Burns v. Egan

• Decision Date: 24 April 1986
• Parties: Heywood BURNS et al., Appellants, v. John C. EGAN, as Commissioner of the New York State Office of General Services, et al., Respondents.
• Court: New York Supreme Court — Appellate Division

Page 742

501 N.Y.S.2d 742

117 A.D.2d 38

Heywood BURNS et al., Appellants, v. John C. EGAN, as Commissioner of the New York State Office

of General Services, et al., Respondents.

Supreme Court, Appellate Division,

Third Department.

April 24, 1986.

Madeline Kochen, New York City, for appellants.

Robert Abrams, Atty. Gen. (Richard J. Dorsey, of counsel), Albany, for respondents.

Before KANE, J.P., and CASEY, WEISS, LEVINE and HARVEY, JJ.

WEISS, Justice.

We are today called upon to consider for the second time the constitutionality of the Prison Construction Act (L.1983, ch. 56, as amended by L.1983, chs. 712, 713) (hereinafter the Act), and as a threshold matter, to determine whether plaintiffs have standing as voters and taxpayers to challenge the Act as violative of their right to vote under N.Y. Constitution, article VII, § 11, which mandates a public referendum before the State undertakes to incur a long-term debt.

We considered these underlying issues in New York State Coalition for Criminal Justice v. Coughlin, 103 A.D.2d 40, 479 N.Y.S.2d 850, affd. 64 N.Y.2d 660, 485 N.Y.S.2d 247. There, the plaintiffs comprised a bevy of special interest groups in addition to five individuals who identified themselves as "residents, citizens and taxpayers". The defendants in both the prior and instant action are the same governmental officials and agencies. The plaintiffs in this case, who are the same five individuals to whom standing was previously denied, now claim standing as "voters".

The record shows that the Act, which became law on April 15, 1983, authorized defendant Urban Development Corporation (UDC) to finance and develop prisons using $380 million to be raised by the issuance of bonds and notes. The Office of General Services (OGS) was to construct the prisons which, in turn, UDC would rent to the State Department of Correctional Services for a sum and duration commensurate with the debt-service on the bonds. At the expiration of the lease, the State could purchase the facilities from UDC for a nominal sum. This financing scheme was developed after the voters rejected a referendum on a $500 million prison bond issue in the November 1981 general election.

In the prior action, the plaintiffs claimed that the act violated certain provisions of the State Constitution (see, N.Y.Const., art. VII, §§ 8, 11; art. VIII, §§ 1, 3). Special Term granted defendants' motion for summary judgment, finding that the plaintiffs lacked standing to challenge the issuance of bonds pursuant to State Finance Law article 7-A. In affirming, this court reasoned that the individual plaintiffs had standing, but upon consideration of the merits, upheld the constitutionality of the statute (New York State Coalition for Criminal Justice v. Coughlin, 103 A.D.2d 40, 43, 44-47, 479 N.Y.S.2d 850, supra ). The Court of Appeals affirmed, holding that the plaintiffs had no standing as citizen taxpayers (New York State Coalition for Criminal Justice v. Coughlin, 64 N.Y.2d 660, 661-662, 485 N.Y.S.2d 247, 474 N.E.2d 607), but refused to resolve the issue of whether they had standing as voters because the plaintiffs had failed to raise that issue at Special Term (id. at 662, n). The court did not reach the constitutional issue.

In January 1985, plaintiffs commenced the instant action asserting standing pursuant to State Finance Law article 7-A, as citizens, taxpayers and voters who have been denied the right to vote upon the State's incurrence of a long-term debt, and contending that the financing scheme was an unconstitutional attempt to circumvent the 1981 electoral defeat of the prison bond referendum. Special Term initially granted defendants' motion for summary judgment dismissing the complaint, apparently relying upon the Court of Appeals decision in New York State Coalition for Criminal Justice v. Coughlin, 64 N.Y.2d 660, 485 N.Y.S.2d 247, 474 N.E.2d 607, supra, and held that plaintiffs lacked standing. Plaintiffs' cross motion for leave to amend the complaint, so as to clarify the distinctions between this action and the earlier action which had been dismissed, was denied on the ground that the State had already spent $178.3 million in the construction of prison facilities and would be prejudiced by the delay which had occurred. Upon reargument, Special Term accepted plaintiffs' standing to sue as voters, but ruled that the Act was constitutional. This appeal by plaintiffs ensued, 129 Misc.2d 130, 492 N.Y.S.2d 666.

We initially find persuasive defendants' assertion that laches serves as a bar to this action. Plaintiffs' original complaint, served August 29, 1983, more than four months after the effective date of the Act, both could, and should have, asserted the individual plaintiffs' claims as voters. It was not until January 9, 1985, after the dismissal of their first action was affirmed by the Court of Appeals, that plaintiffs commenced this action, finally pleading their status as voters. Neglect in asserting a right for an unreasonable length of time may bar an action pursuant to the doctrine of laches (36 NY Jur, Limitations and Laches, § 154, at 142, 143 [1964] ). In New York Public Interest Research Groups v. Levitt, 62 AD2d 1074, 404 N.Y.S.2d 55, appeal dismissed 46 N.Y.2d 849, 415 N.Y.S.2d 1028, 386 N.E.2d 1340, this court held that a delay of 21 months in commencing an action after the Court of Appeals decision in Boryszewski v. Brydges, 37 N.Y.2d 361, 372 N.Y.S.2d 623, 334 N.E.2d 579 (recognizing taxpayer standing to challenge enactments of the Legislature) was sufficient to invoke the doctrine of laches. As in the instant case, the plaintiffs in New York Public Interest Research Groups v. Levitt (supra) sought to challenge a scheme for financing construction of State buildings (the Empire State Plaza in Albany) as set forth in a 1965 agreement. By the time the action was commenced in 1977, the bonds had been issued and sold, and construction was virtually complete.

We recognize that the delay here is not so severe as in New York Public Interest Research Groups v. Levitt (supra), but delay is not the sole, nor necessarily the determinative, element of the laches equation. Indeed, this court has upheld a laches determination where the delay was less than a year's duration (see, Matter of General Bldg. Contrs. of N.Y. State v. Egan, 106 A.D.2d 688, 690, 483 N.Y.S.2d 746, lv. denied 65 N.Y.2d 601, 481 N.E.2d 258; Matter of Eberhart v. La Pilar Realty Co., 45 A.D.2d 679, 680, 355 N.Y.S.2d 791). "The essential element of laches is delay prejudicial to the opposing party" (New York Public Interest Research Groups v. Levitt, supra, pp. 1075-1076). Here, defendants waited for almost two years while plaintiffs exhausted all appeals in their citizen-taxpayer action before the sale of bonds by UDC. In the meantime, under compelling pressure to relieve the increasing burden on the State's overcrowded penal institutions, defendants commenced construction of correctional facilities, some of which have actually been put into use, and sold bonds for approximately $294 million. Adverse judicial action at this juncture would "cause unacceptable disorder and confusion" (Matter of General Bldg. Contrs. of N.Y. State v. Egan, supra, p. 690, 483 N.Y.S.2d 746, see, Matter of Stilsing Elec. v. County of Albany, 97 A.D.2d 631, 632, 469 N.Y.S.2d 154)....