In the Matter of Diane Ballard,
Appellant,
v.
HSBC Bank USA et al.,
Respondents.
2006 NY Int. 67
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 non-waivable jurisdictional defect under Executive Law § 298. We hold that it does not and that respondent HSBC waived its right to challenge the alleged defect.
Following a determination by respondent Edward A. Friedland, Acting Commissioner of the New York State Division of Human Rights, petitioner 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 the 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 "[j]urisdiction is proper pursuant to
Executive Law § 298."[2]
On August 6, HSBC responded to Ballard's
"CPLR 403 requires that a notice of petition specify the time and place 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. Moreover, 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 return 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 order 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 found 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 "implicates subject matter jurisdiction, not
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 Supreme 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 the 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, accompanying the petition."
Respondent HSBC argues that because § 298 requires the filing of a notice of petition and § 403 (a) requires that a notice of petition must include a 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 "upon the filing of a notice of petition and petition" and such requirement is a condition precedent to the 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,
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 hearing date" (4 3 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 interpretation 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 does not deprive a court of subject matter jurisdiction and, accordingly, is waived absent a timely objection by the responding party" (6 3 at 158, citing Fry, 89 NY2d at 718).
Here, the competence of the court and its authority to
hear 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
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 grounds. Raising no
objections to the manner of commencement, HSBC's verified cross
petition specifically asserted that "[j]urisdiction 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 motion at the
Accordingly, the order of the Appellate Division should be reversed, with costs, and the motion to dismiss the petition by respondent HSBC denied.
1 The Commissioner dismissed Ballard's claim that she was 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.
2 HSBC never answered the petition.
3 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.
4 Respondent HSBC also answered petitioner's letter setting forth a return date not with a claim that the action should be dismissed, but with a letter seeking an adjournment of that date to conform with the return date of the cross petition.