New York State Court of Claims

New York State Court of Claims
HUNTINGTON v. THE STATE OF NEW YORK, # 2020-028-530, Claim No. 134544, Motion No. M-95547

Synopsis

Case information

UID: 2020-028-530
Claimant(s): MEEHAN OF HUNTINGTON, INC.
Claimant short name: HUNTINGTON
Footnote (claimant name) :
Defendant(s): THE STATE OF NEW YORK
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 134544
Motion number(s): M-95547
Cross-motion number(s):
Judge: RICHARD E. SISE
Claimant's attorney: ZABELL & COLLOTTA, P.C.
BY: Saul D. Zabell, Esq.
Defendant's attorney: HON. LETITIA JAMES, ATTORNEY
BY: Alex J. Freundlich, Esq.
Assistant Attorney General
Third-party defendant's attorney:
Signature date: September 28, 2020
City: Albany
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

The following papers were read on Defendant's motion to dismiss pursuant to CPLR 3211:

1. Notice of Motion filed June 17, 2020;

2. Affirmation of Alex J. Freundlich dated June 3, 2020 with Exhibits A-F annexed;

3. Affirmation dated June 17, 2020 with Exhibits 1-3 annexed;

4. Affirmation of Alex J. Freundlich dated July 10, 2020 with Exhibit A annexed.

Filed papers: Verified Claim

In May 2017 William Kram filed a complaint with the New York State Division of Human Rights (Division) in which he accused Meehan of Huntington, Inc. (claimant) of telling him he had to leave claimant's restaurant because he had a dog with him and dogs were not allowed in the restaurant. Kram asserted in the complaint that he was made to leave despite having advised claimant's employee that he had a hearing disability and that the dog was a service animal. Following an investigation the Division found probable cause to support the allegations in the complaint and referred the matter for a full hearing before an administrative law judge. Based on the evidence presented at the hearing a Recommended Decision and Order was issued on August 20, 2019. In the decision the administrative law judge found that the dog accompanying Kram at the restaurant had never been trained by a professional service dog training center or trainer and that there was no evidence that Kram suffered from a hearing impairment, or any other disability, on the day he was refused service. The administrative law judge concluded that Kram had failed to establish a prima facie case of unlawful discrimination and recommended dismissal of the complaint. In a Notice and Final Order dated December 2, 2019 the Commissioner of the Division advised the parties that she had reviewed the Recommended Order and had adopted and issued the order as the final order of the Division.

On February 28, 2020 the claim in this action was filed. Claimant alleges that Kram's complaint should not have been permitted to move past the investigatory stage as defendant's investigators knew, or should have known, that Kram's complaints were legally deficient. Claimant alleges that as a result of defendant's malicious prosecution it incurred significant legal fees and costs and suffered harm to its reputation. Defendant has now moved to dismiss the claim contending that it is untimely, that the court is without jurisdiction over the claim insofar as it seeks costs and attorney's fees, or is equitable in nature, and because the complained of decision involved a matter of discretion and thus is protected from suit by governmental immunity.

The motion to dismiss the claim as untimely is based, not on the date of filing, February 28, 2020, but on the date of service, March 5, 2020. Service of a claim based on intentional tort must be made within 90 days of accrual (Court of Claims Act 10 [3]). Defendant contends that the claim accrued on December 2, 2019, the day the Commissioner issued the Division's final order and as March 5, 2020 is the 94th day after December 2, 2019, the claim would be untimely. Claimant argues, however, that the claim did not accrue until December 6, 2019, the 90th day prior to service, when it received notice of the Division's final order.

The argument offered by defendant finds support in case law that generally holds that a cause of action for malicious prosecution accrues when the proceeding terminates favorably to the claimant (see e.g. Matter of Nunez v Vil. of Rockville Centre, 176 AD3d 1211, 1213 [2d Dept 2019] [criminal proceeding]; Teller v Galak, 162 AD3d 959, 960 [2d Dept 2018] [civil proceeding]; Williams v CVS Pharmacy, Inc., 126 AD3d 890, 891 [2d Dept 2015][criminal proceeding]; 347 Cent. Park Assoc., LLC v Pine Top Assoc., LLC, 83 AD3d 689, 691 [2d Dept 2011] [civil proceeding]). Those cases, however, involve the termination of criminal or civil court proceedings. In other cases where, as here, the outcome of an administrative proceeding formed the basis of a claim, accrual was found to occur sometime after formal termination when claimant was made aware of the outcome (Biondo v New York State Bd. of Parole, 60 NY2d 832 [1983] [parole denial]; Commack Self-Service Kosher Meats Inc. v State of New York, 270 AD2d 687, 688 [3d Dept 2000] [prior violation notice]; Augat v State of New York, 244 AD2d 835, 836 [3d Dept 1997] [recision of authority to act as administrator]; see also Hunt Bros. Contrs. v Glennon, 214 AD2d 817, 819, n 5 [3d Dept 1995] [administrative appeal process]; cf. Matter of Owners Comm. on Elec. Rates, 76 NY2d 779 [1990], revg on dissenting op below [Levine, J.], 150 AD2d 45 [3d Dept1989] [distinguishing quasi-legislative and quasi-judicial determinations]).

In determining when a claim accrues, a court "must balance the competing policy considerations of putting to rest stale claims with ensuring fairness to the claimant who shall not unreasonably be deprived of the right to assert a claim" (B.F. v Reproductive Medicine Assoc. of N.Y., LLP, 30 NY3d 608, 615 [2017][internal quotation marks and citation omitted]). In this instance, the underlying administrative proceeding was not resolved at the time the hearing ended, as defendant recognizes, but only months later when the Commissioner ratified the hearing officer's determination and issued an order to that effect. Importantly, the defendant was in control not only of when the determination became effective but also of the time when claimant was given notice of the result. If accrual in such instances is determined to have occurred upon issuance of a final determination, control over the timing of notice could significantly impact a party's ability to timely file because any delay would further restrict the relatively narrow filing period. Thus, given the control exercised by defendant, the competing policy considerations acknowledged in B.F. v Reproductive Medicine Assoc. of N.Y., LLP recommend accrual upon notice to claimant of the favorable termination. This result further comports with the rule that a claim accrues only when damages are reasonably ascertainable (Local 851 of Intl. Bhd. of Teamsters v State of New York, 36 AD3d 672 [2d Dept 2007]) since claimant could not know the outcome of the hearing until notified by defendant.

Defendant's remaining arguments are also unpersuasive. The claim asserts a cause of action for malicious prosecution which is legal in nature not equitable. Moreover, an administrative proceeding, where it involves a hearing and trial of the issues on evidence and testimony under oath, with the right of cross-examination, has sufficient attributes of a judicial proceeding to be considered a judicial proceeding for the purposes of a cause of action for malicious prosecution (Groat v Town Bd. of Town of Glenville, 73 AD2d 426, 429 [3d Dept 1980]; Scollar v City of New York, 160 AD3d 140 [1st Dept 2018]; Manti v New York City Tr. Auth., 165 AD2d 373 [1st Dept 1991]). Thus, while the cause of action here is based on an underlying civil proceeding, requiring patent proof of want of probable cause (Perryman v Village of Saranac Lake, 41 AD3d 1080, 1081-1082 [3d Dept 2007]), as well as proof of special injury (Sapienza v Notaro, 172 AD3d 1418, 1419 [2d Dept 2019]), the court has jurisdiction to entertain this common law tort (Court of Claims Act 9 [2]). Finally, while attorney's fees and other litigation costs, as well as injury to reputation, do not qualify as special damages (Campion Funeral Home v State of New York, 166 AD2d 32, 36-37 [3d Dept 1991]), defendant's objection to this aspect of the claim is based on lack of jurisdiction, a ground not implicated by what would amount to a pleading deficiency.

Accordingly, it is

ORDERED, that the motion is denied.

September 28, 2020

Albany, New York

RICHARD E. SISE

Judge of the Court of Claims