KING v. THE STATE OF NEW YORK, #2000-007-020, Claim No. 95049, Motion Nos.
Claimants seek compensation for two tractor-trailer loads of liquor that were
seized by defendant while being transported to the St. Regis Mohawk Reservation.
Both sides moved for summary judgment. Defendant's motion granted and the claim
KING TRANSPORTATION SERVICES, INC. and REX W. SEITZ
Footnote (claimant name)
THE STATE OF NEW YORK
Footnote (defendant name)
John L. Bell
Zdarsky, Sawicki & Agostinelli(Patrick A. Dudley, Esq., of counsel)
Hon. Eliot Spitzer, Attorney General(Roger B. Williams, Esq., Assistant Attorney General, of counsel)
June 14, 2000
See also (multicaptioned
Defendant has made an application for an order granting summary judgment
dismissing the claim. Claimants have made an application for an order granting
partial summary judgment on the issue of liability. The motions were returnable
May 17, 2000. The following papers were read and considered by the court:
Notice of Motion, Affirmation of Roger B. Williams,
Esq., Annexed Exhibits, Defendant's Memorandum
of Law 1, 2, 3, 4
Notice of Cross-Motion, Affidavit of Patrick A.
Dudley, Esq., Annexed Exhibits, Affidavit of Rex
W. Seitz, Annexed Exhibits 5, 6, 7, 8, 9
Affirmation of Roger B. Williams, Esq., in
Opposition to Cross-Motion 10
Filed Papers: Claim, Answer 11, 12
The instant claim arises from the seizure by defendant of two tractor-trailer
loads of liquor being transported from Baltimore, Maryland, to Hogansburg on the
St. Regis Mohawk Reservation in late 1994. According to the affidavit of
claimant Rex W. Seitz, both of the seized tractor-trailers were owned by
claimant King Transportation Services, Inc. and were financed by him personally.
Claimants allege the seizures were wrongful and seek compensation pursuant to
Tax Law § 1845(h).
The initial seizure occurred on November 3, 1994, when one of claimants'
tractor-trailers was stopped by a State trooper on Route 37 in St. Lawrence
County for a purported violation of the Vehicle and Traffic Law. The trooper
discerned that the vehicle was transporting liquor and thus requested that the
driver, Glenn Matters, produce the manifest (see
, Tax Law § 428).
The shipment included 1680 cases of liquor. Although the manifest reflected
that the distributor was Prime Wine & Spirits of Las Vegas, Nevada, the
distributor's tax registration number was not contained in the
thus, giving rise to a presumption
that the liquor was being imported for sale or use by an unregistered
distributor (Tax Law § 428). The trooper therefore effected a temporary
seizure of the vehicle and contents pursuant to Tax Law § 1845(a).
The second seizure essentially mirrored the first seizure. On December 13,
1994, Glenn Matters was driving another of claimants' tractor-trailers with 1680
cases of liquor to be delivered in Hogansburg. He was stopped by a trooper in
St. Lawrence County for an alleged violation of the Vehicle and Traffic Law.
The manifest that he produced reflected the same essential information and
deficiencies as the prior manifest. The vehicle and contents were thus
On November 10, 1994, Supreme Court Justice David Demarest signed an order to
show cause regarding the application by the Department of Taxation and Finance
for a confirmation pursuant to Tax Law § 1845(c) of the temporary seizure
of November 3. A similar order was executed regarding the December 13 seizure
on December 20 by Acting Supreme Court Justice Eugene Nicandri. In April 1995,
Justice Demarest dismissed both the confirmation applications. The dismissals
were based upon his prior decision in similar cases that the court lacked
subject matter jurisdiction because the type of trade implicated, involving
Native Americans, was preempted by Federal law and Federal courts had exclusive
enforcement jurisdiction (New York State Dept. of Taxation & Fin. v St.
, 161 Misc 2d 383, mod
An appeal of Justice Demarest's
decision and several related cases involving the same issue was subsequently
considered by the Appellate Division, Third Department. The Third Department,
relying in part upon a recently decided case from the United States Supreme
reversed the dismissal of the
confirmation applications and remitted the matters to State Supreme Court
(New York State Dept. of Taxation & Fin. v Tyler Distrib. Ctrs
AD2d 936; see, New York State Dept. of Taxation & Fin. v St. Regis
, 217 AD2d 214, supra
). Upon remittal, Justice Demarest
dismissed the matters in the interest of justice. The dismissals were affirmed
upon appeal (New York State Dept. of Taxation & Fin. v Seitz
Claimants seek a recovery from defendant pursuant to Tax Law § 1845(h),
which provides the exclusive remedy for a wrongful seizure. In order to prevail
on a wrongful seizure claim, claimant must establish that the seizure was made
without reasonable cause and not in good faith (Tax Law § 1845[h]). In the
current motion before the court, the parties have set forth few factual
discrepancies, but rely instead primarily upon legal arguments to support their
respective positions. The matter is therefore ripe for summary disposition
(see, Van Alstine v Padula, 228 AD2d 909, 910, appeal dismissed 89
NY 2d 858).
It is undisputed that claimants' manifests on each occasion did not include
the distributor's tax registration number as required by statute and that such
omission constituted a statutory basis for the seizure. Claimant Rex W. Seitz
asserts in his affidavit that the reason that no registration number was set
forth on the manifest was his "good faith belief" that defendant lacked
authority to enforce the germane provisions of the Tax Law. He explains that
his belief in such regard was based upon Justice Demarest's decision in New
York State Dept. of Taxation & Fin. v St. Regis Group (supra).
Indeed, Justice Demarest's decision that the court lacked subject matter
jurisdiction over similar seizures had been rendered in May 1994, approximately
six months before the first of the two germane seizures. The decision of the
Appellate Division modifying Justice Demarest's reported decision was not
rendered until nearly a year after the subject seizures.
Claimants' argument, garbed in an appeal to basic fairness, is seductive.
Claimant Rex W. Seitz argues that he relied upon a court decision and, indeed,
argues that defendant's refusal to curtail its enforcement activities in light
of such decision was unjustifiable. The allure of claimants' argument does not,
however, hold up under scrutiny.
Although decisions of trial courts may, if well reasoned, be persuasive,
precedents are established by appellate courts (see generally, 28 NY Jur
2d, Courts and Judges, § 220). The Third Department has stated that "a
litigant who has trusted to the erroneous judgment of an inferior tribunal is
not entitled to be helped out by the courts" (Matter of Muller Dairies
[Baldwin], 242 App Div 296, 298). Judge Cardozo explained as follows
regarding reliance upon a trial court's decision:
"We will not help out the man who has trusted to the judgment of some inferior
court. In his case, the chance of miscalculation is felt to be a fair risk of
the game of life, not different in degree from the risk of any other
misconception of right or duty. He knows that he has taken a chance, which
caution often might have avoided. The judgment of a court of final appeal is
felt to stand upon a different basis" (Cardozo, The Nature of the Judicial
Process, at 146-147).
The Court of Appeals has noted that when one of its decisions was taken up for
review to the United States Supreme Court, an individual who engaged in certain
conduct in reliance on the Court of Appeals' decision "took his chances that the
decision * * * would be sustained" (Evans v Supreme Council of the Royal
Arcanum, 223 NY 497, 503).
Here, claimants chose to rely upon a decision of a trial level court at a time
when an appeal was pending from such decision. Claimants took a calculated
risk, ostensibly because they stood to gain financially if their position
ultimately prevailed. Certainly, claimants could have erred on the side of
caution and followed the statutory requirements until the jurisdictional issue
was addressed by an appellate court. The equities implicated by their reliance
on a trial court decision were not totally forgotten as reflected by the fact
that such equities formed a foundation for the decision to dismiss the
forfeiture proceedings in the interests of
While the perceived equities
provided a shield in the forfeiture action, they are insufficient to act as a
sword against defendant in the current claim. The appellate court
interpretation of the underlying law leads to the conclusion defendant acted
lawfully in the seizure and thus claimants cannot successfully establish the
merits of their claim.
ORDERED that defendant's motion is granted and the claim is dismissed;
and it is further
ORDERED that claimants' cross-motion is denied.
Plattsburgh, New York
HON. JOHN L. BELL
Judge of the Court of
Tax Law § 421 (1) provides, inter alia
, that no distributor may
import liquor into the State of New York for sale or use in the State unless
such distributor is properly registered with the Department of Taxation and
At the time Justice Demarest dismissed the subject applications the Appellate
Division had not yet issued its decision modifying Justice Demarest's prior
Department of Taxation & Fin. of N.Y. v Milhelm Attea & Bros
512 US 61.
Defendant points out that, subsequent to the dismissal in the interests of
justice and the affirmance of such dismissal, claimant Rex W. Seitz entered a
plea of guilty in the United States District Court, Northern District of New
York, to one count of violating 18 USC § 1264, a misdemeanor. In his plea,
claimant acknowledged, inter alia
, that he and others had knowingly and
unlawfully participated in the delivery of tractor-trailer loads of liquor to
individuals at the St. Regis Mohawk Reservation other than the persons to whom
the liquor was consigned.
Ironically, it appears that at least one of the tractor-trailers was
nevertheless ultimately forfeited as part of the plea bargain of claimant Rex W.
Seitz in Federal Court (see
, Exhibit K, at 17, Annexed to Affirmation of
Roger B. Williams, Esq.).