Thomas R. Newman
Last month marked the 45th anniversary of the founding of this column by Benjamin H. Siff, who was its principal author until his sudden and untimely death in September 1975. Those who knew Ben, as partner, colleague, friend or even adversary, can attest to the fact that he was a great appellate lawyer and a warm and wonderful human being. His experience in handling appeals was unequalled—during the period 1955 to 1975, he appeared in the New York Court of Appeals in 153 cases. He is a role model worth remembering.
The statewide Supreme Court of the state of New York "is one judicial institution" and the Appellate Division of the Supreme Court "is not a separate court, but a branch of the Supreme Court; that in effect…is the Supreme Court sitting in banc." First Nat'l Bank of Glens Falls v. Reoux , 11 A.D.2d 876, 877, 203 N.Y.S.2d 25, 26 [3d Dept. 1960]. While CPLR §5501, Scope of Review, states in subsection [c] that "The appellate division shall review questions of law and questions of fact on an appeal from a judgment or order," it does not mention that court's power to review an exercise of discretion by the trial court.
Nevertheless, the Appellate Division unquestionably possesses all of the powers of the Supreme Court. Its authority "is as broad as that of the trial court" [ Northern Westchester Professional Park Associates v. Town of Bedford , 60 N.Y.2d 492, 499, 470 N.Y.S.2d 350, 354 [1983]; Matter of Association of the Bar of the City of New York, 222 A.D. 580, 227 N.Y.S. 1 [1st Dept. 1928]], and one often sees an Appellate Division decision and order [one paper] reversing or modifying an order or judgment of the Supreme Court "on the law, the facts and in the exercise of discretion." E.g., Matter of Kelly v. Safir , 271 A.D.2d 326, 706 N.Y.S.2d 113 [1st Dept. 2000], rev'd 96 N.Y.2d 32, 40, 724 N.Y.S.2d 680 [2001].
The Appellate Division has virtually unlimited authority and "discretion" when reviewing orders and judgments of the trial court, but while "[j]udicial discretion is a phrase of great latitude…it never means the arbitrary will of the judge. It is always 'a legal discretion to be exercised in discerning the course prescribed by law;…' It is a legal discretion founded upon conditions which call for judicial action as distinguished from mere individual or personal view or desire." Matter of Superintendent of Banks, 207 N.Y. 11, 15 [1912]. Or, as then U.S. Supreme Court Justice Benjamin Cardozo phrased it, "Discretion is not unconfined and vagrant. It is canalized within banks that keep it from overflowing." Panama Refining Co. v. Ryan , 293 U.S. 388, 440 [1935] [dissent].
For the Appellate Division [and trial courts], those banks are established by the Court of Appeals whenever it finds that the exercise by the lower court of its broad discretionary power was an abuse of discretion as a matter of law—for example, when the court granted or denied relief on the basis of plainly impermissible considerations. Barasch v. Micucci , 49 N.Y.2d 594, 427 N.Y.S.2d 732 [1980].
Court of Appeals
Unlike the Appellate Division, the Court of Appeals' scope of review is restricted by CPLR 5501[a] to questions of law only, except that it shall also review questions of fact where the Appellate Division, on reversing or modifying a final or interlocutory judgment, has expressly or impliedly found new facts and a final judgment pursuant thereto is entered. But, while the CPLR does not grant the Court of Appeals power to review an exercise of discretion by the courts below, neither does the New York State Constitution nor any statute prohibit that court from reviewing questions of discretion; the limitation is entirely self-imposed and found only in the opinions of the court itself.
In Jensen v. Union Ry. Co., 260 N.Y. 1 [1932], a sharply divided Court of Appeals addressed the trial court's decision in vacating a defendant's default and setting aside an inquest. The Appellate Division had reversed the trial court's order, and the Court of Appeals dismissed an appeal from the Appellate Division's decision. The dissent reviewed a number of the court's prior decisions and stated that the "discretion, vested in the lower courts, may, however, become a question of law reviewable by this court, when its exercise is so arbitrary as to deprive litigants of a reasonable opportunity to be heard, or, in other words, comes within that class of rulings which for better terminology, we call 'an abuse of discretion.' This is not a very polite nor exact description; the term perhaps is unfortunate; it simply means that the court has gone too far and beyond the bounds and limitations set by previous example." Id., at 13 [Crane, J., dissenting].
Half a century later, in Barasch, the Court of Appeals, unanimously, reached the same result, stating, "While it is true that this Court has no power to review an exercise of discretion in the ordinary case…, the possibility that the lower court's discretion was abused does give rise to a question of law that is cognizable in this Court." The court recently restated its position that where the Appellate Division "substitut[ed]…its discretion for that of the trial court, our review is limited" to whether the Appellate Division "abuse[d] its discretion as a matter of law." Sadek v. Wesley , 27 N.Y.3d 982, 983, 32 N.Y.S.3d 42, 43 [2016].
Cohen & Karger point out in their chapter on Review of Discretion that "it is always open to a party aggrieved to contend that in the circumstances of his [or her] case the decision against him [or her] below is so improvident, that as a matter of law the decision should not stand." Cohen & Karger, "Powers of the New York Court of Appeals," p. 616 [rev. ed. 1952]. Of course, we are not suggesting that the court expend its valuable judicial time and resources in reviewing each case in which it is claimed that the Appellate Division or trial court abused its discretion as a matter of law. The court has far greater control over its calendar today than it did in 1980 when Barasch was decided and any dissent or modification gave rise to an appeal as of right. It is, therefore, likely that "the ordinary case" presenting an abuse of discretion claim will be denied leave to appeal.
The Court of Appeals has said that it "will not, ordinarily, interfere with the Appellate Division's exercise of [its] discretion unless there has been an abuse of discretion as a matter of law. Where, however, that court, in exercising its discretion, fails to take into account all the various factors entitled to consideration, it commits error of law reviewable by [the Court of Appeals]." Varkonyi v. S. A. Empresa de Viacao Airea Rio Grandense , 22 N.Y.2d 333, 337, 292 N.Y.S.2d 670, 673 [1968].
It necessarily follows from this that there must first be a clear statement of "all the various factors entitled to consideration," and such a statement can only come from the Court of Appeals.
Guidelines and Standards
Viewed from the perspective of practicing attorneys, it is well for the court to occasionally accept a case that will enable it to set forth general guidelines and standards governing the Appellate Division's exercise of the broad discretionary power committed to it. Otherwise, counsel are at a loss to advise clients as to their rights and what factors are likely to be considered determinative by the Appellate Division in any given case. Virtually identical fact situations have not always received identical treatment and resulted in similar dispositions; for example, some Special Term orders denying motions to dismiss are reversed and the action unconditionally dismissed, while in other cases involving similar fact patterns, the same court affirmed the denial of a motion to dismiss. Compare Marine v. Jamaica Hospital, 38 A.D.2d 576, 328 N.Y.S.2d 304 [2d Dept. 1971][action dismissed by AD], with Rockmills Steel Products Corp. v. Crum & Forster Ins . , 41 A.D.2d 604, 340 N.Y.S.2d 391 [2d Dept. 1973][AD affirmed denial of motion to dismiss without opinion].
What we suggest is not without precedent. Judge Domenick Gabrielli's opinion for the court in Barasch exemplifies the type of opinion that should be of great assistance to the courts below. Carefully avoiding the adoption of "an inflexible set of rules" to govern the lower courts' discretion, the opinion sets forth a number of significant factors that are to be considered by a court when passing on a motion to dismiss pursuant to CPLR 3012[b] upon plaintiff's failure to timely serve a complaint.
Barasch was a personal injury action in which defendant moved to dismiss following plaintiff's failure to serve a complaint within 20 days after a demand therefore had been made. Special Term denied the motion "primarily" because it found that defendant had not been prejudiced by the delay. The Appellate Division affirmed, without opinion, and granted defendant leave to appeal and certified the following question of law for consideration by the Court of Appeals: "Did the order of the Supreme Court, as affirmed by this Court, constitute an abuse of discretion as a matter of law?" The Court of Appeals retained jurisdiction and reversed the order appealed from finding that this was "one of those rare instances" in which the denial of defendant's motion constituted an abuse of discretion as a matter of law. 49 N.Y.2d at 601, 427 N.Y.S.2d at 735.
With respect to the merits, the court cautioned that while the lower courts enjoy "considerable latitude" in determining whether to dismiss an action pursuant to CPLR 3012[b], "their decisions must be based upon a genuine consideration of several specific factors." 49 N.Y.2d at 599, 427 N.Y.S.2d at 734 [emphasis added]. Lip service will not do, as the reversal in Barasch makes clear.
First among the court's enumerated factors to avoid dismissal for failure to timely serve a complaint is the requirement that the plaintiff must demonstrate a reasonable excuse for the delay. Next, in addition to showing an adequate justification for delay in serving the complaint, the plaintiff must also demonstrate to the court that the claim against the defendant has legal merit. This is usually done by filing an affidavit of merit containing evidentiary facts and attested to by an individual with personal knowledge of those facts. A bare attorney's affidavit will not suffice.
The decision concerning the sufficiency of a plaintiff's affidavit of merit is ordinarily left to the discretion of the lower courts, and while "there can be no rigid standards in this context," the Court of Appeals noted that "[a]s a general rule, these affidavits must be sufficient to establish prima facie that the plaintiff has a good cause of action." Ibid. Finally, the court recognized that a "variety of other factors such as the length of the delay, the complexity of the facts underlying the plaintiff's claim and the existence of prior settlement negotiations may have a bearing upon a court's decision to grant or deny relief under CPLR 3012." 49 N.Y.2d at 599-600, 427 N.Y.S.2d at 734.
The opinion and facts in Barasch also illustrate what is unacceptable, as a matter of law, as a basis for granting plaintiff relief. Plaintiff was 51/2 months tardy in serving his complaint. His excuse amounted to nothing more than "law office failure" and his purported affidavit of merit was insufficient, since it was that of his attorney who had no personal knowledge of the facts.
In an instructive footnote, the court distinguished "those cases in which a discretionary remedy is denied by the lower court both in the exercise of its discretion and upon the legal ground that the court was without power to grant the requested relief…In such cases, the lower court's legal conclusion cannot be presented to this court in the form of a 'certified question' for the simple reason that our disposition of the question would not be 'decisive' of the outcome. Even if we were to hold that the lower court erred in concluding that it was without power to grant the requested relief, our holding could have no effect upon the result in the case, since the lower court would nonetheless withhold the remedy in the exercise of its non-reviewable discretion. It is these cases that form the basis of the oft-cited principle that the denial of discretionary relief does not ordinarily give rise to a certifiable question of law….That principle is of limited utility, however, where the certified question demands that the court consider whether the denial of otherwise discretionary relief constitutes an abuse of discretion in a particular case." Id., at 598, fn. 1, 427 N.Y.S.2d at 733 fn. 1 [citations omitted].
Conclusion
It is clear from the foregoing that the Court of Appeals has the power, whenever it deems it necessary to exercise it, to accept jurisdiction in a case raising "abuse of discretion as a matter of law" and then set forth the general guidelines that are to govern the exercise of discretion committed to the courts below.
Thomas R. Newman is of counsel to Duane Morris and author of 'New York Appellate Practice' [Matthew Bender]. Steven J. Ahmuty, Jr. is a partner at Shaub, Ahmuty, Citrin & Spratt.
Reprinted with permission from New York Law Journal, © ALM Media Properties LLC. All rights reserved.