New York Tel. Co. v. Town of North Hempstead

• Decision Date: 05 May 1977
• Citation: 395 N.Y.S.2d 143,41 N.Y.2d 691,363 N.E.2d 694
• Parties: , 363 N.E.2d 694 NEW YORK TELEPHONE COMPANY, Respondent, v. TOWN OF NORTH HEMPSTEAD et al., Appellants.
• Court: New York Court of Appeals Court of Appeals

Page 143

395 N.Y.S.2d 143

41 N.Y.2d 691, 363 N.E.2d 694

NEW YORK TELEPHONE COMPANY, Respondent, v. TOWN OF NORTH HEMPSTEAD et al., Appellants.

Court of Appeals of New York.

May 5, 1977.

Edward McCabe, Town Atty. (Adolph Koeppel and William D. Siegel, Mineola, of counsel), for appellants.

John M. Clarke, George E. Ashley, Kenneth J. Lucey and David L. Sohn, New York City, for respondent.

W. Bernard Richland, Corp. Counsel, New York City (L. Kevin Sheridan, Alexander Gigante, Jr. and Stephen P. Kramer, New York City, of counsel), for City of New York, amicus curiae.

Edward M. Barrett and Calvin E. Rafuse, Jr., Mineola, for Long Island Lighting Co., amicus curiae.

JONES, Judge.

We hold that inasmuch as the Town of North Hempstead did not have the right to attach its street lighting fixtures to utility poles owned by the New York Telephone Company without the company's permission, the Telephone Company is entitled to an order directing their removal. While the town is not liable to the company for rent for the unauthorized use of the poles, the Telephone Company may recover for any damages it has sustained in consequence of such use.

Under the provisions of section 27 of the Transportation Corporations Law, New York Telephone Company when it was incorporated in 1896 received from the State of New York an unconditional right to erect and maintain poles for its lines upon public streets and highways, including those in the Town of North Hempstead. Pursuant thereto the Telephone Company has erected and now maintains some 3,800 telephone poles throughout the town.

Prior to 1969 the Telephone Company had entered into agreements with Long Island Lighting Company (LILCO) for the joint use by each company of utility poles of both companies, and the town was furnished street lighting by LILCO street light fixtures energized through LILCO electric wires attached to both LILCO and Telephone Company owned poles. On December 31, 1966 the town created a North Hempstead Lighting District, and on July 1, 1969 the town on behalf of that district entered into an agreement with LILCO for the attachment of street lighting fixtures to the utility poles of both LILCO and the Telephone Company. Pursuant to this agreement approximately 73 street lighting attachments were lawfully made to Telephone Company poles.

On July 15, 1969 the Lighting District wrote a letter to the Telephone Company stating that as of August 1, 1969 the town expected to start installing town owned lighting fixtures on the Telephone Company's poles in place of the then existing LILCO owned fixtures. By that time a revised arrangement had been made between LILCO and the Telephone Company as to the use of Telephone Company poles. Acknowledging that the town accordingly no longer had the right under its agreement with LILCO to attach town fixtures to Telephone Company poles after May 31, 1969, the town requested permission from the Telephone Company to make the planned attachments beginning August 1, 1969. Over the following months negotiations were conducted looking to a mutually acceptable agreement under which the town's lighting fixtures could be attached to Telephone Company poles. While this matter was under discussion the town and the Lighting District attached electrical fixtures to some 1,010 Telephone Company poles.

When negotiations became stalled, the Telephone Company wrote to the town on July 9, 1971 demanding that all fixtures be removed from its poles by August 15, 1971, adding that "(i)n the event any such street lighting fixtures remain on our poles after said date we will consider the town a tenant and thereby fix rental at the rate of $10 per pole, to which such fixtures are attached, per month, or fraction thereof, as long as such attachments remain". Nonetheless, the right to enforce removal of the attachments by legal action was expressly reserved.

When the town failed to respond to the letter of July 9 and did not remove the lighting fixtures, the Telephone Company instituted the present action seeking relief of two sorts rent in the amount of $224,750, plus interest, for use of the telephone poles from August, 1971 through August, 1973, and injunctive relief directing the town to remove all lighting fixtures from Telephone Company poles. The town's answer set forth, in addition to the customary general denial, several affirmative defenses. While cross motions for summary judgment were pending and before their determination, on December 3, 1974 the town adopted Local Law No. 13 of 1974. That law purported expressly to accord to the town, and to every special district within the town with the consent of the town board, "the right to attach, install, and maintain municipal apparatus, without fee or charge, upon any utility pole constructed, erected, owned, leased, or maintained by a utility company within the Town right-of-way, provided that such attachment, installation, and maintenance does not unreasonably interfere with the right of the utility company or its licensees to use such utility poles for the purposes of its franchise".

The Appellate Division affirmed an order of Supreme Court which had granted the Telephone Company's motion for summary judgment on its claim for injunctive relief, but stayed entry of judgment thereon pending trial and determination of the Telephone Company's claim for rent (as to which claim the court denied the town's cross motion for summary judgment). Supreme Court directed that in the event the Telephone Company prevailed on its claim for rent, summary judgment granting injunctive relief should not be entered, but that if it did not so prevail, the judgment granting injunctive relief should be entered. The town's appeal is now before us by permission of the Appellate Division. We reach somewhat different conclusions than did the courts below.

On our analysis the town's motion for summary judgment dismissing the Telephone Company's first cause of action for rent should have been granted. On the Telephone Company's second cause of action for injunctive relief, the stay of entry of judgment attached to the relief granted below should be vacated and the town should be unconditionally ordered to remove all lighting fixtures which have been attached to Telephone Company poles since May 31, 1969. Because the Telephone Company did not appeal we are procedurally precluded from considering whether, as incidental to the injunctive relief sought, the Telephone Company should be afforded an opportunity to establish what damages, if any, were suffered by it in consequence of the unauthorized attachment by the town of its lighting fixtures to the company's poles.

As to the alleged cause of action for rent we conclude that, as a matter of law, the town cannot be held to have entered into any agreement to pay rent. For the purpose of the town's present motion for summary judgment we assume that, were the litigants private parties, sufficient evidence is tendered in this record to create a triable issue of fact as to whether, in the circumstances, the town's failure to remove its lighting fixtures in response to the Telephone Company's letter of July 9, 1971, or to assert (contrary to the position taken in its letter of July 15, 1969) that it had the right to attach the fixtures without the permission of the Telephone Company, operated to manifest an implied acceptance of the rental arrangement proposed by the Telephone Company. Such a factual issue would be irrelevant in this case however, for, even if it were to be resolved in favor of the Telephone Company, there would not have been created an obligation enforceable against the town to pay the specified or any other rental.

The Town Law requires formal approval by the town board of town contracts and the execution thereof by the town supervisor (Town Law, § 64, subd. 6). As our court wrote in Seif v. City of Long Beach (286 N.Y. 382, 387, 36 N.E.2d 630, 632 (contract for legal services rendered to the city at the instance of the Mayor)): "Where the Legislature provides that valid contracts may be made only by specified officers or boards and in specified manner, no implied contract to pay for benefits furnished by a person under an agreement which is invalid because it fails to comply with statutory restrictions and inhibitions can create an obligation or liability of the city." (See, also, Scarborough Props. Corp. v. Village of Briarcliff Manor, 278 N.Y. 370, 375-376, 379, 16 N.E.2d 369, 371-372, 373 (village contract for purchase of sewers and water lines).) The Appellate Division, Fourth Department, has written: "The creation of an obligation against the town, by way of contract, cannot be founded upon omission of action by the town officials, but must be the result of an affirmative determination to create the obligation in the form and manner provided by statute." (Gardner v. Town of Cameron, 155 App.Div. 750, 759, 140 N.Y.S. 634, 641, affd 215 N.Y. 682, 109 N.E. 1004) (town contract for lease-purchase of steamroller); emphasis added.)

In the present instance no evidence is tendered of the performance of any of the formal prerequisites to the execution of a valid contract on the part of the town to pay rental for the right to attach lighting fixtures to the telephone poles. Consequently, the Telephone Company's cause of action for rent should be dismissed.

We turn then to the Telephone Company's second cause of action for injunctive relief based on the contention that, without the permission of the Telephone Company, the town had no right to attach its lighting fixtures to the company's poles and now has no right to continue such attachments. The town bases its claim of right on two legal theories. In the first place...