New York State Court of Claims

New York State Court of Claims

GREEN v. STATE OF NEW YORK, #2000-005-567, Claim No. NONE, Motion No. M-60328


Synopsis


The Court declined to grant leave to file a late claim alleging a cause of action for malicious prosecution arising out of an investigation and administrative proceeding conducted by the Department of Motor Vehicles.

Case Information

UID:
2000-005-567
Claimant(s):
In the Matter of the Claim of DAVID GREEN, ROBERT GREEN AND DAVE GREEN AUTO WORLD, INC. The Court sua sponte amends the caption to reflect only the properly named defendant.
Claimant short name:
GREEN
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK
Footnote (defendant name) :
The Court sua sponte amends the caption to reflect only the properly named defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
NONE
Motion number(s):
M-60328
Cross-motion number(s):

Judge:
DONALD J. CORBETT, JR.
Claimant's attorney:
Michael T. DiPrima, Esq.
Defendant's attorney:
Eliot Spitzer, Attorney GeneralBy: Thomas G. Ramsay, Assistant Attorney General
Third-party defendant's attorney:

Signature date:
October 17, 2000
City:
Rochester
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

On October 20, 1999, the following papers, numbered 1 to 5, were read on motion by Claimants for permission to serve and file a late claim:
1,2 Notice of Motion and Affidavit with Exhibits Annexed
3 Defendant's Affirmation in Opposition dated October 13, 1999 with Exhibits Annexed
4 Claimant's letter reply dated October 18, 1999
5 Defendant's letter reply dated October 19, 1999

Upon the foregoing papers, this motion is denied.

Claimants seek permission to file a late claim pursuant to Court of Claims Act § 10(6) asserting a cause of action sounding in malicious prosecution. The proposed claim arises out of an investigation and subsequent administrative proceeding initiated by Department of Motor Vehicles (DMV) Investigator Ryan Lang concerning charges that Claimant Dave Green Auto World, Inc., violated the Vehicle and Traffic Law by knowingly selling vehicles with falsified odometer readings. The proceeding culminated in a decision of an Administrative Law Judge dated September 16, 1998 which, after a hearing, closed the case without adverse action against the corporation.

The moving papers were served upon the Defendant on September 16, 1999, one year to the day from the termination of the administrative proceeding and the last day on which the Claimants could make a motion for permission to file a malicious prosecution claim under the time constraints of section 10(6) and CPLR article 2 (see Court of Claims Act § 10[6]; CPLR 215[3]). Claimants filed a separate claim (Claim No. 101080-A) on September 16, 1999 alleging that unfounded criminal charges brought against claimants David Green and Robert Green and dismissed on October 16, 1998 resulted from the DMV investigation. An answer to that claim was filed on October 18, 1999. This decision has no bearing on Claim No. 101080-A.

Inasmuch as this motion is timely made, I have jurisdiction to grant relief under Court of Claims Act §10 (6) and I have considered the factors listed therein. Claimants offer no excuse for their failure to timely file, aside from an oblique suggestion that they only recently became aware that a cause of action for malicious prosecution against the State would lie as a result of the administrative decision. This explanation falls under the general category of ignorance of the law, and does not provide an acceptable excuse. Of course, one need not satisfy all statutory factors in order to be successful (Bay Terrace Coop. Section IV v New York State Employees' Retirement Sys. Policemen's & Firemen's Retirement Sys., 55 NY2d 979).

Claimants assert that the Defendant was on notice of the essential facts constituting the claim within the critical 90-day period after its accrual because the State was responsible for the investigation and prosecution of the allegations before the Administrative Law Judge and was also responsible for assisting the Monroe County District Attorney's Office in prosecuting the criminal charges. Notice will not be imputed to the State where the claimed knowledge is that of the alleged tortfeasor, not that of a person possessing the supervisory authority to initiate an investigation into the claim (see Witko v State of New York, 212 AD2d 889; Tarquinio v City of New York, 84 AD2d 265, 270, affd sub nom. Pierson v City of New York, 56 NY2d 950; Matter of Cooper v City of Rochester, 84 AD2d 947; Phillips v State of New York, 36 AD2d 679; Bommarito v State of New York, 35 AD2d 458). Even to the extent knowledge of some facts may be imputed to the Defendant by reason of its participation in the administrative proceeding, the Defendant was unaware of any allegations of wrongdoing and, therefore, had no occasion to investigate (see Remley v State of New York, 174 Misc 2d 523).

The parties have not addressed the issue of prejudice. Nevertheless, much of what transpired is likely memorialized in the records of DMV. Furthermore, less than a month after the expiration of the 90-day period, the Claimants served a notice of intention upon the Attorney General challenging the conduct of the DMV investigation insofar as it resulted in the prosecution of criminal charges against David and Robert Green (Exhibit A appended to Claimants' Affidavit). The notice of intention includes factual allegations as to the actions and motives of DMV Investigator Ryan Lang in pursuing an investigation, instigating the administrative proceeding and participating in the prosecution of the criminal charges. Absent a contention to the contrary, I find that the Defendant would suffer no substantial prejudice in the event the motion is granted.

The issue of the appearance of meritoriousness is pivotal since it would be futile to permit a defective claim to be filed, subject to dismissal, even if other factors tend to favor the request (Rosenhack v State of New York, 112 Misc 2d 967). A claim is said to have an appearance of merit when it is not patently groundless, frivolous or legally defective and there is reasonable cause to believe that a valid cause of action exists (Matter of Santana v New York State Thruway Authority, 92 Misc 2d 1). In order to sustain a cause of action for malicious prosecution, a claimant must show (1) the initiation of a proceeding, (2) termination of the proceeding in favor of claimant; (3) the absence of probable cause, and (4) actual malice (Colon v City of New York, 60 NY2d 78, 82; Broughton v State of New York, 37 NY2d 451, 457, cert denied sub nom Schanbarger v Kellogg, 423 US 929).

As a threshold matter, the Defendant contends that the administrative hearing held in this case is insufficient to serve as the predicate for a malicious prosecution action. In support of its position, the Defendant relies upon the 1933 Court of Appeals' holding in Al Raschid v News Syndicate Co. (265 NY 1) that a hearing before an Administrative Law Judge is not a judicial proceeding of such character as to serve as a predicate for a claim of malicious prosecution. Although Al Raschid v News Syndicate Co. has not been directly overruled, more recent appellate authority has consistently held that administrative proceedings which require a hearing and trial of the issues on evidence and testimony under oath, with the right of cross-examination, have sufficient attributes of judicial proceedings to support a cause of action for malicious prosecution (Groat v Town Board of Glenville, 73 AD2d 426, appeal dismissed 50 NY2d 928 [citing Fulton v Ingalls, 165 App Div 323, affd 214 NY 665]; see Campion Funeral Home v State of New York, 166 AD2d 32, lv denied 78 NY2d 859; Manti v New York City Transit Authority, 165 AD2d 373; O'Brien v Alexander, 101 F3d 1479 [2d Cir.]; Glenn v State of New York 144 Misc 2d 101; 59 NY Jur 2d, False Imprisonment and Malicious Prosecution § 49, at 313 [citing Restatement Torts 2d § 680]). However, as with any cause of action for malicious prosecution founded upon a civil proceeding, the claim must allege that the claimant suffered special damage to personal or property rights beyond those normally associated with being sued, such as interference from a provisional remedy or other "highly substantial and identifiable interference with person, property, or business" (Engel v CBS, Inc., 93 NY2d 195; Belsky v Lowenthal, 62 AD2d 319, affd 47 NY2d 820; Campion Funeral Home v State of New York, supra). Neither legal expenses in defending against the charges nor injury to reputation satisfy the injury to or interference with person or property requirement (Campion Funeral Home v State of New York, supra, at 37).

The administrative hearing at issue was conducted pursuant to Vehicle and Traffic Law §§415 and 417 to determine whether or not Dave Green Auto World Inc.'s dealer registration should be subject to any suspension, revocation, and/or civil penalty. The hearing required for such an action is sufficiently judicial in nature to support a cause of action for malicious prosecution (see Vehicle and Traffic Law §415[9-a]). Moreover, inasmuch as the ALJ's decision to close the case without adverse action against the facility was based upon a conclusion that DMV "failed to establish that the respondent facility knew, or should have known, that the vehicles' odometers and companion paperwork showing mileage had been tampered with and falsified or forged" (ALJ's Decision, Exhibit B appended to Claimants' Affidavit), the Claimants have demonstrated termination in their favor.

Nonetheless, the Claimants' allegations with respect to the remaining elements of malicious prosecution do not satisfy me that there is reasonable cause to believe a valid cause of action exists. Claimants give no indication that they suffered special damages, such as a temporary registration suspension, and their conclusory assertion that they endured "injury to their business" is unsupported by any factual averments, either in the proposed claim or the other papers submitted in support of this motion. Moreover, the proposed claim does not include allegations of fact from which a conclusion could be drawn that Investigator Ryan acted without probable cause.

Probable cause consists of actual or apparent facts strong enough to justify a reasonable person in the belief that he has lawful grounds to commence the action (Burt v Smith, 203 US 129; Colon v City of New York, supra, at 82). The Administrative Law Judge acknowledged that Dave Green Auto World, Inc., sold seven vehicles with incorrect odometer readings. Although the ALJ noted that some testimony and documentation suggested that the odometers had already been tampered with and/or documentation forged at the time the facility received the vehicles, and ultimately concluded that DMV failed to prove that Claimants had knowledge of the tampering and forgery, that determination standing alone does not support a conclusion that DMV lacked probable cause to continue the prosecution of the administrative charges (see Jenks v State of New York, 213 AD2d 513 [absent unequivocal exonerating evidence, possession of forged instrument provides probable cause for prosecution for criminal possession of forged instrument, notwithstanding claimants' denial of knowledge, an essential element of the crime], lv denied 86 NY2d 702; see also Callan v State of New York, 73 NY2d 731, reversed on the dissent below 134 AD2d 882). Finally, the proposed claim is devoid of any allegations of fact upon which a finding of malice could be based (see Nardelli v Stamberg, 44 NY2d 500; Broughton v State of New York, 37 NY2d 451, 457, supra).[1] Consequently, I cannot conclude that the proposed claim has an appearance of merit.

As to the existence of an alternative remedy, the Defendant points out that at the administrative hearing, the Claimants inculpated a business associate in the alleged wrongful conduct and suggests that a suit against that third party "may" provide Claimants with an alternative remedy. The Defendant's bald assertion, without elaboration as to a basis for liability that would provide an adequate substitute for the wrongs sought to be redressed herein, is unconvincing.

After balancing all the statutory factors, I decline to exercise my discretion to permit the proposed claim to be filed. The motion is denied.


October 17, 2000
Rochester, New York

HON. DONALD J. CORBETT, JR.
Judge of the Court of Claims




[1] Under the circumstances, I need not reach the question of whether and to what extent Investigator Ryan's actions were akin to those of a prosecutor, protected by absolute immunity, versus those of a police investigator, entitled to a qualified protection only (see Glenn v State of New York, 144 Misc 2d 101, supra, and cases cited therein).