Pinnacle Bus Service, Inc. v. State

19 Misc. 3d 998, 856 N.Y.S.2d 835
CourtNew York Court of Claims
DecidedMarch 7, 2008
DocketClaim No. 111212
StatusPublished

This text of 19 Misc. 3d 998 (Pinnacle Bus Service, Inc. v. State) is published on Counsel Stack Legal Research, covering New York Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Pinnacle Bus Service, Inc. v. State, 19 Misc. 3d 998, 856 N.Y.S.2d 835 (N.Y. Super. Ct. 2008).

Opinion

OPINION OF THE COURT

Frank P. Milano, J.

Defendant moves to dismiss the claim on the ground that the court lacks subject matter jurisdiction.

In particular, defendant argues that adjudication of the claim would necessarily require review of an administrative determination of a state agency which is only permissible in a CPLR article 78 proceeding brought in Supreme Court. Claimant Pinnacle Bus Service, Inc. opposes the motion, asserting that the claim is based on the “negligent action and/or inaction by the Department of Motor Vehicles” and that no “administrative decision was ever issued in this matter.”

The pertinent facts underlying the motion are not disputed. On June 26, 2003, the New York State Department of Motor Vehicles (DMV) issued an administrative determination against Gala Bus Lines, Ltd. after a hearing. The hearing concerned allegations that Gala had committed numerous violations of article 19-A of the Vehicle and Traffic Law involving mandated background investigations of drivers employed by Gala to transport New York City prekindergarten school children. The hearing resulted in a finding of more than 160 violations by Gala. The hearing determination imposed a fine of $80,000 and a 90-day suspension of the “registrations for vehicles [buses] listed to the respondent.”

On or about August 18, 2003, enforcement of the determination was stayed, pending an administrative appeal, as a result of an article 78 proceeding commenced by Gala (claimant’s exhibit E). During October of 2003, Gala sold and/or assigned the leases of several of the buses affected by the determination to Pinnacle. Pinnacle registered the buses in its name and DMV issued new certificates of title for the buses to Pinnacle.

On December 1, 2003, Gala’s DMV administrative appeal was dismissed and on December 5, 2003 the registration suspension order was reissued with an effective date of December 15, 2003 [1000]*1000(claimant’s exhibit E). Between January and December of 2004, Gala and DMV engaged in settlement discussions concerning the $80,000 fine. In mid-December of 2004, Gala’s attorney stopped returning DMV’s telephone calls (claimant’s exhibit E).

In late December of 2004, DMV made an administrative determination, pursuant to Vehicle and Traffic Law § 509-j (g), to deny renewal of the registrations of the buses obtained by Pinnacle from Gala which had been the subject of the DMV-Gala determination.

DMV made this determination, without a hearing, based upon its belief that the October 2003 bus transfer from Gala to Pinnacle was made in order to avoid compliance with the DMV-Gala determination of June 26, 2003 and in particular to avoid payment of the $80,000 fine (claimant’s exhibit E; defendant’s exhibits D, E).

Faced with the prospect of not being able to lawfully deploy enough buses to satisfy its contracts with the New York City Department of Transportation, Pinnacle paid the $80,000 fine on December 31, 2004 and thereafter commenced this action to recover $80,000 in damages from defendant.

The claim, in paragraphs 8 through 11, contains the following allegations with respect to defendant’s purported liability:

“8. The DMV negligently failed to conduct a proper review of the aforementioned situation; had they performed their duty properly, they would have determined that Pinnacle and Gala were separate entities, recognized that Gala’s interest in the vehicles had been transferred and would have allowed Pinnacle to renew the registrations without paying the fine.
“9. Furthermore, had the DMV timely perfected liens or issued registration suspensions against the vehicles in connection with the aforementioned case number, Pinnacle would have had notice of the fines and suspensions, the new vehicle registrations and vehicle titles would not have been issued in Pinnacle’s name and Pinnacle would not have consummated their agreement with Gala.
“10. The DMV’s negligent record keeping allowed the agreement between Gala and Pinnacle to be consummated and Pinnacle suffered substantial financial loss as a result.
“11. Finally, Pinnacle was denied any hearing on [1001]*1001the matter and due process requires such.”

In City of New York v State of New York (46 AD3d 1168, 1169-1170 [3d Dept 2007]), 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], Iv 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]).”

The law is also clear that

“[a] public employee’s discretionary acts — meaning conduct involving the exercise of reasoned judgment — may not result in the municipality’s liability even when the conduct is negligent. By contrast, ministerial acts — meaning conduct requiring adherence to a governing rule, with a compulsory result— may subject the municipal employer to liability for negligence” (Lauer v City of New York, 95 NY2d 95, 99 [2000]).

There is no question that Vehicle and Traffic Law § 509-j (g) provided the Commissioner of Motor Vehicles with the discretionary authority to deny renewal of the registrations at issue:

“Upon the suspension of a vehicle registration pursuant to subdivision (d) or (e) of this section, the commissioner shall have the authority to deny a registration or renewal application to any other [1002]*1002person for the same vehicle and may deny a registration or renewal application for any other motor vehicle registered in the name of the applicant where the commissioner has reasonable grounds to believe that such registration or renewal will have the effect of defeating the purposes of this article.”

The statute does not require a hearing prior to the Commissioner denying registration or renewal.

In order to award Pinnacle damages of $80,000 (representing the administrative fine) the court would necessarily have to review and annul the discretionary determination of the Commissioner of Motor Vehicles to deny renewal of the subject registrations until the DMV-Gala fine was paid.

The essence of the claim is a complaint about the administrative actions or inactions of a state agency.

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Related

Lauer v. City of New York
733 N.E.2d 184 (New York Court of Appeals, 2000)
Psaty v. Duryea
118 N.E.2d 584 (New York Court of Appeals, 1954)
Gross v. Perales
527 N.E.2d 1205 (New York Court of Appeals, 1988)
Scherbyn v. Wayne-Finger Lakes Board of Cooperative Educational Services
573 N.E.2d 562 (New York Court of Appeals, 1991)
Madura v. State
12 A.D.3d 759 (Appellate Division of the Supreme Court of New York, 2004)
Hill Park Health Care Center, Inc. v. Novello
12 A.D.3d 1010 (Appellate Division of the Supreme Court of New York, 2004)
Hoffman v. State
42 A.D.3d 641 (Appellate Division of the Supreme Court of New York, 2007)
City of New York v. State
46 A.D.3d 1168 (Appellate Division of the Supreme Court of New York, 2007)
Rye Psychiatric Hospital Center, Inc. v. State
177 A.D.2d 834 (Appellate Division of the Supreme Court of New York, 1991)
Ozanam Hall of Queens Nursing Home, Inc. v. State
241 A.D.2d 670 (Appellate Division of the Supreme Court of New York, 1997)
Harvard Financial Services, Inc. v. State
266 A.D.2d 685 (Appellate Division of the Supreme Court of New York, 1999)
Lobel Financial Corp. v. State
8 Misc. 3d 662 (New York State Court of Claims, 2005)

Cite This Page — Counsel Stack

Bluebook (online)
19 Misc. 3d 998, 856 N.Y.S.2d 835, Counsel Stack Legal Research, https://law.counselstack.com/opinion/pinnacle-bus-service-inc-v-state-nyclaimsct-2008.