Thompson v. Lincoln Budget Corp.
| Decision Date | 26 December 1975 |
| Citation | 389 N.Y.S.2d 508,88 Misc.2d 894 |
| Parties | In the Matter of an Administrative Hearing Directed by Edward THOMPSON, J.S.C., Deputy City Administrative Judge, Civil Division, Supreme and Civil Courts, Petitioner, v. 'LINCOLN BUDGET CORP.' et al., Respondents. |
| Court | New York City Court |
Eaton, Van Winkle & Greenspoon, New York City, for Arkay Electromatic Corp., Interstate Budget Corp., Lincoln Budget Co., a division of Arkay Electromatic Corp. and Lincoln Budget Corp., a division of Arkay Electromatic Corporation, respondents-appellants.
Edward Thompson, New York City, J.S.C., Deputy City Administrative Judge, Civ. Div., Supreme and Civil Courts, petitioner-respondent.
Arnold Davis, New York City, for Milton Kostroff, respondent.
Erstein & Sidelle, New York City, for Manning Workman, respondent.
Sidney L. Katz, New York City, pro se.
Douglas V. Ackerman, Brooklyn, amicus curiae.
Louis J. Lefkowitz, Atty. Gen., of the State of New York, New York City, for intervenor.
In this proceeding commenced by Edward Thompson, J.S.C., Deputy City Administrative Judge, Civil Division, Supreme and Civil Courts, pursuant to Judiciary Law Section 217--a, petitioner has moved for disclosure in the form of discovery and production of documents and things for inspection and copying under CPLR Section 3120 and oral examination under CPLR Section 3107. In opposition to petitioner's motion, respondents have challenged the constitutionality of Judiciary Law Section 217--a, and have raised other issues which must be decided antecedent to reaching the disclosure issue.
The respondents contend that Judiciary Law Section 217--a creates new grounds for vacating and setting aside default judgments beyond those grounds embraced by the concept of the inherent power of the courts over their own proceedings. A reading of the cases cited by the parties herein demonstrates not only the existence of the court's inherent power, but also the absence of a limitation as to the grounds for the exercise of that power.
Courts have traditionally controlled their own judgments and orders to accomplish what is '. . . right and just.' When the power of the courts has been exercised for '. . . sufficient reason, in the furtherance of justice,' it is clear that the courts speaking did not recognize and would not permit, one particular ground, such as extrinsic fraud, or the lack of jurisdiction, to serve as the exclusive basis for the power to review their own processes. See e.g. Matter of Buffalo, 78 N.Y. 362; Ladd v. Stevenson, 112 N.Y. 325, 19 N.E. 842; Manahan v. Petroleum Producing and Refining Company, 198 App.Div. 192, 189 N.Y.S. 127.
As stated in Manahan, supra, at 195, 189 N.Y.S. at 129:
'. . . the court is never limited in its action in setting aside or modifying its orders, decrees, or judgments to any one or all of these occasions for its exercise, (fraud, excusable mistake, irregularity or inadvertence) but if it appears that substantial justice will be subserved, and injustice to persons . . . (be) prevented, the court will set aside, correct or modify its judgments.'
Section 217--a of the Judiciary Law has not created new and additional grounds to control court processes beyond those grounds courts have always possessed. Rather, this section codifies an illustrative, but by no means complete, list of recognized, valid grounds on which the courts have properly based their power in the past.
Section 217--a was not intended to either enlarge or impair substantive rights. The statute is remedial and was designed to implement orderly procedures by which an expressed public interest can be given representation in the courts where, at first instance, that interest may have been wronged. Such statutes have been upheld by the United States Supreme Court. See McGee v. International Life Insurance Company, 355 U.S. 220, 78 S.Ct. 199, 2 L.Ed.2d 223.
The respondents contend that Judiciary Law Section 217--a cannot be applied retroactively and that it expressly became effective on January 1, 1974. As has been shown, the power to control and review its processes has historically been inherent to the courts. The courts in which the actions underlying this proceeding were originally brought have always had the authority to look into the subject processes. Section 217--a expressly provides:
'that nothing herein shall be deemed to restrict or limit the court in the exercise of any of the powers it otherwise possesses.'
By applying this statute to actions commenced and default judgments entered prior to January 1, 1974, the Court would in no way be exercising a power greater than that which it already possessed at the time of the section's effective date. The statute is merely a codification of the powers already possessed.
Section 217--a of the Judiciary Law was enacted to aid in the ferreting out of abuses of court process which have occurred and which may occur in the future. Accordingly, the effectuation of its intent calls for its retroactive application. See McGee v. International Life Ins., supra; Laird v. Carton, 196 N.Y. 169, 89 N.E. 822; Matter of Busch v. Austin Co., 37 A.D.2d 648, 322 N.Y.S.2d 416.
Respondents further contend that the instant action is barred in whole or in part by the statutes of limitation. It is the Court, not the individual defendants in the underlying actions, who is bringing this proceeding. The Court itself, as opposed to private parties, is not subject to limitations of time. Particularly where the wrong alleged involves a possible injustice in the use of the Court's own processes, no statute of limitation would be applicable or appropriate.
Section 217--a of the Judiciary Law is seen as a codification of the existing inherent power of the Court. That power, if it cannot be limited in its grounds for exercise, can be no less unrestricted in its independence from time limitations. It has been stated that: 'Courts have always control over their own proceedings, . . .' Matter of City of Buffalo, supra; and 'The power of the court to control its judgments . . . is not subject to the limitation of time . . .' Furman v. Furman, 153 N.Y. 309, 47 N.E. 577; See also Matter of Lyons v. Goldstein, 290 N.Y. 19, 47 N.E.2d 425; Manahan v. Petroleum Producing and Refining Company, supra; Root Refining Co v. Universal Oil Products Co., 169 F.2d 514 (3 Cir. 1948), cert. denied, sub nom. Universal Oil Products Co. v. William Whitman Co., 335 U.S. 912, 69 S.Ct. 481, 93 L.Ed. 444.
If, Arguendo, any of the limitations of time prescribed in CPLR Article 2 could be considered applicable to the instant proceeding, the grounds specified in Section 213(9) would be closest to the nature of the grounds described in Judiciary Law Section 217--a. Under CPLR Section 213(9), in which a six year limitation to the commencement of an action based on fraud is called for, the time period begins to run from the point at which the plaintiff discovered or should have discovered the fraud. As the subject proceeding deals with allegations of fraud practiced on the Court, and such fraud is alleged not to have been discovered until January 23, 1973, commencement of this action on July 17, 1975 would preclude a time bar based on the six year limitation of CPLR Section 213(9).
The point is also raised by respondents that CPLR Section 5015, providing for relief from a judgment or order, allows a party only one year in which to vacate a default judgment. This one year limitation does not apply to the Court itself, which, as it has been shown, has the power to review its judgments at any time.
Respondents contend that Judiciary Law Section 217--a is violative of due process and the Civil Court is disqualified from hearing this proceeding. Judiciary Law Section 217--a provides that an administrative judge may bring a proceeding to set aside judgments obtained through abuse of the courts within his responsibility, pursuant to Section 217 of the Judiciary Law. Section 217--a mandates that a judge other than the administrative judge shall determine the disposition of the proceeding. Such transfer to a judge other than the administrative judge has been carried out in the instant case.
Any Judge of the Civil Court hearing a proceeding instituted pursuant to Judiciary Law Section 217--a sits only as the impartial adjudicator of the evidence and law presented before him...
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