Fine v State of New York

[*1] Fine v State of New York 2005 NY Slip Op 52240(U) [10 Misc 3d 1075(A)] Decided on November 15, 2005 Court Of Claims Minarik, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This opinion is uncorrected and will not be published in the printed Official Reports.

Decided on November 15, 2005
Court of Claims

Howard B. Fine, D.M.D., Claimant,

against

THE State of New York, Defendant.



M-69691



For Claimant:

HARRIS BEACH PLLC

BY: DOUGLAS A. FOSS, ESQ.

For Defendant:

HON. ELIOT SPITZER

New York State Attorney General

BY: REYNOLDS E. HAHN, ESQ.

Assistant Attorney General

Renée Forgensi Minarik, J.

BACKGROUND

This is the motion of Howard B. Fine, D.M.D., for permission to file a late claim pursuant to § 10(6) of the Court of Claims Act ("CCA"). The proposed claim relates to professional misconduct proceedings brought against Dr. Fine pursuant to § 6510 of the Education Law and § 230 of the Public Health Law. These proceedings were initiated when two [*2]of Dr. Fine's former partners, Joseph V. Quevedo, D.D.S. and John Lepore, D.D.S. ("Quevedo" and "Lepore"), filed a complaint against him with the Education Department's Office of Professional Discipline ("OPD"). Education Law § 6510 in conjunction with Public Health Law § 230, provides the statutory framework for investigation of misconduct by professionals licensed by the Department of Health.

On October 1, 2001, after completion of initial investigations but before a final determination of the charges, Daniel J. Kelleher, the Director of Investigations for the OPD, wrote a letter to William Wood, Esq., the attorney for Quevedo and Lepore. The letter indicated that the committee had determined that there was "substantial evidence" that professional misconduct had occurred and that 13 different charges relating to Dr. Fine had been referred to the OPD's Prosecution Division for appropriate action. According to Claimant, the fact that this letter was written violated Education Law § 6510(8), which states that "[t]he files of the department relating to the investigation of possible instances of professional misconduct . . . shall be confidential and not subject to disclosure at the request of any person, except upon the order of a court in a pending action or proceeding."

Subsequently, Quevedo and Lepore became involved in litigation against Dr. Fine in Monroe County Supreme Court. On January 25, 2002, the Kelleher letter was attached to motion papers in that Supreme Court action. When the motion papers were filed in the Monroe County Clerk's Office, they became public record and were picked up by at least one local newspaper.

The Rochester Democrat and Chronicle ran a story in April of 2002 which referenced the Kelleher letter and the charges against Dr. Fine pending with the OPD. The Democrat and Chronicle ran other similar stories between that time and November of 2004. Claimant asserts that the alleged violation of the confidentiality requirement in the statute caused his practice to suffer so badly that he was forced into early retirement in 2004. He seeks permission to file a late claim against the State for the damage the publication of the letter caused to his professional practice.

TIMELINESS

Permission to late file may only be granted if a like action against a citizen would not be barred by the applicable statute of limitations (Court of Claims Act § 10[6]). Defendant, comparing the proposed claim to an intentional tort, argues for the application of the one year statute of limitations contained in CPLR 215(3). Claimant urges the Court to apply the three year statute of limitations contained in CPLR 214(2) which governs actions "to recover upon a liability, penalty or forfeiture created or imposed by statute." Claimant would also measure the accrual of his cause of action from January 25, 2002, when the motion papers containing the Kelleher letter were filed in the County Clerk's Office. If the Court were to adopt Claimant's position, this late claim application would be timely, having been filed on January 24, 2005.

I find that, to the extent a cause of action exists (addressed below), it was created by statute and, therefore, the three year statute of limitations found in CPLR 214(2) is applicable. The case of Gaidon v Guardian Life Ins. Co. of Am. (96 NY2d 201) is instructive on this point. In that case, the Court of Appeals determined that the three year statute of limitations contained in CPLR 214(2) applied to a violation of General Business Law § 349, which was a liability or penalty created by statute. I disagree with Claimant, however, as to when that cause of action accrued. [*3]

Claimant points out that the Gaidon Court determined, for purposes of applying the CPLR 214(2) three year statute of limitations, that the cause of action accrued when the plaintiffs were injured. Counsel for Claimant eloquently and forcefully argued that, based upon Gaidon, Claimant's cause of action accrued when the Kelleher letter was filed in the County Clerk's Office. However, even if I were to ignore the fact that the State had nothing to do with filing the letter in the County Clerk's Office, I would still be constrained to find that the cause of action accrued on October 1, 2001. A closer reading of Gaidon itself compels this result.

Although the Gaidon Court determined that the cause of action under General Business Law § 349 accrued when the plaintiff was injured, the Court's explanation of that determination separates Gaidon from Claimant's proposed cause of action. The Court stated that a cause of action accrues when

"all of the factual circumstances necessary to establish a right of action have occurred, so that the plaintiff would be entitled to relief . . . In an action to recover for a liability created or imposed by statute, the statutory language determines the elements of the claim which must exist before the action accrues" (96 NY2d 201, 210).

The Court went on to opine that, because the statutory language contained in General Business Law § 349 required injury to the plaintiff, the statute was not violated and a cause of action did not accrue until the injury was incurred. Here, the factual circumstance necessary to demonstrate a violation of the statute is simply the failure to maintain the statutorily prescribed confidentiality. This failure occurred, if at all, when Mr. Kelleher sent the letter to Mr. Wood. The action, therefore, accrued on October 1, 2001. Claimant's filing of this motion on January 24, 2005 is beyond the three years provided by CPLR 214(2).

Claimant also argues that, because he did not discover the violation of the statute until the documents were filed in the County Clerk's Office, the statute of limitations should not begin to run until that time. However, it is not the date of discovery that is controlling. As the Appellate Division, First Department stated in Wender v Gilberg Agency (276 AD2d 311, 312): "[T]he three-year limitations period set forth in CPLR 214(2) applies . . . and the date of discovery rule is not applicable and cannot serve to extend that limitations period" (citations omitted).

In Barrett v Huff (6 AD3d 1164), a case cited by Claimant to support his argument that a three-year statute of limitations should apply, the Appellate Division, Fourth Department, determined that it was the date of the tort, not the date of discovery, that controlled the accrual of the cause of action.

"The statute of limitations for those causes of action is three years where, as here, the injury alleged is to plaintiff's economic interests (see Jemison v Crichlow, 139 AD2d 332, 336 [1988]; affd 74 NY2d 726 [1989]; Stacom v Wunsch, 173 AD2d 401 [1991], lv denied 78 NY2d 859 [1991]) and begins running from the date of the tort, not from [the date of] discovery or the exercise of diligence to discover' (Vigilant Ins. Co. of Am. v Housing Auth. of City of El Paso, Tex., 87 NY2d 36, 44 [1995])."

Barrett v Huff (6 AD3d at 1166)

Accordingly, the proposed cause of action is barred by the statute of limitations, and beyond the remedial reach of Court of Claims Act § 10(6) (see Bardi v Warren County Sheriff's Dept., 260 AD2d 763, 764; Coyne v State of New York, 120 AD2d 769). [*4]

Although the Court would normally proceed no further, the novel issues presented in this matter warrant further analysis of Claimant's application. Subdivision 6 of § 10 of the CCA enumerates six factors to be weighed in connection with a late claim motion: (1) whether the delay was excusable; (2) whether Claimant has any other remedy; (3) whether Defendant had notice of the essential facts constituting the claim; (4) whether Defendant had an opportunity to investigate; (5) whether Defendant would be substantially prejudiced; and (6) whether the claim appears to be meritorious. This list is not exhaustive and the presence or absence of any one factor is not dispositive. Rather, the Court in its discretion balances these factors in making its determination (Bay Terrace Coop. Section IV v New York State Employees' Retirement Sys. Policemen's and Firemen's Retirement Sys., 55 NY2d 979).

Of these six factors, Defendant disputes only numbers 1 (excuse for the delay), 2 (alternative remedy) and 6 (merit). Factors 3, 4 and 5 are, therefore, presumed to weigh in Claimant's favor (see Calzada v State of New York, 121 AD2d 988; Cole v State of New York, 64 AD2d 1023, 1024).

With regard to his excuse for the delay, Claimant alleges that he was not aware that he had a remedy in the Court of Claims, and that he did not want to jeopardize the potential for a negotiated resolution of the OPD charges by commencing an action against the State. Such excuses are not legally acceptable and I find that this factor weighs in Defendant's favor. The absence of an excuse, however, is only one of the factors considered by the Court in reviewing a § 10(6) application, and does not necessarily preclude the relief sought here (Bay Terrace Coop. Section IV v New York State Employees' Retirement Sys. Policemen's and Firemen's Retirement Sys., supra).

With regard to alternative remedies, Claimant concedes that he commenced a Supreme Court action against Quevedo, Lepore, Edwin Robert Schulman (the attorney who represented them in the earlier Supreme Court action), Mr. Kelleher and Mr. Wood. Accordingly, I find that this factor also weighs in Defendant's favor.

Of the six enumerated factors in CCA § 10(6), it is the appearance of merit that is most significant. It would be pointless to grant permission to file late if the proposed claim did not have at least the appearance of merit (see e.g. Prusack v State of New York, 117 AD2d 729). Generally, a proposed claim meets the appearance of merit standard if it passes a two-fold test. It must not be patently groundless, frivolous or legally defective, and upon consideration of the entire record, there must be reasonable cause to believe a valid cause of action exists (Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1).

Apart from the issue of timeliness addressed above, Claimant's application raises two interesting merit-related questions. First, did Defendant violate the statute as alleged by Claimant? Second, if the statute was violated, does a private cause of action exist upon which Claimant can recover?

VIOLATION OF THE STATUTE

Citing Matter of Johnson Newspaper Corp. v Melino (77 NY2d 1), Claimant asserts that "Courts . . . have interpreted Education Law § 6510(8) to require that disciplinary hearings involving dentists are to be kept confidential" (Foss Aff., Par. 9). Claimant goes on to assert that, because the Kelleher letter contained information concerning the status of the disciplinary proceedings against Dr. Fine, "the merit of this claim is apparent on its face" (Foss Aff., Par. 21). A closer look at Johnson and the other cases Claimant relies on, however, demonstrates that [*5]§ 6510(8) was not an integral part of those decisions and that the confidentiality issue was not so easily disposed of by those courts.

Except for the disclosure of investigative files [§ 6510(8)], the confidentiality requirement is not spelled out in the statute, rather the courts have determined that the duty is implied in light of the general statutory scheme. For this reason, the court in Johnson reviewed the history of such proceedings and initially conceded petitioner's argument that "there is no specific statutory or regulatory requirement that professional disciplinary hearings be closed" (Matter of Johnson Newspaper Corp. v Melino, 77 NY2d 1 at 10). The Court noted that § 6510(8) imposed "confidentiality on the files of the department . . . [but] not on the actual conduct of hearings" (id.). The Court held, however, that although the statute did not specifically state that the hearings were to be confidential, "under statutes prescribing disciplinary procedures in analogous contexts, the existence of a requirement for confidential hearings has been assumed despite a similar absence of any specific provision mandating closure" (Matter of Johnson Newspaper Corp. v Melino, 77 NY2d 1, 10, supra [emphasis added]).

Similarly, in Doe v Office of Professional Med. Conduct of NY State Dept. of Health (81 NY2d 1050), the Court of Appeals did not find a specific statutory requirement that the proceedings be kept confidential but, rather (citing Johnson v Melino) that their "construction of the statute is consistent with the general policy that disciplinary proceedings involving licensed professionals remain confidential until finally determined." (81 NY2d 1050, 1052).

Even in Anonymous v Bureau of Professional Med. Conduct/State Bd. for Professional Med. Conduct (2 NY3d 663), a case Claimant relies upon heavily, the Court recognized that the statute did not specifically require confidentiality of the proceedings, but pointed to the same quote from Doe presented above to support its determination that the hearings are assumed to be closed. This distinction is important, as it indicates the care with which the courts have scrutinized the statutory language. These courts did not find that § 6510(8) requires disciplinary hearings be kept confidential. Rather, they recognized that the hearings were something separate and distinct from the investigative files to which § 6510(8) referred. Section 6510(8) was not applicable and not controlling in any of the above mentioned decisions.

Similarly, I find here that the investigative files to which § 6510(8) refers are not in issue. Mr. Kelleher did not release, publish or disseminate the department's files relating to the investigation of Dr. Fine. Rather, he simply notified the complainant's attorney of the determination that "substantial evidence" of the charges brought by complainants had been found and that the matter had been referred to the OPD's prosecution division for appropriate action. Notifying the complainants, who may be required to testify in later proceedings, as to the status of the investigation, does not seem to me to be improper. In fact, Defendant argues that departmental policies actually require such notification (Defendant's Affirmation in Opposition, Exhibit A). Moreover, no specifics concerning the actual investigation of the charges, or even the nature of the charges were contained in the letter. While one could argue a wiser course would have been for Mr. Kelleher to remove Dr. Fine's name from the letter, his failure to do so was not a violation of the statute.

CAUSE OF ACTION

Assuming, arguendo, that the Kelleher letter had violated the statute, I find that neither the Public Health Law nor the Education Law create a private cause of action. Both parties [*6]agree that neither statute specifically creates a cause of action for money damages. Claimant argues, however, that the right has been recognized by the Court of Appeals in the Doe and Anonymous cases discussed above. Each of these cases involved Article 78 applications, however, and neither addressed a party's right to sue the State for money damages. In oral argument, Claimant's counsel argued that an Article 78 proceeding is a private cause of action and that "the statute doesn't give rise to that form of relief either." Therefore, because the Court of Appeals had recognized a doctor's right to bring an Article 78 proceeding, counsel argued that a right to bring a private cause of action for money damages was implied. I am aware of no support for this argument. The ability to bring an Article 78 proceeding exists almost universally for someone affected by decisions, actions or inactions of administrative bodies. This fact does not imply a private cause of action for money damages (Warburton v State of New York, 173 Misc 2d 879). As Professor Siegel has stated:

"The Article 78 proceeding supersedes the common law writs of mandamus, prohibition, and certiorari to review . . . So broad and general is the proceeding's grasp that it does not even purport to name the agencies it takes in . . . Any of those bodies or persons who would ever have been affected' by any of the three superseded writs is today subject to Article 78." Siegel's New York Practice, 3rd Ed. § 557, p. 916.

Claimant correctly points out that a cause of action for money damages can be found even though not specifically set forth in the statute. The test of whether a private right of action may be implied involves three factors: "(1) whether the plaintiff is one of the class for whose particular benefit the statute was enacted; (2) whether recognition of a private right of action would promote the legislative purpose; and (3) whether creation of such a right would be consistent with the legislative scheme" (Carrier v Salvation Army, 88 NY2d 298, 302).

While factor 1 appears to fall in Claimant's favor, factors 2 and 3 are more problematic. "Important also are what indications there are in the statute or its legislative history of an intent to create (or conversely to deny) such a remedy and, most importantly, the consistency of doing so with the purposes underlying the legislative scheme" (Burns Jackson Miller Summit & Spitzer v Linder, 59 NY2d 314, 325 [citations omitted]).

Despite the fact that the confidentiality of OPD proceedings has been an issue addressed by several courts, no court has found or even suggested that a private cause of action for money damages was intended by the legislature. A review of the legislative history also reveals no such intent. Indeed, to the extent that the legislature can be said to have shed any light on the issue, it has signaled that a private cause of action is not appropriate. For instance, the statutory framework provides for immunity from civil actions (unless actual malice is shown) for: "persons who assist the department as consultants or expert witnesses" [Education Law § 6510 (7)]; the party who reports the misconduct [Public Health Law § 230 (11)(b)]; and members of the physician committee on professional conduct [Public Health Law § 230 (11)(g)(v)] .

Nothing in the legislative histories of either of these statutes suggests that a private cause of action should be implied. Also, achievement of statutory objectives (protection of both the complainant and the physician involved, as well as the removal of any disincentive for complainants to step forward) will not be enhanced by a civil remedy (see Yanicki v State of New York, 174 Misc 2d 149). As stated above, not only did the legislature fail to specifically create a private cause of action for a breach of confidentiality, the confidentiality itself was not specified. [*7]Claimant is not requesting that the Court recognize an implied cause of action for a clear violation of a statutory prohibition. Rather, Claimant requests that the Court assume a private cause of action for the violation of an assumed statutory duty. I decline Claimant's invitation to find that the statute implies a private cause of action for a breach of its confidentiality requirements.

For the purposes of this application, Claimant has failed to establish that his claim has the appearance of merit.

Accordingly, I find first that Claimant's application is untimely pursuant to CPLR 214(2). Further, upon reviewing and balancing all of the factors enumerated in CCA § 10(6), I find that they weigh in Defendant's favor. Based upon the foregoing, it is hereby ORDERED, that Claimant's motion for permission to file a late claim is denied.