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Attorney(S)

John Haley of counsel (Bickford, Hahn Hayes, attorneys), for appellants. Jerome Tauber of counsel (Sipser, Weinstock, Harper Dorn, attorneys), for respondents.

Judges

Nancy E. Smith

Acts

Labor — Regulatory Provisions — Employee Retirement Income Security Program — Protection Of Employee Benefit Rights — Fiduciary Responsibility — Prohibited Transactions
Labor — Regulatory Provisions — Employee Retirement Income Security Program — Protection Of Employee Benefit Rights — Fiduciary Responsibility — Exemptions From Prohibited Transactions
Labor — General Provisions — Employee Retirement Income Security Program — Protection Of Employee Benefit Rights — Coverage
Labor — General Provisions — Employee Retirement Income Security Program — Protection Of Employee Benefit Rights — Definitions
Internal Revenue Code — Income Taxes — Normal Taxes And Surtaxes — Deferred Compensation, Etc. — Pension, Profit-Sharing, Stock Bonus Plans, Etc. — Special Rules — Definitions And Special Rules

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Smart Summary

Rubin v. Schwartz — Appellate Division, First Department (July 19, 1990)

Factual and Procedural Background

Defendant Committee of Interns and Residents (CIR) established two employee benefit plans: the House Staff Benefits Plan (HSBP) covering doctors employed by public hospitals with collective bargaining agreements with CIR, and the Voluntary Hospitals House Staff Benefits Plan (VHBP) covering doctors at voluntary hospitals. Each plan was managed by its own board of trustees, whose members were officers of CIR.

Plaintiffs (Donald Rubin, Inc. and Donald Rubin) were retained as consultants and plan administrator by HSBP pursuant to a contract executed July 19, 1983, for an initial five-year term (July 19, 1983 — July 18, 1988). The contract contained an automatic renewal clause providing that it would renew for successive five-year terms unless either party mailed notice of non-renewal at least 180 days before the end of the term.

In June 1988 HSBP relieved plaintiffs of administrator duties, and by letter dated July 15, 1988 defendant Schwartz notified plaintiffs their services were terminated effective July 18, 1988 (the contract's initial term end date). In August 1988 plaintiffs sued for damages claiming breach of the automatic renewal provision (seeking enforcement of renewal) against HSBP and its trustees and for tortious interference regarding VHBP and two other plans. Plaintiffs did not assert claims based on the initial July 1983–July 1988 term.

Defendants moved to dismiss under CPLR 3211(a), arguing that the automatic renewal provision was unenforceable under New York General Obligations Law § 5-903 (for service contracts to or for real or personal property where the supplier must give notice to preserve the clause) because plaintiffs failed to give the statutorily required notice, and alternatively that ERISA (29 U.S.C. §§ 1106, 1108 and related regulations) barred enforcement because administrative contracts must permit termination upon reasonably short notice.

The IAS court granted dismissal, concluding the contract fell within General Obligations Law § 5-903 and plaintiffs had failed to give the statutorily required notice. On appeal, the Appellate Division reversed, denied the motion to dismiss, and reinstated the complaint.

Legal Issues Presented

Whether an agreement retaining plaintiffs to administer defendants' employee benefit plan, containing an automatic renewal provision, is enforceable under New York General Obligations Law § 5-903 (i.e., whether § 5-903 invalidates the automatic renewal clause because of failure to give the statutory notice).
Whether the contract is unenforceable under ERISA provisions (notably §§ 406 and 408 and accompanying regulations) that, according to defendants, prohibit administrative contracts that do not allow termination on reasonably short notice — and, relatedly, whether HSBP is subject to Title I of ERISA or is exempt as a "governmental plan" under 29 U.S.C. § 1003(b)(1) and the definition in § 1002(32).

Arguments of the Parties

Plaintiffs' (Appellants') Position

Plaintiffs asserted a breach of contract claim based on the automatic renewal provision of the 1983 agreement and sought damages for termination contrary to that provision.
Plaintiffs also asserted tortious interference claims relating to their role as administrator of VHBP and two other plans.
The complaint did not assert claims for the initial 1983–1988 contract term.

Defendants' (Respondents') Position

Defendants argued the contract concerned the furnishing of "service ... to or for ... personal property" and therefore falls within General Obligations Law § 5-903; because plaintiffs failed to give the statutory notice, the automatic renewal provision is unenforceable.
Defendants alternatively contended the contract is unenforceable under ERISA §§ 406 and 408 (and cited 29 C.F.R. § 550.408b-2(c)), which they read as prohibiting administrative contracts that do not permit termination upon "reasonably short notice." Thus, enforcement of the renewal clause would be barred by ERISA.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Peerless Towel Supply Co. v. Triton Press, 3 A.D.2d 249 (1st Dept 1957)	Illustration of voiding automatic renewal in service-supply contracts under predecessor remedial statutes.	Used as an example of earlier remedial application of automatic-renewal restrictions to supply/service contracts; supports historical scope of statute applied to property-service contracts.
Telephone Secretarial Serv. v. Sherman, 49 Misc.2d 802 (Nassau Dist. Ct. 1966), aff'd 28 A.D.2d 1010	Application of §5-903 predecessor legislation to telephone answering services and legislative history describing purpose to protect small businesses.	Cited for legislative background showing §5-903 aimed at automatic-renewal protection for service-type contracts—court contrasted that purpose with present personal services retainer.
Feder v. Caliguira, 8 N.Y.2d 400	Invalidation of an automatic-renewal lease for operation of a jukebox as within remedial scope of statute.	Included among cases where §5-903 (and predecessors) applied to services to or maintenance of property; court used these to delineate typical §5-903 applications that differ from current personal services contract.
Leibman v. Allied Automatic Indus. (NYLJ Sept. 29, 1976, Civ Ct, Queens)	Application of statute to installation and servicing of coin-operated laundry machines.	Listed as one of several precedents invalidating automatic renewal clauses in property-service contexts; used to show contrast with the present consultant/administrator retainer.
Dime Laundry Serv. v. 230 Apts. Corp., 120 Misc.2d 399 (Sup Ct, N.Y. County 1983)	Application to coin laundry service contracts.	Also cited as an example of §5-903's use in property-related service contracts; court emphasized the difference between those contracts and the subject personal services retainer.
Mount Vernon Amusement Co. v. Georgian Rest. Corp., 30 A.D.2d 823 (2d Dept 1968)	Invalidation of automatic-renewal clauses in installation and servicing of cigarette vending machines.	Another illustrative precedent demonstrating statute's application to property-service agreements, used to contrast the present facts.
Associated Press v. Riddle, 496 F. Supp. 119 (E.D. Ark. 1980); Associated Press v. Berger, 460 F. Supp. 1003 (W.D. Tex. 1978)	Application of statute (or its principles) to provision of wire services.	Cited to show §5-903 and predecessors had been applied to services related to property or dissemination services; court treated these as inapposite to an advisory/administrator retainer.
Harris v. Adams Co. Real Estate, 62 Misc.2d 749 (Civ Ct, N.Y. County 1970)	Application to management of rental property.	Listed among precedents applying the remedial rule to property-management/service contracts; used to frame the class of contracts to which §5-903 has been applied historically.
Prial v. Supreme Ct. Uniformed Officers Assn., 91 Misc.2d 115 (App Term, 1st Dept 1977); see 89 Misc.2d 287 (Civ Ct) aff'd 91 Misc.2d 115	Held General Obligations Law §5-903 inapplicable to a two-year general retainer for legal advice and counsel (a personal services contract with renewal clause).	The court relied on Prial as directly analogous: a retainer for personal services (attorney advice) with renewal was held outside §5-903, supporting the conclusion that plaintiffs' consulting/administrative retainer likewise falls outside the statute.
Rose v. Long Is. R.R. Pension Plan, 828 F.2d 910 (2d Cir. 1987)	Application of IRS regulatory factors (used under 26 U.S.C. §414(d)) to determine whether an entity is an "agency or instrumentality" for purposes of ERISA's governmental plan exemption.	Court adopted the Rose court's use of six factors to determine governmental-plan status and applied those factors to conclude HSBP is a governmental plan exempt from ERISA Title I.
Feinstein v. Lewis, 477 F. Supp. 1256 (S.D.N.Y. 1979), aff'd without opn, 622 F.2d 573 (2d Cir. 1980)	Found welfare funds established pursuant to collective bargaining among school districts and a union to be "established" by governmental entities and thus governmental plans exempt from ERISA.	Cited to support conclusion that plans created under public-employer collective bargaining arrangements may be governmental plans exempt from ERISA; used analogy to HSBP factual structure.
Roy v. Teachers Ins. Annuity Assn., 878 F.2d 47 (2d Cir. 1989)	Held New York State University Optional Retirement Program is a governmental plan "established or maintained" by the State.	Used as additional authority supporting that certain public-employee plans qualify as governmental plans exempt from Title I of ERISA.

Court's Reasoning and Analysis

The court undertook a two-part analysis corresponding to the principal defenses asserted by defendants: (1) whether General Obligations Law § 5-903 applied to the contract's automatic renewal clause, and (2) whether ERISA barred enforcement because HSBP was an ERISA-covered plan or because ERISA required administrative contracts to permit reasonably short notice termination.

On § 5-903, the court reviewed the statute's language, legislative history, and precedent showing its remedial application to service or maintenance contracts for real or personal property (examples included vending-machine leases, laundry services, wire services and similar arrangements). The court emphasized that in those precedents the contract provided for services "to or maintenance of some real or personal property."

The court concluded the contract at issue was a personal services retainer: plaintiffs were retained to provide consulting services and administrative advice to trustees in administering the benefit plan for participating doctors and their dependents. The trustees retained primary responsibility and control of the fund, kept control of money and investments, and had additional outside investment managers. The record (including trustees' minutes) showed plaintiff Donald Rubin's role was advisory—offering recommendations on budgeting, staffing, office space and computer systems—rather than exercising control over property or servicing property.

Applying that analysis, the court rejected the IAS court's reasoning that because the plan fund might be characterized as "personal property" and because plaintiffs' role was to ensure continuation of the fund, § 5-903 should apply. The court concluded that treating every personal services or employment retainer that tangentially concerns an employer-owned item of personal property as within § 5-903 would extend the statute well beyond its intended remedial scope. The court found the present agreement more analogous to the personal services retainer in Prial (an attorney retainer with renewal), to which § 5-903 was held inapplicable.

Regarding ERISA, the court addressed whether HSBP was subject to Title I. It concluded that HSBP is a "governmental plan" exempt from Title I of ERISA under 29 U.S.C. § 1003(b)(1) and the definition in 29 U.S.C. § 1002(32). The court applied the six-factor test discussed in Rose (which borrows IRS/26 U.S.C. § 414(d) factors) — factors concerning government purpose/function, performance on behalf of a state or political subdivision, involvement of private interests, public control/supervision, statutory authority, and financial autonomy — and determined that municipal hospitals employing the plan enrollees are agencies or instrumentalities of a political subdivision, and that HSBP was established or maintained by such entities for their employees. The court cited Feinstein and Roy as consistent authority for treating certain employer/union-established plans involving public employers as governmental plans exempt from ERISA Title I.

Because the court found § 5-903 inapplicable to the personal services retainer and HSBP exempt from Title I of ERISA, the statutory and regulatory bars asserted by defendants did not render the automatic renewal clause unenforceable as a matter of law at the dismissal stage. The Appellate Division therefore reversed the IAS court's dismissal, denied the defendants' motion to dismiss, and reinstated the complaint.

Holding and Implications

Holding: The Appellate Division reversed the Supreme Court's dismissal and held that (1) the automatic-renewal provision in the plaintiffs' personal services retainer is not rendered unenforceable as a matter of law by New York General Obligations Law § 5-903, because the agreement is a personal services contract rather than a contract for service to or maintenance of real or personal property; and (2) the House Staff Benefits Plan (HSBP) is a "governmental plan" exempt from Title I of ERISA under 29 U.S.C. § 1003(b)(1) and § 1002(32), so ERISA-based defenses to enforcement of the renewal clause do not apply here.

Result: The order and judgment of the Supreme Court, New York County (April 19, 1989), and the subsequent judgment (May 2, 1989) dismissing the complaint were unanimously reversed; the defendants' motion to dismiss was denied; and the complaint was reinstated, without costs and without disbursements.

Implications: The decision directly reinstates plaintiffs' claims and denies dismissal. The opinion explains its reasoning distinguishing personal services retainers from property-service contracts under § 5-903 and finds HSBP exempt from ERISA Title I on the facts presented. The opinion does not assert that it establishes a broad new rule beyond its application here; it relies on prior precedent (including Prial, Rose and Feinstein) to resolve the questions on the record.

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DONALD RUBIN, INC., et al., Appellants, v. ROBERT SCHWARTZ et al., Respondents.

SMITH, J.

The issue here is whether an agreement retaining plaintiffs to administer defendants' employee benefits plan, which contains a provision for automatic renewal of the agreement, violates section 5-903 Gen. Oblig. of the General Obligations Law or sections 406 and 408 of the Employee Retirement Income Security Act of 1974 (ERISA) ( 29 U.S.C. § 1106, 1108).

Defendant Committee of Interns and Residents (CIR) is a union of doctors employed as interns and residents in New York City metropolitan area hospitals. CIR established two employee benefit plans providing health and medical benefits to its members. The first, defendant House Staff Benefits Plan (HSBP), covers doctors employed by public hospitals having a collective bargaining agreement with CIR. HSBP is funded by contributions from the City of New York and other municipalities. The second, the Voluntary Hospitals House Staff Benefits Plan (VHBP), covers doctors employed at voluntary hospitals. Each plan is managed by its own board of trustees members of which are officers of CIR.

In 1979 HSBP retained plaintiff Donald Rubin, Inc., a New York corporation solely owned by plaintiff Donald Rubin, to provide consulting services. Under the terms of a five-year contract executed with HSBP trustees on July 19, 1983, Donald Rubin, Inc. agreed to provide consulting services to HSBP and to serve as the plan administrator.

The contract provided: "This agreement shall commence on July 19, 1983 and terminate July 18, 1988. This agreement shall automatically be renewed for successive additional five year terms unless either party shall notify the other in writing by registered mail of its desire not to extend the agreement at least 180 days prior to the end of the initial term or any successive term."

Donald Rubin, Inc. entered into similar agreements with VHBP and with two other service plans established by CIR.

In June 1988, as a result of a dispute between Rubin and defendant Jonathan House, executive director of CIR, HSBP advised Rubin that HSBP "hereby relieve[s] you personally and Donald Rubin, Inc. of any and all duties, responsibilities and authorities which you may have as Administrator of the Plan". By letter of July 15, 1988 defendant Robert Schwartz, chairman of the board of trustees of HSBP, notified plaintiffs that their services were terminated effective July 18, 1988, the date upon which the first term of the contract was scheduled to end.

Plaintiffs in August 1988 commenced this action for damages against HSBP and its trustees for breach of contract under the automatic renewal provision and against all the defendants for tortious interference with plaintiffs' ability to act as administrator of VHBP and of the two other plans. Plaintiffs make no claim under the initial July 1983 to July 1988 term of the contract.

In lieu of answering, all defendants moved pursuant to CPLR 3211 (a) to dismiss the complaint, raising section 5-903 Gen. Oblig. of the General Obligations Law and sections 406 and 408 of ERISA ( 29 U.S.C. § 1106, 1108) as a bar to enforcement of the automatic renewal provision of the contract. Defendants maintain that since the contract was for the furnishing of "service * * * to or for * * * personal property" (General Obligations Law § 5-903) and plaintiffs failed to give defendants timely notice of its reliance on the automatic renewal provision, the contract is unenforceable. Defendants also maintain that the contract is unenforceable under ERISA §§ 406, 408 (b) (2) and 29 C.F.R. § 550.408b-2 (c), which prohibit administrative contracts which do not provide for termination upon "reasonably short notice".

The IAS court granted the motion to dismiss on the grounds that the contract fell within the scope of General Obligations Law § 5-903 and that the plaintiff had failed to give the notice required by that section.

The contract was for a five-year period at a specified annual rate of compensation. It is undisputed that HSBP did not give timely notice of its intention not to continue plaintiff's contract as required by the agreement and that plaintiffs failed to give the notice required by General Obligations Law § 5-903. There is also no claim by defendants that the nonrenewal was for cause.

Subdivision (2) of section 5-903 Gen. Oblig. of the General Obligations Law provides: "No provision of a contract for service, maintenance or repair to or for any real or personal property which states that the term of the contract shall be deemed renewed for a specified additional period unless the person receiving the service * * * gives notice to the person furnishing such * * * of his intention to terminate the contract at the expiration of such term, shall be enforceable * * * unless the person furnishing the service * * * at least fifteen days and not more than thirty days previous to the time specified for serving such notice upon him, shall give to the person receiving the service * * * written notice * * * calling the attention of that person to the existence of such provision in the contract."

Restrictions on automatic renewal clauses were first applied to leases of real property. (Real Property Law former § 230, as amended by L 1936, ch 702.) Former section 399 Gen. Bus. of the General Business Law, enacted in 1953 (L 1953, ch 701), extended this restriction to leases of personal property. (See, Peerless Towel Supply Co. v. Triton Press, 3 A.D.2d 249 [1st Dept 1957] [voiding renewal of a towel and soap supply contract as within this remedial provision].) The provisions of General Obligations Law § 5-903 relating to "contract[s] for service, maintenance or repair to or for any real or personal property" were first adopted in 1961 as General Business Law § 399-a. (L 1961, ch 507.) A supporting memorandum by the Attorney-General, who endorsed the bill, described the legislation as applying to "`automatic renewal provisions contained in service-type contracts'" and to a "`contractor furnishing maintenance, or repair services'". The memorandum refers to the measure as one designed to protect "`small businessmen who unwittingly find themselves "married" to contracts for sign maintenance, laundry and linen supplies and a variety of other services.'" (Telephone Secretarial Serv. v. Sherman, 49 Misc.2d 802, 804 [Nassau Dist Ct 1966] [quoting N.Y. Legis Ann, at 52], affd 28 A.D.2d 1010.)

Thus, General Obligations Law § 5-903 and its predecessor General Business Law § 399-a have been held to invalidate a lease agreement for the operation of a jukebox in a restaurant (Feder v. Caliguira, 8 N.Y.2d 400); the installation and servicing of coin-operated laundry machines (Leibman v. Allied Automatic Indus., NYLJ Sept. 29, 1976, at 16, col 5 [Civ Ct, Queens County 1976]; Dime Laundry Serv. v. 230 Apts. Corp., 120 Misc.2d 399 [Sup Ct, N.Y. County 1983]); the provision of telephone answering services (Telephone Secretarial Serv. v. Sherman, supra); installation and servicing of cigarette vending machines (Mount Vernon Amusement Co. v. Georgian Rest. Corp., 30 A.D.2d 823 [2d Dept 1968]); the provision of wire services (Associated Press v Riddle, 496 F. Supp. 119 [ED Ark 1980]; Associated Press v Berger, 460 F. Supp. 1003 [WD Tex 1978]); and the management of rental property (Harris v. Adams Co. Real Estate, 62 Misc.2d 749 [Civ Ct, N.Y. County 1970]).

In each of these cases the agreement provided for services to or maintenance of some real or personal property. The contract herein, however, is in the nature of a personal services contract requiring that plaintiffs provide "consulting services" to the trustees and administer its plan for the benefit of 2,600 participating doctors and their dependents.

We cannot agree with the reasoning of the IAS court that because the purpose of retaining plaintiffs' services was to ensure continuation of the "fund" for the good of its beneficiaries and because the "fund" is "personal property", plaintiffs' administration of same brings the contract within General Obligations Law § 5-903.

The trustees bear primary responsibility for the plan and retained plaintiffs to render advice as an aid to them in making their decisions regarding benefits. The property, money and income which constitute the "fund" remained in the control of the trustees who retained, in addition to plaintiffs, an outside investment manager to advise them on plan investments. The minutes of HSBP board of trustees meetings, contained in the record, reflect that plaintiff Donald Rubin, in his capacity as fund administrator, merely offered advice and recommendations to the board on such matters as budget, staffing, office space and revamping the HSBP computer system.

In Prial v. Supreme Ct. Uniformed Officers Assn. ( 91 Misc.2d 115 [App Term, 1st Dept 1977]), the Appellate Term found General Obligations Law § 5-903 inapplicable to a two-year general retainer under which an attorney was to provide advice and counsel to a labor union on a variety of legal matters. The retainer was for a specified annual rate of compensation and provided that it was to be renewed for another year unless either party gave timely written notice to the other of that party's intent not to renew. The agreement herein is akin to the personal services contract in Prial.

We reject defendants' argument that General Obligations Law § 5-903 on its face includes "services" to any type of "personal property" and that the latter term, as defined by General Construction Law § 39, includes administrative services contracts. If this position were accepted, every employment contract containing an automatic renewal provision would fall within the ambit of General Obligations Law § 5-903, a result which does not appear to have been contemplated by the legislation. (See, Prial v. Supreme Ct. Uniformed Officers Assn., 89 Misc.2d 287, 289-290 [Civ Ct, N.Y. County 1977], affd 91 Misc.2d 115, supra.) In every employment situation or professional retainer agreement the person hired is likely to come in contact with an item of personal property owned by the employer which is arguably serviced or maintained by such person.

Counsel for HSBP appears to have negotiated and prepared the subject contract and the agreement appears on HSBP letterhead. Schwartz denies that he or any of the codefendant trustees, who are elected annually, were aware of the automatic renewal clause. However, the record reflects that a copy of the contract was set forth in full in the minutes of the trustees' meeting of July 19, 1983. Thus, we are not concerned herein with a small business "unwittingly" locked into the automatic renewal of a service contract.

Finally, we conclude that HSBP, is a "governmental plan", exempt from the provisions of title I of ERISA. ( 29 U.S.C. § 1003 [b] [1]; § 1002 [32]; Rose v. Long Is. R.R. Pension Plan, 828 F.2d 910 [2d Cir 1987], cert denied 485 U.S. 936; Feinstein v. Lewis, 477 F. Supp. 1256 [S.D.N.Y. 1979], affd without opn 622 F.2d 573 [2d Cir 1980].)

ERISA § 4 (b) (1) ( 29 U.S.C. § 1003 [b] [1]) states:

"The provisions of this title shall not apply to any employee benefit plan if —

"(1) such plan is a governmental plan (as defined in section 3 (32)".

The term "governmental plan" is defined by 29 U.S.C. § 1002 (32) as: "a plan established or maintained for its employees by the Government of the United States, by the government of any State or political subdivision thereof, or by any agency or instrumentality of any of the foregoing".

Thus, the HSBP plan is exempt from title I of ERISA if it was "established" or is "maintained" (1) by the government of a State, (2) by a political subdivision of a State, or (3) by an agency or instrumentality of either of the foregoing. (Rose v Long Is. R.R. Pension Plan, supra, 828 F.2d, at 915.)

In Rose v. Long Is. R.R. Pension Plan (supra), the Second Circuit stated that certain definitions used in regulations of the Internal Revenue Service (IRS) could be applied to ERISA. The Federal tax law ( 26 U.S.C. § 414 [d]) and ERISA ( 29 U.S.C. § 1002) similarly define the term "governmental plan". The IRS has used six factors in determining whether or not an "agency" or "instrumentality" is a subdivision of the State within the meaning of 26 U.S.C. § 414 (d). These factors, discussed by the Second Circuit in Rose v. Long Is. R.R. Pension Plan, are equally applicable to our determination of whether HSBP is a governmental plan under ERISA. They are: (1) whether the body is used for a government purpose and performs a government function, (2) whether it performs its function on behalf of a State or political subdivision, (3) whether private interests are involved or government has the power or interests of owners, (4) whether control and supervision is vested in public authority, (5) whether statutory or other authority is necessary for the creation and/or use of the instrumentality and (6) the degree of financial autonomy. (828 F.2d, supra, at 918.)

Applying this standard, it is clear that the New York City and County hospitals which employ physician enrollees of the HSBP plan are "agencies" or "instrumentalities" of a State or of a political subdivision of a State. Municipal hospitals are creatures of legislative or other government action, they perform a function on behalf of the municipality, and they are funded and regulated by government.

Similarly, we conclude that the HSBP plan was "established or maintained" by an agency or instrumentality of a State or its political subdivision for the benefit of its employees. In Feinstein v. Lewis (supra), the District Court found that employee welfare funds established pursuant to a collective bargaining agreement between several school districts and a union were "established" by a State, political subdivision, agency or instrumentality thereof, and, thus, were "governmental plan[s]" exempt from title I of ERISA. The District Court rejected the contention that since the plans were not a creature of legislative enactment or other unilateral government action and were each administered by a board consisting of employer and union representatives, the plans were neither "established" nor "maintained" by governmental entities. The court stated: "Congress, in exempting governmental plans, was concerned more with the governmental nature of public employees and public employers than with the details of how a plan was established or maintained." (477 F Supp, supra, at 1262; see also, Roy v Teachers Ins. Annuity Assn., 878 F.2d 47 [2d Cir 1989] [holding, New York State University Optional Retirement Program is a governmental plan "established or maintained" by the State].)

Accordingly, the order and judgment (one paper) of the Supreme Court, New York County (Beatrice Shainswit, J.), entered April 19, 1989, and a judgment of said court entered thereon on May 2, 1989, dismissing the complaint should be reversed, on the law, the motion to dismiss denied, and the complaint reinstated without costs.

MILONAS, J.P., ROSENBERGER and ELLERIN, JJ., concur.

Order and judgment (one paper), Supreme Court, New York County, entered on April 19, 1989, and a judgment of said court entered thereon on May 2, 1989, unanimously reversed, on the law, without costs and without disbursements, the motion to dismiss denied and the complaint reinstated.

RUBIN, INC. v. SCHWARTZ