Opinion
# 2016-041-088 Claim No. 127391 Motion No. M-88828
10-26-2016
ROBERT BERGER and KAREN BERGER v. THE STATE OF NEW YORK
CARL G. DWORKIN, ESQ. HON. ERIC T. SCHNEIDERMAN New York State Attorney General By: Anthony Rotondi, Esq. Assistant Attorney General
Synopsis
Defendant's motion to dismiss claim is granted where Court of Claims lacks subject matter jurisdiction over claim for attorney's fees and damages resulting from alleged "wrongful exercise of the police power" by Department of Environmental Conservation and the Office of the Attorney General in environmental enforcement proceeding and subsequent Article 78 proceeding and, additionally, where claim fails to state a cause of action and where defendant is entitled to governmental immunity.
Case information
| UID: | 2016-041-088 |
| Claimant(s): | ROBERT BERGER and KAREN BERGER |
| Claimant short name: | BERGER |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 127391 |
| Motion number(s): | M-88828 |
| Cross-motion number(s): | |
| Judge: | FRANK P. MILANO |
| Claimant's attorney: | CARL G. DWORKIN, ESQ. |
| Defendant's attorney: | HON. ERIC T. SCHNEIDERMAN New York State Attorney General By: Anthony Rotondi, Esq. Assistant Attorney General |
| Third-party defendant's attorney: | |
| Signature date: | October 26, 2016 |
| City: | Albany |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Defendant moves to dismiss this claim for damages and attorney's fees arising from an administrative enforcement proceeding and resulting Decision and Order (DEC Order) of the New York State Department of Environmental Conservation (DEC) which was thereafter annulled, without costs, on the ground that it was unsupported by substantial evidence, in an Article 78 proceeding resolved by an opinion and judgment in Matter of Berger v New York State Dept. of Environmental Conservation (125 AD3d 1128 [3d Dept 2015], leave denied 26 NY3d 908 [2015], the "Appellate Division Opinion and Judgment").
The claim, comprised of 37 pages and 210 paragraphs, reduces to the allegations contained in paragraph 5:
"The claim is for damages suffered by Claimants in defending against, and prosecuting a Civil Practice Law and Rules Article 78 challenge to, the wrongful exercise of the police power of the State of New York by the Department of Environmental Conservation ("DEC"), and defending against the continuing wrongful exercise of the police power by the Office of the Attorney General ("OAG") in the form of:
(a) an enforcement action commenced and continued by DEC against Claimants . . . ;
(b) issuance of a Decision and Order ("D&O") by DEC in which [DEC] found and determined that Claimants owned a portion of the Dam and imposed a penalty and a schedule of compliance actions to be taken . . .; and
(c) OAG's representation of DEC in Claimants' Article 78 challenge."
Paragraphs 168-210 of the claim reveal that claimants essentially assert that DEC was negligent in its investigation, presentation and determination of the administrative enforcement proceeding against claimants and that the Office of the Attorney General (OAG) was negligent in its defense of DEC in the claimants' Article 78 proceeding to annul the DEC Order. The claim, at paragraph 176, seeks $113,557.27 for "defending against the DEC's wrongful exercise of police power in the enforcement action." At paragraphs 178-184 of the claim, claimants request damages of $56,855 for "expenditures in complying" with the DEC Order. Finally, in paragraphs 185-210, claimants allege that they are entitled to $167,743.65 based upon the failure of the OAG, during the course of the Article 78 proceeding, to "make any effort to research real estate principles or statutory or decisional law" regarding riparian rights, among other things.
In its answer, the defendant asserts that the Court "lacks subject matter jurisdiction over the claim . . . as the claim fails to comply with Section 11 of the Court of Claims Act [and] because the exclusive remedy available to Claimant in this matter is a special proceeding pursuant to CPLR Article 78."
Defendant's answer further alleges that defendant's actions were discretionary governmental activities and immune from liability; that the defendant owed claimants no legally cognizable duty of care, special or otherwise; and that defendant's actions were "judicial, quasi-judicial or discretionary determinations made by . . . employees acting within the scope of their duties as public officials and therefor defendant is immune from any liability for such actions."
Defendant moves to dismiss the claim on the grounds that the Court lacks subject matter jurisdiction over the claim, the claim fails to state a cause of action and the claim is barred by the governmental immunity doctrine. Claimants oppose the defendant's motion to dismiss the claim.
In opposition to the defendant's motion to dismiss, claimants argue that the DEC investigation and determination had "no basis in law or fact" and was "knowingly contrary" to fact and law and the defendant is therefore not entitled to assert issues "premised upon discretionary and quasi-judicial acts and immunity as bars to this Claim, because [defendant's acts] were all of a nature that fall outside the realm of what the law considers to be legitimate discretionary or quasi-judicial acts to which immunity attaches."
In their Memorandum of Law, claimants also argue that defendant should be required to prove that its actions in the enforcement and adjudication proceeding were "substantially justified." Claimants borrow this standard from CPLR Article 86, which permits a prevailing party in an Article 78 proceeding, other than the state, to "submit to the court an application" to recover "fees and other expenses incurred by such party" and which further provides that the court shall award such fees and expenses "unless the court finds that the position of the state was substantially justified." Claimants concede, however, that CPLR Article 86, by its express terms, does not apply to the claim. Claimants set forth no other statutory or contractual basis for recovery of attorney's fees from defendant (see Hunt v Sharp, 85 NY2d 883, 885 [1995]).
The DEC Order successfully challenged by claimants resulted from an enforcement proceeding brought pursuant to Environmental Conservation Law (ECL) 15-0507, and determined that claimants were owners of the Honk Falls Dam, penalized claimants for not fulfilling certain statutory obligations of dam owners and ordered claimants to undertake certain remedial actions with respect to the Dam.
Claimants challenged the DEC Order in the Article 78 proceeding, which was transferred from Albany County Supreme Court to the Appellate Division, Third Department, pursuant to CPLR 7804 (g) because a substantial evidence issue (see CPLR 7803 [4]) was raised. In particular, the Appellate Division Opinion and Judgment framed and determined the Article 78 issue as follows:
"In this proceeding, the primary issue presented is whether [the Bergers] and the Cooks own the dam. After finding that each party admitted ownership of the parcels abutting the creek, that each was named as an owner of the parcels in their recorded deeds and crediting the opinion of DEC's surveyor that the boundary between the Cook parcel and the Berger parcel is the midpoint of the dam's spillway, the ALJ concluded that they owned the dam. We do not agree.
Generally, we will not disturb an administrative determination made following a hearing unless it is shown that it was not supported by substantial evidence in the record (citations omitted). In our view, the Commissioner, who adopted the findings of the ALJ, erred because his findings were made without regard to the statutory basis for the agreement and indenture by and between the City and Central Hudson, and his conclusions were based on an incomplete record with regard to the condemnation proceeding. As such, we cannot conclude that the determination was supported by substantial evidence."
The Court has carefully reviewed the Appellate Division Opinion and Judgment and finds that the underlying administrative determination and the Appellate Division Opinion and Judgment each considered a complex set of deeds, agreements, court orders, maps, statutes and relevant case law, and further finds that the Appellate Division Opinion and Judgment neither asserts nor implies that the underlying administrative determination of DEC had "no basis in law or fact" or was "knowingly contrary" to fact and law, as claimants have repeatedly insisted.
Rather, the Appellate Division Opinion and Judgment, after considering the evidence, simply did not "agree" with the administrative determination and instead found that the DEC's conclusion was "not supported by substantial evidence in the record." The Appellate Division Opinion and Judgment's holding that the DEC determination lacked a "substantial" evidentiary basis is not equivalent to a holding that the determination had "no basis in law or fact" or was "knowingly contrary" to fact and law, as claimants suggest.
The Court further notes that the Appellate Division Opinion and Judgment was granted without costs against defendant (see CPLR 8101: "The party in whose favor a judgment is entered is entitled to costs in the action . . . unless the court determines that to so allow costs would not be equitable, under all of the circumstances.").
Additionally, pursuant to CPLR 7806, the Appellate Division Opinion and Judgment could have, if warranted, provided claimants "restitution or damages" incidental to the primary relief of annulment sought by claimants. The Appellate Division Opinion and Judgment did not do so.
In seeking dismissal of the claim, defendant first argues that the Court lacks subject matter jurisdiction over the claim because it seeks to review "actions or inactions of a state agency" and that subject matter jurisdiction of such a claim lies only in Supreme Court in the context of a CPLR Article 78 proceeding.
The jurisdiction of the Court of Claims is invoked where money damages are the essential object of the claim, unlike an instance where the principal claim is equitable in nature (such as to review action or inaction by a state agency), with monetary relief being incidental to the principal claim (see Harvard Fin. Servs. v State of New York, 266 AD2d 685, 685 [3d Dept 1999]; Matter of Gross v Perales, 72 NY2d 231, 236 [1988]).
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 explains 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' (Psaty v Duryea, 306 NY 413, 416 [1954]), but may grant incidental equitable relief so long as the primary claim seeks to recover money damages in appropriation, contract or tort cases (see Ozanam Hall of Queens Nursing Home v State of New York, 241 AD2d 670, 671 [1997]), '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"' (Madura v State of New York, 12 AD3d 759, 760 [2004], lv denied 4 NY3d 704 [2005], quoting Matter of Gross v Perales, 72 NY2d 231, 236 [1988]). 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 (see Hoffman v State of New York, 42 AD3d 641, 642 [2007]), as review of such determinations are properly brought only in Supreme Court in a CPLR article 78 proceeding (see Matter of Scherbyn v Wayne-Finger Lakes Bd. of Coop. Educ. Servs., 77 NY2d 753, 757 [1991])."
In order to award claimants damages in this action, the Court would necessarily be required to review the administrative proceedings and determination of the DEC which found, after a nine day hearing, that claimants were an owner of the Honk Falls Dam. The Court would also necessarily be required to review the actions of the OAG, in its role as attorney, in defending its client, the DEC, in the claimants' Article 78 proceeding.
Claimants ask that this Court review the DEC enforcement proceeding and the OAG's legal representation of the DEC and find that each was without "any basis in law or fact" and that each was "knowingly contrary" to law and fact. As set forth above, this Court lacks jurisdiction to do so (see Chevron U.S.A., Inc. v State of New York, 86 AD3d 820, 821 [3d Dept 2011]).
The Court additionally lacks subject matter jurisdiction because the claim fails to comply with Court of Claims Act 11 (b) in that it fails to allege facts sufficient to state a cause of action. In particular, the claim fails to allege facts showing that defendant owed a cognizable legal duty to claimants sufficient to support the claim's negligence-based causes of action.
Valdez v City of New York (18 NY3d 69, 75 [2011]), explains that where a "case involves . . . a classic governmental, rather than proprietary, function . . . [it is a] fundamental obligation of a [claimant] pursuing a negligence cause of action to prove that the putative defendant owed a duty of care."
It is beyond dispute that defendant's mandate to investigate and administratively adjudicate alleged violations of environmental laws and regulations is a discretionary governmental function for which the state owes no actionable duty of care to any particular person or entity (see Lauer v City of New York, 95 NY2d 95, 100 [2000]: "To sustain liability against a municipality, the duty breached must be more than that owed the public generally"; see also Sweet v State of New York (114 Misc 2d 269, 274-276 [Ct Cl 1982]), finding that the "Water Resources Law" (ECL Article 15) is intended to benefit the general public and DEC "cannot be cast in damages for any failure to comply with the provisions of said law . . . Rather, to establish a viable cause of action, it must be shown that the department assumed a special affirmative duty toward claimants and that said duty was performed in a negligent manner").
In McLean v The City of New York (12 NY3d 194, 203 [2009]), the Court of Appeals recited the law as to when the state may be held liable for the negligent performance of a governmental function:
"Government 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."
Liability arising from the negligent performance of a ministerial governmental function may only attach when a claimant establishes that the State breached a special duty owing directly to the claimant (Metz v State of New York, 20 NY3d 175, 179 [2012]; Valdez v City of New York, 18 NY3d 69, 75 [2011]).
A "[special] duty is born of a special relationship between the [claimant] and the governmental entity. When such a relationship is shown--and it is [claimant's] burden to establish it--the government is under a duty to exercise reasonable care toward the [claimant]" (Pelaez v Seide, 2 NY3d 186, 198-199 [2004]). The Pelaez opinion explains that a "special relationship can be formed in three ways: (1) when the [defendant] violates a statutory duty enacted for the benefit of a particular class of persons; (2) when it voluntarily assumes a duty that generates justifiable reliance by the person who benefits from the duty; or (3) when the [defendant] assumes positive direction and control in the face of a known, blatant and dangerous safety violation" (Pelaez, 2 NY3d at 199-200 [2004).
Claimants are required to allege facts sufficient to show that they were owed a special duty by defendant. Claimants have not done so, and do not even suggest that the defendant owed them a special duty of care.
The claim fails to allege a cognizable legal duty of care running from defendant to claimants. The claim thus fails to state a negligence-based cause of action and fails to satisfy Court of Claims Act 11 (b) in that it fails to allege facts stating a cognizable cause of action. The Court lacks subject matter jurisdiction over the claim (see DeHart v State of New York, 92 Misc 2d 631, 634 [Ct Cl 1977]: "Although the precise wording of section 11 does not appear to require that a claim state a valid cause of action, the cases are clear that without such a statement a claim is legally deficient and subject to fatal attack, Patterson v State of New York, 54 AD2d 147; Davis v State of New York, 28 AD2d 609; Weinstein v New York State Thruway Auth., 27 Misc 2d 503")
To summarize, the claim fails to state a cause of action and fails to allege facts sufficient to satisfy the pleading requirements of Court of Claims Act 11 (b).
Finally, defendant is entitled to the protection of the governmental immunity defense even if claimants could credibly assert that they were owed a duty of care. Arteaga v State of New York (72 NY2d 212, 216 [1988]), instructs that where governmental action "involves the conscious exercise of discretion of a judicial or quasi-judicial nature," absolute immunity will attach to those decisions where the "exercise of reasoned judgment . . . could typically produce different acceptable results."
The DEC Order, resolution of which was transferred to the Appellate Division pursuant to CPLR 7804 because it involved an issue of "substantial evidence," unquestionably resulted from a proceeding of a "judicial or quasi-judicial nature" (see 64 NY Jur2d § 374, Article 78 and Related Proceedings).
The annulment of the DEC Order by the Appellate Division Opinion and Judgment was based upon the Appellate Division's independent review and assessment of the sufficiency of the evidence underlying the DEC Order and, as set forth above, reflects the Appellate Division's judgment that the DEC Order suffered from a lack of substantial evidence rather than from a lack of any evidence. The DEC Order is precisely the type of discretionary quasi-judicial decision-making that is entitled to immunity from liability (see McLean v City of New York, 12 NY3d 194 [2009]).
The defendant's motion to dismiss the claim is granted. The claim is dismissed.
October 26, 2016
Albany, New York
FRANK P. MILANO
Judge of the Court of Claims
Papers Considered:
1. Notice of Motion to Dismiss, filed June 30, 2016; 2. Affirmation of Anthony Rotondi, dated June 30, 2016, and annexed exhibits; 3. Affirmation in Opposition of Carl G. Dworkin, dated July 19, 2016; 4. Affidavit in Opposition of Robert Berger, sworn to July 8, 2016; 5. Reply Affirmation of Anthony Rotondi, dated July 25, 2016.