Duffy v. Longo

207 A.D.2d 860, 616 N.Y.S.2d 760, 1994 N.Y. App. Div. LEXIS 9078
CourtAppellate Division of the Supreme Court of the State of New York
DecidedSeptember 26, 1994
StatusPublished
Cited by9 cases

This text of 207 A.D.2d 860 (Duffy v. Longo) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Duffy v. Longo, 207 A.D.2d 860, 616 N.Y.S.2d 760, 1994 N.Y. App. Div. LEXIS 9078 (N.Y. Ct. App. 1994).

Opinions

—In a taxpayer class action, inter alia, to recover damages for waste pursuant to General Municipal Law § 51 and to enjoin the City of Yonkers from authorizing the payment of any legal fees and costs incurred by the defendant council members in defending the action, (1) the defendant Henry Spallone appeals, as limited by his notice of appeal and brief, from so much of an order of the Supreme Court, Westchester County (Gurahian, J.), entered December 12, 1990, as denied the branch of the defendant council members’ motion which was for summary judgment dismissing the first cause of action insofar as it is asserted against him and granted the branch of the plaintiffs’ cross motion which was for partial summary judgment on the first cause of action pursuant to General Municipal Law § 51; (2) the plaintiffs cross-appeal, as limited by their notice of appeal and brief, from so much of the same order as found [861]*861that the defendant Henry Spallone is entitled to be reimbursed by the City of Yonkers, pursuant to Public Officers Law § 18, for his legal fees and expenses; and (3) the defendant Henry Spallone appeals, as limited by his notice of appeal and brief, from so much of an order of the same court, entered April 26, 1991, as, upon reargument, adhered to the prior determination.

Ordered that the appeal from the order entered December 12, 1990, is dismissed since that order was superseded by the order entered April 26, 1991, made upon reargument; and it is further,

Ordered that the order entered December 12, 1990, is affirmed insofar as cross-appealed from; and it is further,

Ordered that the order entered April 26, 1991, is modified, on the law, by deleting the provision thereof which adhered to the prior determination contained in the order entered December 12, 1990, denying the branch of the defendant council members’ motion which was for summary judgment dismissing the first cause of action insofar as it is asserted against the defendant Henry Spallone and substituting therefor a provision granting that branch of the motion and dismissing the first cause of action insofar as it is asserted against the defendant Henry Spallone; as so modified, the order is affirmed insofar as appealed from; and it is further,

Ordered that the order entered December 12, 1990, is modified accordingly; and it is further,

Ordered that the defendant Henry Spallone is awarded one bill of costs.

We conclude that the plaintiffs’ complaint fails to allege facts sufficient to state a cause of action for restitution pursuant to General Municipal Law § 51, and, accordingly, we dismiss the first cause of action insofar as it is asserted against the defendant Henry Spallone.

In their first cause of action pursuant to General Municipal Law § 51, the plaintiffs allege that the acts of the defendant Yonkers City Council members in defying an order of the United States District Court for the Southern District of New York amounted to gross negligence, dereliction of duty, and illegal conduct, all of which caused waste of municipal funds. The Supreme Court granted the plaintiffs partial summary judgment on the issue of liability finding that the defendant council members’ violation of the District Court’s order was an illegal act injurious to the City of Yonkers. The Supreme [862]*862Court held that, in order to compel restitution pursuant to General Municipal Law § 51, "[a]ll that is required is that the act complained of be illegal, and that such illegal action be injurious to the municipality.” We disagree. Case law has firmly established that, in order to impose personal liability upon a public official pursuant to General Municipal Law § 51, a taxpayer must establish that the official’s actions were both illegal and fraudulent, collusive, or motivated by personal gain. Because not one of the latter three elements is established, or even alleged, the first cause of action must fail.

A taxpayer’s action is purely a creature of statute (see, Gaynor v Rockefeller, 21 AD2d 92, 95, affd 15 NY2d 120). At common law a taxpayer had no right of action against a public officer to restrain or prevent the waste of public funds, to restrain or prevent injury to public property, or to restrain a threatened illegal official act. As noted by the Court of Appeals in 1874:

"Municipal corporations had become to an alarming extent the prey of the spoiler, and the tax-payer, upon whom the loss fell and the burden of the wrong-doing ultimately rested, was remediless. The wrong was ordinarily accomplished not by a waste or destruction of the property or funds of the corporation in actual possession, but by the issue and sale of the bonds or other obligations of the municipality, and a conversion or misappropriation of the proceeds * * *

"By the rules of law, as established by the courts, the taxpayers were entirely without remedy, no matter how gross the fraud or wanton the robbery, and notwithstanding the officers of the corporation, those whom the law had put in authority to watch over and protect their constituents and guard their interests, were faithless to their duty or confederate with the wrong-doers” (Ayers v Lawrence, 59 NY 192, 195).

The Legislature recognized that the law was inadequate to protect the rights of the public and enacted legislation to remedy the condition. The first statute adopted on this subject was chapter 161 of the Laws of 1872 entitled "An act for the protection of tax-payers against the frauds, embezzlements and wrongful acts of public officers and agents.” It authorized a taxpayer to maintain an action "to prevent waste or injury to any property, funds or estate” (L 1872, ch 161, § 1) of public corporations (see generally, Ayers v Lawrence, 59 NY 192, supra; Altschul v Ludwig, 216 NY 459). In subsequent years the taxpayer’s cause of action appeared in the Laws of 1881 (ch 531), which was amended by chapter 673 of the Laws of [863]*8631887 and by chapter 301 of the Laws of 1892. It is now expressed in section 51 of the General Municipal Law and has remained in that form since shortly after the turn of the century.

General Municipal Law § 51 is entitled “Prosecution of officers for illegal acts”. Because it is in derogation of the common law, it is subject to the general rule that it is circumscribed and not amenable to judicial extension (see, Matter of Ryan, 291 NY 376, 400). It allows a taxpayer to maintain an action against ”[a]ll officers, agents, commissioners and other persons acting, or who have acted, for or on behalf of’ any public corporation (General Municipal Law § 51). Such an action may be maintained for any of the following purposes:

1. To prevent any illegal official act;

2. To prevent waste or injury to any property, funds, or estate of a public corporation; and

3. To compel restitution of such property, funds, or estate (Altschul v Ludwig, 216 NY 459, 463, supra; General Municipal Law § 51).

The plaintiffs have not maintained this action to prevent waste, but to compel the restitution of money the City of Yonkers had to pay in contempt fines. While General Municipal Law § 51 enables a taxpayer to compel an official to personally restore wasted municipal property, such restitution may only be compelled under certain strictly limited circumstances. In this regard, the statute provides as follows: “In case the waste or injury complained of consists in any * * * officer, * * * by collusion or otherwise,

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Cite This Page — Counsel Stack

Bluebook (online)
207 A.D.2d 860, 616 N.Y.S.2d 760, 1994 N.Y. App. Div. LEXIS 9078, Counsel Stack Legal Research, https://law.counselstack.com/opinion/duffy-v-longo-nyappdiv-1994.