Opinion
# 2018-032-045 Claim No. 120222
08-14-2018
OWARD FINGER v. THE STATE OF NEW YORK
Borrelli & Associates, PLLC By: David D. Barnhorn, Esq. Hon. Barbara D. Underwood, Attorney General By: Joan Matalavage, Assistant Attorney General
Synopsis
Following a trial, claimant's claim for breach of contract is dismissed. Claimant failed to prove by a preponderance of the credible evidence that a valid agreement existed.
Case information
| UID: | 2018-032-045 |
| Claimant(s): | HOWARD FINGER |
| Claimant short name: | FINGER |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 120222 |
| Motion number(s): | |
| Cross-motion number(s): | |
| Judge: | JUDITH A. HARD |
| Claimant's attorney: | Borrelli & Associates, PLLC By: David D. Barnhorn, Esq. |
| Defendant's attorney: | Hon. Barbara D. Underwood, Attorney General By: Joan Matalavage, Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | August 14, 2018 |
| City: | Albany |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Claimant filed the instant claim on August 11, 2011, alleging damages arising from an alleged breach of contract. The claim alleged that claimant entered into a valid and enforceable agreement with defendant wherein claimant would cooperate and provide assistance to defendant during defendant's investigation into the awarding of contracts by Office of Temporary and Disability Assistance (OTDA) for consultative medical examinations. In exchange, claimant alleged that defendant agreed to keep claimant's identity confidential when it released its findings (see Verified Claim). A trial was held on February 13 and 14, 2018 in Albany, New York.
FACTS
Claimant, a consultative medical examiner for multiple companies during his career, commenced this action to recover damages for the breach of an alleged confidentiality agreement with the New York State Office of the Inspector General and the Inspector General of the New York State Comptroller (the "Inspectors General"). Claimant was the sole witness in support of his claim. He denied ever being an employee of the State of New York or the City of New York, but testified that he was an employee of an affiliate of the New York City Health and Hospitals Corporation (NYC HHC) (T: 155-156). Claimant alleged that he agreed to provide information to the Inspectors General against the OTDA regarding the OTDA's awarding of contracts under its procurement bidding process, in exchange for confidentiality as the source of the information for the investigation. He further alleged that OTDA favored claimant's competitor, thereby giving the competitor most of the contracts. The Inspectors General launched an investigation into claimant's allegations. The Joint Report issued by the Inspectors General on April 24, 2009 concluded that many of claimant's allegations "were wholly unsupported by any evidence" and referred claimant's name to the Inspector General of the NYC HHC for the inappropriate use of work equipment for personal business (Exhibit 7).
On the day of trial, claimant's attorney attempted to receive an adjournment of the trial because certain witnesses could not attend. The Court noted that the claim was filed on August 11, 2011. After six scheduling orders, claimant filed a Note of Issue and Certificate of Readiness on April 21, 2017. On May 23, 2017, a trial was scheduled for February 13 and 14, 2018. At trial, the Court denied the request for an adjournment, inasmuch as claimant knew about the trial date since May and defendant had dutifully scheduled its two witnesses who had employment and travel schedules.
References to the trial transcript are indicated here as (T: ).
Claimant alleged that he was notified in March 2009 by George King, the Inspector General of the New York State Comptroller, that claimant's name along with the names of his business and colleagues, would be released in the Joint Report (T: 77-78). On March 11, 2009, claimant wrote an email to Mr. King that stated:
"My colleagues and I, as well as our attorneys, were never informed that the sources of information would not be kept confidential in the final OIG Report, which is to be released shortly to the public. This was never discussed with us beforehand. Had we known this previously, we would have requested that the sources of the information be kept confidential, or else we would not have divulged such information under such circumstances . . ." (Exhibit 5 [emphasis in original]).
Claimant wrote another email to Mr. King on March 18, 2009, explaining his reliance upon the New York State Inspector General's website for the proposition that it was a written offer to provide confidentiality to him when he shared documents with the State Inspector General (Exhibit 6; T: 64). The website provided, in a section entitled "File A Complaint":
"We need your help. New York State government employees, by the terms of Executive Law Article 4-A have an obligation to report to us any information regarding alleged corruption, fraud, criminal activity, conflicts of interest or abuse by another State employee or a person having business dealings with the State. If you are aware or have reason to believe that any such misconduct has occurred, please contact us . . ." (Exhibit 3).
Under a section titled "Confidentiality", the website stated:
"When you contact us with a complaint, regardless of the method you choose to use, although you are not required to identify yourself, we do strongly encourage that you do so in the event additional questions arise during the course of our evaluation or investigation.
"If you do choose to identify yourself when filing a complaint, please
know that it is our strict policy to protect your identity during the
course of an investigation, unless you consent to our disclosing that information or we are compelled to disclose it by law or pursuant to a court order.
"In addition, New York State law affords 'whistle-blower' protection to State employees who report allegations of misconduct: you cannot be disciplined, dismissed or subjected to adverse personnel action because you have filed a complaint with the Office of the State Inspector General" (Exhibit 3).
Claimant also maintains that an agreement for confidentiality was created at a meeting on January 7, 2008. He feared retribution from his competitor and the competitor's alleged allies in the OTDA (T: 46), and testified that at this meeting: "We offered to provide [Mr. King] relevant information to substantiate our allegations, and in return for acting in good faith, we requested that he keep our identity confidential as the sources of the information" (T: 44). Mr. King agreed to these terms (T: 50). But claimant never spoke with Kelly Donovan, First Deputy Chief Inspector General for the State, about confidentiality prior to the release of the Joint Report (T: 159). However, claimant shared voluminous documents with Ms. Donovan and Mr. King (T: 153-154; 223). He testified that he was not aware of the contents of the Joint Report prior to its release (T: 157). Claimant maintains that his reputation was injured due to the publication of the Joint Report and that he had to resign from his position with Metro Diagnostic Medical Services, P.C., as that corporation was preparing to submit a bid to be awarded a consultative medical examination contract from the OTDA (T: 102-103).
Defendant presented two witnesses in its defense. The first witness was George King, who was the Inspector General of the Office of the State Comptroller at the time that the Joint Report was issued in April 2009. He recalled meeting with claimant and his lawyer on January 7, 2008, but testified that he never promised confidentiality to claimant or his attorney at that meeting (T: 221-222). To the best of his knowledge, no one from the State Comptroller's Office promised confidentiality to claimant (T: 235). He noted that neither claimant nor his attorney requested confidentiality at that meeting and that if they did, he would have referred them to the OIG's office. According to Mr. King, claimant did not request confidentiality until after he received a copy of the draft report (T: 224).
Mr. King is an attorney who practiced throughout New York State government including the Office of Children and Family Services, the New York State Commission of Correction, the New York State Parole Board, and the New York State and Local Retirement System within the New York State Comptroller's Office (T: 216).
Exhibit R contains an email to Mr. King from claimant's counsel, dated March 16, 2009, that requested confidentiality for claimant and three other individuals, as well as two entities. After receiving the March 16, 2009 email from claimant's counsel, Mr. King contacted Ms. Donovan regarding the request (Exhibit R). Ms. Donovan responded: "she is out of her mind if they think they are not going to be named" (Exhibit R).
Ms. Donovan explained that she did not recall why she used the pronoun "she" but noted that it could have been in reference to one of claimant's female colleagues (T: 298).
Kelly Donovan was defendant's second witness. She testified that she first became aware of the allegations of favoritism at OTDA regarding the letting of contracts for consultative medical exams in early 2007 (T: 289-290). She met with claimant several times and received large packets of documents from him (T: 291-292). After a two year investigation, she came to the conclusion that the allegations of fraud and corruption were unfounded (T: 292-293). Neither she nor her investigators made a commitment to claimant about confidentiality (T: 293-294). Ms. Donovan explained that confidentiality was not considered because of the nature of the allegations (T: 294). The core of the investigation concerned a public bidding process wherein the names of the bidders were open to the public and available for review on lists maintained at the Comptroller's Office (T: 294; 332). According to Ms. Donovan, claimant's first request for confidentiality was made on the eve of the Joint Report's publication (T: 296). She also noted that claimant's initial complaint did not come through the website of the State Inspector General, as claimant mailed a package to OTDA (T: 330).
Ms. Donovan is an attorney who began her career at the Manhattan District Attorney's Office. In addition to the OIG's Office, she also worked in the New York State Attorney General's Office as Executive Attorney General for the Criminal Division. She is currently a managing director in forensic investigations at KPMG in New York City (T: 287-289). --------
LAW AND ANALYSIS
"To state a claim for breach of contract, a [claimant] must allege: (1) the parties entered into a valid agreement, (2) [claimant] performed, (3) defendant failed to perform, and (4) damages" (VisionChina Media Inc. v Shareholder Representative Servs., LLC, 109 AD3d 49, 58 [1st Dept. 2013], citing Noise in the Attic Prods., Inc. v London Records, 10 AD3d 303, 307 [1st Dept. 2004]).
"To create a binding contract, there must be a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms" (Matter of Express Indus. & Term. Corp. v New York State Dept.of Transp., 93 NY2d 584, 589 [1999], citing Joseph Martin, Jr., Delicatessen v Schumacher, 52 NY2d 105, 109 [1981]). A contract is not enforceable unless a court "is able to determine what in fact the parties have agreed to" (Matter of 166 Mamaroneck Ave. Corp. v 151 E. Post Rd. Corp., 78 NY2d 88, 91 [1991]). Accordingly, "[i]f an agreement is not reasonably certain in its material terms, there can be no legally enforceable contract" (Cobble Hill Nursing Home v Henry & Warren Corp., 74 NY2d 475, 482 [1989] [citations omitted]; see Carione v Hickey, 133 AD3d 811, 811 [2d Dept. 2015]). "An enforceable contract requires 'an objective meeting of the minds' and 'a manifestation of mutual assent sufficiently definite to assure that the parties are truly in agreement with respect to all material terms' " (Towne v Kingsley, 121 AD3d 1381, 1382 [3d Dept. 2014], quoting Matter of Express Indus. & Term. Corp. v New York State Dept.of Transp., 93 NY2d at 589). It is claimant's burden to establish that the parties had an agreement that was enforceable (Kelly v Bensen,151 AD3d 1312, 1313 [3d Dept. 2017]).
Here, claimant failed to establish "a manifestation of mutual assent sufficiently definite to assure that the parties [were] truly in agreement with respect to all material terms" (Matter of Express Indus. & Term. Corp. v New York State Dept.of Transp., 93 NY2d at 589). Claimant's testimony was, at times, confusing. Claimant testified that Mr. King promised confidentiality at the January 7, 2008 meeting between claimant, claimant's counsel and Mr. King and that a policy of confidentiality is reflected on the website of the New York State Inspector General (T: 45, 64; Exhibit 3). However, claimant's testimony was directly contradicted by Mr. King, who stated that claimant did not make a confidentiality request at the meeting (T: 222), and Ms. Donovan, who stated that she never had a conversation with claimant about keeping his identity confidential (T: 301). The Court finds that defendant's witnesses, Mr. King and Ms. Donovan were credible, and the Court credits their testimony which strongly refuted claimant's position.
Ms. Donovan testified that the investigation was started after claimant filed a complaint with OTDA (T: 290). OTDA consequently notified the State Inspector General's Office (T: 290). Mr. King testified that neither claimant nor his counsel requested confidentiality during the January 7, 2008 meeting, and that if even if they did, he would have deferred such a request to the OIG (T: 221-222). Ms. Donovan testified that neither she nor her investigators made a commitment to claimant about confidentiality (T: 293-294) According to both Mr. King and Ms. Donovan, claimant did not request confidentiality until March 2009, only one month before the release of the Joint Report (T: 224, 296; Exhibit 7). Neither Mr. King nor Ms. Donovan promised confidentiality to claimant at that time (T: 235, 301). Thus, claimant failed to show an "objective meeting of the minds" between himself and either Mr. King or Ms. Donovan regarding confidentiality (Towne v Kingsley, 121 AD3d at 1382). Moreover, even if the promise of confidentiality outlined on the OIG's website could be construed as an offer, it only applies to New York State employees, and claimant is not employed by New York State (T: 155-156). Thus, the Court finds that claimant failed to show that the parties agreed on essential terms and entered into a valid and enforceable agreement (see Silber v New York Life Ins. Co., 92 AD3d 436, 439-440 [1st Dept. 2012]).
Accordingly, the Court finds that claimant failed to establish the existence of a binding agreement between the parties. The Court need not address defendant's Statute of Frauds defense or the issue of damages because the Court finds that no binding agreement was formed. Based upon the Court's review of the credible evidence, including observing the witnesses and assessing their demeanor, the Court dismisses the claim in its entirety.
Let judgment be entered accordingly.
August 14, 2018
Albany, New York
JUDITH A. HARD
Judge of the Court of Claims