New York State Court of Claims

New York State Court of Claims

MARTY’S v. THE STATE OF NEW YORK, #2009-044-536, Claim No. 115137, Motion No. M-75804


Synopsis


Claim dismissed for lack of subject-matter jurisdiction, because monetary relief sought was only incident to primary claim, which required review of agency’s administrative determination.

Case Information

UID:
2009-044-536
Claimant(s):
MARTY’S SERVICE, INC.
Claimant short name:
MARTY’S
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK1 1. The Court has sua sponte amended the caption to reflect the State of New York as the sole proper defendant.
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
115137
Motion number(s):
M-75804
Cross-motion number(s):

Judge:
CATHERINE C. SCHAEWE
Claimant’s attorney:
KALTER, KAPLAN, ZEIGER & FORMANBY: Ivan Kalter, Esq., of counsel
Defendant’s attorney:
HON. ANDREW M. CUOMO, ATTORNEY GENERALBY: James E. Shoemaker, Assistant Attorney General
Third-party defendant’s attorney:

Signature date:
July 9, 2009
City:
Binghamton
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Claimant, a closely held automobile towing and repair corporation, filed this claim to recover damages allegedly suffered when it was removed from the informal rotating towing company list (the Towing List) established by State Police Troop F-Zone 1, which encompasses the Town of Liberty, Sullivan County.[2] Defendant State of New York (defendant) answered and asserted several affirmative defenses. Defendant now moves to dismiss for both lack of subject matter jurisdiction and failure to state a cause of action. Claimant opposes the motion. Defendant replies.

Defendant contends that because the money damages sought in this action are merely incidental to claimant’s primary claim, which is for review of its exclusion from the Towing List, the Court of Claims lacks jurisdiction over this matter. Defendant further argues that the placement on the Towing List does not confer any contractual or property rights to any towing company, and the claim therefore fails to state any cause of action sounding in contract.[3]

Conversely, claimant asserts that the claim states causes of action for intentional interference with a prospective business advantage, prima facie tort, breach of contract (express and implied), and breach of the covenant of good faith and fair dealing. Claimant further contends that the main relief sought in this claim is for money damages, and as a result, this Court has jurisdiction over the matter.

State Police Troop F-Zone 1 has implemented an informal towing policy (the Towing Policy) which is used in order to determine which towing company to contact when the State Police encounter a situation involving a disabled vehicle. The Towing Policy sets forth the priority for contacting towing companies as follows: 1) emergency needs at the scene; 2) the owner’s request for a specific towing company; and 3) the next towing company from the Towing List. If the Towing List is employed, the next company on the Towing List is contacted, and is then rotated to the bottom of the Towing List.[4] However, the Towns of Liberty and Thompson have created their own list of towing companies and each day assign one company as the “tow of the day.” The Towing Policy specifically provides that for towing situations located in those towns, the State Police will contact the respective “tow of the day” rather than employing the Towing List.

In addition to filing this claim, claimant also commenced a CPLR Article 78 proceeding in Supreme Court, Sullivan County. Supreme Court found that the Towing Policy did not create any property interest or contractual relationship between claimant and the State Police, and therefore claimant was not entitled to a hearing before being removed from the list (Matter of Marty’s Service, Inc. v State of New York, Sup Ct, Sullivan County, Feb. 23, 2009, Ledina, J., Index No. 1993-08). That Court further found that Prestige Towing had attempted to “steal” a tow from another towing company which had been designated the Town of Liberty “tow of the day,” as well as having solicited a tow from an overturned vehicle without notifying the State Police of the accident (id.). Supreme Court held that there was a rational basis for the determination to remove Prestige Towing from the Tow List, and dismissed that petition (id.). However, Supreme Court found that the determination to remove claimant from the Towing List, based solely upon the facts that Sean Brooks is the sole shareholder of Prestige Towing, and that he and Eleanor Brooks each have 25% ownership in claimant, lacked a rational basis (id.). Supreme Court therefore granted claimant’s petition, annulled the determination, and ordered claimant’s reinstatement to the Towing List (id.).

It is well settled that the Court of Claims “has ‘no jurisdiction to grant strictly equitable relief,’ but may grant incidental equitable relief so long as the primary claim seeks to recover money damages in appropriation, contract or tort cases” (City of New York v State of New York, 46 AD3d 1168, 1169 [2007], lv denied 10 NY3d 705 [2008], quoting Psaty v Duryea, 306 NY 413, 416-417 [1954]; see also Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671 [1997]). In order to determine whether the Court has jurisdiction, two inquiries are necessary: “[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]; see also Madura v State of New York, 12 AD3d 759, 760 [2004], lv denied 4 NY3d 704 [2005]), and “regardless of how a claimant categorizes a claim . . . whether the claim would require review of an administrative agency’s determination – which the Court of Claims has no subject matter jurisdiction to entertain” (City of New York v State of New York, supra).

Claimant alleges that defendant’s negligence, as well as its both intentional and unintentional torts, have caused substantial monetary damages to its business. Specifically, claimant alleges that its removal from the Towing List was:

without any basis in fact, arbitrary and capricious; an abusive [sic] discretion; a denial of due process; a denial of equal protection; a violation of substantive due process; arbitrary and outrageous; in violation of claimant’s civil rights; right of free speech; and . . . in retaliation and a denial of claimant and its officers right of free speech for a previous Notice of Intention to File a Claim . . . previous Article 78 proceeding . . . and a complaint filed with New York State Police Internal Affairs Bureau . . . In the alternative, removing [claimant] from the town [sic] list was disproportionate to any purported violation of the tow policy.[5]


Claimant also alleges that defendant failed to follow the procedure, as set forth in the Towing Policy, for removing towing companies from the Towing List. Claimant candidly states that “[t]he exact amount of damages is not known for certain,” but estimates them to be at least $500,000 per year. Claimant also requests an additional $500,000 in damages for the alleged violation of its civil rights (Verified Claim, ¶ 5).

Claimant’s allegations that its removal from the Towing List was, inter alia, arbitrary and capricious, an abuse of discretion, and in denial of due process, are clearly the crux of its CPLR Article 78 challenge to the determination made by the State Police. The monetary relief sought by claimant is obviously directly dependent upon the Supreme Court’s finding that the agency’s determination was arbitrary and capricious, and not rationally based (see City of New York v State of New York, supra). Accordingly, this Court has no subject matter jurisdiction over the claim (see id.; Hoffman v State of New York, 42 AD3d 641 [2007]; Madura v State of New York, supra). [6]

Accordingly, defendant’s motion is granted, and Claim No. 115137 is hereby dismissed in its entirety.

July 9, 2009
Binghamton, New York

HON. CATHERINE C. SCHAEWE
Judge of the Court of Claims


The following papers were read on defendant’s motion:

1) Notice of Motion filed on November 6, 2008; Affirmation of James E. Shoemaker, Assistant Attorney General (AAG), dated November 3, 2008, and attached Exhibits A through K.

2) Affirmation in Opposition of Ivan Kalter, Esq., dated February 2, 2009; Affidavit in Opposition of Sean Brooks, sworn to on February 6, 2009; Affidavit in Opposition of Eleanor Brooks, sworn to on February 6, 2009, and attached Exhibits 1 through 4.

3) Reply Affirmation of James E. Shoemaker, AAG, dated March 4, 2009, and attached Exhibit A.


Filed papers: Claim filed on April 21, 2008; Verified Answer filed on May 27, 2008.


[2]. Sean Brooks and his wife Eleanor Brooks are each 25% shareholders of claimant. Sean Brooks is the sole shareholder of Prestige Towing & Recovery, Inc. (Prestige Towing), another closely held corporation. Defendant also removed Prestige Towing from the Towing List, prompting that corporation to file Claim No. 115138, which contains allegations virtually identical to this claim.
[3]. Defendant further asserts that by removing claimant from the Towing List, the State exercised a discretionary action for which it has immunity. However, in light of the Court’s determination herein, it is not necessary to reach this issue.
[4]. After the company is contacted, it is rotated to the bottom of the Towing List regardless of whether it actually responds to the call.
[5]. Verified Claim, ¶ 2 (J).
[6]. Even if the Court were to reach the merits, dismissal would be warranted based upon claimant’s failure to state a cause of action. Claimant is bound by Supreme Court’s finding that the Towing Policy did not create any contractual rights (see Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349-350 [1999]), and in the absence of a contract, the causes of action for breach of contract, and breach of the implied covenant of good faith and fair dealing cannot stand (see Western Bldg. Restoration Co., Inc. v Lovell Safety Mgt. Co., LLC, 61 AD3d 1095 [2009]). Further, the failure to allege special damages is fatal to a cause of action for prima facie tort (Freihofer v Hearst Corp., 65 NY2d 135 [1985]). Lastly, claimant’s inability to set forth allegations that it had a proposed contract with a third party, and that defendant had knowledge of and intentionally interfered with this proposed contract, is fatal to a cause of action for intentional interference with prospective business advantage (see NBT Bancorp v Fleet/Norstar Fin. Group, 87 NY2d 614 [1996]; Guard-Life Corp. v Parker Hardware Mfg. Corp., 50 NY2d 183 [1980]).