Campion Funeral Home, Inc. v. State

166 A.D.2d 32, 569 N.Y.S.2d 518, 1991 N.Y. App. Div. LEXIS 5616
CourtAppellate Division of the Supreme Court of the State of New York
DecidedMay 9, 1991
StatusPublished
Cited by17 cases

This text of 166 A.D.2d 32 (Campion Funeral Home, Inc. v. State) is published on Counsel Stack Legal Research, covering Appellate Division of the Supreme Court of the State of New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Campion Funeral Home, Inc. v. State, 166 A.D.2d 32, 569 N.Y.S.2d 518, 1991 N.Y. App. Div. LEXIS 5616 (N.Y. Ct. App. 1991).

Opinion

OPINION OF THE COURT

Levine, J.

Claimant James C. Sherwood is an officer of both claimant Campion Funeral Home, Inc., which operated a funeral home in Albany County, and claimant Sherwood Funeral Home, Inc., which operated two funeral homes at separate locations in Rensselaer County. In 1980, the Bureau of Funeral Directing of the State Department of Health (hereinafter the Bureau) commenced an investigation into the business practices of all three claimants over the preceding two years, including interviewing former employees, subpoenaing records, mailing questionnaires to customers and interviewing a number of persons responding to the questionnaires.

[34]*34In September 1980, three separate disciplinary proceedings were commenced against claimants and their associates arising out of the investigation. In the first of these proceedings (hereinafter proceeding No. 1), Sherwood, Campion Funeral Home and another person were charged with some 160 violations of the Public Health Law (§§ 3440-a, 3450 [1] [e], [f]; § 3441 [1] [e]) and/or the applicable regulations (10 NYCRR 78.1, former 77.3 [a] [2]; [b] [2], [3], [7], [12]; former 77.8 [h]) for failing to furnish itemized statements of the cost of funerals when the funeral arrangements were made; for having itemization statements signed by persons who did not make the funeral arrangements, but who falsely signed the names of the persons who had made such arrangements; and for practicing fraud and deception by altering bills, substituting vaults and a casket, inflating cash advances and adding finance charges to bills.

In the second and third proceedings (hereinafter proceeding Nos. 2 and 3), Sherwood and the two Rensselaer County Sherwood Funeral Homes were charged with multiple violations of Public Health Law § 3440-a and/or 10 NYCRR 78.1 (failing to timely furnish itemized statements); 10 NYCRR former 77.3 (b) (3) (inflating amounts advanced or charged for third-party services for funerals); and 10 NYCRR former 77.3 (b) (12) (failing to comply with regulations regarding finance charges).

In January 1981, while all the foregoing charges were pending, claimants filed a notice of intention to file a claim against the State and, in February 1982, filed such a claim based upon alleged abuse of process by the Bureau in its investigation and prosecution of the foregoing charges.

An evidentiary hearing was conducted in proceeding No. 1, following which the Administrative Law Judge (hereinafter ALJ) sustained only 62 of the 160 charges, finding 36 violations of Public Health Law § 3440-a and 10 NYCRR 78.1 (not furnishing itemized statements); 19 violations of Public Health Law § 3450 (1) (f) (false signatures on itemized statements of the person making the funeral arrangements); 5 violations of Public Health Law § 3450 (1) (e) and 10 NYCRR former 77.3 (b) (2) (fraudulent or deceptive practices in substituting vaults and a casket); and 1 violation each of the regulations dealing with overcharges for cash advances and imposing finance charges without advance disclosure. Proceeding Nos. 2 and 3 were consolidated for a hearing before another ALJ, following which all charges were dismissed.

[35]*35The Commissioner of Health adopted the findings of the ALJs in all three proceedings and, in proceeding No. 1, imposed fines and a two-year suspension of registration, which was conditionally stayed. Sherwood and Campion Funeral Home then challenged the determination in proceeding No. 1 pursuant to CPLR article 78. Upon review, this court annulled the five findings of fraudulent and deceptive practices regarding substitution of caskets or vaults and otherwise confirmed the determination (Matter of Campion Funeral Home v Axelrod, 99 AD2d 901).

Thereafter, claimants filed an amended notice of claim against the State adding a cause of action for malicious prosecution. The claim alleged as damages injury to reputation, loss of business and good will, and legal expenses in defending against the charges. After joinder of issue and claimants’ pretrial disclosure, the State moved for summary judgment dismissing the claim, asserting that (1) claimants’ malicious prosecution cause of action was barred because, inter alia, proceeding No. 1 was not finally terminated in favor of Sherwood and Campion Funeral Home, and there was no proof of interference with the personal or property rights of any claimant, and (2) claimants’ abuse of process cause of action must fail because of the absence of proof of any improper use of process and/or because it was not timely filed. The Court of Claims agreed with the State and dismissed the claim herein in its entirety. This appeal followed.

On appeal, claimants have only addressed the propriety of the dismissal of their cause of action for malicious prosecution and, hence, their appeal from the dismissal of their abuse of process cause of action is deemed abandoned (see, Heroux v Page, 107 AD2d 862, 863-864).

Claimants’ first point addresses the ground for the Court of Claims’ dismissal of the malicious prosecution claim of Campion Funeral Home and Sherwood, namely, that the final determination of misconduct on 57 of some 160 charges in proceeding No. 1 disproved, as a matter of law, that the allegedly unjustified initiation of that prior proceeding was finally determined in those claimants’ favor. Claimants argue that the charges that were ultimately dismissed in proceeding No. 1 involved separate transactions and were significantly more serious than the charges sustained against Campion Funeral Home and Sherwood in that proceeding. Hence, according to claimants, they should be able to recover by estab[36]*36lishing the remaining elements of a malicious prosecution cause of action as to the charges that were favorably terminated in proceeding No. 1. We disagree.

The gravamen of a civil malicious prosecution cause of action is the wrongful initiation, procurement or continuation of a legal proceeding (see, Restatement [Second] of Torts § 674; Prosser and Keeton, Torts § 120, at 889 [5th ed]). Proceeding No. 1 was initiated against Sherwood and Campion Funeral Home by the statement of charges which included those ultimately sustained as well as those dismissed. Almost all of such charges, irrespective of their final disposition, involved improprieties and violations of law and regulations in dealing with customers at the time funeral arrangements were made. Claimants have not demonstrated in any way that the charges were improperly joined in one proceeding. Claimants are clearly wrong in contending that the sustained charges were merely technical or innocuous. Notably, sustained and confirmed upon judicial review were 19 instances of false signing of itemized statements, which the AU characterized as "a source of grave concern”, the Commissioner of Health described as "forged itemization statements” and for which severe financial penalties were imposed. Thus, the Court of Claims correctly concluded that any cause of action for malicious prosecution arising out of proceeding No. 1 failed, as a matter of law, because that proceeding did not finally terminate in claimants’ favor (see, MacLeay v Arden Hill Hosp., 164 AD2d 228, lv denied 77 NY2d 806; Kenyon v State of New York, 118 AD2d 942, 943-944; 59 NY Jur 2d, False Imprisonment and Malicious Prosecution, § 65, at 328; see also, Mondrow v Selwyn, 172 NJ Super 379, 412 A2d 447, cert denied 84 NJ 449, 420 A2d 347).

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Bluebook (online)
166 A.D.2d 32, 569 N.Y.S.2d 518, 1991 N.Y. App. Div. LEXIS 5616, Counsel Stack Legal Research, https://law.counselstack.com/opinion/campion-funeral-home-inc-v-state-nyappdiv-1991.