Loretto v. Teleprompter Manhattan CATV Corp.

• Decision Date: 07 May 1981
• Citation: 53 N.Y.2d 124,423 N.E.2d 320,440 N.Y.S.2d 843
• Parties: , 423 N.E.2d 320 LORETTO, on Behalf of Herself and All Others Similarly Situated, Appellant, v. TELEPROMPTER MANHATTAN CATV CORP. et al., Respondents. City of New York, Intervenor-Respondent.
• Court: New York Court of Appeals Court of Appeals

Page 843

440 N.Y.S.2d 843

53 N.Y.2d 124, 423 N.E.2d 320

LORETTO, on Behalf of Herself and All Others Similarly Situated, Appellant, v. TELEPROMPTER MANHATTAN CATV CORP. et al., Respondents City of New York, Intervenor-Respondent.

Court of Appeals of New York.

May 7, 1981.

Michael S. Gruen, Daniel J. Sullivan and Eric B. Levine, New York City, for appellant

Michael Lesch, Larry F. Gainen and Barry P. Simon, New York City, for respondents.

Robert Abrams, Atty. Gen. (Lawrence J. Logan, Asst. Atty. Gen., and Shirley Adelson Siegel, Sol. Gen., of counsel), in his statutory capacity under section 71 of the Executive Law.

Allen G. Schwartz, Corp. Counsel, New York City (Leonard Koerner and John C. Brennan, Asst. Corp. Counsel, New York City, of counsel), for intervenor-respondent.

OPINION OF THE COURT

MEYER, Judge.

A statute which requires a landlord to allow installation of cable television ¹ facilities upon his property for the use of his tenants or the tenants of other buildings or both is a valid exercise of the police power rather than a taking requiring compensation, notwithstanding that the statute permits the payment by the cable television company for such installation of such amount as the State Commission on Cable Television ² determines to be reasonable. The order of the Appellate Division, 73 A.D.2d 849, 422 N.Y.S.2d 550, should, therefore, be affirmed, with costs.

Plaintiff Loretto purchased the five-story apartment building known as 303 West 105th Street in New York City from Sharie Wald, taking title to the premises on February 28, 1972. In February, 1976, plaintiff began this class action against TelePrompter Corporation and TelePrompter Manhattan CATV Corp. ³ on behalf of a class consisting of all owners of real property in the State of New York on which TelePrompter "has placed any cable television component." As to her own property plaintiff alleged that TelePrompter had placed a CATV cable on the roof of the premises, attaching it by nails and other means, and had dropped a subcable down the front wall of the building to provide service to a first floor tenant. She asked for herself and each member of the class damages for the trespass and an injunction against its continuance. She specifically alleged that TelePrompter acted under the purported authority of section 828 of the Executive Law ⁴ and that its actions constituted a taking without just compensation and a deprivation of property without due process of law.

Class action status was granted by an order which, as amended, constituted the class as plaintiff had requested but except from it owners of single family dwellings on which a CATV component servicing that dwelling exclusively had been placed. ⁵ The City of New York as franchisor of cable television companies within the city was granted leave to intervene and the Attorney-General, pursuant to section 71 of the Executive Law, appears in the action in support of constitutionality. During the examination before trial of plaintiff Loretto it appeared that she had in late 1976 or early 1977 transferred the property to Hargate Realty Corporation, a corporation wholly owned by her. The answers of both TelePrompter and the city raised the affirmative defense that plaintiff had failed to exhaust her administrative remedies in that she had not applied to the Commission under regulations adopted by it (9 NYCRR 598.2) for the fixation of a reasonable fee in excess of the one-time $1 payment fixed by the Commission in a statement of general policy as the normal fee to which landlord would generally be entitled.

TelePrompter moved for summary judgment dismissing the complaint, asserting that it had committed no trespass and that plaintiff had failed to exhaust her administrative remedies. The assertion that it had committed no trespass was grounded on both the legal argument that section 828 of the Executive Law is a valid exercise of the police power making permission unnecessary, and the factual contention that plaintiff Loretto's predecessor in title, Sharie Wald, had granted it an easement for installation of its facilities. TelePrompter also sought leave to renew its opposition to the class action determination. Plaintiff cross-moved for partial summary judgment determining that section 828 is unconstitutional, that it did not in any event include crossover situations, ⁶ and that TelePrompter was liable for trespass in noncrossover situations to damages of 5% of defendant's gross revenues from their premises. Prompted by the transfer of 303 West 105th Street to Hargate Realty, plaintiff Loretto also sought an order amending the class action order to include all persons who have or had title to affected premises at any time on or since January 1, 1973, the effective date of section 828. Neilson Abeel, owner of 320 West 104th Street, on which TelePrompter had installed cable to service his tenants as well as those in neighboring buildings, moved at the same time (acting through the same attorney representing plaintiff) for leave to intervene on the ground that plaintiff Loretto's representation of the class might be inadequate.

Concluding that "the obvious public advantage sought to be served by the legislation under attack greatly outweighs the insignificant nature of the physical use of private property permitted by the statute" (98 Misc.2d 944, 945, 415 N.Y.S.2d 180), Special Term granted summary judgment to TelePrompter and the city declaring section 828 to be a valid exercise of the police power in both crossover and noncrossover situations, denied plaintiff Loretto's cross motion for partial summary judgment and denied as moot TelePrompter's motion to renew opposition to class action status, plaintiff Loretto's motion to amend the class action order to include former owners and proposed intervenor Abeel's motion for leave to intervene. The Appellate Division affirmed, without opinion.

Plaintiff and the proposed intervenor appealed to our court. ⁷ The briefs and oral argument present as issues for determination the standing of plaintiff Loretto to maintain the action; whether if she is without standing proposed intervenor Abeel may prosecute the appeal; whether the action is premature; whether section 828 addresses both crossover and noncrossover situations; the constitutionality of the section; and if it is not constitutional whether class members are each entitled to damages in noncrossover situations of 5% of TelePrompter's gross revenue from the member's building. For the reasons hereafter stated we conclude that (1) plaintiff Loretto has standing to litigate the scope and constitutionality of section 828, (2) the action is not premature, (3) section 828 covers crossovers as well as noncrossovers and (4) the section is a valid exercise of the police power. In light of those conclusions, we need not consider the intervention and damage issues.

I

By agreement dated January 24, 1968, Sharie Wald, the then owner of 303 West 105th Street, for a flat fee of $50, granted TelePrompter permission to install a cable on the building and the exclusive privilege of furnishing CATV services to its occupants. The agreement was for a term of five years and from year to year thereafter unless either party gave the other written notice no later than 90 days prior to the end of a contract year. It also required Wald upon transfer of the building to notify the transferee of the agreement and provided for termination by the transferee at any time within six months after the transfer, upon 90 days written notice to TelePrompter.

On June 1, 1970 TelePrompter installed a cable slightly less than one-half inch in diameter and of approximately 30 feet in length along the length of the building about 18 inches above the roof top, and directional taps, approximately 4 inches by 4 inches by 4 inches, on the front and rear of the roof. By June 8, 1970 the cable had been extended another 4 to 6 feet and cable had been run from the directional taps to the adjoining building at 305 West 105th Street. Plaintiff Loretto testified at her deposition that she purchased the building in 1971 and took title on February 28, 1972, that she was on the roof to inspect it prior to the closing of title and a number of times after the closing while a new roof was being installed, but that she never saw the cables until CATV service was provided to one of her tenants about two years after her purchase.

The Wald agreement was unrecorded and, therefore, would not bind plaintiff Loretto unless the installation was sufficiently open and visible to put her to inquiry and charge her with constructive notice of the agreement that inquiry would have revealed (Pallone v. New York Tele. Co., 34 A.D.2d 1091, 312 N.Y.S.2d 672, affd. 30 N.Y.2d 865, 335 N.Y.S.2d 300, 286 N.E.2d 735; Historic Estates v. United Paper Bd. Co., 260 App.Div. 344, 21 N.Y.S.2d 819, affd. 285 N.Y. 658, 33 N.E.2d 866; see Butterworth v. Crawford, 46 N.Y. 349; 17 N.Y.Jur., Easements & Licenses, § 187, p. 482; Ann., 74 A.L.R. 1250). Transfer to plaintiff Loretto would, however, terminate the license, even though TelePrompter had no notice of the transfer (Restatement, Torts 2d, § 171, Comment f ), unless Loretto had (or was chargeable with) notice and took no steps to terminate the license (id., Comment g ). The factual issues concerning visibility of the TelePrompter equipment and whether the transfer to Loretto (or her bringing of the present action) terminated the Wald agreement bear upon whether Loretto can recover for trespass occurring before the action was begun, but do not affect her right to maintain the cause of action for declaratory judgment concerning the scope of and constitutionality of section 828, for that section, if applicable and valid, prevented her interference with the CATV facilities on her premises from and after the effective date (January 1, 1973) of the section. That she had notice of the Wald agreement, if she did, would...