Hallock v. State

• Decision Date: 09 June 1977
• Citation: 396 N.Y.S.2d 486,58 A.D.2d 67
• Parties: Carlton G. HALLOCK et al., Respondents, v. STATE of New York et al., Appellants.
• Court: New York Supreme Court — Appellate Division

Page 486

396 N.Y.S.2d 486

58 A.D.2d 67

Carlton G. HALLOCK et al., Respondents, v. STATE of New York et al., Appellants.

Supreme Court, Appellate Division, Third Department.

June 9, 1977.

Louis J. Lefkowitz, Atty. Gen., Albany (Douglas S. Dales, Jr. and Ruth Kessler Toch, Albany, of counsel), for State of New York, appellant.

Scott B. Lilly, New York City (John R. Davison, Albany, Mark L. Manewitz, New York City, of counsel), for Power Authority of the State of New York, appellant.

William J. Schoonmaker, Albany, for respondents.

Before GREENBLOTT, J. P., and MAHONEY, MAIN, and HERLIHY, JJ.

MAHONEY, Justice.

The defendant Power Authority appropriated in fee 66 acres of land owned by plaintiffs as tenants in common. The land was to be used as a right-of-way and a source of fill in the construction of the Blenheim-Gilboa Pumped Storage Power Project. Plaintiffs brought this action to challenge the legality of the fee appropriation on the theory that a temporary easement would have been sufficient for the public purpose. Both parties moved for summary judgment, and the issue reached the Court of Appeals (Hallock v. State of New York, 32 N.Y.2d 599, 347 N.Y.S.2d 60, 300 N.E.2d 430), which remanded the action for trial.

The matter was set for trial in Supreme Court, Schoharie County, on April 22, 1975. At that time a stipulation of settlement and discontinuance was put on the stenographic record in the presence of the court and counsel for each of the parties. Plaintiff Phillips was also present, although his tenant in common, Hallock, was confined to a hospital. By the terms of the settlement the plaintiffs' attorney agreed to discontinue the Supreme Court action and a then pending Court of Claims action in exchange for the right to keep some $7,000 already paid pursuant to the original appropriation and a reconveyance of the fee by the Power Authority to the plaintiffs.

Five months later the plaintiffs moved, by order to show cause, for an order vacating the settlement and permitting them to reinstitute their actions, which actions include large claims for damage to the realty. Special Term granted the motion.

On appeal plaintiffs justify the order solely on the ground their attorney, Quartararo, had no authority to make the settlement. The defendants contend that the settlement cannot be attacked by motion (a plenary action being necessary) and that, in any event, plaintiffs' attorney had in fact the necessary authority.

In general, once a settlement discontinuing the action has been reached, it cannot be undone by motion. In Yonkers Fur Dressing Co. v. Royal Ins. Co., 247 N.Y. 435, 160 N.E. 778, the plaintiff-insured sued its insurer on five insurance policies. Several defenses, including arson, were raised. Unable to prove arson, the defendant-insurer settled the claim for $92,500, a reduction from plaintiff's original claim of $250,000. In accordance with the agreement, the case was marked settled and discontinued on the Day Calendar. A month later the insurance companies moved to set aside the settlement on the ground they had secured new evidence of arson. In reversing Special Term's grant of the motion, the Court of Appeals ruled that since after the discontinuance there was no pending action, Special Term had no power to make an order merely on motion. Rather, "(d)efendants may be able in an independent suit to upset the settlement for reasons that would invalidate a contract, such as fraud or over-reaching." (Yonkers Fur Dressing Co. v. Royal Ins. Co., supra, p. 446, 160 N.E. p. 782.)

However, the court, in distinguishing its earlier ruling in Sperb v. Metropolitan El. Ry. Co. (infra ), seemed to suggest that a discontinuance might be vacated on motion where it was entered by an attorney without authority:

Stipulations and agreements of settlement have, no doubt, been set aside on motion (citation omitted). Only one such case has reached this court. (Sperb v. Met. El. Ry. Co., 10 N.Y.S. 865, affd., without opinion, 123 N.Y. 659, 26 N.E. 749.) The question there was primarily one of the authority of plaintiff's attorney to sign the stipulation. Without such authority, it was a nullity. (Yonkers Fur Dressing Co. v. Royal Ins. Co., supra, p. 445, 160 N.E. p. 781.)

But the suggestion was clouded by the court indicating another reason why a motion was proper in the Sperb case:

An examination of the record discloses that the stipulation provided that if the amount agreed on should not be paid before a given date "plaintiff may thereupon enter judgment for the agreed amount." The action was still pending when the stipulation was set aside and it was subject to the supervision of the court because judgment might be entered thereon. (Id.)

The only case to reach the Court of Appeals since Yonkers Fur Dressing Co. v. Royal Ins. Co. (supra ) has been Manufacturers Mutual Fire Ins. Co. v. Hopson, 176 Misc. 220, 25 N.Y.S.2d 502, affd. 262 App.Div. 731, 29 N.Y.S.2d 139, affd. no opn. 288 N.Y. 668, 43 N.E.2d 71, wherein the settlement was challenged on the grounds other than lack of authority. The Court of Appeals' answer to a certified question in that case clearly indicates that generally motion is not the proper procedure (see 288 N.Y. 668, 43 N.E.2d 71), but it does not determine whether an exception exists when lack of authority is the allegation.

Neither has the existence of such an exception been established in the Appellate Division decisions. Stipulations of discontinuance have generally been held immune from motion attack (Covert v. Covert, 50 A.D.2d 622, 374 N.Y.S.2d 432; Kraft v. John A. Vassilaros & Sons, 43 A.D.2d 972, 352 N.Y.S.2d 224; Whipple Bros. v. Andrew, 37 A.D.2d 677, 322 N.Y.S.2d 860; Finlayson v. Kellner Car & Limousine Serv., 30 A.D.2d 676, 292 N.Y.S.2d 618; Adams v. George T. Cantrello, Inc., 29 A.D.2d 559, 286 N.Y.S.2d 128; Gardner v. Board of Educ., Cent. School Dist. No. 1, 28 A.D.2d 616, 279 N.Y.S.2d 794; Schweber v. Berger, 27 A.D.2d 840, 277 N.Y.S.2d 855; Bennett v. Bennett, 285 App.Div. 831, 137 N.Y.S.2d 842; Hegeman v. Conrad, 284 App.Div. 969, 134 N.Y.S.2d 845). However, only in two of these cases was the discontinuance attacked as unauthorized, Gardner v. Board of Educ., Cent. School Dist. No. 1 (supra ) and Whipple Bros. v. Andrew (supra ). Research reveals six Appellate Division cases approving the setting aside of discontinuances on motion, Spisto v. Thompson, 39 A.D.2d 598, 331 N.Y.S.2d 818 (client not present); Fasano v. City of New York, 22 A.D.2d 799, 254 N.Y.S.2d 133 (infant plaintiff); Horodeckyi v. Horodniak, 9 A.D.2d 732, 192 N.Y.S.2d 262 (unperformable stipulation); Silver v. Parkdale Bake Shop, 8 A.D.2d 607, 184 N.Y.S.2d 714; Bruder v. Schwartz, 260 App.Div. 1048, 24 N.Y.S.2d 443 (infant plaintiff); and Goldstein v. Goldsmith, 243 App.Div. 268, 276 N.Y.S. 861 (stipulation not final). Of these, Spisto, Fasano, Silver and Bruder were grounded on the stipulating attorney's lack of authority.

Rather than attempt to reconcile the various cases, we conclude that there is no definitive authority from the Court of Appeals and that this court's 1967 decision in Gardner v. Board of Educ., Cent....