The opinion
SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
1184
CA 12-00075
PRESENT: SCUDDER, P.J., CARNI, SCONIERS, VALENTINO, AND WHALEN, JJ.
COUNTY OF ERIE, PLAINTIFF-RESPONDENT,
V MEMORANDUM AND ORDER
M/A-COM, INC., ET AL., DEFENDANTS,
AND KEVIN J. COMERFORD, DEFENDANT-APPELLANT.
(APPEAL NO. 1.)
DAVID J. SEEGER, P.C., BUFFALO (DAVID J. SEEGER OF COUNSEL), FOR
DEFENDANT-APPELLANT.
GROSS, SHUMAN, BRIZDLE & GILFILLAN, P.C., BUFFALO (KATHERINE M.
LIEBNER OF COUNSEL), FOR PLAINTIFF-RESPONDENT.
Appeal from an order of the Supreme Court, Erie County (John A.
Michalek, J.), entered February 22, 2011. The order denied in part
the motion of defendant Kevin J. Comerford to dismiss the first
amended complaint against him.
It is hereby ORDERED that the order so appealed from is affirmed
without costs.
Memorandum: Plaintiff, County of Erie (County), commenced this
action to recover damages from its former employee, Kevin J. Comerford
(defendant), for fraud and breach of fiduciary duty. Defendant
appeals from an order denying in part his motion to dismiss the first
amended complaint against him on the ground, inter alia, that the
County lacks capacity to sue. The first amended complaint alleges
that defendant, in his capacity as County Commissioner of Central
Police Services, issued a memorandum to the County Legislature
containing false representations concerning the appropriate vendors
with which the County should contract for the upgrade of its computer-
aided dispatch system. The first amended complaint further alleges
that, based upon defendant’s memorandum, the County entered into a
contract with defendants M/A-Com, Inc., Tyco Electronics Corporation,
and Intergraph Corporation (M/A-Com contract) that obligated the
County to pay the sum of $4,093,000 for goods and services that at the
time of the complaint had not been provided or completed.
There is no dispute that the County Legislature did not pass a
resolution authorizing the commencement of this action. Contrary to
defendant’s contention, however, we conclude that, notwithstanding the
absence of such a resolution, the County Executive was empowered to
commence this action on behalf of the County (see Matter of County of
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Rockland v Town of Clarkstown, 167 Misc 2d 367, 371). Under the
County Charter, the County Executive is the Chief Executive Officer,
the administrative head of the County government, and the Chief Budget
Officer of the County. The County Charter grants the County Executive
“all necessary incidental powers to perform and exercise any of the
duties and functions specified . . . or lawfully delegated to him”
(Erie County Charter § 302 [former (n)], now [m]). The County
Executive is empowered by the County Charter to authorize the County
Attorney to commence civil litigation to enforce any of the duties and
functions lawfully designated to the County Executive (see § 602; see
also § 302 [former (m)], now [l]; [former (n)], now [m]). Inasmuch as
this action seeks to recover over $4 million dollars of the County’s
funds that were allegedly improperly paid under the M/A-Com contract
as a result of defendant’s alleged fraud, we conclude that the County
Executive’s duties as Chief Executive Officer and Chief Budget Officer
of the County clearly embrace the subject matter of this action and
empower him to authorize the County Attorney to commence the
litigation (see Rockland County, 167 Misc 2d at 371).
As the dissent correctly notes, section 602 of the Erie County
Charter permits the County Attorney to perform “such additional and
related duties as may be prescribed by law, by the county executive or
by resolution of the county legislature” (emphasis added). Inasmuch
as section 602 specifically discusses the power of the County Attorney
to prosecute an action, the dissent contends that section 602 “cannot
be read to encompass the enumerated power to commence a civil action.”
To do so, in the opinion of our dissenting colleagues, “would render
superfluous the County Legislature’s inclusion of that enumerated
power within section 602.”
In our view, the dissent has conflated the distinct acts of
prosecuting an action and commencing an action. Erie County Charter §
602 and County Law § 501 (1) limit the duties of a County Attorney,
insofar as relevant to this appeal, to prosecuting or defending
actions brought by or against the County. As the dissent correctly
states, the board of supervisors or the legislature of a county is
generally empowered to bring, i.e., commence, a civil action. Thus,
the power to commence a civil action constitutes an additional and
related duty, and our interpretation of both Erie County Charter § 602
and County Law § 501 (1) does not render any language in section 602
superfluous.
We reject defendant’s further contention that the first amended
complaint fails to plead a cause of action for fraud with sufficient
particularity (see CPLR 3016 [b]; Pludeman v Northern Leasing Sys.,
Inc., 10 NY3d 486, 491-492).
As an alternate ground on which to dismiss the fraud cause of
action, the dissent concludes that, to the extent that “[t]he
operative allegations behind the County’s fraud cause of action . . .
are based solely on ‘information and belief,’ ” those allegations are
insufficient. We do not take issue with the legal authority cited by
the dissent, but we decline to dismiss a complaint on a legal theory
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not raised by the defendant on the underlying motion to dismiss or on
appeal. “It is well settled that ‘[a]n appellate court should not,
and will not, consider different theories or new questions, if proof
might have been offered to refute or overcome them had those theories
or questions been presented in the court of first instance’ ”
(Ciesinski v Town of Aurora, 202 AD2d 984, 985). We disagree with the
dissent’s conclusion that defendant’s general contention that the
first amended complaint fails to state a cause of action alleging
fraud encompasses the specific theory that the County failed to
identify the source of the information of the allegations made on
“information and belief.” Had defendant advanced that theory, it is
likely that the County would have been able to offer proof to overcome
it. Indeed, the ease with which the County’s pleading deficiency
could be overcome is the basis for the dissent’s determination to
dismiss the first amended complaint “without prejudice.” The County
was not put on notice that such a theory for dismissal was being
raised by defendant and thus had no opportunity to refute or overcome
it (cf. Belco Petroleum Corp. v AIG Oil Rig, 164 AD2d 583, 598-599).
We decline to dismiss the first amended complaint on a deficiency that
easily could have been addressed had it been raised by defendant.
Finally, we reject defendant’s contention that he is immune from
suit because he exercised discretion in recommending the M/A-Com
contract, inasmuch as he is not being sued for an injury to a member
of the public (see Valdez v City of New York, 18 NY3d 69, 76).
All concur except SCONIERS and WHALEN, JJ., who dissent and vote to
modify in accordance with the following Memorandum: We respectfully
dissent because we cannot agree with the majority that plaintiff,
County of Erie (County), has the capacity to sue and that the first
amended complaint sufficiently states a fraud cause of action against
Kevin J. Comerford (defendant). We would therefore modify the order
by granting in its entirety defendant’s motion to dismiss the first
amended complaint against him based on those grounds.
We first address the majority’s conclusion that the County has
the capacity to sue defendant. “[C]apacity concerns a litigant’s
power to appear and bring its grievance before the court” (Matter of
Graziano v County of Albany, 3 NY3d 475, 478-479 [internal quotation
marks and citation omitted]). To reach its conclusion, the majority
reasons that the Erie County Charter empowers the County Executive to
authorize the County Attorney to commence an action without a
resolution by the County Legislature. We disagree. Pursuant to the
County Law, the power to authorize a county attorney to bring civil
actions and proceedings belongs to the board of supervisors or
legislature of a county rather than its county executive (see County
of Sullivan v Town of Thompson, 99 AD2d 574, 574-575; see e.g. County
of Niagara v Town of Royalton, 48 AD3d 1072; see generally County Law
§§ 150-a; 501 [1]). Of course, a county may supersede the provisions
of the County Law by enacting a local charter that conflicts with or
limits the County Law (see § 2 [b]; Matter of Gallagher v Regan, 42
NY2d 230, 235; Long Is. Liquid Waste Assn. v Cass, 115 AD2d 710, 711-
712, lv dismissed 67 NY2d 870). Indeed, the Erie County Charter
includes a provision recognizing that principle and mandating that,
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“wherever and whenever any state law . . . is inconsistent with this
charter, such law shall be deemed to the extent of such inconsistency
to be superseded by this charter insofar as the county of Erie and its
government are affected” (Erie County Charter § 103). Thus, the
relevant inquiry in this case is whether the Erie County Charter
supersedes the County Law and empowers the County Executive to
authorize the County Attorney to bring a civil action in the absence
of a resolution from the County Legislature. Contrary to the
conclusion of the majority, we conclude that it does not. In support
of its conclusion, the majority relies on Erie County Charter §§ 302
(m) (former [n]) (hereafter, § 302 [m]) and 602, but, in our view,
neither section contains language so empowering the County Executive.
We turn first to section 602, which lists the powers and duties
of the County Attorney and provides that “[t]he county attorney shall
be the legal advisor for the county and, on its behalf in county
matters, of its officers and administrative units. He or she shall,
in all county legal matters of a civil nature, advise all county
officers and employees and, where in the interest of the county,
prepare all necessary papers and written instruments in connection
therewith, prosecute or defend all actions or proceedings of a civil
nature brought by or against the county; prepare resolutions,
ordinances, legalizing acts and local laws to be presented for action
by the county legislature, together with notices and other items in
connection therewith; and perform such additional and related duties
as may be prescribed by law, by the county executive or by resolution
of the county legislature.”
Section 602 describes three categories of powers and/or duties
that fall within the purview of the County Attorney: (1) advising the
County in civil legal matters, which include prosecuting or defending
actions; (2) preparing resolutions and/or local laws; and (3)
performing “such additional and related duties as may be prescribed by
law, by the county executive or by resolution of the county
legislature” (id. [emphasis added]). It is the third category of
duties on which the majority must necessarily base its conclusion that
the County Executive may authorize the County Attorney to commence an
action without a resolution from the County Legislature. Such an
interpretation of section 602, however, runs contrary to the rules of
statutory construction. Because “the clearest indicator of
legislative intent is the statutory text, the starting point in any
case of interpretation must always be the language itself, giving
effect to the plain meaning thereof” (Majewski v Broadalbin-Perth
Cent. School Dist., 91 NY2d 577, 583; see Bluebird Partners v First
Fid. Bank, 97 NY2d 456, 460-461; Matter of New York Skyline, Inc. v
City of New York, 94 AD3d 23, 26-27, lv denied 19 NY3d 809), and
“ ‘effect and meaning must, if possible, be given to the entire
statute and every part and word thereof’ ” (Matter of New York State
Superfund Coalition, Inc. v New York State Dept. of Envtl.
Conservation, 18 NY3d 289, 296, quoting McKinney’s Cons Law of NY,
Book 1, Statutes § 98; see Sanders v Winship, 57 NY2d 391, 395-396).
“[A]ll parts of a statute are to be harmonized with each other, as
well as with the general intent of the statute” (Rangolan v County of
Nassau, 96 NY2d 42, 48), and a construction “resulting in the
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nullification of one part of the [statute] by another[ ] is
impermissible” (Matter of New York County Lawyers’ Assn. v Bloomberg,
95 AD3d 92, 101 [internal quotation marks omitted], affd 19 NY3d 712).
“A construction rendering statutory language superfluous is to be
avoided” (Matter of Branford House v Michetti, 81 NY2d 681, 688).
Applying the foregoing rules to this case, we note that the power
to commence a civil action is enumerated in section 602 as one of the
powers and duties of the County Attorney. That is not to suggest,
however, that the County Attorney may commence a civil action on the
County’s behalf of his own volition. Section 602 must be read in
conjunction with the County Law § 501 (1), which empowers a county
“board of supervisors [or legislature] . . . to bring civil actions
and proceedings[, whereas] the county attorney’s authority is limited
to prosecuting them” (County of Sullivan, 99 AD2d at 574-575).
Pursuant to the last sentence of section 602, the County Executive may
authorize the County Attorney to perform only “additional and related
duties” (emphasis added). Those “additional and related duties,”
however, cannot be read to encompass the enumerated power to commence
a civil action. Doing so would render superfluous the County
Legislature’s inclusion of that enumerated power within section 602.
Stated another way, the power to commence a civil action cannot
reasonably be “additional” or “related” to itself. Thus, the
majority’s reliance on section 602 is misplaced (see Branford House,
81 NY2d at 688).
Likewise, we are not persuaded by the reasoning in the case cited
by the majority, Matter of County of Rockland v Town of Clarkstown
(167 Misc 2d 367). In that case, the court relied on a provision in
the Rockland County Charter that was substantially similar to section
602 of the Erie County Charter. Section C16.02 of the Rockland County
Charter provides in relevant part that the “County Attorney shall be
the legal advisor of the county and all county agencies on civil
matters and shall prosecute or defend actions or proceedings of a
civil nature brought by or against the county. He shall have and
exercise such other and related powers and duties as may be conferred
or imposed upon him by law and perform such other related duties
required by the County Executive or the Legislature” (County of
Rockland, 167 Misc 2d at 369). From that section, the court concluded
that the Rockland County Executive “is empowered by the Rockland
County Charter to authorize the County Attorney to commence civil
litigation to enforce any of the duties and functions lawfully
designated to the County Executive” (id. at 370). Based on the rules
of statutory construction noted above, however, we conclude that the
court made the same error of statutory construction made by the
majority in this case.
Next, contrary to the view of the majority, Erie County Charter §
302 (m) does not require a different result. That provision gives the
County Executive “all necessary incidental powers” to perform any of
his enumerated duties or functions. We acknowledge that the “right to
sue and be sued” has sometimes been included within the broad category
of “incidental powers” (New York City Tunnel Auth. v Consolidated
Edison Co. of N.Y., Inc., 269 App Div 449, 453, revd on other grounds
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295 NY 467, rearg denied 296 NY 745). In this case, however, granting
the broad power to commence litigation to the Erie County Executive
without a resolution from the County Legislature based on Erie County
Charter § 302 (m) still renders the language of section 602
superfluous. Section 302 (m) cannot be read to empower the County
Executive to authorize the County Attorney to perform the enumerated
duty of commencing litigation when section 602 expressly limits the
County Executive’s direction over the County Attorney to performing
“additional” or “related” duties.
The rules of statutory construction “require that, where it is
possible to do so, the various parts of the statutory scheme be
harmonized, reading and construing them together . . . , and
reconciling the apparently conflicting provision in the manner most
consistent with the overall legislative intent” (Matter of Ador
Realty, LLC v Division of Hous. & Community Renewal, 25 AD3d 128,
134). In our view, the Erie County Charter does not evince that the
County Legislature intended to deviate from the rule set forth in the
County Law that it, rather than the County Executive, may authorize
the County Attorney to commence a civil action (see County Law § 501
[1]; County of Sullivan, 99 AD2d at 575; see e.g. County of Niagara,
48 AD3d at 1072).
Indeed, in describing the powers and duties of the County
Legislature, Erie County Charter § 202 explicitly provides that “the
county legislature shall have and exercise all powers and duties of
the county . . .” (emphasis added). It is well established that Erie
County is a municipal corporation with the right to sue and be sued
(see NY Const, art X, § 4; County Law § 3; see generally Beneke v Town
of Santa Clara, 28 AD3d 998, 999). Thus, consistent with the
provisions of the County Law, the County Legislature clearly intended
to grant itself the right to sue and be sued (see generally Beneke, 28
AD3d at 999; County of Sullivan, 99 AD2d at 575).
On the other hand, the powers and duties of the County Executive
are more narrowly defined. The County Executive’s powers and duties
are enumerated in Erie County Charter § 302. Conspicuously absent
from that list of powers and duties is a “catch-all” provision akin to
the language identified above in section 202. The County Legislature
clearly knew how to empower a branch of the Erie County Government
with “all powers and duties of the county” (§ 202), but chose not to
bestow those powers on the County Executive. Therefore, because it is
undisputed in this case that the County Attorney acted only at the
direction of the County Executive and without a resolution from the
County Legislature, we would dismiss the first amended complaint on
the ground that the County lacked the capacity to sue.
Even if we were to agree with the majority that sections 602 and
302 (m) empower the County Executive to authorize the County Attorney
to commence a civil action, we nevertheless disagree with the
majority’s implicit conclusion that the power is so broad that the
County Executive may authorize the County Attorney to commence the
instant action against defendant.
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That conclusion is not inconsistent with section 302 (m). To be
sure, to the extent that the County Executive possesses a specific
duty or function by virtue of section 302, the Erie County Charter
provides him with broad powers to exercise that duty or function (see
§ 302 [m]). Here, however, the County’s action against defendant
involves matters outside the County Executive’s enumerated duties.
The County Executive is “the chief executive officer and
administrative head of the county government” (Erie County Charter §
302 [a]) and is “responsible for the exercise of all executive and
administrative powers in relation to any and all functions of county
government not otherwise specified in [the Erie County Charter]” (§
302 [l]). He or she shall also “appoint to serve . . . the head of
every department and other administrative unit of the county” (§ 302
[b]) and “[s]upervise and direct the internal organization and
reorganization of each department or other administrative unit the
head of which he or she has power to appoint” (§ 302 [c]). Notably,
the Commissioner of Central Police Services (CPS) is appointed by and
“shall serve at the pleasure of the county executive” (§ 1501). The
County Executive, therefore, has a supervisory role with respect to
CPS. The instant action, however, involves allegations of fraud
against the former Commissioner of CPS. In our view, it does not flow
from the County Executive’s power to supervise and direct CPS that the
County Executive, without a resolution from the County Legislature,
may authorize the County Attorney to commence a civil action against a
former county employee who resigned before the County Executive took
office. Simply stated, this action falls outside the enumerated
powers granted to the County Executive in section 302.
Consequently, this case is distinguishable from County of
Rockland, on which the majority heavily relies. Notwithstanding its
threshold error in concluding that the Rockland County Executive had
power to authorize the County Attorney to commence a civil action, the
court in County of Rockland nevertheless pointedly recognized that any
such power necessarily would be limited to matters that fell within
the County Executive’s enumerated duties (see County of Rockland, 167
Misc 2d at 370-371). In that case, the Rockland County Executive was
the “chief budget officer” and the lawsuit involved the County budget
(id.). The County of Rockland commenced separate proceedings against
the Town of Clarkstown and the Town of Ramapo “to compel the subject
Towns to add deficits caused by County revenue chargebacks to the
Town’s portion of each annual budget” (id. at 368).
In this case, even though the County Executive is the County’s
Chief Executive Officer and Chief Budget Officer (see Erie County
Charter § 302 [a], [d]), the nexus between the fraud action commenced
by the County and the County Executive’s enumerated powers is far more
tenuous than it was in County of Rockland. Every decision by a county
agency ultimately has some effect on a county’s budget. The four
million dollars allegedly at issue in this action notwithstanding, the
majority’s holding today allows the County Executive to circumvent the
County Legislature and direct the County Attorney to commence
litigation for any decision that could have an impact on the County’s
budget, no matter how small.
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Therefore, even if we were to accept the majority’s position that
the Erie County Charter empowers the County Executive to authorize the
County Attorney to commence a civil action in some instances, we would
nevertheless reach the conclusion that the County lacks the capacity
to sue defendant herein.
Finally, we note that there is an alternate ground on which the
fraud cause of action, the sole remaining cause of action in the first
amended complaint, must be dismissed, albeit without prejudice. The
operative allegations behind the County’s fraud cause of action
against defendant are based solely on “information and belief.” For
example, the County alleges that, “[u]pon information and belief,
[defendant] was advised by New York State Homeland Security that the
proposed contract with M/A-Com was unauthorized and illegal.” It is
well established that allegations based on “information and belief”
are insufficient to support a fraud cause of action, which must be
pleaded with particularity, unless “the source of such information
[is] revealed” (DDJ Mgt., LLC v Rhone Group L.L.C., 78 AD3d 442, 443;
see Angel v Bank of Tokyo-Mitsubishi, Ltd., 39 AD3d 368, 370; see
generally CPLR 3016 [b]).
We do not dispute that defendant herein failed to raise this
specific issue as a basis to dismiss the fraud cause of action, the
sole remaining cause of action against him, and we agree with the
proposition that “ ‘[a]n appellate court should not, and will not,
consider different theories or new questions, if proof might have been
offered to refute or overcome them had those theories or questions
been presented in the court of first instance’ ” (Ciesinski v Town of
Aurora, 202 AD2d 984, 985, quoting Fresh Pond Rd. Assoc. v Estate of
Schacht, 120 AD2d 561, 561, lv denied 68 NY2d 802). Nevertheless,
defendant moved to dismiss the first amended complaint for, inter
alia, failure to state a cause of action alleging fraud and argued
that the allegations of fraud made against him were too vague. In our
view, defendant’s challenge to the fraud cause of action necessarily
encompasses the sufficiency of the allegations of that cause of
action. We do not agree with the majority that the County should, in
effect, be permitted to proceed on patently insufficient fraud
allegations in the face of defendant’s challenge to the sufficiency of
those very allegations.
At the same time, we recognize that the County has never been
given the opportunity to cure the deficiencies in its allegations and
come forward with the source of the information on which its beliefs
are based. We decline to offer an opinion whether the County will do
so successfully, but we believe that it is incumbent on the County, at
the pleading stage, “to disclose the sources of its information and
belief and otherwise come forward with whatever evidence it has”
concerning its allegations of fraud against defendant, and we also
believe “that it should be given another opportunity to do so” (Belco
Petroleum Corp. v AIG Oil Rig, 164 AD2d 583, 599). Therefore, even
assuming, arguendo, that the County has the capacity to sue defendant,
we would dismiss the fraud cause of action against him without
prejudice to allow the County to replead its allegations of fraud. If
the County cannot provide legally sufficient amended allegations of
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fraud, then defendant will be able to challenge such allegations.
This was the approach taken by the First Department in an analogous
case, Belco Petroleum Corp. (164 AD2d at 598-599), and we see no
reason not to employ it here. We note that, to the extent that the
County may encounter a statute of limitations issue upon further
amending its complaint, CPLR 205 (a) would operate to save the claim
from being time-barred.
For the reasons stated herein, we respectfully dissent and would
modify the order by granting defendant’s motion to dismiss the sole
remaining cause of action against him based on the County’s lack of
capacity to sue and the County’s failure to state a cause of action
alleging fraud.
Entered: March 15, 2013 Frances E. Cafarell
Clerk of the Court