Courts Do Not Defer to Agencies on Matters of Pure Statutory Interpretation

1. In re Gruber, 89 N.Y.2d 225, 231-32 (1996): “[W]here ‘the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency.’ In such circumstances, the judiciary need not accord any deference to the agency’s determination, and is free to ascertain the proper interpretation from the statutory language and legislative intent.”

2. Belmonte v. Snashall, 2 N.Y.3d 560, 565 (2004): “[T]his is not a case where its interpretation of a statute is entitled to deference. . . . [W]here ‘the question is one of pure statutory reading and analysis, dependent only on accurate apprehension of legislative intent, there is little basis to rely on any special competence or expertise of the administrative agency.’” (quoting Gruber, 89 N.Y.2d at 231).

3. Paramount Commc’ns, Inc. v. Gibraltar Cas. Co., 90 N.Y.2d 507, 513-14 (1997): “[A]n irrational determination by the agency requires no deference and may properly be annulled.”

4. Toys ‘R’ Us v. Silva, 89 N.Y.2d 411, 419 (1996): “Where . . . the question is one of pure legal interpretation of statutory terms, deference to the [agency] is not required.”

5. Cintron v. Calogero, 15 N.Y.3d 347, 350 (2010): “In this matter of statutory construction . . . deference to an agency’s interpretation is not required.”

6. KSLM-Columbus Apts., Inc. v. N.Y. State Div. of Hous. & Cmty. Renewal, 5 N.Y.3d 303 (2005): The legal issues in this case do not involve “specialized ‘knowledge and understanding of underlying operational practices or entail[] an evaluation of factual data and inferences to be drawn therefrom.’”

7. Berger v. N.Y. State Dep’t of Soc. Servs., 181 A.D.2d 12, 15 (3d Dep’t 1992): “[T]he term “x-ray” . . . is not a technical term within defendant’s area of expertise. Accordingly, this court is not required to give special deference to defendant’s interpretation of the term.”

8. Lewis Family Farm, Inc. v. N.Y. State Adirondack Park Agency, 64 A.D.3d 1009, 1013 (3d Dep’t 2009): Court refused to defer to an agency’s interpretation of a defined term “because there is little or no need to rely on any special expertise on the agency’s part.”

9. Landmark West v. N.Y.C. Bd. of Standards & Appeals, No. 114798/98, at 5 (Sup. Ct., N.Y. Cnty. Mar. 1, 1999) (Kapnick, J.): “[W]here ‘the question is one

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of pure legal interpretation of statutory terms, deference. . . is not required.’” (quoting Raritan Dev. Corp. v. Silva, 91 N.Y.2d 98, 102-03 (1997)).

10. McDougall v. Scoppetta, 76 A.D.3d 338, 341 (2d Dep’t 2010): “[A] court cannot operate merely as a rubber stamp of the administrative determination.”

11. Rolla v. Barry, 70 A.D.2d 717, 717 (3d Dep’t 1979): “In reviewing administrative decisions . . . courts exercise a ‘genuine judicial function’ and do not confirm a determination ‘simply because it was made by . . . an agency.’”

 

 

 

 

 

TAB # 1

FIND Request: 89 N.Y.2d 225

Court of Appeals of New York.In the Matter of the Claim of David GRUBER, Re-

spondent.New York City Department of Personnel, Appel-

lant;John E. Sweeney, as Commissioner of Labor, Re-

spondent.In the Matter of the Claim of Kent A. GREENE,

Respondent.New York City Department of Personnel, Appel-

lant;John E. Sweeney, as Commissioner of Labor, Re-

spondent.

Nov. 26, 1996.

Employer sought review of Unemployment In-surance Appeal Board's award of benefits. The Su-preme Court, Appellate Division, 221 A.D.2d 789,633 N.Y.S.2d 670, affirmed. Employer appealed. Inseparate action, employer sought review of Board'saward of benefits. The Supreme Court, AppellateDivision, 221 A.D.2d 781, 633 N.Y.S.2d 242, af-firmed. Employer appealed. The Court of Appealsconsolidated cases and, per Titone, J., held thatclaimants' voluntary departure from covered em-ployment disqualified them from receiving unem-ployment insurance benefits, and their eligibilitywas not revived because they left subsequent non-covered school-related posts without fault.

Reversed and remanded.

Levine, J., filed dissenting opinion in whichCiparick, J., joined.

West Headnotes

[1] Unemployment Compensation 392T 101

392T Unemployment Compensation392TIV Cause of Unemployment

392TIV(C) Voluntary Abandonment of Em-ployment

392Tk101 k. Good Cause in General.Most Cited Cases

(Formerly 356Ak401)Term “last employment,” as used in statute

providing that claimant cannot receive unemploy-ment insurance benefits if she voluntarily separateswithout good cause from her last employment,refers to covered employment, and thus claimantwho leaves her last covered employment withoutgood cause does not become eligible for benefits bysubsequently leaving noncovered employment withgood cause. McKinney's Labor Law § 593, subd. 1.

[2] Statutes 361 176

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k176 k. Judicial Authority and Duty.

Most Cited CasesProper interpretation of statute ordinarily

presents issue of law reserved for courts.

[3] Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In General. Most

Cited CasesWhere statute's interpretation or application in-

volves knowledge and understanding of underlyingoperational practices or entails evaluation of factualdata and inferences to be drawn therefrom, courtsregularly defer to governmental agency chargedwith responsibility for administration of statute, andwill not disturb interpretation if it is supported byrational basis.

[4] Statutes 361 219(1)

674 N.E.2d 1354 Page 189 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589(Cite as: 89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589)

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361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In General. Most

Cited CasesIf question is one of pure statutory reading and

analysis, dependent only on accurate apprehensionof legislative intent, judiciary need not accord anydeference to agency's determination, and is free toascertain proper interpretation from statutory lan-guage and legislative intent, since there is littlebasis to rely on any special competence or expertiseof administrative agency.

[5] Unemployment Compensation 392T 5

392T Unemployment Compensation392TI In General

392Tk3 Constitutional and Statutory Provi-sions

392Tk5 k. Purpose and Intent of Provi-sions. Most Cited Cases

(Formerly 356Ak252)Overall purpose of unemployment compensa-

tion legislation is to protect certain classes of work-ers who are involuntarily unemployed through nofault of their own and who, though unemployed, aregenuinely in labor market. McKinney's Labor Law§ 501.

[6] Unemployment Compensation 392T 100

392T Unemployment Compensation392TIV Cause of Unemployment

392TIV(C) Voluntary Abandonment of Em-ployment

392Tk100 k. In General. Most CitedCases

(Formerly 356Ak401)That claimant who departs from noncovered

employment may be as economically needy asclaimant who departs from covered employment isnot pertinent to whether she is entitled to unem-ployment insurance benefits, since unemployment

program is insurance type plan for dislocated work-ers in recognized labor market, rather than publicrelief type plan for all workers who become unem-ployed.

[7] Unemployment Compensation 392T 100

392T Unemployment Compensation392TIV Cause of Unemployment

392TIV(C) Voluntary Abandonment of Em-ployment

392Tk100 k. In General. Most CitedCases

(Formerly 356Ak401)Claimant's eligibility for unemployment bene-

fits may be revived after loss of earlier covered em-ployment without good cause when claimant is in-voluntarily removed from subsequent covered em-ployment. McKinney's Labor Law § 593.

[8] Unemployment Compensation 392T 100

392T Unemployment Compensation392TIV Cause of Unemployment

392TIV(C) Voluntary Abandonment of Em-ployment

392Tk100 k. In General. Most CitedCases

(Formerly 356Ak401)Claimants' voluntary departure from covered

employment disqualified them from receiving un-employment insurance benefits, and their eligibilityfor benefits was not revived because they left sub-sequent noncovered school–related posts withoutfault. McKinney's Labor Law § 593, subd. 1.

***591 *226 **1356 Paul A. Crotty, CorporationCounsel, New York City (Ellen Ravitch and Steph-en J. McGrath, of counsel), for appellant in the firstand second above-entitled proceedings.

*227 Francis J. Smith, Jr., Albany, for DavidGruber, respondent in the first above-entitled pro-ceeding.

McNamee, Lochner, Titus & Williams, P.C., Al-bany (David J. Wukitsch, of counsel), for Kent A.

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Greene, respondent in the second above-entitledproceeding.

Dennis C. Vacco, Attorney General, Brooklyn(Steven Segall, Barbara G. Billet, Peter H. Schiff,Daniel F. De Vita and Steven Koton, of counsel),for John E. Sweeney, respondent in the first andsecond above-entitled proceedings.

*228 OPINION OF THE COURTTITONE, Judge.

[1] Labor Law § 593(1) provides that claimantswill be disqualified from receiving unemploymentinsurance benefits if they voluntarily separatewithout good cause from their “last employment”prior to the filing of an unemployment claim. Ineach of these two cases, the Unemployment Insur-ance Appeal Board determined that the words “lastemployment” as used in that section did not refer tothe last covered “employment” as that term isdefined in Labor Law § 511, but referred to theclaimant's last actual employment, regardless ofwhether that employment was covered by the Un-employment Insurance Law. Under the circum-stances presented, the question of statutory inter-pretation presented is one of law for this Court, re-quiring no deference to the agency determinationsbelow. Having performed that function, we con-clude that the term “last employment” refers tocovered employment, and that these claimants weredisqualified from receiving benefits because theyvoluntarily separated from their last covered em-ployment without good cause (see, Labor Law §593[1] ). Thus, we reverse the determinations be-low that these claimants are entitled to unemploy-ment benefits.

I.Matter of Gruber

Claimant Gruber graduated from Mount SinaiMedical School in May 1983 and received a medic-al degree. He was employed as a research assistantfor the New York City Department of Health fromJuly 15, 1983 through June 13, 1984. He resignedfrom the City post to accept a position in a medical

residency program at St. Luke's, which is a teachinghospital accredited by the AMA.

Gruber's contract with St. Luke's was executedon March 22, 1984 and covered a one-year term tocommence on July 1, 1984. However, claimant re-ceived permission to begin rendering his servicesfor the hospital at an earlier date, and began makingrounds on June 18, 1984. After only several days atthe hospital, claimant became emotionally ill andwas hospitalized. He never returned to the resid-ency program.

Gruber filed a claim for unemployment insur-ance benefits. By initial determination, the local un-employment office *229 concluded that Gruber's“last employment” within the meaning of LaborLaw § 593(1) was with St. Luke's, that he lost suchemployment because of illness—a nondisqualifyingcondition—and thus that he was eligible to receiveunemployment insurance. The office determinedthat claimant's employment with St. Luke's was not“covered” employment, and thus charged the Cityof New York for claimant's benefits under LaborLaw § 581(1)(e) as claimant's “last employer.”

Respondent City of New York objected to theruling, contending that either (1) St. Luke's shouldbe liable if claimant's employment with the hospitaldoes not fall within the exclusion to the definitionof “employment” under Labor Law § 511(15), or(2) if claimant's employment with St. Luke's isdeemed to be “student services” excluded from thedefinition of covered employment, then the CityDepartment of Health should be deemed claimant's“last employer,” but claimant should be deemed in-eligible to receive benefits because he left that em-ployment with the City to pursue his education—adisqualifying condition. The Labor Commissioner***592 **1357 determined that claimant was eli-gible for benefits. However, after concluding thatclaimant's employment at St. Luke's Hospital wasnot covered employment, the Commissionercharged the City Department of Health forclaimant's benefits.

674 N.E.2d 1354 Page 389 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589(Cite as: 89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589)

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Respondent City objected to the Commission-er's determination. A hearing was then held beforean Administrative Law Judge (ALJ) of the NewYork State Department of Labor. The ALJ con-cluded that claimant was eligible for benefits andthat claimant's employment with St. Luke's did notfall under the exception created by Labor Law §511(15) because claimant's service as a medicalresident did not constitute “services rendered for aneducational institution by a person who is enrolledand is in regular attendance as a student in such aninstitution.” Thus, the ALJ sustained the City's ob-jection, and overruled the Labor Commissioner'sdetermination that claimant's employment with St.Luke's was not covered employment. St. Luke's wasthus charged for Gruber's benefits.

On appeal taken by the Commissioner of Laborand St. Luke's, the Unemployment Insurance Ap-peal Board determined that claimant's services atSt. Luke's did fall within the section 511(15) excep-tion to the definition of employment, and St. Luke'swas not liable for claimant's benefits. However, theAppeal Board determined that for purposes ofLabor Law § 593(1), “claimant's last employmentwas with St. Luke's and he left this employmentwith good cause and under nondisqualifying*230conditions.” The Board reasoned that the term“employment” as used in section 593(1) meant anyemployment, not only covered employment asdefined in Labor Law § 511. Thus, the Board con-cluded that the City Department of Health wasprimarily chargeable for claimant's benefits becausethat employment was “covered.” The Appellate Di-vision affirmed. We granted the City's motion forleave to appeal, and now reverse.

Matter of GreeneClaimant Greene was simultaneously employed

by the City of New York Department of Health andby the College of Staten Island as a teacher whileenrolled in a Master's Degree program at the latterinstitution. He voluntarily terminated his employ-ment with the City Department of Health on May24, 1991 to pursue his education. Greene's last day

of teaching was May 30, 1991, although he re-mained on the payroll through August 1, 1991.

Greene filed an application for benefits, and thelocal office ruled that he was eligible. The City ofNew York objected and a hearing was held before aState Department of Labor ALJ. The ALJ foundthat claimant was eligible for benefits, concludingthat “although claimant's last employment was notin covered employment pursuant to Section 511(15), it is nevertheless employment which should beconsidered to adjust the issue of who the last em-ploy[er] [sic] was and under which circumstancesthe last employment came to an end”. The ALJ con-cluded that claimant's employment with the collegewas his last employment “and although that was notcovered employment it is not self-employment andit may be counted to break the disqualification thatis apparent for voluntar[ily] [sic] leaving the muni-cipal employment.”

The City appealed. The Appeal Board adoptedthe findings of fact and opinion of the ALJ and con-firmed the ALJ's determination. The Appeal Boardconcluded that Greene's work as a teacher was notcovered employment and should not be consideredin computing his benefit rate or experience charges.Nonetheless, the Appeal Board concluded thatclaimant was eligible for benefits because his “lastemployment was at school and * * * it ended undernondisqualifying conditions.”

The Appellate Division affirmed. The Courtreasoned that “[a]lthough claimant's employmentwith the College was not ‘covered’ employment * ** it was nevertheless sufficient to break claimant'sprior disqualification which resulted when he *231left his job with the City.” (221 A.D.2d 789, 790,633 N.Y.S.2d 670.) The Court noted that “ LaborLaw § 593(1)(a) does not specify that a claimant's‘last’ employment must be ‘covered’ employmentfor purposes of disqualification” (id., at 790, 633N.Y.S.2d 670.) The Court concluded that sinceclaimant left his ***593 **1358 actual last employ-ment with the college under nondisqualifying con-ditions, the Appeal Board's decision that claimant

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was eligible for benefits was supported by“substantial evidence.” This Court granted theCity's motion for leave to appeal, and we now re-verse.

II.1. Standard of Review

[2][3] Judicial review of the determinations ofthe Unemployment Insurance Appeal Board is lim-ited by statute to questions of law (Labor Law §623; Matter of Fisher [Levine], 36 N.Y.2d 146,149–150, 365 N.Y.S.2d 828, 325 N.E.2d 151). Al-though the proper interpretation of a statute ordin-arily presents an issue of law reserved for thecourts, this Court has recognized that “[a]n admin-istrative agency's interpretation of the statute it ischarged with implementing is entitled to varyingdegrees of judicial deference depending upon theextent to which the interpretation relies upon thespecial competence the agency is presumed to havedeveloped in its administration of the statute” (Matter of Rosen v. Public Empl. Relations Bd., 72N.Y.2d 42, 47, 530 N.Y.S.2d 534, 526 N.E.2d 25).“Where the interpretation of a statute or its applica-tion involves knowledge and understanding of un-derlying operational practices or entails an evalu-ation of factual data and inferences to be drawntherefrom, the courts regularly defer to the govern-mental agency charged with the responsibility foradministration of the statute” (Kurcsics v. Mer-chants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426N.Y.S.2d 454, 403 N.E.2d 159; see also, Matter ofIndustrial Liaison Comm. of Niagara Falls AreaChamber of Commerce v. Williams, 72 N.Y.2d 137,144, 531 N.Y.S.2d 791, 527 N.E.2d 274). Whensuch deference is appropriate, the courts will notdisturb the Appeal Board's interpretation of the pro-vision if it is supported by a rational basis ( Matterof Fisher [Levine], 36 N.Y.2d, at 150, 365N.Y.S.2d 828, 325 N.E.2d 151, supra; Matter ofVan Teslaar [Levine], 35 N.Y.2d 311, 318, 361N.Y.S.2d 338, 319 N.E.2d 702).

[4] By contrast, where “the question is one ofpure statutory reading and analysis, dependent only

on accurate apprehension of legislative intent, thereis little basis to rely on any special competence orexpertise of the administrative agency” (Kurcsics v.Merchants Mut. Ins. Co., 49 N.Y.2d, at 459, 426N.Y.S.2d 454, 403 N.E.2d 159, supra ). In such cir-cumstances, the judiciary need not accord any de-ference to the agency's determination, and is free toascertain the *232 proper interpretation from thestatutory language and legislative intent ( Matter ofVan Teslaar [Levine], 35 N.Y.2d, at 318, 361N.Y.S.2d 338, 319 N.E.2d 702, supra; see alsoMatter of Ferrara [Catherwood], 10 N.Y.2d 1, 7,217 N.Y.S.2d 11, 176 N.E.2d 43).

In this case, the question of law is whether thewords “last employment” contained in Labor Law §593(1) refer to the last covered “employment” asthat term is defined in Labor Law § 511, or whetherin this context the phrase refers to any employment,including those not covered by the article. The Le-gislature has defined with precision both the under-lying purpose of the legislative scheme (Labor Law§ 501) and the term “employment” in the Unem-ployment Insurance Law (Labor Law § 511), andhas directed that statutory definitions are to be ap-plied to interpret the article unless the contextshows otherwise (Labor Law § 510).

By defining the specific classes of employmentthat the Law is designed to cover and by directingthe manner in which the definitional provisions areto be applied, the Legislature has withdrawn thatpolicy-laden determination from the agency (cf.,Chevron U.S.A. v. Natural Resources DefenseCouncil, 467 U.S. 837, 843–844, 104 S.Ct. 2778,2781–2783, 81 L.Ed.2d 694). Further, the questionof what “employment” means in Labor Law §593(1) may be resolved by considering the relevantstatutory language, design and purpose (see, e.g.,Matter of Ferrara [Catherwood], 10 N.Y.2d, at7–8, 217 N.Y.S.2d 11, 176 N.E.2d 43, supra ). Any“specialized knowledge” or expertise that the Ap-peal Board may have is thus irrelevant (see, Matterof Heimbach v. Metropolitan Transp. Auth., 75N.Y.2d 387, 390, 553 N.Y.S.2d 653, 553 N.E.2d

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242; cf., Matter of Industrial Indem. Co. v. Cooper,81 N.Y.2d 50, 54, 595 N.Y.S.2d 726, 611 N.E.2d765). ***594 **1359 Accordingly, contrary to theposition of the dissent, there is no “interpretativegap” left to be filled by the agency (see, dissentingopn., at 243), and deference to the agency determin-ations below is unnecessary (see, e.g., Matter ofFerrara [Catherwood], 10 N.Y.2d 1, 7–9, 217N.Y.S.2d 11, 176 N.E.2d 43, supra; Matter of VanTeslaar [Levine], 35 N.Y.2d 311, 318, 361N.Y.S.2d 338, 319 N.E.2d 702, supra; see also,Matter of Board of Educ. v. New York State Pub.Empl. Relations Bd., 75 N.Y.2d 660, 666, 555N.Y.S.2d 659, 554 N.E.2d 1247).

2. Construction of Labor Law § 593(1)Labor Law § 593 sets forth four circumstances

in which a claimant, who has otherwise compliedwith all eligibility criteria (see, e.g., Labor Law §§527, 591[1], [2] ), will be disqualified from receiv-ing unemployment insurance benefits. One suchdisqualification is voluntary separation from aclaimant's “last employment” without good cause (*233Labor Law § 593[1] [a] ).FN1 Here, we areconcerned with the construction of the term “lastemployment” as used in that section. The questionarises in these appeals because the claimants' separ-ation from their last “covered” employment oc-curred under Labor Law § 593(1)'s disqualifyingcircumstances, but their separation from the“noncovered” employment that they held immedi-ately before filing for benefits did not. Accordingly,whether section 593(1)'s reference to last employ-ment means last “covered” employment or last em-ployment of any type is critical to determiningclaimants' entitlement.

FN1. Specifically, section 593(1)(a)provides that “[n]o days of total unemploy-ment shall be deemed to occur after aclaimant's voluntary separation withoutgood cause from his last employment priorto the filing of his claim until he has sub-sequently worked in employment on notless than three days in each of five weeks

and earned remuneration at least equal tofive times his weekly benefit rate”(emphasis supplied).

Labor Law § 510 provides that “[w]heneverused in this article, the terms defined in this titlehave the respective meanings set forth herein exceptwhere the context shows otherwise ” (emphasis sup-plied). Thus, the statutory definition of“employment” and its exceptions will govern ourinterpretation of the words “last employment” insection 593(1) unless the context shows that a dif-ferent meaning was intended.

Labor Law § 511(1)(a) defines the term“employment” generally to include “any service un-der any contract of employment for hire, express orimplied, written, or oral.” However, the statute goeson to exclude from the definition of “employment”certain specific categories of services or laborers,such as agricultural labor (Labor Law § 511[6] ),golf caddies (Labor Law § 511 [8] ), freelanceshorthand reporters (Labor Law § 511[18] ), andservices for an educational institution by an en-rolled student who is in regular attendance (LaborLaw § 511[15] ). Employers of persons whoprovide services in the categories that are excludedfrom the statutory definition of employment are notobligated to make contributions to the unemploy-ment insurance fund for those services (see, LaborLaw § 517[2][i]; see also, Matter of Hollis HillsJewish Ctr. [Roberts], 92 A.D.2d 1039, 461N.Y.S.2d 555). Thus, under section 511, the term“employment” is specifically made synonymouswith “covered” employment.

Neither the language nor the context of section593(1) shows that the Legislature intended to departfrom the statutory definition of the term“employment”. The absence of any such indicationis especially significant because the Legislature hasrevealed its intention to include in the term“employment” *234 work not covered by the articleby expressly so providing in the text of the particu-lar statutory sections (see, e.g., Labor Law §§ 518,522, 593[2] ). For example, in Labor Law § 522,

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the Legislature defined the eligibility requirementof “total unemployment,” as “the total lack of anyemployment on any day” and expressly providedwithin the context of that section that “[t]he term‘employment’ as used in this section means any em-ployment including that not defined in this title ”(emphasis supplied). FN2 Similarly, ***595**1360 subdivision (2) of section 593, the provi-sion that concerns disqualification for refusal to ac-cept employment without good cause and that im-mediately follows the provision at issue here, ex-pressly provides that disqualification of an other-wise eligible claimant would result where theclaimant “refuses to accept an offer of employmentfor which he is reasonably fitted by training and ex-perience, including employments not subject to thisarticle ” (Labor Law § 593[2] [emphasis supplied]). Given that the Legislature used distinct languagein subdivision (2) when it intended to include em-ployments other than those included in the statutorydefinition of the term “employment” (Labor Law §510), the absence of similar language in the text ofthe immediately preceding subdivision of the samesection indicates that no departure from the stat-utory definition of that term was intended or im-plied (see, McKinney's Cons Laws of NY, Book 1,Statutes §§ 74, 97), as the dissent suggests (see,dissenting opn., at 237, at 596 of 652 N.Y.S.2d, at1361 of 674 N.E.2d).FN3

FN2. Thus, any employment, even in anindustry that is not covered by the Law,excludes the condition of total unemploy-ment. For example, an unemployed personwho has obtained a temporary job on afarm is considered to be employed for pur-poses of assessing “total unemployment”even though farm work is not “covered”employment (Colin, Unemployment Insur-ance in New York, at 164 [NYU Inst ofLabor Relations and Social Security 1950]).

FN3. The dissent cites both Matter of Mit-tleman (Corsi), 282 App.Div. 587, 125

N.Y.S.2d 840 and Matter of Finkel, Nadler& Goldstein (Levine), 46 A.D.2d 196, 361N.Y.S.2d 941 for the proposition that indetermining whether an employee is dis-qualified from receiving unemployment in-surance benefits, the courts should focus“exclusively on the circumstances of theending of the last employment, irrespectiveof any disqualifying reason for the loss ofsome prior employment.” (Dissenting opn.,at 239, at 598 of 652 N.Y.S.2d, at 1363 of674 N.E.2d). In both Mittleman and Finkel,however, the last employment was coveredemployment, and thus those cases do notsupport the dissent's position that the em-ployment that is last in time—whether ornot covered under the Unemployment In-surance Law—is the only employment thatis relevant to the determination under sec-tion 593(1).

[5][6] Notwithstanding the dissent's assertionsto the contrary, interpreting section 593(1) to referonly to last “covered” employment does serve toadvance the over-all purpose of the legislation,which is to protect certain classes of workers who*235 are involuntarily unemployed “through nofault of their own” (Labor Law § 501; see also,Matter of Ferrara [Catherwood], 10 N.Y.2d 1, 8,217 N.Y.S.2d 11, 176 N.E.2d 43, supra ), and“who, though unemployed, are genuinely in thelabor market ” (Colin, Unemployment Insurance inNew York, at 202 [NYU Inst. of Labor Relationsand Social Security 1950] [emphasis supplied] ). Indefining the reach of the system, the Legislaturechose to exclude from the recognized labor marketcertain categories of “workers in specific indus-tries” and “employees who are deemed only casu-ally attached to the labor market” (id., at 135), suchas students employed by their educational institu-tions who are considered to have chosen educationrather than employment as their prime objective (Matter of Mitromaras [Roberts], 122 A.D.2d 368,369, 504 N.Y.S.2d 331). Where an individual hasvoluntarily “opted out” of employment in the re-

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cognized labor market—as defined by Labor Law §511—it makes sense to conclude that the individualis disqualified from recovering benefits, notwith-standing that individual's subsequent acceptance ofwork in a sector of the economy that is outside thatmarket. In a statutory scheme that depends uponparticipation in the legislatively defined labor mar-ket, only events occurring within that market arerelevant, at least absent a clear indication to thecontrary. That a worker who has departed fromnoncovered employment may be as economicallyneedy as a worker who departs from covered em-ployment is not pertinent because “the unemploy-ment program is an insurance type plan” for dislo-cated workers in the recognized labor market, “nota ‘public relief’ type plan” for all workers who be-come unemployed ( Matter of Van Teslaar[Levine], 35 N.Y.2d, at 316, 361 N.Y.S.2d 338, 319N.E.2d 702, supra ).

[7] Under Labor Law § 593, eligible status maybe restored when the previously disqualifiedclaimant “subsequently work[s] in employment onnot less than three days in each of five weeks andearn[s] remuneration at least equal to five times hisweekly benefit rate” (Labor Law § 593[1]–[3][emphasis added] ). Again, nothing in the contextof this section indicates that the italicized term“employment” should be given any other meaningthan that defined by the ***596 **1361 Legis-lature. Thus, for example, a claimant's eligibilityfor unemployment benefits may be revived afterloss of earlier covered employment without goodcause when the claimant is involuntarily removedfrom subsequent “covered” employment (see, e.g.,Matter of Finkel, Nadler & Goldstein [Levine], 46A.D.2d 196, 361 N.Y.S.2d 941, supra; Matter ofMittleman [Corsi], 282 App.Div. 587, 125N.Y.S.2d 840, supra ).

[8] Here, by contrast, claimants never obtainedsubsequent “employment” after leaving theircovered employment and *236 thus, under thescheme devised by the Legislature, did not revivetheir status as eligible beneficiaries of the unem-

ployment insurance program. Sympathetic as thecases of these claimants may be, they were disqual-ified from receiving benefits upon their voluntarydeparture from covered employment, and their eli-gibility for benefits was not revived because theyleft their school-related posts without fault.

Accordingly, the order of the Appellate Divi-sion in each case should be reversed, without costs,and the matters remitted to the Appellate Division,Third Department, with directions to remand to theUnemployment Insurance Appeal Board for furtherproceedings in accordance with the opinion herein.

LEVINE, Judge. (dissenting).I respectfully dissent. The Unemployment In-

surance Appeal Board and the Appellate Divisionwere entirely correct in interpreting the statutorydisqualification from entitlement to unemploymentinsurance benefits for a claimant's “voluntary separ-ation without good cause from his last employ-ment” (Labor Law § 593[1][a] [emphasis supplied]), as not incorporating the student bursary work ex-clusion from the definition of employment con-tained in Labor Law § 511(15).

The New York Unemployment Insurance Law(Labor Law, art. 18) was a pioneering social wel-fare program enacted (by L. 1935, ch. 468) in re-sponse to the hardships of pervasive unemploymentduring the Great Depression (see, W.H.H. Cham-berlin, Inc. v. Andrews, 271 N.Y. 1, 8–9, 2 N.E.2d22, affd 299 U.S. 515, 57 S.Ct. 122, 81 L.Ed. 380).The majority's overliteral application of all of thestatutory definitional exclusions from employmentto the disqualification-for-benefits provisions of theUnemployment Insurance Law conflicts with thecentral statutory purpose of the law to alleviate“[e]conomic insecurity * * * for the benefit of per-sons unemployed through no fault of their own ” (Labor Law § 501 [emphasis supplied] ), which theLegislature expressly prescribed as “a guide to theinterpretation and application of this article” (id.).Moreover, application of the majority's interpreta-tion will create anomalies, incongruous results andunnecessary inconsistencies in the administration of

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the unemployment insurance system.

A.The key interpretive issue on this appeal is

whether the 12 statutory exclusions from the defini-tion of employment contained in Labor Law § 511,plus the several additional exclusions*237 fromthat definition set forth elsewhere in the statute, ap-ply to the usage of “employment” or “last employ-ment” in Labor Law § 593, the disqualification sec-tion of the statute. There is no principled way topick and choose among definitional exclusions ininterpreting employment or last employment undersection 593, and the majority has not attempted todo so.

In addition to the strongly worded directionthat the essential protective purpose of the Unem-ployment Insurance Law shall be the overridingbasis of construction of its provisions, the Legis-lature took the further precautionary measureagainst formalistic interpretation of the law byproviding that “the terms defined in this title havethe respective meanings set forth herein exceptwhere the context shows otherwise ” (Labor Law §510 [emphasis supplied] ). Thus, the drafters of theUnemployment Insurance Law explicitly conveyedtheir anticipation and approval of implied devi-ations from and exceptions to the definition of em-ployment, as shown by the context in which thatterm may be used in the statute.

***597 **1362 Examination of the variousstatutory exclusions from the definition of employ-ment in section 511 and in other provisions of theunemployment insurance article shows (and the ma-jority agrees [see, majority opn, at 233, at 594 of652 N.Y.S.2d, at 1359 of 674 N.E.2d] ) that theirprimary purpose is, through designating excludedcategories of employment service, to restrict cover-age. That is, these exclusions eliminate classes ofemployers from liability for unemployment insur-ance tax contributions, and correspondingly restrictthe eligibility of their employees for benefits. Thus,while employment is broadly defined in its generalcommon-law meaning of “any service under any

contract of employment for hire, express or im-plied” (Labor Law § 511[1][a] ), the statute goes onto provide that the term “employment” does not in-clude such employee services as agricultural labor (Labor Law § 511[6] ); a golf caddy (Labor Law §511[8] ); a babysitter if a minor (Labor Law §511[12] ); a freelance shorthand reporter (LaborLaw § 511[18] ); a qualified real estate agent (Labor Law § 511[19] ); a duly ordained ministerserving a nonprofit organization (Labor Law §563[2] [a] ); a caretaker at a place of religious wor-ship (Labor Law § 563[2] [c] ); or an elected offi-cial of a governmental entity (Labor Law § 565[2][a] ). The effect of these exclusions from the stat-utory definition of employment is that personsproviding the services in those categories are in-eligible for benefits based on that employment,even when they lose their jobs for nondisqualifyingreasons, and their employers*238 are not requiredto make unemployment insurance contributions (see, Matter of Hollis Hills Jewish Ctr. [Roberts],92 A.D.2d 1039, 461 N.Y.S.2d 555; cf., Matter ofWildcat Serv. Corp. [Ross], 78 A.D.2d 710, 432N.Y.S.2d 279).

Contrary to the suggestion of the majority(majority opn, at 234–235, at 594–595 of 652N.Y.S.2d, at 1359–1360 of 674 N.E.2d), there is avirtually complete absence of coherence betweenthe statutory coverage exclusions and the over-allprotective and ameliorative purpose of the Unem-ployment Insurance Law. Coverage issues generallyreflect political, burden/benefit-weighing policy de-cisions by legislatures, having little if anything todo with the needs of the unemployed. Thus, the ag-ricultural labor exclusion (Labor Law § 511 [6] ),found in even the earliest Federal and most Stateunemployment insurance compensation laws, wasattributable to the belief that exemption from addi-tional forms of taxation was necessary to protect,preserve and encourage a fragile and already de-pressed vital industry (see, Carmichael v. SouthernCoal & Coke Co., 301 U.S. 495, 512, 57 S.Ct. 868,873–874, 81 L.Ed. 1245). Employment in familybusinesses was excluded (see, Labor Law § 511[7]

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) for reasons of excessive administrative expense (Carmichael v. Southern Coal Co., supra, 301 U.S.,at 513, 57 S.Ct. at 874).

Still other exclusions (including that containedin Labor Law § 511[15] at issue here) were incor-porated (see, L. 1971, ch. 1027, § 1) when it wasnecessary to expand State coverage (in that instanceto most nonprofit employers) in conformity withFederal law, in order to avoid loss of credits to NewYork employers on their Federal payroll taxes fortheir State contributions, and loss of Federal grantsfor the administration of the State unemploymentinsurance system (see, Mem of Dept of Labor, BillJacket, L. 1971, ch. 1027, at 19–20). SubsequentFederal mandates were also responsible for the cre-ation of statutory exceptions to certain definition-ally excluded services when the employer is a non-profit organization or governmental entity (see, L.1977, ch. 675, § 3 [amending Labor Law § 511(16)]; preamble to L. 1977, ch. 675). Moreover, certainexclusions from the definition of employment be-come statutorily converted to covered employmentwhen an employer elects, with the approval of theCommissioner of Labor, to participate in the unem-ployment insurance system and pays contributions (see, Labor Law § 561 [2][a], [b], [c] ).

The foregoing patchwork delineations ofcovered and noncovered employment hardly sug-gest the existence of some deliberately created, co-herent “protected labor market” system, which isthe underpinning upon which the majority bases itsconclusion that coverage and disqualification issues*239 are actually within the same “context” (see,majority***598 **1363 opn, at 235, at 595 of 652N.Y.S.2d, at 1360 of 674 N.E.2d).

Moreover, as the foregoing discussion shows, itis similarly impossible to find any coherent, con-sistent relationship between the coverage provisionsand the purpose and guiding spirit of the law as out-lined in Labor Law § 501. Thus, the common issuein these appeals has nothing to do with coverage, itis the unrelated question of the meaning of thephrase “last employment” in the disqualification for

benefits section (Labor Law § 593). Unlike the cov-erage provisions, Labor Law § 593 manifestly hasas its underlying rationale and context, the singu-larly expressed purpose of the unemployment insur-ance legislation to protect workers who have losttheir jobs “through no fault of their own” (LaborLaw § 501). Thus, an unemployed worker is dis-qualified from receiving benefits for “ voluntaryseparation without good cause from his last em-ployment prior to the filing of his claim” (LaborLaw § 593[1][a] [emphasis supplied] ); “los[ing]his last employment prior to the filing of his claimthrough misconduct in connection with his employ-ment” (Labor Law § 593[3] [emphasis supplied] );and “los[ing] employment as a result of an act con-stituting a felony in connection with such employ-ment ” (Labor Law § 593[4] [emphasis supplied] ).Additionally, an unemployed worker is disqualifiedfrom receiving benefits for refusing an offer of ree-mployment “without good cause * * * includingemployments not subject to this article” (LaborLaw § 593[2] ).

It has long been settled law that where the stat-utory disqualification expressly relates to a termina-tion of the last employment before filing a claim forbenefits, as in the case of a voluntary separation ora claimant's misconduct (see, Labor Law §593[1][a]; [3] ), the focus is exclusively on the cir-cumstances of the ending of the last employment,irrespective of any disqualifying reason for the lossof some prior employment. Thus, in Matter of Mit-tleman (Corsi), 282 App.Div. 587, 125 N.Y.S.2d840, a worker who left one job under a disqualify-ing condition (voluntary separation without goodcause), was nevertheless ruled eligible for benefitsafter involuntarily being laid off from a temporaryposition she took shortly thereafter (see also, Mat-ter of Cowan [Catherwood], 17 A.D.2d 232, 233N.Y.S.2d 779). And the experience-rated account ofthe prior employer may constitutionally be chargedfor that loss of subsequent “last employment,” al-though the employee voluntarily quit the earlier po-sition (see, Matter of Finkel, Nadler & Goldstein[Levine], 46 A.D.2d 196, 361 N.Y.S.2d 941, mot to

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dismiss appeal granted 37 N.Y.2d 740, 374N.Y.S.2d 1029, 337 N.E.2d 148).

*240 Moreover, contrary to the position of themajority, disqualification does not automaticallyfollow when “an individual has voluntarily ‘optedout’ of employment in the recognized labor mar-ket—as defined by Labor Law § 511 ” (majorityopn, at 235, at 595 of 652 N.Y.S.2d, at 1360 of 674N.E.2d). Leaving one employment for other workgenerally constitutes “good cause,” and therebyavoids disqualification (see, Matter of Curran[Levine], 50 A.D.2d 681, 375 N.Y.S.2d 202[Sweeney, J., dissenting], revd on dissenting membelow 41 N.Y.2d 856, 393 N.Y.S.2d 709, 362N.E.2d 260). That rule applies even when the newposition is not covered employment. Thus, in Mat-ter of Dank (Ross), 81 A.D.2d 717, 437 N.Y.S.2d730, the Court held that a psychologist's voluntarytermination of covered employment in this State totake a similar full-time position at a hospital in Is-rael (clearly not covered employment [see, LaborLaw § 511(5) ] ), did not require disqualification (see also, Colin, Employment Insurance in NewYork, at 244 [leaving a job to start a business con-stitutes good cause] ).

Since disqualification issues ordinarily focuson the reasons for the claimant's loss of last em-ployment and not previous employments, and sincea voluntary transfer from covered to noncoveredemployment is not a ground for disqualification, itwas entirely appropriate for the Appeal Board to fo-cus on the reasons these claimants left their last ac-tual employment (even if it was not covered em-ployment), in the context of the disqualificationprovisions of the statute. Having found that goodcause existed for their loss of those last actual em-ployments, the Appeal Board quite properly awar-ded them ***599 **1364 the benefits for whichthey earned eligibility through prior service incovered employment.

Thus, in my view, the Appeal Board's decisionshere are consistent with the general symmetry andpurpose of the Unemployment Insurance Law, and

certainly, the context of the statutory disqualifica-tion provisions. On the other hand, the majority'sinterpretation conflicts with the overriding purposeof the law and creates needless anomalies and in-congruities in the administration of the unemploy-ment insurance system. To briefly illustrate, underthe majority's interpretation of “last employment,”a worker whose covered employment terminatedfor nondisqualifying reasons and who then took ajob in noncovered employment—such as an ex-cluded position with a nonprofit organization orgovernment entity—would be eligible for benefitseven if that last actual employment ended becauseof the employee's misconduct or commission of afelony in connection with the job (e.g., a ministerembezzling from the congregation, or an officialaccepting a bribe). Moreover, under the *241 ma-jority's holding, two workers similarly situated inthat (1) they were both terminated from coveredemployment for disqualifying reasons; (2) theyboth obtained work in a section 511 definitionallyexcluded category of employment service; and (3)they were both laid off involuntarily, will receivedifferent disqualification determinations dependenton whether their actual last employment was with anonprofit organization (see, Labor Law § 511[16] ),or with an employer who elected to provide unem-ployment insurance coverage (see, Labor Law §561). Surely, we should avoid, if at all possible,construction of the statute which produces such an-omalous and inconsistent results, which have nopractical or logical relationship to the stated policyof the unemployment insurance article or the under-lying basis of the disqualification-for-benefits sec-tion.

B.Whether one agrees with the majority or the

dissent here on the key interpretive issue, I think itis unassailable that, at the least, the UnemploymentInsurance Appeal Board could rationally concludethat in the disqualification context, “last employ-ment” is not limited by the statutory exclusions tothe definition of employment which are primarilydesigned to provide standards for coverage. The

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agreement with the Appeal Board's interpretationby the Appellate Division—a Court with a long tra-dition and wide experience in judicial review of theadministration of the Unemployment InsuranceLaw—supports the rationality of the AppealBoard's decision. In my view, the reasonableness ofthe Appeal Board's interpretation of last employ-ment under Labor Law § 593 should be sufficient torequire affirmance here. Thus, I disagree with themajority's conclusion that these cases present aquestion of “pure” statutory interpretation, where acourt is as competent as the administrative agencyto construe the provisions at issue.

Our decisions regarding judicial deference tothe Appeal Board's interpretations of the provisionsof the Unemployment Insurance Law have not beenentirely consistent. As the majority has noted(majority opn, at 231–232, at 592–593 of 652N.Y.S.2d, at 1357–1358 of 674 N.E.2d) in Matterof Van Teslaar (Levine), 35 N.Y.2d 311, 318, 361N.Y.S.2d 338, 319 N.E.2d 702, we held that defer-ence was inappropriate because the issues presentedwere “interpretation of the overall policy of the Un-employment Insurance Law and general construc-tion of statutory language”, which were “not mater-ially aided by administrative expertise[,] and there[was] no other reason appearing for the courts todefer to the agency.” We have since recognized,however, that deference*242 to the Appeal Board'srational interpretation is appropriate when “thequestion, involving policy considerations relating tothe intended scope of the statute, ‘is [thus] one tothe determination of which the Appeal Board maybring to bear its own special competence in carry-ing out the supervisory authority conferred on it bythe Legislature’ ” ( Matter of La Mountain[Westport Cent. School Dist.—Ross], 51 N.Y.2d318, 330, 434 N.Y.S.2d 171, 414 N.E.2d 672[quoting Matter of Fisher (Levine), 36 N.Y.2d 146,150, 365 N.Y.S.2d 828, 325 N.E.2d 151] ). As theThird Department aptly held in Matter of WildcatServ. Corp. (Ross) (supra), a court should defer tothe special competence of the Appeal***600**1365 Board when “the evidentiary facts * * * are

undisputed and the issue involves policy considera-tions relating to the intended scope of the statute”(78 A.D.2d, at 710, 432 N.Y.S.2d 279).

More recently, not only courts but distin-guished administrative law commentators havecome to recognize the validity of both the explicitand implicit rationales of La Mountain, Fisher andWildcat Serv. Corp., that statutory interpretation of-ten involves subsets of policy choices which, upona fair reading of the statute and its legislative his-tory, the legislative body delegated to the agencycharged with implementing the over-all legislativegoals, and that in such cases deference is required.Judicial deference to the agency's interpretation un-der these circumstances accords with a rightful

“sensitivity to the proper roles of the political andjudicial branches. * * * As Chevron [U.S.A. v.Natural Resources Defense Council, 467 U.S.837, 866, 104 S.Ct. 2778, 2793, 81 L.Ed.2d 694 ]itself illustrates, the resolution of ambiguity in astatutory text is often more a question of policythan of law. * * * When Congress, through ex-press delegation or the introduction of an inter-pretive gap in the statutory structure, has deleg-ated policymaking authority to an administrativeagency, the extent of judicial review of theagency's policy determinations is limited” (Paul-ey v. BethEnergy Mines, 501 U.S. 680, 696, 111S.Ct. 2524, 2534, 115 L.Ed.2d 604; see also, 1Davis and Pierce, Administrative Law Treatise §3.3, at 112–116 [3d ed] ).FN*

FN* For a thorough discussion of the un-avoidable necessity of judicial policy mak-ing in statutory interpretation to fill gaps orresolve ambiguities, see, Kaye, StateCourts at the Dawn of a New Century:Common Law Courts Reading Statutes andConstitutions, 70 NYU L Rev 1, 25–34(1995).

Deference in those circumstances will also res-ult in a more coherent, consistent body of interpret-

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ation of the statutory *243 provisions than will beaccomplished by permitting the courts of this Stateto make their own policy-based independent inter-pretations of the statute (see, 1 Davis and Pierce,Administrative Law Treatise § 3.4, at 116–119 [3ded] ).

In my view, the instant cases readily fall withinthe class of cases where judicial deference to theagency's statutory construction is warranted. As wehave shown, by statutory self-description, the Un-employment Insurance Law is a strongly policy-based body of legislation. We have already recog-nized that in the Unemployment Insurance Law theLegislature gave the Appeal Board“quasi-legislative” authority ( Matter of Fisher[Levine], 36 N.Y.2d, at 150, 365 N.Y.S.2d 828, 325N.E.2d 151, supra ) and policy-choice discretion (Matter of La Mountain [Westport Cent. SchoolDist.—Ross], supra ).

Moreover, here the Legislature deliberately leftan “interpretative gap” (Pauley v. BethEnergyMines, supra ) in stipulating that statutory defini-tions are not to be followed “where the contextshows otherwise” (Labor Law § 510). Indubitably,determining whether the context shows otherwisehere involves policy choices, among which arewhether a voluntary transfer to noncovered employ-ment should place an employee at risk of forfeitureof eligibility for benefits previously earned throughcovered employment, and whether, in light of thecentral purpose of the legislation, it is appropriateto take into account the circumstances of the fault-less loss of noncovered, last actual employment inadministering the statute's disqualification provi-sions. The Unemployment Insurance Appeal Board,not this Court, should make those choices, so longas in doing so its interpretation is rational and notin conflict with express statutory provisions ordefinitive legislative history. Since no such conflicthas been demonstrated here and the Appeal Board'sinterpretation is a rational one, we should affirm.

Order reversed, without costs, and matter re-mitted to the Appellate Division, Third Department,

with directions to remand to the Unemployment In-surance Appeal Board for further proceedings in ac-cordance with the opinion herein.

KAYE, C.J., and SIMONS, BELLACOSA andSMITH, JJ., concur with TITONE, J.***601 **1366 LEVINE, J., dissents and votes toaffirm in a separate opinion in which CIPARICK,J., concurs.

In each case: Order reversed, etc.

N.Y.,1996.Claim of Gruber89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d589

END OF DOCUMENT

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TAB # 2

FIND Request: 2 N.Y.3d 560

Court of Appeals of New York.In the Matter of Dominic J. BELMONTE et al., Re-

spondents,v.

Robert R. SNASHALL, as Chair of New York StateWorkers' Compensation Board, et al., Appellants.

June 10, 2004.

Background: Physicians brought article 78 pro-ceedings challenging decision of Workers' Com-pensation Board to deny their applications to con-duct independent medical examinations (IME). TheSupreme Court, Albany County, Cannizzaro, J., de-clared that regulations requiring board certificationby specialty boards of certain independent medicalassociations were invalid. Appeal was taken. TheSupreme Court, Appellate Division, 304 A.D.2d211, 759 N.Y.S.2d 788, affirmed, and appeal wastaken.

Holdings: The Court of Appeals, Ciparick, J., heldthat:(1) “board certified” in provision of Injured Work-ers' Protection Act requiring physicians conductingindependent medical examinations (IME) to beboard certified means certification by a medicalspecialty board, and(2) regulations requiring certification of physiciansconducting IMEs by the American Board of Medic-al Specialties (ABMS) or American OsteopathicAssociation (AOA) were rational.

Reversed.

West Headnotes

[1] Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction

361k213 Extrinsic Aids to Construction361k219 Executive Construction

361k219(1) k. In General. MostCited Cases

Deference is generally accorded to an adminis-trative agency's interpretation of statutes it enforceswhen the interpretation involves some type of spe-cialized knowledge.

[2] Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In General. Most

Cited CasesWhere the question is one of pure statutory

reading and analysis, dependent only on accurateapprehension of legislative intent, there is littlebasis to rely on any special competence or expertiseof the administrative agency; in such circum-stances, the judiciary need not accord any deferenceto the agency's determination, and is free to ascer-tain the proper interpretation from the statutory lan-guage and legislative intent.

[3] Workers' Compensation 413 1310

413 Workers' Compensation413XVI Proceedings to Secure Compensation

413XVI(G) Medical Examination413k1310 k. By Whom Made. Most Cited

Cases“Board certified” in provision of Injured Work-

ers' Protection Act requiring physicians conductingindependent medical examinations (IME) to beboard certified means certification by a medicalspecialty board. McKinney's Workers' Compensa-tion Law § 137, subd. 3(a).

[4] Workers' Compensation 413 1310

413 Workers' Compensation

813 N.E.2d 621 Page 12 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541, 2004 N.Y. Slip Op. 04790(Cite as: 2 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541)

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413XVI Proceedings to Secure Compensation413XVI(G) Medical Examination

413k1310 k. By Whom Made. Most CitedCases

A podiatrist, who is not a medical doctor andthus cannot be medical board certified, is an “otherperson” who may be authorized to perform inde-pendent medical examinations (IME) by the Work-ers' Compensation Board (WCB) under the InjuredWorkers' Protection Act. McKinney's Workers'Compensation Law § 137, subd. 3(a).

[5] Workers' Compensation 413 1310

413 Workers' Compensation413XVI Proceedings to Secure Compensation

413XVI(G) Medical Examination413k1310 k. By Whom Made. Most Cited

CasesWorkers' Compensation Board (WCB) regula-

tions requiring certification of physicians conduct-ing independent medical examinations (IME) by theAmerican Board of Medical Specialties (ABMS) orAmerican Osteopathic Association (AOA) were ra-tional and related to the goals of the Injured Work-ers' Protection Act. McKinney's Workers' Com-pensation Law § 137(3)(a); Workers' CompensationBoard Rules and Regulations, § 300.2(b)(2)(ii)(a),(b)(3), McK.Consol.Laws, Book 64 App.

***542 *561 **622 Eliot Spitzer, Attorney Gener-al, Albany (Kathleen M. Treasure, Caitlin J. Hal-ligan, Wayne L. Benjamin, Nancy A. Spiegel andPeter H. Schiff of counsel), for appellants.

*562 Ganz Wolkenbreit & Friedman, LLP, Albany(Robert E. Ganz of counsel), Hiscock & BarclayLLP (Stephen H. Volkheimer of counsel), and Sul-livan, Cunningham, Keenan, Mraz & Lemire (MaryMraz of counsel) for respondents.

*563 OPINION OF THE COURTCIPARICK, J.

This appeal presents a question of statutory in-terpretation—whether the term “board certified” as

used in Workers' Compensation Law § 137(3)(a)means certification by a medical specialty board orcertification by the Workers' Compensation Board(WCB). We also address whether the regulationspromulgated by the WCB appropriately defined“board certified” as certification by a medical spe-ciality board recognized by either the AmericanBoard of Medical Specialties (ABMS) or AmericanOsteopathic Association (AOA) (see 12 NYCRR300.2[b][3] ).

In 2000, the Legislature enacted the InjuredWorkers' Protection Act (L. 2000, ch. 473), after areport by the New York State AFL–CIO and theNew York Committee for Occupational Safety andHealth detailing the problems with the then-in-place independent medical examination (IME)process FN1 within the workers' compensation sys-tem (New York State AFL–CIO and New YorkCommittee for Occupational Safety and Health,Unjust Treatment: ‘Independent’ Medical Examina-tions & Workers Compensation in New York State<www.nycosh.org/IME_ Report1.html> [last up-dated Dec. 30, 2002] ). According to the report, theIME system was not sufficiently regulated, result-ing in improper and fraudulent examinations andreports. The report made several recommendations,including that IME physicians should be New YorkState licensed “and certified by the New York StateWorkers' Compensation Board” (Unjust Treatment).

FN1. An independent medical examinationis defined as: “an examination performedby an authorized or qualified independentmedical examiner ... for purposes of evalu-ating or providing an opinion with respectto schedule loss, degree of disability, val-idation of treatment plan or diagnosis,causal relationship, diagnosis or treatmentof disability, maximum medical improve-ment, ability to return to work, perman-ency, appropriateness of treatment, neces-sity of treatment, proper treatment, extentof disability, second opinion or any other

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purpose recognized or requested by theboard” (12 NYCRR 300.2[b][4] ).

In response, the Injured Workers' ProtectionAct added section 137 of the Workers' Compensa-tion Law to provide that “[o]nly a New York statelicensed and board certified physician, surgeon, po-diatrist or any other person authorized to examineor evaluate injury or illness by the board shall per-form such independent medical examination” (Workers' Compensation Law § 137[3][a] ).

*564 The statute goes on to state that IMEs“shall be performed by a practitioner who is li-censed and board certified in the state of New Yorkor any other person authorized to examine or evalu-ate injury or illness by the board” (***543**623Workers' Compensation Law § 137[5] ). Althoughthe Workers' Compensation Law does not definethe term “board certified,” it does define “[b]oard”as “the workmen's [sic ] compensation board of thestate of New York” (Workers' Compensation Law §2[2] ).

In accordance with the new law, and consistentwith the definition of board certified in current useas it relates to fee schedules, the WCB promulgatedregulations defining “board certified.” Those regu-lations provide that, in order to conduct IMEs, aphysician or surgeon must have an appropriate de-gree, meet the State Board of Medicine's and Com-missioner of Education's licensing requirements andbe “board certified” as further defined in the regula-tions (see 12 NYCRR 300.2[b][2][ii][a] ). The reg-ulations define “board certified” as “a physician orsurgeon who is certified by a specialty board that isrecognized by the [ABMS] or the [AOA]” (12NYCRR 300.2[b][3] ). There are separate require-ments for podiatrists, chiropractors and psycholo-gists, who are not medical doctors and cannot becertified by the ABMS or AOA (see 12 NYCRR300.2[b][2][ii][b]-[d] ).FN2

FN2. In response to the WCB's request forinput on the implementation of this legisla-tion, the Medical Society of the State of

New York (MSSNY) noted that there wassome ambiguity in the text of the statute.MSSNY thus requested that the WCB'sregulations specify that physicians must bestate licensed and board certified by amedical specialty board recognized byABMS and AOA, in addition to authoriza-tion by the WCB, in order to performIMEs. Several months later, MSSNY re-quested that some of its older physicianswho had a certain degree of skill andknowledge—“C” ratings—be“[g]randfathered” based upon their experi-ence and that the WCB consider creatingan exception to the board certification re-quirement to accommodate them.

Petitioners are New York State licensed medic-al doctors who, prior to the enactment of the chal-lenged provisions, performed IMEs in the course oftheir practice.FN3 The WCB denied petitioners' re-quests for authorization to conduct IMEs pursuantto Workers' Compensation Law § 13–b (1) becausethey were not certified by an appropriate medicalspecialty board. Many of the petitioners are certi-fied by specialty boards that are not recognized byABMS or AOA. Some of the petitioners are“Crated” (designated a consultant in a certain speci-ality) by the WCB. This status is typically grantedto those physicians certified*565 by the ABMS orAOA. However, the WCB occasionally grants a“C” rating to physicians who show a certain levelof competence through years of experience, thus al-lowing such physicians to collect a higher fee forservices.

FN3. Two of the named petitioners diedduring the course of this litigation.

Petitioners commenced separate CPLR article78 proceedings seeking to annul the portion of 12NYCRR 300.2 that required physicians to beABMS or AOA board-certified in order to conductIMEs, and to annul the WCB's determination thatpetitioners were not authorized to conduct IMEs.After consolidating the actions, Supreme Court

813 N.E.2d 621 Page 32 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541, 2004 N.Y. Slip Op. 04790(Cite as: 2 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541)

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granted the petitions in part, finding that the lan-guage of the statute and the legislative history sup-ported the interpretation that the term “board certi-fied” referred to the WCB. Specifically, SupremeCourt noted that the Workers' Compensation Lawdefined the term “board” as the Workers' Compens-ation Board (see Workers' Compensation Law § 2[2] ), and held that the term should have the samemeaning throughout section 137. The court alsoconcluded that the WCB's interpretation was irra-tional and that the determinations denying petition-ers***544 **624 authorization to conduct IMEsshould be annulled, converted the remainder of theproceedings to a declaratory judgment action anddeclared 12 NYCRR 300.2(b)(2)(ii)(a) and300.2(b)(3) FN4 invalid insofar as they requiredphysicians to be ABMS or AOA board certified.

FN4. Before Supreme Court, the regula-tions were numbered 12 NYCRR300–2.1(b)(2)(i) and 300–2.1(c).

The Appellate Division affirmed, agreeing thatdeference to the WCB was not required for thisquestion of pure statutory interpretation. The Courtalso found that the legislative intent was to give theChair of the WCB the authority to discipline IMEproviders and that this purpose was served by mak-ing the providers subject to WCB certification (304A.D.2d 211, 215–216, 759 N.Y.S.2d 788 [2003] ).It did not determine whether the Board's choice ofthe ABMS or AOA for certification was rational,finding the WCB's interpretation incompatible withthe statutory language. We now reverse.

Analysis[1][2] Although we reach the same conclusion

as the WCB, this is not a case where its interpreta-tion of a statute is entitled to deference. Deferenceis generally accorded to an administrative agency'sinterpretation of statutes it enforces when the inter-pretation involves some type of specialized know-ledge (see *566Matter of Gruber [New York CityDept. of Personnel], 89 N.Y.2d 225, 231, 652N.Y.S.2d 589, 674 N.E.2d 1354 [1996] ). “By con-trast, where ‘the question is one of pure statutory

reading and analysis, dependent only on accurateapprehension of legislative intent, there is littlebasis to rely on any special competence or expertiseof the administrative agency’ ... In such circum-stances, the judiciary need not accord any deferenceto the agency's determination, and is free to ascer-tain the proper interpretation from the statutory lan-guage and legislative intent” (id. at 231–232, 652N.Y.S.2d 589, 674 N.E.2d 1354 [citations omitted]).

[3] A plain language reading of the statute sup-ports the conclusion that “board certified” meanscertification by a medical specialty board. Thephrase “board certified” is a term of art, typicallyunderstood to refer to approval by a designatedgroup of professionals FN5 (see McKinney's Cons.Laws of N.Y., Book 1, Statutes § 233). This is es-pecially true when the phrase is used to describephysicians, who are commonly referred to as boardcertified. The Legislature has also used the term“board certified” in other statutes to refer to a med-ical specialty board (see Correction Law § 43 [1];Insurance Law § 4900[b][2][A][ii]; Public HealthLaw § 4900[2][b] [i][B] ).

FN5. Black's Law Dictionary defines theadjective “board-certified” to mean “( [o]fa professional) recognized by an officialbody as a specialist in a given field of lawor medicine” (Black's Law Dictionary 166[7th ed. 1999] ).

Petitioners attempt to separate the word“board” from the phrase “board certified,” contend-ing that “board” should be given the same meaningthroughout the provision. However, “board” canhave a different meaning on its own than it does aspart of the phrase “board certified.” The statutorydefinition should not be applied mechanically, re-gardless of context. Indeed, there are several placesin the Workers' Compensation Law where the term“board” is not used to refer to the WCB (see e.g.Workers' Compensation Law § 13–d[1] [referringto county medical board] ). Thus, the most naturalinterpretation is that “board certified” refers to cer-

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tification by a medical specialty board and we readthe statute accordingly (see e.g. Castro v. UnitedContainer Mach. Group, Inc., 96 N.Y.2d 398, 401,736 N.Y.S.2d 287, 761 N.E.2d 1014 [2001] ).

***545 **625 [4] We likewise reject petition-ers' argument that the WCB's construction of thestatute renders the term “podiatrist” superfluous.The statute as we interpret it provides that physi-cians and surgeons must be state licensed and med-ical board certified (see Workers' CompensationLaw § 137 [3] ). A podiatrist,*567 who is not amedical doctor and thus cannot be medical boardcertified, is an “other person” who may be author-ized to perform IMEs by the WCB (see Workers'Compensation Law § 137[3][a] ). Indeed, as theWCB notes, the phrase “board certified” would besuperfluous under petitioners' construction, sinceWorkers' Compensation Law § 13–b (1) and (2)were specifically amended in the same bill to givethe WCB the power to authorize providers to per-form IMEs (L. 2000, ch. 473, § 4).

The Appellate Division, First Department hasalso addressed this issue and reached the same con-clusion we reach today (see Matter of Rosenblum v.New York State Workers' Compensation Bd., 309A.D.2d 120, 764 N.Y.S.2d 82 [1st Dept.2003] ). Al-though that Court found that the WCB's interpreta-tion of the statute was entitled to deference, it alsostated that “the WCB's interpretation of the statute,which comports with its plain language, its purposeand its legislative history and gives meaning toevery phrase, was a sound one even as a matter ofpure statutory construction” ( Matter of Rosenblum,309 A.D.2d at 123, 764 N.Y.S.2d 82).

[5] Having determined that “board certified”should be read as certification by an appropriatemedical specialty board, we next address whetherthe regulations requiring certification by the ABMSor AOA are rational. The WCB is authorized to“adopt reasonable rules consistent with and supple-mental to the provisions of this chapter” (Workers'Compensation Law § 117[1] ). This Court reviewsadministrative regulations to determine whether

they are rational and to ensure that they are not ar-bitrary or capricious (see Matter of Levine v.Whalen, 39 N.Y.2d 510, 518, 384 N.Y.S.2d 721,349 N.E.2d 820 [1976] ).

We conclude that the regulations at issue arerational and relate to the goals of the Injured Work-ers' Protection Act. The statute requires that IMEphysicians be certified by a medical specialtyboard. The ABMS and AOA are organizations ofapproved medical and osteopathic specialty boards.Indeed the Medical Society of the State of NewYork specifically requested that the WCB designateonly ABMS and AOA certifying boards. Requiringsuch board certification promotes the purpose of thestatute since it provides a greater level of qualityassurance as the physicians authorized to performIMEs have attained a certain degree of professionalcompetence as recognized by the certifying boards.That some of the petitioners have been retained asimpartial specialists for the WCB does not renderthe regulation irrational. The Workers' Compensa-tion Law does not require such specialists to be“board certified” (see *568Workers' CompensationLaw § 13[e] ). Only specialists selected by employ-ers in the first instance to perform IMEs need to beboard certified.

Petitioners' remaining claims are likewisewithout merit.

Accordingly, the order of the Appellate Divi-sion should be reversed, with costs, the petitionshould be dismissed and the subject regulationsshould be declared valid to the extent challengedherein.

Chief Judge KAYE and Judges G.B. SMITH,ROSENBLATT, GRAFFEO, READ and R.S.SMITH concur.

Order reversed, etc.

N.Y.,2004.Belmonte v. Snashall2 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541,2004 N.Y. Slip Op. 04790

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END OF DOCUMENT

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TAB # 3

FIND Request: 90 N.Y.2d 507

Court of Appeals of New York.PARAMOUNT COMMUNICATIONS, INC.,

Plaintiff,v.

GIBRALTAR CASUALTY CO. et al., Defendants.PARAMOUNT COMMUNICATIONS, INC., Re-

spondent,v.

Salvatore CURIALE, Superintendent of Insuranceof the State of New York, as Administrator of theNew York Property/Casualty Insurance Security

Fund, Appellant.

June 27, 1997.

Insured manufacturer filed claim with Prop-erty/Casualty Insurance Security Fund for insolventinsurer's portion of settlement of underlyingproducts liability suit. The Superintendent of Insur-ance disallowed claim on ground that insured riskdid not arise in New York because manufacturerhad relinquished physical possession and control ofdefective product outside New York when it placedproduct in hands of common carrier for shipmentfrom its Rhode Island plant. The Supreme Court,New York County, Fingerhood, J., denied Superin-tendent's motion to dismiss petition to annul de-termination and granted petition in part, finding thatclaim arose in New York, and the Supreme Court,Appellate Division, 199 A.D.2d 90, 605 N.Y.S.2d44, affirmed in nonfinal order. After the SupremeCourt, Schlesinger, J., held that claim qualified as“allowed claim” and entered judgment, the Superin-tendent appealed by permission. The Court of Ap-peals, Smith, J., held that requirement that“property * * * [be] located * * * in this state” wassatisfied with respect to products liability claimarising after defective valves were delivered for in-stallation in New York nuclear power plant.

Affirmed.

West Headnotes

[1] Insurance 217 1034

217 Insurance217II Regulation in General

217II(C) State Agencies and Regulation217k1028 Commissioners or Superintend-

ents of Insurance217k1034 k. Powers and Duties. Most

Cited Cases(Formerly 217k4.2)Superintendent of Insurance has broad author-

ity and responsibility to interpret Insurance Law.McKinney's Insurance Law § 7613.

[2] Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In General. Most

Cited CasesWhen applying its special expertise in particu-

lar field to interpret statutory language, agency's ra-tional construction is entitled to deference

[3] Administrative Law and Procedure 15A763

15A Administrative Law and Procedure15AV Judicial Review of Administrative De-

cisions15AV(D) Scope of Review in General

15Ak763 k. Arbitrary, Unreasonable orCapricious Action; Illegality. Most Cited Cases

Irrational determination by agency requires nodeference and may properly be annulled.

[4] Insurance 217 1494

217 Insurance217VII Guaranty Funds or Associations

685 N.E.2d 1214 Page 190 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133, 1997 N.Y. Slip Op. 06224(Cite as: 90 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133)

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217VII(D) Claims and Proceedings217k1493 Claims Covered

217k1494 k. In General. Most CitedCases

(Formerly 217k8)For purposes of claim under Property/Casualty

Insurance Security Fund, requirement that“property * * * [be] located * * * in this state” wassatisfied with respect to products liability claimarising from defective valves installed in New Yorknuclear power plant, even though insured relin-quished physical possession of valves when theywere shipped by common carrier from insured'sRhode Island plant, where it was undisputed thatNew York was final destination of delivered prop-erty and claim arose from product's physical pres-ence in New York. McKinney's Insurance Law §§7602(g), 7603(a)(1)(B).

***133 *508 Kaplan, Kilsheimer & Fox L.L.P.,New York City (Charles J. Moxley, Jr., of counsel),for appellant.

*509 Paul, Weiss, Rifkind, Wharton & Garrison,New York City (Stuart M. Cobert and Leslie gor-don Fagen, of counsel), for respondent.

*510 OPINION OF THE COURTSMITH, Judge.

This case concerns a determination by the Su-perintendent of Insurance to deny coverage of peti-tioner's claim under the New York Property/Casu-alty Insurance Security Fund (Security Fund). Un-der its broad powers to ***134 **1215 interpret theInsurance Law and administer the fund establishedto provide coverage for insureds of insolvent insur-ance companies, the Superintendent has determinedthat the insured must relinquish physical possessionand control of the subject property in New York forproperty claims to qualify for coverage under theSecurity Fund. Here, the Superintendent deniedcoverage upon a determination that petitioner relin-quished physical possession of the defectiveproducts in Rhode Island when it placed the goodsin the hands of a common carrier for delivery to the

buyer's plant in New York.

However, the Insurance Law provides that Se-curity Fund coverage attaches to “a claim basedupon a policy insuring property or risks located orresident in this state” (Insurance Law § 7602[g] ).Since it is undisputed that New York was the finaldestination of the delivered property and the claimarose from the property's physical presence in thisState, the requirement contained in the plain lan-guage of the statute—that “property * * * [be] loc-ated * * * in this state”—is satisfied under the factspresented. The Superintendent's resort to a locustest based upon the relinquishment of physical pos-session and control is manifestly inconsistent withthe statutory mandate. Accordingly, the Superin-tendent's determination should be annulled as arbit-rary and capricious and the order of the AppellateDivision should be affirmed.

In 1977, Niagara Mohawk Power Corporationpurchased from petitioner's subsidiary Gulf &Western Manufacturing, *511 eight main steamisolation valve (MSIV) systems for use in the NineMile Point nuclear power station in Scriba, NewYork. MSIVs are custom-designed safety compon-ents used in nuclear power plants to regulate theflow of radioactive steam from the reactor vessel tothe steam turbine. As stated in the pleadings of theunderlying action, MSIVs are meant to “ensure thatin the event of certain nuclear accidents harmfulamounts of radioactive materials would not be dis-charged into the environment.” According toNiagara Mohawk, the Nine Mile Point power sta-tion could not “be licensed for full power opera-tions until the MSIV system” met “performance cri-teria” mandated by the United States Nuclear Regu-latory Commission (NRC). It is undisputed that theMSIVs at issue were intended to be an integral andpermanent part of the nuclear facility located inScriba, New York.

The subject valve systems were constructed atpetitioner's facility in Rhode Island and delivered toNiagara Mohawk's nuclear power plant via com-mon carrier hired by petitioner. The purchase order

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expressly called for petitioner to design, furnish anddeliver the MSIVs “FOB—Jobsite, Scriba, NewYork.” However, the MSIVs contained a design de-fect which was discovered in 1984 by Niagara Mo-hawk during testing. Despite substantial reengineer-ing efforts, the defect could not be eliminated andplant operation was delayed until Niagara Mohawkcould procure and prepare an alternative valve sys-tem which would meet NRC approval. To recoverits alleged damages, Niagara Mohawk commencedan action against petitioner which petitioner ulti-mately settled for $36 million.

During the relevant period, petitioner carried li-ability insurance from numerous insurance compan-ies in varying layers of coverage—primary, um-brella and excess coverage—as protection againstpotential risks arising out of its products. Amongthese were excess insurance policies with IntegrityInsurance Company under which Integrity wouldhave to pay its proportionate share of petitioner'ssettlement with Niagara Mohawk. However, Integ-rity was declared insolvent in 1987 and eventuallybecame the subject of liquidation proceedings.

In March 1988, petitioner filed a timely claimwith respect to the action against it for the MSIVspurchased by Niagara Mohawk seeking recoveryfrom the Security Fund. Thereafter, petitioner ap-prised the Superintendent of the settlement negoti-ations in that action and requested that he acknow-ledge coverage on behalf of the Security Fund un-der the relevant Integrity insurance policies. By let-ter dated March 20, 1990 the Superintendent ad-vised petitioner that:

*512 “there exist two requirements for SecurityFund coverage as applied to products ***135**1216 liability insurance of the type here in-volved. These requirements are:

“1. That the products at issue left the possessionand control of the insured in the State of NewYork.

“2. And, that at the time of the accident, the

products were located in the State of New York.”

The Superintendent conceded facts supportingthe second point but requested proof that “theproducts at issue left the possession and control ofthe insured in the State of New York.”

By letter dated May 4, 1990, petitioner repliedthat “the products were delivered in New York pur-suant to a contract which required delivery FOBNiagara Mohawk's New York plant.” Petitioner ar-gued that under the Uniform Commercial Code, theproducts were transported to New York at petition-er's risk and “title to the products did not pass untilNew York delivery was made.” According to peti-tioner, the FOB delivery alone satisfied the quali-fication requirement for the Security Fund.

Petitioner disagreed with the Superintendent'sview that petitioner could qualify for coverage onlyif it was shown that the valves “were delivered by[petitioner's] company in its own trucks or were in-stalled by [its] employees.” As petitioner explained,“the common carrier's assumption of physical pos-session and control of the product outside of NewYork does not involve the creation of the risk withwhich the Fund is concerned.” Unmoved by peti-tioner's argument, by letter dated May 11, 1990, theSuperintendent denied Security Fund coverage dueto the absence of proof that the products had left thepossession and control of petitioner in New York.

Petitioner commenced the present proceedingpursuant to CPLR article 78 challenging the Super-intendent's determination that it had relinquishedpossession and control of the subject products out-side of New York when it shipped the valves fromRhode Island to New York via common carrier.

Supreme Court identified the central questionposed by Insurance Law § 7602 as whether theclaim had a substantial connection to New York toqualify for Security Fund coverage. The court notedthat under the New York Uniform CommercialCode, “a seller retains title and risk of loss of itemsshipped FOB place of destination, until they arrive

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at their *513 specified destination.” Pursuant tosuch reasoning, the court held that “the valves hav-ing been shipped FOB Scriba, New York, they leftParamount's possession and control when theyreached their destination in New York.” In so hold-ing, the court annulled the Superintendent's denialof coverage as “unreasonable and arbitrary.”

The Appellate Division affirmed, stating:

“that since the insured product was shipped bycommon carrier FOB place of destination in NewYork, it should be deemed to have left the seller'shand and entered the stream of commerce * * *only upon delivery to the purchaser within theState of New York. Absent any explicit statutoryguidance, principles of commercial law (see,UCC 2–319[1][b]; 2–509[1][b]; 2–401[2][b] ),tort law (see, Restatement [Second] of Torts §402A[1][B] ), and products liability law (see,Voss v. Black & Decker Mfg. Co., 59 N.Y.2d 102,107 [463 N.Y.S.2d 398, 450 N.E.2d 204]) sup-port the conclusion that, shipment from out-of-State notwithstanding, the transfer of legalcontrol to a party who will use the product for itsintended use in-State, the purchaser in this case,should define when the insurable risk comes intobeing.” (199 A.D.2d 90, 90–91, 605 N.Y.S.2d44.)

The parties subsequently stipulated that theMSIV claim was indeed covered by the Integritypolicy, and Supreme Court entered judgment forpetitioner in the amount of $980,000 against the Se-curity Fund. This Court granted the Superintend-ent's motion for leave to appeal from the judgmentto bring up for review the prior nonfinal AppellateDivision order.

[1] The Superintendent has broad authority andresponsibility to interpret the Insurance Law (see,e.g., Blue Cross & Blue Shield v. McCall, 89N.Y.2d 160, 163, 652 N.Y.S.2d 218, 674 N.E.2d1124; ***136**1217Matter of New York Pub. In-terest Research Group v. New York State Dept. ofIns., 66 N.Y.2d 444, 448, 497 N.Y.S.2d 645, 488

N.E.2d 466; Matter of Consolidated Mut. Ins. Co.,60 N.Y.2d 1, 8, 466 N.Y.S.2d 663, 453 N.E.2d1080; Ostrer v. Schenck, 41 N.Y.2d 782, 785, 396N.Y.S.2d 335, 364 N.E.2d 1107). Indeed, the Insur-ance Law specifically provides that the Superin-tendent “may adopt, amend and enforce all reason-able rules and regulations necessary for the properadministration” of the Security Fund (InsuranceLaw § 7613; see also, Insurance Law § 7601[e] ).

[2][3] When applying its special expertise in aparticular field to interpret statutory language, anagency's rational construction is entitled to defer-ence (see, Matter of Jennings v. New York StateOff. of Mental Health, 90 N.Y.2d 227, 660N.Y.S.2d 352, 682 N.E.2d 953; *514Kurcsics v.Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426N.Y.S.2d 454, 403 N.E.2d 159; Matter of Consolid-ated Mut. Ins. Co., 60 N.Y.2d 1, 8, 466 N.Y.S.2d663, 453 N.E.2d 1080, supra ). Indeed, once it hasbeen determined that an agency's conclusion has a“sound basis in reason” ( Matter of Pell v. Board ofEduc., 34 N.Y.2d 222, 231, 356 N.Y.S.2d 833, 313N.E.2d 321), the judicial function is at an end and areviewing court may not substitute its judgment forthat of the agency. On the other hand, an irrationaldetermination by the agency requires no deferenceand may properly be annulled (Kurcsics v. Mer-chants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426N.Y.S.2d 454, 403 N.E.2d 159, supra [“if the regu-lation runs counter to the clear wording of a stat-utory provision, it should not be accorded anyweight”]; Matter of Jennings v. New York State Off.of Mental Health, 90 N.Y.2d 227, 660 N.Y.S.2d352, 682 N.E.2d 953, supra ).

The Security Fund was established “for use inpaying property and liability claims remaining un-paid by reason of the insurer's insolvency” ( Matterof Consolidated Mut. Ins. Co., 60 N.Y.2d 1, 6, 466N.Y.S.2d 663, 453 N.E.2d 1080, supra ). Duringthe relevant period, Insurance Law § 7603(a)(1)provided that only “allowed claims” qualified forSecurity Fund coverage.FN1 Prior to its amend-ment in 1990, Insurance Law § 7602(g) defined an

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“allowed claim” as “a claim based upon a policy in-suring property or risks located or resident in thisstate.” Section 7603(a)(1)(B) provided that the fundshall only pay certain specified insurance claims“with respect to coverage of property or risks loc-ated or resident in [New York].”

FN1. The relevant provisions of the Insur-ance Law were amended in 1990 for pro-spective enforcement. Because the eventsat issue occurred prior to these enactments,we have no reason to address the amendedprovisions.

The Superintendent has defined the eligibilityrequirements under Insurance Law § 7602(g) and §7603(a)(1)(B) as two separate types of risks, (1) the“insured risk” and (2) the “covered risk.” Theseterms do not appear anywhere in the statutes. Withrespect to product liability cases, the Superintend-ent has required that the insured risk be “located atthe place where the insured relinquishes physicalpossession and control of the product” and that thecovered risk be “located at the place of the occur-rence, incident or accident giving rise to coverage.”

[4] As the Superintendent recognizes, the Le-gislature hinged Security Fund eligibility basedupon the location of the insured and covered prop-erty and/or risks. Under the plain language of thestatute, the “property or risks” must be “located orresident in this state” to qualify as an allowed claim(*515Insurance Law § 7602[g] ).FN2 The recordreflects that the locus requirement set forth in thestatute has been satisfied.

FN2. Of course, an allowed claim mustalso be “based upon a policy insuring”such property (Insurance Law § 7602[g] ).However, since the parties have stipulatedthat the Integrity policies insure the MSIVsmanufactured by petitioner, the sole ques-tion presented is whether the valves were“located or resident” in this State for Se-curity Fund purposes.

It is conceded that the direct and consequentialdamages incurred by Niagara Mohawk stem fromthe physical presence of the valves in this State. Asstated in Matter of Interstate Ins. Co., 47 N.Y.2d909, 419 N.Y.S.2d 482, 393 N.E.2d 476, “the fundcovers only ‘risks' located in New York” (id., at911, 419 N.Y.S.2d 482, 393 N.E.2d 476). Thatsame reasoning should also apply to the other termin the statute, property. Clearly, ***137 **1218 atthe time the claim arose for purposes of the Secur-ity Fund, the property was “located” in this State asthat term is commonly understood (see, Black'sLaw Dictionary 940 [6th ed 1990] [“(h)aving aphysical presence or existence in a place”] ).FN3

FN3. Arguably, the valves were also“resident” in this State during the time theclaim arose. The final destination of theMSIVs was, and always intended to be,New York. Indeed, it is undisputed that thesubject property was to be an integral andpermanent part of a nuclear power planthere in New York. However, because thevalves were “located” here, we see no reas-on to pass upon the meaning of the stat-utory term “resident” (cf., Antone v. Gen-eral Motors Corp., 64 N.Y.2d 20, 28, 484N.Y.S.2d 514, 473 N.E.2d 742 [“(t)he termresidence * * * has been employed by Le-gislatures for a variety of purposes”] ).

When it is manifest that the property at issue isactually “located * * * in this state”—the determin-ative factor under the plain language of the stat-ute—eligibility for Security Fund coverage shouldnot depend upon the manner of its delivery to NewYork. Indeed, assuming the valves had been in-stalled and an inherent defect remained undetecteduntil after several years of operation and use here inNew York, the Superintendent presumably wouldstill contend that the valves were not “located” inNew York merely because a common carrier haddelivered them from Rhode Island. The Legislaturehas set forth a test based upon the location of theproperty, not the location of the insured and not the

685 N.E.2d 1214 Page 590 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133, 1997 N.Y. Slip Op. 06224(Cite as: 90 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133)

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location where the insured relinquishes possessionand control of the property.

The Superintendent contends that petitioner's“shipping the MSIVs by common carrier ratherthan [using] its own trucks” is dispositive.However, using that fact to determine whether theproperty was “located” in New York is arbitrarywhen applied to facts that plainly fulfill the require-ments contained in *516 the statutory language. Assuch, the Superintendent's determination requiresno deference and must be annulled.FN4

FN4. Both lower courts concluded thatsince the valves were shipped by commoncarrier FOB with a New York destination,the property left the seller's hands upon de-livery in New York. In view of our holdingregarding the insured property's “location”for Security Fund purposes, we have noneed to resolve this issue under the factspresented.

Accordingly, the judgment appealed from andthe order of the Appellate Division brought up forreview should be affirmed, with costs.

KAYE, C.J., and TITONE, BELLACOSA,CIPARICK and WESLEY, JJ., concur.LEVINE, J., taking no part.

Judgment appealed from and order of the Ap-pellate Division brought up for review affirmed,with costs.

N.Y.,1997.Paramount Communications, Inc. v. Gibraltar Cas.Co.90 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d133, 1997 N.Y. Slip Op. 06224

END OF DOCUMENT

685 N.E.2d 1214 Page 690 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133, 1997 N.Y. Slip Op. 06224(Cite as: 90 N.Y.2d 507, 685 N.E.2d 1214, 663 N.Y.S.2d 133)

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TAB # 4

FIND Request: 89 N.Y.2d 411

Court of Appeals of New York.In the Matter of TOYS “R” US, a New York Lim-

ited Partnership, Respondent,v.

Gaston SILVA, as Chairman of City of New YorkBoard of Standards and Appeals, Appellant, et al.,

Respondents;Colette Coffman et al., Intervenors–Appellants.

Dec. 20, 1996.

Landowner brought Article 78 proceeding toannul Board of Standards and Appeals' (BSA) re-vocation of building permit to maintain noncon-forming use. The Supreme Court, New YorkCounty, Saxe, J., 167 Misc.2d 897, 639 N.Y.S.2d881, granted application, and appeal was taken. TheSupreme Court, Appellate Division, 646 N.Y.S.2d91, affirmed, and appeal was taken. The Court ofAppeals, Kaye, C.J., held that: (1) under New YorkCity zoning law prohibiting continuation of non-conforming use if active operation of substantiallyall nonconforming uses is discontinued during two-year period, substantial, rather than complete, dis-continuation of active, nonconforming activity for-feits nonconforming use, and good faith of owner isirrelevant to that determination, and (2) minimalwarehouse activity in nonconforming warehouseand storage facility, following complete stoppage ofoperations for 20 months, failed to preserve non-conforming use status.

Appellate Division reversed and petition dis-missed.

West Headnotes

[1] Zoning and Planning 414 1319

414 Zoning and Planning414VI Nonconforming Uses

414k1317 Discontinuance or Abandonment

414k1319 k. Cessation of use. Most CitedCases

(Formerly 414k337)Under New York City zoning law prohibiting

continuation of nonconforming use if active opera-tion of substantially all nonconforming uses is dis-continued during two-year period, substantial,rather than complete, discontinuation of active,nonconforming activity forfeits nonconforming use,and good faith of owner is irrelevant to that determ-ination. New York, N.Y., Zoning Resolution §52–61.

[2] Zoning and Planning 414 1319

414 Zoning and Planning414VI Nonconforming Uses

414k1317 Discontinuance or Abandonment414k1319 k. Cessation of use. Most Cited

Cases(Formerly 414k337)Minimal warehouse activity in nonconforming

warehouse and storage facility, following completestoppage of operations for 20 months, failed to pre-serve facility's nonconforming use status underNew York City zoning law prohibiting continuationof nonconforming use if active operation of sub-stantially all nonconforming uses is discontinuedduring two-year period; warehouse owner main-tained only eight customer accounts during four-month period, compared to 1,500 accounts previ-ously maintained at warehouse, and only 19 crateswere shipped to warehouse, occupying less thanone percent of building's volume. New York, N.Y.,Zoning Resolution § 52–61.

[3] Zoning and Planning 414 1300

414 Zoning and Planning414VI Nonconforming Uses

414k1300 k. In general. Most Cited Cases(Formerly 414k321)Use of property that is no longer authorized

due to rezoning, but lawfully existed prior to enact-

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ment of existing zoning ordinance, is“nonconforming use.”

[4] Zoning and Planning 414 1300

414 Zoning and Planning414VI Nonconforming Uses

414k1300 k. In general. Most Cited Cases(Formerly 414k321)Law generally views nonconforming uses as

detrimental to zoning scheme, and overriding pub-lic policy of zoning in New York State and else-where is aimed at their reasonable restriction andeventual elimination.

[5] Zoning and Planning 414 1624

414 Zoning and Planning414X Judicial Review or Relief

414X(C) Scope of Review414X(C)1 In General

414k1624 k. Decisions of boards or of-ficers in general. Most Cited Cases

(Formerly 414k605)In questions relating to its expertise, Board of

Standards and Appeals' (BSA) interpretation ofNew York City Zoning Resolutions' terms must begiven great weight and judicial deference, so longas interpretation is neither irrational, unreasonablenor inconsistent with governing statute; its determ-ination, moreover, must be sustained if it has ra-tional basis and is supported by substantial evid-ence. New York City Charter, §§ 659, 666.

[6] Zoning and Planning 414 1624

414 Zoning and Planning414X Judicial Review or Relief

414X(C) Scope of Review414X(C)1 In General

414k1624 k. Decisions of boards or of-ficers in general. Most Cited Cases

(Formerly 414k605)Where question is one of purely legal interpret-

ation of statutory terms, deference to Board ofStandards and Appeals (BSA) is not required.

[7] Zoning and Planning 414 1318

414 Zoning and Planning414VI Nonconforming Uses

414k1317 Discontinuance or Abandonment414k1318 k. In general. Most Cited Cases

(Formerly 414k336.1)Generally, abandonment of nonconforming use

requires both intent to relinquish and some overt actor failure to act, indicating that owner neitherclaims nor retains any interest in subject matter ofabandonment.

[8] Zoning and Planning 414 1319

414 Zoning and Planning414VI Nonconforming Uses

414k1317 Discontinuance or Abandonment414k1319 k. Cessation of use. Most Cited

Cases(Formerly 414k337)In New York, inclusion of lapse period in zon-

ing provision governing abandonment of noncon-forming use removes requirement of intent to aban-don; discontinuance of nonconforming activity forspecified period constitutes abandonment regard-less of intent.

[9] Zoning and Planning 414 1203

414 Zoning and Planning414V Construction, Operation, and Effect

414V(A) In General414k1203 k. Strict or liberal construction

in general. Most Cited Cases(Formerly 414k232)

Zoning and Planning 414 1208

414 Zoning and Planning414V Construction, Operation, and Effect

414V(A) In General414k1206 Meaning of Language

414k1208 k. Ambiguity. Most CitedCases

(Formerly 414k232)Zoning restrictions, being in derogation of

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common-law property rights, should be strictly con-strued and any ambiguity resolved in favor of prop-erty owner.

[10] Zoning and Planning 414 1300

414 Zoning and Planning414VI Nonconforming Uses

414k1300 k. In general. Most Cited Cases(Formerly 414k321)Right to nonconforming use must necessarily

be decided on case-by-case basis.

[11] Zoning and Planning 414 1642

414 Zoning and Planning414X Judicial Review or Relief

414X(C) Scope of Review414X(C)1 In General

414k1637 Wisdom, Judgment, orOpinion

414k1642 k. Decisions of boards orofficers in general. Most Cited Cases

(Formerly 414k618)

Zoning and Planning 414 1698

414 Zoning and Planning414X Judicial Review or Relief

414X(C) Scope of Review414X(C)4 Questions of Fact

414k1698 k. Substantial evidence ingeneral. Most Cited Cases

(Formerly 414k703)Where substantial evidence exists, reviewing

court may not substitute its judgment for that ofBoard of Standards and of Appeals (BSA), even ifcourt might have decided matter differently.

***101*412**863 Paul A. Crotty, CorporationCounsel of New York City (Janet L. Zaleon, BarryP. Schwartz and Robin Binder, of counsel), for ap-pellant.

*413 Bachner, Tally, Polevoy & Misher L.L.P.,New York City (Norman Marcus, of counsel), andJack L. Lester, for intervenors-appellants.

*414 Fischbein Badillo Wagner Harding, NewYork City (Richard S. Fischbein, Howard B. Horn-stein, Donald N. David and Andrew B. Messite, ofcounsel), for Toys“ R” Us, respondent.

Edward N. Costikyan, New York City, for Muni-cipal Art Society of New York, Inc., amicus curiae.

Gallent & Aumand, Jackson Heights (Martin Gal-lent, of counsel), for Metro Chapter of the Americ-an Planning Association, amicus curiae.

OPINION OF THE COURTKAYE, Chief Judge.

[1] The New York City zoning laws prohibitcontinuation of a nonconforming use if, during atwo-year period, “the active operation of substan-tially all the non-conforming uses * * * is discon-tinued” (New York City Zoning Resolution §52–61). This case presents a novel question of stat-utory construction: what is the appropriate legalstandard to determine whether a nonconforming usehas been discontinued under the Zoning ***102*415 **864 Resolution? Contrary to the trial courtand Appellate Division, we conclude that substan-tial—rather than complete—discontinuation of theactive, nonconforming activity forfeits the noncon-forming use, and that the good faith of the owner isirrelevant to that determination.

[2] Here, the Board of Standards and Appeals(BSA) on the facts found minimal warehouse activ-ity following the complete stoppage of operationsfor 20 months, which failed to preserve noncon-forming use status, and it revoked the building per-mit allowing petitioner to maintain a nonconform-ing use on the premises. Because the BSA determ-ination was supported by substantial evidence, wereverse the trial court and Appellate Division de-cisions reinstating the building permit.

1. FactsAt issue here is a portion of a 16–story building

located at the northeast corner of Third Avenue andEast 80th Street in Manhattan. Built in 1926, the

676 N.E.2d 862 Page 389 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100(Cite as: 89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100)

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entire premises were situated in a retail zoning dis-trict and, in compliance with the certificate of occu-pancy and applicable zoning regulation, served as astorage and warehouse facility. When Morgan Man-hattan Storage and Warehouse Company purchasedthe building in 1956, it continued to use the struc-ture exclusively as a warehouse.

The 1961 New York City Zoning Resolutionchanged the neighborhood from a retail zoning dis-trict to residential districts overlaid with strips ofcommercial districts on the avenue (rather thanstreet) blocks. As a result, that portion of the build-ing on Third Avenue presently remains in a com-mercial (C1–9) zoning district. The portion frontingon 80th Street, however, is now in a residential(R8B) zone. Because warehouse use is no longerpermitted as of right in either the commercially orthe residentially zoned areas (see, Zoning Resolu-tion art II; §§ 32–00, 32–25), use of the building asa warehouse could continue under the Zoning Res-olution only as a nonconforming use (see, ZoningResolution §§ 12–10, 52–11).

Morgan continued to use the building as awarehouse until August 1989, when it contracted tosell the premises to a real estate developer. At thattime, Morgan emptied the building and for the next20 months ceased all warehouse operations. Thesale fell through, and in April 1991 Morgan trans-ferred a limited amount of goods stored in its otherwarehouses to the 80th Street facility and assigneda property manager there, in an effort to resumenonconforming warehouse use and thereby main-tain the value of its property.

*416 In June 1992, Chase Manhattan Bank ac-quired the premises from Morgan by way of deed inlieu of foreclosure. In response to a request byChase for advice as to whether nonconformingwarehouse use was permissible, the New York CityDepartment of Buildings (DOB) issued an informalopinion that the nonconforming use at the premiseshad been re-established in April 1991 and couldlawfully continue.

Petitioner Toys “R” Us purchased the base-ment, first and second floors of the building from asubsidiary of Chase in March 1994. Three monthslater, petitioner filed an application with DOB toconvert the purchased premises into a retail toystore. DOB approved the application and inSeptember 1994 issued a building permit authoriz-ing the conversion.

The 38,000 square foot premises occupy bothcommercially and residentially zoned space. A toystore is permitted as of right in the commerciallyzoned portion of the premises on Third Avenue butnot in the residentially zoned section fronting on80th Street, which includes the building's loadingdocks (see, Zoning Resolution art II; §§ 32–00,32–15). The instant dispute arises out of the DOBauthorization to develop and operate this latter seg-ment of the property situated in the residential zon-ing district as a retail toy store—a nonconforminguse.

Respondent-intervenor “Neighbors–R–Us,” acoalition of neighborhood and block associations,objected to the building permit and sought its re-vocation. In October 1994, DOB denied the request.Respondent-intervenor then challenged the issuanceof the building permit by way of an administrative***103 **865 appeal to the BSA. It urged that thenonconforming warehouse use had been discontin-ued during the two-year period from August 1989to July 1991 and, therefore, the Zoning Resolutiononly allowed the property to be developed in fur-therance of a permitted use.

The BSA held public hearings during a five-month period concerning the nature and extent ofwarehouse operations during the period betweenApril and July 1991 and conducted a site inspectionof the building and the surrounding area.

After reviewing hundreds of pages of docu-ments and hearing testimony from all sides, theBSA, “based on the totality of the evidence presen-ted,” found the warehouse activity between Apriland July 1991 minimal. Concluding that the Zoning

676 N.E.2d 862 Page 489 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100(Cite as: 89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100)

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Resolution did not require complete cessation of thenonconforming use as a precondition to termina-tion, the BSA determined *417 that the insignific-ant level of warehouse activity during that periodfailed to perpetuate the nonconforming warehouseuse. Deeming Morgan's clear intent to resumewarehouse operations insufficient to preserve thenonconforming use, the BSA revoked petitioner'sbuilding permit.

Petitioner commenced a CPLR article 78 pro-ceeding seeking to reinstate the permit. SupremeCourt held that the storage of some goods in thewarehouse during April to July 1991, coupled withthe absence of any bad faith or fraud by Morgan,sufficiently continued the nonconforming use. Itthus granted the petition and annulled the BSA de-termination, allowing petitioner to maintain a non-conforming retail use in the residentially zonedspace.

The Appellate Division affirmed, one Justicedissenting. Like the trial court, the Appellate Divi-sion applied a good-faith standard and concludedthat the concededly minimal storage activity fromApril to July 1991 sufficed to preserve noncon-forming use status under the Zoning Resolution.The Appellate Division granted leave to appeal tothis Court, and we now reverse.

2. Analysis[3] A use of property that is no longer author-

ized due to rezoning, but lawfully existed prior tothe enactment of the existing zoning ordinance, is anonconforming use (see, 1 Anderson's AmericanLaw of Zoning § 6.01, at 481–482 [Young 4th ed.];see also, Zoning Resolution § 12–10). Noncon-forming uses are necessarily inconsistent with theland-use pattern established by an existing zoningscheme.

[4] Due to constitutional and fairness concernsregarding the undue financial hardship that immedi-ate elimination of nonconforming uses would causeto property owners, however, courts and municipallegislators have adopted a “grudging tolerance” of

such uses ( Matter of Pelham Esplanade v. Board ofTrustees, 77 N.Y.2d 66, 71, 563 N.Y.S.2d 759, 565N.E.2d 508). The law nevertheless generally viewsnonconforming uses as detrimental to a zoningscheme, and the overriding public policy of zoningin New York State and elsewhere is aimed at theirreasonable restriction and eventual elimination (Matter of Syracuse Aggregate Corp. v. Weise, 51N.Y.2d 278, 284, 434 N.Y.S.2d 150, 414 N.E.2d651; Matter of Harbison v. City of Buffalo, 4N.Y.2d 553, 559–560, 176 N.Y.S.2d 598, 152N.E.2d 42; see, 1 Anderson's American Law ofZoning §§ 6.06, 6.69, at 500, 695 [Young 4th ed.] ).

This policy disfavoring nonconforming useswas expressly incorporated into New York City's1961 Zoning Resolution. *418 The purposes of theZoning Resolution were to encourage “the develop-ment of desirable residential, commercial, and man-ufacturing areas with appropriate groupings ofcompatible and related uses and thus to promoteand to protect public health, safety, and generalwelfare” (Zoning Resolution § 51–00). Noncon-forming uses, while generally allowed to continue (see, Zoning Resolution § 52–11), were consideredantagonistic to those goals and thus “subject to cer-tain limitations” (Zoning Resolution § 51–00). Asexplained in the Statement of Legislative Intent,“[t]he regulations governing non-conforming uses ** * are therefore adopted in order to provide agradual remedy for existing undesirable conditionsresulting from such incompatible non-conforminguses, which are detrimental to the achievement ofsuch purposes” (id.).

***104 **866 One such restriction placed onthe perpetuation of nonconforming uses is con-tained in Zoning Resolution § 52–61, whichprovides for the elimination of any nonconforminguse that is discontinued for two years. Under sec-tion 52–61:

“If, for a continuous period of two years, * * *the active operation of substantially all the non-conforming uses in any building or other struc-ture is discontinued, such land or building or oth-

676 N.E.2d 862 Page 589 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100(Cite as: 89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100)

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er structure shall thereafter be used only for aconforming use. Intent to resume active opera-tions shall not affect the foregoing” (emphasisomitted).

Whether petitioner can use the residential por-tion of the premises at issue here for nonconform-ing toy store use depends on whether its prede-cessor, Morgan, discontinued its nonconformingwarehouse operations for two years within themeaning of section 52–61. This Court has neverconsidered the proper legal standard for determin-ing when a nonconforming use is abandoned underthis zoning ordinance. In revoking petitioner'sbuilding permit, the BSA construed section 52–61as requiring substantial discontinuation, rather thancomplete cessation, of the nonconforming use bythe property owner for two consecutive years, irre-spective of any intent to preserve nonconforminguse status.

[5][6] The BSA, comprised of five experts inland use and planning, is the ultimate administrat-ive authority charged with enforcing the ZoningResolution (see, N.Y. City Charter §§ 659, 666).Consequently, in questions relating to its expertise,the BSA's interpretation of the statute's terms mustbe “given great weight and judicial deference, solong as the interpretation is *419 neither irrational,unreasonable nor inconsistent with the governingstatute” ( Matter of Trump–Equitable Fifth Ave. Co.v. Gliedman, 62 N.Y.2d 539, 545, 478 N.Y.S.2d846, 467 N.E.2d 510; see, Appelbaum v. Deutsch,66 N.Y.2d 975, 977, 499 N.Y.S.2d 373, 489 N.E.2d1275). Its determination, moreover, must be sus-tained if it has a rational basis and is supported bysubstantial evidence (see, Appelbaum v. Deutsch,66 N.Y.2d at 977, 499 N.Y.S.2d 373, 489 N.E.2d1275, supra; Matter of Fuhst v. Foley, 45 N.Y.2d441, 444, 410 N.Y.S.2d 56, 382 N.E.2d 756).Where, however, the question is one of pure legalinterpretation of statutory terms, deference to theBSA is not required (see, Matter of Teachers Ins. &Annuity Assn. v. City of New York, 82 N.Y.2d 35,41–42, 603 N.Y.S.2d 399, 623 N.E.2d 526).

Here, we must resolve two questions. First, wemust determine the appropriate legal standard forabandonment under Zoning Resolution § 52–61–apure legal question that does not mandate deferenceto the BSA. We must then decide whether theBSA's conclusion that Morgan abandoned noncon-forming warehouse use was supported by substan-tial evidence.

(a) The Legal Standard Under Zoning Resolution §52–61

Petitioner argues that the relevant inquiry underZoning Resolution § 52–61 is whether nonconform-ing operations have completely ceased, and that anynonconforming use—however minimal—precludesa finding of abandonment. The trial court and Ap-pellate Division majority agreed, concluding thatMorgan's use of the premises for some actual ware-house activity sufficed to preserve the nonconform-ing use.

According to petitioner, New York courts haveuniformly required proof that the entire noncon-forming use was discontinued as a precondition totermination. Petitioner points to Matter of Marzellav. Munroe, 69 N.Y.2d 967, 516 N.Y.S.2d 647, 509N.E.2d 342, in support of this contention. In Mar-zella, the property owner used a parcel of land thathad been rezoned to permit only one two-familystructure to house four families in two dwellings.When one house remained vacant for 15 years, sothat three families rather than four resided on theproperty, the local zoning board concluded thatnonconforming use of the property for four familieshad been abandoned. This Court disagreed, findinginsufficient evidence to establish that the entirenonconforming use had been abandoned (id., at968, 516 N.Y.S.2d 647, 509 N.E.2d 342).

In doing so, we explained that “[a]bandonmentdoes not occur unless there has been a completecessation of the nonconforming use” **867 ***105(id., at 968, 516 N.Y.S.2d 647, 509 N.E.2d 342).Notably, however, the local zoning ordinance inMarzella broadly prohibited resumption of any“nonconforming use which has been abandoned” (

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see, Village *420 of Dobbs Ferry Code §300–81B). The term “abandoned” was not qualifiedin any way; the statute therefore gave no indicationthat anything less than complete discontinuation ofthe nonconforming use would suffice to surrenderit.

Similarly, in Town of Islip v. P.B.S. Marina,133 A.D.2d 81, 518 N.Y.S.2d 427, also relied uponby petitioner, the relevant zoning ordinance con-tained absolute terms, providing that“discontinuance of any non [-]conforming use for aperiod of one year or more terminates such non-conforming use.” The Appellate Division thus con-cluded that “ ‘discontinuance connotes a completecessation * * * so that a minimal nonconformingfunction, of itself, would not constitute an abandon-ment’ ” (id., quoting Baml Realty, Inc. v. State, 35A.D.2d 857, 314 N.Y.S.2d 1013). Indeed, in eachof the cases cited by petitioner adopting the com-plete cessation standard, the statutes spoke exclus-ively in terms of discontinuance, failing to qualifythat requirement in any way (see, e.g., Baml Realty,Inc. v. State, 35 A.D.2d 857, 314 N.Y.S.2d 1013,supra; City of Binghamton v. Gartell, 275 App.Div.457, 459, 90 N.Y.S.2d 556).

Unlike the statutes in these prior cases,however, Zoning Resolution § 52–61 explicitlyequates abandonment with something less than dis-continuation of the entire nonconforming use. Sec-tion 52–61 specifically terminates any further non-conforming use when “the active operation of sub-stantially all the non-conforming uses * * * is dis-continued” for a continuous two-year period(emphasis added). To construe this statute as re-quiring the property owner to discontinue all non-conforming operations—as the courts belowdid—simply ignores the plain language of the or-dinance requiring that the owner merely cease“substantially” all of the nonconforming use.FN1

Allowing the slightest nonconforming function topreserve the nonconforming use, moreover, wouldeliminate the specific language requiring “active”operations to avoid termination.

FN1. Tellingly, the drafters of section52–61 rejected a proposed termination pro-vision that omitted the qualifying language“substantially all.” In a Zoning Resolutionsubmitted to the City Planning Commis-sion pursuant to a contract with the City ofNew York, a special planning staff of ar-chitects suggested the following regardingtermination of nonconforming uses: “If anon-conforming use discontinues active orcontinuous operations for a continuousperiod of one year, the building or otherstructure or tract of land where such non-conforming use previously existed shallthereafter be occupied and used only for aconforming use. Intent to resume activeoperations shall not affect the foregoing”(Voorhees, Walker, Smith and Smith, Re-port to N.Y. City Planning Commn., Pro-posed Zoning Resolution § 51–31 [Aug.1958] [emphasis added] ).

*421 The carefully chosen words of section52–61 thus impose a standard of substantial ratherthan complete cessation.FN2 The language of thestatute also contradicts the conclusion of both thetrial court and Appellate Division that section52–61 implicitly contains a good-faith standard, al-lowing nonconforming activity to continue upon ashowing that a property owner, in the absence ofbad faith or fraud, intended to resume nonconform-ing use.

FN2. Petitioner alternatively urges that, be-cause section 52–61 refers to discontinu-ation of “substantially all the non-conforming uses ”—emphasizing the plur-al “uses”—discontinuation should bemeasured by whether a majority of thenumber of nonconforming uses is main-tained, regardless of the level of activitydevoted to each use. Petitioner, however,overlooks the basic rule of statutory con-struction that “[w]ords in the singularnumber include the plural, and in the plural

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number include the singular” (GeneralConstruction Law § 35).

[7][8] Generally, abandonment of a noncon-forming use requires both an intent to relinquishand some overt act or failure to act, indicating thatthe owner neither claims nor retains any interest inthe subject matter of the abandonment (see, 1 An-derson's American Law of Zoning § 6.65, at 678[Young 4th ed.] ). In New York, however, the in-clusion of a lapse period in the zoning provision re-moves the requirement of intent to aban-don—discontinuance of nonconforming activity forthe specified period constitutes an abandonment re-gardless of intent (see, ***106**868Matter ofPrudco Realty Corp. v. Palermo, 60 N.Y.2d 656,657–658, 467 N.Y.S.2d 830, 455 N.E.2d 483).

Zoning Resolution § 52–61 provides a specificlapse period—two years—thereby rendering theowner's intent irrelevant to abandonment. Indeed,section 52–61 goes even one step further, expresslystating that “[i]ntent to resume active operationsshall not affect” the determination whether a non-conforming use has been discontinued.

[9] Notwithstanding the unique language ofthis particular zoning provision, petitioner urgesthat section 52–61 must be interpreted in its favoras the landowner. To be sure, zoning restrictions,being in derogation of common-law property rights,should be strictly construed and any ambiguity re-solved in favor of the property owner (see, Matterof Allen v. Adami, 39 N.Y.2d 275, 277, 383N.Y.S.2d 565, 347 N.E.2d 890). Zoning Resolution§ 52–61, however, is not ambiguous—its clear lan-guage prohibits additional nonconforming activitywhen “substantially all” of the “active” noncon-forming operations are discontinued, and deems theowner's intent irrelevant. Furthermore, publicpolicy specifically*422 supports termination ofnonconforming uses, and the Zoning Resolution it-self seeks to achieve “a gradual remedy” for“incompatible” nonconforming uses (Zoning Resol-ution § 51–00). As we have stated in a related con-text:

“It has been said in New York that a zoning or-dinance must be ‘strictly construed’ in favor ofthe property owner * * *. By way of counter-point, however, it has been said, with equal con-viction, that the courts do not hesitate to give ef-fect to restrictions on nonconforming uses * * *.It is because these restrictions flow from a strongpolicy favoring the eventual elimination of non-conforming uses” ( Matter of Off Shore Rest.Corp. v. Linden, 30 N.Y.2d 160, 164, 331N.Y.S.2d 397, 282 N.E.2d 299).

Thus, the interpretation of section 52–61 adop-ted by the BSA and Appellate Division dissent-er—requiring only substantial, rather than com-plete, discontinuation to terminate a nonconforminguse, regardless of the owner's good faith—gives ef-fect to all of the ordinance's terms (see, Matter ofBliss v. Bliss, 66 N.Y.2d 382, 388–389, 497N.Y.S.2d 344, 488 N.E.2d 90 [courts must, wherepossible, give meaning and effect to every word ofa statute] ) and also comports with the policy un-derlying the Zoning Ordinance.

[10] The Appellate Division's concern that any-thing less than complete cessation under section52–61 will lead to arbitrary results warrants com-ment. Section 52–61 imposes an objective, not sub-jective, standard: substantial discontinuation of act-ive, nonconforming operations. Stated otherwise,section 52–61 terminates a nonconforming usewhen only minimal nonconforming activity contin-ues. Whether this standard has been satisfied will,of course, turn on the peculiar facts of each case.All zoning cases are by their nature fact specific,and as a leading authority recognizes, the right to anonconforming use must necessarily be decided “ona case-by-case basis” (1 Anderson's American Lawof Zoning § 6.23, at 553 [Young 4th ed.] ). Cer-tainly, the DOB and BSA, comprised of qualifiedexperts, are capable of making these determina-tions.

(b) Application of the Legal Standard to the FactsIt is undisputed that Morgan's warehouse use

from 1961 to August 1989 was permitted as a non-

676 N.E.2d 862 Page 889 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100(Cite as: 89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100)

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conforming use, and that Morgan completelyceased all nonconforming warehouse operations for20 months between August 1989 and April 1991.The only question before the courts below and thisCourt is whether *423 Morgan's warehouse activityduring the four-month period from April to July1991 sufficed to preserve nonconforming use statusunder Zoning Resolution § 52–61. If not, petitioneris prohibited from operating a nonconforming retailtoy store in the residentially zoned portion of thesubject premises. Either way, of course, petitioner'sstore may be developed in that segment of the prop-erty situated in a commercial zoning district, wherea toy store is permitted as of right.

[11] The BSA's determination that Morgansubstantially discontinued nonconforming ware-house use of the property for 24 months must beconfirmed if it has a rational basis and is supportedby substantial evidence***107 **869 ( Matter ofCowan v. Kern, 41 N.Y.2d 591, 598, 394 N.Y.S.2d579, 363 N.E.2d 305). And where substantial evid-ence exists, a reviewing court may not substitute itsjudgment for that of the BSA—even if the courtmight have decided the matter differently ( Matterof Cowan v. Kern, 41 N.Y.2d at 599, 394 N.Y.S.2d579, 363 N.E.2d 305, supra; Matter of Collins v.Codd, 38 N.Y.2d 269, 270, 379 N.Y.S.2d 733, 342N.E.2d 524). In reaching its conclusion, moreover,the BSA had de novo review power and was notbound by the findings of the DOB (see, ZoningResolution § 72–11).

The BSA's review of warehouse logs for thecontested four-month period revealed only eightcustomer accounts, compared to the 1,500 accountspreviously maintained by the company. It furtherrevealed that approximately 19 crates were shippedto the warehouse at that time, which would haveoccupied only one-tenth of one percent of the entirevolume of the building. This extremely low level ofactivity was corroborated by testimony of the fol-lowing: an Enviropact employee who, after examin-ing every lobby floor and 75% of the storage lock-ers, saw only 12 to 15 crates and a few cardboard

files; a Chase loan officer who walked through thebuilding and observed about 20 large storage crates;various neighborhood residents who noticed thatthe building was vacant and unused; and a local realestate agent who found the warehouse to be com-pletely empty, unheated, unlit and infested with pi-geons. Based on this evidence, the BSA rejected thetestimony of Morgan's president, Jeffrey Morgan,that five percent of the building was used to main-tain 40 to 50 customer accounts from April to July1991.

The BSA's conclusion, however, was premisedon more than the drastic reduction in the volume ofstorage activity. The BSA specifically noted the ab-sence of any standard evidence for the critical four-month period typically available to document a le-gitimate business operation, such as insurance re-cords,*424 tax documents, advertisements, liabilitycoverage, customer records, employee records, cer-tain directory listings, telephone records or sales re-ceipts. Jeffrey Morgan even acknowledged that thecompany failed to renew the requisite Departmentof Consumer Affairs license after it expired in April1991.

The BSA thus properly considered objectivefactors regarding the nature and degree of noncon-forming warehouse use, and its determination thatMorgan's level of warehouse operations from Aprilto July 1991 was too insignificant to preserve non-conforming use status under section 52–61 wassupported by substantial evidence. That conflictinginferences may have been drawn from this evidenceis of no moment. “[T]he duty of weighing the evid-ence and making the choice rests solely upon the[administrative agency]. The courts may not weighthe evidence or reject the choice made by [suchagency] where the evidence is conflicting and roomfor choice exists” ( Stork Rest. v. Boland, 282 N.Y.256, 267, 26 N.E.2d 247).

Finally, petitioner's contention that the BSAdeparted from its own precedent is unavailing. InMatter of 4702/4712 Clarendon Rd., Brooklyn(BSA Resolution, Mar. 23, 1993), the question was

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also whether nonconforming commercial operationswere abandoned under Zoning Resolution § 52–61.After reviewing various business records attestingto the continuous commercial use of the property,the BSA determined that the active operation ofsubstantially all the nonconforming use at thepremises had not been discontinued for two years.In reaching the opposite conclusion here, the BSAnoted the failure to produce similar business docu-ments. Clarendon, therefore, is not inconsistentwith the instant case.

Accordingly, the order of the Appellate Divi-sion should be reversed, with costs, and the petitiondismissed.

SIMONS, TITONE, BELLACOSA, SMITH, LEV-INE and CIPARICK, JJ., concur.

Order reversed, etc.

N.Y.,1996.Toys R Us v. Silva89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100

END OF DOCUMENT

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TAB # 5

FIND Request: 15 N.Y.3d 347

Court of Appeals of New York.In the Matter of Oscar CINTRON, Appellant,

v.Judith A. CALOGERO, as Commissioner of the Di-vision of Housing and Community Renewal of the

State of New York, Respondent.

Oct. 19, 2010.

Background: Tenant commenced article 78 pro-ceeding seeking to annul final order of Division ofHousing and Community Renewal (DHCR) insofaras it limited rent overcharges recoverable by tenantto four years prior to filing of overcharge com-plaint, and limited treble damages to two years pri-or to filing of complaint. The Supreme Court,Bronx County, Sallie Manzanet, J., denied petition.Tenant appealed. The Supreme Court, AppellateDivision, 59 A.D.3d 345, 874 N.Y.S.2d 76, af-firmed. Tenant appealed.

Holding: The Court of Appeals, Ciparick, J., heldthat DHCR could consider rent reduction ordersentered outside of four-year limitations period indetermining amount of overcharge.

Reversed and remitted.

Smith, J., filed dissenting opinion.

West Headnotes

[1] Landlord and Tenant 233 200.75

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.70 Actions to Recover Over-

charges and Penalties233k200.75 k. Admissibility of evid-

ence. Most Cited CasesDivision of Housing and Community Renewal

(DHCR) should, in calculating any rent overcharge,honor rent reduction orders that, while issued priorto four-year limitations period, remained in effectduring that period. McKinney's CPLR 213–a; NewYork City Administrative Code, § 26–516(a)(2).

[2] Landlord and Tenant 233 200.72

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.70 Actions to Recover Over-

charges and Penalties233k200.72 k. Time to sue and limita-

tions. Most Cited CasesPurpose of the four-year limitations or look-

back period for rent overcharge claims is to allevi-ate the burden on honest landlords to retain rent re-cords indefinitely. McKinney's CPLR 213–a; NewYork City Administrative Code, § 26–516(a)(2).

[3] Landlord and Tenant 233 200.57

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.55 Grounds for Adjustment in

General233k200.57 k. Changes in facilities or

services. Most Cited CasesRent reduction orders place continuing obliga-

tion upon owner to reduce rent until required ser-vices are restored or repairs are made. New YorkCity Administrative Code, § 26–514.

[4] Landlord and Tenant 233 200.75

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.70 Actions to Recover Over-

charges and Penalties233k200.75 k. Admissibility of evid-

ence. Most Cited CasesRent reduction orders impose continuing oblig-

938 N.E.2d 931 Page 115 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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ation on landlord and, if still in effect during four-year look-back period, are in fact part of rental his-tory which Division of Housing and CommunityRenewal (DHCR) must consider in evaluating ten-ant's overcharge complaint. McKinney's CPLR213–a; New York City Administrative Code, §26–516(a)(2).

[5] Landlord and Tenant 233 200.75

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.70 Actions to Recover Over-

charges and Penalties233k200.75 k. Admissibility of evid-

ence. Most Cited CasesRent Stabilization Law permitted Division of

Housing and Community Renewal (DHCR) to con-sider rent reduction orders entered outside of four-year limitations period applicable to tenant's rentovercharge claim in determining amount of over-charge, where those orders remained in effect dur-ing the limitations period. McKinney's CPLR 213–a; New York City Administrative Code, §26–516(a)(2).

***499 BAS Legal Advocacy Program, Inc., Bronx(Randolph Petsche of counsel), for appellant.

Gary R. Connor, General Counsel, New York StateDivision of Housing and Community Renewal,New York City (Martin B. Schneider of counsel),for respondent.

South Brooklyn Legal Services, Brooklyn (John C.Gray, Edward Josephson and Pavita Krishnaswamyof counsel) and Queens Legal Services, Jamaica(Heejung Kook of counsel), for Pratt Area Com-munity Council and others, amici curiae.

Legal Aid Society, Brooklyn (Steven Banks,Patrick J. Langhenry, Stephen Myers and JamilaWideman of counsel), for Met Council, Inc.,amicus curiae.

*351 **932 OPINION OF THE COURTCIPARICK, J.

[1] On this appeal, we are asked to interpret theRent Stabilization Law to ascertain the con-sequences on a current rent overcharge claim oftwo rent reduction orders issued prior to, but in ef-fect during, the four-year period preceding the fil-ing of an overcharge claim. We conclude that theDivision of Housing and Community Renewal(DHCR) should, in calculating any rent overcharge,honor rent reduction orders that, while issued priorto the four-year limitations period, remained in ef-fect during that period.

I.In 1986, petitioner Oscar Cintron became a ten-

ant of 2975 Decatur Avenue, apartment 5C, in theBronx, at an initial stabilized rent of $348.91 permonth. The following year, petitioner filed a com-plaint with DHCR against the building's then own-er, alleging a decrease in services related to, amongother things, the apartment's refrigerator, door lockand fire escape window. As a result of the com-plaint, DHCR issued an order reducing petitioner'srent “by the percentage of the most recentguidelines adjustment for the tenant's lease whichcommenced before the effective date of th[e] rentreduction [order],” and providing that the ownercould not collect any rent *352 increase until a rentrestoration order was issued. The rent reduction or-der did not set a particular level of rent. Accordingto petitioner, the 1987 rent reduction order shouldhave resulted in a reduction of his rent to $326.23per month.

In 1989, petitioner filed another complaint withDHCR, alleging a roach infestation of the apart-ment's stove. DHCR issued another rent reductionorder. Despite the 1987 and 1989 rent reduction or-ders, however, the owner failed to make any repairsand continued to charge petitioner the unreducedrent.

In 1991, when the current owner purchased thebuilding, petitioner allegedly advised him of therent reduction orders. Although the current owner

938 N.E.2d 931 Page 215 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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apparently also failed to make any repairs, petition-er continued to pay the unreduced rent and enteredinto a series of leases requiring him to pay greaterrents.

On December 11, 2003, petitioner filed a com-plaint alleging that the rent of $579.99 **933***500 charged in the lease then in effect consti-tuted an overcharge based on the current and priorowners' failure to comply with the 1987 and 1989rent reduction orders. A DHCR Rent Administratordetermined that the base date to be used was thedate four years prior to the filing of the overchargecomplaint—December 11, 1999—and establishedthat the legal regulated rent on the base date was$508.99, which was the rent charged by the currentowner and paid by petitioner on that date. Althoughtaking notice of the 1987 and 1989 rent reductionorders, the Rent Administrator in establishing thelegal stabilized rent calculated the overcharge usingthe base date of December 11, 1999. The Rent Ad-ministrator awarded petitioner a rent refund of$1,008.77, which included interest but did not in-clude treble damages, and prospectively froze therent at the base date level from December 11, 1999until February 1, 2004. Effective February 1, 2004,the Rent Administrator removed the 1987 and 1989rent reduction orders and restored the rent to thefull amount of $579.99, which included rent in-creases.

Petitioner sought administrative review of theRent Administrator's order. DHCR granted the peti-tion for administrative review to the extent of modi-fying the order by (1) reversing the portion of theorder that denied treble damages and (2) awardingtreble damages beginning two years prior to the fil-ing of the overcharge complaint. DHCR denied theremainder of petitioner's challenges, concludingthat the Rent Administrator properly limited recov-ery to the four years preceding the overcharge *353complaint and correctly used the base daterent—$508.99 as of December 11, 1999—ratherthan the rent established by the 1987 and 1989 rentreduction orders in calculating the overcharge.

Petitioner commenced this CPLR article 78proceeding seeking to annul DHCR's order. Su-preme Court denied the petition and dismissed theproceeding, concluding that DHCR's determinationwas not arbitrary or capricious and had a rationalbasis.

On petitioner's appeal, the Appellate Divisionaffirmed, holding:

“The order, finding the base rent date to beDecember 11, 1999 (four years prior to the filingof the overcharge complaint), establishing thelegal base rent as the amount paid on that date,freezing that rent until February 1, 2004, duringwhich time rent reduction orders were extant, anddirecting the owner to refund overcharges collec-ted from the base rent date inclusive of trebledamages, was not arbitrary and capricious, andhad a rational basis” ( Matter of Cintron v. Calo-gero, 59 A.D.3d 345, 346, 874 N.Y.S.2d 76 [1stDept.2009] [citations omitted] ).FN1

FN1. The Appellate Division further heldthat “DHCR appropriately limited theamount of rent overcharges recoverable tothe four years prior to the filing of theovercharge complaint” (59 A.D.3d at 346,874 N.Y.S.2d 76). This is not an issue onthis appeal as petitioner has abandoned hisclaim for rent overcharges in excess offour years prior to the filing of his rentovercharge claim with DHCR. Petitioner ismerely seeking to have the base rent dateset at an earlier time.

Petitioner appealed to this Court by permissionof the Appellate Division, which certified the fol-lowing question: “Was the order of this Court,which affirmed the order of the Supreme Court,properly made?” Because the Appellate Divisionorder is final, we need not answer the certifiedquestion.

II.

938 N.E.2d 931 Page 315 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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[2] Regardless of the forum in which it is com-menced, a rent overcharge claim is **934 ***501subject to a four-year statute of limitations (seeRent Stabilization Law of 1969 [AdministrativeCode of City of NY] § 26–516 [a][2] [hereinafterRent Stabilization Law]; CPLR 213–a).FN2 TheRent Regulation Reform Act of 1997 “clarified andreinforced the four-year statute of limitations *354applicable to rent overcharge claims ... by limitingexamination of the rental history of housing accom-modations prior to the four-year period precedingthe filing of an overcharge complaint” (Thornton v.Baron, 5 N.Y.3d 175, 180, 800 N.Y.S.2d 118, 833N.E.2d 261 [2005], citing Matter of Gilman v. NewYork State Div. of Hous. & Community Renewal, 99N.Y.2d 144, 149, 753 N.Y.S.2d 1, 782 N.E.2d 1137[2002]; see also Matter of Grimm v. State of N.Y.Div. of Hous. & Community Renewal Off. of RentAdmin., 15 N.Y.3d 358, 912 N.Y.S.2d 491, 938N.E.2d 924 [2010] [decided today] ). Notably, theterm “rental history” is not defined in the relevantstatutes or in DHCR regulations and we need notattempt to define it here. As we have previously ex-plained, the purpose of the four-year limitations orlook-back period is to “alleviate the burden on hon-est landlords to retain rent records indefinitely” (Thornton, 5 N.Y.3d at 181, 800 N.Y.S.2d 118, 833N.E.2d 261, citing Matter of Gilman, 99 N.Y.2d at149, 753 N.Y.S.2d 1, 782 N.E.2d 1137; see alsoJenkins v. Fieldbridge Assoc., LLC, 65 A.D.3d 169,174, 877 N.Y.S.2d 375 [2d Dept.2009], appeal dis-missed 13 N.Y.3d 855, 891 N.Y.S.2d 688, 920N.E.2d 92 [2009] ).

FN2. Rent Stabilization Law §26–516(a)(2) states:

“[A] complaint under this subdivisionshall be filed with [DHCR] within fouryears of the first overcharge alleged andno determination of an overcharge andno award or calculation of an award ofthe amount of an overcharge may bebased upon an overcharge having oc-curred more than four years before the

complaint is filed ... This paragraph shallpreclude examination of the rental his-tory of the housing accommodation priorto the four-year period preceding the fil-ing of a complaint pursuant to this subdi-vision,”

and CPLR 213–a states:

“An action on a residential rent over-charge shall be commenced within fouryears of the first overcharge alleged andno determination of an overcharge andno award or calculation of an award ofthe amount of any overcharge may bebased upon an overcharge having oc-curred more than four years before theaction is commenced. This section shallpreclude examination of the rental his-tory of the housing accommodation priorto the four-year period immediately pre-ceding the commencement of the ac-tion.”

[3] Moreover, Rent Stabilization Law § 26–514, which addresses rent reduction orders, states:

“[A]ny tenant may apply to [DHCR] for a reduc-tion in the rent to the level in effect prior to itsmost recent adjustment and for an order requiringservices to be maintained as provided in this sec-tion, and [DHCR] shall so reduce the rent if it isfound that the owner has failed to maintain suchservices. The owner shall also be barred from ap-plying for or collecting any further rent in-creases. The restoration of such services shallresult in the prospective elimination of such sanc-tions” (emphasis added).

Rent reduction orders thus place a “continuingobligation” *355 upon an owner to reduce rent untilthe required services are restored or repairs aremade (Thelma Realty Co. v. Harvey, 190 Misc.2d303, 305–306, 737 N.Y.S.2d 500 [App.Term, 2dDept. 2001]; see also Matter of Condo Units v. NewYork State Div. of Hous. & Community Renewal, 4

938 N.E.2d 931 Page 415 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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A.D.3d 424, 425, 771 N.Y.S.2d 380 [2d Dept.2004], lv. denied **935***5025 N.Y.3d 705, 801N.Y.S.2d 251, 834 N.E.2d 1261 [2005]; Crimminsv. Handler & Co., 249 A.D.2d 89, 91, 671N.Y.S.2d 469 [1st Dept.1998] ). Here, it is allegedthat the landlord failed to fulfill his continuing ob-ligation by willfully flouting DHCR rent reductionorders.

The Rent Stabilization Law and Code are un-fortunately silent as to the effect that a rent reduc-tion order, issued prior to the four-year limitationsperiod but still in effect during that period, as is thecase here, has on a subsequent overcharge com-plaint based on that order. Petitioner argues thatDHCR rent reduction orders must be considered byDHCR in establishing the legal stabilized rent foran apartment for the purposes of an overchargecomplaint and that, because the rent reduction or-ders here remained in effect—and imposed a con-tinuing duty on the landlord to reduce rent—duringthe relevant four-year period, the four-year look-back rule is no bar to considering those orders forthe purposes of calculating the amount by whichpetitioner was overcharged (see Thornton, 5 N.Y.3dat 180, 800 N.Y.S.2d 118, 833 N.E.2d 261; see alsoMatter of 508 Realty Assoc., LLC v. New York StateDiv. of Hous. & Community Renewal, 61 A.D.3d753, 755–756, 877 N.Y.S.2d 392 [2d Dept.2009];Jenkins, 65 A.D.3d at 173, 877 N.Y.S.2d 375). DH-CR, on the other hand, argues that its determinationis supported by a rational basis and is consistentwith the statute as the Legislature intended the four-year limitations/look-back period to be absolute,prohibiting the consideration of earlier rent recordsfor the purpose of calculating a rent overcharge.

In this matter of statutory construction, wheredeference to an agency's interpretation is not re-quired (see e.g. Roberts v. Tishman Speyer Props.,L.P., 13 N.Y.3d 270, 285, 890 N.Y.S.2d 388, 918N.E.2d 900 [2009] ), we find petitioner's argumentmore persuasive as it best reconciles and harmon-izes the legislative aims of both the four-year limit-ations/ look-back period as set forth in Rent Stabil-

ization Law § 26–516(a)(2) and CPLR 213–a andthe “continuing obligation” of a landlord to reducerent and make repairs as per Rent Stabilization Law§ 26–514 (see McKinney's Cons. Laws of NY,Book 1, Statutes §§ 95, 96 [in interpreting statutes,the goal is to further the intent, spirit and purposeof a statute, to harmonize all parts of a statute togive effect and meaning to every part] ).

[4] Certainly, DHCR can take notice of its ownorders and the rent registrations it maintains to as-certain the rent established *356 by a rent reductionorder without imposing onerous obligations onlandlords. Moreover, refusing to give effect to arent reduction order's direction to roll back rent incases where the order remained in effect during thestatutory four-year period would countenance thelandlord's failure to restore required services andthwart the goals of the Legislature in enacting RentStabilization Law § 26–514, namely, to “motivateowners of rent-stabilized housing accommodationsto provide required services, compensate tenantsdeprived of those services, and preserve and main-tain the housing stock in New York City” (Jenkins,65 A.D.3d at 173, 877 N.Y.S.2d 375, citing Matterof Hyde Park Assoc. v. Higgins, 191 A.D.2d 440,442, 594 N.Y.S.2d 57 [1st Dept.1993] ). In short,rent reduction orders impose a continuing obliga-tion on a landlord and, if still in effect during thefour-year period, are in fact part of the rental his-tory which DHCR must consider.

[5] We conclude that the purposes of the relev-ant statutes are best served here if DHCR calculatesthe amount of rent overcharge by reference to the1987 and 1989 rent reduction orders, which re-mained in effect during the four-year limitationsperiod and, accordingly, were part **936 ***503 ofthe rental history that the Rent Stabilization Lawpermits DHCR to consider.

Accordingly, the order of the Appellate Divi-sion should be reversed, with costs, and the case re-mitted to Supreme Court with directions to remandto respondent DHCR for further proceedings in ac-cordance with this opinion. The certified question

938 N.E.2d 931 Page 515 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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should not be answered upon the ground that it isunnecessary.

SMITH, J., dissenting.The relevant provisions of the Rent Regulation

Reform Act of 1997 seem as clear to me as they didwhen I dissented in Thornton v. Baron, 5 N.Y.3d175, 800 N.Y.S.2d 118, 833 N.E.2d 261 (2005).

“[N]o determination of an overcharge and noaward or calculation of an award of the amountof an overcharge may be based upon an over-charge having occurred more than four years be-fore the complaint is filed.... This paragraph shallpreclude examination of the rental history of thehousing accommodation prior to the four-yearperiod preceding the filing of a complaint pursu-ant to this subdivision” (Rent Stabilization Law[RSL] of 1969 [Administrative Code of City ofNY] § 26–516[a][2]; see also id. § 26–516[a][“Where the amount of rent set forth in the annu-al rent registration statement filed four years pri-or to the most recent registration statement*357is not challenged within four years of its filing,neither such rent nor service of any registrationshall be subject to challenge at any time there-after”]; Rent Stabilization Code [9 NYCRR] §2526.1[a][2] ).

In Thornton, this Court, unjustifiably I thought,wrote an exception into the statute, and in this caseit writes another one, which I also think unjustified.

I grant that there is some tension between thecommand of the 1997 Reform Act that rental his-tory going back more than four years may not beconsidered and the provision of RSL § 26–514 thatrent reduction orders based on a failure to providerequired services remain in effect until the defi-ciency in services is cured. There is not such a starkconflict, however, as to justify the majority's choiceto let one statute nullify the other. DHCR has, itseems to me, found a fair solution by ordering that,where the noncompliance goes on for more thanfour years, the rent is in effect frozen for a rollingfour-year period—so that the tenant cannot get the

advantage of a rent level more than four years old,but the landlord is never free from the reduction or-der's effect. This works no undue hardship on thetenant, who need only file a complaint within fouryears of being overcharged to avoid any time bar.

It is thus unnecessary to resort to the fictionembraced by the majority that a rent level existingmore than four years earlier is transformed by therent reduction order into a “part of the [more re-cent] rental history which DHCR must consider”(majority op. at 356, 912 N.Y.S.2d at 502–03, 938N.E.2d at 935–36). I would affirm the order of theAppellate Division.

Chief Judge LIPPMAN and Judges GRAFFEO,READ, PIGOTT and JONES concur with JudgeCIPARICK; Judge SMITH dissents and votes to af-firm in a separate opinion.

Order reversed, etc.

N.Y.,2010.Cintron v. Calogero15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498,2010 N.Y. Slip Op. 07376

END OF DOCUMENT

938 N.E.2d 931 Page 615 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498, 2010 N.Y. Slip Op. 07376(Cite as: 15 N.Y.3d 347, 938 N.E.2d 931, 912 N.Y.S.2d 498)

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TAB # 6

FIND Request: 5 N.Y.3d 303

Court of Appeals of New York.In the Matter of KSLM–COLUMBUS APART-

MENTS, INC., Respondent,v.

NEW YORK STATE DIVISION OF HOUSINGAND COMMUNITY RENEWAL, Appellant,

andWestgate Tenants Association et al., Interven-

ors–Appellants.

June 14, 2005.

Background: Owner of residential apartmentbuildings brought article 78 challenge to Divisionof Housing and Community Renewal's (DHCR)denial of application for “unique and peculiar” ad-justments to initial legal regulated rent. The Su-preme Court, New York County, Sheila Abdus-Sa-laam, J., dismissed petition. Owner appealed. TheSupreme Court, Appellate Division, 6 A.D.3d 28,772 N.Y.S.2d 665, reversed. DHCR appealed.

Holding: The Court of Appeals, G.B. Smith, J.,held that, as to apartments in which there had beenvacancy on or after enactment date of Vacancy De-control Law (VDL), owner could seek “unique andpeculiar” adjustments.

Affirmed as modified.

West Headnotes

[1] Administrative Law and Procedure 15A416.1

15A Administrative Law and Procedure15AIV Powers and Proceedings of Administrat-

ive Agencies, Officers and Agents15AIV(C) Rules and Regulations

15Ak416 Effect15Ak416.1 k. In General. Most Cited

Cases

Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In General. Most

Cited Cases

Statutes 361 219(4)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(4) k. Erroneous Construc-

tion; Conflict with Statute. Most Cited CasesWhere interpretation of statute involves spe-

cialized knowledge and understanding of underly-ing operational practices or entails evaluation offactual data and inferences to be drawn therefrom,court defers to administrative agency's interpreta-tion unless irrational or unreasonable; however,where question is one of pure statutory interpreta-tion dependent only on accurate apprehension of le-gislative intent, agency's expertise and interpretiveregulations are accorded much less weight.

[2] Landlord and Tenant 233 200.17

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.15 Persons and Premises Subject

to Regulations233k200.17 k. Actual Use or Occu-

pancy on Crucial Date. Most Cited Cases

Landlord and Tenant 233 200.58

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities

835 N.E.2d 643 Page 15 N.Y.3d 303, 835 N.E.2d 643, 801 N.Y.S.2d 783, 2005 N.Y. Slip Op. 04989(Cite as: 5 N.Y.3d 303, 835 N.E.2d 643, 801 N.Y.S.2d 783)

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233k200.55 Grounds for Adjustment inGeneral

233k200.58 k. Peculiar Circumstances.Most Cited Cases

Landlord and Tenant 233 200.83

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.83 k. Termination of Rent Con-

trol and Recontrol. Most Cited CasesFollowing withdrawal of apartment buildings

from Mitchell-Lama program, thus subjecting themto rent stabilization, apartments that had been con-tinuously inhabited before July 1, 1971 enactmentof Vacancy Decontrol Law (VDL) were subject toRent Stabilization Law (RSL), and apartments thathad been vacated on or after July 1, 1971 were sub-ject to Emergency Tenant Protection Act (ETPA)and were eligible for “unique or peculiar” adjust-ments to initial legal regulated rent.McK.Unconsol.Laws §§ 8605, 8623 et seq.; RentStabilization Code § 2520.11(c),McK.Unconsol.Laws; McKinney's Private HousingFinance Law § 10 et seq.; New York City Adminis-trative Code, § 26–513(a).

[3] Landlord and Tenant 233 200.17

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.15 Persons and Premises Subject

to Regulations233k200.17 k. Actual Use or Occu-

pancy on Crucial Date. Most Cited CasesBuilding no longer subject to rent regulation

under Private Housing Finance Law (PHFL) losesits exemption under this statute and becomes sub-ject to rent stabilization. McKinney's Private Hous-ing Finance Law § 10 et seq.

[4] Landlord and Tenant 233 200.83

233 Landlord and Tenant

233VIII Rent and Advances233VIII(A) Rights and Liabilities

233k200.83 k. Termination of Rent Con-trol and Recontrol. Most Cited Cases

Purpose of Emergency Tenant Protection Actof 1974 (ETPA) was to recapture or include withinrent-stabilization system housing accommodationsthat were never rent regulated or that had been de-controlled. McK.Unconsol.Laws § 8623 et seq.

[5] Landlord and Tenant 233 200.10

233 Landlord and Tenant233VIII Rent and Advances

233VIII(A) Rights and Liabilities233k200.10 k. Statutory and Municipal

Regulations in General. Most Cited CasesPurpose of Urstadt Law was to prevent any

new tightening of rent regulation after its enact-ment, not to prevent expiration of exemption fromrent stabilization that was already in existence as ofenactment of Rent Stabilization Law of 1969(RSL). McK.Unconsol.Laws § 8605.

***784 *304 Eliot Spitzer, Attorney General, NewYork City (Oren L. Zeve, Caitlin J. Halligan andMichael S. Belohlavek of counsel), for appellant.

*305 Himmelstein, McConnell, Gribben, Donoghue& Joseph, New York City (Serge Joseph, Kevin R.McConnell and William J. Gribben of counsel), forintervenors-appellants.

*306 Rosenberg & Estis, P.C., New York City (Gary M. Rosenberg, Jeffrey Turkel and NicholasKamillatos of counsel), for respondent.

*307 Patterson, Belknap, Webb & Tyler LLP, NewYork City (Karl E. Seib, Jr. and Laura J. Wood ofcounsel), Community Service Society of New York(Juan Cartagena and Risa E. Kaufman of counsel)and Legal Services for New York City Legal Sup-port Unit (Raun Rasmussen and David Robinson ofcounsel) for Community Service Society of NewYork and others, amici curiae.

Emery Celli Brinckerhoff & Abady LLP, New York

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City (Matthew D. Brinckerhoff and KatherineRosenfeld of counsel), for New York State Tenants& Neighbors Coalition, Inc. and others, amici curi-ae.

*308 OPINION OF THE COURTG.B. SMITH, J.

**644 In this appeal by the Division of Hous-ing and Community Renewal (DHCR), the issue iswhether buildings previously constructed and oper-ated pursuant to the Mitchell–Lama program aremade subject to the Rent Stabilization Law of1969(RSL) by the RSL itself, or by the EmergencyTenant Protection Act of 1974 (ETPA). We con-clude that apartments inhabited continuously sincebefore July 1, 1971 were made subject to stabiliza-tion by the RSL, and those in which there has beena vacancy on or after July 1, 1971 were made sub-ject to stabilization by the ETPA. In 1967 and 1968,the predecessor of KSLM–Columbus Apartments,the Westgate Housing Corporation (Westgate), con-structed three buildings located at West 96th andWest 97th Streets in Manhattan. Tenants firstmoved into these buildings in 1968. Westgate was alimited profit housing company which constructedand financed these buildings through article II ofthe Private Housing Finance Law, commonly re-ferred to as the Mitchell–Lama Law. Enacted in1955, the Mitchell–Lama legislation offered finan-cial incentives to landlords to develop low- andmiddle-income housing. Incentives included long-term, low-interest government mortgage loans andreal estate tax exemptions. In return for these finan-cial benefits, developers agreed to regulations con-cerning rent, profit, disposition of property and ten-ant selection. Westgate dissolved in March 1979and was restructured into KSLM.

In March 1998, KSLM withdrew the buildingsfrom the Mitchell–Lama program and they immedi-ately became subject to rent stabilization. The im-mediately preceding rent for each *309 apartmentbecame the “initial regulated rent” under Rent Sta-bilization Law (RSL) of 1969 (Administrative Codeof City of NY) § 26–**645 ***785 512(b)(3) FN1

and Rent Stabilization Code (9 NYCRR) § 2521.1(j).FN2 In 1998, the average initial stabilizedmonthly rents for the KSLM apartments were $267,$333, $407 and $522 for, respectively, studio, one-bedroom, two-bedroom and three-bedroom apart-ments. As a result of withdrawal from theMitchell–Lama program, KSLM began paying fullreal estate taxes and interest at market rates. KSLMalso “enter[ed] the legislative quagmire which en-compasses the New York City and New York Staterent control laws” ( Matter of KSLM–ColumbusApts. v. New York State Div. of Hous. & CommunityRenewal, 6 A.D.3d 28, 30, 772 N.Y.S.2d 665 [1stDept.2004] ).

FN1. Section 26–512(b) reads:

“The initial regulated rent for housingaccommodations subject to this law onthe local effective date of the emergencytenant protection act of nineteen sev-enty-four or which become subject tothis law thereafter, pursuant to such act,shall be ...

“(3) For housing accommodations otherthan those described in paragraphs oneand two of this subdivision, the rent re-served in the last effective lease or otherrental agreement.”

FN2. Section 2521.1(j) reads in part: “Forhousing accommodations whose rentalswere previously regulated under the PHFL,or any other State or Federal law, otherthan the RSL or the City Rent Law, uponthe termination of such regulation, the ini-tial legal regulated rent shall be the rentcharged to and paid by the tenant in occu-pancy on the date such regulation ends.”

In May 1998, KSLM made three separate ap-plications to DHCR for “unique or peculiar” rentadjustments under the ETPA pursuant to RSL §26–513(a). That section provides:

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“The tenant or owner of a housing accommoda-tion made subject to this law by the emergencytenant protection act of nineteen seventy-fourmay, within sixty days of the local effective dateof this section or the commencement of the firsttenancy thereafter, whichever is later, file withthe commissioner an application for adjustmentof the initial legal regulated rent for such housingaccommodation. The commissioner may adjustsuch initial legal regulated rent upon a findingthat the presence of unique or peculiar circum-stances materially affecting the initial legal regu-lated rent has resulted in a rent which is substan-tially different from the rents generally prevailingin the same area for substantially similar housingaccommodations.”

*310 KSLM stated in its applications that itsrents were “substantially different from the rentsgenerally prevailing in the same area for substan-tially similar housing accommodations” since itsbuildings had been governed by the Private Hous-ing Finance Law for over 29 years and were noteconomically viable without the section 26–513(a)adjustment of initial rents.

The DHCR Rent Administrator denied KSLM'sapplications on February 18, 2000, finding thatKSLM was ineligible to apply for relief under sec-tion 26–513(a) because “it became subject to the[RSL] not by virtue of the [ETPA] but by virtue ofthe [RSL] when the building left theMitchell–Lama program.” In January 2001, theDeputy Commissioner denied KSLM's petitions foradministrative review and found that KSLM erredin assuming every housing accommodation is madesubject to the RSL by the ETPA if it came out of itsexempt status after July 1, 1974.

KSLM brought a CPLR article 78 proceedingchallenging DHCR's determination. On June 12,2002, Supreme Court denied the petition and dis-missed the proceeding. The Appellate Division un-animously**646 ***786 reversed. It concluded thatthe jurisdiction of the ETPA covered “any class orclasses of housing accommodations ... exempted

from regulation and control under the provisions ofthe emergency housing rent control law, the localemergency housing rent control act or the New Yorkcity rent stabilization law of nineteen hundredsixty-nine ” ( 6 A.D.3d at 36, 772 N.Y.S.2d 665,quoting ETPA [L. 1974, ch. 576, § 4, as amended]§ 3[a] ). The Appellate Division reasoned that sincethe buildings in question were clearly exemptedfrom the Rent Stabilization Law, they were coveredby ETPA. This Court granted DHCR and the inter-venors leave to appeal and we now modify the Ap-pellate Division's holding.

DiscussionThe New York City Council enacted the RSL

in 1969 (Administrative Code § 26–501 et seq.).Rent stabilization is now administered by DHCR,which has promulgated the Rent Stabilization Code.The 1969 RSL regulated,

“Class A multiple dwellings not owned as a co-operative or as a condominium ... containing sixor more dwelling units which:

“(1) were completed after February first, nineteenhundred forty-seven, except dwelling units ... (b)*311 subject to rent regulation under the privatehousing finance law or any other state law”(Administrative Code § 26–504[a][1][b] ).

In 1971, the State Legislature determined thatnew construction had essentially come to a stand-still and, in response, enacted three statutes de-signed to limit local rent regulation, two of whichare presently relevant: the Vacancy Decontrol Law(VDL) and the Urstadt Law. The VDL exemptedfrom local rent regulation any housing accommoda-tion that became vacant after June 30, 1971 (L.1971, ch. 371). The Urstadt Law barred the adop-tion of more restrictive regulations on housing ac-commodations that were already subject to rent reg-ulation (L. 1971, ch. 372, as amended by L. 1971,ch. 1012 [McKinney's Uncons. Laws of N.Y. §8605] ).

In 1974, the State Legislature recognized the

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need for rent regulation due to a shortage broughton by high demand. It enacted the ETPA (L. 1974,ch. 576, § 4), amended the VDL so vacancies on orafter July 1, 1971 would be subject to the ETPA,and amended the RSL so owners of units broughtunder stabilization by ETPA could seek initial legalregulated rent adjustments based on “unique or pe-culiar” circumstances (L. 1974, ch. 576, § 12,adding Administrative Code § YY51–6.0.2 [a][now § 26–513(a) ] ). Section 3 of the ETPA al-lowed New York City to extend rent stabilization tononstabilized housing after a determination that anemergency (five percent or less vacancy rate) exis-ted. Section 5 of the ETPA allowed stabilizationcoverage to “all or any class or classes of housingaccommodations” with certain exceptions, includ-ing rent-controlled apartments for so long as theymaintained that status, and apartments in buildingsbuilt on or after January 1, 1974. This effectivelyallowed New York City to bring apartments inbuildings of six or more units within New YorkCity's rent stabilization system, including apart-ments that had been decontrolled under the VDL,were in buildings constructed after 1969 but beforeJanuary 1, 1974, or became vacant after 1975.

On this appeal, DHCR and intervenor WestgateTenants Association contend that once KSLM'sMitchell–Lama buildings ceased being subject tothe Private Housing Finance Law, they became sub-ject to stabilization by virtue of the RSL of 1969,and that the ETPA does not govern the status ofthese buildings. If the argument that the 1969 RSLapplies prevails, **647 ***787 KSLM must applyfor an initial legal regulated rent under a hardshipstandard pursuant to Rent Stabilization Code §2522.4(b) and *312 (c), which base “hardship” in-creases on the relationship between the annual rentand a calculation of either the annual net income orthe annual operating expenses of the building, withan increase limit of six percent.

By contrast, KSLM argues that the buildingsare not subject to stabilization by virtue of the 1969RSL but by virtue of the 1974 ETPA and thus are

subject to the initial rent adjustment pursuant toRSL § 26–513(a). If this argument prevails, then,pursuant to section 26–513(a), KSLM may file anapplication with DHCR for an adjustment of theinitial legal regulated rent. DHCR would then con-sider the considerable difference between the mar-ket rates for apartments located on Manhattan's Up-per West Side and current rates in KSLM's build-ings.

[1] The issue before us is one of statutory con-struction and not of deference to DHCR's determin-ation. Where the interpretation of a statute involvesspecialized “knowledge and understanding of un-derlying operational practices or entails an evalu-ation of factual data and inferences to be drawntherefrom,” the courts should defer to the adminis-trative agency's interpretation unless irrational orunreasonable (Kurcsics v. Merchants Mut. Ins. Co.,49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d159 [1980]; see also, Matter of Union Indem. Ins.Co. of N.Y., 92 N.Y.2d 107, 114–115, 677 N.Y.S.2d228, 699 N.E.2d 852 [1998]; Matter of Rosen v.Public Empl. Relations Bd., 72 N.Y.2d 42, 47–48,530 N.Y.S.2d 534, 526 N.E.2d 25 [1988] ). By con-trast, where, as here, the question is one of purestatutory interpretation “dependent only on accurateapprehension of legislative intent, there is littlebasis to rely on any special competence or expertiseof the administrative agency and its interpretiveregulations are therefore to be accorded much lessweight” (Kurcsics v. Merchants Mut. Ins. Co., 49N.Y.2d at 459, 426 N.Y.S.2d 454, 403 N.E.2d 159).

[2][3][4] We reject petitioner's argument that,but for the 1974 ETPA, the 1969 RSL would be in-applicable to all the apartments in its buildings. It isconceded that all the apartments are subject to rentstabilization, but the question is whether they wouldhave been subject to rent stabilization if the ETPAhad never been passed. These are pre–1969 build-ings, which, if they had not been Mitchell–Lamabuildings, would have been regulated under the1969 law, and would not have needed the ETPA tobring them under stabilization. The 1969 law

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(Administrative Code § 26–504[a][1] [b] ) exemptsmultiple dwellings that are “subject to rent regula-tion under the private housing finance law.” Weagree with DHCR that a building no longer subjectto rent regulation under the Private Housing Fin-ance Law loses its exemption under this statute andbecomes subject to rent *313 stabilization. Thus,petitioner's buildings would be subject to rent sta-bilization under the 1969 law, even if the ETPAhad never been enacted.

The 1969 RSL's exception for Mitchell–Lamabuildings provides:

“[The RSL] shall apply to ...

“Class A multiple dwellings not owned as a co-operative or as a condominium ... containing sixor more dwelling units which:

“(1) were completed after [February 1, 1947], ex-cept dwelling units ... (b) subject to rent regula-tion under the private housing finance law or anyother state law ...” (Administrative Code §26–504[a][1][b] ).

KSLM argues that this language shows theMitchell–Lama units were never subject**648***788 to the RSL and could therefore never revertto the RSL. We reject this argument. It is clear thatit was the intent of the Legislature thatMitchell–Lama buildings remain in the rent stabil-ization system after Private Housing Finance Lawwithdrawal (see Federal Home Loan Mtge. Corp. v.New York State Div. of Hous. & Community Renew-al, 87 N.Y.2d 325, 639 N.Y.S.2d 293, 662 N.E.2d773 [1995] [holding that a building once rent stabil-ized which lost its cooperative status again becamesubject to the RSL] ). ETPA was enacted to recap-ture or include within the rent stabilization systemhousing accommodations that were never rent regu-lated or that had been decontrolled. The KSLMbuildings, built before March 10, 1969, werealready under the RSL system when ETPA was en-acted. Therefore, ETPA's language did not apply toKSLM buildings apart from the effect of the VDL

discussed below.

Rent Stabilization Code § 2520.11(c), also re-lied on by the Appellate Division, states:“[H]ousing accommodations in buildings com-pleted or substantially rehabilitated prior to January1, 1974, and whose rentals were previously regu-lated under the PHFL ... shall become subject to theETPA, the RSL and this Code, upon the terminationof such regulation.” While this language might beread as implying that former Mitchell–Lama apart-ments are “made subject to” rent stabilization bythe ETPA, we conclude that it means simply thatthose apartments are “subject to” whatever provi-sions of ETPA, the RSL and the Code are applic-able by their terms. In evaluating the Code provi-sion, we must bear in mind that it is only a regula-tion, and *314 can only interpret the statute. In oth-er words, the pre-ETPA version of the RSL was ap-plicable to former Mitchell–Lama buildings builtbefore 1969 and the Code cannot change that.

[5] KSLM argues that the Urstadt Law, passedin 1971, would prevent former Mitchell–Lamaapartments from reverting to rent stabiliza-tion—i.e., that no such reversion could take place ifthe ETPA did not exist. The Urstadt Law says that“no local law or ordinance shall hereafter providefor the regulation and control of residential rentsand eviction in respect of any housing accommoda-tions which are ... presently exempt from such regu-lation and control ....” (Emphasis added.) It alsosays that “[n]o housing accommodations presentlysubject to regulation and control pursuant to locallaws or ordinances ... shall hereafter be by locallaw or ordinance ... subjected to more stringent orrestrictive provisions of regulation and control thanthose presently in effect.” (Emphasis added.) TheUrstadt Law was intended to prevent any new tight-ening of rent regulation after 1971, not to preventthe expiration of an exemption from rent stabiliza-tion that was already in existence in 1969.

At the time of the Urstadt Law's enactment, theRSL was the default rent stabilization regulatoryscheme. Halting its application to exempt units

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whose expirations were certain to occur would readtoo much into the Urstadt Law in that the Legis-lature was attempting to end rent stabilization inNew York City. This simply was not the case. ThisCourt has explained before that the objective of theUrstadt Law was to limit the fear of “more stringentcontrol [to] encourage owners to invest in the main-tenance and improvement of existing housing unitsand thereby help to stem the tide of abandonment ofsound buildings in the City” (City of New York v.New York State Div. of Hous. & Community Renew-al, 97 N.Y.2d 216, 226, 739 N.Y.S.2d 333, 765N.E.2d 829 [2001], quoting **649***789Mayer v.City Rent Agency, 46 N.Y.2d 139, 150, 412N.Y.S.2d 867, 385 N.E.2d 605 [1978] ). There-fore, we reject KSLM's argument that the enact-ment of the Urstadt Law prevented the RSL's ap-plication once the Private Housing Finance Law ex-emption ended.

KSLM argues, in the alternative, that at least asto apartments that became vacant on or after July 1,1971, the 1969 RSL is inapplicable. The VDL, ef-fective June 30, 1971, provided simply: “housingaccommodations which become vacant shall be ex-empt from regulations and control ...” (L. 1971, ch.371, § 6). But for the ETPA, that would still be thelaw today, and would apply to formerMitchell–Lama apartments that were vacated afterthe VDL's effective date. A 1974 amendment *315changed the language to read “housing accommod-ations which became vacant on or after July first,nineteen hundred seventy-one or which hereafterbecome vacant shall be subject to the provisions ofthe emergency tenant protection act of nineteen[hundred] seventy-four.” (L. 1974, ch. 576, § 2.)The apartments described in that section are “madesubject to” rent stabilization by the ETPA. Thus,RSL § 26–513(a) applies to those apartments.

The Appellate Division cites Matter of Zeitlinv. New York City Conciliation & Appeals Bd., 46N.Y.2d 992, 416 N.Y.S.2d 233, 389 N.E.2d 828[1979], where we held that an apartment originallyexempted from prior city rent control provisions

was subject to the ETPA, as being particularly in-structive. The present case is distinguishable fromZeitlin where the prior local provision exempted thehousing accommodation from rent control and thetenant argued the unit was therefore subject to theETPA. We agreed with the tenant that ETPA cover-age immediately attached. The apartment in Zeitlin,however, was precisely the type of unit the StateLegislature wanted included in the rent stabilizationsystem. Since the choice was between no regulationand the ETPA, this Court chose to follow the intentof the State Legislature and the City Council thatsuch an accommodation be regulated. In the presentcase, the choice is between the RSL, which wouldhave governed the Private Housing Finance Lawunit upon withdrawal in the absence of the VDL,and the ETPA, which sought to reverse decontrollegislation and bring more units into the system.The RSL was applicable to KSLM apartments thatwere inhabited between 1968 and the 1971 enact-ment of the VDL because it was the purpose of theRSL to regulate such housing.

DHCR concedes that the amended VDL sub-jects to ETPA coverage all KSLM apartments thatbecame vacant after dissolution in 1998. DHCRmaintains, however, that the RSL was suspendedbetween 1971 and 1974 due to the Private HousingFinance Law. Therefore, decontrol did not apply.This argument is inconsistent with DHCR's otherargument that the RSL applied to KSLM's apart-ments from the time of its enactment. We agreewith the Appellate Division that it is inherentlycontradictory to argue KSLM apartments are cur-rently “subject to RSL jurisdiction to the exclusionof ETPA jurisdiction, but not subject to the RSL forthe purposes of vacancy deregulation” ( Matter ofKSLM–Columbus Apts. v. New York State Div. ofHous. & Community Renewal, supra, 6 A.D.3d at39, 772 N.Y.S.2d 665). Therefore, we conclude thatthe KSLM apartments vacated on or after July 1,*316 1971 are subject to the ETPA and that as tothose apartments pursuant to RSL § 26–513(a),KSLM may apply to DHCR for “unique or peculi-ar” rent adjustments.

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Accordingly, the order of the Appellate Divi-sion should be modified, without costs, in accord-ance with this opinion and, as so modified, af-firmed.

**650 ***790 Chief Judge KAYE and JudgesCIPARICK, ROSENBLATT, GRAFFEO, READand R.S. SMITH concur.

Order modified, etc.

N.Y.,2005.KSLM-Columbus Apartments, Inc. v. New YorkState Div. of Housing and Community Renewal5 N.Y.3d 303, 835 N.E.2d 643, 801 N.Y.S.2d 783,2005 N.Y. Slip Op. 04989

END OF DOCUMENT

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TAB # 7

FIND Request: 181 A.D.2d 12

Supreme Court, Appellate Division, Third Depart-ment, New York.

Norbert BERGER, Respondent,v.

NEW YORK STATE DEPARTMENT OF SOCIALSERVICES, Appellant.

June 25, 1992.

Radiologist with subspecialty in sonographywas billed by Department of Social Services for al-leged Medicaid overpayments, and radiologistbrought suit seeking declaratory judgment thatmodifier reducing bill where multiple x-rays areperformed during same visit did not apply to sono-grams. The Supreme Court, Albany County,Cheeseman, J., granted radiologist's motion forsummary judgment, and Department appealed. TheSupreme Court, Appellate Division, Harvey, J.,held that provision in the Medicaid ManagementInformation System manual requiring a specialcode, for billing purposes, to be included whenmore than one “x-ray” is performed in one visitdoes not apply to all radiological services, includ-ing sonograms and ultrasounds, but, rather, is lim-ited to ordinary meaning of x-ray.

Affirmed.

Levine, J., filed dissenting opinion with whichCrew, J., concurred.

West Headnotes

[1] Health 198H 473

198H Health198HIII Government Assistance

198HIII(B) Medical Assistance in General;Medicaid

198Hk472 Benefits and Services Covered198Hk473 k. In General. Most Cited

Cases(Formerly 356Ak241.91, 356Ak241.90)Provision in the Medicaid Management In-

formation System manual requiring a special code,for billing purposes, to be included when more thanone “x-ray” is performed in one visit does not applyto all radiological services, including sonogramsand ultrasounds, but, rather, is limited to ordinarymeaning of x-ray, which is defined in dictionary asnonluminous, electromagnetic ray or radiation ofextremely short wave length capable of penetratingbody tissues and affecting photographic plates andfluorescent screens. McKinney's Statutes §§ 94,240.

[2] Health 198H 473

198H Health198HIII Government Assistance

198HIII(B) Medical Assistance in General;Medicaid

198Hk472 Benefits and Services Covered198Hk473 k. In General. Most Cited

Cases(Formerly 356Ak241.91, 356Ak241.90)Whether the term “X-ray” in Medicaid Man-

agement Information System manual was intendedto be limited to ordinary definition of x-ray, ratherthan also including ultrasounds, for purposes of de-termining whether billing modifier was required,involved interpretation of a term that was not a“technical term” within the Department of SocialServices' area of expertise, and thus, court was notrequired to give special deference to Department'sinterpretation of term as including ultrasounds andsonograms. McKinney's Statutes §§ 94, 240.

**239 *12 Robert Abrams, Atty. Gen. (Clifford A.Royael and Nancy A. Spiegel, of counsel), Albany,for appellant.

*13 Lifshutz, Polland & Associates (Joseph K.Gormley and Joseph J. La Barbera, of counsel),New York City, for respondent.

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Before MIKOLL, J.P., and LEVINE, CREW, CA-SEY and HARVEY, JJ.

HARVEY, Justice.Appeal from a judgment of the Supreme Court

(Cheeseman, J.), entered March 7, 1991 in AlbanyCounty, which, inter alia, granted plaintiff's motionfor summary judgment and made a declaration inplaintiff's favor.

Plaintiff, a physician licensed to practice inNew York, is a radiologist with a subspecialty insonography, also known as ultrasound. Plaintiffwas, during all relevant times, a Medicaid providerwho performed and billed Medicaid for sonograph-ic examinations performed on Medicaid recipients.Among those billings were ones for consecutivesonograms on one or more patients during a singlevisit and, in each case, plaintiff billed each sono-gram at the full amount set forth in the MedicaidManagement Information System (hereinafterMMIS) reimbursement fee schedule.

[1] In April 1988 defendant informed plaintiffthat, after reviewing the claims submitted byplaintiff in 1986 and 1987, its analysis showed thatplaintiff allegedly improperly failed to use theMMIS modifier “–62” described in the MMIS Pro-vider Manual when submitting claims for multiplesonograms performed during a single visit. At therelevant time, the MMIS manual's definition of the–62 modifier read as follows:

Multiple X–Ray Exams: When more than one x-ray exam is performed during the same visit, usethe usual fee code for the primary procedure andidentify the secondary procedure(s) by adding themodifier ‘–62’ to the procedure number(s).(Reimbursement will not exceed 60% of the max-imum State Medical Fee Schedule amount).FN1

FN1. We note that the MMIS modifiers areset forth in defendant's regulations (see, 18NYCRR 533.6[e] ) and the MMIS -62modifier employs the term “radiology pro-

cedure” instead of “x-ray exam”. However,since this change was made after the timerelevant to this appeal, interpretation of thelatter term is the sole subject of this ap-peal.

According to defendant, the term “x-ray” in theMMIS –62 modifier was meant to refer to all radi-ological procedures, including the sonograms per-formed by plaintiff. Accordingly, defendant deman-ded that plaintiff repay $265,748 of alleged over-payments for procedures where the –62 modifier al-legedly should have been applied but was not.

Plaintiff disputed defendant's conclusion thathe improperly failed to use the –62 modifier. Theparties agreed that plaintiff would bring a declarat-ory judgment action upon a stipulated set of facts todecide the –62 modifier issue. Following joinder*14 of issue, plaintiff moved for summary judg-ment seeking a declaration that the –62 modifierdid not apply to multiple sonograms performed dur-ing single visits in 1986 and 1987. Defendant cross-moved for summary judgment but Supreme Courtfound in favor of plaintiff. A judgment was enteredin plaintiff's favor granting the requested declarat-ory relief and held that defendant's claim for reim-bursement in the amount of $265,748 was void. De-fendant now appeals.

As acknowledged by the parties, the first sen-tence in the MMIS manual for radiology under theheading “General Information and Rules” statesthat “[t]hese rules apply **240 to all procedurecodes found in the Radiology Section of this FeeSchedule including * * * ultrasound * * * proced-ures”. Rule 3 of the General Information and Rulesstates that when “multiple x-ray examinations areperformed during the same visit”, the MMIS –62modifier must be used in billing Medicaid. Asnoted previously, the definition of the –62 modifiercontained in the rules also makes reference tobilling fee codes when multiple X-rays are per-formed during the same visit. Based on this word-ing, defendant argues that it is reasonable to con-clude that because the first sentence of the general

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rule states that the rules apply to all radiologicalprocedures, the term “x-ray” must include ultra-sound or sonograms. Moreover, defendant arguesthat because the MMIS –62 modifier is a part of theregulations which it enforces, its interpretation ofthe term “x-ray” in that modifier should be accor-ded substantial deference.

[2] We cannot agree with defendant's argu-ments. With respect to the threshold issue of wheth-er defendant's interpretation is entitled to judicialdeference, we note that the term “x-ray” in the –62modifier is not a technical term within defendant'sarea of expertise. Accordingly, this court is not re-quired to give special deference to defendant's in-terpretation of the term (see, Matter of De Mayo v.Rensselaer Polytech Inst., 74 N.Y.2d 459, 462, 548N.Y.S.2d 630, 547 N.E.2d 1157; Kurcsics v. Mer-chants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426N.Y.S.2d 454, 403 N.E.2d 159; Matter of Judd v.Constantine, 153 A.D.2d 270, 272, 551 N.Y.S.2d378). As a result, we look instead to the well-settledrule of construction that words of common usageshould be given their ordinary meaning unless it isclear that a different meaning was intended (see,Catlin v. Sobol, 77 N.Y.2d 552, 559, 569 N.Y.S.2d353, 571 N.E.2d 661; We're Assocs. Co. v. Cohen,Stracher & Bloom, 65 N.Y.2d 148, 151, 490N.Y.S.2d 743, 480 N.E.2d 357; Matter of CabriniMed. Center v. Axelrod, 116 A.D.2d 834, 836, 497N.Y.S.2d 500; cf., McKinney's Cons.Laws of N.Y.,Book 1, Statutes § 94).

Here, the terms “x-ray” and “sonogram” are,among the physicians to whom the MMIS feeschedules apply if not also among lay persons,commonly understood to mean two different *15procedures.FN2 Moreover, despite defendant's con-tention that the term “x-ray” really means all radi-ological services, it is significant that the languagein defendant's definition of the MMIS –60 and –61modifiers during the relevant period refer specific-ally to “radiological services” and do not simplystate “x-rays”. It therefore becomes apparent thatthe general phrase “radiological services”, and not

“x-rays”, was meant to refer to all the radiologicalprocedures named in the first sentence of the manu-al under “General Information Rules”, which ex-plains why this general phrase is then repeated intwo of the modifiers. This is confirmed by the useof the specific term “x-ray” in the –62 modifier,which then created an inference that the other pro-cedures not named, such as sonograms or ultra-sound, were intentionally omitted (cf., McKinney'sCons. Laws of N.Y., Book 1, Statutes § 240). Ac-cordingly, in the absence of proof that the term“x-ray” was meant to have any meaning other thanits ordinary meaning, we find no basis for disturb-ing Supreme Court's determination.

FN2. The dictionary defines the term“x-ray” as “a nonluminous electromagneticray or radiation of extremely shortwavelength * * * capable of penetratingopaque or solid substances, ionizing gasesand body tissues through which they passor, by extended exposure, destroying tis-sue, and affecting photographic plates andfluorescent screens” (Webster's NewWorld Dictionary of the American Lan-guage 1644 [20 college ed.] ).“Ultrasound” is defined as “the applicationof ultrasonic waves to therapy or dia-gnostics, as in deep-heat treatment of ajoint or imaging of internal structures”(Random House Dictionary of the EnglishLanguage 2050–2051 [unabridged 2d ed1987] ). A “sonogram” is “the visual imageproduced by reflected sound waves in adiagnostic ultrasound examination” (id., at1820).

*18 MIKOLL, J.P., and CASEY, J., concur.

LEVINE, Justice (dissenting).We respectfully dissent. In focusing exclus-

ively on the language of modifier “–62” in the“General Information and Rules” (hereinafter gen-eral rules) of the radiology **241 section of theMedicaid Management Information System(hereinafter MMIS) Provider Manual, the majority,

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in our view, misses the point of defendant's ra-tionale for applying the –62 modifier to plaintiff'scharges for multiple sonograms performed on thesame patient during a single visit. The applicableprovision is rule 3 of the general rules of the radi-ology section of the MMIS Provider Manual. Rule3 states in pertinent part:

When multiple x-ray examinations are performedduring the same visit, the charge shall be basedon the greater fee plus 60% of the lesser fee(s). (See MMIS Modifier ‘–62’.) * * *.

The applicability of the –62 modifier thusarises out of its incorporation by reference in rule 3.

*16 While rule 3 speaks in terms of multiple X-ray examinations, it is preceded by the introductoryparagraph of the general rules of the radiology sec-tion of the MMIS Provider Manual which clearlyspecifies that “[t]hese rules apply to all procedurecodes found in the Radiology Section of this FeeSchedule including diagnostic radiology, radiother-apy, nuclear medicine, ultrasound and CT scan pro-cedures” (emphasis supplied). Thus, although an X-ray and an ultrasound are concededly different radi-ological techniques, the MMIS Provider Manualmakes them the same for purposes of the generalrules governing Medicaid charges for radiologicaldiagnostic services. Accordingly, there is nothingunreasonable in applying the billing restrictions formultiple, single-visit X-ray examinations containedin rule 3 to multiple, single-visit sonograms. Like-wise, it seems obvious that, although rule 4 of theradiology general rules bars payment for “repeat x-ray examinations * * * required because of technic-al or professional error in the original x-rays”, itwould equally apply to repeat sonograms or CTscans required because of such errors. Indeed, tohold otherwise would be to eliminate any meaningor application of the previously quoted introductoryprovision of the radiology general rules, making“[t]hese rules” applicable to all such radiologicalprocedures.

In our view, then, it was entirely reasonable for

defendant to interpret rule 3 of the radiology gener-al rules in the MMIS Provider Manual as applicableto plaintiff's charges for multiple, single-visit ultra-sounds, by virtue of which he was limited to pay-ment of 100% of the schedule fee for the mostcostly procedure he performed, plus 60% of theschedule fee for all other procedures performed onthe patient during the same visit. The uncontestedexplanation of the purpose underlying this restric-tion on billing for multiple, single-visit radiologicalprocedures, i.e., to reflect the fact that a radiologistachieves cost savings performing multiple proced-ures on the same patient in a single session, “sincethe patient is already present and prepared for theprocedure”, is contained in the affidavit of a bureaudirector in defendant's Division of Medical Assist-ance submitted on defendant's cross motion forsummary judgment. The 60% billing restriction forprocedures subsequent to the first procedure duringa single visit attempts to “pass some of [the] sav-ings [in the radiologist's time and labor] on to theMedicaid program”. The affiant also states, withoutcontradiction in the record, that the foregoing ra-tionale for rule 3 and the MMIS–62 modifier ap-plies with *17 equal force “regardless of whetherthe radiologist is using x-rays or ultrasound”.

When, as here, the interpretation by the admin-istrative agency of its own rules and regulations isnot irrational or unreasonable, it should be upheld (see, Matter of Johnson v. Joy, 48 N.Y.2d 689, 691,422 N.Y.S.2d 56, 397 N.E.2d 746). Repeatedly, thecourts have deferred to the administrative construc-tion of the agency's rules when, as in the instantcase, that interpretation is not irrational or contraryto the governing statute (see, Matter of Spizzirro v.Ayala, 176 A.D.2d 738, 739, 574 N.Y.S.2d 808;Matter of Lipes v. State of New York, Div. of Hous.& Community Renewal, Off. of Rent Admin., 174A.D.2d 571, 572, 570 N.Y.S.2d 684; Matter of Sil-verlake Nursing Home v. Axelrod, 156 A.D.2d 789,790, 549 N.Y.S.2d 210; **242Matter of Fiorillo v.New York State Dept. of Envtl. Conservation, 123A.D.2d 151, 153, 510 N.Y.S.2d 775, appeal dis-missed 70 N.Y.2d 641, 518 N.Y.S.2d 1031, 512

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N.E.2d 557). Moreover, as demonstrated by theaforementioned affidavit of the bureau director ofdefendant's Division of Medical Assistance, applic-ation of the rules here involves the agency's know-ledge and understanding of underlying radiologicalpractices (see, Matter of Fiorillo v. New York StateDept. of Envtl. Conservation, supra ). Contrary tothe majority's position, the deference due an admin-istrative agency's interpretation of its own rules andregulations is not limited to instances where thelanguage under review is technical terminologywithin the agency's expertise. At least in part, de-ference in interpretation is accorded the agency asdrafter of the regulation “because the administratorsare likely to know more about the background ofintent that went into the regulation” (2 Davis, Ad-ministrative Law § 7:22, at 107 [2d ed.] ). Accord-ingly, an agency's interpretation of its own regula-tions is entitled to even more deference than its in-terpretation of the statute it has the responsibility ofenforcing (see, Udall v. Tallman, 380 U.S. 1, 16, 85S.Ct. 792, 801, 13 L.Ed.2d 616; Bowles v. SeminoleRock & Sand Co., 325 U.S. 410, 413–414, 65 S.Ct.1215, 1217, 89 L.Ed. 1700; see also, Lyng v.Payne, 476 U.S. 926, 939, 106 S.Ct. 2333, 2341, 90L.Ed.2d 921; Immigration & Naturalization Serv. v.Stanisic, 395 U.S. 62, 72, 89 S.Ct. 1519, 1525, 23L.Ed.2d 101).

Inasmuch as application of the billing restric-tions of rule 3 of the general rules of the radiologysection of the MMIS Provider Manual to multiple,single-visit ultrasound procedures is consistent withthe purpose of that rule and it has not been shownto conflict with any of the provisions of the MMISReimbursement Schedule or Provider Manual, de-fendant's interpretation should be upheld (see, Mat-ter of Kaufman v. Sarafan, 59 N.Y.2d 855, 857, 465N.Y.S.2d 924, 452 N.E.2d 1252).

For all the foregoing reasons, we would reverseSupreme Court's judgment, grant defendant's crossmotion for summary judgment and make a declara-tion in its favor.

ORDERED that the judgment is affirmed, with

costs.

CREW, J., concurs.

N.Y.A.D. 3 Dept.,1992.Berger v. New York State Dept. of Social Services181 A.D.2d 12, 585 N.Y.S.2d 238

END OF DOCUMENT

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TAB # 8

FIND Request: 64 A.D.3d 1009

Supreme Court, Appellate Division, Third Depart-ment, New York.

In the Matter of LEWIS FAMILY FARM, INC.,Appellant,

v.NEW YORK STATE ADIRONDACK PARKAGENCY, Respondent. (Proceeding No. 1.)

In the Matter of Lewis Family Farm, Inc. Respond-ent,v.

Adirondack Park Agency, Appellant. (ProceedingNo. 2.)

Adirondack Park Agency, Appellant,v.

Lewis Family Farm, Inc., et al., Respondents.(Action No. 1.)

July 16, 2009.

Background: Owner-operator of organic farm loc-ated within park and within agricultural districtbrought action for judgment declaring that statepark agency lacked jurisdiction over owner-oper-ator's project to construct dwelling units to housefarm workers on its farm and enjoining agencyfrom interfering with construction. The SupremeCourt, Essex County, Ryan, J., converted action in-to Article 78 proceeding, then dismissed petition asunripe. Owner-operator appealed. Owner-operatorcommenced new Article 78 proceeding, challengingagency's direction that it apply for “after-the-fact”permit and pay $50,000 penalty, and agency com-menced action against owner-operator and its prin-cipals to enforce its administrative determination.After joining matters, the Supreme Court, EssexCounty, Meyer, J., 20 Misc.3d 1114, 2008 WL2653236, ruled that collateral estoppel did not barowner-operator's claims and dismissed individualdefendants, and thereafter, 22 Misc.3d 568, 868N.Y.S.2d 481, annulled agency's administrative de-termination and granted summary judgment to own-

er-operator dismissing agency's amended complaintin enforcement action. Agency appealed.

Holding: The Supreme Court, Appellate Division,Garry, J., held that housing units being constructedfor farm workers qualified as “agricultural usestructures,” as defined by Adirondack Park AgencyAct, and were exempt from park agency's jurisdic-tion and permit requirements under AdirondackPark Agency Act and Wild, Scenic and Recreation-al Rivers System Act.

Affirmed.

West Headnotes

[1] Statutes 361 219(9.1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(9) Particular State Statutes

361k219(9.1) k. In general.Most Cited Cases

In deciding whether housing units being con-structed on farm located in resource managementarea of park were “single family dwellings” forwhich permits from park agency were required un-der Adirondack Park Agency Act and Wild, Scenicand Recreational Rivers System Act, or insteadwere “agricultural use structures” and thus gener-ally exempt from park agency's jurisdiction andpermit requirements, trial court was not required todefer to park agency's interpretation of AdirondackPark Agency Act and Wild, Scenic and Recreation-al Rivers System Act as the agency charged withtheir enforcement, given that neither park agency'sstatutory interpretation nor its application requiredknowledge and understanding of underlying opera-tional practices or entailed evaluation of factualdata and inferences to be drawn therefrom. McKin-ney's Executive Law §§ 802(8, 58), 805(3)(g)(4)(2),

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810(1)(e), (2)(d)(1); McKinney's ECL § 15–2709(2)(c); 9 NYCRR 577.4(b)(3)(ii), 577.5(c)(1), 577.6(b)(3).

[2] Statutes 361 219(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k213 Extrinsic Aids to Construction

361k219 Executive Construction361k219(1) k. In general. Most

Cited CasesPure legal interpretation of clear and unam-

biguous statutory terms requires no deference to in-terpretation of agency charged with statute's en-forcement, inasmuch as there is little or no need torely on any special expertise on agency's part.

[3] Zoning and Planning 414 1243

414 Zoning and Planning414V Construction, Operation, and Effect

414V(C) Uses and Use Districts414V(C)1 In General

414k1243 k. Agricultural uses, wood-lands and rural zoning. Most Cited Cases

(Formerly 414k279)Housing units for farm workers being construc-

ted on farm located within park's resource manage-ment area were structures directly and customarilyassociated with agricultural use and thus qualifiedas “agricultural use structures,” as defined by Ad-irondack Park Agency Act, and were exempt frompark agency's jurisdiction and permit requirementsunder Adirondack Park Agency Act and Wild,Scenic and Recreational Rivers System Act, eventhough housing units also fell within statutorydefinition of “single family dwellings,” for whichpermits from park agency were required. McKin-ney's Const. Art. 14, § 4; McKinney's ExecutiveLaw §§ 802(5, 8, 58), 805(3)(g)(1, 2), (3)(g)(4)(2),810(1)(e), (2)(d)(1), 815(4)(b); McKinney's ECL §15–2709(2)(c); McKinney's Agriculture and Mar-kets Law § 305(3); 9 NYCRR 577.4(b)(3)(ii), 577.5(c)(1), 577.6(b)(3).

[4] Statutes 361 181(1)

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k180 Intention of Legislature

361k181 In General361k181(1) k. In general. Most

Cited CasesPrimary goal of statutory interpretation is to as-

certain and give effect to the intention of the legis-lature.

[5] Statutes 361 188

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k187 Meaning of Language

361k188 k. In general. Most CitedCases

Statutory text is the clearest indicator of legis-lative intent, and courts should construe unambigu-ous statutory language to give effect to its plainmeaning.

[6] Statutes 361 205

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k204 Statute as a Whole, and Intrinsic

Aids to Construction361k205 k. In general. Most Cited

Cases

Statutes 361 206

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k204 Statute as a Whole, and Intrinsic

Aids to Construction361k206 k. Giving effect to entire stat-

ute. Most Cited CasesA court must consider a statute as a whole,

reading and construing all parts of an act together

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to determine legislative intent and, where possible,should harmonize all parts of a statute with eachother and give effect and meaning to the entire stat-ute and every part and word thereof.

[7] Statutes 361 184

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k180 Intention of Legislature

361k184 k. Policy and purpose of act.Most Cited Cases

Statutes 361 194

361 Statutes361VI Construction and Operation

361VI(A) General Rules of Construction361k187 Meaning of Language

361k194 k. General and specific wordsand provisions. Most Cited Cases

Rule of ejusdem generis, by which general stat-utory language is limited by the specific phrasespreceding it, is only a rule of construction, andmust yield to the legislature's evident purpose inenacting a statute.

**764 McNamee, Lochner, Titus & Williams, P.C.,Albany (John J. Privitera of counsel), for LewisFamily Farm, Inc., appellant and respondent, andSalim Lewis and another, respondents.

Andrew M. Cuomo, Attorney General, Albany (Ju-lie M. Sheridan of counsel), for New York StateAdirondack Park Agency, respondent and appel-lant.

Cynthia Feathers, Saratoga Springs, for New YorkFarm Bureau, amicus curiae.

Before: MERCURE, J.P., ROSE, KANE,KAVANAGH and GARRY, JJ.

GARRY, J.*1010 Appeals (1) from a judgment of the Su-

preme Court (Ryan, J.), entered August 29, 2007 inEssex County, which converted an action for de-claratory judgment into a proceeding (No. 1) pursu-ant to CPLR article 78 and granted respondent'scross motion to dismiss the petition in proceedingNo. 1, (2) from a judgment of said court (Meyer,J.), entered July 2, 2008 in Essex County, which, inproceeding No. 2 pursuant to CPLR article 78 andaction No. 1, partially denied a motion by the Ad-irondack Park Agency to dismiss certain causes ofaction in proceeding No. 2 and partially granted de-fendants' motion to dismiss the complaint in actionNo. 1, and (3) from a judgment of said court(Meyer, J.), entered November 21, 2008 in EssexCounty, which, among other things, granted peti-tioner's application, in proceeding No. 2 pursuant toCPLR article 78, to annul a determination of re-spondent Adirondack Park Agency directing peti-tioner to apply for a permit and pay a $50,000 civilpenalty.

Lewis Family Farm, Inc. (hereinafter LewisFarm) owns and operates a large organic farm inthe Town of Essex, Essex County, within the Ad-irondack Park and within an agricultural district. Inthe fall of 2006, Lewis Farm obtained a buildingpermit from the Town and began building threesingle-family dwelling units on the farm to be usedto house farm workers. After construction began,Lewis Farm submitted an application *1011 to theAdirondack Park Agency (hereinafter the APA) fora permit under the APA's authority. The APA de-termined that the application was incomplete andrequested additional information. A disagreementensued, and the APA eventually issued a cease anddesist order prohibiting Lewis Farm from complet-ing the construction until the dispute was resolved.Lewis Farm commenced an action for a judgmentdeclaring that the APA lacked jurisdiction over theproject and enjoining it from interfering with theconstruction. Supreme Court granted the APA'smotion to convert the action to a CPLR article 78proceeding (proceeding No. 1). The court thenfound that the APA had jurisdiction to enforce thepermit requirement, but dismissed the petition as

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unripe because the APA had not yet issued a finaldetermination. Lewis Farm appeals from this judg-ment.

The APA thereafter conducted an administrat-ive enforcement proceeding that resulted, in March2008, in a determination **765 that by constructingthe farm housing without an APA permit, LewisFarm had violated the Adirondack Park Agency Act(see Executive Law art. 27 [hereinafter the APAAct] ) and the Wild, Scenic and Recreational RiversSystem Act (see ECL 15–2705, 15–2709[hereinafter the Rivers System Act] ). The APA dir-ected Lewis Farm to apply for an “after-the-fact”permit and pay a $50,000 civil penalty.

Lewis Farm challenged this determination in anew proceeding under CPLR article 78 (proceedingNo. 2), and the APA commenced an action againstLewis Farm and its principals, defendants SalimLewis and Barbara Lewis, to enforce its adminis-trative determination. Supreme Court joined thesematters and, in July 2008, determined, among otherthings, that collateral estoppel did not bar any ofthe claims raised by Lewis Farm and dismissed theindividual defendants. The APA also appeals fromthis judgment.

Subsequently, the parties cross-moved for sum-mary judgment as to the APA's causes of action forenforcement of its administrative determination. InNovember 2008, Supreme Court, among otherthings, granted Lewis Farm's application in pro-ceeding No. 2 and annulled the APA's March 2008administrative determination. The court also gran-ted summary judgment to Lewis Farm and dis-missed the individual defendants. The APA appealsfrom this judgment.

The APA Act creates a comprehensive land useplan that classifies all land within the AdirondackPark into six land use categories and sets forthprimary and secondary compatible uses *1012 foreach category (see Executive Law § 805). The APAAct establishes specific uses as class A and class Bregional projects in each of the six land use cat-

egories (see Executive Law § 810), grants jurisdic-tion to the APA to review and approve all class Aregional projects and certain class B regionalprojects (see Executive Law § 809 [1] ), and re-quires those who plan to undertake such projects toapply beforehand to the APA for a permit (see Ex-ecutive Law § 809[2][a] ).

The farm is located in a “resource manage-ment” land use area (see Executive Law § 805[3][g]). In such areas, “agricultural use structures” areprimary compatible uses that are neither class A norclass B regional projects and are exempt from APAjurisdiction and permit requirements, so long asthey are located a sufficient distance from neigh-boring river shorelines (see Executive Law § 805[3][g][4][2]; § 810[1][e]; [2][d]; 9 NYCRR 577.6[b][3] ). Where, as here, there is no approved localland use program, construction of a “single familydwelling” in a resource management area is a classB regional project that requires a permit from theAPA (see Executive Law § 810[2][d][1] ). Simil-arly, the Rivers System Act accords jurisdiction tothe APA to regulate the use of privately owned landin the immediate environs of certain river systems (see ECL 15–2701, 15–2705, 15–2709[1] ). The dis-puted construction site on the farm is located withina “recreational river” area that is subject to APApermit requirements under the regulations imple-menting the Rivers System Act (see 9 NYCRR577.4, 577.5[c][1] ). However, “agricultural usestructures” that otherwise comply with regulatoryrequirements are exempt from these permit require-ments (see 9 NYCRR 577.4[b] [3][ii]; see also ECL15–2709[2][c] ). The resolution of these appeals de-pends on whether the disputed housing units on thefarm are “single family dwelling[s]” as the APAdetermined in its administrative enforcement pro-ceeding and therefore subject to the APA's jurisdic-tion and permit requirements under the APA Actand the Rivers **766 System Act, or “agriculturaluse structure [s]” exempt from such requirements,as determined by Supreme Court.

The APA Act sets out definitions for 68 words

Page 464 A.D.3d 1009, 882 N.Y.S.2d 762, 2009 N.Y. Slip Op. 05890(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)

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and phrases and provides that “[a]s used in this art-icle, unless the context otherwise requires, [thedefined] words and terms shall have the meaningascribed to them” (Executive Law § 802). A “singlefamily dwelling” is defined as “any detached build-ing containing one dwelling unit, not including amobile home” (Executive Law § 802 [58] ). An“agricultural use structure” is “any barn, stable,shed, silo, garage, fruit and vegetable stand or otherbuilding or structure directly and customarily asso-ciated*1013 with agricultural use” (Executive Law§ 802 [8] [emphasis added] ). The implementingregulations for the Rivers System Act use the samedefinition of an “agricultural use structure” (see 9NYCRR § 577.2[b] ). A “structure” is “any objectconstructed, installed or placed on land to facilitateland use and development or subdivision of land,such as buildings, sheds, single family dwellings,mobile homes, signs, tanks, fences and poles andany fixtures, additions and alterations thereto” (Ex-ecutive Law § 802[62] ). The APA Act furtherdefines “agricultural use” as “any management ofany land for agriculture; ... horticulture or orchards;including the sale of products grown or raised dir-ectly on such land” (Executive Law § 802[7] ).

[1][2] As a preliminary matter, Supreme Courtproperly concluded that it was not required to deferto the APA's interpretation of the APA Act and theRivers System Act as the agency charged with theirenforcement (see Matter of Trump–Equitable FifthAve. Co. v. Gliedman, 57 N.Y.2d 588, 597, 457N.Y.S.2d 466, 443 N.E.2d 940 [1982] ). “ ‘[P]urelegal interpretation’ of clear and unambiguous stat-utory terms” such as the language at issue here re-quires no such deference because there is little orno need to rely on any special expertise on theagency's part (Kennedy v. Novello, 299 A.D.2d 605,607, 750 N.Y.S.2d 175 [2002], lv. denied 99N.Y.2d 507, 757 N.Y.S.2d 817, 787 N.E.2d 1163[2003], quoting Matter of Toys “R” Us v. Silva, 89N.Y.2d 411, 419, 654 N.Y.S.2d 100, 676 N.E.2d862 [1996]; see Matter of Raritan Dev. Corp. v.Silva, 91 N.Y.2d 98, 102, 667 N.Y.S.2d 327, 689N.E.2d 1373 [1997] ). The APA's March 2008 ad-

ministrative determination rested entirely on stat-utory interpretation, and neither that interpretationnor its application required “ ‘knowledge and un-derstanding of underlying operational practices orentail [ed] an evaluation of factual data and infer-ences to be drawn therefrom’ ” (Town of Lysanderv. Hafner, 96 N.Y.2d 558, 565, 733 N.Y.S.2d 358,759 N.E.2d 356 [2001], quoting Kurcsics v. Mer-chants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426N.Y.S.2d 454, 403 N.E.2d 159 [1980] ).

[3][4][5][6] We further agree with the conclu-sion reached by Supreme Court that the disputedhousing units on the farm are “agricultural usestructure[s]” within the meaning of the APA Act.The primary goal of statutory interpretation is “to‘ascertain and give effect to the intention of the Le-gislature’ ” ( Matter of Emigrant Bancorp, Inc. v.Commissioner of Taxation & Fin., 59 A.D.3d 30,33, 869 N.Y.S.2d 689 [2008], quoting Riley v.County of Broome, 95 N.Y.2d 455, 463, 719N.Y.S.2d 623, 742 N.E.2d 98 [2000]; accord Mat-ter of DaimlerChrysler Corp. v. Spitzer, 7 N.Y.3d653, 660, 827 N.Y.S.2d 88, 860 N.E.2d 705 [2006]). “To that end, ‘[t]he statutory text is the clearestindicator of legislative intent and courts shouldconstrue unambiguous language to give effect to itsplain meaning’ ” ( **767Matter of Emigrant Ban-corp, Inc. v. Commissioner of Taxation & Fin., 59A.D.3d at 33, 869 N.Y.S.2d 689, quoting *1014Matter of DaimlerChrysler Corp. v. Spitzer, 7N.Y.3d at 660, 827 N.Y.S.2d 88, 860 N.E.2d 705).“A court must consider a statute as a whole, readingand construing all parts of an act together to de-termine legislative intent and, where possible,should harmonize [ ] [all parts of a statute] witheach other ... and [give] effect and meaning ... tothe entire statute and every part and word thereof” (Friedman v. Connecticut Gen. Life Ins. Co., 9N.Y.3d 105, 115, 846 N.Y.S.2d 64, 877 N.E.2d 281[2007] [internal quotation marks and citations omit-ted] ).

Applying these precepts, Supreme Court ex-amined the text of the pertinent statutory definitions

Page 564 A.D.3d 1009, 882 N.Y.S.2d 762, 2009 N.Y. Slip Op. 05890(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)

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and construed statutorily-defined terms or phraseswithin each definition by reference to the otherdefinitions and by reading them in the context ofthe APA Act as a whole. Accordingly, the courtconcluded that, since a “single family dwelling” isincluded within the statutory definition of a“structure,” and an “agricultural use structure” in-cludes any “building or structure directly and cus-tomarily associated with agricultural use,” it wasrational to conclude that a single family dwellingthat is “directly and customarily associated with ag-ricultural use” falls squarely within the statutorydefinition of an “agricultural use structure” and istherefore exempt from APA regulation (ExecutiveLaw § 802[8] ). With regard to whether farmworkerhousing is “directly and customarily associatedwith agricultural use,” the court took note of a re-lated, though not controlling, statutory analysis de-termining that farmworker residences “contribute tothe production, preparation and marketing of crops,livestock and livestock products as a commercialenterprise” (Agriculture and Markets Law § 301[11] ) and are therefore “farm operations” exemptfrom local zoning regulation under Agriculture andMarkets Law § 305–a (see Town of Lysander v.Hafner, 96 N.Y.2d at 562, 733 N.Y.S.2d 358, 759N.E.2d 356). We agree with Supreme Court thatthere is no reason to conclude that the Legislatureintended a different result within the AdirondackPark. Thus, although the farmworker residencesconstructed on the farm fall within the statutorydefinition of “single family dwelling[s],” they arealso “agricultural use structure[s]” exempt fromAPA jurisdiction because they are “directly andcustomarily associated with agricultural use.”

This conclusion is consistent with the APAAct's proclamation that the need to “protect, man-age and enhance” agricultural resources within re-source management areas is of “paramount import-ance,” that such areas are of “considerable econom-ic importance to segments of the park,” and that thepurposes and objectives of resource managementareas include “encourag[ing] proper and economicmanagement of ... agricultural ... resources” (Exec-

utive Law § 805[3][g][1], [2] ). It is likewise con-sistent*1015 with the APA Act's explicit instructionthat “[the APA's] rules and regulations ... shall ex-clude ... bona fide management of land for agricul-ture, livestock raising, horticulture and orchards ...from review under this section” (Executive Law §815[4][b] ). It is further consistent with the consti-tutionally-mandated state policy to “encourage thedevelopment and improvement of its agriculturallands for the production of food and other agricul-tural products” (N.Y. Const., art. XIV, § 4) andwith the legislative directive that “[i]t shall be thepolicy of all state agencies to encourage the main-tenance of viable farming in agricultural districtsand their administrative regulations and proceduresshall be modified to this end” (Agriculture andMarkets Law § 305[3] ). Nothing in **768 any ofthese provisions suggests, as the APA argues, thatNew York's strong pro-farming policy should applydifferently to farms within the Adirondack Parkthan to farms elsewhere in the state.

The statutory language does not, as the APAcontends, evince a legislative intent for the word“structure” in the definition of “agricultural usestructure” (Executive Law § 802[8] ) to mean an“accessory structure.” This term is specificallydefined in the APA Act (see Executive Law § 802[5] ), and the Legislature had the opportunity to useit if it had intended to limit the definition of“agricultural use structures” accordingly. It did notdo so (see People v. Tychanski, 78 N.Y.2d 909,911, 573 N.Y.S.2d 454, 577 N.E.2d 1046 [1991];People v. Dan, 55 A.D.3d 1042, 1044, 866N.Y.S.2d 382 [2008], lv. denied 12 N.Y.3d 757,876 N.Y.S.2d 708, 904 N.E.2d 845 [2009]; McKin-ney's Cons. Law of N.Y., Book 1, Statutes, § 74).The APA's interpretation would require this Courtto disregard the clear statutory language (see Mat-ter of Trump-Equitable Fifth Ave. Co. v. Gliedman,57 N.Y.2d at 592, 457 N.Y.S.2d 466, 443 N.E.2d940) and render the word “structure” as used in thedefinition of “agricultural use structures” meaning-less (see SIN, Inc. v. Department of Fin. of City ofN.Y., 71 N.Y.2d 616, 621, 528 N.Y.S.2d 524, 523

Page 664 A.D.3d 1009, 882 N.Y.S.2d 762, 2009 N.Y. Slip Op. 05890(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)

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N.E.2d 811 [1988] ).

[7] Contrary to the APA's contention, the ruleof ejusdem generis, by which general statutory lan-guage is limited by the specific phrases precedingit, is inapplicable because the general language atissue—here, the word “structure”—is separatelydefined and, therefore, “is definite and has a precisemeaning” (Johnson v. Hudson Riv. R.R. Co., 49N.Y. 455, 455 [1872] ). Further, “the rule of ejus-dem generis is only a rule of construction; it mustyield to the Legislature's evident purpose in enact-ing the statute” (Mark v. Colgate Univ., 53 A.D.2d884, 886, 385 N.Y.S.2d 621 [1976] ).

Finally, the separate treatment of “single fam-ily dwellings” and “agricultural use structures” insome provisions of the APA Act does not compelthe conclusion that the Legislature intended theterms to be mutually exclusive. For example, *1016Executive Law § 802(50)(g) provides that for thepurpose of applying the APA Act's densityguidelines to farm land, “all agricultural use struc-tures and single family dwellings or mobile homesoccupied by a farmer of land in agricultural use, his[or her] employees engaged in such use and mem-bers of their respective immediate families, will to-gether constitute and count as a single principalbuilding” (emphasis added). As Supreme Courtnoted, the definition of an “agricultural use struc-ture” is broader in scope than that of a “single fam-ily dwelling,” and not all single family dwellingslocated on farms will qualify as agricultural usestructures. Thus, listing them separately, here andthroughout the APA Act, was necessary to ensurethat the provision applied to single family dwell-ings whether or not they also qualified as agricul-tural use structures. Nothing in the APA Act pre-cludes a single family dwelling that is “directly andcustomarily associated with agricultural use” fromqualifying as an agricultural use structure (Execut-ive Law § 802[8] ).

Supreme Court properly concluded that thedwelling units constructed for farmworker housingon Lewis Farm's land are “agricultural use struc-

ture[s]” within the meaning of Executive Law § 802(8) and are therefore exempt from APA jurisdictionand permit requirements. This determinationrenders academic the parties' claims with regard tothe court's earlier judgments.

**769 ORDERED that the judgments are af-firmed, without costs.

MERCURE, J.P., ROSE, KANE and KAVANAGH, JJ., concur.

N.Y.A.D. 3 Dept.,2009.Lewis Family Farm, Inc. v. New York State Ad-irondack Park Agency64 A.D.3d 1009, 882 N.Y.S.2d 762, 2009 N.Y. SlipOp. 05890

END OF DOCUMENT

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TAB # 9

SUPREME COURT OF THE STATE OF NEW 4baK COUNTY OF NEW YORK : IAS PART 12 ----------------------------------------X In the Matter of the Application of LANDMARK WEST!, ONE LINCOLN PLAZA CONDOMINIUM and 64TH STREET BLOCK ASSOCIATION,

Petitioners,

-against-

\~HE NEW YORK CITY BOARD OF STANDARDS AND APPEALS,vrN~ YORK CITY DEPARTMENT OF BUILDINGS, \..OEPARTMENT OF CII!'Y PLANNING, THE Y~CA OF GREATER NEW YORK, ~STSIDE YMCA,\VORNADO REALTY TRUST and

WORNADO 63R0 STREET, INC.,

Respondents. ----------------------------------------X

DECISION/ORDER

Index No. 114798/98 Motion Seq. No. 01

BARBARA R. KAPNICK, J.: VORK

Petitioners Landmark West!, One Lincoln Plaza Condominium

("Lincoln Plaza") , and 64th Street Block Association seek a

judgment, pursuant to CPLR Article 78, ( 1) setting aside and

annulling a July 14, 1998, resolution of respondent New York City

Board of Standards and Appeals ("BSA"), and (2) determining that

Special Permit No. C880189AZSM, awarded on January 9, 1989, has

lapsed by operation of law.

In January 1989, the City Planning Commission ("CPC"} issued

Special Permit No. C880189AZSM to respondent YMCA of Greater New

York (the "Y") , pursuant to zoning regulations governing the

Lincoln Square District, to construct a 41-story, mixed-use tower

at the premises located at 13-15 West 63r' Street, New York, New

York. Lincoln Plaza and other organiza;tior;t:s ,CJ;l<;I+~~nged the Special

Permit in a prior Article 78 proceeding, which was resolved in

favor of the Y. The Parks Council 41~ity of New York, 174 AD2d 446

(1st Dept 1991), appeal denied 79 NY2d 752 (1991).

The Y did not proceed with construction when the litigation

was resolved. In a letter to respondent New York City Department

of Buildings ("DOB"), dated October 4, 1993, however, theY sought

confirmation that the Special Permit would not lapse until, at the

earliest, two years after final judgment was entered in the

proceeding challenging the Landmarks Preservation Commission grant

of a certificate of appropriateness. DOB responded that the lapse

provision of Article VII of the Zoning Resolution (§ 74-99) did not

apply to the Special Lincoln Square District regulations, pursuant

to which the Special Permit was issued, and that, therefore, the

Special Permit would remain in effect unless it was revoked.

In 1994, the regulations governing the Special Lincoln Square

District were amended, inter alia, to modify use and bulk

regulations. Section 82-05 of the new regulations established a

lapse provision, but specifically grandfathered in special permits

issued prior to February 9, 1994 as follows:

For the purposes of this Chapter, the right to continue to construct shall terminate if the provisions of Section 11-30 (BUILDING PERMITS ISSUED BEFORE EFFECTIVE DATE OF AMENDMENT) are not met by December 20, 1993.

Notwithstanding the provisions of this Chapter, any development approved by special permit of the City Planning Commission pursuant to this Chapter prior to February 9, 1994 may be started or continued pursuant to such special permit. ·

Zoning Resolution§ 82-05 (emphasis in original). ~ • r • -: :: : / : , • ; • • •

2

In 1995, the Zoning Resoluticl,.:was again amended, creating a

uniform lapse provision, which provides in relevant part:

Except as otherwise provided ... any authorization o~ special permit granted by the City Planning Commission for a specified use or for a modification of use or bulk regulations granted under the provisions of the 1961 Zoning Resolution shall automatically lapse if substantial construction, in accordance with the plans for which such special permit or authorization was granted, has not been completed within four years from the effective date of such permit or authorization.

Zoning Resolution§ 11-42(a) (emphasis in original).

A maximum of two renewals of three years may be obtained

without a public hearing, provided that the CPC finds that the

facts upon which the authorization or special permit was granted

have not substantially changed. If substantial construction has

not taken place within ten years of the original granting, the

special permit or authorization shall lapse. Zoning Resolution §

11-43.

In 1995, the CPC held a public hearing relating to the

proposed amendments, at which the Y inquired whether its Special

Permit would be subject to the proposed.iapse provisions of Section

11-42. The CPC chairman stated that the Special Permit would not

be subject to Section 11-42, because the Special Permit had no

lapse provision when it was originally granted. The report

forwarded to the City Council with the proposed amendments

contained language, in pertinent part, to the same effect:

The Commission believes that it is important that the record'be clear as to the applicaHi::lit.y 1df. the new lapse

3

provJ.sJ.ons. The proposed ~l.~;se provisions would be applied as follows:

1. A special permit that, when granted, was not subject to the lapse provisions of Sections 74-99 or 78-07, or an authorization that, when granted, was not subject to lapse provisions, would not be subject to the amended lapse provisions.

Report of city Planning Commission, June 21, 1995, Calendar No. 36,

N 950348 ZRY, at 16 (emphasis in original).

In or about September 1997, theY announced that it planned to

commence construction of the residential tower by January 1998,

pursuant to its Special Permit. In a letter to the DOB, dated

December 16, 1997, Lincoln Plaza requested a determination that the

Y's Special Permit had lapsed pursuant to Zoning Resolution § 11-42

in September 1995. In a letter dated January 6, 1998, DOB

responded that the lapse provisions did not apply and that the

Special Permit remained in full force and effect. Lincoln Plaza

sought reconsideration of DOB's position, and in a letter dated

February 23, 1998, DOB Commissioner Gaston R. Silva affirmed the

DOB position that the Special Permit had not lapsed. He noted that

"the legislative history contained in the City Planning Commission

Report accompanying the 1995 text amendment to the Zoning

Resolution's lapse provisions, makes clear that the 1995 amendment

was prospective only, and did not affect special permits that were

not previously subject to lapse."

That determination was appealed to the BSA. On July 14, 1998,

the BSA adopted a resolution, ruhd.nfnidusly: i affirming the

4

commissioner's final determinatiorehat the lapse provisions were intended to be prospective only and did not apply to the Y 's Special Permit, on the basis of the evidence in the record, including, inter alia, the CPC report. It is that determination that petitioners challenge in this proceeding.

Petitioners argue that the lapse provisions of Section 11-42 apply to the Y's Special Permit, that the Special Permit lapsed in September 1995, four years after the conclusion of the unsuccessful challenge to the Special Permit, and that in the absence of a review and finding of no substantial change since it was issued, pursuant to Zoning Resolution § 11-43, the Special Permit may not be renewed without a public hearing. They further argue that just as an express grandfather provision was necessary to protect the Special Permit from lapsing under the provision contained in Section 82-05, such express protective language is also necessary to immunize the Special Permit from the lapse provision in Section 11-42. Because there is no such express exception in Section 11-42, petitioners contend that the lapse provision applies to the Special Permit.

The Court of Appeals has held that [w]here "the question is one of·pure legal interpretation of statutory terms, deference to.the BSA is not required" (Matter of Toys "R" Us v Silva, 89 NY2d 411, 419). On the other hand, when applying its special expertise in a particular field to interpret statutory language, an agency's rational construction is entitled to deference (see, Matter of Jennings v New York State Off. of Mental

5

~-Health, 90 NY2d 227, 239; KurA:ics v Merchants Mut Ins. Co., 49 NY2d 451, 459).

Mtr. Raritan Dey. corp. v Silva, 91 NY2d 98, 102-103 (1997).

The respondents argue that the determination of the BSA, concurring with two other city agencies with special responsibility for the administration of the Zoning Resolution and special expertise in zoning matters, should thus be given deference.

The petitioner, on the other hand, argues that this is a situation where the determination by the agency "runs counter to the clear wording of a statutory provision" and thus the BSA's determination should be given little weight. Mtr. Raritan Dev.

Corp. v Silva, supra at 103.

However,

the fundamental rule in construing any statute, or in this case an amendment to the City's Zoning Resolution, is to ascertain and give effect to the intention of the legislative body, here the New York City Council. The intent of the City council is controlling and, subject to constitutional or other legal limitations, must be given force and effect ... The legislative intent is to be ascertained from the words and language used and the statutory language is generally interpreted according to its natural and obvious sense, without resorting to an artificial or forced construction ... [Therefore, a] 'court in construing a law will sometimes be guided more by its purpose than its phraseology.'

City of New York v Stringfellow's of New York, AD2d I 1999 WL

47716, p. 10 (1st Dep't), quoting McKinney's cons Laws of NY, Book

1, Statutes § 96, at 208-209.

6

Thus, the report of the CPC tl.ich was forwarded to the City

Council with the text of the proposed Section 11-42 must be

considered by the court in order to ascertain the purpose of the

statute. ~' Stringfellow's of New York v City of New York, 91

NY2d 382, 401 (1998). That report clearly demonstrates that the

lapse provision was not intended to apply retroactively to special

permits or authorizations which, when granted, did not themselves

contain lapse provisions, and therefore, was not intended to apply

to the Y's Special Permit. 1

In light of the development which has occurred in the Lincoln

Square District since 1989 when the Y's Special Permit was issued,

the City might well have been advised to include the Special Permit

within the reach of the lapse provisions, thus requiring further

public review before the project could be built.

However, "the responsibility for making zoning decisions has

been committed primarily to quasi-legislative, quasi-administrative

boards composed of representatives from the local community. Local

officials, generally, possess the familiarity with local conditions

There is no dispute that "[t]he general rule against interpreting statutes or ordinances retrospectively, especially where vested rights are involved, applies to zoning ordinances." Town of Islip y. caviglia, 73 NY2d 544, 560 (1989). However, respondents concede that there are no vested rights involved in this case. Moreover, Section 11-42 does expressly apply retroactively to special permits or authorizations which, when granted, were governed by other lapse provisions. Nonetheless, the legislative history confirms that Section 11-42 was not intended to apply retrospectively to the Y's Special Permit.

7

necessary to make the often sens~i ve planning decisions which

affect the development of their community. Absent arbitrariness,

it is for locally selected and locally responsible officials to

determine where the public interest in zoning lies." Cowan y Kern,

41 NY2d 591, 599 (1977), rearg. denied, 42 NY2d 910 (1977).

Thus, it is clear that the City of New York has the power to

exempt the Y's Special Permit from the application of Section 11-

42. Moreover, it is well settled that "[j]udicial review of local

zoning decisions is limited ... Where there is a rational basis for

the local decision, that decision should be sustained. It matters

not whether, in close cases, a court would have, or should have,

decided the matter differently." cowan v Kern, supra at 599.

While it might have been wiser for the drafters to have

accomplished the purpose of exempting the Y's Special Permit by

means of an express grandfather clause, as in Section 82-05, the

interpretation of Section 11-42 by the BSA, and, therefore, the

determination that the Special Permit has not lapsed, appears to

this Court to be consistent with the legislative history of Section

11-42. Therefore, this Court finds that the determination of the

BSA is not arbitrary or capricious.

constrained to deny the petition.

8

Accordingly, the Court is

Thus, it is hereby

ADJUDGED that the petition is denied and the proceeding is

dismissed, without costs or disbursements.

The stay of any demolition or construction work at the

premises stipulated to by the parties on February 26, 1999 is

continued an additional 24 hours through midnight on March 2, 1999.

This constitutes the decision and judgment of this court.

Dated: March 1, 1999

9

. "·················· .. ,1:)} .. 1 . I

' I ' I ! /.. /. .,

~=)!~ Barbara R. Kapnick

J.S.C.

iAABARA R~ ttAPNte«< ~l8l::,

( G~ FILED

COUNTY f.~~KS OFFiCE NEWYOR"\

 

 

 

 

 

TAB # 10

FIND Request: 76 A.D.3d 338

Supreme Court, Appellate Division, Second De-partment, New York.

In the Matter of Thomas J. McDOUGALL, peti-tioner,

v.Nicholas SCOPPETTA, etc., et al., respondents.

July 20, 2010.

Background: Firefighter sought review of determ-ination by Fire Department Commissioner, whichadopted recommendation and findings of adminis-trative law judge (ALJ), made after hearing, findingfirefighter guilty of two charges of misconduct, andterminated his employment.

Holding: The Supreme Court, Appellate Division,Austin, J., held that firefighter's termination aftertesting positive for cocaine was so shocking tocourt's sense of fairness that annulment of termina-tion and imposition of lesser penalty was appropri-ate.

Annulled in part and remitted.

West Headnotes

[1] Municipal Corporations 268 198(4)

268 Municipal Corporations268V Officers, Agents, and Employees

268V(B) Municipal Departments and Of-ficers Thereof

268k193 Fire268k198 Suspension and Removal of

Firemen268k198(4) k. Review. Most Cited

CasesThe power of the Fire Department Commis-

sioner to discipline members of the Fire Depart-ment is reviewable by the Appellate Division underArticle 78. McKinney's CPLR 7801 et seq.

[2] Officers and Public Employees 283 72.53

283 Officers and Public Employees283I Appointment, Qualification, and Tenure

283I(H) Proceedings for Removal, Suspen-sion, or Other Discipline

283I(H)3 Judicial Review283k72.49 Scope of Review

283k72.53 k. Discretion of adminis-trative agency. Most Cited Cases

Officers and Public Employees 283 72.54

283 Officers and Public Employees283I Appointment, Qualification, and Tenure

283I(H) Proceedings for Removal, Suspen-sion, or Other Discipline

283I(H)3 Judicial Review283k72.49 Scope of Review

283k72.54 k. Arbitrary, unreason-able or capricious action; rational basis. Most CitedCases

Under Article 78, the Appellate Division is em-powered to determine whether the penalty of ter-mination of a public employee was arbitrary andcapricious as a matter of law such that there was anabuse of discretion. McKinney's CPLR 7803(3).

[3] Administrative Law and Procedure 15A758

15A Administrative Law and Procedure15AV Judicial Review of Administrative De-

cisions15AV(D) Scope of Review in General

15Ak754 Discretion of AdministrativeAgency

15Ak758 k. Sanctions. Most CitedCases

The reason for the enactment of the statute em-powering courts to review a disciplinary determina-tion of an administrative agency was to make itpossible, where warranted, to ameliorate harsh im-positions of sanctions by administrative agencies,

Page 176 A.D.3d 338, 905 N.Y.S.2d 262, 2010 N.Y. Slip Op. 06170(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)

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and that purpose should be fulfilled by the courtsnot only as a matter of legislative intention, but alsoin order to accomplish what a sense of justicewould dictate. McKinney's CPLR 7803.

[4] Municipal Corporations 268 198(4)

268 Municipal Corporations268V Officers, Agents, and Employees

268V(B) Municipal Departments and Of-ficers Thereof

268k193 Fire268k198 Suspension and Removal of

Firemen268k198(4) k. Review. Most Cited

CasesWhile due deference must be given to a de-

termination of the Fire Department, a court cannotoperate merely as a rubber stamp of the adminis-trative determination if the measure of punishmentor discipline imposed is so disproportionate to theoffense, in the light of all of the circumstances, asto be shocking to one's sense of fairness.

[5] Administrative Law and Procedure 15A758

15A Administrative Law and Procedure15AV Judicial Review of Administrative De-

cisions15AV(D) Scope of Review in General

15Ak754 Discretion of AdministrativeAgency

15Ak758 k. Sanctions. Most CitedCases

Where an administrative sanction shocks one'ssense of fairness and, thereby, as a matter of law,constitutes an abuse of discretion, the Appellate Di-vision is authorized to set aside such a determina-tion by the administrative agency.

[6] Municipal Corporations 268 198(4)

268 Municipal Corporations268V Officers, Agents, and Employees

268V(B) Municipal Departments and Of-

ficers Thereof268k193 Fire

268k198 Suspension and Removal ofFiremen

268k198(4) k. Review. Most CitedCases

Firefighter's termination of employment aftertesting positive for cocaine was so shocking to Ap-pellate Division's sense of fairness that annulmentof administrative agency's determination and im-position of lesser penalty of $80,000 fine was ap-propriate, where firefighter's termination would res-ult in loss of pension benefits valued at approxim-ately $2,000,000, and retirement benefits, firefight-er was sole wage earner of his family, firefighterwas exemplary member of Fire Department, andpositive drug test was isolated incident.

**263 Lynn, Gartner & Dunne, LLP, Mineola, N.Y.(John W. Dunne of counsel), for petitioner.

Michael A. Cardozo, Corporation Counsel, NewYork, N.Y. (Pamela Seider Dolgow and Suzanne K.Colt of counsel), for respondents.

WILLIAM F. MASTRO, J.P., STEVEN W. FISH-ER, ARIEL E. BELEN, and LEONARD B. AUS-TIN, JJ.

AUSTIN, J.*339 In this proceeding we are asked to de-

termine whether, under the particular circumstancesof this case, the penalty of termination of the peti-tioner's employment as a firefighter is so dispropor-tionate to the offense as to be shocking to one'ssense of fairness, thus constituting an abuse of dis-cretion.FN1 Because we conclude, as a matter oflaw, that the penalty of termination is shocking tothe judicial conscience, we set aside that penaltyand remit the matter to the respondents for the im-position of the lesser penalty allowing the petitionerto retire as of the date of the petitioner's termina-tion, June 27, 2008, and fining the petitioner thesum of $80,000.

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FN1. While the petitioner asserts in thefirst cause of action of his petition that thedetermination of the respondent Commis-sioner of the Fire Department of the Cityof New York that he was guilty of the dis-ciplinary charges brought against him bythe Fire Department of the City of NewYork related to testing positive for cocainewas not supported by substantial evidence,in his brief, the petitioner solely conteststhe severity of the penalty of terminationimposed by the Commissioner of the FireDepartment of the City of New York.

The petitioner is a 25–year member of the FireDepartment of the City of New York (hereinafterthe Department). After a positive random drug testconfirmed the presence of cocaine in the petition-er's system, a “Step–1” conference was held to re-view the charges for violation of regulationsbrought against the petitioner by the Department.Following that conference, a deputy assistant chiefof the Department recommended that, although hefound the petitioner guilty of all charges, due to“extenuating circumstances,” the petitioner shouldbe allowed to resign in addition to being fined thesum of $80,000, representing approximately oneyear's salary. The extenuating circumstances identi-fied by the deputy assistant chief consisted of thepetitioner's lengthy service to the Departmentwithout any previous disciplinary problems and thesevere hardship that termination would imposeupon the petitioner and his family since it would in-clude forfeiture of the petitioner's pension benefits.

*340 Thereafter, the Department submitted thematter to an administrative law judge for an“OATH” (Office of Administrative Trials andHearings) hearing. At the OATH hearing, numerouswitnesses testified on behalf of the petitioner attest-ing to his good character, devotion to the Depart-ment, and lack of prior drug usage, which **264was confirmed by prior negative drug test results.Moreover, the petitioner testified that he was thesole wage earner for his family and that the loss of

his pension and medical coverage would impose asevere hardship on his family. Notwithstanding theforegoing mitigating testimony, the administrativelaw judge determined that the only available appro-priate penalty pursuant to Administrative Code ofthe City of New York § 15–113 was termination ofthe petitioner's employment, which he recommen-ded. In a determination dated June 23, 2008, theCommissioner of the Fire Department of the City ofNew York (hereinafter the Commissioner) adoptedthe administrative law judge's recommendation andfindings, and terminated the petitioner's employ-ment.

As a result of his termination of employment,the petitioner forfeited his pension, which was val-ued at approximately $2,000,000, and retirementbenefits, which included health insurance coverage.

Prior to the Department's issuance of thecharges of violation of regulations to the petitioner,the Department had promulgated All Units Circular(hereinafter AUC) 202 which set forth its“zero-tolerance” policy with regard to the use andpossession of, inter alia, illegal drugs, which indis-putably included cocaine. Section 4.1 of AUC 202prohibited the use of any illegal drug while on oroff duty.

AUC 202 § 8.3 permits termination of a mem-ber of the Department with a finding of guilt on afirst offense. However, § 8.3 is not an absolutepolicy. AUC 202 § 8, entitled “Guidelines for Viol-ation of this Policy,” provides, “[t]hese guidelinesare designed to cover the most common infractions,but there may be cases that do not fit preciselywithin them. The Department reserves the right todepart from these guidelines as the exacerbating orextenuating circumstances of each individual caserequire” (parenthetical omitted).

[1][2][3] The power of the Commissioner todiscipline members of the Department, as set forthin Administrative Code of the City of *341 NewYork § 15–113,FN2 is reviewable under CPLR art-icle 78. Pursuant to CPLR 7803(3), this Court is

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empowered to determine whether the penalty of ter-mination of the petitioner was arbitrary and capri-cious as a matter of law such that there was an ab-use of discretion (see Matter of Pell v. Board ofEduc. of Union Free School Dist. No. 1 of Towns ofScarsdale & Mamaroneck, Westchester County, 34N.Y.2d 222, 235, 356 N.Y.S.2d 833, 313 N.E.2d321; see also Matter of Harp v. New York City Po-lice Dept., 96 N.Y.2d 892, 894, 730 N.Y.S.2d 786,756 N.E.2d 74; Matter of Kelly v. Safir, 96 N.Y.2d32, 38, 724 N.Y.S.2d 680, 747 N.E.2d 1280).“There is no doubt that the reason for the enactmentof the statute (CPLR 7803) was to make it possible,where warranted, to ameliorate harsh impositions ofsanctions by administrative agencies. That purposeshould be fulfilled by the courts not only as a mat-ter of legislative intention, but also in order to ac-complish what a sense of justice would dictate” (Matter of Pell, 34 N.Y.2d at 235, 356 N.Y.S.2d833, 313 N.E.2d 321).

FN2. Under Administrative Code of theCity of New York § 15–113, the Commis-sioner has the power to punish an offend-ing member of the Department “by reprim-and, forfeiture and withholding of pay fora specified time, or dismissal from theforce; but not more than ten days' pay shallbe forfeited and withheld for any offense.”

[4][5] While due deference must be given to adetermination of the Department (see Matter ofHarp, 96 N.Y.2d at 894, 730 N.Y.S.2d 786, 756N.E.2d 74; Matter of Kelly v. Safir, 96 N.Y.2d at38, 724 N.Y.S.2d 680, 747 N.E.2d 1280), a courtcannot operate merely as a rubber stamp **265 ofthe administrative determination “if the measure ofpunishment or discipline imposed is so dispropor-tionate to the offense, in the light of all of the cir-cumstances, as to be shocking to one's sense of fair-ness” ( Matter of Pell, 34 N.Y.2d at 233, 356N.Y.S.2d 833, 313 N.E.2d 321 [internal quotationmarks omitted]; see also Matter of Kelly v. Safir, 96N.Y.2d at 38, 724 N.Y.S.2d 680, 747 N.E.2d 1280).Thus, where the administrative sanction shocks

one's sense of fairness and, thereby, as a matter oflaw, constitutes an abuse of discretion, this Court isauthorized to set aside such a determination by theadministrative agency (see Matter of Kelly v. Safir,96 N.Y.2d 32, 724 N.Y.S.2d 680, 747 N.E.2d 1280;Matter of Featherstone v. Franco, 95 N.Y.2d 550,720 N.Y.S.2d 93, 742 N.E.2d 607; Matter of Pell,34 N.Y.2d 222, 356 N.Y.S.2d 833, 313 N.E.2d 321;Matter of Bovino v. Scott, 22 N.Y.2d 214, 216, 292N.Y.S.2d 408, 239 N.E.2d 345).

The Department's “zero tolerance” policy, nomatter how laudable in purpose, does not distin-guish between junior members of the Departmentand those who have served the Department wellpast the time that he or she could have retired, *342like the petitioner herein. The inflexibility of theapplication of AUC 202 § 8.3 to the petitioner iscontrary to the analysis set forth by the Court ofAppeals in Matter of Pell, which considered suchfactors as an employee's length of employment, theprobability that a dismissal will leave the employeewithout any alternative livelihood, the employee'sloss of retirement benefits, and the effect upon theemployee's innocent family in cases where there isan absence of grave moral turpitude and grave in-jury to the agency involved or to the public weal (see Matter of Pell, 34 N.Y.2d at 235, 356 N.Y.S.2d833, 313 N.E.2d 321). Likewise, AUC 202 § 8 au-thorizes departure from the guidelines under“extenuating circumstances.” The term“extenuating circumstances” is not defined in AUC202. Accordingly, we apply the standard enunciatedin Matter of Pell and its progeny (see Matter of Se-quist v. County of Putnam, 40 A.D.3d 1003, 836N.Y.S.2d 287 [ Pell factors applied in annulling thetermination of employment of school bus driverfound guilty of single drug infraction] ).

The testimony at the hearing was undisputedthat this was the first and only time that the peti-tioner had tested positive for an illegal drug; to wit,cocaine. Several times prior to and after the posit-ive test, the petitioner tested negative, unlike in oth-er cases where this Court had upheld the termina-

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tion of firefighters due to positive drug tests (seee.g. Matter of Kelly v. Scoppetta, 56 A.D.3d 475,866 N.Y.S.2d 770 [termination of a member of theDepartment who admitted to regular use of cocainewas confirmed by this Court] ).

[6] Here, due to the termination of his employ-ment, the petitioner and his family will suffer theconsequence of losing his pension and retirementbenefits the petitioner earned during his 25 years ofdedicated service to the Department. The loss ofthose pension benefits, valued at approximately$2,000,000, is particularly shocking in this contextbecause the petitioner chose to continue as a mem-ber of the Department even after he was eligible forfull retirement benefits after 20 years of service.The testimony is uncontroverted that the petitionerwas the sole wage earner of his family and that theloss of his benefits would be financially devastat-ing. Moreover, it is also undisputed that the peti-tioner was an exemplary member of the Depart-ment, considered to be a mentor and role modelwithin his firehouse.

This Court recognizes that the petitioner com-mitted a serious infraction which militates againsthis continued employment as a firefighter.However, this incident was isolated. When coupled*343 with the significant**266 loss of benefits, ter-mination of the petitioner's employment so that heforfeits all of his retirement benefits cannot be sus-tained. Indeed, we have held that the dismissal of along-term employee with an unblemished recordfollowing a singular positive drug test to be soshocking to our sense of fairness that annulment ofthe administrative agency's determination and theimposition of a lesser penalty was required (seeMatter of Sequist v. County of Putnam, 40 A.D.3d1003, 836 N.Y.S.2d 287).

Although we find that the penalty of termina-tion of the petitioner's employment must be an-nulled, the petitioner's continued employment withthe Department in this case is inappropriate. In suchcircumstance, we are authorized to impose a sanc-tion which we deem to be appropriate (see Matter

of Mitthauer v. Patterson, 8 N.Y.2d 37, 42–43, 201N.Y.S.2d 321, 167 N.E.2d 731; Matter of Lo Bellov. McLaughlin, 39 A.D.2d 404, 408, 334 N.Y.S.2d692, affd. 33 N.Y.2d 755, 350 N.Y.S.2d 406, 305N.E.2d 487).FN3 Accordingly, so much of the de-termination of the Commissioner as imposed thepenalty of termination of the petitioner's employ-ment should be annulled, and the petitioner shouldbe allowed to retire and be fined in the sum of$80,000, as recommended by the Department'sdeputy assistant chief following the Step–1 confer-ence.

FN3. Remittal to the Department for theimposition of an appropriate penalty as setforth herein is consistent with Rob TessRest. Corp. v. New York State Liq. Auth.,49 N.Y.2d 874, 427 N.Y.S.2d 936, 405N.E.2d 181 and Matter of Mitthauer v.Patterson, 8 N.Y.2d 37, 201 N.Y.S.2d 321,167 N.E.2d 731. The Mitthauer courtfound that “[i]n appropriate cases, whichwill probably be few, the reviewing courtcan order a lesser discipline, much as itdoes in criminal cases” ( Matter of Mit-thauer v. Patterson, 8 N.Y.2d at 42, 201N.Y.S.2d 321, 167 N.E.2d 731), whichmay include punishments not set forth inthe applicable law (id. at 42–43, 201N.Y.S.2d 321, 167 N.E.2d 731). Since theavailable sanctions under AdministrativeCode of the City of New York § 15–113are extremely limited and offer no accept-able option, we find that this case fallswithin the exception enunciated in Mit-thauer.

Our determination here should do no violenceto the line of cases which sustain the termination offirefighters who are found to have used illegaldrugs (see e.g. Matter of Kirk v. City of New York,47 A.D.3d 406, 848 N.Y.S.2d 169; Matter of Rein-hard v. City of New York, 34 A.D.3d 376, 825N.Y.S.2d 44). Rather, we address only the undulydisproportionate financial consequences of his ter-

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mination of employment on this petitioner and hisfamily and the circumstances of his otherwise un-blemished career.

Therefore, it is adjudged that the petition isgranted insofar as reviewed, on the law, to the ex-tent that so much of the determination as imposed apenalty of termination of the petitioner's employ-ment is annulled and the matter is remitted to the*344 respondents for the imposition of the lesserpenalty allowing the petitioner to retire as of June27, 2008, and fining the petitioner the sum of$80,000.

MASTRO, J.P., FISHER and BELEN, JJ., concur.ADJUDGED that the petition is granted insofar

as reviewed, on the law, with costs, to the extentthat so much of the determination as imposed apenalty of termination of the petitioner's employ-ment is annulled and the matter is remitted to therespondents for the imposition of the lesser penaltyallowing the petitioner to retire as of June 27, 2008,and fining the petitioner the sum of $80,000.

N.Y.A.D. 2 Dept.,2010.McDougall v. Scoppetta76 A.D.3d 338, 905 N.Y.S.2d 262, 2010 N.Y. SlipOp. 06170

END OF DOCUMENT

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TAB # 11

FIND Request: 70 A.D.2d 717

Supreme Court, Appellate Division, Third Depart-ment, New York.

In the Matter of Larry ROLLA, Respondent,v.

William C. BARRY et al., Appellants.

May 17, 1979.

In a proceeding to annul an order of the StateRacing and Wagering Board suspending a harnessracing license, relief was granted by judgment ofthe Supreme Court, Special Term, Sullivan County,Roger J. Miner, J., and an appeal was taken. TheSupreme Court, Appellate Division, held that inview of uncontradicted evidence that the horse wasan unpredictable animal and was tired after an earli-er race, evidence failed to sustain finding of theBoard that change in driving tactics was unjustifiedand was unexpected by wagering public and thusdid not give public “fair shake” and that licensethus should be suspended for racing in a manner in-consistent with an attempt to win, in violation ofregulation.

Affirmed.

West Headnotes

[1] Administrative Law and Procedure 15A651

15A Administrative Law and Procedure15AV Judicial Review of Administrative De-

cisions15AV(A) In General

15Ak651 k. In General. Most Cited CasesIn reviewing administrative decisions, courts

exercise genuine judicial function and do not con-firm determination simply because it was made bysuch an agency. CPLR 7801 et seq.

[2] Public Amusement and Entertainment 315T

35(2)

315T Public Amusement and Entertainment315TII Licensing and Regulation

315TII(A) In General315Tk31 Racing in General

315Tk35 Administrative Agencies andProceedings

315Tk35(2) k. Horse and Dog Ra-cing. Most Cited Cases

(Formerly 376k3.10, 376k3 Theaters andShows)

In view of uncontradicted evidence that horsewas unpredictable animal and was tired after earlierrace, evidence failed to sustain finding of State Ra-cing and Wagering Board that change in drivingtactics was unjustified and was unexpected bywagering public and thus did not give public “fairshake” and that license thus should be suspendedfor racing in manner inconsistent with attempt towin, in violation of regulation.

**429 Robert Abrams, Atty. Gen. (Lew A. Millen-bach, Asst. Atty. Gen., of counsel), for appellants.

Marvin Newberg, Monticello, for respondent.

*718 Before MAHONEY, P. J., and GREEN-BLOTT, KANE, MAIN and MIKOLL, JJ.

MEMORANDUM DECISION.*717 Appeal from a judgment of the Supreme

Court at Special Term, entered September **430 5,1978 in Sullivan County, which granted petitioner'sapplication, in a proceeding pursuant to CPLR art-icle 78, seeking to annul an order of the New YorkState Racing and Wagering Board suspending peti-tioner's harness racing license for 15 days.

Petitioner commenced this article 78 proceed-ing to annul the New York State Racing andWagering Board's (Board) determination that pur-suant to 9 NYCRR 4117.4(n), petitioner's harnessracing license should be suspended for 15 days for

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racing in a “manner inconsistent with an attempt towin”. Special Term concluded that the determina-tion was arbitrary, capricious and an abuse of dis-cretion because it was without foundation in fact.

On April 2, 1978 petitioner drove the horse“Some Network” in the sixth race at MonticelloRaceway and won by five lengths. The race was a“C-1/C-2 handicap trot” and “Some Network”, thenumber 2 horse, was driven “up front” by petitionerto a 2:07:1 “wire-to-wire win”. On April 5, 1978“Some Network”, again driven by petitioner, racedfrom the number 5 post position in a come from be-hind fashion to a 2:11 third place finish in the sixthrace at Monticello.

By a notice of suspension dated April 6, 1978,petitioner was notified by William Dunson, presid-ing judge-steward at Monticello, that he was sus-pended from driving in races for 15 days for violat-ing 9 NYCRR 4117.4(n). The notice stated that“(w)hile driving # 5 (Some Network) in the 6th racethe drive was inconsistent with the drive of thesame horse in the 6th race of April 2nd, 1978 res-ulting in an obvious reversal of form.” Petitionerappealed his suspension and was granted a hearingbefore the New York State Racing and WageringBoard. The hearing officer in his report concludedthat the decision of the judges at Monticello Race-way was a correct exercise of their judgment. TheRacing and Wagering Board in its findings and or-der concluded that there was no justification for pe-titioner to have changed from driving “Some Net-work” up-front to a drive from behind as he did onApril 5, 1978. The Board further stated that thechange in driving strategy on April 5, 1978 was notexpected by the wagering public and it, therefore,confirmed petitioner's suspension.

[1] The dispositive issue raised by this appealis whether the Board's determination was supportedby substantial evidence and, more specifically,whether there was a rational basis for the findingthat petitioner was unjustified in changing his driv-ing tactics. It is well-settled that an administrativedetermination supported by a rational basis must be

confirmed by the courts, who may not substitutetheir judgment for that of an agency, unless the de-cision under review is arbitrary, capricious and con-stitutes an abuse of discretion ( Matter of Pell v.Board of Educ., 34 N.Y.2d 222, 231-232, 356N.Y.S.2d 833, 839-840, 313 N.E.2d 321, 325-326).In reviewing administrative decisions, however,courts exercise a “genuine judicial function” and donot confirm a determination “simply because it wasmade by such an agency” ( 300 Gramatan Ave. As-soc. v. State Div. of Human Rights, 45 N.Y.2d 176,181, 408 N.Y.S.2d 54, 57, 379 N.E.2d 1183, 1186).

[2] At the hearing of this matter, the presidingjudge-steward at Monticello Raceway testified thathe, along with two other judges, observed both theApril 2nd and April 5th races, and, after reviewingboth races on video tape, concluded that “there wasa discrepancy, quite a change in performance, andwe felt the public didn't get a fair shake”. Hereasoned that the time when a driver should changetactics is when his horse is moved up in class wherethe competition is greater, but not when the horse isthe short priced favorite against the same class ofhorse. He felt that the most important factor regard-ing petitioner's culpability was the fact that “hedidn't leave with the horse, didn't show the samekind of race that he did for us on the 2nd, as hewent to the top and just continued motoring, and wefelt as though this horse was capable of the samekind of performance three days later on the 5th, andthat this was not the case. And there, we felt as**431 though that the horse could just motor by thefield, after what he demonstrated on the 2nd.” Hestated that “by not leaving with the horse” duringthe April 5th race, petitioner lost the opportunity togive the public, who had based their wagering onthe April 2nd performance, a “fair shake”. He fi-nally stated that the track and weather conditionsduring both meets were substantially the same. Asnoted, the Board concluded that petitioner's changein driving tactics was unjustified.

The record, however, reveals that a change indriving tactics was justified. Petitioner explained

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that “Some Network” had a “very bad reputation”and was essentially “a wild horse” on the eveningof April 2nd; consequently, he was forced to let thehorse run “wherever he wanted”. The horse ran fastduring the first half mile, but “tired very badly”after the last turn, finishing the last quarter in the“extremely slow” time of “thirty-four and change”.In the uncontradicted opinion of petitioner, thehorse came out of the April 2nd race physically ex-hausted: the horse “just tore himself up”; he was“wiped out”; he was a “nervous wreck”; and he“choked, he choked three times warming up”. Ac-cordingly, petitioner explained that the owner andtrainer determined that “Some Network” would bemore effective racing from behind than up-front; in-deed, in petitioner's view, he “didn't think that thishorse could ever win another race racing in front”.Consequently, equipment changes made before theApril 5th race in an effort to calm the horse andmake him manageable, were ordered by the trainer,who expressly instructed petitioner to race thehorse in a come from behind fashion. Petitionernoted that on April 5th the horse ran a faster lasthalf-mile than on April 2nd; and on April 12th,when rested, won a race employing this come frombehind style. Petitioner finally testified that the in-structions he received from the trainer of “SomeNetwork” were the “right thing to do”.

The Board produced no evidence indicatingthat “Some Network” was not an unpredictable an-imal, or that it was not tired after the April 2ndrace. Rather, the presiding judge dismissed thisfactor by noting that some horses go two dashes thesame afternoon and, therefore, it should not be aconsideration.

In view of petitioner's uncontradicted testi-mony, we agree with Special Term's conclusionthat the record does not contain a rational basis forthe finding that a change in driving tactics was un-justified and, that it cannot be said that the horsewas driven in the second race “in a manner incon-sistent with an attempt to win”. Since the Board'saction was without foundation in fact, Special Term

properly annulled its determination ( Matter of Pellv. Board of Educ., supra, 34 N.Y.2d p. 231, 356N.Y.S.2d p. 839, 313 N.E.2d p. 325).

Judgment affirmed, without costs.

N.Y.A.D., 1979.Rolla v. Barry70 A.D.2d 717, 416 N.Y.S.2d 429

END OF DOCUMENT

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