Attorney's Affidavit, with Exhibit (Proposed Amended Claim) (CM-67496) 4
Affidavit of Donald R. Adair (CM-67496) 5
Affidavit of John T. Purves (CM-67496) 6
Affidavit of Mark P. Boerman, with Exhibits (CM-67496) 7
Claimants' Memorandum of Law (CM-67496) 8
In the original claim, claimants have asserted causes of action alleging
negligence, conversion, tortious interference with business, prima facie
tort, denial of due process under the 14th Amendment of the United States
Constitution, denial of equal protection, unjust taking without due process, and
deprivation of civil rights under 42 USC § 1983.
The claim has its genesis in a criminal investigation instituted by the State
Insurance Fund against one Mark Boerman. On April 5, 2001,
investigators executed a search warrant of claimants' premises at 209-213 East
Main Street, Palmyra, New York, and in the process of this search, seized
records, computers, and computer servers from the offices. The records and
equipment were retained by defendant during its continued investigation of Mr.
Boerman. Eventually, in November, 2002, a 38 count indictment was returned
against Mr. Boerman by the grand jury of Monroe County, alleging a series of
insurance frauds committed by Mr. Boerman through several businesses.
Subsequently, Mr. Boerman entered a guilty plea to Offering a False
Instrument for Filing in the First Degree on March 24, 2003 in Monroe County
From the papers submitted in connection with both the motion and cross-motion,
it is apparent that Mr. Boerman was, in some manner or another, actively
involved in the operations of each of the listed claimants, whether as corporate
officer, majority shareholder, and/or manager. It is equally clear, however,
from the same papers that the indictment was handed down against
Mr. Boerman individually, and there was no indictment issued against any of
the businesses proceeding as claimants in this action.
All of the causes of action asserted by claimants, whether in the original
claim or the proposed amended claim, are based upon the fact that the computers,
computer servers, and information stored therein were all continuously retained
by defendant during the pendency of the criminal investigation, from April 5,
2001, up to the time that Mr. Boerman plead guilty in March, 2003.
Additionally, it is also apparent that upon said conviction, the computer
equipment was still not returned to claimants, but rather was turned over to the
United States Attorney pursuant to a federal subpoena in connection with a
federal criminal investigation. According to claimants' attorney, the equipment
has now been returned to claimants by agents of the federal government, and no
federal criminal proceedings have been instituted against any of the claimants
The claimants allege, in both the original claim and proposed amended claim,
that representatives of the claimants made numerous requests to defendant for
the return of the equipment, and that defendant's agents were made well aware
that such equipment was absolutely essential for the conduct of claimants'
businesses. Claimants further allege that agents of the defendant made numerous
promises and representations that the equipment would be returned within a
certain time-frame, and that such representations were relied upon, to their
detriment, by claimants. As a result of the continued retention of the
computers and information stored therein by defendant, claimants contend that
they were unable to conduct their businesses and were forced by these
circumstances to terminate operations.
As set forth above, defendant now seeks to dismiss each and every cause of
action asserted in the original claim. In their cross-motion, claimants,
however, are requesting permission to amend certain of these causes of action,
as well as seeking permission to assert additional causes of action based upon
the same alleged conduct of defendant. Additionally, claimants have also
indicated, by their attorney's affirmation, that they wish to withdraw certain
causes of action set forth in the original claim.
Specifically, and as set forth in their attorney's affidavit (see Item 4),
claimants have indicated that the cause of action for prima facie tort is
to be withdrawn.
Also, after apparently realizing that the Court of Claims does not have
jurisdiction over federal constitutional tort claims (see, Zulu v State of
New York, 2001 WL 880833 [ct cl 2001]), claimants seek to withdraw their
cause of action alleging violations of the due process clause of the
14th Amendment, their cause of action alleging a denial of equal protection
under the 5th Amendment, and their cause of action for unjust taking without
compensation or due process arising under the 5th Amendment. Similarly,
claimants' cause of action alleging a violation of claimants' federal civil
rights under 42 USC § 1983 cannot be maintained against the State (see,
Thomas v New York Temporary State Commn. on Regulation of Lobbying, 83
AD2d 723, affd 56 NY2d 656).
The Court also notes that in their original claim, claimants had also sought
punitive damages, which are not recoverable against the State (see, Sharapata
v Town of Islip, 56 NY2d 332).
Accordingly, these causes of action are all hereby dismissed.
As previously mentioned, claimants, in their cross-motion, also seek to amend
and clarify causes of action based upon negligence, conversion, and tortious
interference, all causes of action which were asserted, in some form, in the
Pursuant to CPLR Rule 3025(b), a party may amend pleadings at any time with
Court approval, which shall be freely given. It is well settled that in the
absence of prejudice or surprise resulting therefrom, leave to amend pleadings
should be freely granted (McCaskey, Davies & Assoc. v New York City
Health & Hosps. Corp., 59 NY2d 755). In this matter, it does not appear
that there would be any prejudice or surprise whatsoever to the defendant in
allowing claimants to serve and file an amended claim, since claimants are
attempting to amplify and clarify previously asserted causes of action. The
Court, therefore, will consider the allegations set forth in claimants' proposed
amended claim in determining defendant's motion to dismiss.
In a motion to dismiss a claim for failure to state a cause of action, the
movant is treated as having conceded the truth of every fact alleged by a
claimant. Determination of such a motion is based not upon a resolution of any
disputed material facts, but rather on whether the facts asserted by the
claimants are sufficient to make out a claim (see, Stukuls v State of New
York, 42 NY2d 272).
With regard to the cause of action for negligence asserted in the original
claim, defendant seeks dismissal since negligent investigation is not a
recognized cause of action against the State (see, Hernandez v State of New
York, 228 AD2d 902). In their cross-motion, however, claimants assert that
their cause of action for negligence is grounded in negligent misrepresentation
and that defendant violated a "special duty" owed to claimants. Claimants
allege that agents of the defendant assumed an affirmative duty to claimants
when they expressly promised to return claimants' computers and equipment within
a specified time, when they were well aware that failing to return the property
would have significant consequences to claimants' businesses, and that defendant
was aware that claimants were relying upon these promises.
Therefore, viewing the allegations in a light most favorable to claimants, this
Court must find that for purposes of this application, claimants have asserted,
in their proposed amended claim, a valid cause of action for negligence.
With regard to the cause of action for conversion, defendant contends that
there is no conversion because claimants failed to allege a refusal to return
the property upon demand. Clearly, in their proposed amended claim, such
allegations have been made by claimants, sufficient to sustain this cause of
Similarly, in the proposed amended claim, claimants have also alleged that
defendant's agents were aware of the existence of numerous contracts for which
the information contained in the seized computers was essential, and that by
retaining said computers, defendant caused claimants to breach these
contractual obligations. Claimants have therefore substantially alleged a cause
of action for tortious interference, and at this stage of the proceedings, this
cause of action may not be dismissed.
Claimants, in their cross-motion, also seek to add causes of action based upon
alleged violations of State constitutional rights, specifically a denial of
equal protection (New York Constitution, Article I, § 11) and a
violation of the search and seizure clause (New York Constitution, Article I,
In Brown v State of New York (89 NY2d 172), the Court of Appeals
recognized that violations of State constitutional rights, in certain limited
circumstances, could give rise to an action for money damages in the Court of
Claims. As set forth in Brown, in determining whether a cause of action
for a constitutional tort may properly be brought in the Court of Claims, the
Court of Appeals requires the Court to consider whether: (1) the applicable
constitutional provision is self-executing; (2) a monetary damage remedy
furthers the purpose of the underlying constitutional provision and necessarily
assures its effectiveness; (3) the provision imposes a clearly defined duty on
the State officers and employees; (4) declaratory and injunctive relief is
inadequate; and (5) money damages necessarily deter governmental misconduct and
make the claimant whole.
The decision in Brown is considered a "narrow remedy" with two
interests, that (1) the "private interest" to ensure that citizens harmed by
constitutional violations have an appropriate means of redress, and (2) the
"public interest" to ensure that future constitutional violations will be
deterred. (Martinez v City of Schenectady, 97 NY2d 78, 83).
In Brown, as in the instant claim, the Court of Appeals considered
constitutional violations of the search and seizure provisions and the equal
protection provision, of the State Constitution, and found such provisions to be
self-executing and imposing a clearly defined duty upon State officers and
employees. Additionally, in the instant claim, since none of the named
claimants have been subject to criminal prosecution, neither declaratory nor
injunctive relief is available.
At this stage of the proceedings, therefore, claimants have established
sufficient grounds to proceed with their causes of action asserting
constitutional torts. Ultimately, claimants will have to establish their
entitlement to a damages remedy and will have to establish that such remedy
furthers the purpose of the underlying provisions and assures their
effectiveness, and that such damages will necessarily deter such governmental
conduct in the future.
Therefore, based on the foregoing, it is
ORDERED, that Motion No. M-66905 is hereby GRANTED, in part, and DENIED, in
part, as provided for herein; and it is further
ORDERED, that Cross-Motion No. CM-67496 is hereby GRANTED; and it is
ORDERED, that claimants are hereby directed to serve and file their amended
claim within 40 days from the date of filing of this decision and order.
Defendant shall have 40 days from such service of the amended claim to serve and
file its answer, in accordance with § 206.7 of the Uniform Rules for the
Court of Claims.