Buonanotte v. Noonan

534 F. Supp. 2d 385, 2008 U.S. Dist. LEXIS 11713, 2008 WL 446189
CourtDistrict Court, E.D. New York
DecidedFebruary 14, 2008
DocketCV 07-2100
StatusPublished
Cited by1 cases

This text of 534 F. Supp. 2d 385 (Buonanotte v. Noonan) is published on Counsel Stack Legal Research, covering District Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Buonanotte v. Noonan, 534 F. Supp. 2d 385, 2008 U.S. Dist. LEXIS 11713, 2008 WL 446189 (E.D.N.Y. 2008).

Opinion

MEMORANDUM AND ORDER

WEXLER, District Judge.

Plaintiffs commenced this lawsuit alleging that actions taken by Defendants in connection with Plaintiffs’ rights to offer alcohol and substance abuse services and housing, violated their civil rights. The individual Plaintiff is Frank Buonanotte, a resident of Suffolk County who is the Chief Executive Officer of the Plaintiff corporate entities. These corporations are seven entities operating under names that include the name “Crossings,” (the “Crossings Entities”) as well as six entities operating under names including the name “Woodfield” (the “Woodfield Entities”). The exact corporate structure of each of these entities is not clear at this point in the litigation. The court assumes, for the purpose of this motion, that these various entities were owned and/or controlled by Frank Buonanotte (“Buonanotte” or the “Individual Plaintiff’). It appears that the Crossings Entities held, at one time or another, operating certificates issued by the New York State Office of Alcoholism and Substance Abuse Services (“OASAS”). These operating certificates allowed the Crossings Entities to serve as centers providing substance abuse outpatient services. The Woodfield Entities appear to have owned or leased the real estate where Buonanotte operated sober houses, offering substance abuse services on an inpatient basis.

Named as defendants are two individuals. Defendant Shari Noonan is the Acting Commissioner of OASAS and Defendant Henry Zwack is that agency’s Executive Deputy Commissioner. Presently before the court is the motion of Defendants to dismiss the complaint pursuant to Rule 12 of the Federal Rules of Civil Procedure. For the reasons that follow, the motion is granted in part and denied in part.

BACKGROUND

I. Factual Background

The facts set forth below are drawn from Plaintiffs’ complaint. The facts are construed in the light most favorable to Plaintiffs, the non-moving parties and assumed, at this juncture, to be true. Facts are also drawn from state court judicial records presently before the court. See Chambers v. Time Warner, Inc., 282 F.3d 147, 153 (2d Cir.2002) (in context of motion to dismiss court may consider matters of which judicial notice may be taken as well as documents in plaintiffs possession which are relied upon in bringing suit).

As noted, the Individual Plaintiff is engaged in the business of operating centers *389 that provide inpatient and outpatient substance abuse services. Some, but not all of these centers are required to hold, and have been issued, operating certificates issued by OASAS. The facts forming the basis of the complaint begin in or around July of 2005 when OASAS announced that it was imposing fines and taking over the business of treatment centers operating under the name “Lake Grove Treatment Centers” (“LGTC”). Neither the Individual Plaintiff nor the Plaintiff corporate entities have any connection with LGTC. However, upon hearing of the action of OASAS with respect to LGTC, the individual Plaintiff negotiated leases with landlords of certain LGTC sober homes that would allow Plaintiffs to continue offering the services operating in these facilities.

Defendant Zwack is alleged to have told Plaintiff to stop pursuing the patients and/or treatment centers formerly operated under the LGTC name. When Buona-notte asked why he was being asked to cease his negotiations, Zwack is alleged to have told Buonanotte that he should “keep himself off the radar” so as not to become the subject of an OASAS investigation.

On July 20, 2005, Zwack send a letter to Buonanotte advising him that the LGTC sober homes were in a receivership agreement with OASAS. It was further stated that Plaintiffs continuing negotiations to take over the operation of those homes would create a risk to the safety of the residents. The letter also asserted that Buonanotte’s sober homes were being operated in violation of the Mental Hygiene Law. The letter threatened that unless Buonanotte confirmed that he would discontinue any involvement with LGTC sober homes, a cease and desist order for all of the Crossings sober homes would be issued on July 21, 2005. The statements contained in the July 20, 2005 letter are alleged to have been false and that Zwack knew of their falsity at the time.

On December 21, 2005, Zwack, with the alleged knowledge and consent of Defendant Noonan, issued Buonanotte a Notice of Intent to revoke OASAS operating certificates for the Crossings entities. Buo-nanotte alleges that this notice was sent despite the fact that OASAS knew that Crossings was entitled to renewal. The filing of the Notice of Intent triggers a ten day period during which Plaintiffs were entitled to submit a written request for a hearing. On December 26, 2005, Buona-notte timely requested a hearing.

On January 21, 2006, Zwack, with the alleged knowledge and consent of Defendant Noonan, signed a Cease and Desist Order and three days later, Noonan commenced a petition in State Court seeking appointment of a receiver against Crossings. Plaintiffs’ complaint details various provisions of the Mental Hygiene Law and states that Noonan acted outside of the scope of that law in several respects. In general, Zwack and Noonan are alleged to have refused or neglected to afford Plaintiffs the hearing and related procedural safeguards to which they were entitled. Zwack is alleged to have signed an order: (1) imposing upon Plaintiffs a civil penalty in excess of $6 million; (2) revoking Plaintiffs’ operating certificates with respect to several facilities and (8) ordering that OA-SAS operating certificates which were set to expire, not be renewed.

A suspension order directed at Plaintiff is alleged to have been signed on February 14, 2006. This suspension order is alleged to have prohibited Plaintiffs from providing substance abuse treatment. The order also provided that OASAS would be maintaining OASAS personnel at Plaintiffs’ treatment centers.

On February 28, 2006, Buonanotte accepted a voluntary receivership of the facilities operated by Plaintiffs. Pursuant to this receivership, which Buonanotte asserts he was “coerced” into accepting, *390 OASAS was to maintain all clinical and business functions of the Plaintiff facilities until the court proceedings were finalized. Further, according to the complaint, the receiver represented that the status quo would be maintained with respect to the Plaintiff treatment centers and those centers would not be closed without Buona-notte’s consent. However, according to Plaintiffs, Defendants actually intended to use the receiverships as the means to drive Plaintiffs out of business. Defendants are alleged to have “systematically destroyed Crossings’ business by improperly referring away its patients and, essentially, closing its facilities.”

On March 6, 2006, a hearing was held in relation to the OASAS determination to revoke Plaintiffs’ operating certificates.

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Cite This Page — Counsel Stack

Bluebook (online)
534 F. Supp. 2d 385, 2008 U.S. Dist. LEXIS 11713, 2008 WL 446189, Counsel Stack Legal Research, https://law.counselstack.com/opinion/buonanotte-v-noonan-nyed-2008.