Summary
upholding AG's authority to enforce § 63 remedies not found in underlying statute
Summary of this case from City of N.Y. v. FedEx Ground Package Sys., Inc.Opinion
CA 03-01435.
December 31, 2003.
Appeal from an order of Supreme Court, Jefferson County (Gilbert, J.), entered September 6, 2002, which, inter alia, dismissed the petition against respondent David Lowry.
ELIOT SPITZER, ATTORNEY GENERAL, ALBANY (M. PATRICIA SMITH OF COUNSEL), FOR PETITIONER-APPELLANT.
HARRIS BEACH LLP, PITTSFORD (LAURA W. SMALLEY OF COUNSEL), FOR RESPONDENTS-RESPONDENTS.
Before: PRESENT: PIGOTT, JR., P.J., HURLBUTT, SCUDDER, KEHOE, AND GORSKI, JJ.
MEMORANDUM AND ORDER
It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the cross motion in its entirety and reinstating the petition against respondent David Lowry and as modified the order is affirmed without costs.
Memorandum: The Attorney General commenced this proceeding pursuant to Executive Law § 63 (12) against respondents, Frink America, Inc. (Frink) and David Lowry, the chief executive officer, president, and secretary of Frink, alleging that respondents violated Labor Law §§ 191-c and 198 by failing to pay vacation pay, commissions, and expenses still owed to 41 employees after Frink closed its snowplow manufacturing plant. The Attorney General sought to enjoin respondents from continuing to violate Labor Law §§ 191-c and 198, restitution for the amounts owed, counsel fees, and costs. Respondents filed a "cross motion" to "dismiss" the petition "pursuant to CPLR 3211 and 3212" on the grounds that Frink did not have sufficient funds to pay its obligations and that Lowry did not participate in the determination of the amount of wages, vacation pay, commissions, and expenses to be paid to Frink's employees. Supreme Court determined that, while the Attorney General has the authority to redress violations of the Labor Law by a proceeding pursuant to Executive Law § 63 (12), he "may not use Executive Law § 63 (12) to expand the remedies contained in the Labor Law." Thus, the court determined that the Attorney General cannot seek injunctive relief or seek to impose individual liability on Lowry as a corporate officer because those remedies are not available under the Labor Law. The court therefore dismissed the petition as against Lowry.
We disagree with the court's determination that the remedies afforded by Labor Law article 6 are exclusive and preclude the Attorney General from exercising his authority to seek additional remedies under Executive Law § 63 (12). Section 63 (12) does not create any new causes of action, but does provide the Attorney General with standing "to seek redress and additional remedies for recognized wrongs" based on the violation of other statutes ( State of New York v. Cortelle Corp., 38 N.Y.2d 83, 85). In other words, section 63 (12) "create[s] no new claims but * * * provide[s] particular remedies and standing in a public officer to seek redress on behalf of the State and others" ( id. at 86). Thus, where a proceeding is commenced pursuant to Executive Law § 63 (12), the Attorney General is entitled to seek the "additional remed[y]" of injunctive relief ( Cortelle Corp., 38 N.Y.2d at 85). In State of New York v. Princess Prestige Co. ( 42 N.Y.2d 104), the Court of Appeals, following the rationale of Cortelle, held that the Attorney General could obtain injunctive relief pursuant to Executive Law § 63 (12) even though the underlying statute, the Home Solicitation Sales Act (now the Door-to-Door Sales Protection Act, codified as Personal Property Law article 10-A), did not provide for such relief. Similarly, the Attorney General may seek restitution pursuant to Executive Law § 63 (12) for a violation of Insurance Law § 2117 even though that underlying statute does not provide for restitution ( see People v. American Motor Club, 179 A.D.2d 277, 283).
We also reject respondents' contention that allowing the Attorney General to seek additional remedies under section 63 (12) in wage disputes undercuts the Legislative intent behind the statutory scheme of Labor Law article 6. The Attorney General is empowered by section 63 (12) to prosecute and seek redress beyond the remedies available to the Commissioner of Labor and individual employees ( see generally Labor Law §§ 196-199) in cases of repeated or persistent fraud or illegality ( see generally Princess Prestige Co., 42 N.Y.2d at 107; American Motor Club, 179 A.D.2d at 283; State of New York v. Winter, 121 A.D.2d 287, 288).
However, although the Attorney General may seek injunctive relief for a violation of Labor Law article 6 in an appropriate case, we conclude that such relief is inappropriate in the instant case. The Attorney General here seeks payment of money on behalf of former employees of Frink, which is a remedy at law. An injunction is an equitable remedy, and it is well settled that, where adequate relief can be obtained by a money judgment, there is no need for equitable relief; the money judgment suffices ( see Cuppy v. Ward, 187 A.D. 625, 628-629, affd 227 N.Y. 603; Ansonia Assoc. v. Ansonia Residents' Assn., 78 A.D.2d 211, 214; see also City of New York v. State of New York, 94 N.Y.2d 577, 599; Matter of Camp Scatico v. Columbia County Dept. of Health, 277 A.D.2d 689, 690; see generally 67A N.Y. Jur 2d, Injunctions § 23). In addition, injunctive relief is not an appropriate remedy where, as here, the Attorney General seeks relief for past injuries or to restore rights that have already been denied ( see Cuppy, 187 A.D. at 628). The failure of Frink to pay its employees is an accomplished fact for which injunctive relief will not be granted ( see Sivakoff v. Sivakoff, 280 A.D. 106, 108; see also 67A N.Y. Jur 2d, Injunctions § 17).
Finally, because Executive Law § 63 (12) allows the Attorney General to seek relief against "any person," there is no impediment to imposing personal liability against a corporate officer, such as Lowry, if it is established that he personally participated in or had actual knowledge of the fraud or illegality (see People v. Apple Health Sports Clubs, 80 N.Y.2d 803, 807; Princess Prestige Co., 42 N.Y.2d at 106-108; People v. Court Reporting Inst., 245 A.D.2d 564, 565; People v. Concert Connection, 211 A.D.2d 310, 320, appeal dismissed 86 N.Y.2d 837; People v. American Motor Club, 157 A.D.2d 455, 456; Clark v. Pine Hill Homes, 112 A.D.2d 755). Therefore, we modify the order by denying the cross motion in its entirety and reinstating the petition against Lowry.