New York State Court of Claims

New York State Court of Claims

BUONANOTTE v. NEW YORK STATE OFFICE OF ALCOHOLISM AND SUBSTANCE ABUSE SERVICES, SHARI NOONAN, in her official capacity as Acting Commissioner of New York State Office of Alcoholism and Substance Abuse Services and HENRY F. ZWACK, in his official capacity as Executive Deputy Commissioner of New York State Office of Alcoholism and Substance Abuse Services, #2008-042-511, Claim No. 114309, Motion Nos. M-74405, CM-74522


Synopsis


This is a motion brought by claimants for a change of venue of this action from Albany County to Suffolk County. Defendants have cross-moved for an order dismissing the action for lack of subject matter jurisdiction. Claimants’ motion for change of venue is denied. Defendants motion to dismiss is granted and the claim is dismissed.

Case Information

UID:
2008-042-511
Claimant(s):
FRANK BUONANOTTE, CROSSINGS RECOVERY PROGRAM, INC., CROSSINGS ADDICTION MANAGEMENT, INC., CROSSINGS REHABILITATION SERVICES, INC., CROSSINGS OF LONG ISLAND, INC., CROSSINGS OF NASSAU COUNTY, INC., CROSSINGS RECOVERY SYSTEMS, INC., CROSSINGS RECOVERY RESIDENCE, INC., WOODFIELD MANOR ASSOCIATES, LLC, WOODFIELD MANAGEMENT, LLC, WOODFIELD GROUP, LLC, WOODFIELD ENTERPRISES, LLC, WOODFIELD EQUITIES, LLC AND WOODFIELD HOLDINGS, LLC
Claimant short name:
BUONANOTTE
Footnote (claimant name) :

Defendant(s):
NEW YORK STATE OFFICE OF ALCOHOLISM AND SUBSTANCE ABUSE SERVICES, SHARI NOONAN, in her official capacity as Acting Commissioner of New York State Office of Alcoholism and Substance Abuse Services and HENRY F. ZWACK, in his official capacity as Executive Deputy Commissioner of New York State Office of Alcoholism and Substance Abuse Services
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
114309
Motion number(s):
M-74405
Cross-motion number(s):
CM-74522
Judge:
NORMAN I. SIEGEL
Claimant’s attorney:
JASPAN SCHLESINGER HOFFMAN LLPBy: CHRISTOPHER E. VATTER, ESQ.
Defendant’s attorney:
HON. ANDREW M. CUOMO
Attorney General of the State of New York
By: MICHELE M. WALLS, ESQ.Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
June 12, 2008
City:
Utica
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

This matter comes before the court on a motion by claimants for change of venue of this action from Albany County to Suffolk County. The defendant has cross-moved for an order dismissing the action for lack of subject matter jurisdiction. The following papers were considered by the Court:
  1. Notice of Motion, filed January 10, 2008
  2. Affidavit of Frank Buonanotte, sworn to January 5, 2008
  3. Notice of Cross-Motion, filed February 7, 2008
  4. Affirmation of Michele M. Walls, Esq., dated February 6, 2008
  5. Exhibits "A" through "H", annexed to the Notice of Cross-Motion
  6. Reply affirmation of Christopher E. Vatter, Esq., dated March 12, 2008
  7. Exhibit "A", annexed to the reply affirmation
____________________________________
THE CLAIM

The underlying claim was filed on October 3, 2007. Defendant’s[1] answer, verified on October 31, 2007 was interposed on or about that same date. The claim incorporates a “complaint” which sets forth the claimants’ allegations in greater detail. According to the complaint, Claimant Frank Buonanotte “was, and is, the sole shareholder and/or member of the . . . corporate and limited liability company claimants”. These claimants are referred to by claimants themselves, and by this court, as the “Crossings” claimants.

The Crossings claimants provided outpatient substance abuse treatment on Long Island and operated pursuant to operating certificates issued by defendant New York State Office of Alcoholism and Substance Abuse Services (hereinafter referred to as “OASAS”). Claimants also provided housing to individuals in residences known as “sober homes” (hereinafter referred to as “sober homes”). According to claimants, sober homes are not licensed or regulated by OASAS.

On or about December 21, 2005 claimants allege that OASAS issued a “Notice of Intent to Revoke OASAS Operating Certificates” for claimants’ substance abuse treatment programs. Under applicable regulations, claimants requested a hearing.

In late January 2006 OASAS signed a Cease and Desist Order relative to the

sober homes and commenced an action in Suffolk County Supreme Court seeking the appointment of a receiver, pursuant to Mental Hygiene Law, against the Crossings claimants. Claimants contend that under applicable Mental Hygiene laws and regulations, defendant was not entitled to issue findings or make a determination before giving claimants notice and an opportunity to “present evidence and cross-examine adverse witnesses” and that they were denied their right to a hearing. Furthermore, claimants contend that defendant imposed monetary penalties, revoked operating certificates of some facilities and ordered that the certificates of other facilities would not be renewed.

The suspension order of the operating certificates was signed by Henry F. Zwack, Executive Deputy Commissioner of OASAS, on or about February 14, 2006 and in March 2006 a hearing was held relative to the revocations. In September 2006 the hearing officer issued a decision which, according to claimants, “largely upheld OASAS’ revocation of claimants’ Operating Certificates and the fines imposed against claimants.”

Claimants state that on or about February 23, 2006 during a hearing in the Suffolk County Supreme Court proceeding, claimant Buonanotte “was coerced to accept a voluntary receivership of the facilities” (emphasis added). Claimants maintain that at the aforementioned proceeding OASAS’ employees made certain representations with which OASAS failed to thereafter comply.

According to claimants, in or about May 2006 the court terminated the brief receivership and ordered that the assets of Crossings be returned to the control of Buonanotte.

The essence of claimants’ causes of action is that the defendant fraudulently induced the claimants into agreeing to the receivership in the Supreme Court proceeding and further, that with regard to the actions of the OASAS concerning the operating certificate revocations and the receivership proceeding:

[t]he conduct and actions of the defendants, acting under color of State law, were done intentionally, maliciously, and/or with a reckless disregard for the natural and probable consequences of their acts, to claimants of their right to property, liberty, due process and equal protection of the laws, all of which are afforded to claimants under the Fifth and Fourteenth Amendments to the United States Constitution.


MOTION TO CHANGE VENUE

Claimants have moved, pursuant to CPLR § 510, for a change of venue from Albany County, New York to Suffolk County, New York. It is claimants’ contention that Suffolk County is the only proper county for venue because: 1) claimants cannot receive an impartial trial in the Albany District of the Court of Claims, 2) it is more convenient for material witnesses and 3) as a transitory action, the events complained of occurred in Suffolk County. According to claimants, the action was venued in the Albany District of the Court of Claims by the Chief Clerk of the Court at the time of the filing of the claim.

Defendant opposes the change of venue, arguing that venue is properly placed in the Albany District, that an impartial trial may be had, and that claimants have failed to meet their burden in demonstrating the convenience of material witnesses, and further arguing that the relevant complained-of decisions by defendant were made in Albany County.

The Court of Claims is a state-wide court, which is divided into eight districts (22 NYCRR 206.4). Because the claim arose out of determinations made by OASAS, which is headquartered in Albany, the claim was assigned to the Albany District. This matter was originally assigned to another Judge, who recused himself. Thereafter, the case was assigned to me. While the case remains venued in the Albany District, I sit in the Utica District. It is my policy to travel, as necessary, to the district in which a claim is venued.

No provisions in the Court of Claims Act govern motions for change of venue; as a result, the relevant portions of the CPLR apply (see Court of Claims Act § 9 [9]; Richards v State of New York, 281 App Div 947; Poolet v State of New York, 56 Misc 2d 933). It is the practice of the Chief Clerk to assign claims in accordance with CPLR 506 (b) which provides, in relevant part, that proceedings against a body or officer are to be commenced “where the respondent made the determination complained of or refused to perform the duty specifically enjoined upon him by law . . . or where the material events otherwise took place, or where the principal office of the respondent is located . . .” As a result, this claim was assigned to the Albany District.

Claimants contend that they cannot get a fair trial because Henry F. Zwack (Executive Deputy Commissioner of OASAS during the relevant times herein) is now a Court of Claims Judge in the Albany District. As noted above, I do not sit in the Albany District. Further, it is my understanding that Judge Zwack is assigned as an Acting Supreme Court Justice and does not hear Court of Claims cases. To the best of my knowledge, I have never met Judge Zwack (though we may have been present together at an introductory gathering of new judges). And, because of our different assignments and the vast expanse of geography separating our chambers and residences, it is unlikely that I will meet Judge Zwack in the foreseeable future. Thus, this ground for change of venue lacks merit in this particular case (Warm v State of New York, 265 AD2d 546 [2d Dept 1999]).

Claimants’ second ground for a change of venue is convenience of material witnesses. It is claimants’ contention that this matter must be transferred to Suffolk County for the convenience of material witnesses. However, claimants only contacted a limited number of their own employees - just four were mentioned by name - to see if they would be willing to testify as witnesses. Nothing specific was offered as to the substance of the testimony which would be offered by the individual witnesses. Claimants also stated that representatives of various agencies and/or vendors would be likely witnesses, but none had been contacted and again there were no particulars as to the substance of the testimony of specific witnesses.

As the Appellate Division, Third Department noted in Stainbrook v Colleges of the Senecas, 237 AD2d 865:

CPLR 510 (3) provides for a discretionary change of venue where “the convenience of material witnesses and the ends of justice will be promoted by the change”. The party seeking the change of venue bears the burden of proof (see, Andros v Roderick, 162 AD2d 813, 814). Indeed, in order to demonstrate that venue should be changed, the moving party must “supply the names, addresses and occupations of the witnesses whose convenience he claims will be affected, indicate that the prospective witnesses have been contacted and are willing to testify on his behalf and specify the substance of each witness’s testimony, which must be necessary and material” (id., at 814; see O’Brien v Vassar Bros. Hosp., 207 AD2d 169, 172-173; Hojohn v Hamilton, 78 AD2d 570).


Claimants have failed to meet the necessary requirements that are the prerequisites to a change of venue for the convenience of material witnesses (see also Garner v State of New York, UID No. 2007-041-049, Claim No. 110735, Motion No. M-74046, October 30, 2007, Milano, J.). Thus the motion to change venue on this ground is likewise denied (however, the court would note that, as a practical matter, the Court of Claims has the ability to be far more flexible in its non-jury matters than other courts with jury trials. Should a trial be necessary, and should it be apparent to the court and parties that the convenience of material witnesses would be best served by trial in a Court of Claims District which includes Suffolk County, nothing prevents the court from holding testimony on certain dates of the trial in that county, even if the remainder of the case is heard in the Albany District).

Lastly, claimants assert that the transitory nature of the case compels a change of venue to Suffolk County. Nonetheless, the court agrees with the defendant that the determinative rulings underlying this action were issued out of Albany, even though such rulings resulted in enforcement actions in Suffolk County. Since, under CPLR 503 (a) transitory actions are properly venued in a county in which any party resided at the time of commencement of the action, the matter is properly venued in the Albany District, where defendant’s offices are located.

Claimants’ motion to change venue is, in all respects, denied.

CROSS-MOTION TO DISMISS CLAIM
Defendant has cross-moved to dismiss the claim on the ground that the court lacks subject matter jurisdiction. The defendant contends that the causes of action alleged in the claim cannot properly be litigated in the Court of Claims, in essence arguing that the appropriate remedy for claimants was through an Article 78 proceeding, and further, that the alleged constitutional violations are not properly before this court.

In opposition, claimants state that they do not seek review of a discretionary decision of OASAS, an administrative agency, rather claimants seek damages for the “wrongful revocation” of their operating certificates and the denial of their state and federal constitutional rights.

Claimants’ own argument makes the case against the claimants’ position. Any determination of this court that the revocation of the operating certificates was “wrongful” is in fact a review of the discretionary decision of the administrative agency. Likewise, if in fact claimants were fraudulently misled into their voluntary acceptance of the receivership as a resolution of a pending Supreme Court matter, there was recourse readily available in the Supreme Court proceeding, by way of a contempt motion, motion to vacate the stipulated order, or other similar applications.

The law is well-established that “[b]ecause suits against the State are allowed only by the State’s waiver of sovereign immunity and in derogation of the common law, statutory requirements conditioning suit must be strictly construed” (Dreger v New York State Thruway Auth., 81 NY2d 721, 724; Lichtenstein v State of New York, 93 NY2d 911).

All of claimants’ causes of action and alleged damages flow from the initial determinations of OASAS to revoke the operating certificates. The courts have consistently held that actions brought in the Court of Claims in similar matters are in actuality, equitable actions seeking review of administrative determinations, though the claims may be couched as ones solely for money damages. In Madura v State of New York, 12 AD3d 759 (3d Dept 2004), lv app denied 4 NY3d 704, claimant sued in the Court of Claims on the grounds of breach of implied contract arising out of a decision by the New York State Department of Agriculture and Markets to deny claimant’s application for grant money as an onion producer, rather than commencing an Article 78 proceeding.

The court held that:

[a]s a court of limited jurisdiction, the Court of Claims has no jurisdiction to grant strictly equitable relief (see Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671, [1997]; see also Psaty v Duryea, 306 NY 413, [1954]. Thus, in determining the subject matter jurisdiction of the Court of Claims, the threshold question is “[w]hether the essential nature of the claim is to recover money, or whether the monetary relief is incidental to the primary claim” (Matter of Gross v Perales, 72 NY2d 231, 236 [1988]). Here, we are compelled to conclude that claimant’s essential claim is equitable relief, namely, she is seeking annulment of an administrative agency’s discretionary determination relative to the disbursement of grant money. To prevail in obtaining any portion of this money, claimant would need to demonstrate that the Department of Agriculture and Markets erroneously interpreted Farm Security and Rural Investment Act of 2002 § 10106 as disqualifying any onion farmer no longer in business. This is a quintessential example of a dispute governed under CPLR article 78 (see CPLR 7803 [3], [4]; see also Safety Group No. 194 - N.Y. State Sheet Metal Roofing & A.C. Contrs. Assn. v State of New York, 298 AD2d 785, 750 [2002]).


(Madura v State of New York,
12 AD3d 759, 760 - 761 [3d Dept 2004], lv denied 4 NY3d 704).


That claimants characterize this action as one for monetary damages is not determinative; rather the issue is what this court must do in order to award monetary damages (XL-Care v New York State Department of Health, UID No. 2007-015-160, Claim No. NONE, Motion No. M-72547, March 21, 2007, Collins, J.). The challenge of the action of an administrative agency on the grounds that it “was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion” is by a proceeding prescribed by CPLR Article 78 (CPLR 7803 [3]; see also New York City Health and Hospitals Corp. v McBarnette, 84 NY2d 194).

The jurisdiction of the Court of Claims is invoked where money damages are the essential object of the claim, unlike an instance where the principal claim is equitable in nature (such as to annul an allegedly illegal agency determination), with monetary relief being incidental to the principal claim.


(Mayhew v State of New York, 15 Misc 3d 1129A, 841 NYS2d 219, citing Harvard Fin. Servs. v State of New York, 266 AD2d 685 [3d Dept 1999]).

Likewise, “jurisdiction of claims asserting a violation of constitutional rights resulting from actions taken by a public regulatory body . . . is properly vested in Supreme Court in the form of an article 78 proceeding” (Bullard v State of New York, UID No. 2002-015-237, Claim No. 103138, Motion Nos. M-64624, M-64630, April 18, 2002, Collins, J., affd 307 AD2d 676 [3d Dept 2003]; Rodriguez v State of New York, UID No. 2007-015-222, Claim No. 110305, Motion No. M-73379, August 9, 2007, Collins, J.). In sum, this Court lacks subject matter jurisdiction over the claim. At its core, this is an equitable action, seeking to have the court review an administrative determination.

For the foregoing reasons, defendant’s motion is granted and the claim is dismissed.



June 12, 2008
Utica, New York

HON. NORMAN I. SIEGEL
Judge of the Court of Claims




[1].While the caption names “New York State Office of Alcoholism and Substance Abuse Services, Shari Noonan, in her official capacity as Acting Commissioner of New York State Office of Alcoholism and Substance Abuse Services and Henry F. Zwack, in his official capacity as Executive Deputy Commissioner of New York State Office of Alcoholism and Substance Abuse Services”, the New York State Office of Alcoholism and Substance Abuse Services is a part of the State of New York and lacks an independent legal existence, and, inasmuch as the employees are sued in their official capacities, the proper defendant is the State of New York. Since the only proper defendant is the State of New York, the defendants shall be referred to in the singular.