Opinion
# 2011-015-283 Claim No. 116864 Motion No. M-80143
12-27-2011
ESPOSITO v. THE STATE OF NEW YORK
Synopsis
Defendant's motion to dismiss claim was granted as the determination to destroy several truckloads of claimants' fireworks was discretionary and defendant was, therefore, immune from liability under both the applicable statute and the common law. Defendant waived its defense regarding the timeliness by asserting Court of Claims Act § 10 (3) as a defense rather than § 10 (3-b). Case information
UID: 2011-015-283 Claimant(s): VINCENT ESPOSITO and JULY4EVER, INC. Claimant short name: ESPOSITO Footnote (claimant name) : Defendant(s): THE STATE OF NEW YORK Footnote (defendant The caption is amended sua sponte to reflect the only name) : properly named defendant. Third-party claimant (s): Third-party defendant (s): Claim number(s): 116864 Motion number(s): M-80143 Cross-motion number(s): Judge: FRANCIS T. COLLINS Bernfeld, DeMatteo & Bernfeld, LLP Claimant's attorney: By: Joseph R. DeMatteo, Esquire Honorable Eric T. Schneiderman, Attorney General Defendant's attorney: By: Thomas R. Monjeau, Esquire Assistant Attorney General Third-party defendant's attorney: Signature date: December 27, 2011 City: Saratoga Springs Comments: Official citation: Appellate results: See also (multicaptioned case) Decision
Defendant moves for dismissal of the claim pursuant to CPLR 3211 on the grounds that the claim fails to state a cause of action, is time-barred, and that the defendant is immune from liability.
Claimant, July4Ever, Inc. (hereinafter "claimant"), is in the business of importing, wholesaling and displaying fireworks (defendant's Exhibit G, Claim, ¶ 5). On August 8, 2006 the Department of Labor issued a violation to claimant for the improper storage of "explosives" in five trailers and one truck at its facility in Walden, New York (defendant's Exhibit A, Notice of Violation And Order To Comply; defendant's Exhibit G, claim, ¶ 10). On August 9, 2006 the fireworks were seized and the claimants were notified that "[i]n the absence of a timely demand for a hearing, the Commissioner may destroy or order the destruction of or otherwise dispose of such explosives as she deems proper" (defendant's Exhibit A, Notice Of Seizure Of Explosives). The seizure notice indicated as the basis for the seizure and possible destruction of the fireworks that the five trailers and box truck in which they were stored did not meet the safe storage criteria governing regulated explosives, the trucks were unlined and the storage facilities had inadequate locks (defendant's Exhibit A). A hearing, having been timely demanded, was held on September 25, 2006 (defendant's Exhibits B and C). The Hearing Officer rejected claimant's argument that the fireworks were not "explosives" within the meaning of article 16 of the Labor Law and the regulations promulgated thereunder (12 NYCRR § 39.2), stating:
"Labor Law § 458 provides that '[n]o person shall keep or store explosives unless a certificate therefore [sic] shall have been issued by the commissioner. . . .' Since Class C fireworks are regulated under Article 16 as explosives, Labor Law § 453 required that the products be stored in a magazine constructed in accordance with the provisions of Article 16 and Code Rule 39. Such a storage magazine is required to have a certificate issued by the Department, which must be attached to the inside of the magazine. None of the tractor trailers had Certificates issued by the Department that would permit them to be used as explosives storage magazines . . ." (Exhibit C, Report & Recommendation, p. 10 of 12 [Footnote omitted]).
The Hearing Officer determined the claimant violated Labor Law § 453 by storing explosives (Class C fireworks) in trailers without certificates, and recommended the seized fireworks be destroyed and that claimant's license be revoked. On May 15, 2007 the Commissioner of Labor (the "Commissioner") adopted the Hearing Officer's findings of fact and conclusions of law and ordered that his recommended determinations and orders be adopted and constitute the final Determination and Order of the Commissioner of Labor. Claimants sought review of the Commissioner's Determination and Order by the Industrial Board of Appeals (the "Board") pursuant to Labor Law § 101 and § 463. Before the petition for review was filed, however, concerns arose regarding the continued safety of storing such a large quantity of fireworks in trailers during the summer months. Although the fireworks had been moved to an isolated location, they remained in the trailers, which Sergeant Timothy Fisher of the New York State Police Bomb Squad described "as five 'pipe bombs' that constitute a 'dangerous situation' " (defendant's Exhibit D, letter dated May 31, 2007 from the Commissioner). He therefore recommended that the explosives be "'destroyed as soon as possible'" (defendant's Exhibit D). As a result, the Commissioner authorized the destruction of the fireworks pursuant to Labor Law § 460 (5). The fireworks were destroyed in June 2007 (defendant's affirmation in support, p. 3).
It does not appear the claimants sought to stay the destruction of the fireworks pending the determination of the Board.
After the fireworks were destroyed but before the matter was decided by the Board, claimants commenced a proceeding pursuant to CPLR article 78 in which they sought a determination that the seizure and destruction of the fireworks was wrongful, as well as incidental damages (affirmation of Joseph R. DeMatteo dated August 12, 2011, ¶ 13). Defendant moved for dismissal of the petition on the ground, inter alia, that claimants had failed to exhaust their administrative remedies. The Court held that although the Board had the power to review the Commissioner's decision to revoke claimant's license, it had no power to determine whether the seizure of the fireworks was reasonable (claimants' Exhibit 1, Decision and Judgment of Hon. Judith A. Hard, A.J.S.C., dated February 6, 2008, pp. 9-10, citing Labor Law § 463). The motion was therefore granted to the limited extent of dismissing the petition insofar as it sought review of claimants' license revocation.
By decision filed February 29, 2008, the Board reversed the Commissioner's order finding the claimant violated Labor Law § 453, stating:
"The only evidence before the Board as to composition of the seized fireworks is that they are 'consumer fireworks' as defined by federal law. As such, it does not fit into the definition of explosives in the statute nor in the further explanation of explosives in the regulatory definition of high or low. Since consumer fireworks are defined by combustion and the regulations speak only in terms of detonation or deflagration, DOL has failed to prove by substantial evidence that the seized fireworks are explosives and therefore, the finding that there was a violation due to improper storage is invalid and unreasonable since the storage requirements only apply to high and low explosives" (defendant's Exhibit E, Resolution Of Decision).
The Board specifically noted that it "makes no finding as to whether the storage of 57,914.6 pounds of fireworks in unattended and unlocked trailers would endanger public safety . . ." (defendant's Exhibit E, n 5).
By Decision And Judgment dated August 5, 2008, Supreme Court dismissed the article 78 proceeding, stating in pertinent part that "any judicial challenge to the propriety of respondent's August 6, 2007 seizure of consumer fireworks has been rendered academic by the [Board's] determination of February 29, 2008, in which the appeals board held that [the Department of Labor] had failed to establish that the seized fireworks were 'explosives' within the meaning of Article 16 of the Labor Law (see Labor Law 460 [1])" (claimant's Exhibit 3, Decision & Judgment of the Hon. Richard M. Platkin, A.J.S.C., p. 8). The Court also dismissed the damages claim as consequential rather than incidental to the relief sought (id.).
A notice of intention to file a claim was personally served on October 30, 2008 and the claim was filed on May 15, 2009 and served in June 2009.Both the notice of intention and the claim allege damages arising from the destruction of claimants' fireworks in June 2007.
Defendant indicates that an unsigned claim personally served on June 15, 2009 was rejected by the Attorney General's Office. The claim was again served on June 22, 2009, this time by certified mail, return receipt requested (affirmation of Thomas R. Monjeau, Esq., par. 5 [l]).
The Alleged Failure To State A Cause of Action
On a motion to dismiss a claim pursuant to CPLR 3211 (a) (7) the court is required to "accept the facts as alleged in the [claim] as true, accord [claimant] the benefit of every possible favorable inference, and determine only whether the facts as alleged fit within any cognizable legal theory" (Leon v Martinez, 84 NY2d 83, 87-88 [1994]; see also Goshen v Mutual Life Ins. Co. of N.Y., 98 NY2d 314, 326 [2002]). The determination is made by reference to whether "the proponent of the pleading has a cause of action, not whether he has stated one" (id. at 88 [quoting Guggeheimer v Ginzburg, 43 NY2d 268, 275]). Thus, even where, as here, a "claim does not refer to a specific tort theory, this is no bar to recovery under modern rules of pleading" (Della Pietra v State of New York, 125 AD2d 936, 937 [1986], affd 71 NY2d 792 [1988]). Giving claimants the benefit of every possible favorable inference, the facts alleged in the claim state a cause of action for conversion. "A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession" (Colavito v New York Organ Donor Network, Inc., 8 NY3d 43,49-50 [2006]; see also Matter of White v City of Mount Vernon, 221 AD2d 345, 346 [1995]). Insofar as claimants allege that no statutory or regulatory authority empowered the Commissioner of Labor to order the seizure and destruction of the fireworks, the claimant alleged sufficient facts to state a cause of action for conversion. Dismissal of the claim on the ground that it fails to state a cognizable cause of action is, therefore, denied.
Timeliness Of The Claim
Conversion is an intentional tort governed by Court of Claims Act § 10 (3-b) (Thyroff v Nationwide Mut. Ins. Co., 8 NY3d 283, 288 [2007] [conversion is an intentional act of dominion or control over property which seriously interferes with the right of another to control it]; De Long Corp. v Morrison-Knudsen Co., 14 NY2d 346 [1964] [conversion is within the class of intentional torts in which pre-verdict interest is recoverable]; Selkirk v State of New York, 249 AD2d 818, 819 [1998] [applying the time limitations contained in Court of Claims Act § 10 (3-b) to a conversion cause of action]). Court of Claims Act § 10 (3-b) requires that an intentional tort claim be filed and served within 90 days after the claim accrued unless a notice of intention is served within that time, in which case a claim may be filed and served within one year following accrual of the claim. It is "the general principle that a claim accrues for purposes of the Court of Claims Act when damages are reasonably ascertainable" (Augat v State of New York, 244 AD2d 835, 836 [1997], lv denied 91 NY2d 814 [1998]). Here, although the fireworks were destroyed in June 2007 the claimants' damages did not become reasonably ascertainable until the Board's decision, reversing the Commissioner's order finding claimant in violation of Labor Law § 453, was filed on February 29, 2008 (see Matter of White v City of Mount Vernon, 221 AD2d at 347; Commack Self-Serv. Kosher Meats v State of New York, 270 AD2d 687, 688 [2000]). As of this date, all of the elements necessary to establish a claim could be truthfully asserted and, notwithstanding claimant's contrary contention, judicial review of an administrative determination would not have been necessary (cf. Ouziel v State of New York, 174 Misc 2d 900 [1997]). This is consistent with the rule that "[a] cause of action for conversion accrues 'when all of the facts necessary to sustain the cause of action have occurred, so that a party could obtain relief in court' " (State of New York v Seventh Regiment Fund, 98 NY2d 249, 259 [2002], quoting Vigilant Ins. Co. of Am. v Housing Auth. of City of El Paso, Tex., 87 NY2d 36, 43 [1995]). Claimant's argument that the claim did not accrue until their article 78 petition was dismissed by Judge Platkin on August 5, 2008 is based on the contention that it was not until that date that the propriety of the seizure, as distinct from the claimant's license revocation, was determined. However, Judge Platkin dismissed the article 78 petition as "academic" because the Board's determination necessarily resolved the propriety of the seizure and "conclusively establishe[d] that DOL erred in seizing July4Ever's consumer fireworks on August 6, 2007 and in revoking petitioner's License on May 15, 2007 on the basis of the seized fireworks being improperly stored explosives" (claimant's Exhibit 3, Decision & Judgment of Hon. Richard M. Platkin, A.J.S.C., p. 9). Measured from February 29, 2008, the date the decision of the Board was filed, the notice of intention served on October 30, 2008 was untimely (Court of Claims Act § 10 [3-b]). In addition, the claim was not filed until May 15, 2009, more than one year after the date the claim accrued (id.). However, by raising the time limitations of Court of Claims Act § 10 (3) as a defense, without raising the particular time limitations applicable to intentional torts contained in Court of Claims Act § 10 (3-b), the defendant waived its objection to the timeliness of the claim under Court of Claims Act § 10 (3-b). Court of Claims Act § 11 (c) provides that an objection to the timeliness of a claim is waived unless raised with "particularity" either in a pre-answer dismissal motion or in a responsive pleading. While defendant raised as its sixth defense the time limitations of Court of Claims Act § 10 (3), applicable only to unintentional torts, it did not raise the time limitations of Court of Claims Act § 10 (3-b). The tort of conversion being intentional, the defendant waived any objection to the timeliness of the claim by citing the wrong statute (see Court of Claims Act §11 [c]; Sinacore v State of New York, 176 Misc 2d 1 [1998]). Defendant's assertion of the statute of limitations as a defense is unavailing as the claim was filed and served within the three-year statutory limitations period applicable thereto (CPLR 214 [3]; Beesmer v Besicorp Dev., Inc., 72 AD3d 1460 [2010]); Dippolito v State of New York, 192 Misc 2d 395 [2002]).
Immunity
In McLean v City of New York (12 NY3d 194 [2009]), the Court of Appeals clarified that "[g]overnment action, if discretionary, may not be a basis for liability, while ministerial actions may be, but only if they violate a special duty owed to the plaintiff, apart from any duty to the public in general" (Id. at 203; see also Dinardo v City of New York, 13 NY3d 872 [2009]; Lewis v State of New York, 68 AD3d 1513 [2009]). "[D]iscretionary or quasi-judicial acts involve the exercise of reasoned judgment which could typically produce different acceptable results whereas a ministerial act envisions direct adherence to a governing rule or standard with a compulsory result" (Tango v Tulevech, 61 NY2d 34, 41 [1983]).
Claimants argue that the State is not immune from liability because in making the determination to seize and destroy their fireworks, the Commissioner was acting without lawful authority or legal jurisdiction. Claimants contend that because Labor Law § 460 controls only the seizure and impounding of "explosives", which the Board determined did not include the consumer fireworks here in issue, the Commissioner's conduct in seizing and destroying their fireworks was unlawful. As defendant points out, however, Labor Law § 460 (1) governs the seizure and destruction of explosives which are in "apparent" violation of any provisions of Labor Law article 16 or the regulations promulgated thereunder, or where there is "reason to believe that public safety is endangered by such explosives . . ." Labor Law § 460 (5) provides immunity for decisions involving the seizure or destruction of explosives as follows:
"5. Any provision herein to the contrary notwithstanding, where, in the opinion of the commissioner, the manufacture, condition, packing or location of explosives is such that its continued existence or transportation is a danger to public safety, he may, without hearing and without liability therefor to the owner thereof, seize and destroy or direct the seizure and destruction of such explosives."
This subdivision was amended in 2009 to insert the word "storage" and substitute "the commissioner" for "he".
In Donald v State of New York (17 NY3d 389 [2011]) the Court of Appeals held that "Where the issue is governmental immunity, an action is considered 'discretionary' if it involves 'the exercise of reasoned judgment'" (at 395, quoting Lauer v City of New York, 95 NY2d 95, 99 [2000]. Here, as in Donald, the Commissioner's actions in determining the fireworks were explosives within the meaning of the applicable statute, and were therefore subject to seizure for violations of the statute, were the type of discretionary acts as to which immunity applies. In interpreting the statute and determining the actions required to be taken thereunder, the Commissioner was acting within "the scope of discretion and responsibilities of the office and all the circumstances as they reasonably appeared at the time of the action on which liability is sought to be based" (Santangelo v State of New York, 101 AD2d 20, 26 [1984] [internal quotation marks and citations omitted]). This is particularly true as to the decision to destroy the fireworks, which was made only after discussions with other affected state agencies including the Department of Labor, Department of Environmental Conservation, the Attorney General's Office and New York State Police. This type of deliberate governmental decision-making may not serve as the basis for an action seeking money damages in the Court of Claims. That hindsight proved this discretionary determination erroneous provides no basis for defeating the privilege. "Because [the Commissioner] was exercising - albeit mistakenly - the discretion given [her] by law, [her] acts cannot be a basis for state liability" (Donald at 396; cf. Della Pietra v State of New York, 71 NY2d 792 [1988]; Teddy's Dr. In v Cohen, 47 NY2d 79 [1979]). Accordingly, defendant's motion is granted and the claim is dismissed.
December 27, 2011
Saratoga Springs, New York
FRANCIS T. COLLINS
Judge of the Court of Claims
The Court considered the following papers:
1. Notice of motion dated July 18, 2011; 2. Affirmation of Thomas R. Monjeau dated July 18, 2011 with exhibits; 3. Affirmation of Joseph R. DeMatteo dated August 12, 2011 with exhibits.