The opinion of the court was delivered by: Daniel P. Conviser, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the printed Official Reports.
On July 10, 2008, Defendant Eastco Building Services Inc. ("Eastco") pled guilty to one count of Offering a False Instrument for Filing in the First Degree pursuant to Penal Law § 175.35, a Class E felony. Eastco is a company which contracts to provide building maintenance services to government agencies and private companies. In a written plea agreement signed on the date of the plea, Eastco admitted that it had engaged in a collusive bid with a second company on a New York City Department of Education contract. As a part of its plea, Eastco agreed to pay $100,000 to the District Attorney's office in a forfeiture stipulation. The owner and a high managerial agent of Eastco also entered misdemeanor pleas in separate actions in connection with the same criminal act.
On the date of sentencing, September 12, 2008, Eastco moved for the issuance of a Certificate of Relief from Civil Disabilities pursuant to Article 23 of the Correction Law (a "Certificate of Relief"). Eastco's attorney argued that Eastco had not previously been convicted of a crime, was statutorily eligible for the issuance of a Certificate of Relief and was a well-established and reputable company which had engaged in only one illegal action, which was the subject of its plea. Eastco pointed out that upon the issuance of a Certificate of Relief, an entity considering entering into a contract with Eastco could still consider its instant conviction and might determine not to contract with Eastco because of that conviction. But Eastco argued that granting the Certificate would allow Eastco to continue to enter into contracts it might otherwise be automatically barred from and allow Eastco's employees to continue working. The People indicated that they had no position on whether or not Eastco's application should be granted.The Court granted Eastco's application on the sentencing date and issued a Certificate of Relief related to all civil disabilities except provisions related to weapons and related to employment as an accountant, insurance agent, bank officer, bank teller, stockbroker or securities broker. Following the issuance of the Certificate of Relief, the New York City Department of Probation (the "Probation Department") contacted the Court and asked to be heard on the question of whether a corporation (as opposed to an individual defendant) was statutorily eligible to receive a Certificate of Relief from Civil Disabilities. The Probation Department argued that the statute did not authorize the issuance of a Certificate of Relief for a corporate defendant and moved to vacate the Certificate of Relief for Eastco. The Court subsequently heard oral argument on that question and later invited additional submissions from the parties on the matter.
For the reasons stated below, the motion of the Probation Department to vacate the Certificate of Relief granted to Eastco in this matter is granted and such Certificate of Relief is hereby revoked*fn1.
Article 23 of the Correction Law provides a procedure whereby an "eligible offender" may be relieved from any statutory forfeiture, disability or bar to employment arising automatically from a criminal conviction. A court is authorized to issue a Certificate of Relief for an offender who is convicted in that court, if the sentence imposed is a revocable one or does not require a commitment to state prison. Such a Certificate can eliminate all disabilities, forfeitures or bars to employment or may specify the specific bars to be eliminated. The statute also authorizes the State Parole Board to issue Certificates of Relief to eligible offenders who are released from prison. Correction Law § 703. That parole board authority does not apply to corporate defendants because corporations, obviously, cannot be incarcerated and then released from prison. Finally, the statute authorizes the Parole Board to issue a "Certificate of Good Conduct", an instrument similar to a Certificate of Relief, for individuals who have demonstrated "good conduct" for statutorily defined periods of time which vary depending upon the seriousness of the offender's criminal conviction.
The Certificate of Relief statute defines an "Eligible Offender" who may receive a Certificate of Relief as "a person who has been convicted of a crime or of an offense, but who has not been convicted more than once of a felony." Correction Law § 700 (1) (a).
The term "person" is not defined in the Correction Law. The term "person" is defined in the Penal Law as "a human being, and where appropriate, a public or private corporation, an unincorporated association, a partnership, a government or governmental instrumentality." Penal Law § 10.00 (7). It is pursuant to this definition, of course, that Eastco as a corporate entity was convicted in this case. It is notable that in defining the word "person" in other New York statutes, the legislature has often provided that the word "person" includes corporations or other business entities for all purposes, rather than only "where appropriate" as provided under the Penal Law*fn2.
The sole question here is whether the word "person" in Article 23 of the Correction Law includes only natural persons or also includes business entities, in this case, a corporation. As noted infra, this question has not been considered to any significant degree by courts in construing Article 23 of the Correction Law. The question of whether "persons" include "corporations" under other constitutional or statutory provisions of law has been considered in a myriad of circumstances by courts over the centuries. As one commentator has noted: "Whether the word "person", as used in the constitution or in a statute, includes corporations in general depends on the purpose and spirit of the provision using the word." McQuillin The Law of Municipal Corporations, October 2008, § 2.22 citing Cook County Illinois v. United States ex. rel. Chandler,538 U.S. 119 (2003). In the Cook County Illinois case, the United States Supreme Court held that the term "person" under the federal Qui Tam statute included municipal corporations and held that when the Qui Tam statute was enacted in 1863, the term "person" as used in the statute was commonly understood to include a corporation. The Court's early precedents in this regard continue to be vibrant in explaining why, under appropriate circumstances, a "person" can be properly construed as including a corporation:
A corporation "is, in short, an artificial person, existing in contemplation of law, and endowed with certain powers and franchises which, though they must be exercised through the medium of its natural members, are yet considered as subsisting in the corporation itself, as distinctly as if it were a real personage." Cook County Illinois v. ex. rel. Chandler, supra 583 U.S. 125, quoting Trustees of Dartmouth College v. Woodward, 4 Wheat 518, 4 L.Ed. 629 (1819)(opinion of Story J.).
The Court is aware of one reported decision in which the question at issue here was directly addressed. In Matter of Southland Corp. v. New York State Liquor Authority 181 AD2d 19 (1st Dept 1992) the Court upheld the trial court's dismissal of an Article 78 petition by a large operator and franchiser of convenience stores seeking to reverse a determination of the New York State Liquor Authority denying the appellant licenses for off-premises beer and wine sales. The Liquor Authority's determination was based on the fact that the bid-rigging conviction of the appellant corporation created a mandatory statutory bar to the issuance of such licenses under the State Alcoholic Beverage Control Law. In reciting the history of the case, the Court noted that the appellant had earlier applied to the New York State Parole Board for a Certificate of Relief but was told by the Board that corporations were not eligible for such certificates. It was then noted by the Court that:
In a decision dated December 13, 1990, Justice McQuillan observed that section 700(1)(a) of the Correction Law defines "eligible offender" as "a person who has been convicted of a crime or of an offense, but who has not been convicted more than once of a felony", and concluded that the term includes a corporate defendant. Nevertheless, Justice McQuillan denied Southland's application "solely because ...