Ballard v. HSBC BANK USA

May 11, 2006

Versions:6 N.Y.3d 658

848 N.E.2d 1292

815 N.Y.S.2d 915

OPINION OF THE COURT

Ciparick, J.

The issue before this Court is whether the failure of petitioner Diane Ballard to include a return date in a notice of petition constitutes a nonwaivable jurisdictional defect under Executive Law § 298. Wе hold that it does not and that respondent HSBC waived its right to challenge the alleged defect.

Following a determination by respondent Edward A. Fried-land, Acting Commissioner of the New York State Division of Human Rights, pеtitioner Diane Ballard filed a petition in Supreme Court on July 23, 2004, seeking review, pursuant to Executive Law § 298, of that part of the order that was adverse to her. 1 Ballard’s notice of petition left blank thе return date as no justice had yet been assigned to the matter. Copies of the notice of petition and petition were served on respondents along with a letter from petitioner explaining that she would advise respondents of the return date when it was assigned. Two weeks later, on August 4, 2004, after a Supreme Court Justice was assigned to the matter, Ballard sent a letter to the Justice, copying the other parties, stating: “Based upon discussions with your Chambers, we would like to make this matter returnable before you on August 23, 2004, at 9:30 a.m.”

The following day, August 5, 2004, respondent HSBC filed a cross petition specifying a return date of September 13, 2004 and stating that “Q jurisdiction is proper pursuant to Executive Law § 298.” 2 On August 6, HSBC responded to Ballard’s letter of August 4, stating in part:

“CPLR 403 requires that a notice of petition specify the time and рlace of the hearing and CPLR 7804 requires that the time be at least 20 days before the return date. As August 23 is less than 20 days from ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍service of your letter the petition cannot be made returnable on that date. Mоreover, HSBC’s cross-petition is returnable on September 13, 2004, which is the next available return date . . . which is at least 20 days after the notice of cross-petition. . . . Accordingly, I request that you adjourn the rеturn date of the petition to September 13.”

HSBC did not raise an objection based on any alleged jurisdictional defect at that time. It was not until August 18, after the filing of the cross petition, that HSBC moved in Supreme Court to dismiss Ballard’s petition for lack of jurisdiction and as barred by the statute of limitations, based on Ballard’s failure to include a return date in her notice of petition. Ballard cross-moved for an оrder extending her time to serve the notice of petition and petition or to deem her prior service good and sufficient. Respondent Friedland served an answer and moved to transfer the matter to the Appellate Division pursuant to Executive Law § 298. The motions and the underlying petitions were then adjourned to October 18, 2004.

In what amounts to an advisory opinion, dated March 25, 2005, Supreme Court fоund that the court lacked subject matter jurisdiction, opining that based on the language of Executive Law § 298, petitioner’s failure to include a return date on the notice of petition “implicatеs subject matter jurisdiction, not jurisdiction of the parties” (8 Misc 3d 521, 526 [2005]) and transferred the matter to the Appellate Division as required by Executive Law § 298. HSBC then moved before the Appellate Division to dismiss the petitiоn for lack of subject matter jurisdiction and as barred by the statute of limitations. Ballard opposed the motion arguing that the objections sounded of personal jurisdiction and that any such claim was wаived. Thereafter, HSBC filed a second motion to dismiss on personal jurisdiction and statute of limitations grounds. The Appellate Division subsequently granted HSBC’s motion stating only that the Court lacked subject matter jurisdiction. We granted Ballard’s motion for leave to appeal and now reverse the Appellate Division and reinstate the petition. 3

Executive Law § 298 allows any “complainant, respondent or other person aggrieved by an order of the commissioner” to “obtain judicial review thereof’ in a special proceeding “initiated by the filing of a notice of petition and petition” in Suрreme Court. Executive Law § 298 further states that:

“Upon the filing of a notice of petition and ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍petition, the court shall have jurisdiction of the proceeding and of the questions determined therein, except that where the order sought to be reviewed was made as a result of a public hearing . . . the court shall make an order directing that the proceeding be transferred for disposition to thе appellate division” (emphasis added).

CPLR 403 (a) provides that “[a] notice of petition shall specify the time and place of the hearing on the petition and the supporting affidavits, if any, аccompanying the petition.”

Respondent HSBC argues that because section 298 requires the filing of a notice of petition and section 403 (a) requires that a notice of petition must include а return date, petitioner’s failure to specify a return date was a defect in her commencement of the special proceeding implicating subject matter jurisdiction, and the proceeding should be dismissed. HSBC further argues that Executive Law § 298 conditions subject matter jurisdiction “[u]pon the filing of a notice of petition and petition” and such requirement is a condition precedent to thе exercise of such jurisdiction.

Petitioner contends that her filing was not defective, and that even if it was, it would constitute only a personal jurisdiction defect as to which HSBC waived its objection. She further contends that such a defect does not undermine the court’s authority to hear the case.

“The question of subject matter jurisdiction is a question of judicial power: whether the court has the power, conferred by the Constitution or statute, to entertain the case before it” (Matter of Fry v Village of Tarrytown, 89 NY2d 714, 718 [1997]). We have routinely held that technical defects in filings do not. fall under the umbrella of subject ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍matter jurisdiction when they do not undermine the constitutional or statutory basis to hear a case (see Matter of Fry, 89 NY2d at 718-719; see generally Matter of National Gypsum Co., Inc. v Assessor of Town of Tonawanda, 4 NY3d 680 [2005]; Harris v Niagara Falls Bd. of Educ., 6 NY3d 155 [2006]).

Last year, in National Gypsum Co., we held that a notice of petition, in a special proceeding filed under RPTL article 7, was not “jurisdictionally defective” where “petitioner included a return date that was later changed by court personnel”—essentially “a ‘fictitious’ heаring date” (4 NY3d at 682, 683). We explained that because petitioner could not possibly include an accurate return date before a judge had been assigned to the action, “[a]ny other interpretаtion of the statute would be patently unfair to a party attempting to commence such a proceeding” (id. at 684). Even more recently, in Harris, we held that “a defect in compliance with the commencement-by-filing system doеs not deprive a court of subject matter jurisdiction and, accordingly, is waived absent a timely objection by the responding party” (6 NY3d at 158, citing Fry, 89 NY2d at 718).

Here, the competence of the court and its authority to hеar the proceeding stem from the language of Executive Law § 298, which conveys subject matter jurisdiction upon the court to hear challenges by aggrieved parties to rulings made by the Commissioner of the State Division of ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍Human Rights on unlawful discrimination claims. Any alleged technical defect as to the date on the notice of petition invokes a claim of improper commencement оr personal jurisdiction, at best. This is not a case where a condition precedent implicates subject matter jurisdiction (cf. Scantlebury v New York City Health & Hosps. Corp., 4 NY3d 606 [2005] [notice of intention to commence an action as required by section 7401 (2) of McKinney’s Unconsolidated Laws of New York (New York City Health and Hospitals Corporation [HHC] Act [L 1969, ch 1016, § 1, as amended] § 20 [2]) is a condition precedent to a suit against HHC]). Thus, the Appellate Division’s dismissal of the proceeding on the ground of lack of subject matter jurisdiction was improper.

As to personal jurisdiction, to the extent that petitioner’s commencement of the action may have been defective, respondent HSBC waived its right to challenge the defect by actively participating in the proceeding without timely objecting to the defect on personal jurisdiction grоunds. Raising no objections to the manner of commencement, HSBC’s verified cross petition specifically asserted that “jurisdiction is proper.” Neither the motion HSBC made in Supreme Court nor the second motion at the Appellate Division cured this defect as HSBC was required to either move to dismiss the petition before filing its cross petition or affirmatively raise the issue in an answer (see CPLR 404 [a]). 4 Furthermore, HSBC’s initial mоtion at the Appellate Division did not seek dismissal on personal jurisdiction grounds (see CPLR 3211 [e]). As we stated in Harris, “defendants and respondents are warned that if they want to capitalize on technicalities they must mind their own procedures” (6 NY3d at 159, quoting Siegel, NY Prac § 63, at 94 [4th ed]). As respondent failed to timely raise a challenge to personal jurisdiction, that claim was waived and the petition may go forward.

Accordingly, the order of the Appellate Division should be reversed, with ‍‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‌‍costs, and the motion to dismiss the petition by respondent HSBC denied.

Chief Judge Kaye and Judges G.B. Smith, Rosenblatt, Graffeo, Read and R.S. Smith concur.

Order reversed, etc.

Notes

. The Commissioner dismissed Ballard’s claim that she wаs discriminated against when she was not promoted between 1985 and 1987 and her claim that she was unlawfully terminated based on retaliation. However, the Commissioner ordered HSBC to pay Ballard $35,000 as compensatory damages for mental anguish and humiliation suffered as a result of race discrimination and $5,000 as a result of disability discrimination.

. HSBC never answered the petition.

. It should be noted that in response to Supreme Court’s inquiry concerning subject matter jurisdiction HSBC shifted its position and conceded that its notice of cross petition and cross petition were not timely filed and the court was without jurisdiction to hear it. The issue of the viability of the cross petition is not a subject of this appeal.

. Respondent HSBC also answered petitioner’s letter setting forth a return date not with a claim that the action should he dismissed, but with a letter seeking an adjournment of that date to conform with the return date of the cross petition.