Case ID: ny-2d_57/html/0190-01.html
Source: Caselaw Access Project
Author: {"author": "Chief Judge Cooke.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

In the Matter of Edward V. Regan, as Comptroller of the State of New York, Respondent, v Crime Victims Compensation Board, Appellant, et al., Respondent.
    Argued September 2, 1982
    decided October 12, 1982
    
      POINTS OF COUNSEL
    
      Paul S. Hudson for appellant.
    I. Appellant acted legally when it declined to find that claimant, Zelik Kotlarski, would not suffer a serious financial hardship if denied an award. II. The interpretation of the Crime Victims Compensation Board of subdivision 6 of section 631 of the Executive Law (serious financial hardship) is not unreasonable or irrational; the Board’s determination on the present claim is not in violation of law and is supported by substantial evidence. (Matter of Lumpkin v Department of Social Servs. of State of N. Y., 59 AD2d 485, 45 NY2d 351; Matter of Bernstein v Toia, 43 NY2d 437; Matter of Howard v Wyman, 28 NY2d 434; Matter of Condé NastPub. v State Tax Comm., 51 AD2d 17, 39 NY2d 889; Matter of Bork v City School Dist. of City of North Tonawanda, 60 AD2d 13; Trans Alaska Pipeline Rate Cases, 436 US 631; Ferraiolo v O’Dwyer, 302 NY 371; Matter of Nyboe v Allen, 7 AD2d 822; Securities v Sloan, 436 US 103; Matter of Stupach, 274 NY 198.) III. The proper standard for judicial review is illegality or excessiveness. (Matter of Elwood Investors Co. v Behme, 79 Misc 2d 910; Finger Lakes Racing Assn. v New York State Racing & Wagering Bd., 58 AD2d 285; Matter of Lumpkin v Department of Social Servs. of State of N. Y., 45 NY2d 351; Matter of Ward v Nyquist, 43 NY2d 57; Matter of Union Free School Dist. No. 2 of Town of Cheektowaga v Nyquist, 38 NY2d 137; Matter of Stupach, 274 NY 198; Matter of Purdy v Kriesberg, 47 NY2d 354.) IV. Article 22 of the Executive Law establishing the Crime Victims Compensation Board and the State Victim Compensation Program is a remedial statute and should be liberally construed in reviewing the award decision herein. (Chamberlain v Western Transp. Co., 44 NY 305; Harrison v Bain Estates, 2 Misc 2d 52, 2 AD2d 670; Archer v Equitable Life 
      
      Assur. Soc. of U. S., 218 NY 18; Mead v Stratton, 87 NY 493; State of New York v Parker, 67 Misc 2d 36, 38 AD2d 542, 30 NY2d 964; Matter of City of New York [Spuyten Duyvil Shore Front Park], 71 Misc 2d 1019; Matter of Machcinski [Ford Motor Co. — Corsi], 277 App Div 634; Matter of Mittleman [Corsi], 282 App Div 587; Matter of Gryziec v Zweibel, 74 AD2d 9; Matter of Bayswater Health Related Facility v Karagheuzoff, 37 NY2d 408.) V. The Comptroller cannot properly delegate his entire decisional and review function under section 629 of the Executive Law to his appointed subordinates. (Matter of Kilgus v Board of Estimate of City of N. Y., 308 NY 620; Matter of O’Dea’s Bar & Rest, v New York State Liq. Auth., 30 Misc 2d 616; Matter of Juno Operating Corp. v Police Dept. of City of N. Y., 22 Misc 2d 676; New York State Dept. of Audit & Control v Crime Victims Compensation Bd., 76 AD2d 405; Matter of New York State Dept. of Audit & Control v Crime Victims Compensation Bd., 76 AD2d 410.) VI. Respondent-petitioner’s service of respondent claimant did not meet constitutional standards of a procedure and practice reasonably designed to give defendant notice and opportunity to be heard. (Matter of Central Hanover Bank & Trust Co. [Mullane — Vaughan], 275 App Div 769, 299 NY 697, revd sub nom. Mullane v Central Hanover Trust Co., 339 US 306; International Shoe Co. v Washington, 326 US 310; World-Wide Volkswagen Corp. v Woodson, 444 US 286; Vazzana v Horn, 42 Misc 2d 989; Rivera v W. & R. Serv. Sta., 34 AD2d 115.)
    
      Robert Abrams, Attorney-General (Carl E. Stephan and Peter H. Schiff of counsel), for Edward V. Regan, Comptroller, respondent.
    I. The Board illegally awarded claimant $594.01 for loss of earnings where plaintiff had not shown that he would suffer serious financial hardship absent such an award. (Matter of Seitelman v Lavine, 36 NY2d 165; Matter of New York State Dept. of Audit & Control v Crime Victims Compensation Bd., 76 AD2d 410; Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451; Matter of Potts v Kaplan, 264 NY 110; Riss v City of New York, 22 NY2d 579; Matter of Gryziec v Zweibel, 74 AD2d 9; Matter of Bayswater Health Related Facility v Karagheuzoff, 37 NY2d 408; Zaldin v Concord Hotel, 48 NY2d 107; Matter of 
      
      Johnsen v Nissman, 39 AD2d 578; Matter of Howard v Wyman, 28 NY2d 434.) II. The Board’s procedural objections are patently meritless. (Matter of Yeannelis v Menides, 259 NY 513; Matter of Seitelman v Lavine, 36 NY2d 165; Mullane v Central Hanover Bank & Trust Co., 339 US 306; Matter of Gryziec v Zweibel, 74 AD2d 9; Matter of Johnsen v Nissman, 39 AD2d 578; Matter of New York State Dept. of Audit & Control v Crime Victims Compensation Bd., 76 AD2d 410.)
   OPINION OF THE COURT

Chief Judge Cooke.

This case, although involving a relatively small sum of money, raises significant issues with respect to the State’s system of compensating victims of crime. Specifically, it concerns the criteria and means used by the Crime Victims Compensation Board (Board) to determine eligibility for compensation of persons who have suffered injuries as direct results of crime. This court holds that the Board exceeded the limits of its authority in making its award to claimant. Consequently, the order of the Appellate Division should be affirmed.

Claimant Zelik Kotlarski, a 66-year-old plumber, was mugged while working. The robber injured claimant, forcing him to miss nine weeks of work, and relieved him- of $524 in cash. He filed a claim with the Crime Victims Compensation Board, which determined that his unreimbursed loss of earnings was $594 and awarded him that amount. Pursuant to section 629 of the Executive Law, the State Comptroller requested that the Attorney-General bring this proceeding to review the award. The Appellate Division granted the Attorney-General’s petition to annul the award as illegal and excessive.

It should be emphasized that involved here is not the question of whether the State should attempt to make victims whole. Regrettably, crime touches all too many persons today, and many of its victims sustain financial losses as a result of their injuries. To ameliorate these losses, the Legislature enacted a program to provide restricted financial assistance to certain victims of crimes (see Executive Law, § 620 et seq.). What is to be considered on this appeal is whether there should be strict adherence to the provisions of this statutory scheme governing the distribution of finite State resources to these victims.

When the Legislature created this State’s pioneering system for compensating crime victims, it expressly recognized that large numbers of innocent persons were killed or injured each year by criminals and that “[s]uch persons or their dependents may thereby suffer disability, incur financial hardships, or become dependent upon public assistance” (Executive Law, § 620). The Legislature declared its “intent that aid, care and support be provided by the state, as a matter of grace, for such victims of crime” (id.). In the absence of statutory provision or special undertaking, of course, an innocent victim of a crime has no claim to redress by the State (see Riss v City of New York, 22 NY2d 579, 582-583). As a legislative creation, then, the compensation here must be confined to the terms of the statutes creating the program (see Zaldin v Concord Hotel, 48 NY2d 107, 113).

When the Legislature established the Crime Victims Compensation Board, it directed that awards be made only where the claimant would suffer serious financial hardship without compensation. If the Board “finds that the claimant will not suffer serious financial hardship” if refused compensation to offset lost earnings, the statute directs that “the board or board members shall deny an award” (Executive Law, § 631, subd 6). The statute does not define “serious financial hardship”, but directs the Board to “consider all of the financial resources of the claimant” in establishing by rule specific standards for making such determinations.

In claimant’s case, the award was based on a finding by Board Member Gottlieb that serious financial hardship had been established. The Appellate Division was correct in annulling the award determination. The Board’s standards for assessing financial hardship are not in accord with the relevant statutory provisions. Subdivision 6 of section 631 requires that the Board “consider all of the financial resources of the claimant.” Under the rules promulgated by the Board, however, a wide variety of items are exempted from consideration as part of claimant’s “financial resources”: a homestead or five years’ rent, clothing and personal effects, furniture and appliances, equipment necessary for a trade, an automobile, and life insurance (9 NYCRR 525.9 [b]). In addition, the Board permits the exclusion of an amount not exceeding the claimant’s annual income and as much as $100,000 in inventory and property necessary for the production of claimant’s income (9 NYCRR 525.9 [c]). Finally, the Board’s rules provide that “the board shall, within the limitations of the law, render a decision which will as nearly as possible permit the claimant and/or his family to maintain a reasonable standard of living. Where out-of-pocket expenses and/or loss of earnings or support would lower this standard of living, this may in the discretion of the board be deemed serious financial hardship” (9 NYCRR 525.9 [d]).

The Board’s rules extend beyond the terms of the controlling statute. To the extent that they exempt a claimant’s assets and income from consideration, the rules do not take into consideration “all of the financial resources of the claimant” as directed by subdivision 6 of section 631. Likewise, the Board’s rules permit it to deem a lowering of claimant’s “reasonable standard of living”, no matter how minor or short-lived, to be “serious financial hardship”. Although the Legislature left it to the Board to define the precise limits of what constitutes severe financial hardship, the plain meaning of those words themselves establishes the outer boundaries. A diminution, of unspecified degree, in a person’s “reasonable standard of living” falls outside the boundaries of what can be considered a demonstration of serious financial hardship. The Board’s interpretation of the terms of section 631 is contrary to the clear language of the statute and is therefore entitled to no deference (Kurcsics v Merchants Mut. Ins. Co., 49 NY2d 451, 459). To the extent that the Board’s rules conflict with the statute, therefore, they are invalid.

In annulling the Board’s determination with respect to claimant, the Appellate Division held that there was no demonstration that claimant would suffer severe financial hardship if denied an award. The ruling was correct. The Board found that claimant had savings of $24,000, securities worth $4,275, and an interest in real property worth $30,000. In addition, the Board did not take into consideration other property that was exempt under its rules. Claimant’s assets do not support the Board’s conclusion that claimant would suffer severe financial hardship if denied an award of $594 for lost earnings.

The Board, emphasizing the “double negative” in the statute, maintains that, before it grants an award, it is not required to find that severe financial hardship will result if no award is made, and that only when it finds that hardship will not result is it required to deny an award. Such a reading not only runs contrary to the statute but would render it meaningless. Although subdivision 6 of section 631 directs that the Board deny awards when claimants would not suffer severe financial hardship, it does not follow that the Board is free to circumvent the statute by declining to make any determination with respect to the existence of severe hardship. To support an award, there must be a determination, supported by sufficient findings in the record, that the claimant would suffer severe financial hardship if denied an award.

Contrary to the Board’s assertions, this does not place an impossible burden on either the Board or claimants. Claimants need not exhaust all of their financial resources before receiving an award. Nothing in the statutory scheme prevents the Board from assessing, based on a claimant’s current financial position, lost wages and injuries, the prospective likelihood of claimant suffering severe financial hardship. No claimant meeting the criteria set forth by the Legislature need be denied compensation.

The Board’s remaining arguments have been considered and are found to be without merit.

Accordingly, the order of the Appellate Division should be affirmed, without costs.

Judges Jasen, Jones, Wachtler, Fuchsberg and Meyer concur; Judge Gabrielli taking no part.

Order affirmed. 
      
      . At the time New York enacted its program in 1966, only California, Great Britain, and New Zealand had such compensation provisions (see Note, Compensation for Victims of Crimes of Violence, 31 Alb L Rev 120).
     
      
      . In full, subdivision 6 of section 631 of the Executive Law provides: “If the board or board member, as the case may be, finds that the claimant will not suffer serious financial hardship, as a result of the loss of earnings or support and the out-of-pocket expenses incurred as a result of the injury, if not granted financial assistance pursuant to this article to meet such loss of earnings, support or out-of-pocket expenses, the board or board members shall deny an award. In determining such serious financial hardship, the board or board member shall consider all of the financial resources of the claimant. The board shall establish specific standards by rule for determining such serious financial hardship.”