Weimer v. Board of Ed. of Smithtown Central School Dist. No. 1

• Decision Date: 19 February 1981
• Citation: 418 N.E.2d 368,436 N.Y.S.2d 853,52 N.Y.2d 148
• Parties: , 418 N.E.2d 368 George C. WEIMER, Jr., as Assignee of David Burner and another, Appellant, v. BOARD OF EDUCATION OF SMITHTOWN CENTRAL SCHOOL DISTRICT NO. 1 et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 853

436 N.Y.S.2d 853

52 N.Y.2d 148, 418 N.E.2d 368

George C. WEIMER, Jr., as Assignee of David Burner and another, Appellant, v. BOARD OF EDUCATION OF SMITHTOWN CENTRAL SCHOOL DISTRICT NO 1 et al., Respondents.

Court of Appeals of New York.

Feb. 19, 1981.

Gary N. Weintraub, Huntington, for appellant

Martin J. Crowley and Craig F. Meltzer, Smithtown, for respondents.

OPINION OF THE COURT

MEYER, Judge.

Assignment of a taxpayer's action to one not shown to be himself a taxpayer is the transfer of a claim in contravention of public policy and, therefore, proscribed by subdivision 3 of section 13-101 of the General Obligations Law. Because the assignee, appellant at the Appellate Division and in our court, was, as a result, without standing to maintain the action, the appeal should be dismissed and the matter should be remitted to the Appellate Division, 75 A.D.2d 893, 432 N.Y.S.2d 157 with directions to dismiss the appeal to that court.

The present action grows out of an article 78 proceeding by George C. Weimer, Jr., against the board of education and two of its employees, Frank Lo Presti and Joseph Barton, in which a third employee, I. David Bergrin, intervened as a defendant. In the earlier action Weimer charged that he had been improperly removed from the school district payroll through the adoption by the board of a reorganization plan which abolished his position as assistant superintendent for business affairs, and created in its place two new positions of administrator for operations and business manager; that though he had greater seniority than defendant Lo Presti, who was also an assistant superintendent, he, Weimer, rather than Lo Presti, had been removed; that his position and the two new positions were within the same tenure area and although he was entitled to one of them the board had appointed defendant Barton administrator for operations and proposed to appoint someone other than Weimer as business manager. ¹ Weimer's petition asked reinstatement to his former position, or in the alternative, appointment to the other assistant superintendent position or to either the position as administrator for operations or as business manager. The petition having been dismissed by Special Term, Weimer appealed to the Appellate Division, which reversed, directed that he be offered either of the two positions last above mentioned and remitted the matter for determination of the back pay to which he was entitled. The judgment entered after the back pay determination is now pending appeal in this court.

In February, 1978, while the article 78 proceeding was pending undetermined, the present action was begun by David and Sandra Burner against the board of education and Lo Presti, Barton and Bergrin, among others. The complaint alleged that at all relevant times "plaintiffs were and continue to be residents and taxpayers" of the school district. The gravamen of the action is that the board of education illegally expended funds and committed waste in authorizing the employment at district expense of attorneys to represent Lo Presti, Barton and Bergrin in the earlier action. The board defended the present action on the ground that it had acted legally in employing attorneys for the three named employees and that the Burners were not the real parties in interest. The Burners having moved for a preliminary injunction and for summary judgment, Special Term denied both motions and granted defendants summary judgment dismissing the complaint. Its decision made no mention of the real party in interest defense, presumably because the complaint was, in any event, being dismissed.

An appeal was then filed to the Appellate Division by George C. Weimer, Jr., "as assignee of all the rights title and interest of David Burner and Sandra Burner." The record does not contain the assignment instrument and the statement pursuant to CPLR 5531 (both at the Appellate Division and in this court) states only that appellant is "the assignee of the causes of action by the original plaintiffs, David Burner and Sandra Burner." The Appellate Division affirmed, without reaching the question of standing, on the opinion at Special Term, one Judge dissenting. The dissenting Judge found standing on the part of the Burners in section 123-b of the State Finance Law and authority for them to assign their rights to Weimer in section 13-101 of the General Obligations Law. We hold that it is contrary to public policy for a taxpayer's action to be assigned to one who is not shown by the record to have been a taxpayer at the relevant time and therefore dismiss the appeal and remit to the Appellate Division with directions to dismiss the appeal to that court.

The right to maintain a taxpayer's action is governed by both judicial decision and legislative enactment (Wein v. Comptroller of State of N. Y., 46 N.Y.2d 394, 398-399, 413 N.Y.S.2d 633, 386 N.E.2d 242). As we held in Wein, to the extent applicable a legislative enactment will control, but in matters not covered by a statute common-law principles govern. In the instant case, the result is the same whether considered as a common-law or a statutory matter.

The Burners' complaint does not indicate whether they proceeded on statutory or common-law authority. The statutory avenues conceivably open to them are article 7-A of the State Finance Law, section 51 of the General Municipal Law and section 102 of the Civil Service Law. It is not necessary to decide whether any of these is broad enough to encompass the particular grievance the Burners allege, ² for the status allegations essential to their complaint can be assumed ³ for purposes of this opinion. As for the common-law action, the tortuous route by which such actions, long in disfavor with our court, finally came to be recognized in Boryszewski v. Brydges, 37 N.Y.2d 361, 372 N.Y.S.2d 623, 334 N.E.2d 579 and by statute (L. 1975, ch. 827) is traced in Wein v. Comptroller of State of N. Y., 46 N.Y.2d 394, 413 N.Y.S.2d 633, 386 N.E.2d 242 and Matter of Urban League of Rochester, N. Y. v. County of Monroe, 49 N.Y.2d 551, 427 N.Y.S.2d 593, 404 N.E.2d 715; see also, Siegel, New York Practice, § 136, p. 169 and need not be reiterated here. Suffice it to note that while, as the Urban League case exemplifies, not every grievance can be aired in a common-law citizen-taxpayer action, and while the kind of taxes paid that will qualify a citizen to bring a common-law action have been assumed rather than fully articulated, the one common thread running through the decisions is that only one who is in fact a taxpayer may maintain such a common-law action. Thus, whether a statutory or a common-law action be pursued, taxpayer status is a sine qua non.

Appellant Weimer argues that the action was commenced by taxpayers and that his motivation in obtaining assignment of the action and prosecuting the appeal is irrelevant. That a taxpayer's action plaintiff has a personal, as well as a public benefit, motive does not disqualify him (Molloy v. City of New Rochelle, 198 N.Y. 402, 411, 92 N.E. 94; Del Balso Constr. Corp. v. Gillespie, 225 App.Div. 42, 232 N.Y.S. 261, affd. 250 N.Y. 584, 166 N.E. 333; Shewan & Sons v. Mills, 211 App.Div. 687, 208 N.Y.S. 301; Gage v. City of New York, 110 App.Div. 403, 97 N.Y.S. 157; 18 McQuillin, Municipal Corporations (3d ed. rev.), § 52.11), but a taxpayer who permits his status as such as to be used by an unqualified person for the latter's ulterior purpose does not act in good faith and will not be accorded standing (Nathan v. O'Brien, 117 App.Div. 664, 102 N.Y.S. 947; Hull v. Ely, 2 Abb NC 440; Vadakin v. Crilly, 18 Ohio Cir.Ct. 634, affd. 73 Ohio St. 380, 78 N.E. 1140; contra Goshert v. City of Seattle, 57 Wash. 645, 107 P. 860; R. D. Lamar Inc. v. Ray, 132 Fla. 704, 182 So. 292; see McQuillin, loc. cit. supra ). Moreover, if a taxpayer's action plaintiff loses his status as such during the pendency of the action, the action abates (State ex rel. Allen v. Board of Educ., 206 Okl. 699, 246 P.2d 368; Baugh v. Little, 140 Okl. 206, 282 P. 459) unless another person qualified to bring the action is substituted as plaintiff and continues the action (Phillips v. Brandt, 231 Minn. 423, 43 N.W.2d 285; see 74 Am.Jur.2d, Taxpayers' Actions, § 54, at p. 271). Intervention in such a proceeding is limited to one who was qualified to bring the action at the time it was begun (Coyne v. City of Yonkers, 57 Misc. 366, 109 N.Y.S. 625; see Morris v. City Council of Augusta, 204 Ga. 26, 48 S.E.2d 855; Carney v. City of Grinnell, Iowa (8th Cir.) 53 F.2d 44; 74 Am.Jur.2d, Taxpayers' Actions, § 55, at p. 272) or who has standing not as a taxpayer but because he is directly and substantially affected by the issue being litigated (CPLR 1012; see Matter of Burke v. Sugarman, 35 N.Y.2d 39, 358 N.Y.S.2d 715, 315 N.E.2d 772; Williams v. Morgan, 111 U.S. 684, 4 S.Ct. 638, 28 L.Ed. 559). ⁴

The explanation behind these rulings and our decision in the present case is to be found in the reason for granting standing to taxpayers, which is that failure to do so "would be in effect to erect an impenetrable barrier to any judicial scrutiny of" legislative or executive action (Boryszewski v. Brydges, 37 N.Y.2d 361, 364, 372 N.Y.S.2d 623, 334 N.E.2d 579, supra; Matter of Burke v. Sugarman, supra, at p. 45, 358 N.Y.S.2d 715, 315 N.E.2d 772; see Faden v. Philadelphia Housing Auth., 424 Pa. 273, 227 A.2d 619; 74 Am.Jur.2d, Taxpayers' Actions, § 1, at p. 182) and the belief that "the taxpayer, as the ultimate bearer of the burdens" of the governmental agency involved should have a remedy against burdens unjustly imposed (Queens County Water Co. v. Monroe, 83 App.Div. 105, 108, 82 N.Y.S. 610). There is no "impenetrable barrier" when there are...