Matter of Persico v New York City Dept. of Bldgs.

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Matter of Persico v New York City Dept. of Bldgs. 2011 NY Slip Op 33439(U) December 22, 2011 Sup Ct, NY County Docket Number: 110711/2010 Judge: Martin Schoenfeld Republished from New York State Unified Court System's E-Courts Service. Search E-Courts (http://www.nycourts.gov/ecourts) for any additional information on this case. This opinion is uncorrected and not selected for official publication. [* 1] MEMORANDUM DECISION Petitioner, AND JUDGMENT FOR A JUDGMENT UNDER ARTICLE 78 OF THE CIVIL PRACTICE LAW AND RULES TO VACATE THE DECISION OF ROBERT D. LIMANDRX, COMMISSIONER OF THE NEW YORK CITY DEPARTMENT OF BUILDINGS TO REVOKE THE HOIST MACHINE LICENSE OF LAWRENCE PERSICO -against- Index No.: 1 I071 112010 THE NEW YORK CITY DEPARTMENT OF BUILDMGS, Respondent. x --------------------------~---- ----~------------------------------ For Petitioner: Ttivclle & Forte, LLP, I 3 I 1 Mmaronack Avenua Suite 170 White Plains, New York 10605 For Rmspondent: Michael A. Cardozo Corporation Counsel of the City of New York I 00 Churuh Street, Room 5-154 New York, New York 10007 HON. MARTIN SCHOENFELD, J.: Petitianer Lawrence Persico (Petitioner) moves this Court fbr an order pursuant to CPLR Article 78 vacating the decision of Respondent Robert D.Lirnandri, Commissioner of the New York City Department of Buildings (DOE), which revoked Petitioner s hoist machine operator s license. Respondent asserts h a t Petitioner Persico s license was properly revoked for demonstration of poor moral character under NYC Administrative Code 5 26-1 33, renumbered as 5 28-401.6. For the reasons set forth below, the Court denies the petition and dismisses the proceeding. [* 2] Petitioner has held a hoist machine operator s license since 1997. In 2003 Petitioner, along with 41 other defendants, WBS charged with Racketeer Influenced Cormpt Organizations Act, 18 U.S,C. 9: 1962 ( RICO ) violations allegedly orchestrated by organized crime families. In lieu of a trial, in October 2004 Petitioner pled guilty to one count of mail Fraud for submitting false information to Operating Engineers Local 14 Union to obtain wagcs and benefits for work he did not perfom. He was sentenced to 33 months in jail and a fine of more than $750,000. Petitioner served 21 months and completed three years of post-release supervision. ROB has renewed Petitioner s hoist machine operator s license m u a l l y since 1998. In June 2009, Petitioner submitted his annual application for renewal in which, for the first time, lie was asked to disclose his history of criminal convictions or offenses. In the application he disclosed that he had been convicted of mail fraud and indicated that the mail fraud conviction w$s gotten for using the U.S. Postal Service to mail illegally earned benefit stamps to the fund ofiice of local 14 union of operating engineers. Verified Answer at 10. DOB granted Petitioner s 2009 renewal application. In October 2009, hQwever, after discovering that Petitioner s mail fraud conviction was part af a larger RICO case involving an organized crime family, DOB filed a petition with the Office of Administrative Trials and Hearings (OATH) initiating a proceeding io revokc Petitioner s license. Verified Answer at 10-11. In particular, DOB asserted that the conduct underlying petitioner s plea of guilty in the RlCO case reflected poor moral character under Administrative Code 528-401.6(formerly $26-133) . Verified Answer at 11. In March 2010, Administrative Law Judge (ALJ) Kevin Casey held a hearing in the case pursuant to OATH 2 [* 3] rules. At the OATH hearing, DOB introduced into evidence a copy of the transcript of Petitioner s guilty plea in 200.4. It also called Frank Damiani, a DOB supervising inspector working in the Cranes and Demcks Units, as a witness. He testified about the responsibilities of hoist machine operators, the public safety aspects of the job and the dangers associated with it. H explained that operators have a lot of responsibility and must be trustworthy because of the e safety concerns associated with crane operating. Verified Answer, Exhibit a at 24. Petitioner s counsel thcii cross examined Mr. Damiani. Next, Mr. Persico testified on his own behalf. He confirmed that he pled guilly t mail o fraud in 2004 and that he served 2 1 months in jail and three years of supervised release. Verified Answer, Exhibit G at 35-36. He also testified that he currently was paying restitution. He stated that he had been working as a hoist macline operator since his release, his license had been renewed each y m , and that there had been no complaints about his work. Verified Answer, Exhibit CJ at 36-38. Ile explained that he was the sole support for his wife and two children ages 13 and 18. He indicated that without a hoist machine operator s license his job opportunities would be ( verylimited and he would be only eligible for the lowest pay. Verified Answer, Exhibit G at 39-40. Upon cross examination, Mr Persico confirmed that the activity for which he had been convicted occurred between 2000 and 2002 and that it involved submitting benefit stamps to the union for work he did not perform on two construction jobs. Verified Answer, Exhibit 0 at 44. He acknowledged that he was Yorty-nine going on f-w hc pled guilty and that he had when held his hoist machine operator s license for three years at the time of the crime. Verified 3 [* 4] Answer, Exhibit G at 4 1 - 42. He also indicated that he had other licenses and that though his work opportunities would be limited he could find other work through the union. Verified Answer, Exhibit Ci at 43. Mr. Persico indicated, in response to a question by AW Casey, that he held paid $5000 of the money he owed in restitution. Verified Answer, Exhibit G at 45. On April 9,2010, ALJ Casey issued a report finding that Petitioner Persiao had violated NYC Administrative Code 4 28-401.6 Elnd recommending revocation of his hoist machine operator s license. Specifically, ALJ Casey found that Petitioner s conviction proved that he committed misconduct related to the trade for which he is licensed and had demonstrated poor m r l character in violation of the Code. Verified Answer, Exhibit I at 3 (The report is dso oa annexed to the Verified Petition tis Exhibit B). In so finding, the ALJ noted that there was a direct connection between *Petitioner s criminal conviction and his license and that the DOB had a compelling interest in ensuring that c m c operators are honest, trustworthy individuals. Verified Answer, Exhibit I at 5. He emphasized that being a hoist machine operator was a safety-sensitive position where cutting corners, inattention, or an error in judgment can lead to death or serious injury. Verified Answer, Exhibit I at 5 . Ln addition, he noted that the DOB has an obligation to prevent the insidiow influence of corruption in the construction industry and that inspectors cannot be at all locations at all times, Verified Answer, Exhibit I at 5. He went on to find that: By his own admission, Ipersico] falsely reported that he was working at construction sites. If [Persic~] missing from a job site, then he w a s incapable was of ensuring that dl necessary safety procedures were followed. Likewise, because Cpersico] engaged in racketeering activity, he contributed to corruption at the job site. Id The ALJ concluded that DOB has gaod reason to doubt [Persico s] fitness to be a hoist machine 4 [* 5] operator. Verified Answer, Exhibit I at 5. He emphasized that revocation of the license was the proper penalty noting that [aJlthough[Persico] presented some mitigation, the weight of evidence supparts license revocation. Verified Answer, Exhibit I at 3. In a letter dated April 23,2010, Respondent adopted the recommendations of ALJ Casey and revoked Petitioner Persico s license, quoting the ALJ s opinion for its reasoning. Verified Answer, Exhibit J (The letter is also annexed to the Verified Petition as Exhibit C). Petitioner aow moves this court to vacate this decision pursuant to CPLR Article 78. DISCUSSION A3 a preliminary mattar, the Court must determine whether, as suggested by the parties, there is a substantial evidence question here that requires transfer to the Appellate Division pursuant to CPLR sections 7803(4) and 7804(g). Section 7803 lays out several grounds on which a Petitioner may base an Article 78 Special Proceeding. Relevant here are sections three and four. Section three allows challenges on the grounds that the administrative decision was made in violation of lawful procedure, was affected by an error of Iaw or w s arbitrary and a capricious or an abuse of discretion. CPLR 7803(3). Under section four, the challenge is based on whether a determination made as H result of a hearing held, and at which evidence was taken, pursuant to direction by law is, on the entire record, supported by substantial evidence. CPLR 8 780314). When a substantial evidence questioq is raised under this section, CPLR section 7804(g) directs the court to transfer the case to the Appellate Division for disposition. The courts have interpreted this provision as prohibiting he Supreme Court from reaching the 5 [* 6] issue of whether an agency determination is supported by substantial evidence where the administrative decision w s made as the result of a hearing requirad by law. Verdell v. Lincoln a Amsterdam House, Inc., 27 A.D.3d 388,391 (lU Dept. 2006). Whether a petition raises a substantial evidence quastion, however, is a determinaliun decided by the court and not by how the parties characterize the issues. Robinson v. F l d z l , 194 Misc.2d 55,63 (Sup. Ct. NY County 2002); LaFlurnrne v. Berger, 87 Misc.2d 494,496 (Sup. Ct. Onondaga County 1976);Frederick v. Dumpsun, 84 Misc.2d 514,515 (Sup. Ct. Queens County); Ideal Corp. v. New YorkState Tax Comm., 132 A.D.2d419,422 fn 2 (3d Dept. 1987); Mmu v. 7he City ofNew York, 201 0 WL 7407640 (Sup. Ct. NY County 2010); see Bonded Cuncrele v. Town Bd. OfTuwn qf Rotterdum, 176 A.D.2d 1137 (3d Dept. 1991). In making this determination, courts look to whether an Article 78 petition ohallenges the respondent s application of a rule to undisputed facts . Robinnson, 194 Misc.2d at 64. Where there are no isgues of fact, no substantial evidence question arises. Id at 64; Sunrise Manor Crr. Fur Nursing & Rehabilitlrtlon v. Novello, 19 A.D.3d 426,427 (2d Dept. 2005); MCIOU, 10 WL 7507640 20 (Sup. Ct. NY County 2010); see Roche v. Turner, 186 Misc,2d 581,589 (Sup. Ct. NY County 2000); Davis, Russell, et. a. NYJUR Article 78 8 29. l, The Court is aware that there is some confusion among courts as to when, under CPLR §7804(g), the Supreme Court must transfer Article 78 cases to the Appellate Division. Contvmf Verdell v. Lincoln Arnsterdnrn House, h c . , 27 A.D.3d 388, 390 (11 Dept. 2006) (citing Silberjarb v. Board ofcoop Educ. Servs., 60 N.Y.2d 979,98 1 (1983)) ( Judicial Review of an administI.ative determination made as the result of a hearing required by law is limited to whether that determination is supported by substantial evidence, );East Midtown Plazu Housing Co., Inc. 6 [* 7] V. h?Y.C.Depl. O Housing Preservation & Dev., 2007 WL 2 176927 (Sup. Ct. NY County f 2007); E d b n Parking, LLC V. The City ofNew Yo& 2010 WL 4809137 (Sup. Ct. New Yark County 20 10) aLaFZurnrne v. Berger, 87 Misc.2d 494,496 (Sup, Ct. Onodaga County 1976) ((The mere fact that a fair hearing was held does not require transferD the Appellate Division to under CPLR 7&04(g)))(citing Hurris v. Lavine, 43 A.D.2d 894 (4* Dept, 1974)); Robinson, 194 Misc.2d at 63; Sunrise Munor Cfr,,19 A.D.3d at 427; Frey v. The New York C iV Dccpt. Of Housing Preservation and Dev., 20 11 WL 1898199 (Sup. Ct. NY County 201 1); Roche, 186 Misc.2d at 589. Nevertheless, under the circumstances of this case, transfer would make little sense; because there is no substaatiztl evidence issue for the Appellate Division to decide. Neither Petitioner nor Respondent haw pointed to disputed issues of fact on which to base a substantial evidence claim. Indeed, among other things, Petitioner confirmed in his testimony before the ALJ that he pled guilty to mail fraud, spent 21 months in prison and has paid $5000 of the more than $750,000he owes in restitution. Nor is it in dispute that Petitioner is the sole supporter of his fmily or that revocation of his license will likely give him fewer or Less desirable job opportunities. Moreover, Petitioner s counsel cross examined DOB s witness, Mr. Damiani, and has not disputed his testimony regarding the duties and obligations of hoist machine licensees. Thus, at issue here is not the factual record but whether, in light of these facts, DOE S finding that the hw required revocation of Petitioner s hoist machine operator s license was arbitrary and capricious or an abuse of discretion under CPLR section 7803(3), Accordingly, this Court need not transfer this case to the Appellate Division but must decide it under this standard, See Sunrise Manor Ci r., 19 A.D.3d at 427; Robinson, 194 Misc.2d at 64, 7 [* 8] .. . . The a bisusfTBfive:de[ern!- 1 was notba -r . An administrative determination by an agency is arbitrary and capricious when it is made without sound basis in reason and is generally taken without regard io the facts. Pel1 Y . Board o Education, 34 N.Y.2d 222,23 1 (1974); Testwell, Inc. v New York City &pi. o Bldg., 80 f f A.D.3d 266,276 (2010) (applying arbitrary and capricious standard to licensing case). The Court m s give great weight and judicial deference to the expartise of the administrative agency s ut determinations. Teatwell, 80 A.D.3d at 276. It may nat substitute its judgment for that of the administrative body. PelE, 34 N.Y,2d at 232 (citations omitted). The Commissioner of Buildings is authorized to suspend or revoka a license, such as the w e held by Petitioner, for, among other things, [ploor moral character that adversely reflects on his or her fitness to conduct work regulated by this code. NYC Administrative Code 5 28-40 1.19(13). The code also requires DOB building work licensees to be of good moral character. NYC Administrative Code $28-401.6. The Appellate Division, First Department, has recently provided guidance on when revocation of a DOB license for lack of good moral character under these sections of the Administrative Code is appropriate. In Zng1ese v Limundri, -A.D.3d - 201 1 NY Slip Op. 08484 (hpp. Div. First Dept. 201 l), rev 2 2 9 Misc.3d 1234(A) (Sup. Ct. NY County 2010), petitioner Lnglese, who had held n hoist machine license since 2000, pled guilty in 2004 to conspiracy to commit extortion for receiving preferential treatment in obtaining a job as an operating engineer to run matmid waste at a job site. Inglese, 29 Misc.3d 1234(A) at *2. He WBB sentenced to one year and a day and was fined $3000. id,After being released fromjail, Inglcse returned to work and DOB renewed his hoist machine license in subsequent years. Id. In 8 [* 9] 2010, however, after an OATH hearing, an ALJ found Inglee lacked good moral character under NYC Administrative Code 4 28-401.6 based on his prior conviction. Id. at *3. However, because DOB had presented no witnesses and bad relied only on Inglese s conviction and the plea allocution to support its case, the ALJ recommended that Inglese s license be suspended for one year, rather than revoked, noting that DOB had failed to establish a connection between the type and severity of the crime committed and the job responsibilitia of a hoist machine operator. Id. at *4. DOB Commissioner Limandri disagreed and issued a letter revoking Inglese s license, stating that Inglese s conduct was sufficiently serious to warrant revocation of his license and not just suspension. Id, at *4. H noted that DOB ?relies on the integrity and honesty of all e licenseas to assure public safety and indicated that Inglese s acts of receiving and providing preferential tmatnient for constructionjobs are sufficient to establish poor moral charaoter that adversely reff wts on [his] fitness to hold a hoist machirse license. Id. In reviewing Mr. Inglese s subsequent Article 78 petition, a Supreme Court Justice annulled the license revocation, essentially agraeing with the ALJ that here w s a fundamental failure of proof of a connection a between Inglese s job responsibilitiesand his conviction that %hock[ed] one s sense of fairness. Id at 5 . The Appellate Division, reversed and dismissed the petition. &lese, 2011 NY Slip Op. 084814. In doing so, it did not focus on the need to establish an evidentiary connection between He emphasized that hgkse WBS only 35 at the time of conviction, that the only also evidence presented on his behalf was a letter from his spouse, and that the crime was directly related to the Construction industry and was committed soon after he received his license. Zglese, 29 Misc.3d 1234(A) at *4. 9 [* 10] the conviction and job responsibilities as did the nisiprius Justice, but instcad merely found that where the conviction of a crime is directly related to the use of the subject license the licensee has demonstrated poor moral character that adversely reflects on his fitness to hold a licensed position i the construction industry. Id. (emphasis added); see also Carrara v. Lirnandri, 201 1 n NY Slip O 30937 (Sup, Ct. NY County 2011) (dismissing Article 78 petition challenging p revocation of hoist machine operator s license where licensoo pled guilty to conspiracy to commit extortion for receiving a preforontid construction job); Cann v. Limandri, 201 1 NY Slip Op 31932 (Sup. Ct. NY County 201 1) (upholding denial of application for renewal of Stationary Engineer license based an conviction for third degree burglary). In the instant case, the direct relationship between Petitioner s crime and his job raponsibilities is, in any event, far clearer than in Ingkse. DQB s witness, Mr. Damiani, was a supervisor who had first hand knowledge of the work performed by hoist rnaahina operators and testified about the safety concerns ofthe job aqd the need for honesty and integrity as a result. In addition, the evidence showed that Petitioner s crime - mail fraud m part of a larger RICO case involving crime families -was directly related to his work as a hoist machine operator. Petitioaer admitted in his testimony that he billed the union for work he did not show up for or perform. Both the ALJ and the Commissioner, in their decisions, emphasized that Petitioner s mail ¬mud conviction had been for dishonesty on the jab, The Commissioner noted that the DOB has a compelling interest in ensuring that crane operators are honest orth thy also f o u d that the imposition of the penalty of license revocation WEN not disproportionate to the offense, IngZese Y Lirnandri, 201 1 NY Slip Op. 08484. Moreover, the court noted that the Commissionerhad properly considered the Mtigating factors set forth in Correction Law 4 753. Id. 10 [* 11] individuals and emphasized that while working on constructionjobs [Persico] participated in a criminal organization that defrauded a local operating engineer s union. Verified Answer, Exhibit J. The Commissioner found that such action evidenced poor moral character that made revocation of his license appropriate. Verified Answer, Exhibit J. This finding was rationally based on the uncontroverted evidence presented and entirely consistent with the First Department s decision in Ingiese. In his Memorandum of Law in Further Support of Petition to Vacate Decision, Petitioner argues, however, that the revocation decision was arbitrary and capricious because it was based n salely on his criminal conviction without taking into consideration the many mitigatin$ factors i his case. Specifically, he argues that Respondent arbitrarily failed to consider evidence of Petitioner s rehabilitation, including his ongoing repayment of restitution and that he was a good standing citizen who had not gotten into any trouble since his conviction. Petitioner also argues that the decision failed to consider %the devastating impact revocation would have on his ability to support his f m i l y and continue to make restitution. . This argunent is unconvincing. As in Irzglese, the finding of lack of good moral charactar here was based on the crime committed and its relationship to Petitioner s job. Additionally, contrary to Petitioner s assertions, the AW did consider his mitigating factors in making his decision, including the fact that he has not had any problems at work after his prison senkpcet and the financial hardship revocation would cause, but did not find them compelling in light of the seriousness of the crime committed. Verified Answer, bxhibit I at 5-6, He also ashowledged ?he state s public policy to cncourage licensure and employment af persons previously convicted of om or more crimes but noted that Petitioner had not received a 11 [* 12] certificate of realief of disabilities entitling him to 8 presumption of rehabilitation, nor had he paid much of his restitution or personally express remorse during his testimony. Varified Answar, Exhibit I at 4-6. On the whole, in weighmg the evidence, the ALJ found that [tlhe nature and gravity of [the] crime, committed when persico] was a mature adult over 40 years of age, justiqied] revocation of his license despite the presence of some mitigation. > Verified Answer, Exhibit I at 6. Nor did the decision ignore the fact that Petitioner g liense was renewed in 2009 after he had disclosed his conviction. As the ALJ rightly pointed out, DOB could have been more vigilant. Verified Answer, Exhibit I at 7. Nevertheless, DOB did initiate the revoaation proceeding within months of the license renewal. Verified Answer, Exhibit I at 7. This modest delay in seeking revocation of Petitioner s hoist machine operator s license does not somehow make the DOB s decision irrational,Sea Inglese, 201 1 NY Slip Op. 08484. This Court cannot now second guess DOB s decision or substitute its own judgment here. DOB s finding of lack of good moral character , pursuant to NYC Administrative Code section 28-401.6, was rationally based on the undisputed facts in the case, and was neither arbitrary nor capricious. Petitioner also contends that the penalty of revocation here shocks the conscience by depriving Petitioner of Iris ability to work in his chosen vocation Memorandum of Law in 3. Petitioner also argues that the AW failed to consider his mental health issues as a mitigating factor here. At the beginning of the hearing th parties stipulated that Petitioner takes medication he for bipolar disorder. However, 8s the ALJ pointed out, no further evidence concerning when this condition was diagnosed, the extent of treatment, his prognosis or his ability ta hction was offered to show its relevance to the issue of xvpcation. Verified Answer Exhibit I at 6. 12 [* 13] Further Support of Petition to Vacate Decision. It is true t a where the facts support the ht administmtivo determination yet the penalty is so disproportionate to the offense, in the light of all the circumstances, as to be shocking to one s sense of fairness the court may vacate the penalty and remand the m e for impositioii of a lesser penalty. Pell, 34 N.Y.2d at 233 (internal citations and qwtations omitted). This is not the case how, hawever. As discussed above, the revocation decision was made by carefully balancing all of the circumstances involved including the severity of the crime, the safety and public policy concerns as well as Petitioner s mitigating factors. Nor was the penalty of revocation here disproportionate in light of the seriousness of the crime and ?hedirect relationship between the Petitioner s illegal conduct and his responsibilities BS a hoist machine operator. See Inglese, 201 1 NY Slip Op. 08484 (finding penalty of license revocation was not disproportionateto the offense ) . Moreover, revocation of Petitioner s hoist machine operator s license will not deprive him of his ability to work, as he argues. As previously noted, in his own testimony, Petitioner admitted that although revocation may limit his work options, he has other licenses which will allow him to find other types of work through the union. Verified Answer, Exhibit G at 43. Finally, Petitioner argues that equitable considerations support his petition, citing to Correction Law g752. Under this law, applications for licenses should not be acted upon adversely because of lack of good m r l character when based upon the fact that the oa individual has previously been convicted of one or more criminal offenses. However, this law specifically allows for adverse action, when %hr is a direct relationship between the criminal t ee offense and the specific license sought, or when granting the license wouldinvolve an unreasonable risk to property or to the safety or welfare of specific individuals or the general 13 [* 14] public. Correction Law §752(1) & (2). As discussed above, the administrative decision here was based squaraly on both the &act relationship between Petitioner s conviction and his license and concerns for public safety. Moreover, the ALJ considered the factors listed in section 753 of the Corrections Law, including Petitioner s age, work responsibilities, the seriousness of the crime and his good conduct , and found that they supported his recommendation for license ADJUDGED that the petition is dismissed. J.S.C. Dated: New York, New York December 22,201 1 4Under swtion 753(1)(a) - (h) of the Correction Law, the factors to be considered concerning a previous conviction include (1) the state spublic policy to encourage the licensure and employment of persons previoudy convicted; (2) the specific duties and respoasibilities necessarily related to the license or employment sought or held by the person ; (3) the k i n g the offense will have on his fitnessor ability to perform the dutiea of the job; (4)the time which has elapsed since the offense; the age of the persorl at the time it occurred; the seriowness of the crime; ( 5 ) information concerning the rehabilitation and good conduct of the offender; and (6) an interest i protecting property, and tho safety and welfare of n individuals or the general public. J 14

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