Opinion
# 2015-030-013 Claim No. 122445
08-19-2015
PRATOW CORPORATION v. THE STATE OF NEW YORK
PESKA & ASSOCIATES, P.C. BY: ADAM M. PESKA, ESQ. HON. ERIC T. SCHNEIDERMAN ATTORNEY GENERAL OF THE STATE OF NEW YORK BY: DIAN KERR McCULLOUGH ASSISTANT ATTORNEY GENERAL
Synopsis
Claim dismissed. Claimant failed to establish any basis for State liability on breach of contract claim. More significantly, Court lacks subject matter jurisdiction. What claimant seeks is collateral judicial review of a discretionary determination made by State agency. To award damages, review of administrative and investigative determinations of the New York State Police, when it decided to remove claimant from the rotational towing list on I-684, would be necessary. Monetary relief incidental to the primary claim that wrongfully removed.
Case information
| UID: | 2015-030-013 |
| Claimant(s): | PRATOW CORPORATION |
| Claimant short name: | PRATOW |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 122445 |
| Motion number(s): | |
| Cross-motion number(s): | |
| Judge: | THOMAS H. SCUCCIMARRA |
| Claimant's attorney: | PESKA & ASSOCIATES, P.C. BY: ADAM M. PESKA, ESQ. |
| Defendant's attorney: | HON. ERIC T. SCHNEIDERMAN ATTORNEY GENERAL OF THE STATE OF NEW YORK BY: DIAN KERR McCULLOUGH ASSISTANT ATTORNEY GENERAL |
| Third-party defendant's attorney: | |
| Signature date: | August 19, 2015 |
| City: | White Plains |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Claimant Pratow Corporation alleges that the defendant breached its contract allowing claimant to provide towing services along I-684 when the New York State Police refused such offered services on or about November 30, 2012 and thereafter. The claim was filed in the Office of the Chief Clerk of the Court of Claims on February 28, 2013, and served upon the Attorney General's Office on or about February 27, 2013. Issue was joined by service of an answer on April 2, 2013. This decision relates only to liability, after a bifurcated trial of the matter and submission of post trial memoranda of law.
In support of its claim, claimant presented the testimony of its president, Stephanie Corritori, Brian Prato, Ms. Corritori's father and the owner of B & B Auto Body, retired State Trooper Miguel Nunez, State Trooper Juan Thomas, and New York State Police Technical Lieutenant Hector Hernandez, the deposition testimony of Peter Breese, the owner of rival tower Reliable Auto Body and Towing [Exhibit 20], as well as documentary exhibits. [Exhibits 1 - 3, 5 - 7, 10, 13 - 18].
Defendant cross-examined claimant's witnesses, and presented the testimony of Stephen Vagianelis, Assistant Director of Financial Administration of the New York State Police, State Police Investigator William Maasz and Major Michael Kopy, as well as documentary exhibits and photographs. [Exhibits C - G, L - T].
Upon review of all the evidence, the Court finds that the claimant has failed to establish any basis for State liability on its breach of contract claim and, more significantly, that the Court lacks subject matter jurisdiction. What claimant has essentially sought here is collateral judicial review of a discretionary determination made by a State agency, namely the New York State Police. Such review is had in an Article 78 proceeding brought in State Supreme Court, not in a claim for damages in the Court of Claims, a court of limited jurisdiction. See generally Court of Claims Act §9.
In City of New York v State of New York, 46 AD3d 1168, 1169 - 1170 (3d Dept 2007) lv denied 10 NY3d 705 (2008), the court explained that:
"Two inquiries must be made to determine if the Court of Claims has subject matter jurisdiction. As that court has 'no jurisdiction to grant strictly equitable relief' . . . (citation omitted), but may grant incidental equitable relief so long as the primary claim seeks to recover money damages in appropriation, contract or tort cases . . . (citation omitted), 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' . . . (citations omitted). The second inquiry, regardless of how a claimant categorizes a claim, is whether the claim would require review of an administrative agency's determination - which the Court of Claims has no subject matter jurisdiction to entertain . . . (citation omitted), as review of such determinations are properly brought only in Supreme Court in a CPLR article 78 proceeding . . . (citation omitted)."
In order for this Court to award claimant damages in this action, it necessarily has to review the administrative and investigative determinations of the New York State Police, when the agency decided to remove claimant from the rotational towing list. Additionally, the monetary relief sought is incidental to the primary claim that the claimant was wrongfully removed.
Those who applied for and were placed on the rotational towing list for I-684 pursuant to the State Police's nascent towing policy did so with a very clear risk that they could be removed in the agency's sole discretion for a variety of amorphous reasons, and without notice. [See Exhibit 3].
Private towing services for certain parkways in Columbia, Dutchess, Putnam and Westchester Counties are governed by 17 NYCRR Part 185, which provides for a competitive bidding system, payment for the license to provide such services, and the like.
Indeed, when this claimant was again placed on the rotational tow list in a year subsequent to the events claimed here, when it was again removed from the list it properly commenced an Article 78 proceeding to obtain judicial review. [See Exhibit Q]. In its decision, order and judgment denying the petition, entered January 16, 2015, the Supreme Court noted that the issue it was determining was whether Pratow Corporation was properly removed from the tow list and whether it was entitled to reinstatement. [Ibid.]. In determining the issue, the Supreme Court reviewed the basis for the removal - which involved the claimant's post approval inclusion of her father, who was then still under a criminal cloud, as a tow truck driver - found it to be rationally based and not arbitrary or capricious.
The "Troop K and F Interstate Towing Informational Memorandum" dated September 1, 2011, which claimant's principal, Stephanie Corritori, formerly known as Stephanie Prato, indicated was in effect at the time of the alleged breach, provides in its introduction that it is an "informational memorandum" that
"does not confer any rights to any tow truck owner or operator. It contains non-mandatory guidelines for use by the New York State Police in securing qualified towing services to operate on the Interstate Highway System.
This notice will promote safety, free flow of traffic, as well as consistency, fairness and efficiency for the motoring public and the servicing tow agencies on I684 and I84. All tow operators must sign the notice to be authorized to be called for a rotational tow . . . The notice will go into effect once the selections are made and will be renewed every 2 (two) years." [Exhibit 3].
The 15 page document continues to describe the obligations of the tower, including, among other things, the equipment required, availability, sections of the roadways served, insurance, and also provides, under a heading entitled "Removal from the Rotational List" that
"A tow agency may be temporarily or permanently removed from the rotational list for any legitimate reason, including but not limited to: unsatisfactory performance, violations of law, imposition of unreasonable charges on motorists, refusals to accept standard methods of payment from motorists, and failure to meet the characteristics and other standards outlined in these guidelines.
a. In the event the State Police decides to remove, or is considering the removal of a tow agency from the list, it may provide the agency with written notice of the change, and the reasons for the change. If the tow agency disagrees, the State Police may offer an opportunity to be heard either orally or in writing at the NYSP's discretion.
b. Before removing the tow agency from the list, the State Police will generally provide a written notice containing the reasons for the removal and specifying the date the removal is scheduled to take effect . . . However, in the event prior notice is not appropriate in the judgment of the State Police, the notice may be provided as soon as possible after the removal." [Exhibit 3].
Finally, although the 2011 informational memorandum contains a signature page indicating that "this Agreement is executed by the State and the Tow Operator by their duly authorized representatives" it is unsigned by either Ms. Prato, or an authorized State representative, nor is it approved by the State Comptroller's office [see generally State Finance Law §112]. [Ibid.].
Prior towing documents were introduced as well, including a document entitled "I-684 Towing Policy" dated November 1, 2005 to which Brian Prato, as President of Prato Autobody Corp., and Stephanie Corritori's father, was a signatory on April 20, 2006 [Exhibit 1], and a document entitled "I 684 Towing Policy" dated August 29, 2006 to which Stephanie Prato "of Pratow," was a signatory on September 19, 2006. [Exhibit 2]. The 2005 version does not appear to have any specific notice or termination provisions [Exhibit 1], although the 2006 version contains a paragraph entitled "Termination of the Contract" and provides that
"The agreement may be terminated at any time for violations of the terms of the agreement, violations of law, or other incapacity. Grounds for termination include, but are not limited to those listed under penalties in this document. In addition, the agreement may be terminated without a specific finding of regulatory violation whenever it believes that the public interest or safety would be better served by such termination as determined by the NYSP or DOT." [Exhibit 2].
Neither the November 1, 2005 or the August 29, 2006 towing policy is signed by a representative of the State or the State Comptroller's office. [Exhibits 1 and 2].
Notice of the pertinent removal of claimant from the tow list was given in a writing dated March 28, 2012, effective March 8, 2012, containing only the 201 Railroad Avenue, Bedford Hills, New York address for Pratow Corporation. [Exhibit 5]. This writing was hand-delivered by State Trooper Juan Thomas to Brian Prato, whose auto body business is on adjoining property at 211 Railroad Avenue.
Photographs showed that the business enterprises on the adjoining lots shared parking - Pratow trucks can be seen on what is ostensibly B & B Auto body property - and testimony showed that Ms. Prato utilized office space in her father's part of the properties occasionally, as is natural between companies used by relatives. [See Exhibits F, G, L, M, N, O, P.]
Although Mr. Prato remained as a driver for Pratow Corporation, his auto body business did subcontractor work for his daughter's company, his wife and other daughter worked in the Pratow Corporation office when Ms. Corritori was at her 9 to 5 employment elsewhere, and he consulted with Ms. Corritori on business matters, he was not a principal in Pratow Corporation.
Mr. Prato did not make his daughter aware of his receipt of this letter notice of removal from the towing list. Instead, it was Ms. Corritori's testimony that she first learned of her company's removal when one of her trucks was sent back (after being called out) on November 30, 2012.
In sum, all the evidence adduced at this trial concerned the wrongful reasons for claimant's removal from the list as claimant perceived it. Testimony concerned the enmity between a competitor and Mr. Prato, Mr. Prato's business practices and resolution of criminal proceedings brought against him (and the allegedly dubious genesis of same), the alleged friendship between a member of the Westchester County District Attorney's Office investigative staff, or a member of the State Police and the competitor, Pratow Corporation's good record as a tower, and the arbitrariness and capriciousness of the removal and the lack of a substantial, rational, basis for same.
No property interest or contractual relationship is established by the "Troop K and F Interstate Towing Informational Memorandum" policy [Exhibit 3] in effect when claimant alleges it was wrongfully removed from the rotational towing list. See Matter of Alltow, Inc. v Village of Wappingers Falls, 94 AD3d 879, 881 (2d Dept 2012); see also Matter of Henson v City of Syracuse, 119 AD3d 1340, 1341 (4th Dept 2014); Matter of Prestige Towing & Recovery, Inc. v State of New York, 74 AD3d 1606, 1608 (3d Dept 2010). It is an informal policy, that does not require the State agency to provide written notice of removal in the first place ("the State Police will generally provide a written notice", " in the event prior notice is not appropriate in the judgment of the State Police, the notice may be provided as soon as possible after the removal . . ."), and allows removal for "any legitimate reason." [Exhibit 3, emphasis added].
Other claims brought in the Court of Claims have been dismissed based upon the lack of subject matter jurisdiction presented by the present claim. See e.g. Marty's v State of New York, UID No. 2009-044-536 (Ct Cl, Schaewe, J., July 9, 2009); Prestige Towing & Recovery, Inc., Claim No. 115138, Motion No. M-75805, unreported (Schaewe, J., July 9, 2009).
Notwithstanding claimant's attempt to characterize this claim as one for breach of contract, what the Court is being asked to do is review whether the State Police determination to remove claimant from the towing list "was made in violation of lawful procedure, was affected by an error of law or was arbitrary and capricious or an abuse of discretion." Civil Practice Law and Rules §7803 (3). Whether claimant has lost incidental income as a result, cannot be decided without reviewing the investigations and determinations made by the New York State Police. This claim is "a quintessential example of a dispute governed under CPLR article 78." Madura v State of New York, 12 AD3d 759, 761 (3d Dept 2004).
Based on the foregoing, Claim Number 122445 is in all respects dismissed.
Let Judgment be entered accordingly.
August 19, 2015
White Plains, New York
THOMAS H. SCUCCIMARRA
Judge of the Court of Claims