Summary
finding that a conclusory affidavit is inadequate to make a showing of probable success on the merits
Summary of this case from Royal Flush, Inc. v. AriasOpinion
Submitted August 22, 2000
September 26, 2000.
APPEAL by the defendants, in an action for a judgment declaring that the defendant Roger H. Corbin must recuse himself from voting on appointments to the board of directors of the Nassau County Regional Off-Track Betting Corporation, and to enjoin the defendant Nassau County Legislature from conducting a vote in which Roger H. Corbin participates, as limited by their brief, from an order of the Supreme Court (Thomas A. Adams, J.), entered in Nassau County on June 2, 2000, which, inter alia, granted the plaintiff's motion for a preliminary injunction enjoining the defendant Roger H. Corbin from voting on the appointments.
Jaspan Schlesinger Hoffman, LLP, Garden City, N.Y. (Stanley Harwood, Stephen R. Schlesinger, and Scott B. Fisher of counsel), and Frederick K. Brewington, Hempstead, N. Y., for appellants (one brief filed).
Ryan Brennan, LLP, Floral Park, N.Y. (John E. Ryan of counsel), for respondent.
Before: GUY JAMES MANGANO, P.J., WILLIAM C. THOMPSON, THOMAS R. SULLIVAN, GABRIEL M. KRAUSMAN, GLORIA GOLDSTEIN, JJ.
OPINION ORDER
On this appeal, we must determine whether the defendant Roger H. Corbin, a Nassau County Legislator, should be preliminarily enjoined from voting on the appointment of members to the board of directors of the Nassau County Regional Off-Track Betting Corporation (hereinafter the Nassau OTB).
By order to show cause dated May 10, 2000, the plaintiff Gregory P. Peterson, the President of the Nassau OTB, commenced this action against Corbin and the Nassau County Legislature seeking (1) a judgment declaring that Corbin must recuse himself from voting as a legislator on any appointment to the board of directors of the Nassau OTB, and (2) to permanently enjoin the Nassau County Legislature from conducting any vote on the appointment to the board of directors of the Nassau OTB. Peterson alleged that Corbin's employment as a branch manager for the New York City Off-Track Betting Corporation (hereinafter NYC-OTB) and membership in Local 858 of the International Brotherhood of Teamsters (hereinafter Local 858), which represents all of the employees of the Nassau OTB and the branch managers of NYC-OTB, presented Corbin with interests which conflicted with his duties as a Nassau County Legislator, in violation of the Nassau County Code of Ethics (Nassau County Charter, Title XXII, § 2218).
Following a hearing on May 15, 2000, the date on which the vote was scheduled to take place, the Supreme Court issued a preliminary injunction against Corbin enjoining, restraining, and staying him from voting on the appointment to the board of directors of Nassau OTB after finding the existence of an "appearance of impropriety". We reverse.
To obtain the drastic remedy of a preliminary injunction, a movant must demonstrate (1) a likelihood or probability of success on the merits, (2) irreparable harm if the injunction is denied, and (3) a balance of the equities in favor of granting the injunction (see, Aetna Ins. Co. v. Capasso, 75 N.Y.2d 860; Grant Co. v. Srogi, 52 N.Y.2d 496). We agree with Corbin's contention that Peterson did not meet this "particularly high" burden (Council of New York City v. Giuliani, 248 A.D.2d 1, 4).
While it is true that Peterson was not required to establish the certainty of success on the merits but merely the likelihood of success, we have said that:
"Preliminary injunctive relief is a drastic remedy which will not be granted ' unless a clear right thereto is established under the law and the undisputed facts upon the moving papers, and the burden of showing an undisputed right rests upon the movant'" (Nalitt v. City of New York, 1 38 A.D.2d 580, 581, quoting First Natl. Bank v. Highland Hardwoods, 98 A.D.2d 924, 926).
Thus, Peterson was required to demonstrate a likelihood of success on the merits by making a prima facie showing, at least by affidavits, if not by testimony, of conflicts of interest. However, the only showing Peterson made is found in his conclusory affidavit in support of the application for the order to show cause, and in the testimony of John Nagy, general counsel for the Nassau OTB. Nagy's testimony consisted primarily of hearsay, and was significantly impeached by cross-examination, as well as by the testimony of Barbara Reda, president of Local 858. Clearly, this was not sufficient to enjoin a duly-elected member of the Nassau County Legislature from exercising his statutory right to vote for the appointment of members of the board of directors of the Nassau OTB (see, Racing, Pari-Mutuel Wagering and Breeding Law § 502).
By contrast, in opposing Peterson's motion for a preliminary injunction, Corbin relied on Reda's testimony demonstrating that, as a branch manager of NYC-OTB, Corbin does not hold a policy-making position and that as a mere member of Local 858, Corbin is not a member of the negotiating team. Corbin also relied on a report by the Nassau County Ethics Board, which had considered whether Corbin's vote for directors of the Nassau OTB would be prohibited by Nassau County Charter § 2218 1(a)(3) and its comparable Administrative Code section. By a divided vote of five members, the majority held:
"We do not find that Mr. Corbin's vote for, or against candidates for appointment to the Board of Directors of the Nassau OTB may create a prohibited conflict with his official duties as a Nassau County Legislator. Accordingly, Mr. Corbin is not required to recuse himself, and he may vote on the Nassau OTB appointments".
Accordingly, Peterson did not make a sufficient showing as to conflicts of interest. Also, his reliance on Matter of Tuxedo Conservation Taxpayers Assn. v. Town Bd. of Town of Tuxedo ( 69 A.D.2d 320) and Matter of Zagoreos v. Conklin ( 109 A.D.2d 281) is misplaced. Those cases are distinguishable on the all-important factor of whether the questioned official benefited directly and individually from the action that was taken.
To begin with, in Tuxedo, the "lame duck" town board, which included a member named Martineau, voted to grant necessary preliminary approval to Sterling Forest Development Corp. (hereinafter Sterling) to construct a 3,900-unit residential development. In Zagoreos, Orange Rockland Utilities, Inc., sought certain permits and variances in order to convert two oil-burning generating units into coal-burning units. During the course of the proceedings in Zagoreos, certain members of the town board and the Board of Zoning Appeals, who were also employees of Orange Rockland Utilities, Inc., voted. Importantly, the claim in each case was that the votes, which had been already cast, were tainted as the result of conflicts of interest. In this case, however, Peterson made a "pre-emptive strike" to prevent a public officer from acting based on claimed conflicts of interest even though, absent extraordinary circumstances, the courts are not to enjoin the legislative process (see, Pospisil v. Anderson, 140 A.D.2d 317; Matter of One Pelham Rd. Co. v. Paduano, 123 A.D.2d 768 H. Development Corp. v. City of Yonkers, 64 A.D.2d 690; see also, 13 Weinstein, Korn and Miller, New York Civil Practice § 6301.32).
More significantly, in both Tuxedo and Zagoreos, the conflicts of interests on the part of the public officials were clear and obvious. In Tuxedo, the residential development had been hotly debated for three years, as it would result in increasing the town's population more than four hundred percent. Preliminary matters, including SEQRA, had been referred to the planning board, and while that body was actively considering it, it became clear that a study would not be concluded by January 1, 1978. In December 1977, the "lame duck" town board passed a local law transferring authority over the development from the planning board to the town board. On December 28, 1977, the town board voted to grant all the preliminary approvals to Sterling, and the controlling vote was cast by Martineau, who was vice-president of an advertising agency that had City Investing Corp., of which Sterling was a wholly-owned subsidiary, as a client. In Zagoreos, votes benefiting Orange Rockland Utilities, Inc., were cast by public officials who were employees of Orange Rockland Utilities, Inc.
In this case, Corbin's employment as a NYC-OTB branch manager and his position as a member of the Nassau County Legislature pose no conflict since there is nothing in the record indicating dealings between NYC-OTB and the Nassau County Legislature. Also, while Corbin is a member of Local 858, he is not an officer or member of the negotiating team of that union. In addition, while Local 858 also represents the Nassau OTB employees, there is no connection between the contracts reached by Local 858 and the two OTBs. There is evidence in the record that there are two negotiating units within Local 858; one dealing with NYC-OTB branch managers and the other dealing with all the Nassau OTB employees.
Peterson's contention that Corbin's employment with NYC-OTB may in the future benefit from his vote for directors of the Nassau OTB is not only unpersuasive but it is also completely speculative (see, Town of North Hempstead v. Village of North Hills, 38 N.Y.2d 334).
It is also obvious that Peterson failed in his burden to show that he would suffer irreparable harm if this preliminary injunction was not issued. At no point in either his papers or at the hearing before the Supreme Court did Peterson claim that there would be any "harm" other than a violation of Nassau County Code of Ethics. That statute was enacted for the benefit of the general public, and anyone seeking to enjoin a violation of the statute must show that he will sustain special damages (see, 13 Weinstein, Korn and Miller, New York Civil Practice § 6 301.00).
Further, even if we assume, without evidence, that Peterson will not be reappointed to the board of directors of the Nassau OTB as a result of Corbin's decisive vote, this could not be considered irreparable harm. Notably, Peterson holds that position as the result of his appointment by that same legislative body and continues in that position at the pleasure of that body (see, Racing, Pari-Mutuel Wagering and Breeding Law § 502). Peterson does not have a protected property interest in his position as a director of the Nassau OTB. Moreover, he would not be without an adequate remedy since a preliminary injunction is a provisional remedy and a decision concerning a preliminary injunction does not become the law of the case, nor would it constitute an adjudication on the merits so as to preclude reconsideration of that issue at a trial on the merits (see, Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397; Bauer v. Planning Bd. of Vil. of Scarsdale, 159 A.D.2d 532; Ratner v. Fountains Clove Rd. Apts., 118 A.D.2d 843).
Lastly, as to a balancing of the equities, on the one hand, Peterson has not demonstrated any potential harm in the absence of a preliminary injunction while, on the other hand, if a preliminary injunction is granted, a duly-elected member of the County Legislature will be enjoined from performing an act he is directed to perform by State law. If the County Legislature, with the exception of Corbin, was to vote for the appointment of directors of the Nassau OTB, the residents of the Second Legislative District would be without representation as to that vote. Therefore, the order is reversed insofar as appealed from, on the law, without costs or disbursements, and the motion for a preliminary injunction is denied.
The decision to grant a preliminary injunction is a matter ordinarily committed to the sound discretion of the court hearing the motion (see, Doe v. Axelrod, 73 N.Y.2d 748, 750). The movant must establish a likelihood of ultimate success on the merits, irreparable injury absent the injunction, and a balancing of the equities in the movant's favor (see, Egan v. New York Care Plus Ins. Co., 266 A.D.2d 600). "[E]ven when facts are in dispute, the * * * court can find that a plaintiff has a likelihood of success on the merits, from the evidence presented, though such evidence may not be'conclusive'" (Sau Thi Mau v. Xuan T. Lien, 198 A.D.2d 186, 187, quoting Demartini v. Chatham Green, 169 A.D.2d 689, 690). "Thus a preliminary injunction, even when issued after an evidentiary hearing, depends upon probabilities, any or all of which may be disproven when the action is tried on the merits, and the affirmance of an order granting a preliminary injunction determines no more than that the discretion exercised in favor of granting the order was not based upon a demonstration of those probabilities so insufficient as to constitute an abuse of discretion" (Preston Corp. v. Fabrication Enters., 68 N.Y.2d 397, 406). Where the denial of a preliminary injunction would disturb the status quo and render the final judgment ineffectual, the degree of proof required to establish the element of likelihood of success on the merits should be reduced (see, State of New York v. City of New York, A.D.2d [2d Dept., Sept. 18, 2000]).
Viewed from this perspective, it cannot be said that the decision of the Supreme Court granting the plaintiff's motion for a preliminary injunction was an improvident exercise of discretion (see, State of New York v. City of New York, supra; Nelson v. Jannace, 248 A.D.2d 448).
The undisputed facts in the record are that the appellant Roger H. Corbin is the branch manager of the New York City Off-Track Betting facility in Astoria, Queens. He is not classified as a management and/or confidential employee, but is responsible for the entire operation of that branch office. The New York City Off-Track Betting Corporation and the Nassau County Regional Off-Track Betting Corporation are separate corporations.
In 1993, the Chief Deputy County Attorney of Nassau County concluded that Corbin's employment as branch manager for the New York City Off-Track Betting Corporation made him a "public officer" who was precluded from serving as a member of the board of directors of the Nassau County Regional Off-Track Betting Corporation, because doing so would constitute a conflict of interest pursuant to the Racing, Pari-Mutuel Wagering and Breeding Law § 107.
The question of whether Corbin's voting, in his capacity as a Nassau County Legislator, on appointments to the board of directors of the Nassau County Regional Off-Track Betting Corporation may constitute a conflict of interest was submitted to the Nassau County Board of Ethics (hereinafter the Board). The Board determined, by divided 3-to-2 vote, that voting on such appointments did not create a prohibited conflict, because Corbin did not influence policy and did not engage in labor negotiations.
The minority noted that in 1995, the Nassau County Code of Ethics was amended to require recusal from participation in conduct which may result in a conflict with his official duties (see, Nassau County Charter § 2218[1][b]).
At the hearing on the application for a preliminary injunction, John Nagy, general counsel for the Nassau County Regional Off-Track Betting Corporation, testified that employees of the New York City Off-Track Betting Corporation and the Nassau County Regional Off-Track Betting Corporation are represented by the same union, Teamsters Local 858, and the same Chief Labor negotiator. During labor negotiations, the union would refer to the New York City contract in negotiating the Nassau County contract.
The New York City Off-Track Betting Corporation's branches near Nassau County were in direct competition with the Nassau County Regional Off-Track Betting Corporation. Further, the Nassau County Regional Off-Track Betting Corporation was considering establishing additional branches closer to the border with New York City and thus in competition with Corbin's branch.
The Supreme Court granted the preliminary injunction, holding that the plaintiff was likely to succeed on the merits of his contention that Corbin's voting on appointments to the board of directors of the Nassau County Regional Off-Track Betting Corporation might constitute a conflict of interest and created the appearance of impropriety.
The test for disqualifying Corbin from voting is not whether there is a conflict, but whether there might be (see, Nassau County Charter § 2218[1][b]; Matter of Zagoreos v. Conklin, 109 A.D.2d 281; Matter of Tuxedo Conservation Taxpayers Assn. v. Town Bd. of Town of Tuxedo, 69 A.D.2d 320).
In view of the evidence of a potential conflict of interest, a preliminary injunction was necessary to avoid the appearance of impropriety to maintain public confidence in the administration of government (see, 1999 Opns Atty Gen 42; 1999 Opns Atty Gen 21).
Where county legislators hold employment in the public sector which is incompatible with their duties, they may be compelled to resign from either the legislative position or their employment if the potential conflict involves a significant aspect of the legislature's responsibilities (see, Matter of Dupras v. County of Clinton, 213 A.D.2d 952). In the instant case, the plaintiff did not seek Corbin's resignation. However, the facts presented a basis for recusal from the vote in issue (see, Annotation, Public Officers — Personal Interest, 133 ALR 1257-1258). There is no merit to the contention that the preliminary injunction violates the doctrine of separation of powers (see, Matter of Dupras v. County of Clinton, supra).
Nor is there any merit to the contention that there will be no irreparable harm if the preliminary injunction is not granted. At oral argument, the appellants conceded Peterson's standing to bring this action. In view of our acceptance of that concession, it is clear that Peterson was not required to demonstrate that he suffered special damages from a violation of the Nassau County Code of Ethics.
The majority acknowledges that Peterson serves as a member of the Nassau County Regional Off-Track Betting Corporation "at the pleasure" of the Nassau County Legislature (Racing, Pari-Mutuel Wagering and Breeding Law § 502), which, may, with the benefit of Corbin's vote, appoint a successor to Peterson. It is not at all clear that, if the Nassau County Legislature appoints a successor to Peterson, Peterson could retain his seat by seeking injunctive relief at that time. The granting of a preliminary injunction preserves the status quo, avoids such procedural uncertainties, and preserves confidence in government. "[T]he equities lie in favor of preserving the status quo while the legal issues are determined in a deliberate and judicial manner" (State of New York v. City of New York, supra).
In view of the foregoing, it cannot be said that the Supreme Court improvidently exercised its discretion in issuing a preliminary injunction (see, State of New York v. City of New York, supra).
ORDERED that the order entered June 2, 2000, is reversed, on the law, without costs or disbursements, and the motion for a preliminary injunction is denied.