Board of Education v. Christa Construction, Inc. (80 N.Y.2d 1033, 1993)

Motion, treated as a motion for clarification of this Court’s memorandum and for amendment of this Court’s remittitur, granted. This Court’s November 18, 1992 memorandum is amended by deleting the first paragraph thereof and substituting in its stead the following: "The order of the Appellate Division should be reversed, with costs, and the order of Supreme Court, insofar as it granted appellant Christa Construction, Inc.’s motion to compel arbitration, reinstated.” Return of remittitur requested and, when returned, it will be amended to read as follows:

"Order reversed, with costs, and order of Supreme Court, Ontario County, insofar as it granted appellant Christa Construction, Inc.’s motion to compel arbitration, reinstated in a memorandum.

"Acting Chief Judge Simons and Judges Kaye, Titone, Bellacosa and Smith concur; Judge Hancock, Jr., taking no part.”

Inasmuch as only Christa Construction, Inc. moved for leave to appeal and we granted that motion, and inasmuch as Christa is the only party appellant in the Court of Appeals, we can and and did grant affirmative relief on this record and in this procedural setting only to that party.

Concur: Acting Chief Judge Simons and Judges Kaye, Titone, Bellacosa and Smith. Taking no part: Judge Hancock, Jr.

DIGEST-INDEX [See separate Table of Statutes and Rules Construed] ACTIONS. See Dismissal and Nonsuit, and other specific titles. ADMINISTRATIVE LAW. Judicial Review. 1. Substantial Evidence Test — Propriety Where Procedural Noncompliance by Administrative Body Amounts to Abuse of Discretion or Authority. — In a CPLR article 78 proceeding challenging a determination of respondent Board of Education dismissing petitioner teacher from her tenured teaching position for insubordination wherein the Court of Appeals concluded that respondent violated the mandatory provisions of Education Law § 3020-a (3) (b) and (c) by paying compensation beyond that authorized by statute to a member of the hearing panel that considered petitioner’s case, respondent’s contention that the Court should nonetheless affirm the hearing panel’s determinations if they are supported by substantial evidence in the record is rejected. Where the procedural noncompliance by an administrative body rises to the level of an abuse of discretion or authority, as it does here, the noncompliance alone is sufficient to warrant granting a new hearing. To employ a substantial evidence test here would be to give validity to a record clouded by the unlawful act of the Board and to leave petitioner with an inadequate remedy. Matter of Syquia v Board of Educ., 80 NY2d 531. ADOPTION. Notice to Putative Father. 1. Consent — Unwed Father Who is Unaware of Child’s Conception or Birth — Due Process. — Petitioner, an unwed father, who was unaware of the pregnancy or the birth of his child until nearly 18 months after the child’s birth, was neither entitled to notice nor was his consent to the adoption of his child required where he failed to take any steps to discover the pregnancy or the birth of the child before first asserting his parental interest 10 months after the adoption became final (see, Domestic Relations Law § 111-a [2]; § 111 [1] [e]). In determining whether an unwed father has created a liberty interest, the timing of the father’s actions is the most significant element. The biological father must promptly manifest his parental interest through action on his part; absent that, the biological link of the father is insufficient to create a constitutionally protected interest. Here, petitioner’s inaction was solely attributable to him and under the circumstances he is not entitled to the protections of constitutional due process. Matter of Robert O. v Russell K., 80 NY2d 254. 2. Consent — Unwed Father Who is Unaware of Conception or Birth of Child — Equal Protection. — Petitioner, an unwed father, who was unaware of the pregnancy or birth of his child until 10 months after the child’s adoption became final was not denied equal protection because the applicable statutes (Domestic Relations Law § 111-a [2]; § 111 [1] [e]) did not require notice to one in his position or require his consent to the adoption. The Equal Protection Clause does not preclude the State from withholding the privilege of vetoing an adoption from an unwed father who has never come forward to participate in the rearing of his 1035

1036 80 NEW YORK REPORTS, 2d SERIES ADOPTION — Cont’d child. That "unknowing” unwed fathers may be treated differently under the statute than other unwed fathers is not dispositive. The equal protection inquiry focuses on whether the statute’s relation to the State interests it is intended to promote is so tenuous that it lacks the rationality contemplated by the Fourteenth Amendment, and petitioner has not met the burden of showing a lack of rationality in either the notice or the consent provisions of New York law. Matter of Robert O. v Russell K., 80 NY2d 254. AGENCY. See Brokers. APPEAL. See, also, Crimes, and other specific titles. Academic and Moot Questions. 1. Temporary Injunctive Relief — Resolution of Summary Judgment Motion.— In a special proceeding by the Attorney-General to enjoin a corporation operating a health club from entering into any new contracts with consumers until it had complied with the security requirements of General Business Law § 622-a and to impose substantial fines and costs, the arguments of respondents, an individual and a related corporation, that they were denied due process by the grant of temporary injunctive relief freezing their bank accounts pending trial and directing them to file a bond, and that they were improperly joined in the court’s order notwithstanding an absence of evidence showing that they exercised control over or acted as agents for the now defunct health club, are not rendered moot by Supreme Court’s decision, issued while the instant appeal was under advisement, granting the Attorney-General’s motion for summary judgment against the health club, since that motion resolved only the issue of liability, and because the issue of damages persists, as does the issue of liability with respect to the related corporate defendant, the order freezing bank accounts and requiring the filing of the bond continues to ensure availability of funds while the remaining issues are resolved. Therefore, the propriety of issuing that order remains an issue meriting appellate review. People v Health & Sports Clubs, 80 NY2d 803. Court of Appeals. 2. Matters Reviewable — Improper Summation Comments. — To the extent that Reehil v Fraas (197 NY 64) states that exceptions to improper summation comments raise no question of law reviewable by the Court of Appeals, it is no longer to be followed. DiMichel v South Buffalo Ry. Co., 80 NY2d 184. 3. Consideration of Matters Outside Record — Child Custody Proceeding. — In a proceeding pursuant to Social Services Law §392 involving a determination of custody of a child voluntarily placed in foster care and not freed for adoption, where the Appellate Division applied an erroneous "best interest” test, the Court of Appeals, in reversing the Appellate Division’s award of legal custody to the foster parents, will take notice of new facts and allegations outside the record to the extent they indicate that the record before the Court of Appeals is no longer sufficient for determining appellant father’s fitness and right to custody, and remit to Family Court for a new hearing and determination of those issues. Appellant’s request that the Court of Appeals ignore the new developments and simply grant appellant custody, because matters outside the record cannot be considered by an appellate court, would exalt the procedural rule to a point of absurdity and reflect no credit on the judicial process. Changed circumstances may have particular significance in child custody matters. Matter of Michael B., 80 NY2d 299. 4. Matters Reviewable — Latent Defect in Juvenile Delinquency Petition. — In a juvenile delinquency proceeding, respondent’s argument, raised for the first time on his appeal to the Appellate Division from the dispositional order, that the capacity of the 10-year-old complainant to sign the supporting deposition under oath had not been properly established through a voir dire conducted before her signature was affixed, cannot be reviewed by the Court of Appeals. Inasmuch as

DIGEST-INDEX, 80 NY2d 1037 APPEAL — Cont’d the claimed defect was not apparent from the face of the accusatory instrument, it was not the kind of nonwaivable "jurisdictional flaw” that the Court of Appeals may consider even in the absence of a timely objection. Matter of Edward B., 80 NY2d 458. 5. Matters Reviewable — Latent Defect in Juvenile Delinquency Petition. — In a juvenile delinquency proceeding, respondent’s claim on his appeal from the Appellate Division order affirming Family Court’s dispositional order that the supporting deposition was legally inadequate because the complainant was not made aware of its precise contents before she signed it, has not been waived and is properly before the Court of Appeals notwithstanding that respondent’s contention concerns a latent rather than a facial defect since the claim was the subject of a motion to dismiss. Matter of Edward B., 80 NY2d 458. Finality of Judgments and Orders. 6. Order Granting Motion to Disqualify Counsel. — An order granting or denying a motion to disqualify counsel is nonfinal since it merely administers the course of litigation. Accordingly, to the extent an appeal to the Court of Appeals seeks review of so much of an order of the Appellate Division as reversed an order of the Surrogate’s Court granting objectant’s motion to disqualify the proponent’s counsel, it is dismissed. Matter of Henderson, 80 NY2d 388. Grant of Relief to Nonappealing Party. 7. In two personal injury actions in which the Appellate Division held that defendants had to turn over to plaintiffs only those surveillance tapes that they intended to use at trial, the Court of Appeals cannot consider, on defendants’ appeals from the respective Appellate Division orders, plaintiffs’ arguments that they are entitled to view every surveillance film that defendants may have taken, regardless of whether defendants intend to use the films at trial, since any broadening of the scope of discovery authorized by the Appellate Division would, in effect, grant affirmative relief to plaintiffs, who are not appellants here. DiMichel v South Buffalo Ry. Co., 80 NY2d 184. Matters Reviewable. See Infants, 6. ARBITRATION. Stay of Arbitration. 1. Potential Public Policy Violation. — A controversy over petitioner’s right to receive supplemental payments upon his withdrawal from respondent law firm should be decided by an arbitrator in the first instance in light of the broad arbitration clause in the parties’ partnership agreement and the existence of factual disputes between the parties, including which amendment of the agreement applies and whether the supplemental payments were intended to constitute approximation of the withdrawing partner’s share of undistributed earned income. Petitioner’s claim that an arbitrator’s award denying him benefits would be contrary to public policy is insufficient to preemptively stay arbitration and may be addressed subsequently on a motion to vacate or confirm the award, if such an award is in fact made. Hackett v Milbank, Tweed, Hadley & McCloy, 80 NY2d 870. 2. Contractual Dispute between School District and Contractors — Public Policy. — In litigation arising out of a contract between a construction company and a board of education, Supreme Court properly ordered the parties to arbitrate their differences, notwithstanding the assertion of the school district that the contract is void because the board’s agreement with respect to change orders, if enforced through an arbitration, would result in an expenditure by the board in excess of amounts lawfully appropriated (see, Education Law § 1718 [1]), since arbitration is a favored method of dispute resolution in New York, and New York courts should interfere as little as possible with the freedom of consenting parties to submit disputes to arbitration. While arbitration may be challenged on public policy grounds, that is a limited exception which is not applicable here. Board of Edue. v Christa Constr., 80 NY2d 1031.

1038 80 NEW YORK REPORTS, 2d SERIES ATTORNEY AND CLIENT. Disciplinary Proceedings. 1. Fitness to Practice Law — Acts Committed while Attorney Mentally 111.— Respondent attorney was properly found to be unfit to practice law and disbarred for violating DR 1-102 (A) (6) (now DR 1-102 [A] [7] [22 NYCRR 1200.3 (a) (7)]), which prohibits a lawyer from engaging in "conduct that adversely reflects on [the lawyer’s] fitness to practice law”, on the basis of his commission of four homicides, notwithstanding that he was found not guilty of the killings by reason of mental disease or defect. That respondent was not criminally culpable for the four killings is not controlling. The primary purpose of an attorney disciplinary proceeding is the protection of the public in its reliance on the integrity and responsibility of the legal profession. Thus, the inquiry is not directed to the attorney’s subjective mental processes, but to the objectives and qualitative nature of the conduct, for it is the acts themselves which the public sees and which guide its perception of the Bar. Although respondent was not criminally responsible for his acts, they tended to undermine public confidence in the Bar and, as such, they properly provided a basis for disciplinary action. Matter of Rowe, 80 NY2d 336. ' 2. Holding Oneself Out as Attorney in Violation of Suspension Order — Use of Letters "J.D.”. — In an attorney disciplinary proceeding, in determining whether an individual held himself out as an attorney in violation of an Appellate Division order of suspension, the individual’s use of the letters "J.D.” following his name identified that person as one who has successfully completed a law school curriculum, not as a member of the Bar licensed to practice law. Matter of Rowe, 80 NY2d 336. 3. Practice of Law — Publication of Law-Related Article by Suspended Attorney. — Respondent attorney did not violate the provision of an Appellate Division order of suspension, which directed respondent to desist and refrain "from practicing law in any form”, by publishing a law-related article during his suspension. The practice of law involves the rendering of legal advice and opinions directed to particular clients. Inasmuch as respondent’s article neither rendered advice to a particular person nor was intended to respond to known needs and circumstances of a larger group, its publication did not constitute the practice of law. Matter of Rowe, 80 NY2d 336. 4. Publication of Law-Related Article by Suspended Attorney — Freedom of Speech. — An Appellate Division order of suspension, which, in part, prohibited respondent attorney "from giving to another an opinion as to the law or its application or any advice in relation thereto”, violated respondent’s constitutional right to speak freely insofar as it was applied to discipline respondent for publishing a law-related article during his suspension that "offered advice to readers on the significance and effect of court decisions concerning the legal rights of psychiatric patients who refuse treatment”. The courts may, in the public interest, prohibit attorneys from practicing law and that prohibition may incidentally affect the attorney’s constitutional right to free speech by forbidding the giving of advice to clients. Where the individual is not practicing law, however, and does not purport to be exercising judgment on behalf of any particular individual, government regulation ceases to function as legitimate regulation of professional practice with only incidental impact on speech, and impermissibly interferes with that individual’s First Amendment rights. Here, since publication of the article did not constitute the practice of law, and respondent was exercising his right to free speech by publishing his article, application of the Appellate Division order to discipline respondent for publishing the article violated respondent’s constitutional right to free speech. Matter of Rowe, 80 NY2d 336. ATTORNEY-GENERAL. Enjoining Deceptive Practices. 1. Consumer Fraud — Liability of Individual Corporate Director. — In a special proceeding by the Attorney-General to enjoin a corporation operating a health

DIGEST-INDEX, 80 NY2d 1039 ATTORNEY-GENERAL — Cont’d club from entering into any new contracts with consumers until it had complied with the security requirements of General Business Law § 622-a and to impose substantial fines and costs, there is no merit to the contention of an individual respondent and another corporate respondent that the trial court was without a basis to freeze their bank accounts or impose a bond requirement on them because the health club was a completely separate and distinct corporation which was not controlled by them, since Executive Law § 63 (12) authorizes the Attorney-General to prosecute "any person” who engages in repeated fraudulent or illegal acts, with "fraud” broadly defined, and not only is it sufficiently likely to be shown at trial that the individual respondent, as the 50% owner and eventual sole director of the health club, against which abundant evidence of fraud and persistent illegality exists, had actual knowledge of the club’s fraudulent activities, but there is also evidence that it was the individual respondent himself who decided to operate the club without complying with section 622-a. Accordingly, the individual respondent may be liable for any money owed to club members and any civil fines owed the State. People v Health & Sports Clubs, 80 NY2d 803. 2. Consumer Fraud — Liability of Related Corporation. — In a special proceeding by the Attorney-General to enjoin a corporation operating a health club from entering into any new contracts with consumers until it had complied with the security requirements of General Business Law § 622-a and to impose substantial fines and costs, there is no merit to the contention of another corporate respondent that the trial court was without a basis to freeze its bank accounts or impose a bond requirement on it because the health club was a completely separate and distinct corporation, since there was a sufficient showing that the two corporations were not separate and distinct entities. The other corporation had the same two shareholders as did the health club, and it owned and operated the buildings in which the health club operated. Moreover, there was evidence that during negotiations with the Attorney-General, representations were made that the health club should be given a waiver from compliance with the statute because it was owned by the other corporate respondent, which had substantial assets and would stand behind the club’s debts. Additionally, there was other evidence of affinity between the corporations and, thus, there was a substantial likelihood that the Attorney-General could prove that the corporations were interlocking and acted in concert, thereby subjecting the other corporation to liability for the fraudulent and illegal activities pursued by the health club. People v Health & Sports Clubs, 80 NY2d 803. 3. Due Process — Freezing Bank Accounts — Filing Bond. — In a special proceeding by the Attorney-General to enjoin a corporation operating a health club from entering into any new contracts with consumers until it had complied with the security requirements of General Business Law § 622-a and to impose substantial fines and costs, an individual and a related corporation, also named as respondents, were not denied due process by the granting of temporary injunctive relief freezing their bank accounts pending trial and directing them to file a bond, since the instant dispute had proceeded for some months, the present litigation came as no surprise to them, prior negotiations with the Attorney-General clearly apprised respondents of the underlying facts, as did the petition, and afforded them ample opportunity to raise opposing contentions on the merits, and respondents restated those contentions in their answering petitions and at oral argument. Accordingly, the procedure was constitutionally sufficient and there was adequate support in the record to warrant the temporary relief awarded by the trial court. People v Health & Sports Clubs, 80 NY2d 803. BROKERS. Real Estate Brokers. 1. Responsibility of Corporate Broker for Violations by Salespersons — "Actual Knowledge” of Salespersons Not to be Imputed to Corporate Broker. — Knowledge possessed by sales employees of a corporate real estate broker is not by itself sufficient to satisfy the statutory ingredient of "actual knowledge” that must be chargeable against a broker under Real Property Law § 442-c for revocation or

1040 80 NEW YORK REPORTS, 2d SERIES BROKERS — Cont’d suspension of license purposes. The purposes and limitations of the relevant statute can best be effectuated and harmonized by allowing a corporate broker to be charged with "actual knowledge” only when its principals, i.e., representative brokers, directors or officers have actual knowledge of the pertinent violation or misrepresentation. Accordingly, respondent New York State Department of State’s suspension of petitioner corporate broker’s license for acts and knowledge of only its salesperson employees is not authorized and that determination was correctly annulled by the Appellate Division; however, since the absence of "actual knowledge” does not insulate real estate brokers from disciplinary measures less severe than license suspension or revocation for misconduct, a remand for consideration of an appropriate lesser sanction, if any, based on demonstrated untrustworthiness or incompetency, is necessary. Matter of Roberts Real Estate v New York State Dept, of State, Div. of Licensing Seros., 80 NY2d 116. CITIES. See Municipal Corporations. CIVIL RIGHTS. Discrimination in Employment. 1. Availability of Punitive Damages in Court Action. — A person aggrieved by a discriminatory practice in violation of the Human Rights Law may not recover punitive damages in a court action brought pursuant to Executive Law § 297 (9). Nothing in the statute indicates that the Legislature, in making legal remedies available in a judicial proceeding, contemplated that the courts would grant relief for a purpose other than alleviating or rectifying the harm done to the person aggrieved by the discrimination. In administrative proceedings before the State Division of Human Rights, the purpose of the permissible remedies is solely to right the wrong done to the aggrieved person, not to punish the wrongdoer. That the Legislature has consistently been concerned with rectifying the wrong to the injured party caused by the discriminatory practice — not punishing the transgressor — is borne out by the relevant history of the Human Rights Law from the time of its original enactment in 1951. Moreover, the logical inference from the Legislature’s action in amending the Human Rights Law to expressly permit punitive damages in housing cases is that such damages were not then recoverable for discrimination in other areas including employment. Thoreson o Penthouse Inti., 80 NY2d 490. CIVIL SERVICE. See, also, Municipal Corporations; Schools, and other specific titles. Appointment and Promotion. 1. County Deputy Sheriffs/Correction Officers. — County Law § 652-a, which permits the Sheriff in certain counties to continue "the appointment and promotion of deputy sheriffs” and which was adopted in response to an amendment to the State Constitution eliminating the basis for exempting certain employees of the Sheriff from the Civil Service Law, was designed to provide time during which a fair and orderly means of dealing with the many issues raised by the constitutional amendment are addressed and resolved, and was intended to maintain the status quo in order to prevent any disruption in either the law enforcement or corrections services provided by the Sheriff. Accordingly, the statute authorized a Sheriff to make appointments to fill staff vacancies at the county jail, and respondent personnel officer erred in declaring the appointments of petitioners invalid because they were nominally for the position of correction officer instead of Deputy Sheriff, since it is clear from the legislative history that the Legislature did not use the term "deputy sheriff”, or intend it to be used, in a narrow, technical way. Matter of Orlopp o Stirpe, 80 NY2d 946. Classification. 2. Exempt or Competitive Class — Impracticability of Competitive Testing. — In a proceeding challenging the designation of 40 Municipal Financial Analyst

DIGEST-INDEX, 80 NY2d 1041 CIVIL SERVICE — Cont’d positions as exempt, an order of the Appellate Division, which affirmed a judgment granting the petition, should be affirmed, since the Appellate Division properly concluded that the impracticability of competitive testing for the positions in question had not been established; nor did the record disclose any different or additional qualifications which would distinguish Municipal Financial Analysts from auditors placed in the competitive class. Accordingly, there was no rational basis for the wholesale exemption of all Municipal Financial Analysts from civil service competitive examination. Matter of Shafer v Regan, 80 NY2d 1006. Police. 3. Promotion — Accident Disability Retirement. — In a proceeding to direct respondent municipal officials to retroactively promote petitioner patrolman, who had retired on an accident disability pension, to the rank of sergeant and to recalculate his retirement allowance on the basis of the higher rank, an order of the Appellate Division, which affirmed the dismissal of the petition, is affirmed for the reasons stated in the memorandum thereat, which concluded that Matter of Deas v Levitt (73 NY2d 525) was controlling and required dismissal of the petition since it was undisputed that before the promotional list expired, petitioner failed to challenge its validity and, thus, he had no right to the relief requested; that it could not be said that respondents acted arbitrarily, capriciously or in bad faith by failing to notify petitioner before his retirement that he had passed a rescored promotional examination where petitioner was initially told that he had failed the examination, which was regraded following a successful, independent court challenge; that no property right is created by the right to appeal an adverse promotional decision (see, NY City Charter § 812 [d]); that petitioner was not entitled to relief pursuant to Civil Service Law § 50 (4) or § 52 (2); that selection for a Police Academy orientation course is not the legal equivalent of the promulgation of an official promotional list; that no one was promoted from the revised eligible list until after petitioner’s medical retirement; that there was nothing to indicate that any person had ever been promoted after approval of a medical retirement, and that respondents did not act arbitrarily, capriciously or in bad faith. Matter ofHasenstab v McGuire, 80 NY2d 812. 4. Line-of-Duty Injury — Negligence of Injured Officer. — In a proceeding to review a determination of respondents denying petitioner police officer a line-of-duty designation for a back injury, thereby disqualifying petitioner from receiving payment of her hospital bills pursuant to Administrative Code of the City of New York § 12-127 (b), which authorizes the City to pay hospital bills of its uniformed forces who, while on duty, sustain injury through no "fault or misconduct” on their part, respondents properly interpreted the "fault or misconduct” standard to include negligence, thereby prohibiting payment of petitioner’s hospital expenses, which were occasioned by petitioner’s slip in a puddle of water in a precinct bathroom. Although petitioner contends that the statutory standard refers to gross negligence or acts that would result in the denial of benefits under the Workers’ Compensation Law, her reliance is misplaced since the Workers’ Compensation Law provides benefits "without regard to fault as a cause of the injury” (Workers’ Compensation Law § 10 [1]), and construing "fault” as equivalent to "gross negligence” is unsupported by either the plain meaning of “fault” or the legislative history. Moreover, respondents’ interpretation is reasonable in this instance. Matter ofHeintz v Brown, 80 NY2d 998. 5. Line-of-Duty Injury — Slipping on Wet Bathroom Floor. — In a proceeding to review a determination of respondents denying petitioner police officer a line-of-duty designation for a back injury she sustained when she slipped on a wet bathroom floor in the precinct, thereby disqualifying petitioner from receiving payment of her hospital bills pursuant to Administrative Code of the City of New York § 12-127 (b), which does not authorize such payment if an officer’s injury resulted from his or her "fault or misconduct”, respondents’ determination was neither arbitrary, capricious, nor an abuse of discretion, since respondents met their burden of showing that petitioner was negligent. That petitioner failed to

1042 80 NEW YORK REPORTS, 2d SERIES CIVIL SERVICE — Cont’d avoid an obvious hazard is supported by her own statement that the water was a puddle in front of a sink; moreover, petitioner’s failure to allege any facts tending to show that her injuries were not due to any fault or misconduct on her part leaves the finding of negligence unrebutted. In addition, petitioner’s request was subjected to five levels of internal review via an informal grievance process, and at no time during that process did petitioner supplement her claim with information establishing that she was not negligent. Accordingly, there was a rational basis for respondents’ determination. Matter ofHeintz v Brown, 80 NY2d 998. Retirement and Pension Benefits. See Civil Service, 3. CONSTITUTIONAL LAW. Constitutionality of Senate Redistricting Plan. See Legislature, 1, 2. Due Process of Law. See Adoption, 1; Attorney-General, 3; Crimes, 55; Social Services, 3; Taxation, 5. Duties of State Comptroller. See Counties, 1. Equal Protection of Laws. See, also, Adoption, 2; Social Services, 3; Taxation, 6. 1. Rational Basis Test. — The rational basis test is the appropriate standard of review for a challenge under the Equal Protection and Due Process Clauses of the Federal and State Constitutions to Social Services Law § 131-c (2), which requires that a portion of the income of a grandparent who resides in the same dwelling unit as an infant grandchild and minor parent under the age of 18, be deemed available to the infant in determining the infant’s eligibility for Home Relief payments, since the statute involves economic and social welfare concerns, presenting no distinctions based on race, disability or other suspect classification. Lovelace v Gross, 80 NY2d 419. Freedom of Speech. See Attorney and Client, 4; Libel and Slander, 1-4. Obligation of State to Aid Needy. See Social Services, 4. Privileges and Immunities Clause. See Taxation, 6. CONTRACTS. See, also, Arbitration; Brokers; Insurance; Municipal Corporations; Vendor and Purchaser, and other specific titles. Illegal Contracts. 1. Enforceability of Loan Agreement That Violates Small Business Administration Regulations. — A loan agreement that violated Federal Small Business Administration (SBA) regulations by charging an excessive rate of interest and requiring a commitment fee is enforceable under New York law, since the violation was not malum, in se but was merely malum prohibitum due to Federal law, which does not provide for borrowers to interpose illegality as a defense to repayment of their loans, and the SBA’s regulatory sanctions, reinforced by the potential civil liability where State law is also violated, complementarily and proportionately protect the public policy underlying the Federal Small Business Investment Act. Nothing in the Federal law compels a different result. Further, permitting plaintiff to seek repayment of the debt does not command illegal conduct; the SBA scheme does not provide that a loan in violation of its regulations is void ab initia, and the terms being enforced fall within the allowable parameters of Federal law. Lloyd Capital Corp. v Pat Henchar, Inc., 80 NY2d 124. COUNTIES. See, also, Municipal Corporations. Entitlement to STOP-DWI Funds. 1. Constitutional Duties of State Comptroller. — A provision in the 1990-1991 State Operations Budget, which directed the State Comptroller to collect and

DIGEST-INDEX, 80 NY2d 1043 COUNTIES — Cont’d withhold a maximum of 2% of the revenues received in any court by counties participating in the special traffic options program for driving while intoxicated (STOP-DWI) in order to defray the costs incurred by the State Department of Motor Vehicles relating to STOP-DWI, violates NY Constitution, article V, § 1 since it assigns to the Comptroller duties not incidental to his constitutional duties and grants him overbroad discretion to effect the reduction in the counties’ share of STOP-DWI revenues. Although plaintiff counties concede that the Legislature, which has ultimate authority over the disposition of fines collected in the State, may reduce or even eliminate their share of the STOP-DWI revenues, the instant challenge concerns the methodology by which the Legislature accomplished the "up to” 2% reduction, and in that regard, the Supreme Court and Appellate Division correctly concluded that the provision in question did not merely direct the Comptroller to allocate funds between the State and localities, but invested him with extraconstitutional administrative duties which had no nexus with any auditing or other constitutionally designated function of the office of State Comptroller. County of Rensselaer v Regan, 80 NY2d 988. COURTS. Jurisdiction. See Crimes, 15. CRIMES. See, also, Evidence; Grand Jury; Infants (Juvenile Delinquents); Motor Vehicles, and other specific titles. Alibi. 1. Rebuttal Evidence. — In a robbery prosecution, the trial court did not err in permitting the People to rebut alibi witnesses’ testimony that they had promptly reported defendant’s alibi to police by calling the police officer to testify that such statements were never made, since the rule prohibiting the use of extrinsic evidence to impeach a witness on a matter that is merely collateral has no application where the issue to which the evidence relates is material in the sense that it is relevant to the very issues that the jury must decide. The extrinsic evidence herein was used to challenge the validity of the alibi, a material issue in the case, and was, therefore, not limited to collateral significance. Moreover, it makes no difference that the testimony to be impeached was elicited by the prosecutor rather than the defense, since, regardless of who elicited the evidence, the subject of that testimony was directly pertinent to the truthfulness of defendant’s alibi and, consequently, was relevant to a "material” issue. People v Knight, 80 NY2d 845. Appeal. See, also, Crimes, 23, 73, 82, 83. 2. Court of Appeals — Affirmative Relief Unavailable to Nonappealing Party.— On defendant’s appeal to the Court of Appeals from an order of the Appellate Division, which reversed County Court’s order granting a motion by defendant to suppress certain physical evidence seized pursuant to a search warrant that was supported in part by information from a confidential informant, after the People were unable to produce the informant for an in camera Darden hearing, the Court of Appeals is unable to consider the People’s argument that the hearing court should not have ordered a Darden examination in the first instance since, if the Court of Appeals were to hold that the hearing Judge abused his discretion in ordering the examination, it would in essence be affording affirmative relief to a nonappealing party, which the Court of Appeals is not empowered to do. To the extent that People v Johnson (39 NY2d 364) suggests that CPL 470.35 (2) (b) gives the Court of Appeals power to grant affirmative relief to a nonappealing party, it is overruled. People v Carpenito, 80 NY2d 65. 3. Trial Court Order Suppressing Evidence — Further Prosecution Not Barred under CPL 450.50 (2) When People Withdraw Appeal with Permission of Appellate Court. — CPL 450.50 (2), which provides that the taking of an appeal by the People pursuant to CPL 450.20 (8) from a trial court order suppressing evidence constitutes a bar to the prosecution of the accusatory instrument unless and until

1044 80 NEW YORK REPORTS, 2d SERIES CRIMES — Cont’d the suppression order is reversed upon appeal and vacated, does not operate to bar further prosecution of an indictment unless and until the underlying People’s appeal actually culminates in an affirmance. Thus, the People’s CPL 450.50 (1) statement that the order to be appealed has rendered their case either "insufficient as a matter of law” or "so weak in its entirety that any reasonable possibility of prosecuting * * * has been effectively destroyed”, which the People are required to file by CPL 450.20 (8) when they take such an appeal, is not binding on the People so as to foreclose prosecution after the People’s appeal has been withdrawn with the permission of the appellate court. An appeal that has been "withdrawn” with the permission of the court is a nullity. Consequently, a withdrawn appeal is not an appeal that has been "taken” within the meaning of CPL 450.50 (2) and the bar to further prosecution contemplated by that statute is not applicable. Further, if the appellate court has authorized the withdrawal of an appeal, the accompanying CPL 450.50 (1) statement is necessarily withdrawn along with it and, in consequence, it is of no further legal significance. People v McIntosh, 80 NY2d 87. 4. Power of Court of Appeals to Review Legality of Corrective Action Directed by Appellate Division upon Reversal of Conviction. — The Court of Appeals does not have power under CPL 450.90 (2) (b) to review on defendant’s appeal the legality of the corrective action ordered by the Appellate Division in connection with its reversal of defendant’s conviction of one count of criminal possession of a weapon in the third degree. Although CPL 450.90 (2) (b) authorizes an appeal to be taken from an Appellate Division order reversing or modifying a judgment or order of a criminal court if the "appeal is based upon a contention that corrective action * * * taken or directed by the intermediate appellate court was illegal”, subdivision (2) must be read in conjunction with CPL 450.90 (1), which requires first that the order appealed from be adverse or partially adverse to the party appealing, and defendant was not adversely affected by the Appellate Division order reversing his judgment of conviction. People v Jackson, 80 NY2d 112. 5. Relief Available upon Finding That Trial Court Improperly Entertained Oral Suppression Motion. — Where the Appellate Division correctly concluded that defendant’s oral motion to suppress should not have been entertained, the proper relief would have been for the Appellate Division to reverse the order of suppression and remit for further proceedings, including a new motion to suppress if appropriate, rather than to consider and dispose of the suppression motion on the merits. Since the motion was not made in accordance with the dictates of CPL article 710, it was, in effect, a nullity, and the Appellate Division should have treated the motion as if it had never been made in determining the proper relief on appeal. People v Mezon, 80 NY2d 155. 6. Court of Appeals — Fact Finding. — Where the trial court and the Appellate Division held the entire 90-day period of delay between the dismissal of an indictment and the People’s obtaining a new indictment to be unreasonable, the Court of Appeals will not consider the People’s request to exclude at least some of that period as a "reasonable time” for motion practice, since any effort by the Court of Appeals to define a lesser "reasonable” period for motion practice would require the Court to engage in fact finding, which is outside the scope of its powers. People v Cortes, 80 NY2d 201. 7. Matters Appealable — Bargained-For Waiver of Right to Appeal — Disposition. — A bargained-for waiver of the right to appeal does not affect the appealability of a judgment that is otherwise appealable under CPL 450.10 (1) and does not operate to deprive the appellate court of its jurisdiction of the appeal. Instead, it merely forecloses appellate review of all claims that might be raised on appeal, except those categories of claims that survive such waivers under case law. Accordingly, the proper disposition in appeals where there is no claim that the waiver was constitutionally defective and no public policy impediment to enforcing the waiver, is an affirmance predicated on the absence of any reviewable issues that have not been superseded by the waiver. Additionally, in cases where there has been a bargained-for waiver of the right to appeal and the intermediate appellate court determines that the judgment of conviction should be affirmed, it

DIGEST-INDEX, 80 NY2d 1045 CRIMES — Cont’d would be helpful if the intermediate appellate court would specify whether its disposition is based on the existence of an enforceable waiver or instead on the merits of the defendant’s appellate claims, so as to facilitate further appellate review and minimize unnecessary remittals. People v Callahan, 80 NY2d 273. 8. Validity of Waiver of Right to Appeal as Part of Negotiated Sentence or Plea Bargain — Appellate Challenge to Sentencing Procedures. — Except where the very power of the court is implicated, appellate challenges to the procedures utilized in determining and imposing sentence may effectively be waived by a voluntarily and intelligently made agreement entered in connection with a sentence or plea bargain. Accordingly, defendant cannot avoid the effect of his waiver of the right to appeal made in connection with his plea bargain where his appellate claim is addressed merely to the adequacy of the procedures the court used to arrive at its sentencing determination, specifically its purported overreliance on the presentencing report’s restitution recommendation and its failure to conduct a special inquiry into defendant’s ability to pay a surcharge. People v Callahan, 80 NY2d 273. 9. Validity of Waiver of Right to Appeal as Part of Negotiated Sentence or Plea Bargain — Constitutional Speedy Trial Claims. — Because of the societal interest in speedy trials and the implications for the integrity of the criminal justice system, parties cannot foreclose appellate review of a constitutional speedy trial claim through the plea bargaining process. This rule applies without regard to whether the facts in the particular case suggest duress arising from the facts underlying the speedy trial claim itself. People v Callahan, 80 NY2d 273. 10. Validity of Waiver of Right to Appeal as Part of Negotiated Sentence or Plea Bargain — Voluntary, Knowing and Intelligent Waiver. — Before a waiver of the right to appeal obtained as a condition of a sentence or plea bargain may be enforced, the record must be examined to ensure that the waiver was voluntary, knowing and intelligent. Accordingly, the Appellate Division erred in holding enforceable defendant’s bargained-for waiver of his right to appeal where there was no record discussion between the court and defendant concerning the waiver, there was not even an attempt by the court to ascertain on the record an acknowledgement from defendant that he had, in fact, signed the waiver or that, if he had, he was aware of its contents, and there is nothing on the record to establish that the court was familiar with the circumstances surrounding the execution of a proffered document purporting to embody defendant’s waiver. There is, thus, no assurance that the waiver was executed under constitutionally acceptable circumstances. People v Callahan, 80 NY2d 273. 11. Retroactivity of Judicial Decision — Application of State Retroactivity Rules Where Decision Involves No Federal Constitutional Principles. — The question of the retroactivity of People v Antommarehi (80 NY2d 247), which held that the court may not actively solicit answers from a prospective juror which relate to that juror’s bias or hostility in the absence of defendant, is one of State law, since that decision involves no Federal constitutional principles. The basis for the Antommarehi decision is found in CPL 260.20, which provides that a defendant must be personally present during the trial of an indictment and has been construed to extend to the impaneling of the jury. Accordingly, Griffith v Kentucky (479 US 314), which held that a new constitutional rule is to be applied retroactively to all cases pending on direct review, is not binding on the Court of Appeals in determining the retroactivity of Antommarehi. People v Mitchell, 80 NY2d 519. 12. Court of Appeals — Grant of Relief to Nonappealing Party — New Trial Sought by Nonappealing Defendant. — Where, on the People’s appeal, the Court of Appeals reinstated defendant’s conviction, that Court is precluded from reviewing defendant’s alternative contentions seeking a new trial, since the relief sought goes beyond mere affirmance of the Appellate Division order appealed from and thus constitutes a request for affirmative relief requiring defendant to obtain leave to appeal, which previously was denied. People v Acosta, 80 NY2d 665. 13. Matters Reviewable — Remittal by Court of Appeals to Appellate Division — Excessive Sentence Claim Not Previously Considered by Appellate Division.— Where the Court of Appeals reversed an Appellate Division order reversing and

1046 80 NEW YORK REPORTS, 2d SERIES CRIMES — Cont’d vacating defendant’s conviction, reinstated the conviction and remitted the case to the Appellate Division for consideration of the facts, the Appellate Division should, if it upholds the conviction upon exercise of its factual review power, consider defendant’s excessive sentence claim. Although the Appellate Division rejected defendant’s "other” claims by initially reversing the conviction and vacating the resultant sentence, that court necessarily did not pass on defendant’s argument that his sentence was harsh and excessive. People v Acosta, 80 NY2d 665. 14. Appeal by People. — An order of the Appellate Division, which, inter alia, dismissed an appeal by the People from a judgment convicting defendant of burglary and resisting arrest, should be affirmed since CPL 450.30 (2), which authorizes the People to appeal from a sentence that is invalid as a matter of law, does not similarly entitle the People to appeal from a conviction, and the People do not allege that defendant’s sentence is an illegal one; rather, their challenge focuses upon the legality of the Trial Judge’s decision to accept defendant’s plea over the prosecutor’s objection. Thus, in the guise of challenging the sentence imposed, the People are essentially attacking the validity of defendant’s underlying conviction, and the statute does not permit them to do so. People v Cosme, 80 NY2d 790. 15. Jurisdiction of Court of Appeals. — The Court of Appeals has jurisdiction to pass upon a claim that Penal Law § 245.01, exposure of a person, offends the Equal Protection Clauses of the Federal and State Constitutions (see, CPL 470.35 [2] [a]), since appellants’ contention was expressly passed upon by County Court (acting as an appellate court), and its disposition of that claim was a necessary basis for its order of reversal of a City Court order which had dismissed the informations. People v Santorelli, 80 NY2d 875. 16. Dismissal of Appeal — Execution of Judgment. — An order of the Appellate Division, which denied a motion by defendant for summary reversal of an execution of judgment or for a reconstruction hearing, and dismissed an appeal by defendant from the execution of judgment, is affirmed, where defendant was tried and sentenced in absentia, filed an appeal which was dismissed, and was arrested on a Bench warrant some eight years later, whereupon the judgment of conviction was executed and he began serving his sentence, since the Appellate Division did not err as a matter of law in dismissing the appeal from the execution of judgment to that court. People v Scott, 80 NY2d 888. 17. Preservation of Issue for Appellate Review — Sentence. — In a robbery prosecution in which defendant was sentenced to four concurrent terms of imprisonment, an order of the Appellate Division, which affirmed defendant’s conviction and sentence, is affirmed. The People’s contention that defendant’s fourth term of imprisonment should have been imposed consecutively to the other three because he was out on bail when he committed the fourth robbery (see, Penal Law § 70.25 [2-b]) was not advanced at a time sufficient to preserve the issue for review in the Court of Appeals. People v Santiago, 80 NY2d 916. Arrest. 18. Probable Cause — Veracity Prong of Aguilar/Spinelli Test — Corroboration by Verification of Noncriminal Details of Informant’s Information. — The veracity prong of the Aguilar/Spinelli test for the adequacy of probable cause supporting a warrantless arrest based on hearsay information provided by an informant may, in a proper case, be established through corroboration where the police have verified only noncriminal details of activity referred to in the informant’s statement. Thus, to be sufficient corroboration, the independently verified details, although not of themselves criminal in nature, may not be merely peripheral to the reported criminal scheme; they must fit within the informant’s story of the contemplated crime as activities which are significant and essential to carrying it out. Corroboration by such noncriminal details, particularly where known informants have given the tip to authorities on their own initiative, will adequately

DIGEST-INDEX, 80 NY2d 1047 CRIMES — Cont’d protect the rights of the suspect by guarding against the informant’s guile, gregariousness or gullibility which may cause him to pass on unreliable or even deliberately false information. People v DiFalco, 80 NY2d 693. 19. Probable Cause — Veracity Prong of Aguilar/Spinelli Test — Corroboration by Verification of Noncriminal Details of Informant’s Information — Possession of Cocaine. — With respect to the warrantless arrest of defendant and the codefendant passenger when police stopped the car defendant was driving and seized cocaine found therein, the veracity component of the Aguilar/Spinelli test for the adequacy of probable cause was satisfied by police corroboration of details of the information provided by an identified informant that were not, if taken separately, suggestive of criminal activity. The informant had told the police that the codefendant was going to Rochester from Batavia to buy drugs, that he had promised to buy drugs for the informant with the $200 "buy money” police had given the informant, and that he had agreed to deliver the drugs at a specified location in Bergen approximately 1 hour and 45 minutes later. The heart of the criminal enterprise was the trip to Rochester where the drugs were to be purchased, as to which the informant gave the police the following details which they verified through personal observation: (1) codefendant would be driving a white Chevrolet Impala; (2) the car would proceed from codefendant’s house to Route 490; (3) codefendant would drive onto Route 490 east toward Rochester; (4) he would return on Route 490 west; and (5) the trip from Batavia to Rochester and back to Bergen where the delivery was to be made would take about 1 hour and 45 minutes. Additional facts observed by the police point to the criminal purpose of the mission: that the informant no longer had the $200 which he stated he had given to codefendant, that codefendant’s car was stopped on the Bergen exit of Route 490 west, and that codefendant had returned on Route 490 west to the Bergen exit soon enough to make the prospective delivery to the informant at the appointed time. Under these circumstances, the police had sufficient independent verification to satisfy the veracity component of Aguilar/ Spinelli. People v DiFalco, 80 NY2d 693. 20. Wrongful Arrest — Suppression of Incriminating Evidence. — In a gambling prosecution in which defendant was wrongfully arrested outside a room in which illegal gambling was being conducted, defendant’s conviction for various gambling offenses should be reversed and the indictment against him dismissed, where defendant was arrested in the hallway outside the room in question just prior to the execution of a search warrant for said room, and where defendant, upon being led back to the room by the police, picked up a jacket which had been draped over a chair in the room and put it on when he was escorted out of the room by the police, since while the jacket was properly admitted in evidence as the product of the warrant execution, it had no incriminating value against defendant absent evidence connecting defendant to it, and the necessary connecting evidence was supplied by the arresting officer’s testimony concerning defendant’s conduct upon his concededly unlawful arrest and asportation to the room. Accordingly, that testimony should have been suppressed as it resulted, not from the lawful execution of a valid search warrant, but from defendant’s wrongful arrest, and, because that testimony was the only evidence connecting defendant with the jacket which was the only direct link between defendant and the gambling activities, the indictment should have been dismissed. People v Rossi, 80 NY2d 952. Bail Jumping. See Infants, 4. Bribery. 21. "Agreement or Understanding” That Bribe Will Influence Public Servant’s Conduct. — With respect to a third degree bribery charge under Penal Law § 200.00, the statutory phrase "agreement or understanding” means more than "intent to influence”; rather, the statute disjunctively requires either a mutual "agreement” between the bribe maker and the public servant, or at least a unilateral "understanding”, i.e., a perception or belief, in the mind of the bribe

1048 80 NEW YORK REPORTS, 2d SERIES CREMES — Cont’d maker that the bribe will influence the public servant’s conduct. People v Tran, 80 NY2d 170. 22. Sufficiency of Evidence — Proof of Understanding That Bribe Would Influence Public Servant’s Conduct. — A count of bribery in the third degree (Penal Law § 200.00) against defendant, the fire safety director of two hotels with outstanding fire safety violations, must be dismissed on the ground that the People’s evidence is legally insufficient where that evidence established only that when a municipal fire safety inspector told defendant a new violation would be reported, defendant put $310 into the shirt pocket of the inspector, who immediately removed the money and said he could not accept it and that the violation would still be reported, and defendant responded by telling the inspector to keep the money "even if [he] wrote a violation” and "do whatever [he] had to do, but keep [the money]”. To sustain the charge of bribery, the prosecution was required to prove at least an "understanding” in the mind of the bribe maker that the bribe receiver would effectuate the proscribed corruption of public process and was affected to do so by the actus reus of this particular crime. Here, there is no evidence from which any "understanding”, as required by the statute, can be attributed to the defendant. People v Tran, 80 NY2d 170. Confession. 23. Appeal — Matters Reviewable. — In a drug prosecution in which defendant asserts that certain statements he made to the police should have been suppressed, an order of the Appellate Division, which affirmed defendant’s conviction for criminal possession of a controlled substance in the second degree, is affirmed since the determination that a defendant validly waived the constitutional right to remain silent resolves a mixed question of law and fact, and is not subject to further review in the Court of Appeals where, as here, it is supported by evidence in the record. People v Nunez, 80 NY2d 858. Conspiracy. 24. Admissibility of Coconspirator’s Recorded Hearsay Statements. — In a prosecution arising out of the alleged bribery of an investigator posing as a municipal fire safety inspector who discovered a violation at the subject hotel, the People failed to present independent prima facie evidence of a conspiracy justifying use of a coconspirator’s recorded hearsay evidence against defendant where the People’s evidence established that defendant and his alleged coconspirator were both hotel employees, that defendant urged the undercover investigator to return to the hotel on the day in question, and that the alleged coconspirator gave $100 to the investigator when he returned. Although the coconspirator’s recorded statement that the purpose of the payment was to "clear up * * * something here, about Local Law 16”, is admissible as a verbal act offered not for the truth of the matter asserted, but merely to give legal effect to the conduct it accompanied, it served at best to establish only that the coconspirator paid the investigator $100 to influence his handling of the hotel’s alleged Local Law 16 violations; it does not and cannot be used to supply the prima facie foundation or connection to defendant as part of a conspiracy. People v Tran, 80 NY2d 170. Controlled Substances. 25. Attempted Criminal Possession — Rejection of Drugs as Abandonment of Attempt. — In the prosecution of defendant for attempted criminal possession of a controlled substance in the first degree wherein the evidence established that defendant, with the intent to possess more than four ounces of a controlled substance, met with his supplier’s courier and examined cocaine, but rejected it because he was dissatisfied with the quality, defendant’s rejection of the drugs did not vitiate the attempt under an abandonment theory (see, Penal Law § 40.10 [3]). Abandonment is an affirmative defense which the defendant has the burden of establishing by a preponderance of the evidence, but defendant never sought to present such defense at trial. Moreover, to qualify for the defense, the abandonment must be permanent, and here the evidence revealed that even after rejecting the initial offer, defendant continued making efforts to obtain cocaine. People v Acosta, 80 NY2d 665.

DIGEST-INDEX, 80 NY2d 1049 CRIMES — Cont’d 26. Attempted Criminal Possession — Rejection of Proffered Drugs Due to Defect in Quality. — Under the Penal Law, a person is guilty of an attempt to commit a crime when, with intent to commit a crime, he or she commits acts very near to the accomplishment of the intended crime (see, Penal Law § 110.00). Accordingly, a person who, with intent to possess cocaine, orders from a supplier, admits a courier into his or her home, examines the drugs and ultimately rejects them because of perceived defects in quality, has passed beyond mere preparation to commit a crime and come "very near” to possessing the drugs; thus, that person has attempted to possess cocaine within the meaning of the Penal Law. The only remaining step between the attempt and the completed crime is the person’s acceptance of the proffered merchandise, an act entirely within his or her control. People v Acosta, 80 NY2d 665. 27. Attempted Criminal Possession — Sufficiency of Evidence. — The evidence was legally sufficient to support defendant’s convict