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1
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OPINION
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EXTRACTED KEY WORDS
NY2D MATTER REINSTATEMENT AUTHORITY PENALTY MEMORANDUM DETERMINATION RESTITUTION AWARD PAYMENT KOSTIKA CUOMO SUPRA JUDGE YORK PUBLICATION INSOFAR COSTS STATE ORDERING PAID GOLD LOMENZO LICENSE PROFIT SALE IMPOSING PRACTICES COMMISSIONS REVIEW SUBMISSIONS PURSUANT |
IN THE MATTER OF GIANFRANCO DONATI v. GAIL S. SHAFFER, AS SECRETARY OF STATE
OF THE STATE OF NEW YORK,
83 N.Y.2d 828, 633 N.E.2d 1099, 611 N.Y.S.2d 495 (1994).
March 24, 1994
2 No. 140 SSM 6 (1994 NY Int. 048)
Decided March 24, 1994
_________________________________________________________________
This memorandum is uncorrected and subject to revision before
publication in the New York Reports.
MEMORANDUM:
The order of the Appellate Division should be reversed, insofar as
appealed from, with costs, and the determination of the Secretary of
State ordering interest to be paid as part of the restitution award
should be reinstated.
This Court granted leave to the Secretary of State to decide whether
that officer has the authority to order payment of interest on
restitution (Real Property Law §441-c).
In Matter of Gold v Lomenzo (29 NY2d 468) we held the Secretary of
State has "inherent authority" to impose conditions on the
reinstatement of a broker's license -- including the payment of
restitution (id., at 479). Thereafter, we upheld a penalty imposed by
the Secretary of State that required a realtor to return the
"ill-gotten profit" from the sale of property, against a challenge
that the penalty was unduly harsh (see, Kostika v Cuomo, 41 NY2d 673,
677). Concluding that "the secretary must be accorded broad discretion
in imposing penalties" to safeguard the public interest and discourage
improper practices, we held that the penalty imposed -- the return of
profit on the sale transaction -- most effectively accomplished these
goals (id.).
Petitioner's contention that, absent statutory authorization or a
contractual agreement, the Secretary is without authority to require
interest payments fails in light of this Court's holdings in Matter of
Gold v Lomenzo (29 NY2d 468, supra) and Kostika v Cuomo (41 NY2d 673,
supra). Interest on wrongfully obtained commissions is not an award
separate from restitution but, rather, represents the present economic
value of the restitution itself. The imposition of a condition
precedent to reinstatement of a suspended broker's license of
restitution plus interest removes the incentive to obtain commissions
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