Matter of Gambino v New York City Dept. of Consumer Affairs
Annotate this CaseDecided on January 5, 2010
Supreme Court, New York County
In the Matter of the Application of Giovanni Gambino d/b/a Tower Building, Petitioner,
against
New York City Department of Consumer Affairs and Robert Scattaglia, Respondents.
108061/2009
Robert Ligansky, Esq. for Petitioner
Corporation Counsel of the City of New York
by William Vidal,Esq. for respondent NYC Dept. of Consumer Affairs
Robert W. Soos, Esq. for respondent Robert Scattaglia
O. Peter Sherwood, J.
Petitioner Giovanni Gambino d/b/a Tower Building ("petitioner") brings this CPLR Article 78 proceeding seeking a judgment vacating an Appeal Determination, dated February 9, 2009 ("the Appeal Determination") which denied petitioner's motion to vacate a Decision and Order of the respondent New York City Department of Consumer Affairs ("DCA"), entered on default, dated July 18, 2008 ("the Decision"), which found petitioner guilty of certain charges upon his failure to appear at a hearing, imposed fines in the total sum of $16,500, revoked his license to operate a home improvement business, declared that petitioner is unfit to hold any licenses issued by DCA and directed him to pay restitution to respondent Robert Scattaglia ("Scattaglia"), a homeowner, in the amount of $88,000.
Respondent DEC opposes the petition and cross moves for an order dismissing the petition
pursuant to CPLR §§ 3211 (a) (2) and 7804 (f) on the ground that petitioner has failed
to exhaust administrative remedies and is, therefore, barred from challenging DEC's Decision.
Background
DCA is an agency responsible for licensing all contractors and salespersons engaged in the home improvement business (Administrative Code of the City of New York ["Administrative Code"] § 20-387). DCA has the power "upon due notice and hearing" to revoke any license it issued and to impose fines and civil penalties (Administrative Code § 20-104 [e]).
Tower Building ("Tower") is a sole proprietorship engaged in the home improvement business and operated by petitioner Giovanni Gambino ("Gambino") (Pet. ¶ 1). Tower Building is licensed by DCA as a home improvement contractor and Gambino is licensed by DCA as a home improvement salesperson. In 2004, respondent Scattaglia entered into four home improvement [*2]contracts with petitioner to build an extension and transform Scattaglia's Staten Island home from a one-family to a two-family home (Vidal Aff. ¶ 3). The total amount of the contracts was $95,176 (Vidal Aff. Ex. "A"). On or about July 25, 2006, Scattaglia filed a complaint against petitioner with DCA alleging that petitioner had abandoned the job before it was completed and he had to hire another contractor to complete the work. He was seeking to recover monies paid to petitioner for work it did not perform and monies paid to the new contractor for completion of the job (id., Ex. "B"). Based upon Scattaglia's complaint, DCA charged petitioner with 18 violations of the Administrative Code and the Rules of the City of New York ("RCNY").
On January 25, 2008, DCA sent petitioner a notice of hearing scheduled for May 6, 2008. The notice was mailed to petitioner at 25 Andrews Street, Staten Island, New York 10305, which is the address registered with DCA (id. ¶ 4, Ex. "H"). The notice contained the following warnings:
IF YOU DO NOT APPEAR FOR THE HEARING AS ORDERED, A
DECISION MAY BE RENDERED ON DEFAULT, YOU MAY BE
SUBJECT TO A FINE AND LICENSE REVOCATION, AND AN
ADDITIONAL PENALTY FOR FAILING TO APPEAR MAY BE
IMPOSED.
***
IN ORDER TO DEFEND AGAINST THESE CHARGES, YOU
MUST APPEAR EITHER PERSONALLY OR THROUGH AN
AGENT FAMILIAR WITH THE CASE.
The petitioner failed to appear on the scheduled hearing date and an inquest was conducted before Administrative Law Judge ("ALJ") Judith Gould. In the Decision after inquest dated July 18, 2008, ALJ Gould found petitioner guilty of all 18 charges, as well as of a violation of 6 RCNY § 1-14, revoked petitioner's home improvement contractor and salesperson licenses, imposed a $16,500 fine and ordered petitioner to pay restitution to Scattaglia in the sum of $88,000 which represents the amount Scattaglia spent to correct and complete the work, plus $10,000 petitioner was found to have borrowed from Scattaglia, but which he did not repay (id. ¶ 5, Ex. "E").
As indicated by a certificate of mailing, a copy of the Decision was mailed to petitioner at his Staten Island address on July 18, 2008 (id. ¶ 6). Instructions regarding how to make a motion to vacate the Decision on default were appended to the Decision. Such instructions advised that a motion to vacate must be submitted to DCA within 15 days of the date petitioner "knew or should have known" of the Decision, together with a check for $25.00, a check in the full amount of the restitution ordered in the Decision and a sworn statement outlining a meritorious defense and an excuse for his default (id. ¶ 7).
By letter dated September 15, 2008, petitioner sought a rehearing stating that it had not contracted with Scattaglia and that none of the contracts belonged to Tower. With his letter, petitioner submitted a $25.00 check made payable to DCA (id. ¶ 8, Ex. "F"). The letter did not proffer an explanation for petitioner's default nor contain a check in the amount of the restitution.
The Appeal Determination dated February 9, 2009 denied petitioner's motion to vacate on
the grounds that: (1) it was untimely; (2) petitioner failed to submit proof that he served a copy
of the motion on Scattaglia; and (3) petitioner failed to submit a sworn statement outlining a
meritorious defense to the charges (id. ¶ 9, Ex. "G"). This petition
followed.
[*3]
Discussion
Petitioner seeks vacatur of the Decision and Appeal Determination on the ground that: (1) it is arbitrary and capricious; (2) DCA acted beyond its jurisdiction and violated its rules and regulations by fining him and ordering him to pay restitution without proof that he or anyone from Tower entered into any contracts with Scattaglia, agreed to perform any work for Scattaglia, or received any monies from Scattaglia; and (3) violated his due process rights by imposing liability without any proof of wrongdoing on petitioner's part. Petitioner contends that the Decision essentially permits Scattaglia to get work performed on his house for free.
DCA argues that having failed on two occasions to exhaust its administrative remedies, petitioner is barred from challenging the Decision or Appeal Determination in this Court. In support of its cross motion to dismiss, DCA submits, inter alia, an affidavit of its Deputy Director of Operations of the Adjudications Division detailing the procedures for mailing decisions to respondents in proceedings before it together with certificates of mailing indicating that the procedures were followed with respect to mailing of the Decision and Appeal Determination to petitioner in this case.
Here, petitioner does not allege that the available remedies were exhausted. Rather, petitioner argues that the doctrine does not apply because his claims that DCA acted outside its authority and violated due process by imposing restitution damages and fines against petitioner without proof that it was engaged in any licensed activity fall within the exceptions to the exhaustion of administrative remedies doctrine.
In reply, DCA contends that the exceptions to the exhaustion of administrative remedies doctrine cited by petitioner do not apply and that petitioner is using an exception to the doctrine as a pretext for having this Court review the merits of the Decision. DCA argues further that the factual basis of the Decision is not relevant to the issue of whether DCA had the authority to revoke petitioner's license and impose fines and order restitution. DCA contends that under the relevant provisions of the Administrative Code it clearly had such authority. In addition, DCA contends that petitioner provides no support for its due process argument but, in any event, the record sufficiently establishes that DCA gave petitioner notice of the hearing and an opportunity to be heard.
It is a well-settled principle of law in New York that "one who objects to the act of an administrative agency must exhaust available administrative remedies before being permitted to litigate in a court of law" (Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57 [1978]).Pursuant to 6 RCNY § 6-44 which governs DCA hearings, a party seeking to vacate a default decision rendered following an inquest must file a written motion to vacate with the Director of Adjudication within 15 days from the date such party knew or should have known of the decision. It is not disputed that petitioner failed to timely file such motion to vacate. Thus, petitioner's failure to do so bars judicial review of his claims unless an exception to the exhaustion doctrine applies (see, Irizarry v New York City Police Department, 260 AD2d 269 [1st Dept 1999]; see also, Matter of Murray v Downey, 48 AD3d 817 [2d Dept 2008]; Matter of Laureiro v New York City Dept. Of Consumer Affairs, 41 AD3d 717 [2d Dept 2007]). Exhaustion of administrative remedies is not required where the action is challenged as unconstitutional or is wholly beyond the agency's grant of power or when resort to an available remedy would be futile (see, Lehigh Portland Cement Co. v New York State Dept. Of Environmental Conservation, 87 NY2d 136, 140 [1995]; Watergate II [*4]Apts. v Buffalo Sewer Auth, supra).
Petitioner seeks to define his challenges to DCA's determination as within the
unconstitutionality or jurisdictional exceptions. The Court credits DCA's contention that the
arguments raised by the petitioner address the underlying merits of DCA's Decision rather than
DCA's jurisdiction to render the Decision. DCA is charged with the maintenance of standards of
integrity, honesty and fair dealing among persons or entities engaged in licensed activities
(see, Administrative Code § 20-101) and is authorized, upon due notice and a
hearing, to impose fines and penalties (see, Administrative Code § 20-104 [e]).
Accordingly, DCA had the authority to hold a hearing and to issue a determination upon
petitioner's default. Moreover, petitioner's due process claim lacks merit as the record
sufficiently demonstrates that petitioner was given ample notice of the hearing and an
opportunity to be heard. The fact that petitioner chose not to appear at the hearing or follow the
procedures for filing a motion to vacate the determination upon his default warrants dismissal of
his petition for failure to exhaust administrative remedies.
Conclusion
Accordingly, it is
ORDERED, that the cross motion of respondent the New York City Department of Consumer Affairs to dismiss the petition for failure to exhaust administrative remedies is granted; and it is further
ORDERED AND ADJUDGED, that the petition seeking a judgment vacating an
Appeal Determination, dated February 9, 2009, which denied petitioner's motion to vacate a
Decision and Order of the respondent New York City Department of Consumer Affairs, entered
on default, dated July 18, 2008, is denied with prejudice, the proceeding is dismissed and the
Clerk is directed to enter judgment accordingly.
This constitutes the decision, order and judgment of the court.
DATED:
ENTER,
______________________________
O. PETER SHERWOOD
J.S.C.
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