MBIA Trial Docs2

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 agencys 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 Commcns, 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 agencys 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 Dept of Soc. Servs., 181 A.D.2d 12, 15 (3d Dept 1992):
[T]he term x-ray . . . is not a technical term within defendants area of
expertise. Accordingly, this court is not required to give special deference to
defendants interpretation of the term.
8. Lewis Family Farm, Inc. v. N.Y. State Adirondack Park Agency, 64 A.D.3d
1009, 1013 (3d Dept 2009): Court refused to defer to an agencys interpretation
of a defined term because there is little or no need to rely on any special
expertise on the agencys 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
FILED: NEW YORK COUNTY CLERK 06/11/2012
INDEX NO. 601846/2009
NYSCEF DOC. NO. 308 RECEIVED NYSCEF: 06/11/2012

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 Dept 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 Dept 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. In
separate action, employer sought review of Board's
award of benefits. The Supreme Court, Appellate
Division, 221 A.D.2d 781, 633 N.Y.S.2d 242, af-
firmed. Employer appealed. The Court of Appeals
consolidated cases and, per Titone, J., held that
claimants' voluntary departure from covered em-
ployment disqualified them from receiving unem-
ployment insurance benefits, and their eligibility
was not revived because they left subsequent non-
covered school-related posts without fault.
Reversed and remanded.
Levine, J., filed dissenting opinion in which
Ciparick, J., joined.
West Headnotes
[1] Unemployment Compensation 392T 101
392T Unemployment Compensation
392TIV 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 separates
without good cause from her last employment,
refers to covered employment, and thus claimant
who leaves her last covered employment without
good cause does not become eligible for benefits by
subsequently leaving noncovered employment with
good cause. McKinney's Labor Law 593, subd. 1.
[2] Statutes 361 176
361 Statutes
361VI Construction and Operation
361VI(A) General Rules of Construction
361k176 k. Judicial Authority and Duty.
Most Cited Cases
Proper interpretation of statute ordinarily
presents issue of law reserved for courts.
[3] Statutes 361 219(1)
361 Statutes
361k213 Extrinsic Aids to Construction
361k219 Executive Construction
361k219(1) k. In General. Most
Cited Cases
Where statute's interpretation or application in-
volves knowledge and understanding of underlying
operational practices or entails evaluation of factual
data and inferences to be drawn therefrom, courts
regularly defer to governmental agency charged
with responsibility for administration of statute, and
will not disturb interpretation if it is supported by
rational basis.
[4] Statutes 361 219(1)
674 N.E.2d 1354 Page 1
89 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)
2012 Thomson Reuters. No Claim to Orig. US Gov. Works.
361 Statutes
Cited Cases
If question is one of pure statutory reading and
analysis, dependent only on accurate apprehension
of legislative intent, judiciary need not accord any
deference to agency's determination, and is free to
ascertain proper interpretation from statutory lan-
guage and legislative intent, since there is little
basis to rely on any special competence or expertise
of administrative agency.
392TI 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 no
fault of their own and who, though unemployed, are
genuinely in labor market. McKinney's Labor Law
501.
ployment
392Tk100 k. In General. Most Cited
Cases
(Formerly 356Ak401)
That claimant who departs from noncovered
employment may be as economically needy as
claimant who departs from covered employment is
not 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 public
relief type plan for all workers who become unem-
ployed.
ployment
Cases
(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.
ployment
Cases
(Formerly 356Ak401)
Claimants' voluntary departure from covered
employment disqualified them from receiving un-
employment insurance benefits, and their eligibility
for benefits was not revived because they left sub-
sequent noncovered schoolrelated posts without
fault. McKinney's Labor Law 593, subd. 1.
***591 *226 **1356 Paul A. Crotty, Corporation
Counsel, New York City (Ellen Ravitch and Steph-
en J. McGrath, of counsel), for appellant in the first
and second above-entitled proceedings.
*227 Francis J. Smith, Jr., Albany, for David
Gruber, respondent in the first above-entitled pro-
ceeding.
McNamee, Lochner, Titus & Williams, P.C., Al-
bany (David J. Wukitsch, of counsel), for Kent A.
674 N.E.2d 1354 Page 2
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
Greene, respondent in the second above-entitled
proceeding.
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 and
second above-entitled proceedings.
*228 OPINION OF THE COURT
TITONE, Judge.
[1] Labor Law 593(1) provides that claimants
will be disqualified from receiving unemployment
insurance benefits if they voluntarily separate
without good cause from their last employment
prior to the filing of an unemployment claim. In
each of these two cases, the Unemployment Insur-
ance Appeal Board determined that the words last
employment as used in that section did not refer to
the last covered employment as that term is
defined in Labor Law 511, but referred to the
claimant's last actual employment, regardless of
whether 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 determinations
below. Having performed that function, we con-
clude that the term last employment refers to
covered employment, and that these claimants were
disqualified from receiving benefits because they
voluntarily 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 Sinai
Medical School in May 1983 and received a medic-
al degree. He was employed as a research assistant
for the New York City Department of Health from
July 15, 1983 through June 13, 1984. He resigned
from the City post to accept a position in a medical
residency program at St. Luke's, which is a teaching
hospital accredited by the AMA.
Gruber's contract with St. Luke's was executed
on March 22, 1984 and covered a one-year term to
commence on July 1, 1984. However, claimant re-
ceived permission to begin rendering his services
for the hospital at an earlier date, and began making
rounds on June 18, 1984. After only several days at
the hospital, claimant became emotionally ill and
was 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 Labor
Law 593(1) was with St. Luke's, that he lost such
employment because of illnessa nondisqualifying
conditionand thus that he was eligible to receive
unemployment insurance. The office determined
that claimant's employment with St. Luke's was not
covered employment, and thus charged the City
of New York for claimant's benefits under Labor
Law 581(1)(e) as claimant's last employer.
Respondent City of New York objected to the
ruling, contending that either (1) St. Luke's should
be liable if claimant's employment with the hospital
does not fall within the exclusion to the definition
of employment under Labor Law 511(15), or
(2) if claimant's employment with St. Luke's is
deemed to be student services excluded from the
definition of covered employment, then the City
Department 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 educationa
disqualifying condition. The Labor Commissioner
***592 **1357 determined that claimant was eli-
gible for benefits. However, after concluding that
claimant's employment at St. Luke's Hospital was
not covered employment, the Commissioner
charged the City Department of Health for
claimant's benefits.
674 N.E.2d 1354 Page 3
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
Respondent City objected to the Commission-
er's determination. A hearing was then held before
an Administrative Law Judge (ALJ) of the New
York State Department of Labor. The ALJ con-
cluded that claimant was eligible for benefits and
that claimant's employment with St. Luke's did not
fall under the exception created by Labor Law
511(15) because claimant's service as a medical
resident did not constitute services rendered for an
educational institution by a person who is enrolled
and is in regular attendance as a student in such an
institution. Thus, the ALJ sustained the City's ob-
jection, and overruled the Labor Commissioner's
determination that claimant's employment with St.
Luke's was not covered employment. St. Luke's was
thus charged for Gruber's benefits.
On appeal taken by the Commissioner of Labor
and St. Luke's, the Unemployment Insurance Ap-
peal Board determined that claimant's services at
St. Luke's did fall within the section 511(15) excep-
tion to the definition of employment, and St. Luke's
was not liable for claimant's benefits. However, the
Appeal Board determined that for purposes of
Labor Law 593(1), claimant's last employment
was with St. Luke's and he left this employment
with good cause and under nondisqualifying*230
conditions. The Board reasoned that the term
employment as used in section 593(1) meant any
employment, not only covered employment as
defined in Labor Law 511. Thus, the Board con-
cluded that the City Department of Health was
primarily chargeable for claimant's benefits because
that employment was covered. The Appellate Di-
vision affirmed. We granted the City's motion for
leave to appeal, and now reverse.
Matter of Greene
Claimant Greene was simultaneously employed
by the City of New York Department of Health and
by the College of Staten Island as a teacher while
enrolled in a Master's Degree program at the latter
institution. He voluntarily terminated his employ-
ment with the City Department of Health on May
24, 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 the
local office ruled that he was eligible. The City of
New York objected and a hearing was held before a
State Department of Labor ALJ. The ALJ found
that claimant was eligible for benefits, concluding
that although claimant's last employment was not
in covered employment pursuant to Section 511(15)
, it is nevertheless employment which should be
considered to adjust the issue of who the last em-
ploy[er] [sic] was and under which circumstances
the last employment came to an end. The ALJ con-
cluded that claimant's employment with the college
was his last employment and although that was not
covered employment it is not self-employment and
it may be counted to break the disqualification that
is apparent for voluntar[ily] [sic] leaving the muni-
cipal employment.
The City appealed. The Appeal Board adopted
the findings of fact and opinion of the ALJ and con-
firmed the ALJ's determination. The Appeal Board
concluded that Greene's work as a teacher was not
covered employment and should not be considered
in computing his benefit rate or experience charges.
Nonetheless, the Appeal Board concluded that
claimant was eligible for benefits because his last
employment was at school and * * * it ended under
nondisqualifying conditions.
The Appellate Division affirmed. The Court
reasoned that [a]lthough claimant's employment
with the College was not covered employment * *
* it was nevertheless sufficient to break claimant's
prior disqualification which resulted when he *231
left his job with the City. (221 A.D.2d 789, 790,
633 N.Y.S.2d 670.) The Court noted that Labor
Law 593(1)(a) does not specify that a claimant's
last employment must be covered employment
for purposes of disqualification (id., at 790, 633
N.Y.S.2d 670.) The Court concluded that since
claimant left his ***593 **1358 actual last employ-
ment with the college under nondisqualifying con-
ditions, the Appeal Board's decision that claimant
674 N.E.2d 1354 Page 4
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
was eligible for benefits was supported by
substantial evidence. This Court granted the
City's motion for leave to appeal, and we now re-
verse.
II.
1. Standard of Review
[2][3] Judicial review of the determinations of
the 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,
149150, 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 the
courts, this Court has recognized that [a]n admin-
istrative agency's interpretation of the statute it is
charged with implementing is entitled to varying
degrees of judicial deference depending upon the
extent to which the interpretation relies upon the
special competence the agency is presumed to have
developed in its administration of the statute (
Matter of Rosen v. Public Empl. Relations Bd., 72
N.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 drawn
therefrom, the courts regularly defer to the govern-
mental agency charged with the responsibility for
administration of the statute (Kurcsics v. Mer-
chants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426
N.Y.S.2d 454, 403 N.E.2d 159; see also, Matter of
Industrial Liaison Comm. of Niagara Falls Area
Chamber of Commerce v. Williams, 72 N.Y.2d 137,
144, 531 N.Y.S.2d 791, 527 N.E.2d 274). When
such deference is appropriate, the courts will not
disturb the Appeal Board's interpretation of the pro-
vision if it is supported by a rational basis ( Matter
of Fisher [Levine], 36 N.Y.2d, at 150, 365
N.Y.S.2d 828, 325 N.E.2d 151, supra; Matter of
Van Teslaar [Levine], 35 N.Y.2d 311, 318, 361
N.Y.S.2d 338, 319 N.E.2d 702).
[4] By contrast, where 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 (Kurcsics v.
Merchants Mut. Ins. Co., 49 N.Y.2d, at 459, 426
N.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 to
ascertain the *232 proper interpretation from the
statutory language and legislative intent ( Matter of
Van Teslaar [Levine], 35 N.Y.2d, at 318, 361
N.Y.S.2d 338, 319 N.E.2d 702, supra; see also
Matter 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 the
words last employment contained in Labor Law
593(1) refer to the last covered employment as
that term is defined in Labor Law 511, or whether
in 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), and
has directed that statutory definitions are to be ap-
plied to interpret the article unless the context
shows otherwise (Labor Law 510).
By defining the specific classes of employment
that the Law is designed to cover and by directing
the manner in which the definitional provisions are
to be applied, the Legislature has withdrawn that
policy-laden determination from the agency (cf.,
Chevron U.S.A. v. Natural Resources Defense
Council, 467 U.S. 837, 843844, 104 S.Ct. 2778,
27812783, 81 L.Ed.2d 694). Further, the question
of what employment means in Labor Law
593(1) may be resolved by considering the relevant
statutory language, design and purpose (see, e.g.,
Matter of Ferrara [Catherwood], 10 N.Y.2d, at
78, 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, Matter
of Heimbach v. Metropolitan Transp. Auth., 75
N.Y.2d 387, 390, 553 N.Y.S.2d 653, 553 N.E.2d
674 N.E.2d 1354 Page 5
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
242; cf., Matter of Industrial Indem. Co. v. Cooper,
81 N.Y.2d 50, 54, 595 N.Y.S.2d 726, 611 N.E.2d
765). ***594 **1359 Accordingly, contrary to the
position of the dissent, there is no interpretative
gap left to be filled by the agency (see, dissenting
opn., at 243), and deference to the agency determin-
ations below is unnecessary (see, e.g., Matter of
Ferrara [Catherwood], 10 N.Y.2d 1, 79, 217
N.Y.S.2d 11, 176 N.E.2d 43, supra; Matter of Van
Teslaar [Levine], 35 N.Y.2d 311, 318, 361
N.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, 555
N.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 complied
with all eligibility criteria (see, e.g., Labor Law
527, 591[1], [2] ), will be disqualified from receiv-
ing unemployment insurance benefits. One such
disqualification is voluntary separation from a
claimant's last employment without good cause (
*233Labor Law 593[1] [a] ).
FN1
Here, we are
concerned with the construction of the term last
employment as used in that section. The question
arises in these appeals because the claimants' separ-
ation from their last covered employment oc-
curred under Labor Law 593(1)'s disqualifying
circumstances, 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 determining
claimants' entitlement.
FN1. Specifically, section 593(1)(a)
provides that [n]o days of total unemploy-
ment shall be deemed to occur after a
claimant's voluntary separation without
good cause from his last employment prior
to the filing of his claim until he has sub-
sequently worked in employment on not
less than three days in each of five weeks
and earned remuneration at least equal to
five times his weekly benefit rate
(emphasis supplied).
Labor Law 510 provides that [w]henever
used in this article, the terms defined in this title
have the respective meanings set forth herein except
where the context shows otherwise (emphasis sup-
plied). Thus, the statutory definition of
employment and its exceptions will govern our
interpretation of the words last employment in
section 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 or
implied, written, or oral. However, the statute goes
on 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] ), freelance
shorthand reporters (Labor Law 511[18] ), and
services for an educational institution by an en-
rolled student who is in regular attendance (Labor
Law 511[15] ). Employers of persons who
provide services in the categories that are excluded
from the statutory definition of employment are not
obligated to make contributions to the unemploy-
ment insurance fund for those services (see, Labor
Law 517[2][i]; see also, Matter of Hollis Hills
Jewish Ctr. [Roberts], 92 A.D.2d 1039, 461
N.Y.S.2d 555). Thus, under section 511, the term
employment is specifically made synonymous
with covered employment.
Neither the language nor the context of section
593(1) shows that the Legislature intended to depart
from the statutory definition of the term
employment. The absence of any such indication
is especially significant because the Legislature has
revealed its intention to include in the term
employment *234 work not covered by the article
by 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,
674 N.E.2d 1354 Page 6
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
the Legislature defined the eligibility requirement
of total unemployment, as the total lack of any
employment on any day and expressly provided
within 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 the
claimant refuses to accept an offer of employment
for which he is reasonably fitted by training and ex-
perience, including employments not subject to this
article (Labor Law 593[2] [emphasis supplied]
). Given that the Legislature used distinct language
in subdivision (2) when it intended to include em-
ployments other than those included in the statutory
definition of the term employment (Labor Law
510), the absence of similar language in the text of
the immediately preceding subdivision of the same
section 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, at
1361 of 674 N.E.2d).
FN3
FN2. Thus, any employment, even in an
industry that is not covered by the Law,
excludes the condition of total unemploy-
ment. For example, an unemployed person
who has obtained a temporary job on a
farm 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 of
Labor 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, 361
N.Y.S.2d 941 for the proposition that in
determining whether an employee is dis-
qualified from receiving unemployment in-
surance benefits, the courts should focus
exclusively on the circumstances of the
ending of the last employment, irrespective
of any disqualifying reason for the loss of
some prior employment. (Dissenting opn.,
at 239, at 598 of 652 N.Y.S.2d, at 1363 of
674 N.E.2d). In both Mittleman and Finkel,
however, the last employment was covered
employment, and thus those cases do not
support the dissent's position that the em-
ployment that is last in timewhether or
not covered under the Unemployment In-
surance Lawis the only employment that
is relevant to the determination under sec-
tion 593(1).
[5][6] Notwithstanding the dissent's assertions
to the contrary, interpreting section 593(1) to refer
only to last covered employment does serve to
advance the over-all purpose of the legislation,
which is to protect certain classes of workers who
*235 are involuntarily unemployed through no
fault 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 the
labor market (Colin, Unemployment Insurance in
New York, at 202 [NYU Inst. of Labor Relations
and Social Security 1950] [emphasis supplied] ). In
defining the reach of the system, the Legislature
chose to exclude from the recognized labor market
certain categories of workers in specific indus-
tries and employees who are deemed only casu-
ally attached to the labor market (id., at 135), such
as students employed by their educational institu-
tions who are considered to have chosen education
rather 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 has
voluntarily opted out of employment in the re-
674 N.E.2d 1354 Page 7
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
cognized labor marketas defined by Labor Law
511it makes sense to conclude that the individual
is disqualified from recovering benefits, notwith-
standing that individual's subsequent acceptance of
work in a sector of the economy that is outside that
market. In a statutory scheme that depends upon
participation in the legislatively defined labor mar-
ket, only events occurring within that market are
relevant, at least absent a clear indication to the
contrary. That a worker who has departed from
noncovered employment may be as economically
needy 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, not
a 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, 319
N.E.2d 702, supra ).
[7] Under Labor Law 593, eligible status may
be restored when the previously disqualified
claimant subsequently work[s] in employment on
not less than three days in each of five weeks and
earn[s] remuneration at least equal to five times his
weekly benefit rate (Labor Law 593[1][3]
[emphasis added] ). Again, nothing in the context
of this section indicates that the italicized term
employment should be given any other meaning
than that defined by the ***596 **1361 Legis-
lature. Thus, for example, a claimant's eligibility
for unemployment benefits may be revived after
loss of earlier covered employment without good
cause when the claimant is involuntarily removed
from subsequent covered employment (see, e.g.,
Matter of Finkel, Nadler & Goldstein [Levine], 46
A.D.2d 196, 361 N.Y.S.2d 941, supra; Matter of
Mittleman [Corsi], 282 App.Div. 587, 125
N.Y.S.2d 840, supra ).
[8] Here, by contrast, claimants never obtained
subsequent employment after leaving their
covered employment and *236 thus, under the
scheme devised by the Legislature, did not revive
their status as eligible beneficiaries of the unem-
ployment insurance program. Sympathetic as the
cases of these claimants may be, they were disqual-
ified from receiving benefits upon their voluntary
departure from covered employment, and their eli-
gibility for benefits was not revived because they
left 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 the
Unemployment Insurance Appeal Board for further
proceedings in accordance with the opinion herein.
LEVINE, Judge. (dissenting).
I respectfully dissent. The Unemployment In-
surance Appeal Board and the Appellate Division
were entirely correct in interpreting the statutory
disqualification from entitlement to unemployment
insurance 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 unemployment
during the Great Depression (see, W.H.H. Cham-
berlin, Inc. v. Andrews, 271 N.Y. 1, 89, 2 N.E.2d
22, affd 299 U.S. 515, 57 S.Ct. 122, 81 L.Ed. 380).
The majority's overliteral application of all of the
statutory definitional exclusions from employment
to the disqualification-for-benefits provisions of the
Unemployment Insurance Law conflicts with the
central 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 the
Legislature expressly prescribed as a guide to the
interpretation and application of this article (id.).
Moreover, application of the majority's interpreta-
tion will create anomalies, incongruous results and
unnecessary inconsistencies in the administration of
674 N.E.2d 1354 Page 8
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
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 from
that 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 to
pick and choose among definitional exclusions in
interpreting employment or last employment under
section 593, and the majority has not attempted to
do so.
In addition to the strongly worded direction
that the essential protective purpose of the Unem-
ployment Insurance Law shall be the overriding
basis of construction of its provisions, the Legis-
lature took the further precautionary measure
against formalistic interpretation of the law by
providing that the terms defined in this title have
the respective meanings set forth herein except
where the context shows otherwise (Labor Law
510 [emphasis supplied] ). Thus, the drafters of the
Unemployment Insurance Law explicitly conveyed
their anticipation and approval of implied devi-
ations from and exceptions to the definition of em-
ployment, as shown by the context in which that
term may be used in the statute.
***597 **1362 Examination of the various
statutory exclusions from the definition of employ-
ment in section 511 and in other provisions of the
unemployment insurance article shows (and the ma-
jority agrees [see, majority opn, at 233, at 594 of
652 N.Y.S.2d, at 1359 of 674 N.E.2d] ) that their
primary purpose is, through designating excluded
categories of employment service, to restrict cover-
age. That is, these exclusions eliminate classes of
employers from liability for unemployment insur-
ance tax contributions, and correspondingly restrict
the eligibility of their employees for benefits. Thus,
while employment is broadly defined in its general
common-law meaning of any service under any
contract of employment for hire, express or im-
plied (Labor Law 511[1][a] ), the statute goes on
to 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 (Labor
Law 511[18] ); a qualified real estate agent (
Labor Law 511[19] ); a duly ordained minister
serving 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 persons
providing the services in those categories are in-
eligible for benefits based on that employment,
even when they lose their jobs for nondisqualifying
reasons, and their employers*238 are not required
to 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 of
Wildcat Serv. Corp. [Ross], 78 A.D.2d 710, 432
N.Y.S.2d 279).
Contrary to the suggestion of the majority
(majority opn, at 234235, at 594595 of 652
N.Y.S.2d, at 13591360 of 674 N.E.2d), there is a
virtually complete absence of coherence between
the statutory coverage exclusions and the over-all
protective and ameliorative purpose of the Unem-
ployment Insurance Law. Coverage issues generally
reflect political, burden/benefit-weighing policy de-
cisions by legislatures, having little if anything to
do with the needs of the unemployed. Thus, the ag-
ricultural labor exclusion (Labor Law 511 [6] ),
found in even the earliest Federal and most State
unemployment insurance compensation laws, was
attributable 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. Southern
Coal & Coke Co., 301 U.S. 495, 512, 57 S.Ct. 868,
873874, 81 L.Ed. 1245). Employment in family
businesses was excluded (see, Labor Law 511[7]
674 N.E.2d 1354 Page 9
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
) 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 contained
in Labor Law 511[15] at issue here) were incor-
porated (see, L. 1971, ch. 1027, 1) when it was
necessary to expand State coverage (in that instance
to most nonprofit employers) in conformity with
Federal law, in order to avoid loss of credits to New
York employers on their Federal payroll taxes for
their State contributions, and loss of Federal grants
for the administration of the State unemployment
insurance system (see, Mem of Dept of Labor, Bill
Jacket, L. 1971, ch. 1027, at 1920). Subsequent
Federal 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, certain
exclusions from the definition of employment be-
come statutorily converted to covered employment
when an employer elects, with the approval of the
Commissioner 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 of
covered and noncovered employment hardly sug-
gest the existence of some deliberately created, co-
herent protected labor market system, which is
the underpinning upon which the majority bases its
conclusion that coverage and disqualification issues
*239 are actually within the same context (see,
majority***598 **1363 opn, at 235, at 595 of 652
N.Y.S.2d, at 1360 of 674 N.E.2d).
Moreover, as the foregoing discussion shows, it
is similarly impossible to find any coherent, con-
sistent relationship between the coverage provisions
and the purpose and guiding spirit of the law as out-
lined in Labor Law 501. Thus, the common issue
in these appeals has nothing to do with coverage, it
is the unrelated question of the meaning of the
phrase last employment in the disqualification for
benefits section (Labor Law 593). Unlike the cov-
erage provisions, Labor Law 593 manifestly has
as its underlying rationale and context, the singu-
larly expressed purpose of the unemployment insur-
ance legislation to protect workers who have lost
their jobs through no fault of their own (Labor
Law 501). Thus, an unemployed worker is dis-
qualified from receiving benefits for voluntary
separation without good cause from his last em-
ployment prior to the filing of his claim (Labor
Law 593[1][a] [emphasis supplied] ); los[ing]
his last employment prior to the filing of his claim
through 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 disqualified
from receiving benefits for refusing an offer of ree-
mployment without good cause * * * including
employments not subject to this article (Labor
Law 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 for
benefits, as in the case of a voluntary separation or
a 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 loss
of some prior employment. Thus, in Matter of Mit-
tleman (Corsi), 282 App.Div. 587, 125 N.Y.S.2d
840, a worker who left one job under a disqualify-
ing condition (voluntary separation without good
cause), was nevertheless ruled eligible for benefits
after involuntarily being laid off from a temporary
position she took shortly thereafter (see also, Mat-
ter of Cowan [Catherwood], 17 A.D.2d 232, 233
N.Y.S.2d 779). And the experience-rated account of
the prior employer may constitutionally be charged
for 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
674 N.E.2d 1354 Page 10
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
dismiss appeal granted 37 N.Y.2d 740, 374
N.Y.S.2d 1029, 337 N.E.2d 148).
*240 Moreover, contrary to the position of the
majority, disqualification does not automatically
follow when an individual has voluntarily opted
out of employment in the recognized labor mar-
ketas defined by Labor Law 511 (majority
opn, at 235, at 595 of 652 N.Y.S.2d, at 1360 of 674
N.E.2d). Leaving one employment for other work
generally constitutes good cause, and thereby
avoids disqualification (see, Matter of Curran
[Levine], 50 A.D.2d 681, 375 N.Y.S.2d 202
[Sweeney, J., dissenting], revd on dissenting mem
below 41 N.Y.2d 856, 393 N.Y.S.2d 709, 362
N.E.2d 260). That rule applies even when the new
position is not covered employment. Thus, in Mat-
ter of Dank (Ross), 81 A.D.2d 717, 437 N.Y.S.2d
730, the Court held that a psychologist's voluntary
termination of covered employment in this State to
take a similar full-time position at a hospital in Is-
rael (clearly not covered employment [see, Labor
Law 511(5) ] ), did not require disqualification (
see also, Colin, Employment Insurance in New
York, at 244 [leaving a job to start a business con-
stitutes good cause] ).
Since disqualification issues ordinarily focus
on the reasons for the claimant's loss of last em-
ployment and not previous employments, and since
a voluntary transfer from covered to noncovered
employment is not a ground for disqualification, it
was 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 disqualification
provisions of the statute. Having found that good
cause existed for their loss of those last actual em-
ployments, the Appeal Board quite properly awar-
ded them ***599 **1364 the benefits for which
they earned eligibility through prior service in
covered employment.
Thus, in my view, the Appeal Board's decisions
here are consistent with the general symmetry and
purpose of the Unemployment Insurance Law, and
certainly, the context of the statutory disqualifica-
tion provisions. On the other hand, the majority's
interpretation conflicts with the overriding purpose
of the law and creates needless anomalies and in-
congruities in the administration of the unemploy-
ment insurance system. To briefly illustrate, under
the majority's interpretation of last employment,
a worker whose covered employment terminated
for nondisqualifying reasons and who then took a
job in noncovered employmentsuch as an ex-
cluded position with a nonprofit organization or
government entitywould be eligible for benefits
even if that last actual employment ended because
of the employee's misconduct or commission of a
felony in connection with the job (e.g., a minister
embezzling from the congregation, or an official
accepting a bribe). Moreover, under the *241 ma-
jority's holding, two workers similarly situated in
that (1) they were both terminated from covered
employment for disqualifying reasons; (2) they
both obtained work in a section 511 definitionally
excluded category of employment service; and (3)
they were both laid off involuntarily, will receive
different disqualification determinations dependent
on whether their actual last employment was with a
nonprofit 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 no
practical or logical relationship to the stated policy
of 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 it
is unassailable that, at the least, the Unemployment
Insurance Appeal Board could rationally conclude
that in the disqualification context, last employ-
ment is not limited by the statutory exclusions to
the definition of employment which are primarily
designed to provide standards for coverage. The
674 N.E.2d 1354 Page 11
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
agreement with the Appeal Board's interpretation
by the Appellate Divisiona Court with a long tra-
dition and wide experience in judicial review of the
administration of the Unemployment Insurance
Lawsupports the rationality of the Appeal
Board's decision. In my view, the reasonableness of
the Appeal Board's interpretation of last employ-
ment under Labor Law 593 should be sufficient to
require affirmance here. Thus, I disagree with the
majority's conclusion that these cases present a
question of pure statutory interpretation, where a
court is as competent as the administrative agency
to construe the provisions at issue.
Our decisions regarding judicial deference to
the Appeal Board's interpretations of the provisions
of the Unemployment Insurance Law have not been
entirely consistent. As the majority has noted
(majority opn, at 231232, at 592593 of 652
N.Y.S.2d, at 13571358 of 674 N.E.2d) in Matter
of Van Teslaar (Levine), 35 N.Y.2d 311, 318, 361
N.Y.S.2d 338, 319 N.E.2d 702, we held that defer-
ence was inappropriate because the issues presented
were 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 to
defer to the agency. We have since recognized,
however, that deference*242 to the Appeal Board's
rational interpretation is appropriate when the
question, involving policy considerations relating to
the intended scope of the statute, is [thus] one to
the determination of which the Appeal Board may
bring to bear its own special competence in carry-
ing out the supervisory authority conferred on it by
the Legislature ( Matter of La Mountain
[Westport Cent. School Dist.Ross], 51 N.Y.2d
318, 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 the
Third Department aptly held in Matter of Wildcat
Serv. Corp. (Ross) (supra), a court should defer to
the 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 have
come to recognize the validity of both the explicit
and implicit rationales of La Mountain, Fisher and
Wildcat Serv. Corp., that statutory interpretation of-
ten involves subsets of policy choices which, upon
a fair reading of the statute and its legislative his-
tory, the legislative body delegated to the agency
charged with implementing the over-all legislative
goals, 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 and
judicial 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 a
statutory text is often more a question of policy
than 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 administrative
agency, the extent of judicial review of the
agency's policy determinations is limited (Paul-
ey v. BethEnergy Mines, 501 U.S. 680, 696, 111
S.Ct. 2524, 2534, 115 L.Ed.2d 604; see also, 1
Davis and Pierce, Administrative Law Treatise
3.3, at 112116 [3d ed] ).
FN*
FN* For a thorough discussion of the un-
avoidable necessity of judicial policy mak-
ing in statutory interpretation to fill gaps or
resolve ambiguities, see, Kaye, State
Courts at the Dawn of a New Century:
Common Law Courts Reading Statutes and
Constitutions, 70 NYU L Rev 1, 2534
(1995).
Deference in those circumstances will also res-
ult in a more coherent, consistent body of interpret-
674 N.E.2d 1354 Page 12
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589
ation of the statutory *243 provisions than will be
accomplished by permitting the courts of this State
to make their own policy-based independent inter-
pretations of the statute (see, 1 Davis and Pierce,
Administrative Law Treatise 3.4, at 116119 [3d
ed] ).
In my view, the instant cases readily fall within
the class of cases where judicial deference to the
agency's statutory construction is warranted. As we
have 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 the
Legislature gave the Appeal Board
quasi-legislative authority ( Matter of Fisher
[Levine], 36 N.Y.2d, at 150, 365 N.Y.S.2d 828, 325
N.E.2d 151, supra ) and policy-choice discretion (
Matter of La Mountain [Westport Cent. School
Dist.Ross], supra ).
Moreover, here the Legislature deliberately left
an interpretative gap (Pauley v. BethEnergy
Mines, supra ) in stipulating that statutory defini-
tions are not to be followed where the context
shows otherwise (Labor Law 510). Indubitably,
determining whether the context shows otherwise
here involves policy choices, among which are
whether a voluntary transfer to noncovered employ-
ment should place an employee at risk of forfeiture
of eligibility for benefits previously earned through
covered employment, and whether, in light of the
central purpose of the legislation, it is appropriate
to take into account the circumstances of the fault-
less loss of noncovered, last actual employment in
administering the statute's disqualification provi-
sions. The Unemployment Insurance Appeal Board,
not this Court, should make those choices, so long
as in doing so its interpretation is rational and not
in conflict with express statutory provisions or
definitive legislative history. Since no such conflict
has been demonstrated here and the Appeal Board's
interpretation 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 and
SMITH, JJ., concur with TITONE, J.
***601 **1366 LEVINE, J., dissents and votes to
affirm in a separate opinion in which CIPARICK,
J., concurs.
In each case: Order reversed, etc.
N.Y.,1996.
Claim of Gruber
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d
589
END OF DOCUMENT
674 N.E.2d 1354 Page 13
89 N.Y.2d 225, 674 N.E.2d 1354, 652 N.Y.S.2d 589

TAB # 2
In the Matter of Dominic J. BELMONTE et al., Re-
spondents,
v.
Robert R. SNASHALL, as Chair of New York State
Workers' 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). The
Supreme Court, Albany County, Cannizzaro, J., de-
clared that regulations requiring board certification
by specialty boards of certain independent medical
associations were invalid. Appeal was taken. The
Supreme Court, Appellate Division, 304 A.D.2d
211, 759 N.Y.S.2d 788, affirmed, and appeal was
taken.
Holdings: The Court of Appeals, Ciparick, J., held
that:
(1) board certified in provision of Injured Work-
ers' Protection Act requiring physicians conducting
independent medical examinations (IME) to be
board certified means certification by a medical
specialty board, and
(2) regulations requiring certification of physicians
conducting IMEs by the American Board of Medic-
al Specialties (ABMS) or American Osteopathic
Association (AOA) were rational.
Reversed.
West Headnotes
[1] Statutes 361 219(1)
361 Statutes
Cited Cases
Deference is generally accorded to an adminis-
trative agency's interpretation of statutes it enforces
when the interpretation involves some type of spe-
cialized knowledge.
[2] Statutes 361 219(1)
361 Statutes
Cited Cases
Where the question is one of pure statutory
reading and analysis, dependent only on accurate
apprehension of legislative intent, there is little
of the administrative agency; in such circum-
stances, the judiciary need not accord any deference
to 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' Compensation
413XVI Proceedings to Secure Compensation
413XVI(G) Medical Examination
413k1310 k. By Whom Made. Most Cited
Cases
Board certified in provision of Injured Work-
ers' Protection Act requiring physicians conducting
independent medical examinations (IME) to be
board certified means certification by a medical
specialty board. McKinney's Workers' Compensa-
tion Law 137, subd. 3(a).
813 N.E.2d 621 Page 1
2 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541, 2004 N.Y. Slip Op. 04790
Cases
A podiatrist, who is not a medical doctor and
thus cannot be medical board certified, is an other
person who may be authorized to perform inde-
pendent medical examinations (IME) by the Work-
ers' Compensation Board (WCB) under the Injured
Workers' Protection Act. McKinney's Workers'
Compensation Law 137, subd. 3(a).
Cases
Workers' Compensation Board (WCB) regula-
tions requiring certification of physicians conduct-
ing independent medical examinations (IME) by the
American Board of Medical Specialties (ABMS) or
American 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' Compensation
Board 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 and
Peter H. Schiff of counsel), for appellants.
*562 Ganz Wolkenbreit & Friedman, LLP, Albany
(Robert E. Ganz of counsel), Hiscock & Barclay
LLP (Stephen H. Volkheimer of counsel), and Sul-
livan, Cunningham, Keenan, Mraz & Lemire (Mary
Mraz of counsel) for respondents.
CIPARICK, J.
This appeal presents a question of statutory in-
terpretationwhether the term board certified as
used in Workers' Compensation Law 137(3)(a)
means certification by a medical specialty board or
certification by the Workers' Compensation Board
(WCB). We also address whether the regulations
promulgated by the WCB appropriately defined
board certified as certification by a medical spe-
ciality board recognized by either the American
Board of Medical Specialties (ABMS) or American
Osteopathic Association (AOA) (see 12 NYCRR
300.2[b][3] ).
In 2000, the Legislature enacted the Injured
Workers' Protection Act (L. 2000, ch. 473), after a
report by the New York State AFLCIO and the
New York Committee for Occupational Safety and
Health detailing the problems with the then-
in-place independent medical examination (IME)
process
FN1
within the workers' compensation sys-
tem (New York State AFLCIO and New York
Committee 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, the
IME system was not sufficiently regulated, result-
ing in improper and fraudulent examinations and
reports. The report made several recommendations,
including that IME physicians should be New York
State licensed and certified by the New York State
Workers' Compensation Board (Unjust Treatment
).
FN1. An independent medical examination
is defined as: an examination performed
by an authorized or qualified independent
medical examiner ... for purposes of evalu-
ating or providing an opinion with respect
to schedule loss, degree of disability, val-
idation of treatment plan or diagnosis,
causal relationship, diagnosis or treatment
of disability, maximum medical improve-
ment, ability to return to work, perman-
ency, appropriateness of treatment, neces-
sity of treatment, proper treatment, extent
of disability, second opinion or any other
813 N.E.2d 621 Page 2
purpose recognized or requested by the
board (12 NYCRR 300.2[b][4] ).
In response, the Injured Workers' Protection
Act added section 137 of the Workers' Compensa-
tion Law to provide that [o]nly a New York state
licensed and board certified physician, surgeon, po-
diatrist or any other person authorized to examine
or 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 York
or any other person authorized to examine or evalu-
ate injury or illness by the board (***543**623
Workers' Compensation Law 137[5] ). Although
the Workers' Compensation Law does not define
the term board certified, it does define [b]oard
as the workmen's [sic ] compensation board of the
state of New York (Workers' Compensation Law
2[2] ).
In accordance with the new law, and consistent
with the definition of board certified in current use
as it relates to fee schedules, the WCB promulgated
regulations defining board certified. Those regu-
lations provide that, in order to conduct IMEs, a
physician or surgeon must have an appropriate de-
gree, meet the State Board of Medicine's and Com-
missioner of Education's licensing requirements and
be 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 or
surgeon who is certified by a specialty board that is
recognized by the [ABMS] or the [AOA] (12
NYCRR 300.2[b][3] ). There are separate require-
ments for podiatrists, chiropractors and psycholo-
gists, who are not medical doctors and cannot be
certified by the ABMS or AOA (see 12 NYCRR
300.2[b][2][ii][b]-[d] ).
FN2
FN2. In response to the WCB's request for
input on the implementation of this legisla-
tion, the Medical Society of the State of
New York (MSSNY) noted that there was
some ambiguity in the text of the statute.
MSSNY thus requested that the WCB's
regulations specify that physicians must be
state licensed and board certified by a
medical specialty board recognized by
ABMS and AOA, in addition to authoriza-
tion by the WCB, in order to perform
IMEs. Several months later, MSSNY re-
quested that some of its older physicians
who had a certain degree of skill and
knowledgeC ratingsbe
[g]randfathered based upon their experi-
ence and that the WCB consider creating
an 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 of
their practice.
FN3
The WCB denied petitioners' re-
quests for authorization to conduct IMEs pursuant
to Workers' Compensation Law 13b (1) because
they were not certified by an appropriate medical
specialty board. Many of the petitioners are certi-
fied by specialty boards that are not recognized by
ABMS or AOA. Some of the petitioners are
Crated (designated a consultant in a certain speci-
ality) by the WCB. This status is typically granted
to those physicians certified*565 by the ABMS or
AOA. However, the WCB occasionally grants a
C rating to physicians who show a certain level
of competence through years of experience, thus al-
lowing such physicians to collect a higher fee for
services.
FN3. Two of the named petitioners died
during the course of this litigation.
Petitioners commenced separate CPLR article
78 proceedings seeking to annul the portion of 12
NYCRR 300.2 that required physicians to be
ABMS or AOA board-certified in order to conduct
IMEs, and to annul the WCB's determination that
petitioners were not authorized to conduct IMEs.
After consolidating the actions, Supreme Court
813 N.E.2d 621 Page 3
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, Supreme
Court noted that the Workers' Compensation Law
defined the term board as the Workers' Compens-
ation Board (see Workers' Compensation Law 2
[2] ), and held that the term should have the same
meaning throughout section 137. The court also
concluded that the WCB's interpretation was irra-
tional and that the determinations denying petition-
ers***544 **624 authorization to conduct IMEs
should be annulled, converted the remainder of the
proceedings to a declaratory judgment action and
declared 12 NYCRR 300.2(b)(2)(ii)(a) and
300.2(b)(3)
FN4
invalid insofar as they required
physicians to be ABMS or AOA board certified.
FN4. Before Supreme Court, the regula-
tions were numbered 12 NYCRR
3002.1(b)(2)(i) and 3002.1(c).
The Appellate Division affirmed, agreeing that
deference to the WCB was not required for this
question of pure statutory interpretation. The Court
also found that the legislative intent was to give the
Chair of the WCB the authority to discipline IME
providers and that this purpose was served by mak-
ing the providers subject to WCB certification (304
A.D.2d 211, 215216, 759 N.Y.S.2d 788 [2003] ).
It did not determine whether the Board's choice of
the ABMS or AOA for certification was rational,
finding the WCB's interpretation incompatible with
the 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. Deference
is generally accorded to an administrative agency's
interpretation of statutes it enforces when the inter-
pretation involves some type of specialized know-
ledge (see *566Matter of Gruber [New York City
Dept. of Personnel], 89 N.Y.2d 225, 231, 652
N.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 accurate
of the administrative agency ... In such circum-
stances, the judiciary need not accord any deference
to the agency's determination, and is free to ascer-
tain the proper interpretation from the statutory lan-
guage and legislative intent (id. at 231232, 652
N.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 means
certification by a medical specialty board. The
phrase board certified is a term of art, typically
understood to refer to approval by a designated
group 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 describe
physicians, who are commonly referred to as board
certified. 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 Health
Law 4900[2][b] [i][B] ).
FN5. Black's Law Dictionary defines the
adjective board-certified to mean ( [o]f
a professional) recognized by an official
body as a specialist in a given field of law
or 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 meaning
throughout the provision. However, board can
have a different meaning on its own than it does as
part of the phrase board certified. The statutory
definition should not be applied mechanically, re-
gardless of context. Indeed, there are several places
in the Workers' Compensation Law where the term
board is not used to refer to the WCB (see e.g.
Workers' Compensation Law 13d[1] [referring
to county medical board] ). Thus, the most natural
interpretation is that board certified refers to cer-
813 N.E.2d 621 Page 4
tification by a medical specialty board and we read
the statute accordingly (see e.g. Castro v. United
Container 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 the
statute 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' Compensation
Law 137 [3] ). A podiatrist,*567 who is not a
medical doctor and thus cannot be medical board
certified, is an other person who may be author-
ized to perform IMEs by the WCB (see Workers'
Compensation Law 137[3][a] ). Indeed, as the
WCB notes, the phrase board certified would be
superfluous under petitioners' construction, since
Workers' Compensation Law 13b (1) and (2)
were specifically amended in the same bill to give
the WCB the power to authorize providers to per-
form IMEs (L. 2000, ch. 473, 4).
The Appellate Division, First Department has
also addressed this issue and reached the same con-
clusion we reach today (see Matter of Rosenblum v.
New York State Workers' Compensation Bd., 309
A.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 also
stated that the WCB's interpretation of the statute,
which comports with its plain language, its purpose
and its legislative history and gives meaning to
every phrase, was a sound one even as a matter of
pure 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 appropriate
medical specialty board, we next address whether
the regulations requiring certification by the ABMS
or 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 reviews
administrative 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 are
rational and relate to the goals of the Injured Work-
ers' Protection Act. The statute requires that IME
physicians be certified by a medical specialty
board. The ABMS and AOA are organizations of
approved medical and osteopathic specialty boards.
Indeed the Medical Society of the State of New
York specifically requested that the WCB designate
only ABMS and AOA certifying boards. Requiring
such board certification promotes the purpose of the
statute since it provides a greater level of quality
assurance as the physicians authorized to perform
IMEs have attained a certain degree of professional
competence as recognized by the certifying boards.
That some of the petitioners have been retained as
impartial specialists for the WCB does not render
the regulation irrational. The Workers' Compensa-
tion Law does not require such specialists to be
board certified (see *568Workers' Compensation
Law 13[e] ). Only specialists selected by employ-
ers in the first instance to perform IMEs need to be
board certified.
Petitioners' remaining claims are likewise
without merit.
sion should be reversed, with costs, the petition
should be dismissed and the subject regulations
should be declared valid to the extent challenged
herein.
Chief Judge KAYE and Judges G.B. SMITH,
ROSENBLATT, GRAFFEO, READ and R.S.
SMITH concur.
Order reversed, etc.
N.Y.,2004.
Belmonte v. Snashall
2 N.Y.3d 560, 813 N.E.2d 621, 780 N.Y.S.2d 541,
2004 N.Y. Slip Op. 04790
813 N.E.2d 621 Page 5
END OF DOCUMENT
813 N.E.2d 621 Page 6

TAB # 3
PARAMOUNT COMMUNICATIONS, INC.,
Plaintiff,
v.
GIBRALTAR CASUALTY CO. et al., Defendants.
PARAMOUNT COMMUNICATIONS, INC., Re-
spondent,
v.
Salvatore CURIALE, Superintendent of Insurance
of the State of New York, as Administrator of the
New York Property/Casualty Insurance Security
Fund, Appellant.
June 27, 1997.
Insured manufacturer filed claim with Prop-
erty/Casualty Insurance Security Fund for insolvent
insurer's portion of settlement of underlying
products liability suit. The Superintendent of Insur-
ance disallowed claim on ground that insured risk
did not arise in New York because manufacturer
had relinquished physical possession and control of
defective product outside New York when it placed
product in hands of common carrier for shipment
from 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 that
claim arose in New York, and the Supreme Court,
Appellate Division, 199 A.D.2d 90, 605 N.Y.S.2d
44, affirmed in nonfinal order. After the Supreme
Court, 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 was
satisfied with respect to products liability claim
arising after defective valves were delivered for in-
stallation in New York nuclear power plant.
Affirmed.
West Headnotes
[1] Insurance 217 1034
217 Insurance
217II Regulation in General
217II(C) State Agencies and Regulation
217k1028 Commissioners or Superintend-
ents of Insurance
217k1034 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 Statutes
Cited Cases
When 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 15A
763
15A Administrative Law and Procedure
15AV Judicial Review of Administrative De-
cisions
15AV(D) Scope of Review in General
15Ak763 k. Arbitrary, Unreasonable or
Capricious Action; Illegality. Most Cited Cases
Irrational determination by agency requires no
deference and may properly be annulled.
[4] Insurance 217 1494
217 Insurance
217VII Guaranty Funds or Associations
685 N.E.2d 1214 Page 1
217VII(D) Claims and Proceedings
217k1493 Claims Covered
217k1494 k. In General. Most Cited
Cases
(Formerly 217k8)
For purposes of claim under Property/Casualty
Insurance Security Fund, requirement that
property * * * [be] located * * * in this state was
satisfied with respect to products liability claim
arising from defective valves installed in New York
nuclear power plant, even though insured relin-
quished physical possession of valves when they
were shipped by common carrier from insured's
Rhode Island plant, where it was undisputed that
New 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.
SMITH, 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 the
Insurance Law and administer the fund established
to provide coverage for insureds of insolvent insur-
ance companies, the Superintendent has determined
that the insured must relinquish physical possession
and control of the subject property in New York for
property claims to qualify for coverage under the
Security Fund. Here, the Superintendent denied
coverage upon a determination that petitioner relin-
quished physical possession of the defective
products in Rhode Island when it placed the goods
in 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 based
upon a policy insuring property or risks located or
resident in this state (Insurance Law 7602[g] ).
Since it is undisputed that New York was the final
destination of the delivered property and the claim
arose from the property's physical presence in this
State, the requirement contained in the plain lan-
guage of the statutethat property * * * [be] loc-
ated * * * in this stateis satisfied under the facts
presented. The Superintendent's resort to a locus
test based upon the relinquishment of physical pos-
session and control is manifestly inconsistent with
the statutory mandate. Accordingly, the Superin-
tendent's determination should be annulled as arbit-
rary and capricious and the order of the Appellate
Division should be affirmed.
In 1977, Niagara Mohawk Power Corporation
purchased from petitioner's subsidiary Gulf &
Western Manufacturing, *511 eight main steam
isolation valve (MSIV) systems for use in the Nine
Mile Point nuclear power station in Scriba, New
York. MSIVs are custom-designed safety compon-
ents used in nuclear power plants to regulate the
flow of radioactive steam from the reactor vessel to
the steam turbine. As stated in the pleadings of the
underlying action, MSIVs are meant to ensure that
in the event of certain nuclear accidents harmful
amounts of radioactive materials would not be dis-
charged into the environment. According to
Niagara 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 the
MSIVs at issue were intended to be an integral and
permanent part of the nuclear facility located in
Scriba, New York.
The subject valve systems were constructed at
petitioner's facility in Rhode Island and delivered to
Niagara Mohawk's nuclear power plant via com-
mon carrier hired by petitioner. The purchase order
685 N.E.2d 1214 Page 2
expressly called for petitioner to design, furnish and
deliver the MSIVs FOBJobsite, Scriba, New
York. 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 and
plant operation was delayed until Niagara Mohawk
could procure and prepare an alternative valve sys-
tem which would meet NRC approval. To recover
its alleged damages, Niagara Mohawk commenced
an 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 coverageprimary, um-
brella and excess coverageas protection against
potential risks arising out of its products. Among
these were excess insurance policies with Integrity
Insurance Company under which Integrity would
have to pay its proportionate share of petitioner's
settlement with Niagara Mohawk. However, Integ-
rity was declared insolvent in 1987 and eventually
became the subject of liquidation proceedings.
In March 1988, petitioner filed a timely claim
with respect to the action against it for the MSIVs
purchased by Niagara Mohawk seeking recovery
from 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 Security
Fund 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 possession
and control of the insured in the State of New
York.
2. And, that at the time of the accident, the
products were located in the State of New York.
The Superintendent conceded facts supporting
the second point but requested proof that the
products at issue left the possession and control of
the insured in the State of New York.
By letter dated May 4, 1990, petitioner replied
that the products were delivered in New York pur-
suant to a contract which required delivery FOB
Niagara Mohawk's New York plant. Petitioner ar-
gued that under the Uniform Commercial Code, the
products were transported to New York at petition-
er's risk and title to the products did not pass until
New 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's
view that petitioner could qualify for coverage only
if 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 New
York does not involve the creation of the risk with
which the Fund is concerned. Unmoved by peti-
tioner's argument, by letter dated May 11, 1990, the
Superintendent denied Security Fund coverage due
to the absence of proof that the products had left the
possession and control of petitioner in New York.
Petitioner commenced the present proceeding
pursuant to CPLR article 78 challenging the Super-
intendent's determination that it had relinquished
possession and control of the subject products out-
side of New York when it shipped the valves from
Rhode Island to New York via common carrier.
Supreme Court identified the central question
posed by Insurance Law 7602 as whether the
claim had a substantial connection to New York to
qualify for Security Fund coverage. The court noted
that under the New York Uniform Commercial
Code, a seller retains title and risk of loss of items
shipped FOB place of destination, until they arrive
685 N.E.2d 1214 Page 3
at their *513 specified destination. Pursuant to
such reasoning, the court held that the valves hav-
ing been shipped FOB Scriba, New York, they left
Paramount's possession and control when they
reached their destination in New York. In so hold-
ing, the court annulled the Superintendent's denial
of coverage as unreasonable and arbitrary.
The Appellate Division affirmed, stating:
that since the insured product was shipped by
common carrier FOB place of destination in New
York, it should be deemed to have left the seller's
hand and entered the stream of commerce * * *
only upon delivery to the purchaser within the
State of New York. Absent any explicit statutory
guidance, principles of commercial law (see,
UCC 2319[1][b]; 2509[1][b]; 2401[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 legal
control to a party who will use the product for its
intended use in-State, the purchaser in this case,
should define when the insurable risk comes into
being. (199 A.D.2d 90, 9091, 605 N.Y.S.2d
44.)
The parties subsequently stipulated that the
MSIV claim was indeed covered by the Integrity
policy, and Supreme Court entered judgment for
petitioner 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 judgment
to bring up for review the prior nonfinal Appellate
Division order.
[1] The Superintendent has broad authority and
responsibility to interpret the Insurance Law (see,
e.g., Blue Cross & Blue Shield v. McCall, 89
N.Y.2d 160, 163, 652 N.Y.S.2d 218, 674 N.E.2d
1124; ***136**1217Matter of New York Pub. In-
terest Research Group v. New York State Dept. of
Ins., 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.2d
1080; Ostrer v. Schenck, 41 N.Y.2d 782, 785, 396
N.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 proper
administration of the Security Fund (Insurance
Law 7613; see also, Insurance Law 7601[e] ).
[2][3] When applying its special expertise in a
particular field to interpret statutory language, an
agency's rational construction is entitled to defer-
ence (see, Matter of Jennings v. New York State
Off. of Mental Health, 90 N.Y.2d 227, 660
N.Y.S.2d 352, 682 N.E.2d 953; *514Kurcsics v.
Merchants Mut. Ins. Co., 49 N.Y.2d 451, 459, 426
N.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.2d
663, 453 N.E.2d 1080, supra ). Indeed, once it has
been determined that an agency's conclusion has a
sound basis in reason ( Matter of Pell v. Board of
Educ., 34 N.Y.2d 222, 231, 356 N.Y.S.2d 833, 313
N.E.2d 321), the judicial function is at an end and a
reviewing court may not substitute its judgment for
that of the agency. On the other hand, an irrational
determination by the agency requires no deference
and may properly be annulled (Kurcsics v. Mer-
N.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 any
weight]; Matter of Jennings v. New York State Off.
of Mental Health, 90 N.Y.2d 227, 660 N.Y.S.2d
352, 682 N.E.2d 953, supra ).
The Security Fund was established for use in
paying property and liability claims remaining un-
paid by reason of the insurer's insolvency ( Matter
of Consolidated Mut. Ins. Co., 60 N.Y.2d 1, 6, 466
N.Y.S.2d 663, 453 N.E.2d 1080, supra ). During
the relevant period, Insurance Law 7603(a)(1)
provided that only allowed claims qualified for
Security Fund coverage.
FN1
Prior to its amend-
ment in 1990, Insurance Law 7602(g) defined an
685 N.E.2d 1214 Page 4
allowed claim as a claim based upon a policy in-
suring property or risks located or resident in this
state. Section 7603(a)(1)(B) provided that the fund
shall 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 events
at issue occurred prior to these enactments,
we have no reason to address the amended
provisions.
The Superintendent has defined the eligibility
requirements 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. These
terms do not appear anywhere in the statutes. With
respect to product liability cases, the Superintend-
ent has required that the insured risk be located at
the place where the insured relinquishes physical
possession and control of the product and that the
covered 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 based
upon the location of the insured and covered prop-
erty and/or risks. Under the plain language of the
statute, the property or risks must be located or
resident in this state to qualify as an allowed claim
(*515Insurance Law 7602[g] ).
FN2
The record
reflects that the locus requirement set forth in the
statute has been satisfied.
FN2. Of course, an allowed claim must
also be based upon a policy insuring
such property (Insurance Law 7602[g] ).
However, since the parties have stipulated
that the Integrity policies insure the MSIVs
manufactured 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 consequential
damages incurred by Niagara Mohawk stem from
the physical presence of the valves in this State. As
stated in Matter of Interstate Ins. Co., 47 N.Y.2d
909, 419 N.Y.S.2d 482, 393 N.E.2d 476, the fund
covers only risks' located in New York (id., at
911, 419 N.Y.S.2d 482, 393 N.E.2d 476). That
same reasoning should also apply to the other term
in the statute, property. Clearly, ***137 **1218 at
the time the claim arose for purposes of the Secur-
ity Fund, the property was located in this State as
that term is commonly understood (see, Black's
Law Dictionary 940 [6th ed 1990] [(h)aving a
physical presence or existence in a place] ).
FN3
FN3. Arguably, the valves were also
resident in this State during the time the
claim arose. The final destination of the
MSIVs was, and always intended to be,
New York. Indeed, it is undisputed that the
subject property was to be an integral and
permanent part of a nuclear power plant
here in New York. However, because the
valves 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, 484
N.Y.S.2d 514, 473 N.E.2d 742 [(t)he term
residence * * * has been employed by Le-
gislatures for a variety of purposes] ).
When it is manifest that the property at issue is
actually located * * * in this statethe determin-
ative factor under the plain language of the stat-
uteeligibility for Security Fund coverage should
not depend upon the manner of its delivery to New
York. Indeed, assuming the valves had been in-
stalled and an inherent defect remained undetected
until after several years of operation and use here in
New York, the Superintendent presumably would
still contend that the valves were not located in
New York merely because a common carrier had
delivered them from Rhode Island. The Legislature
has set forth a test based upon the location of the
property, not the location of the insured and not the
685 N.E.2d 1214 Page 5
location where the insured relinquishes possession
and control of the property.
The Superintendent contends that petitioner's
shipping the MSIVs by common carrier rather
than [using] its own trucks is dispositive.
However, using that fact to determine whether the
property was located in New York is arbitrary
when applied to facts that plainly fulfill the require-
ments contained in *516 the statutory language. As
such, the Superintendent's determination requires
no deference and must be annulled.
FN4
FN4. Both lower courts concluded that
since the valves were shipped by common
carrier FOB with a New York destination,
the property left the seller's hands upon de-
livery in New York. In view of our holding
regarding the insured property's location
for Security Fund purposes, we have no
need to resolve this issue under the facts
presented.
Accordingly, the judgment appealed from and
the order of the Appellate Division brought up for
review 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.2d
133, 1997 N.Y. Slip Op. 06224
END OF DOCUMENT
685 N.E.2d 1214 Page 6

TAB # 4
In the Matter of TOYS R US, a New York Lim-
ited Partnership, Respondent,
v.
Gaston SILVA, as Chairman of City of New York
Board of Standards and Appeals, Appellant, et al.,
Respondents;
Colette Coffman et al., IntervenorsAppellants.
Dec. 20, 1996.
Landowner brought Article 78 proceeding to
annul Board of Standards and Appeals' (BSA) re-
vocation of building permit to maintain noncon-
forming use. The Supreme Court, New York
County, Saxe, J., 167 Misc.2d 897, 639 N.Y.S.2d
881, granted application, and appeal was taken. The
Supreme Court, Appellate Division, 646 N.Y.S.2d
91, affirmed, and appeal was taken. The Court of
Appeals, Kaye, C.J., held that: (1) under New York
City zoning law prohibiting continuation of non-
conforming use if active operation of substantially
all 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 is
irrelevant to that determination, and (2) minimal
warehouse activity in nonconforming warehouse
and storage facility, following complete stoppage of
operations 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 Planning
414VI Nonconforming Uses
414k1317 Discontinuance or Abandonment
414k1319 k. Cessation of use. Most Cited
Cases
(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
5261.
Cases
(Formerly 414k337)
Minimal warehouse activity in nonconforming
warehouse and storage facility, following complete
stoppage of operations for 20 months, failed to pre-
serve facility's nonconforming use status under
New York City zoning law prohibiting continuation
of nonconforming use if active operation of sub-
stantially all nonconforming uses is discontinued
during 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 crates
were shipped to warehouse, occupying less than
one percent of building's volume. New York, N.Y.,
Zoning Resolution 5261.
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-
676 N.E.2d 862 Page 1
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
ment of existing zoning ordinance, is
nonconforming use.
(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 and
eventual elimination.
414X Judicial Review or Relief
414X(C) Scope of Review
414X(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 of
New York City Zoning Resolutions' terms must be
given great weight and judicial deference, so long
as interpretation is neither irrational, unreasonable
nor 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.
414X(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 of
Standards and Appeals (BSA) is not required.
(Formerly 414k336.1)
Generally, abandonment of nonconforming use
requires both intent to relinquish and some overt act
or failure to act, indicating that owner neither
claims nor retains any interest in subject matter of
abandonment.
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 for
specified period constitutes abandonment regard-
less of intent.
414V Construction, Operation, and Effect
414V(A) In General
414k1203 k. Strict or liberal construction
in general. Most Cited Cases
(Formerly 414k232)
Zoning and Planning 414 1208
414V(A) In General
414k1206 Meaning of Language
414k1208 k. Ambiguity. Most Cited
Cases
(Formerly 414k232)
Zoning restrictions, being in derogation of
676 N.E.2d 862 Page 2
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
common-law property rights, should be strictly con-
strued and any ambiguity resolved in favor of prop-
erty owner.
(Formerly 414k321)
Right to nonconforming use must necessarily
be decided on case-by-case basis.
414X(C)1 In General
414k1637 Wisdom, Judgment, or
Opinion
414k1642 k. Decisions of boards or
officers in general. Most Cited Cases
(Formerly 414k618)
Zoning and Planning 414 1698
414X(C)4 Questions of Fact
414k1698 k. Substantial evidence in
general. Most Cited Cases
(Formerly 414k703)
Where substantial evidence exists, reviewing
court may not substitute its judgment for that of
Board of Standards and of Appeals (BSA), even if
court might have decided matter differently.
***101*412**863 Paul A. Crotty, Corporation
Counsel of New York City (Janet L. Zaleon, Barry
P. Schwartz and Robin Binder, of counsel), for ap-
pellant.
*413 Bachner, Tally, Polevoy & Misher L.L.P.,
New York City (Norman Marcus, of counsel), and
Jack L. Lester, for intervenors-appellants.
*414 Fischbein Badillo Wagner Harding, New
York City (Richard S. Fischbein, Howard B. Horn-
stein, Donald N. David and Andrew B. Messite, of
counsel), 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 COURT
KAYE, Chief Judge.
[1] The New York City zoning laws prohibit
continuation of a nonconforming use if, during a
two-year period, the active operation of substan-
tially all the non-conforming uses * * * is discon-
tinued (New York City Zoning Resolution
5261). This case presents a novel question of stat-
utory construction: what is the appropriate legal
standard to determine whether a nonconforming use
has been discontinued under the Zoning ***102
*415 **864 Resolution? Contrary to the trial court
and Appellate Division, we conclude that substan-
tialrather than completediscontinuation of the
active, nonconforming activity forfeits the noncon-
forming use, and that the good faith of the owner is
irrelevant 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 operations
for 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, we
reverse the trial court and Appellate Division de-
cisions reinstating the building permit.
1. Facts
At issue here is a portion of a 16story building
located at the northeast corner of Third Avenue and
East 80th Street in Manhattan. Built in 1926, the
676 N.E.2d 862 Page 3
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
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 a
storage and warehouse facility. When Morgan Man-
hattan Storage and Warehouse Company purchased
the building in 1956, it continued to use the struc-
ture exclusively as a warehouse.
The 1961 New York City Zoning Resolution
changed the neighborhood from a retail zoning dis-
trict to residential districts overlaid with strips of
commercial districts on the avenue (rather than
street) blocks. As a result, that portion of the build-
ing on Third Avenue presently remains in a com-
mercial (C19) zoning district. The portion fronting
on 80th Street, however, is now in a residential
(R8B) zone. Because warehouse use is no longer
permitted as of right in either the commercially or
the residentially zoned areas (see, Zoning Resolu-
tion art II; 3200, 3225), use of the building as
a warehouse could continue under the Zoning Res-
olution only as a nonconforming use (see, Zoning
Resolution 1210, 5211).
Morgan continued to use the building as a
warehouse until August 1989, when it contracted to
sell the premises to a real estate developer. At that
time, Morgan emptied the building and for the next
20 months ceased all warehouse operations. The
sale fell through, and in April 1991 Morgan trans-
ferred a limited amount of goods stored in its other
warehouses to the 80th Street facility and assigned
a property manager there, in an effort to resume
nonconforming 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 in
lieu of foreclosure. In response to a request by
Chase for advice as to whether nonconforming
warehouse use was permissible, the New York City
Department of Buildings (DOB) issued an informal
opinion that the nonconforming use at the premises
had been re-established in April 1991 and could
lawfully continue.
Petitioner Toys R Us purchased the base-
ment, first and second floors of the building from a
subsidiary of Chase in March 1994. Three months
later, petitioner filed an application with DOB to
convert the purchased premises into a retail toy
store. DOB approved the application and in
September 1994 issued a building permit authoriz-
ing the conversion.
The 38,000 square foot premises occupy both
commercially and residentially zoned space. A toy
store is permitted as of right in the commercially
zoned portion of the premises on Third Avenue but
not in the residentially zoned section fronting on
80th Street, which includes the building's loading
docks (see, Zoning Resolution art II; 3200,
3215). The instant dispute arises out of the DOB
authorization to develop and operate this latter seg-
ment of the property situated in the residential zon-
ing district as a retail toy storea nonconforming
use.
Respondent-intervenor NeighborsRUs, a
coalition 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 issuance
of the building permit by way of an administrative
***103 **865 appeal to the BSA. It urged that the
nonconforming warehouse use had been discontin-
ued during the two-year period from August 1989
to July 1991 and, therefore, the Zoning Resolution
only 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 of
warehouse operations during the period between
April and July 1991 and conducted a site inspection
of the building and the surrounding area.
After reviewing hundreds of pages of docu-
ments and hearing testimony from all sides, the
BSA, based on the totality of the evidence presen-
ted, found the warehouse activity between April
and July 1991 minimal. Concluding that the Zoning
676 N.E.2d 862 Page 4
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
Resolution did not require complete cessation of the
nonconforming use as a precondition to termina-
tion, the BSA determined *417 that the insignific-
ant level of warehouse activity during that period
failed to perpetuate the nonconforming warehouse
use. Deeming Morgan's clear intent to resume
warehouse operations insufficient to preserve the
nonconforming use, the BSA revoked petitioner's
building permit.
Petitioner commenced a CPLR article 78 pro-
ceeding seeking to reinstate the permit. Supreme
Court held that the storage of some goods in the
warehouse during April to July 1991, coupled with
the absence of any bad faith or fraud by Morgan,
sufficiently continued the nonconforming use. It
thus granted the petition and annulled the BSA de-
termination, allowing petitioner to maintain a non-
conforming retail use in the residentially zoned
space.
The Appellate Division affirmed, one Justice
dissenting. Like the trial court, the Appellate Divi-
sion applied a good-faith standard and concluded
that the concededly minimal storage activity from
April to July 1991 sufficed to preserve noncon-
forming use status under the Zoning Resolution.
The Appellate Division granted leave to appeal to
this 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 to
the enactment of the existing zoning ordinance, is a
nonconforming use (see, 1 Anderson's American
Law of Zoning 6.01, at 481482 [Young 4th ed.];
see also, Zoning Resolution 1210). Noncon-
forming uses are necessarily inconsistent with the
land-use pattern established by an existing zoning
scheme.
[4] Due to constitutional and fairness concerns
regarding the undue financial hardship that immedi-
ate elimination of nonconforming uses would cause
to property owners, however, courts and municipal
legislators have adopted a grudging tolerance of
such uses ( Matter of Pelham Esplanade v. Board of
Trustees, 77 N.Y.2d 66, 71, 563 N.Y.S.2d 759, 565
N.E.2d 508). The law nevertheless generally views
nonconforming uses as detrimental to a zoning
scheme, and the overriding public policy of zoning
in New York State and elsewhere is aimed at their
reasonable restriction and eventual elimination (
Matter of Syracuse Aggregate Corp. v. Weise, 51
N.Y.2d 278, 284, 434 N.Y.S.2d 150, 414 N.E.2d
651; Matter of Harbison v. City of Buffalo, 4
N.Y.2d 553, 559560, 176 N.Y.S.2d 598, 152
N.E.2d 42; see, 1 Anderson's American Law of
Zoning 6.06, 6.69, at 500, 695 [Young 4th ed.] ).
This policy disfavoring nonconforming uses
was expressly incorporated into New York City's
1961 Zoning Resolution. *418 The purposes of the
Zoning Resolution were to encourage the develop-
ment of desirable residential, commercial, and man-
ufacturing areas with appropriate groupings of
compatible and related uses and thus to promote
and to protect public health, safety, and general
welfare (Zoning Resolution 5100). Noncon-
forming uses, while generally allowed to continue (
see, Zoning Resolution 5211), were considered
antagonistic to those goals and thus subject to cer-
tain limitations (Zoning Resolution 5100). As
explained in the Statement of Legislative Intent,
[t]he regulations governing non-conforming uses *
* * are therefore adopted in order to provide a
gradual remedy for existing undesirable conditions
resulting from such incompatible non-conforming
uses, which are detrimental to the achievement of
such purposes (id.).
***104 **866 One such restriction placed on
the perpetuation of nonconforming uses is con-
tained in Zoning Resolution 5261, which
provides for the elimination of any nonconforming
use that is discontinued for two years. Under sec-
tion 5261:
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 5
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
er structure shall thereafter be used only for a
conforming use. Intent to resume active opera-
tions shall not affect the foregoing (emphasis
omitted).
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 nonconforming
warehouse operations for two years within the
meaning of section 5261. This Court has never
considered the proper legal standard for determin-
ing when a nonconforming use is abandoned under
this zoning ordinance. In revoking petitioner's
building permit, the BSA construed section 5261
as requiring substantial discontinuation, rather than
complete cessation, of the nonconforming use by
the property owner for two consecutive years, irre-
spective of any intent to preserve nonconforming
use status.
[5][6] The BSA, comprised of five experts in
land use and planning, is the ultimate administrat-
ive authority charged with enforcing the Zoning
Resolution (see, N.Y. City Charter 659, 666).
Consequently, in questions relating to its expertise,
the BSA's interpretation of the statute's terms must
be given great weight and judicial deference, so
long as the interpretation is *419 neither irrational,
unreasonable nor inconsistent with the governing
statute ( Matter of TrumpEquitable Fifth Ave. Co.
v. Gliedman, 62 N.Y.2d 539, 545, 478 N.Y.S.2d
846, 467 N.E.2d 510; see, Appelbaum v. Deutsch,
66 N.Y.2d 975, 977, 499 N.Y.S.2d 373, 489 N.E.2d
1275). Its determination, moreover, must be sus-
tained if it has a rational basis and is supported by
substantial evidence (see, Appelbaum v. Deutsch,
66 N.Y.2d at 977, 499 N.Y.S.2d 373, 489 N.E.2d
1275, supra; Matter of Fuhst v. Foley, 45 N.Y.2d
441, 444, 410 N.Y.S.2d 56, 382 N.E.2d 756).
Where, however, the question is one of pure legal
interpretation of statutory terms, deference to the
BSA is not required (see, Matter of Teachers Ins. &
Annuity Assn. v. City of New York, 82 N.Y.2d 35,
4142, 603 N.Y.S.2d 399, 623 N.E.2d 526).
Here, we must resolve two questions. First, we
must determine the appropriate legal standard for
abandonment under Zoning Resolution 5261a
pure legal question that does not mandate deference
to the BSA. We must then decide whether the
BSA's conclusion that Morgan abandoned noncon-
forming warehouse use was supported by substan-
tial evidence.
(a) The Legal Standard Under Zoning Resolution
5261
Petitioner argues that the relevant inquiry under
Zoning Resolution 5261 is whether nonconform-
ing operations have completely ceased, and that any
nonconforming usehowever minimalprecludes
a finding of abandonment. The trial court and Ap-
pellate Division majority agreed, concluding that
Morgan's use of the premises for some actual ware-
house activity sufficed to preserve the nonconform-
ing use.
According to petitioner, New York courts have
uniformly required proof that the entire noncon-
forming use was discontinued as a precondition to
termination. Petitioner points to Matter of Marzella
v. Munroe, 69 N.Y.2d 967, 516 N.Y.S.2d 647, 509
N.E.2d 342, in support of this contention. In Mar-
zella, the property owner used a parcel of land that
had been rezoned to permit only one two-family
structure to house four families in two dwellings.
When one house remained vacant for 15 years, so
that three families rather than four resided on the
property, the local zoning board concluded that
nonconforming use of the property for four families
had been abandoned. This Court disagreed, finding
insufficient evidence to establish that the entire
nonconforming use had been abandoned (id., at
968, 516 N.Y.S.2d 647, 509 N.E.2d 342).
In doing so, we explained that [a]bandonment
does not occur unless there has been a complete
cessation 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 in
Marzella broadly prohibited resumption of any
nonconforming use which has been abandoned (
676 N.E.2d 862 Page 6
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
see, Village *420 of Dobbs Ferry Code
30081B). The term abandoned was not qualified
in any way; the statute therefore gave no indication
that anything less than complete discontinuation of
the nonconforming use would suffice to surrender
it.
Similarly, in Town of Islip v. P.B.S. Marina,
133 A.D.2d 81, 518 N.Y.S.2d 427, also relied upon
by petitioner, the relevant zoning ordinance con-
tained absolute terms, providing that
discontinuance of any non [-]conforming use for a
period of one year or more terminates such non-
conforming use. The Appellate Division thus con-
cluded that discontinuance connotes a complete
cessation * * * so that a minimal nonconforming
function, of itself, would not constitute an abandon-
ment (id., quoting Baml Realty, Inc. v. State, 35
A.D.2d 857, 314 N.Y.S.2d 1013). Indeed, in each
of the cases cited by petitioner adopting the com-
plete cessation standard, the statutes spoke exclus-
ively in terms of discontinuance, failing to qualify
that 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 5261 explicitly
equates abandonment with something less than dis-
continuation of the entire nonconforming use. Sec-
tion 5261 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 operationsas the courts below
didsimply 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 to
preserve the nonconforming use, moreover, would
eliminate the specific language requiring active
operations to avoid termination.
FN1. Tellingly, the drafters of section
5261 rejected a proposed termination pro-
vision that omitted the qualifying language
substantially all. In a Zoning Resolution
submitted to the City Planning Commis-
sion pursuant to a contract with the City of
New York, a special planning staff of ar-
chitects suggested the following regarding
termination of nonconforming uses: If a
non-conforming use discontinues active or
continuous operations for a continuous
period of one year, the building or other
structure or tract of land where such non-
conforming use previously existed shall
thereafter be occupied and used only for a
conforming use. Intent to resume active
operations shall not affect the foregoing
(Voorhees, Walker, Smith and Smith, Re-
port to N.Y. City Planning Commn., Pro-
posed Zoning Resolution 5131 [Aug.
1958] [emphasis added] ).
*421 The carefully chosen words of section
5261 thus impose a standard of substantial rather
than complete cessation.
FN2
The language of the
statute also contradicts the conclusion of both the
trial court and Appellate Division that section
5261 implicitly contains a good-faith standard, al-
lowing nonconforming activity to continue upon a
showing that a property owner, in the absence of
bad faith or fraud, intended to resume nonconform-
ing use.
FN2. Petitioner alternatively urges that, be-
cause section 5261 refers to discontinu-
ation of substantially all the non-
conforming uses emphasizing the plur-
al usesdiscontinuation should be
measured by whether a majority of the
number of nonconforming uses is main-
tained, regardless of the level of activity
devoted to each use. Petitioner, however,
overlooks the basic rule of statutory con-
struction that [w]ords in the singular
number include the plural, and in the plural
676 N.E.2d 862 Page 7
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
number include the singular (General
Construction Law 35).
[7][8] Generally, abandonment of a noncon-
forming use requires both an intent to relinquish
and some overt act or failure to act, indicating that
the owner neither claims nor retains any interest in
the 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-
dondiscontinuance of nonconforming activity for
the specified period constitutes an abandonment re-
gardless of intent (see, ***106**868Matter of
Prudco Realty Corp. v. Palermo, 60 N.Y.2d 656,
657658, 467 N.Y.S.2d 830, 455 N.E.2d 483).
Zoning Resolution 5261 provides a specific
lapse periodtwo yearsthereby rendering the
owner's intent irrelevant to abandonment. Indeed,
section 5261 goes even one step further, expressly
stating that [i]ntent to resume active operations
shall not affect the determination whether a non-
conforming use has been discontinued.
[9] Notwithstanding the unique language of
this particular zoning provision, petitioner urges
that section 5261 must be interpreted in its favor
as 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, Matter
of Allen v. Adami, 39 N.Y.2d 275, 277, 383
N.Y.S.2d 565, 347 N.E.2d 890). Zoning Resolution
5261, however, is not ambiguousits clear lan-
guage prohibits additional nonconforming activity
when substantially all of the active noncon-
forming operations are discontinued, and deems the
owner's intent irrelevant. Furthermore, public
policy specifically*422 supports termination of
nonconforming uses, and the Zoning Resolution it-
self seeks to achieve a gradual remedy for
incompatible nonconforming uses (Zoning Resol-
ution 5100). 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 of
the 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 strong
policy favoring the eventual elimination of non-
conforming uses ( Matter of Off Shore Rest.
Corp. v. Linden, 30 N.Y.2d 160, 164, 331
N.Y.S.2d 397, 282 N.E.2d 299).
Thus, the interpretation of section 5261 adop-
ted by the BSA and Appellate Division dissent-
errequiring only substantial, rather than com-
plete, discontinuation to terminate a nonconforming
use, regardless of the owner's good faithgives ef-
fect to all of the ordinance's terms (see, Matter of
Bliss v. Bliss, 66 N.Y.2d 382, 388389, 497
N.Y.S.2d 344, 488 N.E.2d 90 [courts must, where
possible, give meaning and effect to every word of
a 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 section
5261 will lead to arbitrary results warrants com-
ment. Section 5261 imposes an objective, not sub-
jective, standard: substantial discontinuation of act-
ive, nonconforming operations. Stated otherwise,
section 5261 terminates a nonconforming use
when 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 a
nonconforming use must necessarily be decided on
a case-by-case basis (1 Anderson's American Law
of Zoning 6.23, at 553 [Young 4th ed.] ). Cer-
tainly, the DOB and BSA, comprised of qualified
experts, are capable of making these determina-
tions.
(b) Application of the Legal Standard to the Facts
It is undisputed that Morgan's warehouse use
from 1961 to August 1989 was permitted as a non-
676 N.E.2d 862 Page 8
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
conforming use, and that Morgan completely
ceased all nonconforming warehouse operations for
20 months between August 1989 and April 1991.
The only question before the courts below and this
Court is whether *423 Morgan's warehouse activity
during the four-month period from April to July
1991 sufficed to preserve nonconforming use status
under Zoning Resolution 5261. If not, petitioner
is prohibited from operating a nonconforming retail
toy store in the residentially zoned portion of the
subject premises. Either way, of course, petitioner's
store may be developed in that segment of the prop-
erty situated in a commercial zoning district, where
a toy store is permitted as of right.
[11] The BSA's determination that Morgan
substantially discontinued nonconforming ware-
house use of the property for 24 months must be
confirmed if it has a rational basis and is supported
by substantial evidence***107 **869 ( Matter of
Cowan v. Kern, 41 N.Y.2d 591, 598, 394 N.Y.S.2d
579, 363 N.E.2d 305). And where substantial evid-
ence exists, a reviewing court may not substitute its
judgment for that of the BSAeven if the court
might have decided the matter differently ( Matter
of Cowan v. Kern, 41 N.Y.2d at 599, 394 N.Y.S.2d
579, 363 N.E.2d 305, supra; Matter of Collins v.
Codd, 38 N.Y.2d 269, 270, 379 N.Y.S.2d 733, 342
N.E.2d 524). In reaching its conclusion, moreover,
the BSA had de novo review power and was not
bound by the findings of the DOB (see, Zoning
Resolution 7211).
The BSA's review of warehouse logs for the
contested four-month period revealed only eight
customer accounts, compared to the 1,500 accounts
previously maintained by the company. It further
revealed that approximately 19 crates were shipped
to the warehouse at that time, which would have
occupied only one-tenth of one percent of the entire
volume of the building. This extremely low level of
activity 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 the
building and observed about 20 large storage crates;
various neighborhood residents who noticed that
the building was vacant and unused; and a local real
estate agent who found the warehouse to be com-
pletely empty, unheated, unlit and infested with pi-
geons. Based on this evidence, the BSA rejected the
testimony 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 July
1991.
The BSA's conclusion, however, was premised
on more than the drastic reduction in the volume of
storage 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, liability
coverage, customer records, employee records, cer-
tain directory listings, telephone records or sales re-
ceipts. Jeffrey Morgan even acknowledged that the
company failed to renew the requisite Department
of Consumer Affairs license after it expired in April
1991.
The BSA thus properly considered objective
factors regarding the nature and degree of noncon-
forming warehouse use, and its determination that
Morgan's level of warehouse operations from April
to July 1991 was too insignificant to preserve non-
conforming use status under section 5261 was
supported by substantial evidence. That conflicting
inferences may have been drawn from this evidence
is 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 weigh
the evidence or reject the choice made by [such
agency] where the evidence is conflicting and room
for choice exists ( Stork Rest. v. Boland, 282 N.Y.
256, 267, 26 N.E.2d 247).
Finally, petitioner's contention that the BSA
departed from its own precedent is unavailing. In
Matter of 4702/4712 Clarendon Rd., Brooklyn
(BSA Resolution, Mar. 23, 1993), the question was
676 N.E.2d 862 Page 9
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
also whether nonconforming commercial operations
were abandoned under Zoning Resolution 5261.
After reviewing various business records attesting
to the continuous commercial use of the property,
the BSA determined that the active operation of
substantially all the nonconforming use at the
premises had not been discontinued for two years.
In reaching the opposite conclusion here, the BSA
noted the failure to produce similar business docu-
ments. Clarendon, therefore, is not inconsistent
with the instant case.
sion should be reversed, with costs, and the petition
dismissed.
SIMONS, TITONE, BELLACOSA, SMITH, LEV-
INE and CIPARICK, JJ., concur.
N.Y.,1996.
Toys R Us v. Silva
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100
END OF DOCUMENT
676 N.E.2d 862 Page 10
89 N.Y.2d 411, 676 N.E.2d 862, 654 N.Y.S.2d 100

TAB # 5
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 of
Housing and Community Renewal (DHCR) insofar
as it limited rent overcharges recoverable by tenant
to 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, Appellate
Division, 59 A.D.3d 345, 874 N.Y.S.2d 76, af-
firmed. Tenant appealed.
Holding: The Court of Appeals, Ciparick, J., held
that DHCR could consider rent reduction orders
entered outside of four-year limitations period in
determining amount of overcharge.
Reversed and remitted.
Smith, J., filed dissenting opinion.
West Headnotes
[1] Landlord and Tenant 233 200.75
233 Landlord and Tenant
233VIII Rent and Advances
233VIII(A) Rights and Liabilities
233k200.70 Actions to Recover Over-
charges and Penalties
233k200.75 k. Admissibility of evid-
ence. Most Cited Cases
Division of Housing and Community Renewal
(DHCR) should, in calculating any rent overcharge,
honor rent reduction orders that, while issued prior
to four-year limitations period, remained in effect
during that period. McKinney's CPLR 213a; New
York City Administrative Code, 26516(a)(2).
233k200.72 k. Time to sue and limita-
tions. Most Cited Cases
Purpose 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 213a; New
York City Administrative Code, 26516(a)(2).
233k200.55 Grounds for Adjustment in
General
233k200.57 k. Changes in facilities or
services. Most Cited Cases
Rent reduction orders place continuing obliga-
tion upon owner to reduce rent until required ser-
vices are restored or repairs are made. New York
City Administrative Code, 26514.
Rent reduction orders impose continuing oblig-
938 N.E.2d 931 Page 1
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 Community
Renewal (DHCR) must consider in evaluating ten-
ant's overcharge complaint. McKinney's CPLR
213a; New York City Administrative Code,
26516(a)(2).
Rent 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 rent
overcharge claim in determining amount of over-
charge, where those orders remained in effect dur-
ing the limitations period. McKinney's CPLR 213a
; New York City Administrative Code,
26516(a)(2).
***499 BAS Legal Advocacy Program, Inc., Bronx
(Randolph Petsche of counsel), for appellant.
Gary R. Connor, General Counsel, New York State
Division 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 Krishnaswamy
of 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 Jamila
Wideman of counsel), for Met Council, Inc.,
amicus curiae.
*351 **932 OPINION OF THE COURT
CIPARICK, J.
[1] On this appeal, we are asked to interpret the
Rent Stabilization Law to ascertain the con-
sequences on a current rent overcharge claim of
two 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 the
Division of Housing and Community Renewal
(DHCR) should, in calculating any rent overcharge,
honor rent reduction orders that, while issued prior
to 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 the
Bronx, at an initial stabilized rent of $348.91 per
month. The following year, petitioner filed a com-
plaint with DHCR against the building's then own-
er, alleging a decrease in services related to, among
other things, the apartment's refrigerator, door lock
and fire escape window. As a result of the com-
plaint, DHCR issued an order reducing petitioner's
rent by the percentage of the most recent
guidelines adjustment for the tenant's lease which
commenced before the effective date of th[e] rent
reduction [order], and providing that the owner
could not collect any rent *352 increase until a rent
restoration order was issued. The rent reduction or-
der did not set a particular level of rent. According
to petitioner, the 1987 rent reduction order should
have resulted in a reduction of his rent to $326.23
per month.
In 1989, petitioner filed another complaint with
DHCR, alleging a roach infestation of the apart-
ment's stove. DHCR issued another rent reduction
order. Despite the 1987 and 1989 rent reduction or-
ders, however, the owner failed to make any repairs
and continued to charge petitioner the unreduced
rent.
In 1991, when the current owner purchased the
building, petitioner allegedly advised him of the
rent reduction orders. Although the current owner
938 N.E.2d 931 Page 2
apparently also failed to make any repairs, petition-
er continued to pay the unreduced rent and entered
into a series of leases requiring him to pay greater
rents.
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 prior
owners' failure to comply with the 1987 and 1989
rent reduction orders. A DHCR Rent Administrator
determined that the base date to be used was the
date four years prior to the filing of the overcharge
complaintDecember 11, 1999and established
that the legal regulated rent on the base date was
$508.99, which was the rent charged by the current
owner and paid by petitioner on that date. Although
taking notice of the 1987 and 1989 rent reduction
orders, the Rent Administrator in establishing the
legal stabilized rent calculated the overcharge using
the 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 the
rent at the base date level from December 11, 1999
until February 1, 2004. Effective February 1, 2004,
the Rent Administrator removed the 1987 and 1989
rent reduction orders and restored the rent to the
full amount of $579.99, which included rent in-
creases.
Petitioner sought administrative review of the
Rent 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 the
order that denied treble damages and (2) awarding
treble damages beginning two years prior to the fil-
ing of the overcharge complaint. DHCR denied the
remainder of petitioner's challenges, concluding
that the Rent Administrator properly limited recov-
ery to the four years preceding the overcharge *353
complaint and correctly used the base date
rent$508.99 as of December 11, 1999rather
than the rent established by the 1987 and 1989 rent
reduction orders in calculating the overcharge.
Petitioner commenced this CPLR article 78
proceeding seeking to annul DHCR's order. Su-
preme Court denied the petition and dismissed the
proceeding, concluding that DHCR's determination
was not arbitrary or capricious and had a rational
basis.
On petitioner's appeal, the Appellate Division
affirmed, holding:
The order, finding the base rent date to be
December 11, 1999 (four years prior to the filing
of the overcharge complaint), establishing the
legal base rent as the amount paid on that date,
freezing that rent until February 1, 2004, during
which time rent reduction orders were extant, and
directing the owner to refund overcharges collec-
ted from the base rent date inclusive of treble
damages, was not arbitrary and capricious, and
had a rational basis ( Matter of Cintron v. Calo-
gero, 59 A.D.3d 345, 346, 874 N.Y.S.2d 76 [1st
Dept.2009] [citations omitted] ).
FN1
FN1. The Appellate Division further held
that DHCR appropriately limited the
amount of rent overcharges recoverable to
the four years prior to the filing of the
overcharge complaint (59 A.D.3d at 346,
874 N.Y.S.2d 76). This is not an issue on
this appeal as petitioner has abandoned his
claim for rent overcharges in excess of
four years prior to the filing of his rent
overcharge claim with DHCR. Petitioner is
merely seeking to have the base rent date
set at an earlier time.
Petitioner appealed to this Court by permission
of 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 Division
order is final, we need not answer the certified
question.
II.
938 N.E.2d 931 Page 3
[2] Regardless of the forum in which it is com-
menced, a rent overcharge claim is **934 ***501
subject to a four-year statute of limitations (see
Rent Stabilization Law of 1969 [Administrative
Code of City of NY] 26516 [a][2] [hereinafter
Rent Stabilization Law]; CPLR 213a).
FN2
The
Rent Regulation Reform Act of 1997 clarified and
reinforced the four-year statute of limitations *354
applicable to rent overcharge claims ... by limiting
examination of the rental history of housing accom-
modations prior to the four-year period preceding
the filing of an overcharge complaint (Thornton v.
Baron, 5 N.Y.3d 175, 180, 800 N.Y.S.2d 118, 833
N.E.2d 261 [2005], citing Matter of Gilman v. New
York State Div. of Hous. & Community Renewal, 99
N.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 Rent
Admin., 15 N.Y.3d 358, 912 N.Y.S.2d 491, 938
N.E.2d 924 [2010] [decided today] ). Notably, the
term rental history is not defined in the relevant
statutes or in DHCR regulations and we need not
attempt to define it here. As we have previously ex-
plained, the purpose of the four-year limitations or
look-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, 833
N.E.2d 261, citing Matter of Gilman, 99 N.Y.2d at
149, 753 N.Y.S.2d 1, 782 N.E.2d 1137; see also
Jenkins 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, 920
N.E.2d 92 [2009] ).
FN2. Rent Stabilization Law
26516(a)(2) states:
[A] complaint under this subdivision
shall be filed with [DHCR] within four
years of the first overcharge alleged and
no determination of an overcharge and
no award or calculation of an award of
the amount of an overcharge may be
based upon an overcharge having oc-
curred more than four years before the
complaint is filed ... This paragraph shall
preclude examination of the rental his-
tory of the housing accommodation prior
to the four-year period preceding the fil-
ing of a complaint pursuant to this subdi-
vision,
and CPLR 213a states:
An action on a residential rent over-
charge shall be commenced within four
years of the first overcharge alleged and
no determination of an overcharge and
no award or calculation of an award of
the amount of any overcharge may be
based upon an overcharge having oc-
curred more than four years before the
action is commenced. This section shall
preclude examination of the rental his-
tory of the housing accommodation prior
to the four-year period immediately pre-
ceding the commencement of the ac-
tion.
[3] Moreover, Rent Stabilization Law 26514
, 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 its
most recent adjustment and for an order requiring
services to be maintained as provided in this sec-
tion, and [DHCR] shall so reduce the rent if it is
found that the owner has failed to maintain such
services. The owner shall also be barred from ap-
plying for or collecting any further rent in-
creases. The restoration of such services shall
result in the prospective elimination of such sanc-
tions (emphasis added).
Rent reduction orders thus place a continuing
obligation *355 upon an owner to reduce rent until
the required services are restored or repairs are
made (Thelma Realty Co. v. Harvey, 190 Misc.2d
303, 305306, 737 N.Y.S.2d 500 [App.Term, 2d
Dept. 2001]; see also Matter of Condo Units v. New
York State Div. of Hous. & Community Renewal, 4
938 N.E.2d 931 Page 4
A.D.3d 424, 425, 771 N.Y.S.2d 380 [2d Dept.2004]
, lv. denied **935***5025 N.Y.3d 705, 801
N.Y.S.2d 251, 834 N.E.2d 1261 [2005]; Crimmins
v. Handler & Co., 249 A.D.2d 89, 91, 671
N.Y.S.2d 469 [1st Dept.1998] ). Here, it is alleged
that the landlord failed to fulfill his continuing ob-
ligation by willfully flouting DHCR rent reduction
orders.
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 limitations
period but still in effect during that period, as is the
case here, has on a subsequent overcharge com-
plaint based on that order. Petitioner argues that
DHCR rent reduction orders must be considered by
DHCR in establishing the legal stabilized rent for
an apartment for the purposes of an overcharge
complaint and that, because the rent reduction or-
ders here remained in effectand imposed a con-
tinuing duty on the landlord to reduce rentduring
the relevant four-year period, the four-year look-
back rule is no bar to considering those orders for
the purposes of calculating the amount by which
petitioner was overcharged (see Thornton, 5 N.Y.3d
at 180, 800 N.Y.S.2d 118, 833 N.E.2d 261; see also
Matter of 508 Realty Assoc., LLC v. New York State
Div. of Hous. & Community Renewal, 61 A.D.3d
753, 755756, 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 determination
is supported by a rational basis and is consistent
with the statute as the Legislature intended the four-
year limitations/look-back period to be absolute,
prohibiting the consideration of earlier rent records
for the purpose of calculating a rent overcharge.
In this matter of statutory construction, where
deference 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, 918
N.E.2d 900 [2009] ), we find petitioner's argument
more 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 26516(a)(2) and CPLR 213a and
the continuing obligation of a landlord to reduce
rent and make repairs as per Rent Stabilization Law
26514 (see McKinney's Cons. Laws of NY,
Book 1, Statutes 95, 96 [in interpreting statutes,
the goal is to further the intent, spirit and purpose
of a statute, to harmonize all parts of a statute to
give effect and meaning to every part] ).
[4] Certainly, DHCR can take notice of its own
orders and the rent registrations it maintains to as-
certain the rent established *356 by a rent reduction
order without imposing onerous obligations on
landlords. Moreover, refusing to give effect to a
rent reduction order's direction to roll back rent in
cases where the order remained in effect during the
statutory four-year period would countenance the
landlord's failure to restore required services and
thwart the goals of the Legislature in enacting Rent
Stabilization Law 26514, namely, to motivate
owners of rent-stabilized housing accommodations
to provide required services, compensate tenants
deprived 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 Matter
of 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 the
four-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 calculates
the amount of rent overcharge by reference to the
1987 and 1989 rent reduction orders, which re-
mained in effect during the four-year limitations
period and, accordingly, were part **936 ***503 of
the rental history that the Rent Stabilization Law
permits DHCR to consider.
sion should be reversed, with costs, and the case re-
mitted to Supreme Court with directions to remand
to respondent DHCR for further proceedings in ac-
cordance with this opinion. The certified question
938 N.E.2d 931 Page 5
should not be answered upon the ground that it is
unnecessary.
SMITH, J., dissenting.
The relevant provisions of the Rent Regulation
Reform Act of 1997 seem as clear to me as they did
when I dissented in Thornton v. Baron, 5 N.Y.3d
175, 800 N.Y.S.2d 118, 833 N.E.2d 261 (2005).
[N]o determination of an overcharge and no
award or calculation of an award of the amount
of an overcharge may be based upon an over-
charge having occurred more than four years be-
fore the complaint is filed.... This paragraph shall
preclude examination of the rental history of the
housing accommodation prior to the four-year
period preceding the filing of a complaint pursu-
ant to this subdivision (Rent Stabilization Law
[RSL] of 1969 [Administrative Code of City of
NY] 26516[a][2]; see also id. 26516[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*357
is not challenged within four years of its filing,
neither such rent nor service of any registration
shall 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 case
it writes another one, which I also think unjustified.
I grant that there is some tension between the
command of the 1997 Reform Act that rental his-
tory going back more than four years may not be
considered and the provision of RSL 26514 that
rent reduction orders based on a failure to provide
required services remain in effect until the defi-
ciency in services is cured. There is not such a stark
conflict, however, as to justify the majority's choice
to let one statute nullify the other. DHCR has, it
seems to me, found a fair solution by ordering that,
where the noncompliance goes on for more than
four years, the rent is in effect frozen for a rolling
four-year periodso 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 the
tenant, who need only file a complaint within four
years of being overcharged to avoid any time bar.
It is thus unnecessary to resort to the fiction
embraced by the majority that a rent level existing
more than four years earlier is transformed by the
rent 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 50203, 938
N.E.2d at 93536). I would affirm the order of the
Appellate Division.
Chief Judge LIPPMAN and Judges GRAFFEO,
READ, PIGOTT and JONES concur with Judge
CIPARICK; Judge SMITH dissents and votes to af-
firm in a separate opinion.
N.Y.,2010.
Cintron v. Calogero
15 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 6

TAB # 6
In the Matter of KSLMCOLUMBUS APART-
MENTS, INC., Respondent,
v.
NEW YORK STATE DIVISION OF HOUSING
AND COMMUNITY RENEWAL, Appellant,
and
Westgate Tenants Association et al., Interven-
orsAppellants.
June 14, 2005.
Background: Owner of residential apartment
buildings brought article 78 challenge to Division
of 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. The
Supreme 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 been
vacancy on or after enactment date of Vacancy De-
control Law (VDL), owner could seek unique and
peculiar adjustments.
Affirmed as modified.
West Headnotes
416.1
15AIV Powers and Proceedings of Administrat-
ive Agencies, Officers and Agents
15AIV(C) Rules and Regulations
15Ak416 Effect
15Ak416.1 k. In General. Most Cited
Cases
Statutes 361 219(1)
361 Statutes
Cited Cases
Statutes 361 219(4)
361 Statutes
361k219(4) k. Erroneous Construc-
tion; Conflict with Statute. Most Cited Cases
Where interpretation of statute involves spe-
cialized knowledge and understanding of underly-
ing operational practices or entails evaluation of
factual 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 interpretive
regulations are accorded much less weight.
233k200.15 Persons and Premises Subject
to Regulations
233k200.17 k. Actual Use or Occu-
pancy on Crucial Date. Most Cited Cases
Landlord and Tenant 233 200.58
835 N.E.2d 643 Page 1
233k200.55 Grounds for Adjustment in
General
233k200.58 k. Peculiar Circumstances.
Most Cited Cases
Landlord and Tenant 233 200.83
233k200.83 k. Termination of Rent Con-
trol and Recontrol. Most Cited Cases
Following withdrawal of apartment buildings
from Mitchell-Lama program, thus subjecting them
to rent stabilization, apartments that had been con-
tinuously inhabited before July 1, 1971 enactment
of Vacancy Decontrol Law (VDL) were subject to
Rent Stabilization Law (RSL), and apartments that
had 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.; Rent
Stabilization Code 2520.11(c),
McK.Unconsol.Laws; McKinney's Private Housing
Finance Law 10 et seq.; New York City Adminis-
trative Code, 26513(a).
233k200.15 Persons and Premises Subject
to Regulations
233k200.17 k. Actual Use or Occu-
pancy on Crucial Date. Most Cited Cases
Building no longer subject to rent regulation
under Private Housing Finance Law (PHFL) loses
its exemption under this statute and becomes sub-
ject to rent stabilization. McKinney's Private Hous-
ing Finance Law 10 et seq.
233k200.83 k. Termination of Rent Con-
trol and Recontrol. Most Cited Cases
Purpose of Emergency Tenant Protection Act
of 1974 (ETPA) was to recapture or include within
rent-stabilization system housing accommodations
that were never rent regulated or that had been de-
controlled. McK.Unconsol.Laws 8623 et seq.
233k200.10 k. Statutory and Municipal
Regulations in General. Most Cited Cases
Purpose of Urstadt Law was to prevent any
new tightening of rent regulation after its enact-
ment, not to prevent expiration of exemption from
rent stabilization that was already in existence as of
enactment of Rent Stabilization Law of 1969
(RSL). McK.Unconsol.Laws 8605.
***784 *304 Eliot Spitzer, Attorney General, New
York City (Oren L. Zeve, Caitlin J. Halligan and
Michael 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), for
intervenors-appellants.
*306 Rosenberg & Estis, P.C., New York City (
Gary M. Rosenberg, Jeffrey Turkel and Nicholas
Kamillatos of counsel), for respondent.
*307 Patterson, Belknap, Webb & Tyler LLP, New
York City (Karl E. Seib, Jr. and Laura J. Wood of
counsel), 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 of
counsel) for Community Service Society of New
York and others, amici curiae.
Emery Celli Brinckerhoff & Abady LLP, New York
835 N.E.2d 643 Page 2
City (Matthew D. Brinckerhoff and Katherine
Rosenfeld of counsel), for New York State Tenants
& Neighbors Coalition, Inc. and others, amici curi-
ae.
G.B. SMITH, J.
**644 In this appeal by the Division of Hous-
ing and Community Renewal (DHCR), the issue is
whether buildings previously constructed and oper-
ated pursuant to the MitchellLama program are
made subject to the Rent Stabilization Law of
1969(RSL) by the RSL itself, or by the Emergency
Tenant Protection Act of 1974 (ETPA). We con-
clude that apartments inhabited continuously since
before July 1, 1971 were made subject to stabiliza-
tion by the RSL, and those in which there has been
a vacancy on or after July 1, 1971 were made sub-
ject to stabilization by the ETPA. In 1967 and 1968,
the predecessor of KSLMColumbus Apartments,
the Westgate Housing Corporation (Westgate), con-
structed three buildings located at West 96th and
West 97th Streets in Manhattan. Tenants first
moved into these buildings in 1968. Westgate was a
limited profit housing company which constructed
and financed these buildings through article II of
the Private Housing Finance Law, commonly re-
ferred to as the MitchellLama Law. Enacted in
1955, the MitchellLama legislation offered finan-
cial incentives to landlords to develop low- and
middle-income housing. Incentives included long-
term, low-interest government mortgage loans and
real 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 1979
and was restructured into KSLM.
In March 1998, KSLM withdrew the buildings
from the MitchellLama program and they immedi-
ately became subject to rent stabilization. The im-
mediately preceding rent for each *309 apartment
became the initial regulated rent under Rent Sta-
bilization Law (RSL) of 1969 (Administrative Code
of 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 stabilized
monthly 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 the
MitchellLama program, KSLM began paying full
real estate taxes and interest at market rates. KSLM
also enter[ed] the legislative quagmire which en-
compasses the New York City and New York State
rent control laws ( Matter of KSLMColumbus
Apts. v. New York State Div. of Hous. & Community
Renewal, 6 A.D.3d 28, 30, 772 N.Y.S.2d 665 [1st
Dept.2004] ).
FN1. Section 26512(b) reads:
The initial regulated rent for housing
accommodations subject to this law on
the local effective date of the emergency
tenant protection act of nineteen sev-
enty-four or which become subject to
this law thereafter, pursuant to such act,
shall be ...
(3) For housing accommodations other
than those described in paragraphs one
and two of this subdivision, the rent re-
served in the last effective lease or other
rental agreement.
FN2. Section 2521.1(j) reads in part: For
housing accommodations whose rentals
were previously regulated under the PHFL,
or any other State or Federal law, other
than the RSL or the City Rent Law, upon
the termination of such regulation, the ini-
tial legal regulated rent shall be the rent
charged 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 rent
adjustments under the ETPA pursuant to RSL
26513(a). That section provides:
835 N.E.2d 643 Page 3
The tenant or owner of a housing accommoda-
tion made subject to this law by the emergency
tenant protection act of nineteen seventy-four
may, within sixty days of the local effective date
of this section or the commencement of the first
tenancy thereafter, whichever is later, file with
the commissioner an application for adjustment
of the initial legal regulated rent for such housing
accommodation. The commissioner may adjust
such initial legal regulated rent upon a finding
that 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 prevailing
in the same area for substantially similar housing
accommodations.
*310 KSLM stated in its applications that its
rents were substantially different from the rents
generally prevailing in the same area for substan-
tially similar housing accommodations since its
buildings had been governed by the Private Hous-
ing Finance Law for over 29 years and were not
economically viable without the section 26513(a)
adjustment of initial rents.
The DHCR Rent Administrator denied KSLM's
applications on February 18, 2000, finding that
KSLM was ineligible to apply for relief under sec-
tion 26513(a) because it became subject to the
[RSL] not by virtue of the [ETPA] but by virtue of
the [RSL] when the building left the
MitchellLama program. In January 2001, the
Deputy Commissioner denied KSLM's petitions for
administrative review and found that KSLM erred
in assuming every housing accommodation is made
subject to the RSL by the ETPA if it came out of its
exempt status after July 1, 1974.
KSLM brought a CPLR article 78 proceeding
challenging 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 that
the jurisdiction of the ETPA covered any class or
classes of housing accommodations ... exempted
from regulation and control under the provisions of
the emergency housing rent control law, the local
emergency housing rent control act or the New York
city rent stabilization law of nineteen hundred
sixty-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 since
the buildings in question were clearly exempted
from the Rent Stabilization Law, they were covered
by ETPA. This Court granted DHCR and the inter-
venors leave to appeal and we now modify the Ap-
pellate Division's holding.
Discussion
The New York City Council enacted the RSL
in 1969 (Administrative Code 26501 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 six
or more dwelling units which:
(1) were completed after February first, nineteen
hundred forty-seven, except dwelling units ... (b)
*311 subject to rent regulation under the private
housing finance law or any other state law
(Administrative Code 26504[a][1][b] ).
In 1971, the State Legislature determined that
new construction had essentially come to a stand-
still and, in response, enacted three statutes de-
signed to limit local rent regulation, two of which
are presently relevant: the Vacancy Decontrol Law
(VDL) and the Urstadt Law. The VDL exempted
from 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
835 N.E.2d 643 Page 4
need for rent regulation due to a shortage brought
on by high demand. It enacted the ETPA (L. 1974,
ch. 576, 4), amended the VDL so vacancies on or
after July 1, 1971 would be subject to the ETPA,
and amended the RSL so owners of units brought
under stabilization by ETPA could seek initial legal
regulated rent adjustments based on unique or pe-
culiar circumstances (L. 1974, ch. 576, 12,
adding Administrative Code YY516.0.2 [a]
[now 26513(a) ] ). Section 3 of the ETPA al-
lowed New York City to extend rent stabilization to
nonstabilized housing after a determination that an
emergency (five percent or less vacancy rate) exis-
ted. Section 5 of the ETPA allowed stabilization
coverage to all or any class or classes of housing
accommodations with certain exceptions, includ-
ing rent-controlled apartments for so long as they
maintained that status, and apartments in buildings
built on or after January 1, 1974. This effectively
allowed New York City to bring apartments in
buildings of six or more units within New York
City's rent stabilization system, including apart-
ments that had been decontrolled under the VDL,
were in buildings constructed after 1969 but before
January 1, 1974, or became vacant after 1975.
On this appeal, DHCR and intervenor Westgate
Tenants Association contend that once KSLM's
MitchellLama buildings ceased being subject to
the 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 of
these buildings. If the argument that the 1969 RSL
applies prevails, **647 ***787 KSLM must apply
for an initial legal regulated rent under a hardship
standard pursuant to Rent Stabilization Code
2522.4(b) and *312 (c), which base hardship in-
creases on the relationship between the annual rent
and a calculation of either the annual net income or
the annual operating expenses of the building, with
an increase limit of six percent.
By contrast, KSLM argues that the buildings
are not subject to stabilization by virtue of the 1969
RSL but by virtue of the 1974 ETPA and thus are
subject to the initial rent adjustment pursuant to
RSL 26513(a). If this argument prevails, then,
pursuant to section 26513(a), KSLM may file an
application with DHCR for an adjustment of the
initial 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 involves
specialized knowledge and understanding of un-
derlying operational practices or entails an evalu-
ation of factual data and inferences to be drawn
therefrom, the courts should defer to the adminis-
trative agency's interpretation unless irrational or
unreasonable (Kurcsics v. Merchants Mut. Ins. Co.,
49 N.Y.2d 451, 459, 426 N.Y.S.2d 454, 403 N.E.2d
159 [1980]; see also, Matter of Union Indem. Ins.
Co. of N.Y., 92 N.Y.2d 107, 114115, 677 N.Y.S.2d
228, 699 N.E.2d 852 [1998]; Matter of Rosen v.
Public Empl. Relations Bd., 72 N.Y.2d 42, 4748,
530 N.Y.S.2d 534, 526 N.E.2d 25 [1988] ). By con-
trast, where, as here, the question is one of pure
statutory interpretation dependent only on accurate
of the administrative agency and its interpretive
regulations are therefore to be accorded much less
weight (Kurcsics v. Merchants Mut. Ins. Co., 49
N.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 is
conceded that all the apartments are subject to rent
stabilization, but the question is whether they would
have been subject to rent stabilization if the ETPA
had never been passed. These are pre1969 build-
ings, which, if they had not been MitchellLama
buildings, would have been regulated under the
1969 law, and would not have needed the ETPA to
bring them under stabilization. The 1969 law
835 N.E.2d 643 Page 5
(Administrative Code 26504[a][1] [b] ) exempts
multiple dwellings that are subject to rent regula-
tion under the private housing finance law. We
agree with DHCR that a building no longer subject
to rent regulation under the Private Housing Fin-
ance Law loses its exemption under this statute and
becomes subject to rent *313 stabilization. Thus,
petitioner's buildings would be subject to rent sta-
bilization under the 1969 law, even if the ETPA
had never been enacted.
The 1969 RSL's exception for MitchellLama
buildings provides:
[The RSL] shall apply to ...
Class A multiple dwellings not owned as a co-
operative or as a condominium ... containing six
or 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 any
other state law ... (Administrative Code
26504[a][1][b] ).
KSLM argues that this language shows the
MitchellLama units were never subject**648
***788 to the RSL and could therefore never revert
to the RSL. We reject this argument. It is clear that
it was the intent of the Legislature that
MitchellLama buildings remain in the rent stabil-
ization system after Private Housing Finance Law
withdrawal (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.2d
773 [1995] [holding that a building once rent stabil-
ized which lost its cooperative status again became
subject to the RSL] ). ETPA was enacted to recap-
ture or include within the rent stabilization system
housing accommodations that were never rent regu-
lated or that had been decontrolled. The KSLM
buildings, built before March 10, 1969, were
already under the RSL system when ETPA was en-
acted. Therefore, ETPA's language did not apply to
KSLM 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 January
1, 1974, and whose rentals were previously regu-
lated under the PHFL ... shall become subject to the
ETPA, the RSL and this Code, upon the termination
of such regulation. While this language might be
read as implying that former MitchellLama apart-
ments are made subject to rent stabilization by
the ETPA, we conclude that it means simply that
those 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 MitchellLama buildings built
before 1969 and the Code cannot change that.
[5] KSLM argues that the Urstadt Law, passed
in 1971, would prevent former MitchellLama
apartments from reverting to rent stabiliza-
tioni.e., that no such reversion could take place if
the ETPA did not exist. The Urstadt Law says that
no local law or ordinance shall hereafter provide
for the regulation and control of residential rents
and eviction in respect of any housing accommoda-
tions which are ... presently exempt from such regu-
lation and control .... (Emphasis added.) It also
says that [n]o housing accommodations presently
subject to regulation and control pursuant to local
laws or ordinances ... shall hereafter be by local
law or ordinance ... subjected to more stringent or
restrictive provisions of regulation and control than
those presently in effect. (Emphasis added.) The
Urstadt Law was intended to prevent any new tight-
ening of rent regulation after 1971, not to prevent
the expiration of an exemption from rent stabiliza-
tion that was already in existence in 1969.
At the time of the Urstadt Law's enactment, the
RSL was the default rent stabilization regulatory
scheme. Halting its application to exempt units
835 N.E.2d 643 Page 6
whose expirations were certain to occur would read
too much into the Urstadt Law in that the Legis-
lature was attempting to end rent stabilization in
New York City. This simply was not the case. This
Court has explained before that the objective of the
Urstadt Law was to limit the fear of more stringent
control [to] encourage owners to invest in the main-
tenance and improvement of existing housing units
and thereby help to stem the tide of abandonment of
sound 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, 765
N.E.2d 829 [2001], quoting **649***789Mayer v.
City Rent Agency, 46 N.Y.2d 139, 150, 412
N.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 as
to apartments that became vacant on or after July 1,
1971, the 1969 RSL is inapplicable. The VDL, ef-
fective June 30, 1971, provided simply: housing
accommodations which become vacant shall be ex-
empt from regulations and control ... (L. 1971, ch.
371, 6). But for the ETPA, that would still be the
law today, and would apply to former
MitchellLama apartments that were vacated after
the VDL's effective date. A 1974 amendment *315
changed the language to read housing accommod-
ations which became vacant on or after July first,
nineteen hundred seventy-one or which hereafter
become vacant shall be subject to the provisions of
the emergency tenant protection act of nineteen
[hundred] seventy-four. (L. 1974, ch. 576, 2.)
The apartments described in that section are made
subject to rent stabilization by the ETPA. Thus,
RSL 26513(a) applies to those apartments.
The Appellate Division cites Matter of Zeitlin
v. New York City Conciliation & Appeals Bd., 46
N.Y.2d 992, 416 N.Y.S.2d 233, 389 N.E.2d 828
[1979], where we held that an apartment originally
exempted from prior city rent control provisions
was subject to the ETPA, as being particularly in-
structive. The present case is distinguishable from
Zeitlin where the prior local provision exempted the
housing accommodation from rent control and the
tenant argued the unit was therefore subject to the
ETPA. We agreed with the tenant that ETPA cover-
age immediately attached. The apartment in Zeitlin,
however, was precisely the type of unit the State
Legislature wanted included in the rent stabilization
system. Since the choice was between no regulation
and the ETPA, this Court chose to follow the intent
of the State Legislature and the City Council that
such an accommodation be regulated. In the present
case, the choice is between the RSL, which would
have governed the Private Housing Finance Law
unit upon withdrawal in the absence of the VDL,
and the ETPA, which sought to reverse decontrol
legislation and bring more units into the system.
The RSL was applicable to KSLM apartments that
were inhabited between 1968 and the 1971 enact-
ment of the VDL because it was the purpose of the
RSL to regulate such housing.
DHCR concedes that the amended VDL sub-
jects to ETPA coverage all KSLM apartments that
became vacant after dissolution in 1998. DHCR
maintains, however, that the RSL was suspended
between 1971 and 1974 due to the Private Housing
Finance Law. Therefore, decontrol did not apply.
This argument is inconsistent with DHCR's other
argument that the RSL applied to KSLM's apart-
ments from the time of its enactment. We agree
with the Appellate Division that it is inherently
contradictory to argue KSLM apartments are cur-
rently subject to RSL jurisdiction to the exclusion
of ETPA jurisdiction, but not subject to the RSL for
the purposes of vacancy deregulation ( Matter of
KSLMColumbus Apts. v. New York State Div. of
Hous. & Community Renewal, supra, 6 A.D.3d at
39, 772 N.Y.S.2d 665). Therefore, we conclude that
the KSLM apartments vacated on or after July 1,
*316 1971 are subject to the ETPA and that as to
those apartments pursuant to RSL 26513(a),
KSLM may apply to DHCR for unique or peculi-
ar rent adjustments.
835 N.E.2d 643 Page 7
sion should be modified, without costs, in accord-
ance with this opinion and, as so modified, af-
firmed.
**650 ***790 Chief Judge KAYE and Judges
CIPARICK, ROSENBLATT, GRAFFEO, READ
and R.S. SMITH concur.
Order modified, etc.
N.Y.,2005.
KSLM-Columbus Apartments, Inc. v. New York
State Div. of Housing and Community Renewal
5 N.Y.3d 303, 835 N.E.2d 643, 801 N.Y.S.2d 783,
2005 N.Y. Slip Op. 04989
END OF DOCUMENT
835 N.E.2d 643 Page 8

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 SOCIAL
SERVICES, Appellant.
June 25, 1992.
Radiologist with subspecialty in sonography
was billed by Department of Social Services for al-
leged Medicaid overpayments, and radiologist
brought suit seeking declaratory judgment that
modifier reducing bill where multiple x-rays are
performed during same visit did not apply to sono-
grams. The Supreme Court, Albany County,
Cheeseman, J., granted radiologist's motion for
summary judgment, and Department appealed. The
Supreme Court, Appellate Division, Harvey, J.,
held that provision in the Medicaid Management
Information System manual requiring a special
code, for billing purposes, to be included when
more than one x-ray is performed in one visit
does 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 which
Crew, J., concurred.
West Headnotes
[1] Health 198H 473
198H Health
198HIII Government Assistance
198HIII(B) Medical Assistance in General;
Medicaid
198Hk472 Benefits and Services Covered
198Hk473 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 than
one x-ray is performed in one visit does not apply
to all radiological services, including sonograms
and ultrasounds, but, rather, is limited to ordinary
meaning of x-ray, which is defined in dictionary as
nonluminous, electromagnetic ray or radiation of
extremely short wave length capable of penetrating
body tissues and affecting photographic plates and
fluorescent screens. McKinney's Statutes 94,
240.
[2] Health 198H 473
198H Health
198HIII Government Assistance
198HIII(B) Medical Assistance in General;
Medicaid
198Hk472 Benefits and Services Covered
198Hk473 k. In General. Most Cited
Cases
(Formerly 356Ak241.91, 356Ak241.90)
Whether the term X-ray in Medicaid Man-
agement Information System manual was intended
to be limited to ordinary definition of x-ray, rather
than 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 Social
Services' area of expertise, and thus, court was not
required to give special deference to Department's
interpretation of term as including ultrasounds and
sonograms. 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.
Page 1
181 A.D.2d 12, 585 N.Y.S.2d 238
(Cite as: 181 A.D.2d 12, 585 N.Y.S.2d 238)
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 Albany
County, which, inter alia, granted plaintiff's motion
for summary judgment and made a declaration in
plaintiff's favor.
Plaintiff, a physician licensed to practice in
New York, is a radiologist with a subspecialty in
sonography, also known as ultrasound. Plaintiff
was, during all relevant times, a Medicaid provider
who performed and billed Medicaid for sonograph-
ic examinations performed on Medicaid recipients.
Among those billings were ones for consecutive
sonograms on one or more patients during a single
visit and, in each case, plaintiff billed each sono-
gram at the full amount set forth in the Medicaid
Management Information System (hereinafter
MMIS) reimbursement fee schedule.
[1] In April 1988 defendant informed plaintiff
that, after reviewing the claims submitted by
plaintiff in 1986 and 1987, its analysis showed that
plaintiff allegedly improperly failed to use the
MMIS modifier 62 described in the MMIS Pro-
vider Manual when submitting claims for multiple
sonograms performed during a single visit. At the
relevant time, the MMIS manual's definition of the
62 modifier read as follows:
Multiple XRay Exams: When more than one x-
ray exam is performed during the same visit, use
the usual fee code for the primary procedure and
identify the secondary procedure(s) by adding the
modifier 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 are
set forth in defendant's regulations (see, 18
NYCRR 533.6[e] ) and the MMIS -62
modifier employs the term radiology pro-
cedure instead of x-ray exam. However,
since this change was made after the time
relevant to this appeal, interpretation of the
latter term is the sole subject of this ap-
peal.
According to defendant, the term x-ray in the
MMIS 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 that
he improperly failed to use the 62 modifier. The
parties agreed that plaintiff would bring a declarat-
ory judgment action upon a stipulated set of facts to
decide the 62 modifier issue. Following joinder
*14 of issue, plaintiff moved for summary judg-
ment seeking a declaration that the 62 modifier
did not apply to multiple sonograms performed dur-
ing single visits in 1986 and 1987. Defendant cross-
moved for summary judgment but Supreme Court
found in favor of plaintiff. A judgment was entered
in 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 the
heading General Information and Rules states
that [t]hese rules apply **240 to all procedure
codes found in the Radiology Section of this Fee
Schedule including * * * ultrasound * * * proced-
ures. Rule 3 of the General Information and Rules
states that when multiple x-ray examinations are
performed during the same visit, the MMIS 62
modifier must be used in billing Medicaid. As
noted previously, the definition of the 62 modifier
contained in the rules also makes reference to
billing 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
Page 2
181 A.D.2d 12, 585 N.Y.S.2d 238
(Cite as: 181 A.D.2d 12, 585 N.Y.S.2d 238)
rule states that the rules apply to all radiological
procedures, the term x-ray must include ultra-
sound or sonograms. Moreover, defendant argues
that because the MMIS 62 modifier is a part of the
regulations which it enforces, its interpretation of
the 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 judicial
deference, we note that the term x-ray in the 62
modifier is not a technical term within defendant's
area 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, 548
N.Y.S.2d 630, 547 N.E.2d 1157; Kurcsics v. Mer-
N.Y.S.2d 454, 403 N.E.2d 159; Matter of Judd v.
Constantine, 153 A.D.2d 270, 272, 551 N.Y.S.2d
378). As a result, we look instead to the well-settled
rule of construction that words of common usage
should be given their ordinary meaning unless it is
clear that a different meaning was intended (see,
Catlin v. Sobol, 77 N.Y.2d 552, 559, 569 N.Y.S.2d
353, 571 N.E.2d 661; We're Assocs. Co. v. Cohen,
Stracher & Bloom, 65 N.Y.2d 148, 151, 490
N.Y.S.2d 743, 480 N.E.2d 357; Matter of Cabrini
Med. Center v. Axelrod, 116 A.D.2d 834, 836, 497
N.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 fee
schedules apply if not also among lay persons,
commonly understood to mean two different *15
procedures.
FN2
Moreover, despite defendant's con-
tention that the term x-ray really means all radi-
ological services, it is significant that the language
in defendant's definition of the MMIS 60 and 61
modifiers during the relevant period refer specific-
ally to radiological services and do not simply
state x-rays. It therefore becomes apparent that
the general phrase radiological services, and not
x-rays, was meant to refer to all the radiological
procedures named in the first sentence of the manu-
al under General Information Rules, which ex-
plains why this general phrase is then repeated in
two of the modifiers. This is confirmed by the use
of 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's
Cons. 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 than
its ordinary meaning, we find no basis for disturb-
ing Supreme Court's determination.
FN2. The dictionary defines the term
x-ray as a nonluminous electromagnetic
ray or radiation of extremely short
wavelength * * * capable of penetrating
opaque or solid substances, ionizing gases
and body tissues through which they pass
or, by extended exposure, destroying tis-
sue, and affecting photographic plates and
fluorescent screens (Webster's New
World Dictionary of the American Lan-
guage 1644 [20 college ed.] ).
Ultrasound is defined as the application
of ultrasonic waves to therapy or dia-
gnostics, as in deep-heat treatment of a
joint or imaging of internal structures
(Random House Dictionary of the English
Language 20502051 [unabridged 2d ed
1987] ). A sonogram is the visual image
produced by reflected sound waves in a
diagnostic ultrasound examination (id., at
1820).
*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 the
Medicaid Management Information System
(hereinafter MMIS) Provider Manual, the majority,
Page 3
181 A.D.2d 12, 585 N.Y.S.2d 238
(Cite as: 181 A.D.2d 12, 585 N.Y.S.2d 238)
in our view, misses the point of defendant's ra-
tionale for applying the 62 modifier to plaintiff's
charges for multiple sonograms performed on the
same patient during a single visit. The applicable
provision is rule 3 of the general rules of the radi-
ology section of the MMIS Provider Manual. Rule
3 states in pertinent part:
When multiple x-ray examinations are performed
during the same visit, the charge shall be based
on the greater fee plus 60% of the lesser fee(s). (
See MMIS Modifier 62.) * * *.
The applicability of the 62 modifier thus
arises 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 introductory
paragraph of the general rules of the radiology sec-
tion of the MMIS Provider Manual which clearly
specifies that [t]hese rules apply to all procedure
codes found in the Radiology Section of this Fee
Schedule 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 Manual
makes them the same for purposes of the general
rules governing Medicaid charges for radiological
diagnostic services. Accordingly, there is nothing
unreasonable in applying the billing restrictions for
multiple, single-visit X-ray examinations contained
in rule 3 to multiple, single-visit sonograms. Like-
wise, it seems obvious that, although rule 4 of the
radiology general rules bars payment for repeat x-
ray examinations * * * required because of technic-
al or professional error in the original x-rays, it
would equally apply to repeat sonograms or CT
scans required because of such errors. Indeed, to
hold otherwise would be to eliminate any meaning
or application of the previously quoted introductory
provision of the radiology general rules, making
[t]hese rules applicable to all such radiological
procedures.
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 applicable
to 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 most
costly procedure he performed, plus 60% of the
schedule fee for all other procedures performed on
the patient during the same visit. The uncontested
explanation of the purpose underlying this restric-
tion on billing for multiple, single-visit radiological
procedures, i.e., to reflect the fact that a radiologist
achieves cost savings performing multiple proced-
ures on the same patient in a single session, since
the patient is already present and prepared for the
procedure, is contained in the affidavit of a bureau
director in defendant's Division of Medical Assist-
ance submitted on defendant's cross motion for
summary judgment. The 60% billing restriction for
procedures subsequent to the first procedure during
a single visit attempts to pass some of [the] sav-
ings [in the radiologist's time and labor] on to the
Medicaid program. The affiant also states, without
contradiction in the record, that the foregoing ra-
tionale for rule 3 and the MMIS62 modifier ap-
plies with *17 equal force regardless of whether
the radiologist is using x-rays or ultrasound.
When, as here, the interpretation by the admin-
istrative agency of its own rules and regulations is
not 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, the
courts have deferred to the administrative construc-
tion of the agency's rules when, as in the instant
case, that interpretation is not irrational or contrary
to 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., 174
A.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, 123
A.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
Page 4
181 A.D.2d 12, 585 N.Y.S.2d 238
(Cite as: 181 A.D.2d 12, 585 N.Y.S.2d 238)
N.E.2d 557). Moreover, as demonstrated by the
aforementioned affidavit of the bureau director of
defendant's Division of Medical Assistance, applic-
ation of the rules here involves the agency's know-
ledge and understanding of underlying radiological
practices (see, Matter of Fiorillo v. New York State
Dept. of Envtl. Conservation, supra ). Contrary to
the majority's position, the deference due an admin-
istrative agency's interpretation of its own rules and
regulations is not limited to instances where the
language under review is technical terminology
within the agency's expertise. At least in part, de-
ference in interpretation is accorded the agency as
drafter of the regulation because the administrators
are likely to know more about the background of
intent 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 of
enforcing (see, Udall v. Tallman, 380 U.S. 1, 16, 85
S.Ct. 792, 801, 13 L.Ed.2d 616; Bowles v. Seminole
Rock & Sand Co., 325 U.S. 410, 413414, 65 S.Ct.
1215, 1217, 89 L.Ed. 1700; see also, Lyng v.
Payne, 476 U.S. 926, 939, 106 S.Ct. 2333, 2341, 90
L.Ed.2d 921; Immigration & Naturalization Serv. v.
Stanisic, 395 U.S. 62, 72, 89 S.Ct. 1519, 1525, 23
L.Ed.2d 101).
Inasmuch as application of the billing restric-
tions of rule 3 of the general rules of the radiology
section of the MMIS Provider Manual to multiple,
single-visit ultrasound procedures is consistent with
the purpose of that rule and it has not been shown
to conflict with any of the provisions of the MMIS
Reimbursement Schedule or Provider Manual, de-
fendant's interpretation should be upheld (see, Mat-
ter of Kaufman v. Sarafan, 59 N.Y.2d 855, 857, 465
N.Y.S.2d 924, 452 N.E.2d 1252).
For all the foregoing reasons, we would reverse
Supreme Court's judgment, grant defendant's cross
motion 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 Services
181 A.D.2d 12, 585 N.Y.S.2d 238
END OF DOCUMENT
Page 5
181 A.D.2d 12, 585 N.Y.S.2d 238
(Cite as: 181 A.D.2d 12, 585 N.Y.S.2d 238)

TAB # 8
ment, New York.
In the Matter of LEWIS FAMILY FARM, INC.,
Appellant,
v.
NEW YORK STATE ADIRONDACK PARK
AGENCY, Respondent. (Proceeding No. 1.)
In the Matter of Lewis Family Farm, Inc. Respond-
ent,
v.
Adirondack Park Agency, Appellant. (Proceeding
No. 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 district
brought action for judgment declaring that state
park agency lacked jurisdiction over owner-oper-
ator's project to construct dwelling units to house
farm workers on its farm and enjoining agency
from interfering with construction. The Supreme
Court, Essex County, Ryan, J., converted action in-
to Article 78 proceeding, then dismissed petition as
unripe. Owner-operator appealed. Owner-operator
commenced new Article 78 proceeding, challenging
agency'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, Essex
County, Meyer, J., 20 Misc.3d 1114, 2008 WL
2653236, ruled that collateral estoppel did not bar
owner-operator's claims and dismissed individual
defendants, and thereafter, 22 Misc.3d 568, 868
N.Y.S.2d 481, annulled agency's administrative de-
termination and granted summary judgment to own-
er-operator dismissing agency's amended complaint
in enforcement action. Agency appealed.
Holding: The Supreme Court, Appellate Division,
Garry, J., held that housing units being constructed
for farm workers qualified as agricultural use
structures, as defined by Adirondack Park Agency
Act, and were exempt from park agency's jurisdic-
tion and permit requirements under Adirondack
Park Agency Act and Wild, Scenic and Recreation-
al Rivers System Act.
Affirmed.
West Headnotes
[1] Statutes 361 219(9.1)
361 Statutes
361k219(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 management
area of park were single family dwellings for
which permits from park agency were required un-
der Adirondack Park Agency Act and Wild, Scenic
and Recreational Rivers System Act, or instead
were agricultural use structures and thus gener-
ally exempt from park agency's jurisdiction and
permit requirements, trial court was not required to
defer to park agency's interpretation of Adirondack
Park Agency Act and Wild, Scenic and Recreation-
al Rivers System Act as the agency charged with
their enforcement, given that neither park agency's
statutory interpretation nor its application required
knowledge and understanding of underlying opera-
tional practices or entailed evaluation of factual
data and inferences to be drawn therefrom. McKin-
ney's Executive Law 802(8, 58), 805(3)(g)(4)(2),
Page 1
64 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)
810(1)(e), (2)(d)(1); McKinney's ECL 152709
(2)(c); 9 NYCRR 577.4(b)(3)(ii), 577.5(c)(1), 577.6
(b)(3).
[2] Statutes 361 219(1)
361 Statutes
361k219(1) k. In general. Most
Cited Cases
Pure 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 to
rely on any special expertise on agency's part.
414V(C) Uses and Use Districts
414V(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 customarily
associated with agricultural use and thus qualified
as agricultural use structures, as defined by Ad-
irondack Park Agency Act, and were exempt from
park agency's jurisdiction and permit requirements
under Adirondack Park Agency Act and Wild,
Scenic and Recreational Rivers System Act, even
though housing units also fell within statutory
definition of single family dwellings, for which
permits from park agency were required. McKin-
ney's Const. Art. 14, 4; McKinney's Executive
Law 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
152709(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 Statutes
361k180 Intention of Legislature
361k181 In General
361k181(1) k. In general. Most
Cited Cases
Primary goal of statutory interpretation is to as-
certain and give effect to the intention of the legis-
lature.
361 Statutes
361k188 k. In general. Most Cited
Cases
Statutory text is the clearest indicator of legis-
lative intent, and courts should construe unambigu-
ous statutory language to give effect to its plain
meaning.
361 Statutes
361k204 Statute as a Whole, and Intrinsic
Aids to Construction
361k205 k. In general. Most Cited
Cases
Statutes 361 206
361 Statutes
361k204 Statute as a Whole, and Intrinsic
Aids to Construction
361k206 k. Giving effect to entire stat-
ute. Most Cited Cases
A court must consider a statute as a whole,
reading and construing all parts of an act together
Page 2
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)
to determine legislative intent and, where possible,
should harmonize all parts of a statute with each
other and give effect and meaning to the entire stat-
ute and every part and word thereof.
361 Statutes
361k180 Intention of Legislature
361k184 k. Policy and purpose of act.
Most Cited Cases
Statutes 361 194
361 Statutes
361k194 k. General and specific words
and provisions. Most Cited Cases
Rule of ejusdem generis, by which general stat-
utory language is limited by the specific phrases
preceding it, is only a rule of construction, and
must yield to the legislature's evident purpose in
enacting a statute.
**764 McNamee, Lochner, Titus & Williams, P.C.,
Albany (John J. Privitera of counsel), for Lewis
Family Farm, Inc., appellant and respondent, and
Salim Lewis and another, respondents.
Andrew M. Cuomo, Attorney General, Albany (Ju-
lie M. Sheridan of counsel), for New York State
Adirondack Park Agency, respondent and appel-
lant.
Cynthia Feathers, Saratoga Springs, for New York
Farm 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 in
Essex County, which converted an action for de-
claratory judgment into a proceeding (No. 1) pursu-
ant to CPLR article 78 and granted respondent's
cross motion to dismiss the petition in proceeding
No. 1, (2) from a judgment of said court (Meyer,
J.), entered July 2, 2008 in Essex County, which, in
proceeding No. 2 pursuant to CPLR article 78 and
action No. 1, partially denied a motion by the Ad-
irondack Park Agency to dismiss certain causes of
action in proceeding No. 2 and partially granted de-
fendants' motion to dismiss the complaint in action
No. 1, and (3) from a judgment of said court
(Meyer, J.), entered November 21, 2008 in Essex
County, which, among other things, granted peti-
tioner's application, in proceeding No. 2 pursuant to
CPLR 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 civil
penalty.
Lewis Family Farm, Inc. (hereinafter Lewis
Farm) owns and operates a large organic farm in
the Town of Essex, Essex County, within the Ad-
irondack Park and within an agricultural district. In
the fall of 2006, Lewis Farm obtained a building
permit from the Town and began building three
single-family dwelling units on the farm to be used
to house farm workers. After construction began,
Lewis Farm submitted an application *1011 to the
Adirondack Park Agency (hereinafter the APA) for
a permit under the APA's authority. The APA de-
termined that the application was incomplete and
requested additional information. A disagreement
ensued, and the APA eventually issued a cease and
desist order prohibiting Lewis Farm from complet-
ing the construction until the dispute was resolved.
Lewis Farm commenced an action for a judgment
declaring that the APA lacked jurisdiction over the
project and enjoining it from interfering with the
construction. Supreme Court granted the APA's
motion to convert the action to a CPLR article 78
proceeding (proceeding No. 1). The court then
found that the APA had jurisdiction to enforce the
permit requirement, but dismissed the petition as
Page 3
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)
unripe because the APA had not yet issued a final
determination. Lewis Farm appeals from this judg-
ment.
The APA thereafter conducted an administrat-
ive enforcement proceeding that resulted, in March
2008, in a determination **765 that by constructing
the farm housing without an APA permit, Lewis
Farm had violated the Adirondack Park Agency Act
(see Executive Law art. 27 [hereinafter the APA
Act] ) and the Wild, Scenic and Recreational Rivers
System Act (see ECL 152705, 152709
[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 a
new proceeding under CPLR article 78 (proceeding
No. 2), and the APA commenced an action against
Lewis Farm and its principals, defendants Salim
Lewis and Barbara Lewis, to enforce its adminis-
trative determination. Supreme Court joined these
matters and, in July 2008, determined, among other
things, that collateral estoppel did not bar any of
the claims raised by Lewis Farm and dismissed the
individual defendants. The APA also appeals from
this judgment.
Subsequently, the parties cross-moved for sum-
mary judgment as to the APA's causes of action for
enforcement of its administrative determination. In
November 2008, Supreme Court, among other
things, granted Lewis Farm's application in pro-
ceeding No. 2 and annulled the APA's March 2008
administrative determination. The court also gran-
ted summary judgment to Lewis Farm and dis-
missed the individual defendants. The APA appeals
from this judgment.
The APA Act creates a comprehensive land use
plan that classifies all land within the Adirondack
Park into six land use categories and sets forth
primary and secondary compatible uses *1012 for
each category (see Executive Law 805). The APA
Act establishes specific uses as class A and class B
regional 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 A
regional projects and certain class B regional
projects (see Executive Law 809 [1] ), and re-
quires those who plan to undertake such projects to
apply 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 are
primary compatible uses that are neither class A nor
class B regional projects and are exempt from APA
jurisdiction and permit requirements, so long as
they 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 local
land use program, construction of a single family
dwelling in a resource management area is a class
B regional project that requires a permit from the
APA (see Executive Law 810[2][d][1] ). Simil-
arly, the Rivers System Act accords jurisdiction to
the APA to regulate the use of privately owned land
in the immediate environs of certain river systems (
see ECL 152701, 152705, 152709[1] ). The dis-
puted construction site on the farm is located within
a recreational river area that is subject to APA
permit requirements under the regulations imple-
menting the Rivers System Act (see 9 NYCRR
577.4, 577.5[c][1] ). However, agricultural use
structures that otherwise comply with regulatory
requirements are exempt from these permit require-
ments (see 9 NYCRR 577.4[b] [3][ii]; see also ECL
152709[2][c] ). The resolution of these appeals de-
pends on whether the disputed housing units on the
farm are single family dwelling[s] as the APA
determined in its administrative enforcement pro-
ceeding and therefore subject to the APA's jurisdic-
tion and permit requirements under the APA Act
and the Rivers **766 System Act, or agricultural
use structure [s] exempt from such requirements,
as determined by Supreme Court.
The APA Act sets out definitions for 68 words
Page 4
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)
and phrases and provides that [a]s used in this art-
icle, unless the context otherwise requires, [the
defined] words and terms shall have the meaning
ascribed to them (Executive Law 802). A single
family dwelling is defined as any detached build-
ing containing one dwelling unit, not including a
mobile home (Executive Law 802 [58] ). An
agricultural use structure is any barn, stable,
shed, silo, garage, fruit and vegetable stand or other
building or structure directly and customarily asso-
ciated*1013 with agricultural use (Executive Law
802 [8] [emphasis added] ). The implementing
regulations for the Rivers System Act use the same
definition of an agricultural use structure (see 9
NYCRR 577.2[b] ). A structure is any object
constructed, installed or placed on land to facilitate
land use and development or subdivision of land,
such as buildings, sheds, single family dwellings,
mobile homes, signs, tanks, fences and poles and
any fixtures, additions and alterations thereto (Ex-
ecutive Law 802[62] ). The APA Act further
defines agricultural use as any management of
any 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 Court
properly concluded that it was not required to defer
to the APA's interpretation of the APA Act and the
Rivers System Act as the agency charged with their
enforcement (see Matter of TrumpEquitable Fifth
Ave. Co. v. Gliedman, 57 N.Y.2d 588, 597, 457
N.Y.S.2d 466, 443 N.E.2d 940 [1982] ). [P]ure
legal interpretation of clear and unambiguous stat-
utory terms such as the language at issue here re-
quires no such deference because there is little or
no need to rely on any special expertise on the
agency's part (Kennedy v. Novello, 299 A.D.2d 605,
607, 750 N.Y.S.2d 175 [2002], lv. denied 99
N.Y.2d 507, 757 N.Y.S.2d 817, 787 N.E.2d 1163
[2003], quoting Matter of Toys R Us v. Silva, 89
N.Y.2d 411, 419, 654 N.Y.S.2d 100, 676 N.E.2d
862 [1996]; see Matter of Raritan Dev. Corp. v.
Silva, 91 N.Y.2d 98, 102, 667 N.Y.S.2d 327, 689
N.E.2d 1373 [1997] ). The APA's March 2008 ad-
ministrative determination rested entirely on stat-
utory interpretation, and neither that interpretation
nor its application required knowledge and un-
derstanding of underlying operational practices or
entail [ed] an evaluation of factual data and infer-
ences to be drawn therefrom (Town of Lysander
v. Hafner, 96 N.Y.2d 558, 565, 733 N.Y.S.2d 358,
759 N.E.2d 356 [2001], quoting Kurcsics v. Mer-
N.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 disputed
housing units on the farm are agricultural use
structure[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, 719
N.Y.S.2d 623, 742 N.E.2d 98 [2000]; accord Mat-
ter of DaimlerChrysler Corp. v. Spitzer, 7 N.Y.3d
653, 660, 827 N.Y.S.2d 88, 860 N.E.2d 705 [2006]
). To that end, [t]he statutory text is the clearest
indicator of legislative intent and courts should
construe unambiguous language to give effect to its
plain meaning ( **767Matter of Emigrant Ban-
corp, Inc. v. Commissioner of Taxation & Fin., 59
A.D.3d at 33, 869 N.Y.S.2d 689, quoting *1014
Matter of DaimlerChrysler Corp. v. Spitzer, 7
N.Y.3d at 660, 827 N.Y.S.2d 88, 860 N.E.2d 705).
A court must consider a statute as a whole, reading
and construing all parts of an act together to de-
termine legislative intent and, where possible,
should harmonize [ ] [all parts of a statute] with
each other ... and [give] effect and meaning ... to
the entire statute and every part and word thereof (
Friedman v. Connecticut Gen. Life Ins. Co., 9
N.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 5
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)
and construed statutorily-defined terms or phrases
within each definition by reference to the other
definitions and by reading them in the context of
the APA Act as a whole. Accordingly, the court
concluded that, since a single family dwelling is
included 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 was
rational to conclude that a single family dwelling
that is directly and customarily associated with ag-
ricultural use falls squarely within the statutory
definition of an agricultural use structure and is
therefore exempt from APA regulation (Executive
Law 802[8] ). With regard to whether farmworker
housing is directly and customarily associated
with agricultural use, the court took note of a re-
lated, though not controlling, statutory analysis de-
termining that farmworker residences contribute to
the production, preparation and marketing of crops,
livestock and livestock products as a commercial
enterprise (Agriculture and Markets Law 301
[11] ) and are therefore farm operations exempt
from local zoning regulation under Agriculture and
Markets Law 305a (see Town of Lysander v.
Hafner, 96 N.Y.2d at 562, 733 N.Y.S.2d 358, 759
N.E.2d 356). We agree with Supreme Court that
there is no reason to conclude that the Legislature
intended a different result within the Adirondack
Park. Thus, although the farmworker residences
constructed on the farm fall within the statutory
definition of single family dwelling[s], they are
also agricultural use structure[s] exempt from
APA jurisdiction because they are directly and
customarily associated with agricultural use.
This conclusion is consistent with the APA
Act'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 the
purposes and objectives of resource management
areas include encourag[ing] proper and economic
management of ... agricultural ... resources (Exec-
utive Law 805[3][g][1], [2] ). It is likewise con-
sistent*1015 with the APA Act's explicit instruction
that [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 the
development and improvement of its agricultural
lands for the production of food and other agricul-
tural products (N.Y. Const., art. XIV, 4) and
with the legislative directive that [i]t shall be the
policy of all state agencies to encourage the main-
tenance of viable farming in agricultural districts
and their administrative regulations and procedures
shall be modified to this end (Agriculture and
Markets Law 305[3] ). Nothing in **768 any of
these provisions suggests, as the APA argues, that
New York's strong pro-farming policy should apply
differently to farms within the Adirondack Park
than to farms elsewhere in the state.
The statutory language does not, as the APA
contends, evince a legislative intent for the word
structure in the definition of agricultural use
structure (Executive Law 802[8] ) to mean an
accessory structure. This term is specifically
defined in the APA Act (see Executive Law 802
[5] ), and the Legislature had the opportunity to use
it if it had intended to limit the definition of
agricultural use structures accordingly. It did not
do 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, 866
N.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 Court
to 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.2d
940) and render the word structure as used in the
definition of agricultural use structures meaning-
less (see SIN, Inc. v. Department of Fin. of City of
N.Y., 71 N.Y.2d 616, 621, 528 N.Y.S.2d 524, 523
Page 6
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)
N.E.2d 811 [1988] ).
[7] Contrary to the APA's contention, the rule
of ejusdem generis, by which general statutory lan-
guage is limited by the specific phrases preceding
it, is inapplicable because the general language at
issuehere, the word structureis separately
defined and, therefore, is definite and has a precise
meaning (Johnson v. Hudson Riv. R.R. Co., 49
N.Y. 455, 455 [1872] ). Further, the rule of ejus-
dem generis is only a rule of construction; it must
yield to the Legislature's evident purpose in enact-
ing the statute (Mark v. Colgate Univ., 53 A.D.2d
884, 886, 385 N.Y.S.2d 621 [1976] ).
Finally, the separate treatment of single fam-
ily dwellings and agricultural use structures in
some provisions of the APA Act does not compel
the conclusion that the Legislature intended the
terms to be mutually exclusive. For example, *1016
Executive Law 802(50)(g) provides that for the
purpose of applying the APA Act's density
guidelines to farm land, all agricultural use struc-
tures and single family dwellings or mobile homes
occupied 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 principal
building (emphasis added). As Supreme Court
noted, 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 dwellings
located on farms will qualify as agricultural use
structures. Thus, listing them separately, here and
throughout the APA Act, was necessary to ensure
that 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 and
customarily associated with agricultural use from
qualifying as an agricultural use structure (Execut-
ive Law 802[8] ).
Supreme Court properly concluded that the
dwelling units constructed for farmworker housing
on Lewis Farm's land are agricultural use struc-
ture[s] within the meaning of Executive Law 802
(8) and are therefore exempt from APA jurisdiction
and permit requirements. This determination
renders academic the parties' claims with regard to
the 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 Agency
64 A.D.3d 1009, 882 N.Y.S.2d 762, 2009 N.Y. Slip
Op. 05890
END OF DOCUMENT
Page 7
(Cite as: 64 A.D.3d 1009, 882 N.Y.S.2d 762)

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-
NEW YORK CITY BOARD OF STANDARDS
AND YORK CITY DEPARTMENT
OF BUILDINGS, \..OEPARTMENT OF CII!'Y
PLANNING, THE OF GREATER NEW YORK,
YMCA,\VORNADO REALTY TRUST and
WORNADO 63R
0
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 the Special
Permit in a prior Article 78 proceeding, which was resolved in
favor of the Y. The Parks Council 4 1 ~ i t y 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
1
df. the new lapse
3
provJ.sJ.ons. The proposed ~ l . ~ ; s e 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 ofpure 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 s e n s ~ 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 ttAPNte<

(
FILED
COUNTY OFFiCE
NEWYOR"\

TAB # 10
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, which
adopted recommendation and findings of adminis-
trative law judge (ALJ), made after hearing, finding
firefighter guilty of two charges of misconduct, and
terminated his employment.
Holding: The Supreme Court, Appellate Division,
Austin, J., held that firefighter's termination after
testing positive for cocaine was so shocking to
court'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 Corporations
268V Officers, Agents, and Employees
268V(B) Municipal Departments and Of-
ficers Thereof
268k193 Fire
268k198 Suspension and Removal of
Firemen
268k198(4) k. Review. Most Cited
Cases
The power of the Fire Department Commis-
sioner to discipline members of the Fire Depart-
ment is reviewable by the Appellate Division under
Article 78. McKinney's CPLR 7801 et seq.
[2] Officers and Public Employees 283 72.53
283 Officers and Public Employees
283I Appointment, Qualification, and Tenure
283I(H) Proceedings for Removal, Suspen-
sion, or Other Discipline
283I(H)3 Judicial Review
283k72.49 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 Employees
283I Appointment, Qualification, and Tenure
283I(H) Proceedings for Removal, Suspen-
sion, or Other Discipline
283I(H)3 Judicial Review
283k72.49 Scope of Review
283k72.54 k. Arbitrary, unreason-
able or capricious action; rational basis. Most Cited
Cases
Under Article 78, the Appellate Division is em-
powered to determine whether the penalty of ter-
mination of a public employee was arbitrary and
capricious as a matter of law such that there was an
abuse of discretion. McKinney's CPLR 7803(3).
758
cisions
15Ak754 Discretion of Administrative
Agency
15Ak758 k. Sanctions. Most Cited
Cases
The reason for the enactment of the statute em-
powering courts to review a disciplinary determina-
tion of an administrative agency was to make it
possible, where warranted, to ameliorate harsh im-
positions of sanctions by administrative agencies,
Page 1
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)
and that purpose should be fulfilled by the courts
not only as a matter of legislative intention, but also
in order to accomplish what a sense of justice
would dictate. McKinney's CPLR 7803.
ficers Thereof
268k193 Fire
Firemen
Cases
While due deference must be given to a de-
termination of the Fire Department, a court cannot
operate merely as a rubber stamp of the adminis-
trative determination if the measure of punishment
or discipline imposed is so disproportionate to the
offense, in the light of all of the circumstances, as
to be shocking to one's sense of fairness.
758
cisions
15Ak754 Discretion of Administrative
Agency
15Ak758 k. Sanctions. Most Cited
Cases
Where an administrative sanction shocks one's
sense 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.
ficers Thereof
268k193 Fire
Firemen
Cases
Firefighter's termination of employment after
testing positive for cocaine was so shocking to Ap-
pellate Division's sense of fairness that annulment
of 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, firefighter
was exemplary member of Fire Department, and
positive 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, New
York, 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 circumstances
of 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's
sense of fairness, thus constituting an abuse of dis-
cretion.
FN1
Because we conclude, as a matter of
law, that the penalty of termination is shocking to
the judicial conscience, we set aside that penalty
and remit the matter to the respondents for the im-
position of the lesser penalty allowing the petitioner
to retire as of the date of the petitioner's termina-
tion, June 27, 2008, and fining the petitioner the
sum of $80,000.
Page 2
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)
FN1. While the petitioner asserts in the
first cause of action of his petition that the
determination of the respondent Commis-
sioner of the Fire Department of the City
of New York that he was guilty of the dis-
ciplinary charges brought against him by
the Fire Department of the City of New
York related to testing positive for cocaine
was not supported by substantial evidence,
in his brief, the petitioner solely contests
the severity of the penalty of termination
imposed by the Commissioner of the Fire
Department of the City of New York.
The petitioner is a 25year member of the Fire
Department of the City of New York (hereinafter
the Department). After a positive random drug test
confirmed the presence of cocaine in the petition-
er's system, a Step1 conference was held to re-
view the charges for violation of regulations
brought against the petitioner by the Department.
Following that conference, a deputy assistant chief
of the Department recommended that, although he
found the petitioner guilty of all charges, due to
extenuating circumstances, the petitioner should
be allowed to resign in addition to being fined the
sum of $80,000, representing approximately one
year's salary. The extenuating circumstances identi-
fied by the deputy assistant chief consisted of the
petitioner's lengthy service to the Department
without any previous disciplinary problems and the
severe hardship that termination would impose
upon the petitioner and his family since it would in-
clude forfeiture of the petitioner's pension benefits.
*340 Thereafter, the Department submitted the
matter to an administrative law judge for an
OATH (Office of Administrative Trials and
Hearings) hearing. At the OATH hearing, numerous
witnesses testified on behalf of the petitioner attest-
ing to his good character, devotion to the Depart-
ment, and lack of prior drug usage, which **264
was confirmed by prior negative drug test results.
Moreover, the petitioner testified that he was the
sole wage earner for his family and that the loss of
his pension and medical coverage would impose a
severe hardship on his family. Notwithstanding the
foregoing mitigating testimony, the administrative
law judge determined that the only available appro-
priate penalty pursuant to Administrative Code of
the City of New York 15113 was termination of
the petitioner's employment, which he recommen-
ded. In a determination dated June 23, 2008, the
Commissioner of the Fire Department of the City of
New York (hereinafter the Commissioner) adopted
the administrative law judge's recommendation and
findings, 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 retirement
benefits, which included health insurance coverage.
Prior to the Department's issuance of the
charges 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 and
possession of, inter alia, illegal drugs, which indis-
putably included cocaine. Section 4.1 of AUC 202
prohibited the use of any illegal drug while on or
off duty.
AUC 202 8.3 permits termination of a mem-
ber of the Department with a finding of guilt on a
first offense. However, 8.3 is not an absolute
policy. AUC 202 8, entitled Guidelines for Viol-
ation of this Policy, provides, [t]hese guidelines
are designed to cover the most common infractions,
but there may be cases that do not fit precisely
within them. The Department reserves the right to
depart from these guidelines as the exacerbating or
extenuating circumstances of each individual case
require (parenthetical omitted).
[1][2][3] The power of the Commissioner to
discipline members of the Department, as set forth
in Administrative Code of the City of *341 New
York 15113,
FN2
is reviewable under CPLR art-
icle 78. Pursuant to CPLR 7803(3), this Court is
Page 3
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)
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 of
Educ. of Union Free School Dist. No. 1 of Towns of
Scarsdale & Mamaroneck, Westchester County, 34
N.Y.2d 222, 235, 356 N.Y.S.2d 833, 313 N.E.2d
321; 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.2d
32, 38, 724 N.Y.S.2d 680, 747 N.E.2d 1280).
There is no doubt that the reason for the enactment
of the statute (CPLR 7803) was to make it possible,
where warranted, to ameliorate harsh impositions of
sanctions by administrative agencies. That purpose
should 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.2d
833, 313 N.E.2d 321).
FN2. Under Administrative Code of the
City of New York 15113, the Commis-
sioner has the power to punish an offend-
ing member of the Department by reprim-
and, forfeiture and withholding of pay for
a specified time, or dismissal from the
force; but not more than ten days' pay shall
be forfeited and withheld for any offense.
[4][5] While due deference must be given to a
determination of the Department (see Matter of
Harp, 96 N.Y.2d at 894, 730 N.Y.S.2d 786, 756
N.E.2d 74; Matter of Kelly v. Safir, 96 N.Y.2d at
38, 724 N.Y.S.2d 680, 747 N.E.2d 1280), a court
cannot operate merely as a rubber stamp **265 of
the administrative determination if the measure of
punishment 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, 356
N.Y.S.2d 833, 313 N.E.2d 321 [internal quotation
marks omitted]; see also Matter of Kelly v. Safir, 96
N.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 of
law, constitutes an abuse of discretion, this Court is
authorized to set aside such a determination by the
administrative 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, 292
N.Y.S.2d 408, 239 N.E.2d 345).
The Department's zero tolerance policy, no
matter how laudable in purpose, does not distin-
guish between junior members of the Department
and those who have served the Department well
past the time that he or she could have retired, *342
like the petitioner herein. The inflexibility of the
application of AUC 202 8.3 to the petitioner is
contrary to the analysis set forth by the Court of
Appeals in Matter of Pell, which considered such
factors as an employee's length of employment, the
probability that a dismissal will leave the employee
without any alternative livelihood, the employee's
loss of retirement benefits, and the effect upon the
employee's innocent family in cases where there is
an 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.2d
833, 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 AUC
202. Accordingly, we apply the standard enunciated
in Matter of Pell and its progeny (see Matter of Se-
quist v. County of Putnam, 40 A.D.3d 1003, 836
N.Y.S.2d 287 [ Pell factors applied in annulling the
termination of employment of school bus driver
found guilty of single drug infraction] ).
The testimony at the hearing was undisputed
that 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-
Page 4
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)
tion of firefighters due to positive drug tests (see
e.g. Matter of Kelly v. Scoppetta, 56 A.D.3d 475,
866 N.Y.S.2d 770 [termination of a member of the
Department who admitted to regular use of cocaine
was confirmed by this Court] ).
[6] Here, due to the termination of his employ-
ment, the petitioner and his family will suffer the
consequence of losing his pension and retirement
benefits the petitioner earned during his 25 years of
dedicated service to the Department. The loss of
those pension benefits, valued at approximately
$2,000,000, is particularly shocking in this context
because the petitioner chose to continue as a mem-
ber of the Department even after he was eligible for
full retirement benefits after 20 years of service.
The testimony is uncontroverted that the petitioner
was the sole wage earner of his family and that the
loss 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 model
within his firehouse.
This Court recognizes that the petitioner com-
mitted a serious infraction which militates against
his 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 he
forfeits all of his retirement benefits cannot be sus-
tained. Indeed, we have held that the dismissal of a
long-term employee with an unblemished record
following a singular positive drug test to be so
shocking to our sense of fairness that annulment of
the administrative agency's determination and the
imposition of a lesser penalty was required (see
Matter of Sequist v. County of Putnam, 40 A.D.3d
1003, 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 with
the Department in this case is inappropriate. In such
circumstance, 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, 4243, 201
N.Y.S.2d 321, 167 N.E.2d 731; Matter of Lo Bello
v. McLaughlin, 39 A.D.2d 404, 408, 334 N.Y.S.2d
692, affd. 33 N.Y.2d 755, 350 N.Y.S.2d 406, 305
N.E.2d 487).
FN3
Accordingly, so much of the de-
termination of the Commissioner as imposed the
penalty of termination of the petitioner's employ-
ment should be annulled, and the petitioner should
be allowed to retire and be fined in the sum of
$80,000, as recommended by the Department's
deputy assistant chief following the Step1 confer-
ence.
FN3. Remittal to the Department for the
imposition of an appropriate penalty as set
forth herein is consistent with Rob Tess
Rest. Corp. v. New York State Liq. Auth.,
49 N.Y.2d 874, 427 N.Y.S.2d 936, 405
N.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 court
found that [i]n appropriate cases, which
will probably be few, the reviewing court
can order a lesser discipline, much as it
does in criminal cases ( Matter of Mit-
thauer v. Patterson, 8 N.Y.2d at 42, 201
N.Y.S.2d 321, 167 N.E.2d 731), which
may include punishments not set forth in
the applicable law (id. at 4243, 201
N.Y.S.2d 321, 167 N.E.2d 731). Since the
available sanctions under Administrative
Code of the City of New York 15113
are extremely limited and offer no accept-
able option, we find that this case falls
within the exception enunciated in Mit-
thauer.
Our determination here should do no violence
to the line of cases which sustain the termination of
firefighters who are found to have used illegal
drugs (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, 825
N.Y.S.2d 44). Rather, we address only the unduly
disproportionate financial consequences of his ter-
Page 5
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)
mination of employment on this petitioner and his
family and the circumstances of his otherwise un-
blemished career.
Therefore, it is adjudged that the petition is
granted insofar as reviewed, on the law, to the ex-
tent that so much of the determination as imposed a
ment is annulled and the matter is remitted to the
*344 respondents for the imposition of the lesser
penalty allowing the petitioner to retire as of June
27, 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 extent
that so much of the determination as imposed a
ment is annulled and the matter is remitted to the
respondents for the imposition of the lesser penalty
allowing 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. Scoppetta
76 A.D.3d 338, 905 N.Y.S.2d 262, 2010 N.Y. Slip
Op. 06170
END OF DOCUMENT
Page 6
(Cite as: 76 A.D.3d 338, 905 N.Y.S.2d 262)

TAB # 11
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 State
Racing and Wagering Board suspending a harness
racing license, relief was granted by judgment of
the Supreme Court, Special Term, Sullivan County,
Roger J. Miner, J., and an appeal was taken. The
Supreme Court, Appellate Division, held that in
view of uncontradicted evidence that the horse was
an unpredictable animal and was tired after an earli-
er race, evidence failed to sustain finding of the
Board that change in driving tactics was unjustified
and was unexpected by wagering public and thus
did not give public fair shake and that license
thus should be suspended for racing in a manner in-
consistent with an attempt to win, in violation of
regulation.
Affirmed.
West Headnotes
651
cisions
15AV(A) In General
15Ak651 k. In General. Most Cited Cases
In reviewing administrative decisions, courts
exercise genuine judicial function and do not con-
firm determination simply because it was made by
such an agency. CPLR 7801 et seq.
[2] Public Amusement and Entertainment 315T
35(2)
315T Public Amusement and Entertainment
315TII Licensing and Regulation
315TII(A) In General
315Tk31 Racing in General
315Tk35 Administrative Agencies and
Proceedings
315Tk35(2) k. Horse and Dog Ra-
cing. Most Cited Cases
(Formerly 376k3.10, 376k3 Theaters and
Shows)
In view of uncontradicted evidence that horse
was unpredictable animal and was tired after earlier
race, evidence failed to sustain finding of State Ra-
cing and Wagering Board that change in driving
tactics was unjustified and was unexpected by
wagering public and thus did not give public fair
shake and that license thus should be suspended
for racing in manner inconsistent with attempt to
win, 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's
application, in a proceeding pursuant to CPLR art-
icle 78, seeking to annul an order of the New York
State 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 and
Wagering Board's (Board) determination that pur-
suant to 9 NYCRR 4117.4(n), petitioner's harness
racing license should be suspended for 15 days for
Page 1
70 A.D.2d 717, 416 N.Y.S.2d 429
(Cite as: 70 A.D.2d 717, 416 N.Y.S.2d 429)
racing in a manner inconsistent with an attempt to
win. 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 Monticello
Raceway and won by five lengths. The race was a
C-1/C-2 handicap trot and Some Network, the
number 2 horse, was driven up front by petitioner
to a 2:07:1 wire-to-wire win. On April 5, 1978
Some Network, again driven by petitioner, raced
from the number 5 post position in a come from be-
hind fashion to a 2:11 third place finish in the sixth
race 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 race
the drive was inconsistent with the drive of the
same horse in the 6th race of April 2nd, 1978 res-
ulting in an obvious reversal of form. Petitioner
appealed his suspension and was granted a hearing
before the New York State Racing and Wagering
Board. The hearing officer in his report concluded
that the decision of the judges at Monticello Race-
way was a correct exercise of their judgment. The
Racing 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 on
April 5, 1978. The Board further stated that the
change in driving strategy on April 5, 1978 was not
expected by the wagering public and it, therefore,
confirmed petitioner's suspension.
[1] The dispositive issue raised by this appeal
is whether the Board's determination was supported
by substantial evidence and, more specifically,
whether there was a rational basis for the finding
that petitioner was unjustified in changing his driv-
ing tactics. It is well-settled that an administrative
determination supported by a rational basis must be
confirmed by the courts, who may not substitute
their 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, 356
N.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 do
not confirm a determination simply because it was
made 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 presiding
judge-steward at Monticello Raceway testified that
he, along with two other judges, observed both the
April 2nd and April 5th races, and, after reviewing
both races on video tape, concluded that there was
a discrepancy, quite a change in performance, and
we felt the public didn't get a fair shake. He
reasoned that the time when a driver should change
tactics is when his horse is moved up in class where
the competition is greater, but not when the horse is
the short priced favorite against the same class of
horse. He felt that the most important factor regard-
ing petitioner's culpability was the fact that he
didn't leave with the horse, didn't show the same
kind of race that he did for us on the 2nd, as he
went to the top and just continued motoring, and we
felt as though this horse was capable of the same
kind of performance three days later on the 5th, and
that this was not the case. And there, we felt as
**431 though that the horse could just motor by the
field, after what he demonstrated on the 2nd. He
stated that by not leaving with the horse during
the April 5th race, petitioner lost the opportunity to
give the public, who had based their wagering on
the April 2nd performance, a fair shake. He fi-
nally stated that the track and weather conditions
during both meets were substantially the same. As
noted, the Board concluded that petitioner's change
in driving tactics was unjustified.
The record, however, reveals that a change in
driving tactics was justified. Petitioner explained
Page 2
70 A.D.2d 717, 416 N.Y.S.2d 429
(Cite as: 70 A.D.2d 717, 416 N.Y.S.2d 429)
that Some Network had a very bad reputation
and was essentially a wild horse on the evening
of April 2nd; consequently, he was forced to let the
horse run wherever he wanted. The horse ran fast
during 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, the
horse 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 and
trainer determined that Some Network would be
more effective racing from behind than up-front; in-
deed, in petitioner's view, he didn't think that this
horse could ever win another race racing in front.
Consequently, equipment changes made before the
April 5th race in an effort to calm the horse and
make him manageable, were ordered by the trainer,
who expressly instructed petitioner to race the
horse in a come from behind fashion. Petitioner
noted that on April 5th the horse ran a faster last
half-mile than on April 2nd; and on April 12th,
when rested, won a race employing this come from
behind style. Petitioner finally testified that the in-
structions he received from the trainer of Some
Network were the right thing to do.
The Board produced no evidence indicating
that Some Network was not an unpredictable an-
imal, or that it was not tired after the April 2nd
race. Rather, the presiding judge dismissed this
factor by noting that some horses go two dashes the
same afternoon and, therefore, it should not be a
consideration.
In view of petitioner's uncontradicted testi-
mony, we agree with Special Term's conclusion
that the record does not contain a rational basis for
the finding that a change in driving tactics was un-
justified and, that it cannot be said that the horse
was driven in the second race in a manner incon-
sistent with an attempt to win. Since the Board's
action was without foundation in fact, Special Term
properly annulled its determination ( Matter of Pell
v. Board of Educ., supra, 34 N.Y.2d p. 231, 356
N.Y.S.2d p. 839, 313 N.E.2d p. 325).
Judgment affirmed, without costs.
N.Y.A.D., 1979.
Rolla v. Barry
70 A.D.2d 717, 416 N.Y.S.2d 429
END OF DOCUMENT
Page 3
70 A.D.2d 717, 416 N.Y.S.2d 429
(Cite as: 70 A.D.2d 717, 416 N.Y.S.2d 429)

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