is ordinarily interpreted as not precluding competition by the principal personally but only as precluding him from appointing another agent to accomplish the (same) result”]). Indeed, Morpheus asserts that UBSRE was required to delay the transfer to the Stabilization Fund until the contract expired at the end of 2008 to see whether Morpheus could solicit a better offer. But as the dissent below rightfully recognized, this interpretation “transform[s] a contract that expressly confers the exclusive right to deal . . . into one that confers the exclusive right to sell” (105 AD3d at 154 [Tom, J., dissenting]). Furthermore, from a practical standpoint, a duty to wait would have been an absurd contractual term given the rapidly evolving landscape of the business world during the difficult economic time when the parties entered into the agreement. In short, in the absence of language expressly varying the parties’ rights under an exclusive agency, UBSRE had no duty to wait.

Finally, contrary to plaintiffs contention, it is unnecessary to conduct further discovery to shed light on the details of the bailout that included the Swiss government’s assumption of the distressed student loan assets. It is inconsequential whether UBSRE was legally compelled to participate in the bailout or whether the Stabilization Fund is technically a separate entity from the SNB. The transfer was neither the work of a competing broker nor the result of the type of third-party introduction contemplated by section five of the agreement. Therefore, the bailout did not trigger defendant’s obligation to pay Morpheus a Success Fee.

III

In sum, plaintiffs causes of action are conclusively contradicted by the language of the parties’ contract, mandating dismissal of the complaint. Accordingly, the order of the Appellate Division should be reversed, with costs, the motion of defendant UBS Real Estate Securities, Inc. to dismiss the complaint as against it granted, and the certified question answered in the negative.

Pigott, J.

(dissenting). The language used in this agreement could reasonably be interpreted to indicate that the parties intended Morpheus to have an exclusive right to sell the student loan assets during the relevant contract period. For this reason, I dissent.

The majority holds as a matter of law that the agreement in dispute gave Morpheus only a “standard exclusive agency,” not an “exclusive right to sell” certain student loan assets (see majority op at 531). In holding so, the majority sets forth a rule that has not yet been uniformly applied in cases involving investment banking contracts; that an “affirmative and unequivocal statement” must be made to establish an exclusive right to sell the assets (id. at 535). Rather, this rule was established in Appellate Division cases involving brokerage real estate agreements.

Reading this agreement most favorably to Morpheus, which we must on this CPLR 3211 motion, questions of fact exist as to whether the parties intended Morpheus to have an exclusive right to sell. The agreement gave Morpheus the “exclusive right to solicit counterparties for any potential Transaction involving the Student Loan Assets during the term of this Agreement.” The agreement also provided that Morpheus “shall receive a Success Fee payable upon the closing of’ any transaction involving the sale, transfer, or transfer of risk of first loss of the student loan assets.

Further, the parties negotiated a contractual provision that relieves UBS Real Estate Securities (UBSRE) of the obligation to pay Morpheus if it or its affiliates completed a certain type of deal with two particular entities, Morgan Stanley or NBF International. This limited exception of UBSRE’s obligation to pay Morpheus for a transaction that it and/or its affiliates initiated would be unnecessary if UBSRE could dispose of the student loan assets without liability to Morpheus in a self-directed transaction. Another provision permits UBSRE to jointly market the assets with Morpheus “taking the lead.” This provision, like the Morgan Stanley/NBF International carve out, also would be unnecessary if UBSRE had, as it claims, an unfettered right to sell the student loan assets without obligation to Morpheus on the theory that Morpheus only had an exclusive agency right.

Judges Graffeo, Read and Rivera concur with Chief Judge Lippman; Judge Pigott dissents in an opinion; Judges Smith and Abdus-Salaam taking no part.

Order reversed, with costs, motion of defendant UBS Real Estate Securities to dismiss the complaint as against it granted, and certified question answered in the negative.

      . Morpheus’ dismissed claims against UBS AG, the parent company of UBSRE, are not at issue on this appeal.

      . For example, the agreement here does not contain language providing that a Success Fee is payable “regardless of whether [the broker] has actually procured the Purchase Agreement” (see Audrey Balog Realty Corp. v East Coast Real Estate Devs., 202 AD2d 529, 530 [2d Dept 1994] [holding that broker had exclusive right to sell]), or that UBSRE “will proceed only through [the broker] and will not directly or through others negotiate the sale” (Hammond, Kennedy, 48 AD2d at 396 [same]). Nor does the contract require that UBSRE “refer all inquiries or offers” to Morpheus for negotiation (see Audrey Balog, 202 AD2d at 530).


author: Per Curiam.

text:
    [15 NE3d 1181, 992 NYS2d 172]
    In the Matter of Working Families Party, Appellant, v Fern A. Fisher, Deputy Chief Administrative Judge for New York City Courts, et al., Respondents.
    Argued April 29, 2014;
    decided June 10, 2014

      POINTS OF COUNSEL

      Dentons US LLP, New York City (Avi Schick, Richard M. Zuckerman and Kiran Patel of counsel), for appellant.
    I. CPLR article 78 relief is available to challenge a judicial order appointing a special district attorney. (Matter of Soares v Herrick, 20 NY3d 139; Matter of Schumer v Holtzman, 60 NY2d 46; Matter of Association of Secretaries to Justices of Supreme & Surrogate’s Cts. in City of N.Y. v Office of Ct. Admin. of State of N.Y., 75 NY2d 460; Babigan v Wachtler, 133 Misc 2d 111, 126 AD2d 445, 69 NY2d 1012; Matter of McGinley v Hynes, 51 NY2d 116.) II. The disqualification standard established by County Law § 701 and this Court’s prior decisions requires a showing of actual prejudice based on a demonstrated conflict of interest and applies when the district attorney is the party seeking his own disqualification. (Matter of Schumer v Holtzman, 94 AD2d 516, 60 NY2d 46; People v Keeton, 74 NY2d 903; People v Herr, 86 NY2d 638; Matter of Soares v Herrick, 20 NY3d 139; People v Adams, 20 NY3d 608; People v Cruz, 60 AD2d 872; Matter of Fox v Shapiro, 84 Misc 2d 223; People v Shinkle, 51 NY2d 417; People v Loewinger, 37 AD2d 675, 30 NY2d 587; United States v Goot, 894 F2d 231.) III. The order also conflicts with the additional requirements established by County Law § 701. (People v Anonymous, 126 Misc 2d 673; People v Davis, 100 AD2d 747; Matter of Dwyer v Evans, 107 Misc 2d 484; Matter of Crandall v Harrigan, 183 AD2d 1009; People v Leahy, 72 NY2d 510; Matter of Rice, 31 Misc 3d 838; Matter of Board of Supervisors of Montgomery County v Aulisi, 62 AD2d 644, 46 NY2d 731.)

      John W. McConnell, New York State Office of Court Administration, New York City (Lee Alan Adlerstein and Antonio Galvao of counsel), for Fern A. Fisher and another, respondents.
    I. The Appellate Division was correct in ruling that CPLR article 78 relief is not available to disturb the subpoenas because their issuance was part of Special District Attorney Adler’s executive investigative duties. (Matter of Suffolk County Legislature v Mullen, 211 AD2d 736; Matter of McGinley v Hynes, 51 NY2d 116; Matter of Brunswick Hosp. Ctr. v Hynes, 52 NY2d 333; Matter of Rushmore v Lipson, 45 Misc 2d 487; Matter of Schumer v Holtzman, 94 AD2d 516, 60 NY2d 46; Matter of Pirro v Angiolillo, 89 NY2d 351; Matter of Rush v Mordue, 68 NY2d 348; Matter of Nicholson v State Commn. on Jud. Conduct, 50 NY2d 597; Matter of Lee v County Ct. of Erie County, 27 NY2d 432; Matter of Molea v Marasco, 64 NY2d 718.) II. By any standard, District Attorney Donovan’s self-disqualification was appropriate and provides no grounds — and certainly no clear legal right — for vacatur of the special district attorney appointment order. (People v Schrager, 74 Misc 2d 833; People v Anonymous, 126 Misc 2d 673; People v Zimmer, 51 NY2d 390; People v Adams, 20 NY3d 608; Matter of Soares v Herrick, 20 NY3d 139; Matter of Town of Huntington v New York State Div. of Human Rights, 82 NY2d 783; Matter of McNamara v Tormey, 42 AD3d 971.) III. The January 2012 order fully complied with County Law § 701. (People v Correa, 15 NY3d 213; Kagen v Kagen, 21 NY2d 532; People v Darling, 50 AD2d 1038; Misicki v Caradonna, 12 NY3d 511; Matter of Suffolk County Legislature v Mullen, 211 AD2d 736; Matter of Morgenthau v Cooke, 56 NY2d 24; People v Leahy, 72 NY2d 510; Matter of Board of Supervisors of Montgomery County v Aulisi, 62 AD2d 644, 46 NY2d 731; Matter of Rice, 31 Misc 3d 838; Matter of McGinley v Hynes, 51 NY2d 116.)

      Daniel M. Donovan, Jr., Staten Island, pro se, and Morrie I. Kleinbart, for Daniel M. Donovan, Jr., respondent.
    A district attorney’s discretionary decision to recuse himself in a particular case is not amenable to review by CPLR article 78. (Matter of Dondi v Jones, 40 NY2d 8; Matter of McGinley v Hynes, 51 NY2d 116; People v Leahy, 72 NY2d 510; Matter of Grady, 138 Misc 2d 983; People v Schrager, 74 Misc 2d 833; Matter of Rice, 31 Misc 3d 838; Matter of Soares v Herrick, 20 NY3d 139; People v Shinkle, 51 NY2d 417; People v Adams, 20 NY3d 608; People v Nelson, 167 Misc 2d 665.)

      Wendy Evans Lehmann, New York Prosecutors’ Training Institute, Albany, and Kathleen M. Rice, District Attorney, Albany, for District Attorneys Association of the State of New York, amicus curiae.
    Prohibition does not lie to challenge an elected district attorney’s decision to seek recusal due to a conflict of interest or a court’s resulting appointment of a special district attorney. (Matter of Schumer v Holtzman, 60 NY2d 46; Matter of Soares v Herrick, 20 NY3d 139; Matter of Morgenthau v Erlbaum, 59 NY2d 143; Matter of Pirro v Angiolillo, 89 NY2d 351; Matter of Holtzman v Goldman, 71 NY2d 564; Matter of Rush v Mordue, 68 NY2d 348; Matter of Mulvaney v Dubin, 55 NY2d 668; La Rocca v Lane, 37 NY2d 575; Matter of Rice, 31 Misc 3d 838; Matter of Dondi v Jones, 40 NY2d 8.)
   OPINION OF THE COURT

Per Curiam.

This CPLR article 78 proceeding in the nature of prohibition was brought to challenge an order relieving a district attorney at his own request, and appointing a special district attorney to conduct an investigation in his place. The Appellate Division dismissed the proceeding on the ground that prohibition was not an appropriate remedy. We disagree and reach the merits of the case, but we affirm the Appellate Division’s dismissal because we hold that the special prosecutor was validly appointed.

I

Daniel Donovan, the District Attorney of Richmond County, applied to the Deputy Chief Administrative Judge for the New York City Courts (DCAJ) for an order relieving him and his assistants, and appointing a special district attorney, in what he described as “a case involving possible violations” of Election Law § 14-126 and other provisions of law “in connection with a 2009 City Council election on Staten Island.” An affirmation containing the facts that Donovan thought warranted this action was submitted under seal. The DCAJ granted the application and appointed Roger Bennet Adler as special district attorney.

Approximately a year later, Adler issued grand jury subpoenas to two officials of the Working Families Party (petitioner in this case), and to an entity known as Citizen Action of New York. Petitioner brought this proceeding against the DCAJ, seeking to vacate Adler’s appointment, quash the subpoenas and unseal Donovan’s application and the documents supporting it. It seems, though the record is surprisingly unclear, that Donovan and Adler were also made parties to the proceeding; Donovan has participated as a party, but Adler has not. Donovan, with the permission of the Appellate Division, submitted opposition papers to that court under seal and served on petitioner only a copy of his Appellate Division brief from which the facts were largely redacted.

The Appellate Division denied the petition and dismissed the proceeding. It held that relief by prohibition was unavailable because the conduct that petitioner was seeking to prevent was not “the quasi-judicial act of representing the State in its efforts to bring individuals accused of crimes to justice” but rather a “purely investigative function” that was “executive in nature” (Matter of Working Families Party v Fisher, 109 AD3d 478, 480 [2d Dept 2013]).

We granted leave to appeal (22 NY3d 855 [2013]). After we did so, Donovan moved in this Court to proceed as he had in the Appellate Division, by filing a brief under seal and serving a redacted copy of the brief on petitioner. We denied the motion (2014 NY Slip Op 64560 [2014]). Donovan then chose to file a brief from which substantially all of the facts that formed the basis of his application for a special prosecutor were omitted. Those facts are, however, in the record before us, which remains under seal. Petitioner has not moved here, as it did in the Appellate Division, for unsealing.

We now affirm the Appellate Division’s judgment, though on grounds different from those the Appellate Division relied on.

II

The Appellate Division erred in holding that an article 78 proceeding in the nature of prohibition is an inappropriate remedy in this case. We recently restated the rule that “prohibition is an appropriate remedy to void the improper appointment of a [special] prosecutor when made by a court” (Matter of Soares v Herrick, 20 NY3d 139, 145 [2012], quoting Matter of Schumer v Holtzman, 60 NY2d 46, 54 [1983] [insertion by Soares court]). While the power to grant prohibition should be exercised sparingly, its availability in cases like this serves an important purpose. When the validity of the appointment of a prosecutor is in question, the question should where possible be given a prompt and definitive answer. It is not in the public interest to allow a prosecutor to carry out a lengthy investigation when there is doubt that his or her appointment is valid, and to run the risk that the process will have to start all over again with a different prosecutor.

This case illustrates the point. Adler was appointed in 2012 to investigate events occurring in 2009. If the validity of his appointment is not decided now, his investigation may continue for many more months or years under a cloud that will not be removed until or unless he obtains an indictment, and the person indicted moves to dismiss it on the ground that Adler was never validly appointed. That would be at best wasteful, and at worst could result in the inability, for statute of limitations or other reasons, to prosecute cases that should be prosecuted.

The Appellate Division based its conclusion that prohibition was inappropriate here on our decision in Matter of McGinley v Hynes (51 NY2d 116 [1980], cert denied 450 US 918 [1981]). But McGinley did not involve a challenge to the validity of the appointment of a special prosecutor. It was brought to prevent a validly appointed special prosecutor from submitting additional evidence to a grand jury without court permission. We held prohibition unavailable, but specifically limited our holding to a case in which “there is no claim that the subject matter of [the special prosecutor’s] investigation is beyond the scope of his prosecutorial authority” (id. at 119).

Here, petitioner’s claim is that Adler has no valid “prosecutorial authority” at all. This proceeding is a proper vehicle for deciding the merits of that claim.

III

County Law § 701 (1) says, in relevant part:

“Whenever the district attorney of any county and such assistants as he or she may have . . . are disqualified from acting in a particular case to discharge his or her duties at a term of any court, a superior criminal court in the county wherein the action is triable may, by order:
“(a) appoint some attorney at law having an office in or residing in the county, or any adjoining county, to act as special district attorney during the absence, inability or disqualification of the district attorney and such assistants as he or she may have.”

The principal question in this appeal is whether Donovan and his subordinates in the Richmond County District Attorney’s office are “disqualified from acting,” within the meaning of this statute, in the matter that Adler was appointed to investigate.

While we have several times considered cases in which parties adverse to a district attorney have argued that he or his office should be disqualified (see People v Adams, 20 NY3d 608 [2013]; Soares, 20 NY3d 139; People v Shinkle, 51 NY2d 417 [1980]; People v Zimmer, 51 NY2d 390 [1980]), this case is apparently the first we have confronted in which a district attorney sought his or her own disqualification (cf. Matter of Schumer v Holtzman, 60 NY2d at 49 [district attorney sought to appoint a “special prosecutor” by written agreement; adverse party sought to disqualify the district attorney]). The parties before us take opposite positions as to the standard to be applied in deciding such a case. Petitioner, arguing that Donovan is not disqualified, says that we should adhere to the demanding standard used in cases where disqualification is sought by an adverse party. In such a case, the general rule requires a showing of “actual prejudice arising from a demonstrated conflict of interest or a substantial risk of an abuse of confidence” (Adams, 20 NY3d at 612, quoting Schumer, 60 NY2d at 55), though “in rare situations, the appearance of impropriety itself is a ground for disqualification” (id.). Donovan, by contrast, argues in substance that a district attorney and his office are “disqualified” if the district attorney himself so decides. A district attorney’s decision to recuse himself should, in Donovan’s view, be unreviewable.

We reject both of these arguments. To allow a district attorney to disqualify himself and his office in his sole discretion would value too lightly the public interest in having prosecutorial duties performed, where possible, by the “constitutional officer chosen by the electorate” (Schumer, 60 NY2d at 55). But the standards that apply in cases where a district attorney opposes his own disqualification and those in which he seeks it are not the same. Where there is legitimate doubt as to whether a district attorney and his office may proceed with a case, the district attorney is not barred from resolving that doubt by choosing to step aside. We have already mentioned that it is desirable for all concerned to know, as promptly as possible, whether the person investigating or prosecuting a case is lawfully entitled to do so. That interest is served by allowing a district attorney who has ground for thinking that he and his office may be disqualified to seek the appointment of a special prosecutor. Thus we agree with the court in People v Schrager (74 Misc 2d 833, 834 [Sup Ct, Queens County 1973]) that a district attorney seeking to disqualify himself or herself may do so upon “a good faith application containing the reasonable grounds for his belief that he is so disqualified.”

Upon examination of the record (which, with the acquiescence of all parties, remains sealed) we are satisfied that Donovan had a good faith, reasonable basis for his view that he is disqualified from pursuing the investigation within the meaning of County Law § 701 (1).

IV

Petitioner also argues that Adler’s appointment should be set aside because the proper procedures were not followed in making that appointment. While the procedure was flawed, we do not find that the flaws warrant nullifying the appointment.

Section 200.15 of the Uniform Rules for the New York State Trial Courts (22 NYCRR) says:

“Any party filing with a superior court an application for appointment of a special district attorney, pursuant to section 701 of the County Law, shall make the application to the Chief Administrator of the Courts. The Chief Administrator, in consultation and agreement with the Presiding Justice of the appropriate Appellate Division, then shall designate a superior court judge to consider the application as provided by law.”

It is not contested that, under this rule, Donovan properly applied to the DCAJ for appointment of a special district attorney (see Judiciary Law § 210 [3]; 22 NYCRR 80.1 [b] [4]; 80.2 [a]). Petitioner argues, however, that the rule does not empower the DCAJ simply to appoint the special prosecutor herself, as she did here. Rather, she must, after “consultation and agreement with” the Presiding Justice, appoint “a superior court judge to consider the application.” The DCAJ responds that she complied with the rule by in effect appointing herself, an elected Supreme Court Justice and thus “a superior court judge,” to decide whether to appoint a special prosecutor and whom to appoint.

We agree with petitioner that the rule should have been — as we trust in future cases it will be — more meticulously followed. While the DCAJ was free to appoint herself, she should have documented in a separate order the fact that she did so, not simply proceeded to the appointment of Adler as Special Prosecutor. She should also have consulted with, and obtained the approval of, the Presiding Justice of the Appellate Division, and should have recited in her order that she had done so.

We do not believe, however, that these irregularities justify nullifying Adler’s appointment and creating the undesirable situation, of which we have already spoken twice in this opinion, of an investigation that goes on for years and then is forced to return to square one. Neither petitioner nor anyone else could possibly claim to be prejudiced by the fact that the DCAJ signed one document when she should have signed two. Nor does the absence of any record of the consultation and agreement with the Presiding Justice seem a major defect here. The apparent purpose of requiring such consultation is to be sure that the judge chosen by the DCAJ is, in the opinion of the Presiding Justice, available and suitable for the task. In a case where the DCAJ chooses to appoint herself, consultation with the Presiding Justice may be of secondary importance.

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

Judges Graffeo, Read, Smith, Pigott, Rivera and AbdusSalaam concur; Chief Judge Lippman taking no part.

Judgment affirmed, with costs.