author: Jones, J.

text:
    [973 NE2d 172, 950 NYS2d 77]
    The People of the State of New York, Appellant, v Carol Elmer, Respondent. The People of the State of New York, Respondent, v Kevin O. Cooper, Appellant.
    Argued May 30, 2012;
    decided June 27, 2012

      POINTS OF COUNSEL

      Nicole Duvé, District Attorney, Canton (Amanda N. Nissen of counsel), for appellant in the first above-entitled action.
    The Appellate Division erred in dismissing the People’s appeal because an appeal properly lies from an oral order. (People v Silva, 122 AD2d 750; People v Wallace, 220 AD2d 248; People v Parker, 223 AD2d 179; People v Ainsworth, 106 AD2d 357; People v Hetenyi, 277 App Div 310, 301 NY 757; People v Holmes, 206 AD2d 542; People v Herrara, 173 AD2d 850; People v Herne, 84 AD3d 1589; People v Price, 67 AD2d 990.)

      Richard V. Manning, Parishville, for respondent in the first above-entitled action.

      Timothy P. Donaher, Public Defender, Rochester (Drew R. DuBrin of counsel), for appellant in the second above-entitled action.
    I. The County Court’s determination, made at the bench, is an order finally denying defendant’s motion to suppress and, therefore, defendant did not forfeit his right to appellate review of his suppression claim by pleading guilty. (People v Fernandez, 67 NY2d 686; People v Taylor, 65 NY2d 1; People v Manini, 79 NY2d 561; Riley v County of Broome, 95 NY2d 455; People v

      Coaye, 68 NY2d 857; People v Kisina, 14 NY3d 153; Cohen v Lord, Day & Lord, 75 NY2d 95; Matter of Balter v Regan, 63 NY2d 630; People v Allman, 133 AD2d 638; People v Wallace, 220 AD2d 248.) II. The Appellate Division correctly held that defendant’s waiver of the right to appeal is unenforceable because the record fails to demonstrate that it was knowing, intelligent, and voluntary. (People v Seaberg, 74 NY2d 1; People v Hidalgo, 91 NY2d 733; People v Harris, 61 NY2d 9; People v Callahan, 80 NY2d 273; People v Lopez, 6 NY3d 248; People v Moissett, 76 NY2d 909; People v Kemp, 94 NY2d 831; Jones v Barnes, 463 US 745; People v Louree, 8 NY3d 541; People v Murray, 15 NY3d 725.) III. As a matter of law, the police’s observations of a grocery bag stuffed with cash sticking out of defendant’s shorts and a small baggie with white residue in the van defendant was driving did not give police probable cause to arrest him for possession of cocaine. (People v Carrasquillo, 54 NY2d 248; People v Davis, 36 NY2d 280; People v Oden, 36 NY2d 382; People v McRay, 51 NY2d 594; People v Wirchansky, 41 NY2d 130; People v Dodt, 61 NY2d 408; People v Edwards, 95 NY2d 486; People v Nieves, 67 NY2d 125; People v Concepcion, 17 NY3d 192; People v Muhammad, 17 NY3d 532.)

      Sandra Doorley, District Attorney, Rochester (Geoffrey Kaeuper of counsel), for respondent in the second above-entitled action.
    I. As part of the agreed-upon plea, defendant waived his right to appeal. (People v Ramos, 7 NY3d 737; People v Bradshaw, 18 NY3d 257; People v Kemp, 94 NY2d 831.) II. By pleading guilty without obtaining an order finally denying his suppression motion, defendant forfeited any suppression issues. (People v Konieczny, 2 NY3d 569; People v Fernandez, 67 NY2d 686; People v Hardy, 13 NY3d 805; People v Thomas, 53 NY2d 338; Burke v Crosson, 85 NY2d 10; People v Ventura, 139 AD2d 196; People v Williams, 43 AD2d 884, 36 NY2d 829; People v Taylor, 65 NY2d 1; People v Seaberg, 74 NY2d 1.) III. Police had probable cause to arrest defendant. (People v Silvestry, 11 NY3d 902; People v Edwards, 14 NY3d 741; People v Mizell, 72 NY2d 651; People v Shulman, 6 NY3d 1; People v Moore, 6 NY3d 496; People v Carrasquillo, 54 NY2d 248; People v Bigelow, 66 NY2d 417.)
   OPINION OF THE COURT

Jones, J.

The common issue presented by these appeals is whether an appeal lies from an oral order issued by a criminal court on a pretrial matter. In People v Elmer, the People appealed pursuant to CPL 450.20 (1) from an oral decision by the trial court that granted, in part, defendant’s motion to dismiss the indictment on speedy trial grounds. In People v Cooper, defendant sought review pursuant to CPL 710.70 (2) of an oral order denying his motion to suppress evidence obtained in a search attendant to his arrest. In both cases, the Appellate Division ruled adversely to the appellants, finding that the failure to obtain a written order precluded appellate review. We conclude otherwise, holding that an appeal does lie from an oral order of a criminal court that finally disposes of the pretrial matter at issue.

People v Carol Elmer

Defendant Carol Elmer was charged with 37 counts of over-driving, torturing and injuring an animal in violation of Agriculture and Markets Law § 353 for the alleged failure to properly care for horses within her custody. In a pretrial motion, defendant moved to controvert the search warrant used to enter her premises and to suppress evidence. Although County Court ordered a suppression hearing, the matter was adjourned several times by the People due to the ostensible unavailability of a witness. Consequently, defendant moved to dismiss the indictment on statutory speedy trial grounds.

County Court granted the motion in part, dismissing the first 22 counts of the indictment. Recounting the procedural history of the matter, the court noted the dilatory efforts of the prosecution in procuring the witness, remarking that “the People, by not being ready for a hearing, delayed, actually made it impossible [for] the scheduling of a trial, holding of a trial, and by not being ready for a suppression hearing concerning a search warrant, they should be held with post-readiness delay because it prevented the trial from going forward.” The court orally ordered that “[t]he first 22 counts are dismissed as defendant was denied her right to a speedy trial.”

The Appellate Division dismissed the People’s appeal and remitted the matter to County Court for the issuance of a written order, concluding that no appeal lies from the “County Court’s oral ruling dismissing the first 22 counts of the indictment [as it] was never reduced to a writing and was never entered” (84 AD3d 1593, 1593 [3d Dept 2011]). A Judge of this Court granted the People leave to appeal (17 NY3d 903 [2011]).

People v Kevin Cooper

As a result of a vehicular stop, arrest and search that uncovered narcotics, defendant Kevin Cooper was charged with criminal possession of a controlled substance in the third degree, criminal possession of a controlled substance in the fourth degree, bribery in the third degree and certain traffic violations.

Acting on an anonymous tip that a van marked by a light-colored stripe and driven by an individual wearing red shorts was transporting narcotics, the police stopped defendant’s vehicle—which matched the description—after observing that it lacked a rear license plate lamp and had made an unlawful right turn without the appropriate signal. When the police approached the vehicle, they observed defendant dressed in red shorts and upon further inspection, in plain view, officers observed a grocery bag “bulging with money” on defendant’s person and “a little dime baggie with white residue” on the vehicle’s console. As a result, defendant was arrested and an ensuing search recovered a small portion of cocaine secreted in defendant’s right sock.

Following a suppression hearing to preclude the recovered evidence, County Court denied defendant’s motion to suppress. That court remarked and orally decided that

“Officer Masik had probable cause to stop the van initially for his observation of the vehicle and traffic violations of no tail lamp and failure to signal a turn and based upon the information that he received from the individual that everything matched the description. When Officer Masik observed the residue in the console of the car he had probable cause to ask the defendant out of the car and subsequently arrest him for possession of that residue ... so the Court is going to deny the defendant’s motion to suppress any evidence on the People’s direct case. Your exception is noted for the record.”

Ultimately, defendant pleaded guilty to criminal possession of a controlled substance in the third degree.

On appeal from his judgment of conviction, defendant sought review pursuant to CPL 710.70 (2) of the suppression court’s denial of his motion to suppress. The Appellate Division, however, concluded that defendant forfeited his statutory right of review because he had entered a guilty plea prior to the transcription of the oral order (85 AD3d 1594, 1595 [4th Dept 2011]). In that court’s view, section 710.70 (2) was inapplicable because it did not permit appellate review of an oral bench decision denying a suppression motion. In the alternative, that court also addressed the merits and concurred with the trial court’s determination that defendant’s arrest was supported by probable cause. A Judge of this Court granted defendant leave to appeal (17 NY3d 902 [2011]). We now reverse in Elmer and affirm in Cooper.

Discussion

The principal argument set forth by the appellants is that the term “order” encompasses both oral and written orders because the Legislature has expressly provided for a “written order” when specifically required. Accordingly, it is asserted that an appeal does lie from an oral “order.” We agree.

The Legislature is presumed to be aware of the distinction between the terms “order” and “written order” and thus, absent an express definition, we ascribe a broader view to its use of the unqualified phrase “order.” Where deemed necessary, the Legislature has provided for a “written order” in certain provisions of both the Criminal Procedure Law and the Penal Law (see CPL 195.30 [when a court approves waiver of an indictment, it must “execute a written order to that effect”]; Penal Law § 215.70 [a person is guilty of unlawful grand jury disclosure unless the disclosure was made “upon written order of the court”]; see also CPL 190.25 [4] [a]; CPL 420.10 [6]; CPL 420.40 [5]; Penal Law § 85.05 [3] [b]). By contrast, in Elmer, the People appeal under CPL 450.20 (1) which provides that the prosecution can appeal from “[a]n order dismissing an accusatory instrument or a count thereof, entered pursuant to section 170.30, 170.50 or 210.20” (emphasis added). Likewise, in Cooper, defendant relies upon CPL 710.70 (2) which provides that “[a]n order finally denying a motion to suppress evidence may be reviewed upon an appeal from an ensuing judgment of conviction notwithstanding the fact that such judgment is entered upon a plea of guilty” (emphasis added). These two provisions, and other similar penal statutes, significantly, permit appeals from an “order” without further restriction. It logically follows, then, that a statute authorizing an appeal from an “order”—as opposed to a “written order”—should be construed to permit an appeal from either a written or oral order.

This Court previously held as much in People v Coaye (68 NY2d 857 [1986]). In that case, upon the defendant’s motion, Supreme Court orally reduced an attempted murder conviction to a lesser degree and then immediately pronounced sentence, commencing the defendant’s 30-day period to appeal as of right from the judgment of conviction under CPL 460.10. While the defendant’s appeal was pending, the People obtained, some time thereafter, a written order memorializing the oral decision and then appealed from the written order on a separate appellate track. The Appellate Division ultimately consolidated the dual appeals and reversed, reinstating the jury’s original conviction on the attempted murder count. The defendant contended that the People’s appeal should not have been entertained because it had been commenced well beyond the 30-day period following the oral order. In turn, the People responded that an appeal is only appropriately taken upon the entry of a written order.

Under the factual circumstances of that case, where the oral decision rendered on the motion was subsumed by the judgment of conviction by virtue of the pronouncement of the sentence immediately after, we held that the People should have appealed from the oral order (68 NY2d at 858-859). Of primary concern was the potential unfairness engendered by the directives of section 460.10, namely, that a defendant has 30 days to appeal as of right from the judgment of conviction, whereas the People could conceivably enlarge the time to appeal by procuring a written order at a later date. Although Coaye presented unique factual circumstances, it demonstrated our willingness to sanction appeals from oral orders and we now think it is sound policy to permit such appeals so long as they are taken, in accordance with the appropriate governing criminal statute, from an oral order that conclusively disposes of the matter at issue. This not only provides a clear signal to the respective parties as to when the time to appeal certain orders commences, but also mitigates potentially anomalous consequences, as illustrated by Coaye. Further, our holding reflects and accommodates the common experience of criminal practice where courts may issue oral decisions, often on a multitude of matters, without engaging in the additional affirmative step of ensuring that every order is reduced to writing. The failure to do so does not necessarily render an oral order infirm nor undermine its intended final authority.

In light of the foregoing, the Appellate Division erred in People v Elmer by dismissing the appeal and remitting the matter to County Court. The People were entitled under section 450.20 (1) to appellate review of the lower court’s oral decision dismissing certain counts of the indictment.

In People v Cooper, it was similarly error to conclude that defendant’s appeal under section 710.70 (2) was forfeited by the entry of his guilty plea simply because the oral order had not been issued in writing. Although a guilty plea “generally results in a forfeiture of the right to appellate review of any nonjurisdictional defects in the proceedings,” section 710.70 (2) has been recognized as a limited exception permitting appellate review, notwithstanding the entry of a guilty plea (People v Fernandez, 67 NY2d 686, 688 [1986]). Moreover, we have countenanced a forfeiture of this statutory right only where a defendant pleaded guilty “before the hearing on his suppression motion,” thereby foreclosing appellate review for lack of a sufficient factual record (67 NY2d at 688). Here, even though the suppression motion was decided orally, it is evident that it was “an order finally denying a motion to suppress evidence.” The suppression court issued its findings of fact on the record; found sufficient probable cause for the stop, arrest and search of defendant; denied the motion to suppress; noted defendant’s exception and immediately set the matter for a trial date. We reject the People’s contention that the issuance of a written order, a ministerial act, was a pending judicial action that rendered the oral order non-final (see People v Allman, 133 AD2d 638, 639 [2d Dept 1987] [“On this record, it cannot be stated that the hearing court’s express denial of the defendant’s omnibus motion does not constitute ‘(a)n order finally denying a motion to suppress evidence’ ”]).

However, with respect to People v Cooper, the Appellate Division did reach the merits of the parties’ contentions and reversal is not warranted here. Contrary to the People’s argument, despite defendant’s execution of a written waiver of the right to appeal, he did not knowingly, intelligently or voluntarily waive his right to appeal as the record fails to demonstrate a “full appreciation of the consequences of such waiver” (People v Bradshaw, 18 NY3d 257, 264 [2011] [internal quotation marks omitted]; People v Lopez, 6 NY3d 248, 256 [2006]). There was no “attempt by the court to ascertain on the record an acknowledgment from defendant that he had, in fact, signed the waiver or that, if he had, he was aware of its contents” (People v DeSimone [companion case to People v Callahan, 80 NY2d 273, 283 (1992)]). Moreover, defendant’s assertion that the police lacked probable cause to effectuate an arrest and search presents a mixed question of law and fact beyond the purview of this Court’s jurisdiction so long as there is record support for the lower courts’ determination (see People v Bigelow, 66 NY2d 417, 420 [1985]; People v McRay, 51 NY2d 594, 601 [1980]; People v Wharton, 46 NY2d 924, 925 [1979]). In this case, there is sufficient record evidence that the police possessed probable cause, foreclosing further review.

Accordingly, in People v Elmer, the order of the Appellate Division should be reversed and the case remitted to the Appellate Division, Third Department, for consideration of the merits of the appeal taken to that court. In People v Cooper, the order of the Appellate Division should be affirmed.

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

In People v Elmer: Order reversed, etc.

In People v Cooper: Order affirmed.

      . Our holding does not, in any way, abrogate the well settled rule that “[n]o appeal lies from a determination made in a criminal proceeding unless specifically provided for by statute” (People v Pagan, 19 NY3d 368, 370 [2012], quoting People v Dunn, 4 NY3d 495, 497 [2005]; People v Hernandez, 98 NY2d 8, 10 [2002]).

      . The Civil Practice Law and Rules, unlike the Criminal Procedure Law, explicitly defines the term “order” as written in nature, mandating that an order determining a motion “shall be in writing” or “shall be reduced to writing or otherwise recorded” (CPLR 2219 [a]). Moreover, a civil appeal as of right is to be taken within 30 days from service of “a copy of the judgment or order appealed from and written notice of its entry” (CPLR 5513 [a]; see also CPLR 2220).

      . We find no persuasive authority supporting a series of Appellate Division cases that routinely dismissed, or held in abeyance, appeals taken from oral orders (see People v Holmes, 206 AD2d 542 [2d Dept 1994]; People v Austin, 208 AD2d 990 [3d Dept 1994]; People v Herrara, 173 AD2d 850 [2d Dept 1991]; cf. People v Wallace, 220 AD2d 248 [1st Dept 1995]; People v Silva, 122 AD2d 750 [1st Dept 1986]).

        (n. cont’d)


source: Caselaw Access Project

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

license: Public Domain

text:
    [973 NE2d 743, 950 NYS2d 333]
    Georgia Malone & Company, Inc., Appellant, v Ralph Rieder et al., Defendants, and Rosewood Realty Group, Inc., et al., Respondents.
    Argued May 31, 2012;
    decided June 28, 2012

      POINTS OF COUNSEL

      Adam Leitman Bailey, P.C., New York City (Jeffrey R. Metz and Courtney Killelea of counsel), for appellant.
    I. Georgia Malone & Company, Inc.’s complaint states a viable cause of action for unjust enrichment against Aaron Jungreis and Rosewood Realty Group, Inc. (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561; Miller v Schloss, 218 NY 400; Byxbie v Wood, 24 NY 607; Blue Cross of Cent. N.Y. v Wheeler, 93 AD2d 995; Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415; Aetna Cas. & Sur. Co. v LFO Constr. Corp., 207 AD2d 274; Carriafielio-Diehl & Assoc., Inc. v D&M Elec. Contr., Inc., 12 AD3d 478; Wolf v National Council of Young Israel, 264 AD2d 416; Cohn v Rothman-Goodman Mgt. Corp., 155 AD2d 579.) II. The dissent properly interpreted this Court’s decision in Mandarin Trading Ltd. v Wildenstein (16 NY3d 173 [2011]). (Sperry v Crompton Corp., 8 NY3d 204; Kagan v K-Tel Entertainment, 172 AD2d 375.)

      Westerman Ball Ederer Miller & Sharfstein, LLP, Uniondale (Jeffrey A. Miller of counsel), for respondents.
    I. Appellant’s unjust enrichment claim was properly dismissed because appellant could not state the elements of the claim. (Mandarin

      Trading Ltd. v Wildenstein, 16 NY3d 173; Sperry v Crompton Corp., 8 NY3d 204; Kagan v K-Tel Entertainment, 172 AD2d 375; Ehrlich v Froehlich, 72 AD3d 1010; Seneca Pipe & Paving Co., Inc. v South Seneca Cent. School Dist., 63 AD3d 1556; M & B Joint Venture, Inc. v Laurus Master Fund, Ltd., 49 AD3d 258; Clark v Daby, 300 AD2d 732; Monex Fin. Servs., Ltd. v Dynamic Currency Conversion, Inc., 62 AD3d 675; Maywalt v Parker & Parsley Petroleum Co., 808 F Supp 1037; Reading Intl., Inc. v Oaktree Capital Mgt. LLC, 317 F Supp 2d 301.) II. In the alternative, appellant’s unjust enrichment claim was properly dismissed because a valid and binding contract governed the subject transaction. (American Sugar Ref. Co. of N.Y. v Waterfront Commn. of N.Y. Harbor, 55 NY2d 11, appeal dismissed sub nom. New York Shipping Assn., Inc. v Waterfront Commn. of N.Y. Harbor, 458 US 1101; Matter of Rivera v Smith, 63 NY2d 501; Telaro v Telaro, 25 NY2d 433; Clark-Fitzpatrick, Inc. v Long Is. R.R. Co., 70 NY2d 382; Seneca Pipe & Paving Co., Inc. v South Seneca Cent. School Dist., 63 AD3d 1556; Feigen v Advance Capital Mgt. Corp., 150 AD2d 281; Julien J. Studley, Inc. v New York News, 70 NY2d 628.) III. The cases appellant cites in its brief either undermine appellant’s position or have no application to this case. (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132; Goldman v Metropolitan Life Ins. Co., 5 NY3d 561; Miller v Schloss, 218 NY 400; Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415; Bradkin v Leverton, 26 NY2d 192; Carriafielio-Diehl & Assoc., Inc. v D&M Elec. Contr., Inc., 12 AD3d 478; Wolf v National Council of Young Israel, 264 AD2d 416; Ehrlich v Froehlich, 72 AD3d 1010; Aetna Cas. & Sur. Co. v LFO Constr. Corp., 207 AD2d 274; Corto v Fujisankei Communications Intl., 177 AD2d 397.)
   OPINION OF THE COURT

Graffeo, J.

In this action, a real estate company that prepared due diligence reports for a developer in connection with the potential purchase of commercial properties alleges that a rival brokerage firm was unjustly enriched when it acquired the materials from the developer and later obtained a commission on the ultimate sale of the properties. The issue before us is whether a sufficient relationship existed between the two real estate firms to provide a basis for an unjust enrichment cause of action. Based on the allegations presented in the complaint, we hold that the relationship between these two parties was too attenuated.

Plaintiff Georgia Malone & Company, Inc. (Malone) is a licensed real estate brokerage and consulting firm that provides its clients with information regarding the purchase and sale of properties not yet on the market. Its principal officer is Georgia Malone. Defendant Rosewood Realty Group, Inc. (Rosewood) and defendant Aaron Jungreis, a broker in the firm, are also engaged in the real estate trade.

In the course of its realty business, Malone introduced defendant CenterRock Realty, LLC (CenterRock), a developer, to the sellers of residential apartment buildings in midtown Manhattan. Thereafter, Malone and CenterRock, by its managing member, defendant Ralph Rieder, entered into a contract in which Malone agreed to produce due diligence materials relating to the properties for CenterRock’s review for potential acquisition. CenterRock acknowledged that it would keep the due diligence information confidential and agreed to pay Malone a commission of 1.25% of the total purchase price for its brokerage services.

Malone then provided CenterRock with certain documents, including an underwriting model, purchase contract, certificates of occupancy, income summary, short aging summary, bank accounts and bank deposit reports, rent rolls, reports of environmental and engineering investigations and recommendations for the selection of consultants. In December 2007, CenterRock executed a contract of sale with the owners to purchase the properties for $70 million.

Under the terms of the purchase agreement, CenterRock had 25 days to perform due diligence investigations, during which time it could terminate the deal without a penalty. According to Malone, Rieder delayed tender of the down payment and the sellers agreed to extend the due diligence deadline an additional 21 days. During the due diligence period, Malone claims that it continued to collect, create and provide CenterRock with confidential information pertaining to the properties and that Rieder repeatedly represented that CenterRock would be ready to close on time.

About a week before the expiration of the contract extension, Georgia Malone received an e-mail from Rieder that stated: “See what you can do about finding [another] buyer for [the properties]. If it falls flat I am prepared to do whatever you think is fair including making up your entire fee. Ideally, I would like to tack it on to our next deal.” Malone attempted but failed to locate another buyer. CenterRock terminated the contract on the last day of the due diligence period and refused to pay Malone’s demand for its commission in the amount of $875,000 (1.25% of the contract price).

After CenterRock pulled out of the deal, Malone alleges that Elie Rieder gave the due diligence materials to a third party for the purpose of selling the documentation to Rosewood. In return, Rosewood paid the Rieders $150,000 for the materials and obtained a new buyer who eventually purchased the properties for $68.5 million. Rosewood received a commission of $500,000 from the sale.

Following that transaction, Malone commenced this action alleging a breach of contract against CenterRock and Ralph Rieder and interposing unjust enrichment claims against all defendants. Supreme Court dismissed all claims except those against CenterRock. On Malone’s appeal, the Appellate Division modified, with two Justices dissenting, by reinstating the unjust enrichment claims against the Rieders and otherwise affirmed (86 AD3d 406 [2011]). The Appellate Division granted Malone’s motion for leave to appeal and certified the following question: “Was the order of this Court, which modified the order of the Supreme Court, properly made?” (2011 NY Slip Op 85308[U] [2011]).

On appeal, Malone seeks reinstatement of its unjust enrichment claim against Rosewood. Malone contends that Rosewood knew that it produced the due diligence materials and that, as a consequence, Rosewood unfairly profited at Malone’s expense by collecting a commission on the sale of the properties. In opposition, Rosewood argues that Malone’s complaint fails to make out an unjust enrichment claim against it because there was no business relationship or connection between them. In addition, Rosewood submits that Malone’s complaint is inadequate because it does not assert that Rosewood was aware that the information had been deemed confidential, nor does it allege that Rosewood knew that CenterRock had not paid Malone for production of the due diligence documents.

As we have stated on several occasions, “ ‘[t]he theory of unjust enrichment lies as a quasi-contract claim’ ” and contemplates “an obligation imposed by equity to prevent injustice, in the absence of an actual agreement between the parties” (IDT Corp. v Morgan Stanley Dean Witter & Co., 12 NY3d 132, 142 [2009], quoting Goldman v Metropolitan Life Ins. Co., 5 NY3d 561, 572 [2005]). An unjust enrichment claim is rooted in “the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another” (Miller v Schloss, 218 NY 400, 407 [1916]). Thus, in order to adequately plead such a claim, the plaintiff must allege “that (1) the other party was enriched, (2) at that party’s expense, and (3) that it is against equity and good conscience to permit the other party to retain what is sought to be recovered” (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173,182 [2011] [brackets and internal quotation marks omitted]).

In Sperry v Crompton Corp. (8 NY3d 204 [2007]), we held that a plaintiff cannot succeed on an unjust enrichment claim unless it has a sufficiently close relationship with the other party. In that case, the plaintiff, who claimed to have purchased overpriced tires, asserted a cause of action for unjust enrichment against the producers of the chemicals used by tire manufacturers (id. at 209). The plaintiffs theory was that the chemical producers overcharged the tire manufacturers, who, in turn, passed the cost to the plaintiff and others similarly situated (id.). Defendants moved under CPLR 3211 to dismiss the claim for failure to state a cause of action and we held that, while “a plaintiff need not be in privity with the defendant to state a claim for unjust enrichment,” there must exist a relationship or connection between the parties that is not “too attenuated” (id. at 215-216).

More recently, we elaborated on the pleading requirements for unjust enrichment in Mandarin, wherein the plaintiff sought to purchase a famous painting with the intent to later auction it for a profit (16 NY3d at 177). The defendant, an alleged art expert, wrote a letter to a third party estimating the painting’s value at $15 million to $17 million but the letter did not disclose the defendant’s ownership interest in the artwork (id.). After obtaining a copy of the letter, the plaintiff claimed to have relied on defendant’s representations on valuation in ultimately purchasing the painting for $11.3 million (id.). Unbeknownst to the plaintiff, $8.8 million of the sale proceeds went to defendant (id.). When the plaintiff was unable to resell the painting for a price greater than or equal to its acquisition cost, it sued the defendant for unjust enrichment.

Upon defendant’s motion to dismiss, we dismissed the unjust enrichment claim due to “the lack of allegations [in the complaint] that would indicate a relationship between the parties, or at least an awareness by [the defendant] of [the plaintiffs] existence” (Mandarin, 16 NY3d at 182). Reaffirming Sperry, we held that although the plaintiff was not required to allege privity, it had to assert a connection between the parties that was not too attenuated (id.). We concluded that

“under the facts alleged, there are no indicia of an enrichment that was unjust where the pleadings failed to indicate a relationship between the parties that could have caused reliance or inducement. Without further allegations, the mere existence of a letter that happens to find a path to a prospective purchaser does not render this transaction one of equitable injustice requiring a remedy to balance a wrong. Without sufficient facts, conclusory allegations that fail to establish that a defendant was unjustly enriched at the expense of a plaintiff warrant dismissal” (id. at 182-183).

Seizing on Mandarin’s reference to “awareness,” Malone argues that its unjust enrichment claim should be allowed to proceed because Rosewood was aware that Malone had created the due diligence reports and Rosewood had used the materials for its own benefit without compensating Malone. But mere knowledge that another entity created the documents is insufficient to support a claim for unjust enrichment under the facts of this case. Our mention of awareness in Mandarin was intended to underscore the complete lack of a relationship between the parties in that case.

Similar to Sperry and Mandarin, the relationship between Malone and Rosewood is too attenuated because they simply had no dealings with each other. Accepting as true the facts alleged in the complaint and affording Malone the benefit of every favorable inference, as we must on a motion to dismiss (see Roni LLC v Arfa, 18 NY3d 846, 848 [2011]), the complaint does not contain sufficient allegations to support an unjust enrichment claim against Rosewood. In particular, the complaint does not assert that Rosewood and Malone had any contact regarding the purchase transaction. And, although the complaint states that Rosewood “knew at all times!’ that Malone produced the due diligence reports and provided them to CenterRock with the expectation that it would be compensated in the event a purchase agreement was reached, there is no allegation that Rosewood was aware that Malone and CenterRock had agreed to the confidential nature of the due diligence information or that Rosewood knew that CenterRock had failed to pay Malone before the documents were conveyed to Rosewood. Indeed, Jungreis’s e-mail communications submitted by Malone in opposition to the motions to dismiss allude to Rosewood’s offer to pay the Rieders for the “due diligence costs” they “laid out,” suggesting that Rosewood believed that the Rieders had compensated Malone for its services.

Contrary to Malone’s contentions, there is no claim that Rosewood had anything other than arm’s length business interactions with CenterRock or the Rieders. The pleadings do not implicate Rosewood in the Rieders’ alleged wrongdoing. The Rieders furnished the due diligence documents and, in exchange, Rosewood paid them $150,000. Rosewood obtained a buyer and negotiated the purchase transaction with the sellers and their broker. Hence, Malone’s argument that Rosewood profited without doing any work lacks merit.

The dissent cites Simonds v Simonds (45 NY2d 233 [1978]), a case that involved an unjust enrichment action against the second wife of the plaintiffs ex-husband. Plaintiff sought a portion of her ex-husband’s life insurance proceeds obtained by the second wife. We imposed a constructive trust on the insurance proceeds held by the second wife on the basis that “[a] bona fide purchaser of property upon which a constructive trust would otherwise be imposed takes free of the constructive trust, but a gratuitous donee, however innocent, does not” (id. at 242). We determined that the second wife in Simonds was a gratuitous donee. In contrast, here, Malone has alleged that Rosewood paid the Rieders for the due diligence files. Additionally, because the complaint fails to allege that Rosewood was aware of the wrongfulness of Center Rock’s actions, Rosewood appears to fit the criteria of a good-faith purchaser for value which, under Simonds, would not support an unjust enrichment claim.

Moreover, regardless of whether Rosewood was a good-faith purchaser of the due diligence materials, the complaint fails to present a sufficient connection between Malone and Rosewood to form the basis of an unjust enrichment claim. In this respect, Malone’s and the dissent’s reliance on Bradkin v Leverton (26 NY2d 192 [1970]) is misplaced because the defendant in that case was an officer of the corporation with which the plaintiff contracted and thus his relationship with the plaintiff was much closer.

The rule urged by Malone would require parties to probe the underlying relationships between the businesses with whom they contract and other entities tangentially involved but with whom they have no direct connection. This would impose a burdensome obligation in commercial transactions. Although Malone’s alleged loss of compensation for preparation of the due diligence reports certainly appears unfair, its unjust enrichment claim against Rosewood falls short of stating facts establishing a sufficient relationship to impose potential liability against that party. Such claims may be more properly pursued against CenterRock and the Rieders and, since those claims remain pending, Malone is not without recourse.

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

Chief Judge Lippman (dissenting).

We have established that “[t]he essential inquiry in any action for unjust enrichment. . . is whether it is against equity and good conscience to permit the defendant to retain what is sought to be recovered” (Mandarin Trading Ltd. v Wildenstein, 16 NY3d 173, 182 [2011] [internal quotation marks and citation omitted]). It is apparent that equity and good conscience do not permit Rosewood to retain the benefits of Malone’s diligent work, and that plaintiff has adequately pleaded that Rosewood was unjustly enriched. Therefore, I respectfully dissent.

The allegations of this complaint are sufficient to state a cause of action that Rosewood cannot retain the sales commission it received by using Malone’s work product. According to the pleadings, Malone performed the services and due diligence necessary to equip a buyer to negotiate and to execute the purchase of the commercial properties. Rosewood then profited by using the fruits of Malone’s labor and transmitting the diligence materials to a different buyer, netting Rosewood a hefty commission while Malone never received compensation for its work. Furthermore, Rosewood had an appreciation and awareness that the diligence materials were drafted by Malone, as alleged in the complaint. Rosewood knew that it was receiving a benefit from Malone, its competitor in the New York real estate brokerage market, because it was evident from the materials themselves. In an affidavit in opposition to Rosewood’s motion to dismiss, Georgia Malone stated, “[A]ll of the [due diligence] materials either were printed on plaintiff’s letterhead or contained other information linking them to plaintiff’ (emphasis omitted). Evaluating Malone’s unjust enrichment claim under the “broad considerations of equity and justice” (Paramount Film Distrib. Corp. v State of New York, 30 NY2d 415, 421 [1972]), it is only fair to allow Malone’s claim against Rosewood to proceed at this early stage in the litigation. At the motion to dismiss stage under CPLR 3211, “the pleading is to be afforded a liberal construction,” and we “accord plaintiffs the benefit of every possible favorable inference” (Leon v Martinez, 84 NY2d 83, 87-88 [1994]). The majority’s intimation that Rosewood believed Malone had been compensated by the Rieders for its services and that Rosewood is a good-faith purchaser for value inappropriately draws inferences in favor of defendants in the context of a CPLR 3211 motion to dismiss.

In addition to requiring proof that defendant was inequitably enriched at plaintiff’s expense, we held in Sperry v Crompton Corp. (8 NY3d 204, 215-216 [2007]) that there needs to be some nexus between the plaintiff and defendant, and the “connection” between the party conferring the benefit and the enriched party cannot be “too attenuated.” Disregarding the equitable concerns at hand, the majority rules on the basis that Malone’s connection to Rosewood does not satisfy the standard of Sperry. The majority now requires plaintiffs pleading unjust enrichment to have a “sufficient relationship” with defendant, involving “dealings with each other” (see majority op at 513, 518). Requiring a relationship of mutual dealing where the plaintiff confers a benefit on the unjustly enriched party treads too close to requiring privity, which this Court expressly disclaimed in Sperry and Mandarin Trading. Our holdings in Sperry and Mandarin Trading never required that there be direct contact or a close relationship between the parties.

In Mandarin Trading, we indicated that “an awareness” by defendant of plaintiffs existence was sufficient for an unjust enrichment claim (16 NY3d at 182). The language describing the connection between Mandarin Trading and Wildenstein as not a “relationship . . . causing] reliance or inducement” was merely for illustrative purposes and was dicta alluding back to how Mandarin also failed to meet the standard for negligent misrepresentation (id.). It was not a statement of the standard for unjust enrichment actions, and the majority here likewise correctly refrains from applying the heightened reliance/ inducement standard. Rather, our holding in Mandarin Trading was that the connection between the defendant, who was not aware of plaintiffs existence, was “too attenuated” under Sperry. In Mandarin Trading, the appraisal letter drafted by Wildenstein was not addressed to Mandarin Trading, and there was no information about how the letter reached plaintiffs hands. Also the plaintiff did not plead that Wildenstein was aware that Mandarin existed. The connection between the parties here by contrast was made out because Rosewood was aware that it was profiting from its competitor’s work. Williston on Contracts § 68:5 is instructive here, stating that an unjustly enriched party must have “an appreciation or knowledge ... of the benefit” and have accepted or retained the benefit inequitably without payment for its value (26 Lord, Williston on Contracts § 68:5 [4th ed]). The Court here is dealing with an equitable concept and should not propagate a standard that gives an impregnable defense to a party allegedly dealing in misappropriated property.

This Court’s precedent on unjust enrichment has never required that there be a close relationship or dealings between the parties. We stated in Simonds v Simonds (45 NY2d 233, 242 [1978], quoting Miller v Schloss, 218 NY 400, 407 [1916]) that “[u]njust enrichment, however, does not require the performance of any wrongful act by the one enriched .... Innocent parties may frequently be unjustly enriched. What is required, generally, is that a party hold property ‘under such circumstances that in equity and good conscience he ought not to retain it.’ ” In Simonds, plaintiff prevailed in an action against her ex-husband’s second wife and daughter for a portion of her ex-husband’s life insurance proceeds. We determined that though defendants had not acted wrongly and had no dealings with the plaintiff, they were still unjustly enriched as beneficiaries of the insurance policies (Simonds, 45 NY2d at 242-243). Nowhere in Simonds did we require defendant to have procured the unjust benefit or that there be contact between plaintiff and defendant. The majority attempts to distinguish Simonds on the basis that the defendant in Simonds did not pay for the insurance proceeds it received whereas Rosewood “appear[ed]” to be a good-faith purchaser for value of the diligence materials (majority op at 519). Drawing every inference in favor of plaintiff, Rosewood could not have been a good-faith purchaser because it had notice from Malone’s letterhead that the diligence materials did not belong to CenterRock and the Rieders. The requirement that defendant not be a gratuitous donee is only applicable in the context of constructive trusts, and more importantly, it is not relevant to the connection between the plaintiff and defendant. The fact that the defendant in Simonds did not pay for life insurance does not change the fact that she had no relationship with plaintiff. As we stated in Simonds, “to evolve formalisms narrowing the broad scope of equity is to defeat its essential purpose” (45 NY2d at 239).

In Bradkin v Leverton (26 NY2d 192 [1970]), we found a viable unjust enrichment claim where there were no direct dealings between plaintiff and defendant. “[T]he defendant received a benefit from the plaintiff’s services under circumstances which, in justice, preclude him from denying an obligation to pay for them” {id. at 197). The defendant in Bradkin knowingly used plaintiff’s contacts without paying for them, similar to Rosewood’s alleged use of Malone’s due diligence materials.

The majority’s policy concerns are unfounded. A ruling that Rosewood was unjustly enriched here would not impede commercial transactions or create an excessive burden on contracting parties. If a business partner conveys information whose source is clearly the company’s direct competitor, the company can inquire about the circumstances of the transmission of the information. Since Malone’s name was allegedly printed on the due diligence materials themselves and Malone obviously had an interest in obtaining the sales commission, Rosewood should have known that the materials were suspect. The majority ruling would appear to simply condone willful ignorance.

For these reasons, I would modify the Appellate Division order to reinstate the unjust enrichment claims against Rosewood and Jungreis.

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

Order affirmed, etc.

      . Specifically, the agreement provided that CenterRock “agrees to treat all [information [furnished to it by Malone] as confidential and shall not duplicate, distribute, disclose, or disseminate such documentation or information without the prior written consent of [Malone], in each instance, which [Malone] may withhold in its sole discretion.” The contract further stated that CenterRock could, on a confidential basis, “reveal the [(Information only to its affiliates, representatives, key employees, lenders, partners, advisors, outside counsel and accountants (‘Related Parties’) . . . who (x) need to know the [(Information for the purpose of evaluating the [p]ropert[ies], and (y) are informed by [CenterRock] of the confidential nature of the [(Information.” CenterRock also agreed to be held liable for the breach of the confidentiality clause by any of the Related Parties.

      . While these events were transpiring, Malone alleges that Rieder and defendant Elie Rieder (Rieder’s son and an officer of CenterRock) were secretly attempting to obtain equity partners in order to purchase the properties through another entity to avoid paying Malone its commission.

      . Contrary to the dissent’s contention, the “awareness” language in Mandarin was dicta since the thrust of the holding pertained to the attenuation of the relationship between the parties.

      . Malone conceded at oral argument that it had no relationship with Rosewood.

      . Paragraph 86 of the complaint states, “Rosewood and Jungreis knew at all times that Malone[ ] had performed the aforementioned work, labor and services and had supplied the aforesaid information with the expectation that Malone[ ] would be compensated therefor in the event that an agreement was reached to purchase the Property.”

        . Only plaintiffs pleading a quantum meruit theory of unjust enrichment are required to show that they performed services for the defendants or at the defendant’s behest (see Monex Fin. Servs., Ltd. v Dynamic Currency Conversion, Inc., 62 AD3d 675, 676 [2d Dept 2009]). A claim of quantum meruit requires the plaintiff to allege that services were performed for defendant in good faith, that defendant accepted the services, an expectation of compensation arose, and the reasonable value of the services rendered (AHA Sales, Inc. v Creative Bath Prods., Inc., 58 AD3d 6, 19 [2d Dept 2008]). The rule espoused in Kagan v K-Tel Entertainment (172 AD2d 375, 376 [1st Dept 1991]), which required that services resulting in unjust enrichment be performed at the “behest” of defendant, is not the correct standard for unjust enrichment. Kagan cited an action for quantum meruit in support of its “behest” requirement (Kagan, 172 AD2d at 376), and as noted by the dissent below, “limiting unjust enrichment claims to those where the benefit was conferred at the behest of the defendant . . . virtually collapses the distinction between claims for quantum meruit and those for unjust enrichment” (86 AD3d 406, 416 n 5 [1st Dept 2011]).

      . The majority acknowledges that “Malone’s alleged loss of compensation for preparation of the due diligence reports certainly appears unfair” (see majority op at 519).


author: Read, J.

text:
    [973 NE2d 1284, 950 NYS2d 510]
    Lillian Roberts, as Executive Director of District Council 37, American Federation of State, County and Municipal Employees, AFL-CIO, et al., Appellants, v David A. Paterson, as Governor of the State of New York, et al., Respondents.
    Argued May 29, 2012;
    decided June 28, 2012

      POINTS OF COUNSEL

      Stroock & Stroock & Lavan LLP, New York City (Curtis C. Mechling, Alan M. Klinger, Ernst H. Rosenberger, Meredith Strauss and Dina Kolker of counsel), and Mary J. O’Connell, General Counsel, District Council 37, AFSCME, AFL-CIO, for appellants.
    I. The lower courts erred in interpreting the New York Constitution and the Racing, Pari-Mutuel Wagering and Breeding Law. (Williamsburgh Sav. Bank v State of New York, 243 NY 231; Schulz v State of New York, 84 NY2d 231, 84 NY2d 851, 513 US 1127; Local Govt. Assistance Corp. v Sales Tax Asset Receivable Corp., 2 NY3d 524; Wein v Levitt, 42 NY2d 300.) II. Appellants meet the standard for a mandatory injunction to restore their health insurance benefits. (Second on Second Café, Inc. v Hing Sing Trading, Inc., 66 AD3d 255; Tucker v Toia, 54 AD2d 322; Bingham v Struve, 184 AD2d 85; McCain v Koch, 70 NY2d 109; Tom Doherty Assoc., Inc. v Saban Entertainment, Inc., 60 F3d 27.) III. Appellants are likely to succeed on the merits under multiple legal theories. (Cook v Arrowsmith Shelburne, Inc., 69 F3d 1235; Lihli Fashions Corp., Inc. v National Labor Relations Bd., 80 F3d 743; Strauss v New York State Dept. of Educ., 26 AD3d 67; Matter of Kemp v City of Hornell, 250 AD2d 950; Kuznetz v County of Nassau, 229 AD2d 476; Matter of County of Ulster v CSEA Unit of Ulster County Sheriff’s Dept., Ulster County CSEA Ch., 37 AD2d 437; Matter

      of Jefferson County v New York State Pub. Empl. Relations Bd., 204 AD2d 1001; Gulino v New York State Educ. Dept., 460 F3d 361; Matter of Schorr v New York City Dept. of Hous. Preserv. & Dev., 10 NY3d 776; Agress v Clarkstown Cent. School Dist., 69 AD3d 769.) IV The City of New York agrees that the State of New York is liable for the New York City Off-Track Betting Corporation’s remaining obligations.

      Eric T. Schneiderman, Attorney General, New York City (Laura R. Johnson, Barbara D. Underwood and Richard Dearing of counsel), for David A. Paterson and another, respondents.
    I. The complaint fails to allege that plaintiffs have any contractual right to health benefits, even as to the New York City Off-Track Betting Corporation itself. (Matter of Aeneas McDonald Police Benevolent Assn. v City of Geneva, 245 AD2d 1042, 92 NY2d 326.) II. Because the State of New York was never plaintiffs’ employer, any contractual right to benefits does not run against the State. (Schulz v State of New York, 84 NY2d 231; Bordeleau v State of New York, 18 NY3d 305; Collins v Manhattan & Bronx Surface Tr. Operating Auth., 62 NY2d 361; Matter of Plumbing, Heating, Piping & A.C. Contrs. Assn. v New York State Thruway Auth., 5 NY2d 420; Arculeo v On-Site Sales & Mktg., LLC, 425 F3d 193; Arbaugh v Y & H Corp., 546 US 500; Strauss v New York State Dept. of Educ., 26 AD3d 67; Matter of Kemp v City of Hornell, 250 AD2d 950; Kuznetz v County of Nassau, 229 AD2d 476; Matter of Jefferson County v New York State Pub. Empl. Relations Bd., 204 AD2d 1001.)

      Michael A. Cardozo, Corporation Counsel, New York City (Sharyn Rootenberg, Larry A. Sonnenshein and Janice Birnbaum of counsel), for Michael Bloomberg and another, respondents.
    Appellants failed to demonstrate a likelihood of success against the City of New York, as the City is not legally or statutorily required to assume the New York City Off-Track Betting Corporation’s (NYC OTB) obligation to pay the actual cost of NYC OTB retirees’ health insurance and welfare benefits premiums. (Bordeleau v State of New York, 18 NY3d 305; Schulz v State of New York, 84 NY2d 231; Matter of Haynes v Giuliani, 238 AD2d 257; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 45 NY2d 471; Matter of Palmer v Spaulding, 299 NY 368; Johnson v Hudson Riv. R.R. Co., 49 NY 455; People v Felix, 58 NY2d 156.)

      Colleran, O’Hara & Mills, L.L.P., Garden City (Edward J. Groarke of counsel), for New York State AFL-CIO, amicus curiae.
   OPINION OF THE COURT

Read, J.

The New York City Off-Track Betting Corporation (NYC OTB or the Corporation) was created in 1970 as a public benefit corporation charged with operating an off-track pari-mutuel betting system within New York City. The Corporation, which was established and governed by the Racing, Pari-Mutuel Wagering and Breeding Law, collected about $1 billion a year in wagers in each of the four fiscal years ending on June 30, 2008. The lion’s share (roughly 80%) went to winning bettors, with the remainder distributed to the City, the racing industry and the State in accordance with statutory formulas. After paying these mandatory statutory distributions, however, NYC OTB was left with insufficient funds to cover operating expenses, and so accumulated growing deficits. When the Corporation prepared to cease operations in June of 2008, the Legislature stepped in and enacted a statute designed to stabilize NYC OTB’s financial position to allow time for restructuring (see L 2008, ch 115 [NYC OTB Act]). Under the NYC OTB Act, the Governor (rather than the Mayor) appointed the Corporation’s five-member board, and NYC OTB was temporarily empowered to retain more revenue to cover operating expenses.

Nevertheless, the Corporation continued to hemorrhage money, leading its board to file for bankruptcy protection under chapter 9 of the Bankruptcy Code (11 USC) on December 3, 2009 (see 427 BR 256 [SD NY 2010] [detailing NYC OTB’s business operations, capital and debt structure and the events leading to the filing of the chapter 9 petition]). After the New York State Senate declined to adopt legislation implementing NYC OTB’s proposed reorganization plan, the Corporation shut down on December 7, 2010 and the bankruptcy case was dismissed (see 2011 WL 309594, 2011 Bankr LEXIS 319 [SD NY 2011]). By letter dated December 8, 2010, the City’s Corporation Counsel informed NYC OTB that in light of its decision to close, NYC OTB retirees would lose coverage under the City’s health insurance and welfare benefit plans because the Corporation was no longer able to reimburse the City, as required by Racing, Pari-Mutuel Wagering and Breeding Law § 606 (4) and section 30 of chapter 115 of the Laws of 2008.

By summons and complaint dated December 23, 2010, District Council 37, AFSCME, AFL-CIO (DC 37), and its Local 2021, which represented 1,027 NYC OTB employees and more than 600 retirees; the DC 37 Benefits Fund Trust; officers of these entities, including two prospective NYC OTB retirees; and four NYC OTB retirees (collectively, plaintiffs) brought suit against the State and the Governor (collectively, the State) and the Mayor and the City (collectively, the City). Plaintiffs sought a judgment declaring that the failure of the State and the City to fund, and the termination of, retiree health insurance and supplemental benefits violated section 12-126 of the New York City Administrative Code and “other express and implied obligations”; and ordering the State and the City to “immediately fund and reinstate retiree health insurance coverage and supplemental benefits, and not to terminate [these] benefits as of December 31, 2010, or at any later date.”

On December 27, 2010, plaintiffs obtained a temporary restraining order requiring the State and City to continue funding their health insurance benefits, and moved for a preliminary injunction to the same effect. After a hearing on January 5, 2011, Supreme Court vacated the temporary restraining order as of January 12 and issued a decision and order, dated January 18, denying plaintiffs’ request for a preliminary injunction (2011 NY Slip Op 30096[U] [Sup Ct, NY County 2011]). The judge reasoned that plaintiffs could not demonstrate a likelihood of success on the merits because there were “three statutes or constitutional provisions that provide that NYC OTB is responsible for funding its retirees[’] health benefits, two of which specifically prohibit the State from assuming those obligations” (2011 NY Slip Op 30096[U], *4 [emphasis added]); namely, Racing, Pari-Mutuel Wagering and Breeding Law § 614; article X, § 5 of the New York State Constitution; and section 30 of the NYC OTB Act.

Next, Supreme Court rejected the four theories advanced by plaintiffs to support State or City liability for NYC OTB retiree health benefits. First, the judge held that the joint employer doctrine did not override statutory and constitutional provisions prohibiting the State from assuming NYC OTB’s liabilities and obligations. Additionally, Supreme Court cited Gulino v New York State Educ. Dept. (460 F3d 361, 378 [2d Cir 2006]) for the proposition that extending this doctrine to “cases involving the complex relations between levels of government would be impracticable and would implicate . . . constitutional concerns.” Second, Supreme Court turned away plaintiffs’ estoppel argument, which primarily relied on statements attributed to former Governor Paterson to the effect that NYC OTB’s closure would foist $600 million in pension obligations onto the State. The judge considered this insufficient to create estoppel because any such representation would have been “contrary to the statutes and constitutional provisions” she had previously cited and, in any event, plaintiffs had not established detrimental reliance (2011 NY Slip Op 30096[U], *5).

Third, Supreme Court concluded that the State did not breach a fiduciary duty by causing NYC OTB to “plunge into ‘deepening insolvency’ ” (id. at *6). In the judge’s view, plaintiffs had not established that the State or City owed a fiduciary duty to NYC OTB, let alone that the State pushed NYC OTB into “deepening insolvency” by enacting the NYC OTB Act, which created a lifeline for the Corporation. Finally, Supreme Court held that NYC OTB retirees were not “City retirees” within the meaning of section 12-126 (a) (ii) of the Administrative Code because, quite simply, they were never employed by the City (id.). Plaintiffs appealed.

On May 26, 2011, the Appellate Division unanimously affirmed in a memorandum decision, which stated in its entirety as follows:

“The City and the State are precluded by NY Constitution, article X, § 5, and Racing, Pari-Mutuel Wagering and Breeding Law § 614 from assuming the legal obligation to pay the NYC OTB retirees’ health insurance benefits. Thus, plaintiffs cannot show a probability of success on the merits or otherwise meet the ‘heightened standard’ governing their application for a mandatory preliminary injunction” (84 AD3d 655 [1st Dept 2011]).

Then on July 14, 2011, the Appellate Division granted plaintiffs’ motion for leave to appeal, certifying the following question to us: “Was the order of Supreme Court, as affirmed by [the Appellate Division], properly made?” We answer the certified question in the affirmative, but on a different ground.

First, plaintiffs did not demonstrate a likelihood of success on the merits of their claim against the City. Plaintiffs argued in the lower courts that NYC OTB retirees were eligible for City-authorized benefits as “City retiree[s]” under section 12-126 (a) (ii) of the Administrative Code. As Supreme Court pointed out, however, a “City retiree” (with an exception not relevant here) within the meaning of section 12-126 (a) (ii) must (among other qualifications) have been a “City employee” as defined by section 12-126 (a) (i). And this latter provision requires a “City employee” to have been “employed by a department or agency of the city; and . . . paid out of the city treasury” (again, among other qualifications) (see Administrative Code of City of NY § 12-126 [a] [i] [emphasis added]).

As a public benefit corporation created by the State, though, NYC OTB was never a “department or agency” of the City (see Racing, Pari-Mutuel Wagering and Breeding Law § 603; Bordeleau v State of New York, 18 NY3d 305, 316 [2011] [“(t)his Court has ‘consistently recognized public authorities as legal entities separate from the State, enjoying an existence separate and apart from the State, its agencies and political subdivisions’ ” (quoting Schulz v State of New York, 84 NY2d 231, 246 n 4 [1994])]). In opposition to plaintiffs’ motion for preliminary injunctive relief, the assistant director of the City’s Office of Management and Budget attested in an affidavit that NYC OTB’s employees had “never been issued City paychecks” and were “never . . . paid for their OTB employment from the City’s treasury.” These statements are uncontested.

Further, NYC OTB retirees’ participation in City-authorized health insurance and welfare benefit plans was contingent upon the Corporation’s reimbursement of the City for these benefits’ actual costs (see Racing, Pari-Mutuel Wagering and Breeding Law § 606 [4]; L 2008, ch 115, § 30). The assistant director attested in her affidavit that, as of early January 2011, NYC OTB was, in fact, nearly $8 million in arrears in payments to the City. And once NYC OTB ceased operations on December 7, 2010, there was no way for the Corporation to reimburse the City for NYC OTB retirees’ health insurance benefits going forward, the circumstance that prompted the Corporation Counsel’s letter of the next day.

With respect to the State, plaintiffs principally focus on whether the lower courts erred when deciding that Racing, PariMutuel Wagering and Breeding Law § 614 and/or article X, § 5 of the New York State Constitution prohibit the State from funding NYC OTB retirees’ health benefits. They contend that the word “obligations” in these provisions refers exclusively to debt obligations—i.e., bonds and other debt instruments issued by public authorities. On this appeal, we need not resolve and express no opinion about this question: whether or not section 614 and/or article X, § 5 prohibit the State from paying for the NYC OTB retirees’ health insurance and supplemental benefits is beside the point since plaintiffs have stated no viable theory under which the State assumed responsibility for this assistance in the first place.

We return to the bedrock principle that a public benefit corporation, such as NYC OTB, “enjoy[s] an existence separate and apart from the State, its agencies and political subdivisions” (Bordeleau, 18 NY3d at 316 [internal quotation marks omitted]). Indeed, “a prime purpose for creating such corporations [is] to separate their administrative and fiscal functions from the State and its subdivisions” (Collins v Manhattan & Bronx Surface Tr. Operating Auth., 62 NY2d 361, 367-368 [1984] [holding that public benefit corporation was not subject to constitutional provisions regarding civil service appointment]).

Plaintiffs advance several theories (i.e., joint or single employer, estoppel, fiduciary duty, piercing the corporate veil) in an attempt to get around or nullify NYC OTB’s separate legal identity, but this obstacle to their success on the merits is insuperable. The NYC OTB remained “a body corporate and politic constituting a public benefit corporation” (Racing, PariMutuel Wagering and Breeding Law § 603 [1]) under the NYC OTB Act, the State’s last-ditch effort to revive the Corporation’s fortunes. And when the Legislature adopted the act, it amended section 606 of the Racing, Pari-Mutuel Wagering and Breeding Law, governing pension, retirement and other benefits, to add a new subdivision (1). This provision assures that “[f]or the purposes of this section [606], all employees of the [NYC OTB] on or after the effective date of the chapter of the laws of two thousand eight which amended this section shall remain employees of such corporation after such effective date” (Racing, Pari-Mutuel Wagering and Breeding Law § 606 [1] [emphasis added]). As previously discussed, the Legislature also amended subdivision (4) of section 606 and adopted section 30 of chapter 115 of the Laws of 2008 so as to condition eligibility for benefits from City-authorized health insurance or welfare benefit programs on the Corporation’s reimbursement of the City’s actual costs (see nn 1, 2).

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

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

Order affirmed, etc.

      . Section 606 (4) states that
      “[a]ll employees and officers of the corporation in classes or positions whose incumbents, in equivalent classes or positions of the city, are eligible, as of the effective date hereof, to participate in, and receive benefits from any city authorized health insurance or welfare benefit program, shall be eligible to participate in, and receive benefits from any such health insurance or welfare benefit program; provided, however, that [NYC OTB] shall reimburse the city or its designee for the actual cost of benefits under this subdivision” (emphasis added).

      . Section 30 provides as follows:
      “Notwithstanding any other provision of law or regulation, nothing in [the NYC OTB Act] shall diminish the rights that retired employees and officers of [the NYC OTB] have to participate in, and receive benefits from any city authorized health insurance or welfare benefit program; provided, however, that [the NYC OTB] shall reimburse the city or its designee for the actual cost of such benefits” (emphasis added).

      . Racing, Pari-Mutuel Wagering and Breeding Law § 614 states that “[t]he bonds, notes or other obligations of the [NYC OTB] shall not be a debt of either the state or the city, and neither the state nor the city shall be liable thereon, nor shall they be payable out of any funds other than those of the corporation” (emphasis added). Relatedly, section 624 of the Racing, PariMutuel Wagering and Breeding Law, as amended by the NYC OTB Act, provides that the
      “[NYC OTB] and its corporate existence shall continue until terminated by law; provided, however, that no such law shall take effect so long as the corporation shall have bonds, notes or other obligations outstanding. Upon termination of the existence of the corporation all of its rights, property, assets and funds shall thereupon vest in and be possessed by the state” (emphasis added).

      . The State cannot be liable for the obligations of a public corporation under the New York Constitution, the applicable portion of which states that
      “[n] either the state nor any political subdivision thereof shall at any time be liable for the payment of any obligations issued by such a public corporation heretofore or hereafter created, nor may the legislature accept, authorize acceptance of or impose such liability upon the state or any political subdivision thereof; but the state or a political subdivision thereof may, if authorized by the legislature, acquire the properties of any such corporation and pay the indebtedness thereof” (NY Const, art X, § 5 [emphasis added]).


text:
    [975 NE2d 470, 951 NYS2d 89]
    In the Matter of Todd M. Smith, Respondent, v James C. Tormey, as District Administrative Judge for the Fifth Judicial District, Respondent, and County of Onondaga et al., Appellants.
    Argued April 26, 2012;
    decided June 12, 2012

      POINTS OF COUNSEL

      Bond, Schoeneck & King, PLLC, Syracuse (Jonathan B. Fellows of counsel), for appellants.
    I. The Appellate Division’s holding that the assignment and compensation of counsel under article 18-B of the County Law is a matter for judicial review conflicts with decisions of this Court. (Matter of Parry v County of Onondaga, 51 AD3d 1385; Levenson v Lippman, 4 NY3d 280; Matter of Director of Assigned Counsel Plan of City of N.Y. [Bodek], 87 NY2d 191; Matter of Werfel v Agresta, 36 NY2d 624; People v Ward, 199 AD2d 683; Kraham v Mathews, 305 AD2d 746; Goehler v Cortland County, 70 AD3d 57; Matter of Legal Aid Socy. of Orange County v Patsalos, 185 AD2d 926; Matter of Harvey v County of Rensselaer, 83 NY2d 917.) II. The Appellate Division’s improperly narrow reading of section 127.2 (b) of the Rules of the Chief Administrator of the Courts (22 NYCRR) conflicts with this Court’s decisions and unconstitutionally interferes with the authority of the Chief Administrative Judge. (Matter of Werfel v Agresta, 36 NY2d 624; Matter of Director of Assigned Counsel Plan of City of N.Y. [Bodek], 87 NY2d 191; Levenson v Lippman, 4 NY3d 280; People v Ward, 199 AD2d 683; Taddeo v Medallic Art Co., Ltd., 40 AD3d 444.)

      Gary H. Collison, Liverpool, for respondent.
    I. The Appellate Division, Fourth Department, was correct in holding that the appointment of respondent Todd M. Smith, Esq. to defend Stacey Castor was subject to judicial review, rather than administrative review. (Public Serv. Commn. v Grand Cent. Cadillac Renting Corp., 273 App Div 595; Kocak v Metropolitan Life Ins. Co., 144 Misc 422, 237 App Div 780, 263 NY 518; Matter of Dobess Realty Corp. v Magid, 186 Misc 225; Matter of Wendell v Lavin, 246 NY 115; Matter of Tonis v Board of Regents of Univ. of State of N.Y., 295 NY 286; Palmer v Van Santvoord, 153 NY 612; Allen v Stevens, 161 NY 122; Salamone v Wincaf Props., 9 AD3d 127; Rangolan v County of Nassau, 96 NY2d 42; LaSalle Bank, N.A. v Pace, 31 Misc 3d 627.) II. The Appellate Division, Fourth Department, correctly held that respondent Honorable James C. Tormey exceeded the scope of his authority to conduct an administrative review under 22 NYCRR 127.2 by ruling on the eligibility of respondent Todd M. Smith, Esq. to be assigned to defend Stacey Castor, rather than reviewing the amount. (Matter of Parry v County of Onondaga, 51 AD3d 1385; Matter of Werfel v Agresta, 36 NY2d 624; Matter of Director of Assigned Counsel Plan of City of N.Y. [Bodek], 87 NY2d 191.)

      Stillman & Friedman, P.C., New York City (Nathaniel Z. Marmur and Laura P. Wexler of counsel), and Richard D. Willstatter, White Plains, for New York State Association of Criminal Defense Lawyers, amicus curiae.
    22 NYCRR 127.2 (b) does not allow an administrative judge to nullify the appointment of counsel for an indigent defendant. (Gideon v Wainwright, 372 US 335; People v Witenski, 15 NY2d 392; McMann v Richardson, 397 US 759; Strickland v Washington, 466 US 668; People v Baldi, 54 NY2d 137; Matter of Werfel v Agresta, 36 NY2d 624; Levenson v Lippman, 4 NY3d 280; People v Ward, 199 AD2d 683; Matter of Stream v Beisheim, 34 AD2d 329; People v Brabson, 9 NY2d 173.)
   OPINION OF THE COURT

Jones, J.

The primary issue presented on this appeal is whether an Administrative Judge exceeded his authority pursuant to 22 NYCRR 127.2 (b) by considering the order of a trial court assigning an attorney, under article 18-B of the County Law, to a criminal proceeding. We hold that section 127.2 (b), which only provides for an administrative judge’s review of orders awarding legal fees to attorneys, did not authorize the Administrative Judge to review the assignment of counsel.

Pursuant to article 18-B of the County Law, all counties within the State of New York must maintain a plan to provide counsel to those charged with a crime or otherwise entitled to such representation (see County Law § 722; Levenson v Lippman, 4 NY3d 280, 285 [2005]). Respondent Onondaga County maintains a contractual agreement with respondent Assigned Counsel Program, Inc. (ACP), a not-for-profit corporation that delivers legal services to discharge the County’s duty to provide legal representation. Accordingly, ACP, as administrator, oversees panel lists of qualified attorneys eligible to provide criminal representation in the County, including misdemeanor, felony and homicide panels.

This particular appeal arises from a criminal homicide prosecution in September 2007 against defendant Stacey Castor. Defendant was represented by privately retained counsel, Charles Keller, who, in light of the high-profile and complex nature of the case, asked petitioner Todd Smith to assist and serve as second-chair “based on [petitioner’s] level of experience as an attorney who has been trying both felony and misdemeanor cases.” At the time he was asked to assist in the defense, petitioner was not included on any panel list for assigned criminal counsel in the County.

Months later, after defendant exhausted her legal retainer, County Court designated Mr. Keller as assigned counsel, but petitioner remained unappointed. Ultimately, the matter proceeded to trial in January 2009 and a verdict was rendered on February 5, 2009. Petitioner had applied during the course of his participation in the defense to be placed on ACP’s misdemeanor and felony panel lists, but was not accepted onto the felony panel list until two weeks after the verdict was issued.

In March 2009, after the completion of the trial, petitioner submitted a form to County Court entitled “Order Upon Request To Withdraw As Assigned Counsel” which claimed that petitioner had “been assigned on or about the 20th day of February, 2008.” The court signed the form, retroactively appointing petitioner to the matter. As a result, petitioner submitted a voucher for payment to ACP seeking remuneration in the sum of $31,412.50 for 105.7 hours of in-court work and 313.8 hours of out-of-court work. ACP declined to remit payment because petitioner was “off panel” and “2nd chair not approved for pay” at the time he assisted in defendant’s case. ACP’s Executive Committee affirmed the denial of payment on identical grounds.

Petitioner subsequently moved before County Court, pursuant to County Law § 722-b and 22 NYCRR 1022.12, for an order awarding legal fees. County Court granted the motion, concluding that the “extraordinary circumstances [of the criminal matter] justified, and in fact, necessitated, the assignment of a ‘second chair’ to assure” that defendant received effective assistance of counsel. Recognizing that petitioner “was not on the ACP panel throughout his representation of [defendant], but was added to the panel at sometime in November of 2008,” the court ordered that petitioner be paid for services rendered from November 2008 to the conclusion of the case.

Pursuant to 22 NYCRR 127.2 (b), the County and ACP made an application to the Administrative Judge of the Fifth Judicial District seeking review of County Court’s order directing that petitioner be awarded legal fees. The Administrative Judge found that it was beyond the purview of County Court, in contravention of County Law § 722-b, to appoint petitioner as he “never timely applied to be appointed for ACP nor was he qualified to be appointed by ACP as a second-seated counsel in this matter.” Rejecting petitioner’s argument that his scope of review was limited to orders of compensation, the Administrative Judge concluded that he was vested with authority under rule 127.2 to also consider the propriety of an appointment because “the improper appointment of counsel to an indigent person under the auspices of [the] County Law in and of itself makes any fees or determination of compensation improper.” Upon such review, the Administrative Judge determined that County Court exceeded its authority in awarding compensation because “[w]ithout proper appointment pursuant to the Rules, any legal fee award is ‘excessive.’ ”

Consequently, petitioner commenced a CPLR article 78 proceeding in the Appellate Division to annul the determination of the Administrative Judge and seeking a judgment that he be paid for services in accordance with County Court’s order awarding legal fees. The Appellate Division granted the petition in part, concluding that the Administrative Judge exceeded the authority conferred by section 127.2 (b) (83 AD3d 1425 [4th Dept 2011]). As an initial matter, the court rejected the County and ACP’s contention that it lacked the authority to review administrative determinations assigning counsel, remarking that it had the power “to review challenges related to the court’s power to assign and compensate counsel pursuant to a plan or statute” (83 AD3d at 1427). As such, that court stated that the Administrative Judge exceeded his authority by considering the validity of the underlying appointment, reasoning that section 127.2 (b) only permits an administrative judge to review a claim for compensation in excess of statutorily defined limits. With respect to the petition’s additional request for relief, the Appellate Division opined that it was rendered academic by its holding. And in any event, petitioner’s qualifications as assigned counsel under ACP’s rules and plans should have been contested by the County or ACP through the commencement of a CPLR article 78 proceeding or appeal of the County Court order assigning petitioner retroactively.

This Court granted the County and ACP leave to appeal (17 NY3d 704 [2011]), and we now affirm.

The County and ACP contend that the Administrative Judge did not exceed his authority in considering the order that retroactively assigned petitioner to the criminal proceedings. Relying primarily on Matter of Werfel v Agresta (36 NY2d 624 [1975]) and People v Ward (199 AD2d 683 [3d Dept 1993]), they assert that a trial court’s orders assigning and compensating counsel are not amenable to judicial review and are properly challenged by application to the appropriate administrative judge. In turn, petitioner, in reliance on section 127.2 (b) and Matter of Legal Aid Socy. of Orange County v Patsalos (185 AD2d 926 [2d Dept 1992]), argues that administrative judges are limited in review to the amount of awarded compensation, and any challenge to the underlying assignment of counsel is properly commenced by filing a CPLR article 78 proceeding in the nature of prohibition. We find the County and ACP’s arguments unavailing and hold that the Administrative Judge exceeded the authority conferred by section 127.2 (b) by considering the order of assignment. Any objection to that determination of the trial court should have been raised by the County or ACP through an article 78 proceeding seeking a writ of prohibition.

In 2001, the Chief Administrative Judge amended 22 NYCRR 127.2 (b), which now provides that

“[t]he order of the trial judge with respect to a claim for compensation in excess of the statutory limits may be reviewed by the appropriate administrative judge, with or without application, who may modify the award if it is found that the award reflects an abuse of discretion by the trial judge. Any order modifying a trial judge’s award shall be in writing.”

The rule was amended in response to a series of cases, starting in Werfel (36 NY2d 624 [1975]), where this Court observed that awards of legal fees are not amenable to appellate review as there are no pertinent criminal statutes expressly permitting consideration of an amount of compensation, nor an equivalent vehicle for civil review of such awards. For example, CPLR 7801 was deemed an inadequate basis for review as it “precludes the kind of determination petitioner seeks, which is, in effect, to obtain a higher allowance than he was awarded” (Werfel, 36 NY2d at 626). Accordingly, the petitioner in that case was directed to seek review of the award of compensation “by application through the several layers of judicial administration, that is, to the appropriate Administrative Judges and even to the Administrative Board of the court system” (id. at 627). We affirmed the Appellate Division’s dismissal of the article 78 challenge to the order of compensation.

Subsequently, in Matter of Director of Assigned Counsel Plan of City of N.Y. (Bodek) (87 NY2d 191 [1995]), we reaffirmed the holding of Werfel, remarking that “formal appellate review of these compensation orders is impractical, since the appeals courts are several steps removed from the circumstances in which the services were rendered and are therefore not well positioned to assess the wisdom of the Trial Judges’ discretionary choices” (Bodek, 87 NY2d at 194). In that case, which dealt solely with the appealability and reviewability of compensation orders, we again affirmed the Appellate Division’s declination to engage in appellate review of an order of compensation.

Finally, in Levenson (4 NY3d 280 [2005]), we rejected a constitutional challenge to amended section 127.2 (b), concluding that the Chief Administrative Judge had properly amended the rule pursuant to his power under the State Constitution and the Judiciary Law, and did not unconstitutionally divest the Appellate Division departments of jurisdiction to review compensation orders—they have never enjoyed such inherent authority (see Levenson, 4 NY3d at 289).

In light of the foregoing, it is evident the Administrative Judge exceeded his authority under section 127.2 (b) when he considered and vacated the order of assignment. That provision, which is notably silent on the issue of assignment, only empowers administrative judges to assess the amount of compensation awarded, permitting a reduction of awards deemed excessive. The rule is a codification of this Court’s consistent holdings in Werfel and Bodek that orders of compensation can only be reviewed before an administrative judge. Indeed, the rule was amended with the sole purpose of burnishing a “mechanism to review . . . enhanced awards” (Levenson, 4 NY3d at 286) and does not authorize, as was done here, an administrative judge to conflate the issues of assignment and compensation.

The County and ACP refer to this Court’s remark in Werfel that “[t]he assignment and compensation of counsel in criminal matters . . . might be characterized as administrative” (36 NY2d at 626 [internal quotation marks omitted]) to contend that an assignment, because it is a similarly administrative function as an order of compensation, should also be reviewed by an administrative judge. Although we have previously observed that both the assignment and compensation of counsel in criminal matters do not fall squarely into either criminal or civil proceedings, and can be most closely characterized as administrative in nature, the County and ACP place undue emphasis on that similarity (see Werfel, 36 NY2d at 626). Werfel, Bodek and Levenson have exclusively concerned orders of compensation and simply established that administrative judges may consider awards of legal fees. We have never spoken on the appealability and reviewability of an order of assignment, nor expanded the scope of an administrative judge’s authority to encompass review of an assignment of counsel. Thus, the County and ACP’s reliance on Ward (199 AD2d at 684 [“The appeal must be dismissed, for this Court lacks jurisdiction to entertain appeals involving the ‘assignment and compensation of counsel in criminal matters’ ”]) is misplaced to the extent that the decision broadly interpreted this Court’s holding in Werfel to apply to orders of assignment and compensation alike. Rather, certain distinctions between the nature of assigning and compensating counsel warrant different avenues of review.

Most significantly, the Bodek Court opined that appellate review of compensation orders is impractical as appellate courts are too removed to assess the propriety of the trial court’s discretionary decision-making in fixing compensation. Consequently, as noted in Werfel, there are no adequate judicial methods of review for orders of compensation. Thus, a challenge should be presented before the appropriate administrative judge, as now codified in section 127.2 (b).

An order of assignment, however, is properly contested by a CPLR article 78 proceeding in the nature of prohibition. Although an extraordinary remedy, a writ of prohibition is appropriate in “cases where a court acts without jurisdiction” as the “function of the writ . . . [is] not merely to restrain an unwarranted assumption of jurisdiction, but also to restrain an inferior court from exceeding its authorized powers in a proceeding over which it has jurisdiction” (Matter of Lee v County Ct. of Erie County, 27 NY2d 432, 436-437 [1971]). County Law § 722 (4) requires courts “[to] assign counsel ... in accordance with a plan conforming to the requirements of [section 722]” and permits courts to exercise their inherent authority to assign counsel in the event a particular county or city lacks a plan in conformance with the mandates of article 18-B (Matter of Stream v Beisheim, 34 AD2d 329, 333 [2d Dept 1970] [a court has “inherent power (in) the performance of its constitutional or statutory duty to furnish proper counsel to an indigent defendant”]).

A challenge that a trial court’s order of assignment is infirm for failure to adhere to the particular requirements and qualifications enumerated under a county’s plan, is pointed at a court’s inherent or statutorily based authority to assign counsel. Such a challenge, pertaining to a court’s exercise of authority in excess of its jurisdiction, constitutes a justiciable matter as appellate courts “have the authority to review challenges related to the [trial] court’s power to assign and compensate counsel pursuant to a plan or statute” (Goehler v Cortland County, 70 AD3d 57, 61 [3d Dept 2009]; see also Matter of Parry v County of Onondaga, 51 AD3d 1385 [4th Dept 2008]; Matter of Legal Aid Socy. of Orange County v Patsalos, 185 AD2d 926 [2d Dept 1992]). Put another way, an allegation concerning a trial court’s overreach raises judicial or quasi-judicial issues amenable to judicial review under CPLR 7803 (2) which is suited for instances where “the body or officer proceeded, is proceeding or is about to proceed without or in excess of jurisdiction.”

Our holding should not be misconstrued to unduly constrain the authority of administrative judges. Section 127.2 (b) does allow review and modification of an order of compensation “with or without application.” For instance, although the Administrative Judge here exceeded his authority under section 127.2 (b) by addressing the assignment of petitioner, he has not yet assessed whether the amount of compensation was adequate or excessive—an issue that is still open and not within our purview to address. However, it is evident that section 127.2 (b), which is a vehicle established for the exclusive review of awards of legal fees, cannot be used to circumvent a failure to contest an underlying order of assignment. Had the County and ACP sought to challenge the underlying order assigning petitioner to the matter nunc pro tunc, they should have commenced a timely CPLR article 78 proceeding in the nature of prohibition, challenging the County Court’s assignment as exceeding its authority under County Law § 722 (4).

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

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

Order affirmed, with costs.