Argued April 27, 2005; decided June 9, 2005

Matter of Best Payphones v Department of Info. Tech. & Telecom. of City of N.Y., 1 AD3d 592, affirmed.

Chief Judge Kaye.

At issue before us is the date when an administrative determination became "final and binding upon the petitioner," so as to trigger the four-month limitations period for CPLR article 78 review (CPLR 217 [1]).

Petitioner, Best Payphones, Inc., owned and operated sidewalk payphones in New York City. Respondent, the New York City{**5 NY3d at 33} Department of Information Technology and Telecommunications (DOITT), regulates pay telephone operations on city streets. On August 11, 1999, the City approved petitioner's payphone franchise, subject to certain conditions, including the execution and delivery of a Franchise Agreement. [*2]

On January 13, 2000, DOITT notified petitioner that, because it did not submit executed copies of the Franchise Agreement and other required closing documents, it "failed to meet an essential condition of [city] approval, and the [City] can therefore be deemed to have determined not to approve a franchise for Best." The letter went on to state that Best had 60 days to enter into an agreement to sell its payphones to an entity that had been awarded a public pay telephone franchise by the City, or to remove its public pay telephones from the City's property, or to submit executed copies of the Franchise Agreement and all required closing documents. If petitioner failed within 60 days to pursue one of those courses, the letter continued, its phones would be subject to removal from city property and Best would be considered for all purposes a nonholder of a city franchise.

Best took none of the three options within the 60-day period. Thus, in early May 2000, the City issued notices of violation for illegal maintenance of such phones and began removing petitioner's phones from city property. On May 10, 2000, petitioner executed and delivered the Franchise Agreement to DOITT. On June 19, 2000, the City notified petitioner that it was unlawfully maintaining public telephones on city property.

On July 11, 2000, Best filed this article 78 petition seeking to compel DOITT to accept the executed Franchise Agreement, compel DOITT to allow it to sell its assets to another entity and, if necessary, to compel DOITT to allow petitioner to reapply for a franchise. Petitioner alleged that DOITT selectively imposed unlawful and discriminatory procedures and arbitrary deadlines on it, which resulted in the denial of a franchise. DOITT sought an order dismissing the petition pursuant to CPLR 217 and 306-b on the grounds that all but one of Best's claims were barred by the statute of limitations and that service of process was untimely as to all claims.

Supreme Court dismissed the petition on the ground of improper service. Although stating that it need not even reach the statute of limitations issue, the court found petitioner's claims barred by the four-month statute of limitations, reasoning{**5 NY3d at 34} that petitioner's claims accrued at the latest on January 13, 2000.^[FN*] The Appellate Division affirmed on the statute of limitations ground alone, agreeing that the agency determination became final and binding on January 13, and the petition was therefore untimely. We agree. [*3]

An article 78 proceeding must be brought "within four months after the determination to be reviewed becomes final and binding upon the petitioner" (CPLR 217 [1]). A strong public policy underlies the abbreviated statutory time frame: the operation of government agencies should not be unnecessarily clouded by potential litigation (see Solnick v Whalen, 49 NY2d 224, 232 [1980]).

This Court has identified two requirements for fixing the time when agency action is "final and binding upon the petitioner." First, the agency must have reached a definitive position on the issue that inflicts actual, concrete injury and second, the injury inflicted may not be prevented or significantly ameliorated by further administrative action or by steps available to the complaining party (see e.g. Stop-The-Barge v Cahill, 1 NY3d 218, 223 [2003]; Matter of Essex County v Zagata, 91 NY2d 447, 453 [1998]; see also Church of St. Paul & St. Andrew v Barwick, 67 NY2d 510, 519, 521 [1986], cert denied 479 US 985 [1986] [ripeness for review]).

In Essex, for example, we found agency action final when petitioner was notified that it was required to file a new application for its landfill proposal with the Adirondack Park Agency (APA) (91 NY2d at 451). At that point, the agency "left no doubt that there would be no further administrative action and that the expenditure of additional litigation expense and effort before the APA would do nothing to change the agency's position or alleviate appellants' injury" (id. at 454). Here, similarly, DOITT's January 13, 2000 letter left no doubt that the agency had reached a definitive position regarding petitioner's payphones that inflicted actual, concrete injury on Best. DOITT notified petitioner that it had to execute the agreement as proposed, sell the business to an approved entity or remove the phones. The 60-day grace period offered petitioner no opportunity to ameliorate the injury, or to avoid it, except by agreeing to the agency's demands. The January 13 letter held out no{**5 NY3d at 35} hope of further administrative action, or change in the agency's position, but left petitioner only with the choice of accepting DOITT's position or initiating suit. Thus, DOITT's action was final and binding upon petitioner on January 13, and its article 78 petition filed in July was untimely.

Accordingly, the order of the Appellate Division should be affirmed, with costs.

Judges G.B. Smith, Ciparick, Rosenblatt, Graffeo, Read and R.S. Smith concur.

Order affirmed, with costs.