Pietra v. State

125 A.D.2d 936, 510 N.Y.S.2d 334, 1986 N.Y. App. Div. LEXIS 63113

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: December 19, 1986
• Docket: Claim No. 62334
• Status: Published

Opinions

— Judgment modified, on the law, and, as modified, affirmed, without costs, and matter remitted to Court of Claims for further proceedings, in accordance with the following memorandum: Claimant B-T Productions, Inc. operated a dinner theater in East Rochester, New York, which opened in December 1974 and showed a profit of $30,000 the first year. The business was highly successful, necessitating an addition in 1975 to permit seating of an additional 200 people. Thereafter, claimant Anthony Della Pietra and his business partner, Barry Tuttle, each of whom owned half the business, had a falling out and Della Pietra sought to buy out Tuttle, who went to the New York State Organized Crime Task Force, asserting that the business was engaged in organized crime. The Task Force obtained a search warrant and seized a large number of documents, including many involving the day-today running of the business. The search warrant was later held invalid because the Task Force had failed to obtain the Governor’s approval as required by statute, and we granted the extraordinary remedy of prohibition (Matter of B.T. Prods, v Barr, 54 AD2d 315), and the Court of Appeals affirmed, holding that Task Force officers exceeded their jurisdiction (44 NY2d 226). No further criminal prosecution ever took place beyond the seizure of the records. In the interim, however, publicity resulting from the illegal search and seizure caused business to plummet. Political functions were canceled; advance sales dropped off; and it became difficult to schedule performers. Ultimately, the business went bankrupt. Claimants commenced this lawsuit and the Court of Claims awarded $777,000.

On appeal, the State argues, inter alia, that reversal is mandated because: there is no theory of liability to support recovery; the State is immune from suit; and damages are speculative as a matter of law. Claimants cross-appealed, seeking to increase damages and obtain prejudgment interest. We affirm in all respects except to remit for the fixing of prejudgment interest.

Although the claim does not refer to a specific tort theory, this is no bar to recovery under modern rules of pleading (Diemer v Diemer, 8 NY2d 206, 212; see also, Underpinning & Found. Constructors v Chase Manhattan Bank, 46 NY2d 459, 464, n 1). At the commencement of the trial, claimants’ attorney stated that he intended to establish liability under several theories. Without addressing them all, we agree that claimants have spelled out liability under theories of conversion and tortious interference with business.

"Conversion is any unauthorized exercise of dominion or control over property by one who is not the owner of the property, which interferes with and is in defiance of a superior possessory right of another in the property” (Meese v Miller, 79 AD2d 237; see also, Sporn v MCA Records, 58 NY2d 482; Kahn v Crames, 92 AD2d 634, 635; General Elec. Co. v American Export Isbrandtsen Lines, 37 AD2d 959). In this case, the Task Force search and seizure were unlawful not merely because of lack of probable cause, but because Task Force officials exceeded their jurisdiction in applying for the warrant (Matter of B.T. Prods, v Barr, supra, pp 232, 236). Under these circumstances, the wrongful withholding of claimants’ property for over two years amounted to conversion. Tortious interference with business relations occurs when defendant uses unlawful means to disrupt plaintiffs business, resulting in injury (Sommer v Kaufman, 59 AD2d 843; Rosenberg v DelMar Div., 56 AD2d 576, 577; see also, NRT Metals v Laribee Wire, 102 AD2d 705, appeal dismissed 63 NY2d 770; Harden, S.P.A. v Commodore Elecs., 90 AD2d 733; see, Dunn, Recovery of Damages for Lost Profits, at 145-148 [2d ed]). The disruption of claimants’ business resulting from the unlawful seizure and the resulting notoriety of being associated with organized crime resulted in the bankruptcy of claimants’ business, and renders the State liable for its conduct.

We also reject the State’s claim of immunity. Tango v Tulevech (61 NY2d 34) does not apply to the facts of this case, since Task Force officials were not exercising their discretion in conducting an unlawful search. Nor does the qualified immunity applicable to the prosecutorial function apply where officials act in an investigatory manner and in doing so step outside the scope of their authority (Teddy’s Drive In v Cohen, 47 NY2d 79, 82).

Finally, we find the damages supported by the record. The court was free to reject the statistical projections of increased future profit suggested by the expert (Lloyd v Town of Wheat-field, 67 NY2d 809; Kenford Co. v County of Erie, 67 NY2d 257), and to disregard the half million dollars in loans to claimants which were discharged in bankruptcy. Claimants’ creditors, not claimants, suffered those losses. We agree that claimants are entitled to prejudgment interest. Where the precise date from which to fix interest is ambiguous, "the date of commencement of the damage action” is an appropriate date to choose (Delulio v 320-57 Corp., 99 AD2d 253, 255; De Long Corp. v Morrison-Knudsen Co., 20 AD2d 104, afifd 14 NY2d 346). The matter is remitted to the Court of Claims and the clerk is directed to calculate interest on the recovery from August 11, 1978, the date the claim was filed, to December 2, 1985, the date of the judgment.

All concur, except Lawton, J., who dissents and votes to reverse and dismiss the claim, in the following memorandum.