Della Pietra v. State

• Decision Date: 19 December 1986
• Docket Number: B-T,No. 62334,62334
• Citation: 125 A.D.2d 936,510 N.Y.S.2d 334
• Parties: Anthony DELLA PIETRA, Eugene Della Pietra andProductions, Inc., Respondents-Appellants, v. The STATE of New York, Appellant-Respondent (Claim)
• Court: New York Supreme Court — Appellate Division

Page 334

510 N.Y.S.2d 334

125 A.D.2d 936

Anthony DELLA PIETRA, Eugene Della Pietra and B-T Productions, Inc., Respondents-Appellants, v. The STATE of New York, Appellant-Respondent (Claim No. 62334.)

Supreme Court, Appellate Division Fourth Department.

Dec. 19, 1986.

Robert Abrams, Atty. Gen. by Michael Buskus, Albany, for appellant-respondent.

Harris, Beach, Wilcox, Rubin & Levey, by James Hartman, Rochester, for respondents-appellants.

Before CALLAHAN, J.P., and DOERR, GREEN, LAWTON and SCHNEPP, JJ.

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-to-day 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 A.D.2d 315, 388 N.Y.S.2d 483), and the Court of Appeals affirmed, holding that Task Force officers exceeded their jurisdiction (44 N.Y.2d 226, 405 N.Y.S.2d 9, 376 N.E.2d 171). 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 N.Y.2d 206, 212, 203 N.Y.S.2d 829, 168 N.E.2d 654; see also, Underpinning & Foundation Constructors v. Chase Manhattan Bank, N.A., 46 N.Y.2d 459, 464, n. 1, 414 N.Y.S.2d 298, 386 N.E.2d 1319). 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 A.D.2d 237, 436 N.Y.S.2d 496; see also, Sporn v. MCA Records, 58 N.Y.2d 482, 462 N.Y.S.2d 413, 448 N.E.2d 1324; Kahn v. Crames, 92 A.D.2d 634, 635, 459 N.Y.S.2d 941; General Elec. Co. v. American Export Isbrandtsen Lines, 37 A.D.2d 959, 327 N.Y.S.2d 93). 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, 388 N.Y.S.2d 483). 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 plaintiff's business, resulting in injury (Sommer v. Kaufman, 59 A.D.2d 843, 399 N.Y.S.2d 7; Rosenberg v. Del-Mar Div., Champion Int. Corp., 56 A.D.2d 576, 577, 391 N.Y.S.2d 182; see also, NRT Metals v. Laribee Wire, 102 A.D.2d 705, 476 N.Y.S.2d 335, appeal dismissed 63 N.Y.2d 770; Harden, S.P.A. v. Commodore Electronics, 90 A.D.2d 733, 455 N.Y.S.2d 792; see, Dunn, Recovery of Damages for Lost Profits [2d ed.], pp 145-148). 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 N.Y.2d 34, 471 N.Y.S.2d 73, 459 N.E.2d 182, 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 N.Y.2d 79, 82, 416 N.Y.S.2d 782, 390 N.E.2d 290).

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 Wheatfield, 67 N.Y.2d 809, 501 N.Y.S.2d 323, 492 N.E.2d 396; Kenford Co. v. County of Erie, 67 N.Y.2d 257, 502 N.Y.S.2d 131, 493 N.E.2d 234), 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 A.D.2d 253, 255, 472 N.Y.S.2d 379; DeLong Corp. v. Morrison-Knudsen Co., 20 A.D.2d 104, 244 N.Y.S.2d 859, affd. 14 N.Y.2d 346, 251 N.Y.S.2d 657, 200 N.E.2d 557). 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.

Judgment modified on the law and as modified affirmed without costs and matter remitted to Court of Claims for further proceedings.

All concur, except LAWTON, J., who dissents and votes to reverse and dismiss the claim, in the following Memorandum:

The claimants by a joint notice of claim filed on August 11, 1978 seek to recover damages against the State flowing from the New York State Organized Crime Task Force's obtaining and executing a search warrant against the claimants' properties on or about August 11, 1976. Claimants allege that the material seized was retained by the Task Force until April 10, 1978. Claimants allege further that by reason of this seizure and retention, claimant B.T. Productions, Inc.'s dinner theater suffered loss of business, forcing the claimants into bankruptcy. No specific theory of liability is set forth in the notice of claim. The Court of Claims in finding liability did not identify the nature of the action, choosing instead to rely upon language of the Court of Appeals and of this court in opinions in a previous cause of action brought by the claimant, B.T. Productions, Inc., against Judge Barr for a writ of prohibition (see, Matter of B.T. Prods. v. Barr, 54 A.D.2d 315, 388 N.Y.S.2d 483, affd. 44 N.Y.2d 226, 405 N.Y.S.2d 9, 376 N.E.2d 171). The majority now affirms giving the claim the identity of the torts of conversion and tortious interference with claimants' business.

There has been no finding that the search warrant which is the subject of this action was issued based upon insufficient affidavits or that it was issued by a court lacking jurisdiction. Trial Term and the majority herein base defendant's liability solely on its failure to obtain prior approval from the Governor and the appropriate district attorney before obtaining the search warrant for claimants' premises. In Matter of B.T. Prods. v. Barr (supra ) the Court of Appeals voided this search warrant, finding such preapproval a jurisdictional prerequisite pursuant to Executive Law § 70-a(7). The majority views that the respondent's failure to comply with Executive Law § 70-a(7) creates liability per se. I disagree. In doing so I believe that the majority is creating a new cause of action not previously recognized at law (see, Restatement [Second] of...