City of New York v. State

• Decision Date: 28 October 1976
• Docket Number: 52436,Nos. 47847,s. 47847
• Citation: 40 N.Y.2d 659,389 N.Y.S.2d 332
• Parties: , 357 N.E.2d 988 CITY OF NEW YORK, Appellant, v. STATE of New York, Respondent. CITY OF NEW YORK, Appellant, v. STATE of New York, Respondent. Claim
• Court: New York Court of Appeals Court of Appeals

Page 332

389 N.Y.S.2d 332

40 N.Y.2d 659, 357 N.E.2d 988

CITY OF NEW YORK, Appellant, v. STATE of New York, Respondent.

CITY OF NEW YORK, Appellant, v. STATE of New York, Respondent.

Claim Nos. 47847, 52436.

Court of Appeals of New York.

Oct. 28, 1976.

W. Bernard Richland, Corp. Counsel, New York City (Alfred Weinstein and L. Kevin Sheridan, New York City, of counsel), for appellant in the first and second above-entitled actions.

Louis J. Lefkowitz, Atty. Gen. (Joseph F. Gibbons and Ruth Kessler Toch, Albany, of counsel), for respondent in the first above-entitled action.

Louis J. Lefkowitz, Atty. Gen. (Joseph F. Gibbons, Ruth Kessler Toch and Grace K. Banoff, Albany, of counsel), for respondent in the second above-entitled action.

FUCHSBERG, Judge.

These two cases, bearing Court of Claims Nos. 47847 and 52436, respectively, were brought by the City of New York to obtain reimbursement from the State for certain interest paid by the city on awards for properties taken by it in condemnation in furtherance of a federally sponsored interstate highway program. The costs of the acquisitions were to be fully reimbursable to the city by the State (New York State, Highway Law, § 340--b, subd. 5); the State, in turn, was entitled to get 90% Of its expenditures back from the Federal Government (Federal-Aid Highway Act of 1956, 70 U.S.Stat. 374).

The city's primary liability as condemnor included not only damages for the parcels themselves but also for interest on such damages from the date each title had vested in the city until the date when payment was actually made to each condemnee. The State, however, reimbursed the city for interest on each award for no more than one year after the vestings. The city now seeks repayment of an aggregate of $1,696,692.61 for interest it expended to cover periods of time beyond the first year.

In both cases, the Court of Claims held the additional interest payments reimbursable items as a matter of law. It thereupon granted the city's motion for summary judgment on the particular cause of action in Claim No. 52436 to which that motion has been directed by agreement of the parties. It denied the State's cross motion as to the entire claim (64 Misc.2d 421, 314 N.Y.S.2d 829). In Claim No. 47847, however, the court dismissed on the ground that the claim had not been filed with the court 'within 6 months after the accrual of such claim' as required by subdivision 4 of section 10 of the Court of Claims Act (61 Misc.2d 517, 306 N.Y.S.2d 131). The Appellate Division, on the sole ground that the additional interest was not reimbursable as a matter of law, reversed and dismissed in No. 52436 (49 A.D.2d 641, 370 N.Y.S.2d 241) and affirmed the dismissal in No. 47847 (49 A.D.2d 644, 373 N.Y.S.2d 853); it did not reach the timeliness issue. For the reasons which follow, we conclude that the additional interest was reimbursable to the city and therefore we reach the timeliness question as well.

The resolution of the issue of reimbursibility of the additional interest is largely dependent upon how one reads subdivision 5 of section 340--b and subdivision 3.3 of section 349--c of the Highway Law.

Subdivision 3.3 of section 349--c was the first of these two statutes to be adopted. Directed to the modernization and construction of Intrastate arterial highways, as enacted in its original form by chapter 543 of the Laws of 1944 and as amended by chapter 619 of the Laws of 1945, it provided that the 'costs and expenses' of the necessary property acquisitions for such highways within the city were to be borne 'fifty per centum by the state and fifty per centum by the city'. Apparently because such a large share of State money was to go into the cost of the acquisitions controlled by the city, the statute contained a number of restrictions on the costs to which the State's 50% Share was to apply. The were to be computed only on the basis of the State's own Superintendent of Public Works' 'estimate' of the value of property taken rather than what the city actually paid, ¹ and interest on awards was to be shared only to the extent incurred within one year after the city had taken title. It is noteworthy that these provisions directly dealt with the substantive matter of the extent of the costs the State was to share in paying.

Subdivision 3.3 of section 349--c also set forth the procedural path which had to be followed before the city could obtain reimbursement from the State for the share to which the latter was committed. Among other things, the city's Corporation Counsel had to certify that the city had title to the property, the State's Attorney-General had to certify to the State Comptroller that such certification of title was adequate, the city had to furnish a 'certificate stating the amount' due it and, bearing most significantly on the issue of timeliness in the cases before us here, the amounts so certified were to be paid only 'after audit by the state comptroller'.

Section 340--b, on the other hand, was directed solely to Interstate highways. First enacted 12 years after 349--c, by chapter 651 of the Laws of 1956, it implemented the State's plan to avail itself of the generous benefits of the then freshly enacted Federal-Aid Highway Act, under which the Federal Government offered to provide fully 90% Of the cost of the vast highway construction it contemplated as against but 10% Of State 'matching' funds. The Dederal act made no direct provision for participation by cities or other local governments as such. Through 340--b, the State of New York, however, decided to provide for the involvement of its cities in the implementation of its participation. In the course of doing so, by chapter 707 of the Laws of 1957, it adopted and amendment to then subdivision 5 of section 340--b which states, in pertinent part, that: 'interstate highways shall be acquired by the city of New York in the same manner as provided, in section three hundred forty-nine-c of this chapter relating to the acquisition of property for the state arterial system in the city of New York, except that The city shall be reimbursed in full for the costs and expenses incurred by such acquisitions for interstate highways subsequent to the enactment of the federal aid highway act of nineteen hundred fifty-six, In the manner as provided in section three hundred forty-nine--c of this chapter relating to reimbursement of costs and expenses of acquisitions for the state arterial highways.' (Emphasis added.)

It was while acting under that statute that the city incurred and paid the interest obligations which are the subject matter of the cases before us. The crux of the State's position is that the phrase 'in the same manner as provided in section three hundred forty-nine--c' means that all portions of subdivision 3.3 of section 349--c, including the one-year interest limitation, have been imported into subdivision 5 of section 340--b. The city takes a more restrictive view. It reads the incorporation by reference of section 349--c into subdivision 5 of section 340--b as limited by its language to the procedures set forth in subdivision 3.3 of section 349--c for the approval and processing of the reimbursement vouchers submitted to the State. The interest limitation, it points out, is not a procedural matter, in these cases being as substantive as $1,696,692.61.

On that question, it appears to us that the words 'in the same manner' on their face do indeed yield an intent to treat only with the methods or procedures by which property was to be acquired and the city reimbursed. That connotation is reinforced both by the significant specification in the clause commencing with the word 'except' that the city's reimbursement for costs and expenses incurred in the interstate highway acquisitions was to be 'in full' ² as well as by the fact that subdivision 5 of section 340--b's second reference to 349--c is again qualified by the words 'in the manner' in a way that manifestly affects its meaning. Pertinent too is the comment of our own court in defining the nearly identical phrase 'in like manner' in Matter of Niagara Falls Power Co. v. Water Power & Control Comm., 267 N.Y. 265, 277, 196 N.E. 51, 56: 'The provision in the statute ( § 614, subd. 13, Supra) that the rental shall be fixed 'in like manner as if the application was made for a license' simply means that the procedure employed in the issuance of licenses is applicable. Conservation Law, § 616, subd. 1. It cannot be construed to mean that the amounts and kind of rental found in the licensing section ( § 616) are to be bodily lifted out of that section and incorporated into section 614, subdivision 13. The reference is made, not to qualify the substance of subdivision 13, but merely to provide a means for formal execution.'

Furthermore, the importation into subdivision 5 of section 340--b of the one-year interest limitation found in section 349--c would not accord with the former's legislative history and purpose. As already indicated, subdivision 5 of section 340--b was enacted in a totally different context than was section 349--c. The distinction between the almost equal division of financial responsibility between State and city contemplated by section 349--c for the intrastate program and the far different intent under subdivision 5 of section 340--b 'to relive cities of the obligation to participate in the cost of property acquisition for interstate highway routes', including that for the interest items here involved and for which the Federal Government had in any event assumed the lion's share, is simply too striking to be overlooked (see Governor's Memorandum, N.Y.Legis.Ann., 1957, pp. 510--511). It is also evident in subdivision 4 of section 340--b by which the State gave express assurance that, except in circumstances not relevant here, '(n)o city shall be required to participate in the costs of an interstate highway project'. The product of Court of Claims...