| State of New York v International Asset Recovery Corp. |
| 2008 NY Slip Op 08380 [56 AD3d 849] |
| November 6, 2008 |
| Appellate Division, Third Department |
| State of New York, Respondent, v International Asset RecoveryCorporation, Appellant, et al., Defendants. Alan G. Hevesi, Individually and as Comptroller ofthe State of New York, et al., Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Kathleen M. Treasure of counsel), for Stateof New York and others, respondents.
Peters, J. Appeal from an order of the Supreme Court (Egan, Jr., J.), entered June 4, 2007 inAlbany County, which, among other things, granted plaintiff's motion for summary judgment.
Plaintiff commenced this action to recover money paid out of its abandoned property fundheld by the Comptroller's Office of Unclaimed Funds. The torturous facts giving rise to thisclaim are as follows. On January 28, 1992, a judgment was entered in an Oregon Circuit Court infavor of defendants Richard J. Dahle and Verla Dahle against Integrated Resources EquityCorporation (hereinafter IREC), among others, in the amount of $413,232 (hereinafter theOregon judgment). The Dahles subsequently received $156,000 on the Oregon judgment and, inApril 1992, a full satisfaction of judgment, signed by the Dahles's counsel, was entered in anOregon court. Nevertheless, almost a decade later, the Dahles assigned their interest in theOregon judgment to defendant Citi Surety Corporation. Then, on February 27, 2002, Citi [*2]Surety's attorney filed the Oregon judgment in New York pursuantto CPLR 5402 and issued property executions for funds held by the Office of Unclaimed Fundsin the name of IREC. The Comptroller thereafter turned over $57,404.82 to the Albany CountySheriff who, in turn, remitted the funds less his fees to Citi Surety's attorney. When the Oregonjudgment was again assigned in October 2002 to defendant International Asset RecoveryCorporation (hereinafter defendant), the funds were turned over to defendant by Citi Surety'sattorney.
Prior to the assignment to defendant, the Comptroller, having learned that a satisfaction ofjudgment had been filed with respect to the Oregon judgment, commenced an action against CitiSurety's attorney seeking to recover the unclaimed funds that had been turned over to him. ThisCourt ultimately affirmed the dismissal of the Comptroller's suit on the ground that Citi Surety'sattorney could not be held civilly liable for actions taken on behalf of his client (State of New York v Poulson, 26AD3d 650 [2006]). While that action was pending, the Dahles, through defendant, theirassignee, commenced an action in Oregon seeking to set aside the satisfaction of judgment on theground that it was made under duress. An Oregon Circuit Court held that, pursuant to Oregon's10-year statute of limitations, the Oregon judgment had expired on January 28, 2002, and theissue of the validity of the satisfaction of judgment was therefore moot.
Plaintiff subsequently commenced the instant action against defendant, Citi Surety and theDahles seeking to recover the money paid on the allegedly expired and satisfied Oregonjudgment. Defendant answered, asserting cross claims against the Dahles and a counterclaimagainst plaintiff. Defendant also asserted a second counterclaim against plaintiff, the Comptrollerand John Dalton, Robert Harder and certain anonymous parties, all of whom were alleged to beofficers or employees of the Comptroller or plaintiff. Plaintiff then moved for summary judgmenton its claim for money had and received and for dismissal of defendant's counterclaims, while theComptroller, Dalton and Harder (hereinafter collectively referred to as the state officials)separately moved to dismiss the counterclaims asserted against them. Additionally, defendantcross-moved for summary judgment dismissing the complaint. Supreme Court granted plaintiff'sand the state officials' motions and denied defendant's cross motion, prompting this appeal bydefendant.
Defendant first contends that summary judgment was improperly awarded to plaintiff on itsclaim for money had and received because the Oregon judgment, although expired under Oregonlaw, became a New York judgment once it was filed in New York and was thereafter governedby New York's 20-year limitations period for actions on a money judgment (see CPLR211 [b]). We disagree. In accordance with the Full Faith and Credit Clause (US Const, art IV,§ 1), New York is required to give a foreign judgment only the same validity and effect asthe judgment would be given in its state of rendition (see O'Connell v Corcoran, 1 NY3d 179, 184 [2003]; Boudreaux v State of La., Dept. ofTransp., 49 AD3d 238, 240-241 [2008]). During the time period relevant to this appeal,Oregon law provided that "whenever a period of 10 years elapses after the entry of a judgment ina circuit court, the judgment and any docketed or recorded lien thereof shall expire" (Or Rev Stat§ 18.360 [1] [2002]). As found by the Oregon Circuit Court, the Oregon judgment expiredas of January 28, 2002, approximately one month prior to the date it was entered in New York.Under these circumstances, to recognize the Oregon judgment in New York would be to give itgreater effect than it would be given in Oregon (see Boudreaux v State of La., Dept. ofTransp., 49 AD3d at 241; see Restatement [Second] of Conflict of Laws §111, Comment a ["the judgment will not be enforceable in the other states so long as itremains unenforceable in the state of rendition"]). Further, CPLR 211 (b), which provides that amoney judgment is valid and enforceable for a period of 20 years, "is [*3]subject to CPLR 202, the borrowing statute" and, consequently, "inan action by a nonresident plaintiff on a foreign judgment, New York will hold the actionuntimely if it is barred either under CPLR 211 (b) or under the corresponding statute in theforeign state" (McLaughlin, Practice Commentaries, McKinney's Cons Laws of NY, Book 7B,CPLR C211:3, at 637; see Chesapeake Coal Co. v Mengis, 102 App Div 15, 16-18[1905]; see also Shipman v Treadwell, 150 App Div 57, 58-59 [1912], affd 208NY 404 [1913]). For these reasons, we agree with Supreme Court's conclusion that because theOregon judgment was expired and thus unenforceable under Oregon law on January 28, 2002, itwas likewise unenforceable in New York subsequent to that date.
A cause of action for money had and received is established where " '(1) the defendantreceived money belonging to [the] plaintiff, (2) the defendant benefited from receipt of themoney, and (3) under principles of equity and good conscience, the defendant should not bepermitted to keep the money' " (Matter of Witbeck, 245 AD2d 848, 850 [1997], quoting22A NY Jur 2d, Contracts § 520, at 244; see Parsa v State of New York, 64 NY2d143, 148 [1984]). Given that this is an equitable cause of action premised upon principles ofunjust enrichment and governed by "broad considerations of right, justice and morality"(Parsa v State of New York, 64 NY2d at 148; see Hamlin Beach Camping, Catering,& Concessions Corp. v State of New York, 303 AD2d 849, 852 [2003]), the fact that thefunds turned over to defendant do not technically belong to plaintiff, but constitute abandonedproperty for which plaintiff acts as custodian until a claim for such property is made (seeAbandoned Property Law § 1404 [1] [ii]), is not determinative on this issue. In our view,plaintiff has sufficiently demonstrated that defendant "received or is holding sums of money towhich [plaintiff] is entitled" (Hamlin Beach Camping, Catering, & Concessions Corp. v Stateof New York, 303 AD2d at 853; see Anesthesia Group of Albany v State of NewYork, 309 AD2d 1130, 1132 [2003]) and, therefore, summary judgment in favor of plaintiffon this cause of action was properly awarded.
We next address defendant's counterclaims, which stem from the Comptroller's denial of itsseparate claim for unclaimed funds held on behalf of IREC's parent and sister corporations(hereinafter the Integrated companies). As to defendant's first counterclaim, which in essenceseeks a declaration that plaintiff wrongfully refused to turn over the aforementioned unclaimedfunds and monetary damages incidental to such refusal, we find that it is not ripe for judicialreview. It is well settled that an administrative determination is final, and thus ripe for review,only when the " 'decision-maker has arrived at a definitive position on the issue that inflicts anactual, concrete injury' " (Church of St. Paul & St. Andrew v Barwick, 67 NY2d 510, 519[1986], cert denied 479 US 985 [1986], quoting Williamson County RegionalPlanning Comm'n v Hamilton Bank of Johnson City, 473 US 172, 193 [1985]; see Matterof Essex County v Zagata, 91 NY2d 447, 453 [1998]). Notably, "the controversy cannot beripe if the claimed harm may be prevented or significantly ameliorated by further administrativeaction or by steps available to the complaining party" (Church of St. Paul & St. Andrew vBarwick, 67 NY2d at 520; see Matter of Essex County v Zagata, 91 NY2d at 453; Matter of Schmitt v Skovira, 53 AD3d918, 920 [2008]).
Here, by letter dated September 13, 2006, the Comptroller denied defendant's claim andadvised defendant of its right to an administrative hearing pursuant to Abandoned Property Law§ 1406 (1) (b). Although defendant thereafter requested a hearing, one has yet to be heldon the matter. Abandoned Property Law § 1406 (1) (b) provides that a final determinationshall be made by the Comptroller after such a hearing, which alone is reviewable in a CPLRarticle 78 proceeding. Therefore, inasmuch as defendant's claim is still under consideration andthe hearing "might render the disputed issue moot or academic," the Comptroller's initial positionon the [*4]matter "cannot be considered 'definitive' or the injury'actual' or 'concrete' " (Essex County v Zagata, 91 NY2d at 454; see Matter of Demers v New York StateDept. of Envtl. Conservation, 3 AD3d 744, 746 [2004]; Matter of Martin vAmbach, 85 AD2d 869, 871 [1981], affd 57 NY2d 1001 [1982]). Relatedly,defendant's first counterclaim is also barred by its failure to exhaust available administrativeremedies under Abandoned Property Law § 1406 (1) (b) (see Watergate II Apts. vBuffalo Sewer Auth., 46 NY2d 52, 57 [1978]).
Turning to its second counterclaim, defendant alleges violations of 42 USC § 1983against plaintiff and the state officials, both in their official and individual capacities. However,given that these civil rights claims are wholly dependent on the Comptroller's nonfinal decisiondenying defendant's claim for unclaimed funds held on behalf of the Integrated companies, theytoo are not ripe for judicial review (see Town of Orangetown v Magee, 88 NY2d 41, 50[1996]; Montano v City ofWatervliet, 47 AD3d 1106, 1111 [2008]). Further, because plaintiff, the State of NewYork, is not a "person" subject to suit under 42 USC § 1983 (see Will v MichiganDept. of State Police, 491 US 58, 71 [1989]; Matter of Gable Transp., Inc. v State of New York, 29 AD3d 1125,1128 [2006]; Cavanaugh v Doherty, 243 AD2d 92, 97 [1998]), defendant's secondcounterclaim as asserted against plaintiff is also properly dismissed on this basis. With respect tothe civil rights claims asserted against the state officials, dismissal is required on the additionalground that they were procedurally improper. While defendant can assert a joint counterclaim inits answer against plaintiff and the state officials, who are not parties to this action but are"alleged to be liable" (CPLR 3019 [a]), service of the answer on the state officials needed to beaccompanied by a summons (see CPLR 3019 [d]; Siegel, Practice Commentaries,McKinney's Cons Laws of NY, Book 7B, CPLR C3019:6, at 212; see also Linzer v Bal,184 Misc 2d 132, 136-137 [Civ Ct, NY County 2000]; Wyler v Wyler, 5 Misc 3d1031[A], 2004 NY Slip Op 51653[U], *2 [Sup Ct, Nassau County 2004]). As this was not donehere, the counterclaim as asserted against the state officials must be dismissed on this additionalground.
Defendant's remaining contentions, to the extent not addressed herein, have been deemedacademic in light of our decision or found to be without merit.
Mercure, J.P., Rose, Lahtinen and Kane, JJ., concur. Ordered that the order is affirmed,without costs.