Case Name: James C. Bender, a Minor, by His Father, Gerard Bender, et al., Appellants, v. New York City Health and Hospitals Corporation, Respondent, et al., Defendants; In the Matter of George Economou et al., Respondents, v. New York City Health and Hospitals Corporation, Appellant
Court: New York Court of Appeals
Jurisdiction: New York
Decision Date: 1976-02-19
Citations: 38 N.Y.2d 662
Docket Number: 
Parties: James C. Bender, a Minor, by His Father, Gerard Bender, et al., Appellants, v New York City Health and Hospitals Corporation, Respondent, et al., Defendants. In the Matter of George Economou et al., Respondents, v New York City Health and Hospitals Corporation, Appellant.
Judges: 
Reporter: New York Reports
Volume: 38
Pages: 662–669

Head Matter:
James C. Bender, a Minor, by His Father, Gerard Bender, et al., Appellants, v New York City Health and Hospitals Corporation, Respondent, et al., Defendants. In the Matter of George Economou et al., Respondents, v New York City Health and Hospitals Corporation, Appellant.
Argued January 12, 1976;
decided February 19, 1976
Paul D. Rheingold for appellants in the first above-entitled matter.
I. Special Term properly held that notice to the City of New York was notice to the New York City Health and Hospitals Corporation, both as a matter of law and in fact; the latter agency is estopped from asserting otherwise. (Winbush v City of Mount Vernon, 306 NY 327; Sandak v Tuxedo Union School Dist. No. 3, Town of Tuxedo, 308 NY 226; Sweeney v City of New York, 225 NY 271; Zivyak v Board of Educ. of City of N. Y., 282 App Div 704; Matter of Murray v City of New York, 30 NY2d 113.) II. Special Term was correct in exercising its discretion to allow appellants to proceed by amending the notice to the city. (Matter of Murray v City of New York, 30 NY2d 113; Winbush v City of Mount Vernon, 306 NY 327; Matter of Goglas v New York City Housing Auth., 13 AD2d 939; Matter of Pandoliano v New York City Tr. Auth., 17 AD2d 951; Gisondi v Town of Harrison, 16 AD2d 929; Matter of Charlemagne v City of New York, 277 App Div 689, 302 NY 871.) III. Section 20 of the New York City Health and Hospitals Corporation Act (L 1969, ch 1016) is unconstitutional if it is applied to defeat this claim. (Baxstrom v Herold, 383 US 107; Montez v Metropolitan Transp. Auth., 43 AD2d 224; Matter of Brown v Board of Trustees of Town of Hamptonburg, School Dist. No. 4, 303 NY 484.)
W. Bernard Richland, Corporation Counsel (Irving Cohen and L. Kevin Sheridan of counsel), for respondent in the first above-entitled matter.
I. It was improper for the court at Special Term to permit amendment and service of the notice of claim upon the New York City Health and Hospitals Corporation, where the effect thereof was to permit service of a notice of claim upon the corporation, which had not been named in the original claim, more than a year after the alleged act of malpractice. (Matter of Divisich v Marshall, 281 NY 170; Santiago v Board of Educ. of City of N. Y., 41 AD2d 616; Salner v City of New York, 12 AD2d 771; Matter of Negrone v New York City Tr. Auth., 15 AD2d 676; Matter of Shankman v New York City Housing Auth., 21 AD2d 968, 16 NY2d 500; Anderson v County of Nassau, 31 AD2d 761; Pugh v Board of Educ. Cent. Dist. No. 1-Fayetteville-Manlius School Dist., 38 AD2d 619, 30 NY2d 968; People v Friedman, 302 NY 75; Lawrence Constr. Corp. v State of New York, 293 NY 634; Camarella v East Irondequioit School Bd., 34 NY2d 139.) II. Section 20 of the New York City Health and Hospitals Corporation Act, which provides for notice to the Health and Hospitals Corporation within 90 days of the accrual of the action in certain actions, is constitutional. (Matter of Brown v Board of Trustees of Town of Hamptonburg, School Dist. No. 4, 303 NY 484; Morey v Doud, 354 US 457; Baxstrom v Herold, 383 US 107; Avery v Midland County, 390 US 474; Matter of Bauch v City of New York, 21 NY2d 599; Bucho Holding Co. v Temporary State Rent Comm., 11 NY2d 469; People v Paine Drug Co., 16 NY2d 503.)
Louis J. Lefkowitz, Attorney-General (Jesse J. Fine and Samuel A. Hirshowitz of counsel), in his statutory capacity under section 71 of the Executive Law in the first above-entitled matter.
The requirement that claimant, having a tort claim against the New York City Health and Hospitals Corporation, file a timely notice of claim, as required by section 20 of the New York City Health and Hospitals Corporation Act, is not a denial of equal protection. (San Antonio School Dist. v Rodrigues, 411 US 1; McGinnis v Royster, 410 US 263; Matter of Murray v City of New York, 30 NY2d 113; Matter of City of New York [Elm St], 239 NY 220; Diehl v City of Lackawanna, 233 App Div 348; Farrell v City of New York, 197 Misc 1059; Homer Eng. Co. v State of New York, 12 NY2d 508; Matter of Cherkis v Impellitteri, 307 NY 132; Blaikie v Borden Co., 47 Misc 2d 180; Reilly v Loventhal, 32 AD2d 514.)
W. Bernard Richland, Corporation Counsel (Murray L. Lewis and L. Kevin Sheridan of counsel), for appellant in the
second above-entitled matter. The New York City Health and Hospitals Corporation Act (L 1969, ch 1016) requires as a condition precedent to the commencement of a lawsuit against the New York City Health and Hospitals Corporation that a notice of claim be served on that corporation. Petitioners have shown no basis upon which they should be excused from this requirement.
(Hall v State of New York, 28 AD2d 1034; Pugh v Board of Educ. Cent. Dist. No. 1-Fayetteville-Manlius School Dist, 38 AD2d 619, 30 NY2d 968; Matter of Defelice v Board of Educ. of City of N. Y., 37 AD2d 930.)
William Rosenthal and Sidney N. Georgiou for respondents in the second above-entitled matter.
I. The discretion exercised by the court should not be interfered with. (Matter of Murray v City of New York, 30 NY2d 113; Matter of Stowe v City of Elmira, 31 NY2d 814.) II. The discretion exercised by the Supreme Court and affirmed by the Appellate Division in granting leave to serve a notice of claim nunc pro tunc should be affirmed on the principle of estoppel. (Robinson v City of New York, 24 AD2d 260.) III. The intended purposes of the notice of claim required by section 50-e of the General Municipal Law were met and affirmance should lie. (Sandak v Tuxedo Union School Dist. No. 3, Town of Tuxedo, 308 NY 226; Winbush v City of Mount Vernon, 306 NY 327.)

Opinion:
Wachtler, J.
The instant appeals stem from the creation of a separate entity, the New York City Health and Hospitals Corporation, to operate the municipal medical facilities in New York City (L 1969, ch 1016, as amd). In addition to transferring the operating responsibility from the city to the New York City Health and Hospitals Corporation, this legislation changed the notice of claim procedure. Under the new statutory scheme, it became necessary for a party sustaining injury allegedly attributable to these health facilities to file a verified notice of claim with the corporation prior to the commencement of a lawsuit (New York City Health and Hospitals Corporation Act, § 20, subd 2; L 1969, ch 1016, as amd, incorporating all the provisions of General Municipal Law, § 50-e). In both cases, plaintiffs were injured and preceded their lawsuits by filing notices of claim with the city rather than the Health and Hospitals Corporation. Claiming that they were misled by the manner in which their claims were handled and by the inequity caused by the new statutory scheme as it relates to notice, both seek leave to file notices of claim on the Health and Hospitals Corporation, nunc pro tunc. The issue thus presented is whether, and under what circumstances, the corporation may be estopped from asserting lack of notice of claim.
Appellant James Bender's cause of action is based on alleged improper treatment he received at two municipal hospitals. He was injured in an automobile accident on October 7, 1971 and was taken to Jamaica Hospital where he was not admitted but was instead transferred and later admitted to Queens General Hospital. By virtue of alleged delay in treatment and improper treatment, gangrene developed and it became necessary to amputate his left leg at the thigh. Notice of claim containing the requisite details of the malpractice claim was received by the city on December 23, 1971.
Corporation Counsel, who is the attorney for the city, and incidentally the attorney for the Health and Hospitals Corporation, was apprised of the claim shortly thereafter and noticed a hearing and physical examination for January 19, 1972 which was held in fact on March 21, 1972. At no time did Corporation Counsel who conducted the hearing, inform claimants or counsel that the notice had been filed with the wrong agency or that notice should have been served on the Health and Hospitals Corporation. An action was commenced against the city on April 5, 1972, well within the one year and ninety days prescribed by statute (General Municipal Law, § 50-i).
In August of that year appellants' counsel deposed one of the treating doctors whom the city had selected as familiar with the circumstances of the suit. At no time was the Health and Hospitals Corporation mentioned. Subsequently, appellants' attorney learned of the establishment of the Health and Hospitals Corporation and served the complaint in this action on the corporation on January 10, 1973.
In a belated answer the corporation raised, inter alia, the affirmative defense of failure to comply with the notice of claim provision and sought judgment dismissing the complaint. Special Term held that the notice served on the city constituted notice on the corporation and granted leave to serve an amended notice on the corporation. The Appellate Division reversed concluding that failure to serve notice of claim as required by statute was a fatal defect (46 AD2d 898).
In the second case before us, respondents Economou and Sarantos also seek an order granting leave to serve a notice of claim on the Health and Hospitals Corporation, nunc pro tunc. Both men were employed as painters who were injured while painting a ward located on the ground floor of Bellevue Hospital. The injuries, which occurred on April 5, 1972, were the result of exposure to ultra violet lights located in the ward. Apparently the louvres which ordinarily shielded these lights had been removed by employees of the hospital. One week later, notices of claim were served on the city on behalf of the petitioners.
Thereafter Corporation Counsel demanded an examination of the parties at its office on July 3, 1972. This examination was adjourned to September 20, 1972 at which time the painters were examined as to the details of the accident and the extent of their damages. They also submitted to a physical examination by a doctor employed by the city. An action was commenced against the city in October of that year. When the city answered by denying operation and control of Bellevue despite admitting ownership, the petitioners' attorney was alerted to the new law. Shortly thereafter the petitioners moved for an order to permit their notices to be served nunc pro tunc on the Health and Hospitals Corporation. Special Term granted petitioners' application and the Appellate Division affirmed with one Justice dissenting (47 AD2d 877).
With the State's waiver of sovereign immunity (Court of Claims Act, § 12-a) and subsequent interpretation extending that waiver to all civil divisions of the State (Bernardine v City of New York, 294 NY 361), the Legislature saw fit to enact limitations on time and procedure for maintaining actions against the government (General Municipal Law, § 50-e; see, generally, Reports of the Joint Legislative Committee on Municipal Tort Liability, 1955-1963, 1964; 18 McQuillin, Municipal Corporations [3d ed], § 53.151-53.152). To alleviate the harshness of absolute compliance, certain excuses were allowed by statute to be applied in the court's discretion (General Municipal Law, § 50-e, subds 5, 6).
Although the court has broad power to allow for certain infirmities (General Municipal Law, § 50-e, subd 5) or to correct nonprejudicial mistakes or irregularities in notices of claim (General Municipal Law, § 50-e, subd 6) the instant cases do not involve such defects. Here the petitioners raise the issue of whether or not the corporation should be disqualified from asserting a failure to file. While there is some support for this approach in the lower courts (see, e.g., Debes v Monroe County Water Auth., 16 AD2d 381; Matter of Daley v Greece Cent. School Dist., 21 AD2d 976, affd 17 NY2d 530; Matter of Johnson v Board of Educ. of City of Rochester, 33 AD2d 647; Matter of Scibilia v City of Niagara Falls, 44 AD2d 757) our court has never specifically adopted the doctrine of estoppel in the notice of claim area. (But see Teresta v City of New York, 304 NY 440, 443.) We do so today.
We believe that where a governmental subdivision acts or comports itself wrongfully or negligently, inducing reliance by a party who is entitled to rely and who changes his position to his detriment or prejudice, that subdivision should be estopped from asserting a right or defense which it otherwise could have raised. (See, generally, Applicability of doctrine of estoppel against government and its governmental agencies, Ann., 1 ALR2d 338; 2 Antieau, Municipal Corporations, § 16A.22; cf. La Porto v Village of Philmont, 39 NY2d 7.) The equitable bar to a defense may arise by virtue of positive acts, or omissions where there was a duty to act. By applying the doctrine of equitable estoppel to notice of claim situations, the courts may insure that statutes like section 50-e of the General Municipal Law, do not become "a trap to catch the unwary or the ignorant" (see Sweeney v City of New York, 225 NY 271, 273).
The question remains as to what avenue estoppel may best be asserted. Bearing in mind that notice of claim is a condition precedent to bringing suit, the facts allegedly constituting an estoppel must first be brought before the court. It has been held that this could be accomplished by serving an amended complaint setting forth facts sufficient to excuse the filing of notice of claim by virtue of estoppel (see, e.g., Matter of Daley v Greece Cent. School Dist., 21 AD2d 976, affd 17 NY2d 530, supra). In our view a more appropriate way would be to move to file a notice of claim nunc pro tunc. The matter could then be litigated prior to proceeding to trial. This procedure would lead to an expeditious resolution of the question on the basis of evidentiary facts, which is of paramount concern to all parties involved.
The instant cases arise in the context of motions to file nunc pro tunc. However, the records before us do not present facts sufficient to resolve the issue. Among the allegations needing further elucidation to determine whether the corporation is estopped are the claims that for a period of time the corporation and the city refrained from strictly applying the new statute, that the date of the transfer of operational responsi bility to the corporation was not a matter susceptible of public discovery and that the corporation failed to indicate its autonomy in a manner similar to other autonomous city agencies. The determination of these questions in addition to ones concerning the duties and authority of persons handling the claims are necessary to the resolution of the estoppel issue. Finally, it does not appear on the records before us whether or to what extent action or inaction on the part of the city and the Corporation Counsel should be attributed to the corporation. We consider a rule which provides that when estoppel can be established compliance with notice of claim provisions should be excused to be a fair and just accommodation of competing interests.
Accordingly, the orders of the Appellate Division should be reversed in Bender and modified in Economou and the matters remitted to Special Term for a consideration of evidentiary facts as to whether or not there should be an estoppel against the defendant corporation.
Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Fuchsberg and Cooke concur.
In Bender v New York City Health & Hosps. Corp.: Order reversed and case remitted to Supreme Court, Queens County, for further proceedings in accordance with the opinion herein, with costs to plaintiffs to abide the event.
In Matter of Economou v New York City Health & Hosps. Corp.: Order modified and matter remitted to the Supreme Court, New York County, for further proceedings in accordance with the opinion herein and, as so modified, affirmed, with costs to petitioners to abide the event.