Ronan v. Levitt

Appellate Division of the Supreme Court of New York

Ronan v. Levitt

42 A.D.2d 10, 344 N.Y.S.2d 624, 1973 N.Y. App. Div. LEXIS 4198

CourtAppellate Division of the Supreme Court of the State of New York

DecidedJune 11, 1973

StatusPublished

Cited by7 cases

This text of 42 A.D.2d 10 (Ronan v. Levitt) 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

Ronan v. Levitt, 42 A.D.2d 10, 344 N.Y.S.2d 624, 1973 N.Y. App. Div. LEXIS 4198 (N.Y. Ct. App. 1973).

Pincite

Opinion

Kane, J.

This is an appeal from an order of the Supreme Court at Special Term, entered March 1,1973 in Albany County, which denied a motion by petitioners to quash subpoenas duces tecum and granted a cross motion for an order directing petitioners to appear pursuant to the subpoenas duces tecum.

On September 21, 1972, respondent Comptroller caused subpoenas duces tecum to be served upon the Chairman and Chief Executive Officer of the New York City Transit Authority, incident to an-audit being conducted by the Comptroller pursuant to section 2503 of the Public Authorities Law.¹ A motion to quash or modify the subpoenas was made returnable in Supreme Court, New York County and was followed by respondent’s -application for change of venue to Supreme Court, Albany County. The venue change was allowed (affd. 41 A D 2d 906) and a cross motion to compel compliance, made by respondent, was granted; a determination which forms the basis of this appeal.

An appeal from the order changing venue was taken by petitioners which they contend caused an automatic stay (Public Authorities Law, § 1212-a, subd. 3; CPLR 5519, subd. [a], par. 1), precluding a decision on the merits by Supreme Court, Albany [12]*12County. While section 1212-a of the Public Authorities Law applies to officers of an authority when they are sued in their representative capacity, as well as an authority itself, the failure to recognize the stay did not divest Special Term of jurisdiction. All further proceedings subsequent to the decision were stayed, maintaining the status quo, and it would be pointless to remand the matter to the same court for a relitigation of the identical issues.

Section 2503 does not merely authorize but commands the Comptroller to examine, at least once every five years, the books and accounts of every public authority including its receipts, disbursements, contracts, leases, sinking funds, investments and any other matters relating to its financial standing. The courts of this State have been extremely liberal in construing legislation designed to provide a system of financial checks and balances, particularly in the area of governmental agencies and public authorities (Matter of Edge Ho Holding Corp., 256 N. Y. 374; Matter of New York World’s Fair 1964-1965 Corp. v. Beame, 22 A D 2d 611, affd. without opn. 16 N Y 2d 570). A report of the Temporary State Commission on Coordination of State Activities entitled “ Staff Report on Public Authorities Under New York State ” (N. Y. Legis. Doc., 1956, No. 46, pp. 495-500) lends strong support to the Comptroller’s argument that his function under section 2503 consists of1 more than a mere verification of financial accounts and balance sheets. The fact that section 2503 authorizes the Comptroller to accept an outside audit in lieu of his own examination in no way delimits the nature of the examination when performed by him. The Comptroller’s approach in this matter is also consistent with the scope of governmental audits in general (Comptroller General of the United States, Standards for Audit of Governmental Organizations, Programs, Activities and Functions [1972]).

The order should be affirmed, without costs.

Staley, Jr., J. P., Greenblott, Cooke and Reynolds, JJ.. concur.

Order affirmed, without costs.

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Kane, J.

This is an appeal from an order of the Supreme Court at Special Term, entered March 1,1973 in Albany County, which denied a motion by petitioners to quash subpoenas duces tecum and granted a cross motion for an order directing petitioners to appear pursuant to the subpoenas duces tecum.

On September 21, 1972, respondent Comptroller caused subpoenas duces tecum to be served upon the Chairman and Chief Executive Officer of the New York City Transit Authority, incident to an-audit being conducted by the Comptroller pursuant to section 2503 of the Public Authorities Law.¹ A motion to quash or modify the subpoenas was made returnable in Supreme Court, New York County and was followed by respondent’s -application for change of venue to Supreme Court, Albany County. The venue change was allowed (affd. 41 A D 2d 906) and a cross motion to compel compliance, made by respondent, was granted; a determination which forms the basis of this appeal.

An appeal from the order changing venue was taken by petitioners which they contend caused an automatic stay (Public Authorities Law, § 1212-a, subd. 3; CPLR 5519, subd. [a], par. 1), precluding a decision on the merits by Supreme Court, Albany [12]*12County. While section 1212-a of the Public Authorities Law applies to officers of an authority when they are sued in their representative capacity, as well as an authority itself, the failure to recognize the stay did not divest Special Term of jurisdiction. All further proceedings subsequent to the decision were stayed, maintaining the status quo, and it would be pointless to remand the matter to the same court for a relitigation of the identical issues.

Section 2503 does not merely authorize but commands the Comptroller to examine, at least once every five years, the books and accounts of every public authority including its receipts, disbursements, contracts, leases, sinking funds, investments and any other matters relating to its financial standing. The courts of this State have been extremely liberal in construing legislation designed to provide a system of financial checks and balances, particularly in the area of governmental agencies and public authorities (Matter of Edge Ho Holding Corp., 256 N. Y. 374; Matter of New York World’s Fair 1964-1965 Corp. v. Beame, 22 A D 2d 611, affd. without opn. 16 N Y 2d 570). A report of the Temporary State Commission on Coordination of State Activities entitled “ Staff Report on Public Authorities Under New York State ” (N. Y. Legis. Doc., 1956, No. 46, pp. 495-500) lends strong support to the Comptroller’s argument that his function under section 2503 consists of1 more than a mere verification of financial accounts and balance sheets. The fact that section 2503 authorizes the Comptroller to accept an outside audit in lieu of his own examination in no way delimits the nature of the examination when performed by him. The Comptroller’s approach in this matter is also consistent with the scope of governmental audits in general (Comptroller General of the United States, Standards for Audit of Governmental Organizations, Programs, Activities and Functions [1972]).

The order should be affirmed, without costs.

Staley, Jr., J. P., Greenblott, Cooke and Reynolds, JJ.. concur.

Order affirmed, without costs.

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42 A.D.2d 10, 344 N.Y.S.2d 624, 1973 N.Y. App. Div. LEXIS 4198, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ronan-v-levitt-nyappdiv-1973.

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