# Appendix — George Campbell Painting Corp. v. Reid > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0021%3A01 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1968 - **Citation:** 392 U.S. 286 ## Text oe 5 fetid fyi r ty, be 9 APPENDIX IN THE Supreme Court nf the United States October Term, 1967 No 673 | ~GeorGE CamMpBELL Parntixc Corp., | Appellant, against “ . X Ww ILLIAM Rep, Francis V. Mapicax, Ira S. Rossins, Mem- . bers of. the ‘New York ‘City Housing Authority, and Tue New York City Houstxc AvTuority, : \ = ees. - snail, a Gerorce CaMPBELL Parxtinc Corp., . Appellant, against - | | Wiiuiam Rem, Francis V. Mapican, Ina S. Rossrxs, Mem- bers of the New York City Housing Authority, and Tue New York City Hovusine AvTuoriry, ; . cS . ' Appellees. On Appeal from the ‘Court of Appeals of the . State of New -York —__ ‘ aa we , ‘ ae | : . Filed October 2, 1967 ? _ Probable Jurisdiction Noted January. 29, 1968 D 4 : » 5 TABLE OF ‘CONTENTS f j PAGE Record of Review from Administrative Determination _ Motion of Petition, -:.........+ 4 . . = . . i oS : | bd . . - “ ~ . e . 4 ‘ . . al - , ‘ . ; a * RECORD OF REVIEW FROM ADMINISTRATIVE DETERMINATION ~ ) Notice of Petition SUPREME COURT OF THE STATE OF NEW YORK County or New York - Index No. 6987/1965 _ [Same TiriE] ~ Sims: 7 2. Presse Take Notice that upon the annexed petition of’ George Campbell Painting Corp., verified on the 2nd day’ of Octaber, 1965, upon.all the proceedings heretofore had - herein, an application will be made to a Special Term, Part I of this Court, to be held at.the New York County Court House, 60 Centre Street, Borough of Manhattan, _. City and State of New York, on October 25, 1965, at 9:30. '. A.M., or as soon thereafter as counsel can be heard, for a judgment granting the relief prayed for in the petition, and for such other and further relief this Court may deem just and peng. TAKE Furruer Notice that petitioner demands that you . produce the following papers at the hearing specified above: 1. The letter by District Attorney Frank S. Hogan to William Reid, advising the New York City Housing Authority of the- alleged refusal of — Campbell, Jr. to waive immunity ; 2. Copies of the decisions, orders, or notices in which the New York City Housing Authority allegedly ae the petitioner from bidding on future contracts ; ; A and ‘ Notice of Petition 3. A copy of the transcript of the deposition of Theodoré Ruzow taken pursuant to Section 157(3) of the Public Housing Law on ‘August 5, 1965, and subscribed to on August 19, 1965. Dated: New York, New York October 4, 1965. Yours, etc. . , “‘Ruzow & Liner Attorneys - for. Petitioner Axprrt A. BLINDER To: . - William Reid Francis I. Madigan _ Ira S. Robbins New York City Housing » Authority Z Of Counsel - % alae A8 | _ Petition SUPREME COURT OF THE STATE OF NEW YORK County oF New York [Same Tit.e] To the Supreme Court of the State Of New York: Petitioner, George Campbell Painting Corp., by its at- torneys, Ruzow & Lipner, complaining of Kiana re- spectfully alleges : 1. Petitioner is a corporation duly organized under the laws of the State. of New York, with its principal place of business at 40-11 149th Street, Flushing, County of Queens. 2. Petitioner is in the business of general painting con- tracting and, among: other things, has been engaged in painting and decorating contracts for the respondent, New : ‘York. City Housing aria - 3. Respondents, William Reid, Francis V. Madigan and Tra 8. Robbins, respectively, are chairmer aud members of | the New York City Housing ‘Authority. A Respondent, New York City Housing duainatiy is the agency which cancelled certain existing contracts of the ' _ petitioner and barred it from future bidding for five years. 5. The alleged refusal by: an officer and director of peti- tioner to waive re oecurred in New York County. 6. Petitioner is a eunpiieltum which was organized i in 1964 with the Estate.of George Campbell, Sr., owning fifty wt Ad mM, Petition | (50%) percent of the stock therein, and the*remaining fifty . (50%) percent owned equally by George Campbell, Jr., ‘Marian Campbell Rizzi, Anita Campbell Ponte, Jane Camp- bell J ny ‘and a Campbell Dougherty. a Pripr to the incorporation of the George Campbell Painting Corp., as aforesaid, the business was conducted as a partnership entitled ‘‘George Campbell & Company.”’ The stockholders of petitioner were members of the part-. . nership with the same ownership interest. At all times - during his lifetime George Campbell, Sr., was the general partner in charge of the partnership. : _8. Under the partnership the aforesaid George Camp- bell, Sr. was engaged in performing general painting con- tracting for the respondent, New York City Housing Au-— thority, and for other governmental agencies and sub-divi- sions within the State of New York and elsewhere, for a period in excess of thirty (30) years. At no time during that period had any of its contracts been cancelled or had it been barred from future bidding because of provisions of Public Authorities Law, §2602,.General Municipal Law .§103(b), or any other corresponding sections of. the State or Federal Statutes. te 9. After the demise of George Campbell, Sr. on August 2, 1964, petitioner acquired all of the asséts/and assumed all of the liabilities of the partnership. George Campbell, Jr. was elected president of petitioner. He was also a di- rector and stoekholder. ; 10. On March 26, 1965, the aforesaid George Campbell, Jr. resigned as an officer and director of the petitioner, and on or about that date he divested himself of his stockhold- ings. - A copy of the minutes of the directors’ meeting per- taining to the resignation is annexed hereto, made a part hereof and marked Exhibit A. . - A5 Petition 11. Since March 26, 1965, George Campbell, Jr. has — been employed as an estimator, a position which does: not cneaiyeny management functions. : ; nat | 12. On April-13, 1965,.at the office of Albert’A. Blinder, 485 Lexington Avenue, New York ‘“Gity, a detective of the New York County District Attorney’s Office served a sub- poena upon the aforesaid George Campbell, Jr., calling for — _ his appearance -before a Grand J ury” on Wednesday, April 14, 1965. 13. On April 14, 1965, George Campbell, Jr. appeared before the Grand Jury, and refused to sign a waiver of im- f munity. ‘thereat. Panne, age : caipanteennlee 14. Upon information aad “pelief, New York County District Attorney Frank S. Hogan, advised the respondent, New York City Housing Authority, of such refusal in a letter to the —— Reid. 15. Upon ndienniitten and ‘belief, as a result of the aforesaid letter, the respondent, New York City> Housing Authority, upon the decision made by the respondents Reid, Madigan and Robbins, cancelled the existing contracts of the George Campbell Painting Corp. and barred it from future bidding with respondent, New York City Housing Authority, for five years. 16. Thereafter a letter was sent to the petitioner by the New York City Housing Authority informing it of the Authority’s action. A copy of the letter is annexed hereto, made a part, hereof and issinaees Exhibit B. 17. On March 29,-4965, ‘Emest Ponte, a vice-president of the petitioner, was subpoenaed to appear before the same _ Grand Jury allegedly investigating painting contracts. On A6 - Petition : / March 30, 1965; the aforesaid Ernest Ponte appeared at the office of the District Attorney and was. interviewed by an assistant district attorney. At that time the assistant district attorney in charge was informed that the aforesaid Ernest Ponte was willing to 8 a waiver of immunity. ‘The assistant ‘district attorney informed: the aforesaid Ernest Ponte that his appearance was not required on that date, but that at a latef time he would be recalled. The aforesaid assistant district attorney was. told that Mr. Ponte would cooperate with the Grand Jury and would appear whenever a request was made through counsel. 18. On or about the 20th Sey of April, 1965, other offi- cers and directors of the petitioner, to wit, Marian Camp- bell Rizzi, Elizabeth Campbell, George Morvan, Theodore Ruzow and Ernest Ponte, were requested to appear before the Grand Jury. Each of the aforesaid officers and direc- tors voluntarily appeared on the 22nd day of April, 1965, . each advised the assistant district attorney that he (or she) would sign a waiver of immunity, did in fact so sign. Later, George Morvan, Theodore -Ruzow and Ernest Ponte were asked to appear before the Grand-Jury and each answered any and all questions put to him by the aforesaid Grand Jury and its legal representative. (Marion. Campbell Rizzi and Elizabeth Campbell were excused without —— asked to testify.) :; 19. No agreements of any kind have been entered into with. the aforesaid George Campbell, Jr. about his rein- statement as an officer and director. The petitioner does ' not now intend te reemploy or otherwise reengage his serv- _ ices as an officer and director. 20. The petitioner, as aforesaid, through its other off- cers and directors as aforesaid,. has cooperated with the District Attorney’s investigation. Moreover, its books and ee ee ere yet yer — sor partnership, and since its incorpdration, the petitioner, .... been the highest. Among thewajor contracts undertaken _ and satisfactorily completed by the petitioner and its pred- ~ _ ecessor partnership wales the last ten years: have been: ‘AT _ Petition | a records have been made-available to ‘other city agencies in connection gwith their investigations. 21. The titles of the officers and directors of the petie tioner who ny testified and/or signed waivers of Immunity are: 4 George Morvan | : Executive Vice-President, Director : Ernest Ponte _ Vice-President Theodore Ruzow' ~ | Director Marion Campbell Rizzi Secretary, Director ee - Elizabeth Campbell - Treasurer, Director me ra 22. During the past thirty years, petitioner’s predeces- has constituted’ oné of the largest painting contractors in the area. Its reputation’for public service contracts has ‘United States ‘Militatry Academy West Point, New York Oahe Reservoir Pierre, South Dakota General Electric Appliance Patk -" Louisville, Kentucky . : A8 _ Petition ° 4 '. Triboro Bridge . °, . New York - Whitestone Bridge New York |.’ - Henry Hudson Bridge New York Walt Whitman Bridge _ Philadelphia, Pa. Mid-Hudson Bridge New York Memphis Arkansas Bridge _, Memphis, Tenn. | Ravenswood Generating Plant _ New York Astoria Génerating Plant New York - Mahlstrom Airforce Base Great Falls, Montana - $Scott Airforce Base Illinois arey Loring Airforce Base Caribou, Maine New York State Court of Appeals ~ Albany, New York - Creédmoor Hospital New York Solel ee | Harlem Valley State Hospital _ Pawling, New York x . won az AQ Petition : : Booth Memorial Hospital c= Queens, New York | Veteran’s Admini stration Hospital New York United States Court House é, Foley Square, New York City, New York Yeshiva University =~ | New York | Municipal Court, "New York | Bronx City Prison - New York . Raymond Street J ail Brooklyn, New York - Grumman Aireraft Company Plant e Brookhaven, New Yor City of New York © | 5 4 four years of age. legatee under the 1,Sr. No distribu- es the only beneficial rge Campbell, Jr. now has in petitioner, bell, Jr. will receive in lieu’ of a distribution Ow owned by the estate. A10 Petition 25. The work done by the petitioner and its predecessor partnership during the last five years for respondent, New York City Housing Authority, has constituted léss than fifteen (15%) percent of-its total annual volume. At the ~present time the work for the respondent, as aforesaid, con- stitutes an even smaller percentage of its gross sales. 26. The action by the respondents, Reid, Madigan and Robbins, and the New York City Housing Authority, pur- portedly was pursuant to Section 2602 of the Public Au- thorities Law ‘in that the aforesaid respondents thought that the aforesaid section had been violated’ by a member, partner, director, or officer of ‘the petitioner refusing to eR a waiver of immunity. a. Respondents in barring the’ petitioner from future bidding for five years for the alleged refusal of George _ Campbell, Jr. to waive immunity before the New York County Grand Jury, violated the rights of your petitioner, and your petitioner respectfully submits that this action by respondents, Reid, Madigan, Robbins and the New York | City Housing Authority was an abuse of their discretion _ and was decided arbitrarily and-ecapriciously, based upon erroneous information and/or interpretation of the afore- said section of the Public Authorities Law. : : 28... Such acts by the respondents were arbitrary, capri- . cious and an abuse of discretion in that the aforesaid . George Campbell, Jr., was no longer an officer, director, or stockholder of.the petitioner at the time he refused to waive immunity before the Grand Jury, and moreover, was not an officer, director, or stockholder at the time a subpoena was served upon him for his appearance as aforesaid. 29. The decision by the respondents, Reid, Madigan, Robbins and fhe New York City Housing Authority on or © : Petition ~ about April 21, 1965, to bar and disqualify as aforesaid, ' was arrived at without a hearing being held, despite the fact that they were informed by letter dated April 9, 1965, that the aforesaid George Campbell, Jr. was no longer an - Officer and director of the corporation. Likewise, by létter .- _ bearing the same date, the District Attorney of New York County, Frank S. Hogan, was notified . that the aforesaid - George Campbell, Jr. whs no longer an ‘officer, director, or . stockhelder of said co ration. oe , 30. After notice by the respondents, Reid, Madigan, ~ Robbins and the New York City Housing Authority of the barring and disqualification as aforesaid, a letter dated April 23, 1965 was sent by the petitioner through its counsel to the respondent, requesting an immediate hearing. A copy of the letters dated April 9, 1965 and April 23, 1965 are annexed hereto, made_a part hereof and designated : as Exhibits C and C-1. . _ $81. When no reply was received concerning the afore- said Exhibit C, a telegram was sent by one of the counsel for petitioner on April 27, 1965, again requesting a hearing. | A eopy of the aforesaid telegram is annexed hereto, made a part hereof and marked — D. ‘ 32. On or about May | 1965, respondent, New York City Housing Authority, fae Te: to petitjoner’s requests by letter, to the effect that no useful purpose would be served . . by holding a hearing. A copy of the. aforesaid letter is annexed hereto, made a part hereof and marked Exhibit E. 33.. Petitioner submitted a notice of claim to the re- spondent, New York City Housing Authority, a copy of which is annéxed hereto, made a part hereof, and marked Exhibit F. More than thirty days have elapsed since the notice of claim was served and since then the deposition, pursuant to Section 157(3) of.the ‘Public Housing Law was a +s ° ‘ 4 a A12 Petition ? oe ‘concluded by the respondent New York City Housing Au-. ~ thority. an Petitioner holds other contracts with povernmentel bodies, subdivisions. and authorities within the State of New York. .The decision by the New York City Housing - Authority and its members, as aforesaid, has caused and ' will contiriue: to cause irreparable damage io petitioner’s goodwill and reputation in the community, with a resulting loss of business, and may well jeopardize its continuing relationship with government departments, agencies, au- | thorities or their subdivisions within the State of New York. 35. Onor about: ‘April 21, 1965, upon i. Ceebtionel erro- neous findings of the reapendanta, Reid, Madigan, Robbins and the New York City Housing Authority, the aforesaid respondents directed their Director of Public Relations, ‘one Oscar Kanny, to release a ‘‘news release’’ which was disseminated not: only among all the news media within this county and state, but was also, sent to other’ public officials at governmental agencies, departments, bureaus and, their subdivisions with whom the petitioner has con- tracts extant. A copy of the news release is annexed here- to, made a part hereof and marked Exhibit G. 36. Upon all the foregoing and the cancellation of the _ three contracts described in Exhibit C annexed hereto, peti- _ tioner is now suffering irreparable and irremedial injury which will continue for the next five years as a result of the arbitrary, capricious and erroneous. decision referred to — above. 37. For the reasons above stated, and in view of the limited amo int of financial interest.of the aforesaid George Campbell, Jr. at the time of his refusal to sign a waiver of — immunity, the petitioner believes that it will not be in the public interest to countenance the disqualification alleged above. eh Ais ee 1 ¥g Petites 38. Petitioner, to the Shelia of any of its es. and directors, denies that it has engaged in any .practices which were illegal under any state or federal law, oru — any anny ordinance or regulation. 39. This petition applies ‘only to the disqualification ' portionef the notice of claim heretofore served. 40.. Petitioner has no sacsiroreie remedy at law. 41. Petitioner. commended’ a special proceeding» on or about May 5, 1965, in this Court. Upon the return date thereof respondents moved -to: dismiss for, among other reasons, the failure of petitioner to allege that more than thirty days had elapsed between the time of the filing of- ‘the notice of claim and the commencement of the special ‘ proceeding. Justice William Lyman sustained the motion © on this ground, but granted petitioner leave to renew upon compliance ‘therewith. As set forth above in paragraph 33, petitioner has complied with the thirty-day requirement. and makes this p@ition pursuant to the previous decision of = Mr. Justice Lyman. Waninnens, ‘petitioner prays that an order be granted . herein pursuant to Article 78 of the Civil Practice Law and -Rules annulling the deterthination by respondents barring and otherwise disqualifying petitioner from future bidding _ . for a period of five (5) years and for such other and further _ relief as to this Court may seem just and proper. Ruzow & Lipner Attorneys for Petitioner — : Albert A. Blinder . Of Counsel (Verified Oct. 2, 1965.) Al4 Exhibit A Annexed to Petition — Copy of Minutes of Directors’ Meeting Minutes or a SpeciaL MEETING . OF Boarp oF DIRECTORS. GEORGE CAMPBELL PAINTING CORP. A special Meeting of the Board of Directors of Gzorce . * CaMPBELL Parntrne Corp. was held on the 9th day of April, 1965 at 10:30 AM o’clock in the offices of Ruzow and — 501 Fifth Avenue, New York City. The following were present: George Morvan Jane Jesinsky - Marian Rizzi Elizabeth Campbell Anita Ponte | Pheodore M. Ruzow Theodore M. Ruzow served as Acting Chairman and called the meeting to order. The Acting Chairman presented the shania of George Campbell, Jr., as President and Director of Gzorcr CaMPBELL PaInTING Cons. dated March 26, 1965, and also surrendered Stock Certificate #6 in the amount of 10 shares - transferred to Gzorcz CampBeLL Parnqine Corp. to the Di- rectors of Gzorcz CAMPBELL Parntrne Corp. at the meeting. On motion duly made, seconded and unanimously car- ‘ried, it was '.Resoivep, that committee be elected to select a presi- dent. The committee to be Elizabeth Campbell, Jane Jesinsky, ‘Anita Ponte, with Marian Rizzi as Secre- tary +o the Committee, ite nae Campbell A15 _Exhibit A Annexed to Petition Resouven, that the Committee would give their re- port 1 in — (30) days. There being no further business before the meeting, the same was, on motion, duly adjourned. 2 Marian Rizzi Secretary Dated: April 9, 1965 Letter of Resignation Dated March 26,. 1965 ‘Annexed to Exhibit A | March 26, 1965 To The Board of Directors . George Campbell Painting Corp. Ei ma resign as Director and President of many ainting Corp. effective immediately. ! George W. Campbell, Jt. Witness: - Theodore M. Ruzow Harry Lipner on ° At 6 x + ae | w iges \ Exhibit B Annexed to Petition ~ Letter Dated April 21, 1965 [LETTERHEAD OF ] cN EW YORK CITY HOUSING AUTHORITY {> 250 Broadway New York, N. Y. 10007 . ~ . April 21, 1965 Gestes en Painting Corp. | 40-11 149th Street _ Flushing 52, New York . , tm Re: Contracts Nos. : PD 65-5A (McKinley, Morris & . . Morrisania) — \ PD 65-10C (First & Riis\(F-& ( C) - PD 65-14B (Lehman & Taft) + a) Gentlemen: — ft. ~ Youll _ The Authority has been officially = i the Dis- trict Attorney of New York County that George Carnpbell, Jr., an officer of your company, has refused to waive im- munity when subpoenaed to testify before the Grand Jury © of that county in connection with a pending investigation to determine whether the crimes of bid rigging on public . contracts, bribery of a public officer, bribery of a labor. official, extortion, coercion, assault, and conspiracy to com- mit each of those crimes; has occurred in New York County. — take notice that by reason of the foregoing, and pursuant to the provisions of Section 38 of the General Conditions of the above contracts, the Authority has di- - rected, and you are hereby advised, that such Contracts be and they hereby are cancelled and terminated, effective im- mediately. You are directed to remove immediately from ALT | Exhibit B Annexed to Petition each of the projects seeenek by the above Contracts all your materials and equipment. . Please take ‘further notice that in accordance with the further provisions-of said Section 38 the Authority has © directed, and- you are hereby advised, that said George Campbell, Jr., and any firm, partnership or corporation of which he is a member, partner, director or officer, in- cluding your company, has been and will be disqualified from selling’ to or submitting bids to or receiving awards from or enteritig into any contracts with the Authority for goods, work or services, fora _ period “a five (5) years after . such refusal. Yours very isn, — Poy Bit ok} teats Gerald J. Carey - | General Manager Certified Mail — . Return Receipt Requested 2 a | —AI8. Exhibit C Annexed to Petition ' Letter Dated April 9, 1965 | [uerrerBEsD oF | GEORGE CAMPBELL PAINTING CORP. 40-11 149th Street — ; Flushing, N. Y. 11352 : April 9, 1965 New York City Housing Authority 250 Broadway New York, New York 10007 ‘ Gentlemen: Please be advised that George William Campbell, Jr. Tesigned as an officer and director of our corporation on March 26, 1965. , Very truly yours, - Groce Canvouts, Pascoe Corp. | ’ Marian Rizzi Secretary Pnse AI9 Exhibit C-1 Annexed to Petition Letter Dated April 23, 1965 [LETTERHEAD OF] RUZOW & LIPNER ATTORNEYS AND COUNSELLORS aT Law 501 Fifth Avenue New York 17, N. Y. | April 23, 1965 ' New York City Housing Authority 250 Broadway ; New York, New York 10007 Att. Mr. Qerald J. Carey General Manager — Re: George Campbell Painting Corp. Morris Houses, McKinley and Morrisania‘Houses_ Contract No. PD 65-5A Amt. of Contract—$80,630.00 First and Riis Houses Contract No. PD 65-10C - Amt. of Contract—$61,395.00 Lehman Village & Taft Houses Contract No. PD 65-14B. Amt. of Contract—$8,500.00 _ Dear Sir: We are the attorneys for George Campbell Painting Corp. and have been requested to write to you by our client, - with regard to the following matter. On April 9, 1965, a letter was addressed to the Authority advising you that George William Campbell, Jr. had re- A20 Exhibit C-1 Annexed to Petition’ signed as an officer and director of ‘their corporation on March 26, 1965, a copy of which is attached herewith. On April 20, 1965, the employees of George Campbell Painting Corp. were directed to cease their work at the site. On April 21, 1965, George Campbell Painting Corp. re- ceived a requisition, which contained a written statement to _ the effect that their contract was cancelled April 20, 1965. On April 21, 1965, the undersigned spoke to Mr. Fitz- simmons of the Legal Department of the New Y6rk City ' Housing Authority and was informed that a letter was in .the mail to George Campbell Painting Corp. cancelling the several contracts between the Authority and them, includ- ing the above referred to contracts. , Mr. Fitzsimmons further said that this action was taken as a result of information received from the District At- torney of New York County’s office and mentioned having. received it from Assistant District Attorney Joseph Phil- | | lips. At this point in the conversation, the undersigned asked Mr. Fitzsimmons if the Authority had received and had before it, at the time it made the decision to cancel the contracts of George Campbell Painting Corp., the aforesaid letter of April 9, 1965 attached herewith. Mr. Fitzsimmons did: not answer the question propounded and I then told him that the. letter stated that George William Campbell, Jr. had resigned as an officer and director of George Campbell Painting Corp. on March 26, 1965 and that this was a fact. I also informed Mr. Fitzsimmons that a similar communi- cation had been sent to Mr. Joseph Phillips, Assistant Dis- trict Attorney, on April*9, 1965, giving Mr. Phillips the same information regarding the resignation of Mr. Camp- bell. 7 I requested Mr. Fitzsimmons to arrange a hearing or _ give the contractor and his attorneys some opportunity to present the facts regarding the resignation, because of their significance relevant to the acts of cancellation of the con- . tracts by the Authority. . A21 ; _Exhbit C-1 Annexed to Petition + ‘- . | On April 23, 1965, George Campbell Painting Corp. re- _ ceived a letter from the Authority formally notifying it of the proposed cancellation of the above referred to con- tracts. , I direct your attention to Section 38 of the Aasepiteiente to General Conditions enfitled ‘‘Cancellation and Disquali- fication for Faflure to Waive Immunity’’.- It is a fact that George Willjam Campbell, Jr. refused to waive immunity at an appearance before a Grand J ury of seeaed York County on April 14, 1965. Your attention is directed to Subdivision (a) of Section 38, which clearly speaks. in the present tense, when it refers to the disqualification of the person failing to waive im- _ munity and in Subdivision (b), it speaks in the present ~ tense, when it refers to the right of the Authority to cancel existing contracts as a result of th» relationship between the person failing to waive immunity and the corporation "2 under contract with ‘the Authority. It is respectfully submitted that if George William Campbell, Jr. resigned-as an officer, director and stock- holder prior to his being called upon to waive immunity and prior tothis failure. to waive immunity, that the pro- visions of: Section 38 have no application and should not be applied or enforced by the Authority, with relation to any contracts existing between the Authority and Qeorge Campbell Painting Corp. a Please be advised that all officers and directors of George Campbell Painting Corp., who have been requested to appear before the New York County Grand Jury have _ voluntarily appeared, without subpoena, and have volun- -tarily signed waivers of immunity. . _ As time is of the essence and great and irreparable harm and damages are accruing hourly to George Campbell Painting Corp., this letter is being hand-delivered to your office, to request an immediate hearing by the Authority with regard to the cancellation of the contracts and the ee pts A22 @ Exhibit D Annexed to Petition application of Section 38 thereto and the related tition of ‘the resignation of George William Campbell, “Jr. as an officer, director and stockholder of George Campbell Paint- ing Corp. Very truly yours, Ruzow & Lieven By TMR sag Enc. Copy of letter of George Campbell Painting Corp. dated April 9, 1965 DELIVERED BY Hanp Exhibit D Annexed to Petition ) Telegram Dated April 27, 1965° WESTERN UNION [TELEGRAM | New York NY Apr 27 1965 Gerald J Carey N. Y. City Housing Authority 250 Bway NYK We respectfully request prompt reply to our 4etter of April 23rd regarding George Campbell Painting Corp. re- questing hearing on cancellation. | Theodore M Ruzow 501 Fifth Ave. NYC . | Exhibit E Annexed to Petition Letter Dated May 5, 1965 [LETTERHEAD OF] NEW YORK CITY HOUSING AUTHORITY 250 Broadway New York, N. Y. 10007 : May 5, 1965 Ruzow & Lipner, Esqs. z 501 Fifth Avenue New York 17, N. Y. Re: George Campbell Painting Corp. Gentlemen: This will acknowledge your letter of April 23, 1965 and telegram of April 27, 1965... | | The contents of your letter jndicate no basis for any change in the Authority’s determination, and you are there- fore advised that there is no purpose to further correspond- ence upon or discussion of this matter. a Yours very truly, Gerald J. Carey General Manager Exhibit F Annexed to Petition Notice of Claim Dated July 2, 1965 —- ae In the Matter of the Claim of GEoRGE CAMPBELL ParntinG Corp. against a- iy Tue New York City Hovustne AuTHoRITY Sirs: =e TaKe Norice that the “undersigned, insane Campnats, , ParntinG Corp., with its principal place of business at 40-11 — 149th Street, Flushing, oe of — New. York, ’. claims: | 1) Damages against The New York City Housing Au- - thority in the sum of Onze Mion Lt 000,000.00) Dotuars, - 2) A right to have its cancelled contracts with The New York City Housing Authority reinstated, and 3) The order barring it from future bidding for a period . of five (5) years vacated, because of The New York City Housing Authority’ s wrongful interpretation and applica- — - tion of the provisions of the contract entered into by and between George Cambell Painting Corp. and The New York City Housing Authority and the applicable statutes. The damages, wrongful cancellation of the contracts and wrongful barring of the claimant from future bidding for a* - period of five (5) years were sustained as a result of the | + AQ5 ‘Exhibit F Annexed to Petition _action by The New York City Housing Authority purport- edly pursuant to provisions of the contract and applicable statutes claiming a violation thereof by a member, partner, director or officer of the claimant refusing to sign a waiver of imnfunity. The New Yorkity Housing Authority in making the determination of cancelling the existing con- tracts and barring petitioner from future bidding for five (5) years for the alleged _refusal-of George Campbell, Jr..to waive immunity before the New York Grand Jury, was a — - breach of contract and violated the claimant’s rights and was based upon the erroneous information and/or interpre- tation of the aforesaid contracts and statutes in that the aforesaid George Campbell, Jr. was no longer an officer, “director or stockholder of the ‘petitioner at the time he refused to waive immunity before the Grand Jury, and, — moreover, was not an officer, director or stockholder at the time a subpoena was served upon him for his appearance . aS aforesaid. The decision by The New York.City Housing _ Authority was arrived at despite the fact that they were informed by letter dated April 9, 1965 that George Camp- bell, Jr. was no longer an officer and director of the cor- poration. , The undersigned, on Campbell Painting Corp. ie claims damages in the sum of Onze Mrxion ($1,000,000.00) Dotuars for loss of profits on contracts they were prevented from obtaining because of said wrongful determinatiqn by The New York City Housing Authority. TaKe FurtHER Notice that the undersigned, George _ _ Gampbell Painting Corp., hereby presents its claims as - aforesaid respectively for adjustment, reinstatement, vaca- ture of the existing prohibition and payment, and notifies you that unless the same’ are adjusted, reinstated, vacated. and paid within thirty (30) days from the date of their presentation to you, it is the intention of the undersigned to commence an action or actions, a proceeding or proceed- A26 Exhibit F Annezed to Petition ings thereon in the. Supreme Court of the State of New - York, County of-New York, against The New York City Housing Authority: and its members for the relief sought herein, with costs and disbursements in the action or ac- tions, proceeding or proceedings as aforesaid. Dated: Flushing, New York - - July 2, 1965 Grorce CaMPBELL Parntine Corp. By ~ 2 Marran CO. Rizzt . State of New York ): County of Queens ) ss.: On this 2nd day of July 1965, before mé personally came Marian C. Rizzi, to me known, who, being duly sworn, did depose and say, that she resides at 55 Rose Drive, Great Neck, New York; that she is the Secretary of George Camp- - bell Painting Corp., the corporation described in and which exectted the foregoing instruments that she knows the seal of said corporation, that the seal affixed to said instrument is such corporate seal; that it-was so affixed by order of the board of directors of said corporation, and that she signed her name thereto by like order. Harry Lipner Notary Public Harry Lipner. ’ Notary Public, State of New York * No. 41-7564430 Queens County Term Expires March 30, 1966 Bs A27 Exhibit F Annezed to Petition State of New York ) County of Queens ) ss.: Marran C. Rizzi, being duly sworn, deposes dnd says: That she is the Secretary of George Campbell Painting Corp., the corporation named in the within Notice of Claim; that she has read the foregoing Notice of Claim and knows the contents thereof; and that the same is true to her own knowledge, except as to the matters therein stated to.be alleged upon information and belief and as to those matters, she believes it to be true. Deponent further says that the reason this verification is made by deponent and not by George Campbell Painting Corp. is because the said George Campbell Painting Corp. — is a domestic corporation and deponent is an officer thereof, to — its ne Marin C. Rizzr Sworn to before me. this 2nd day of July 1965 ; . Harry Lipngr Notary Public, State of New York No. 41-7564430 Queens County Term Expires March 30, 1966 A28 Exhibit G Annexed to Petition | NEW YORK CITY HOUSING AUTHORITY News Release Dated Friday, May 28, , 1965 - 250 Broadway New York, N. Y. 10007 : From: Oscar: Kanny Drmecror or Pusiic ReLations 433-5013 : For ImMEDIATE RELEASE Frmay, May 28, 1965 _ William Reid, Chairman of the-New York City Housing Authority, announced today cancellation of the existing . contracts of Eli Smith of Smith Decorating Co., Inc., 327 Canal Place, the Bronx and barring it from future bidding - for five years for refusing to answer relevant questions be- fore the New York County Grand Jury. Contracts total $193,061. . + _ This action was taken pursuant to the terms of the con- tracts under which a contractor who after signing a waiver of immunity refuses to answer relevant soos awed before a Grand Jury and therefore incurs these penalties. _ New York County District’ Attorney Frank 8. Hogan ~* had advised the Authority of such refusal in a letter to Mr. - Reid received this morning and the above action by the - Authority followed later in the day. _ District Attorney Hogan ’s office, with the Authority,’s cooperation, has been conducting an exhaustive investiga- tion into painting contracts. e Notice of Respondents’ Cross-Motion ~ SUPREME COURT OF THE STATE OF NEW YORK * Country or New York [Same TitiE] - Sirs: _ Pueasz Taxe Notice that upon the notice of petitioner’s motion herein dated October 4, 1965, the petition herein of . George. Campbell Painting Corp., verified the 2nd day of October, 1965, the exhibits annexed thereto, and.uponall the proceedings heretofore had herein, the undersigned will cross-move this court at Special Term, Part I, on October 25, 1965, at 9:30 A.M. upon the return of the application made herein by petitioner for judgment, : Pursuant to Section 7804(f) CPLR, iteiiiaiies the peti- . tion as a matter of law, upon the following grounds: (a) Petitioner has an adequate remedy at law. * (b) The petition fails to state facts sufficient to warrant the relief sought therein; ‘ (c) The determination sought to be challenged herein should properly, and could adequately, have been reviewed ‘by appeal to this court pursuant to the provisions of Section 2603 of the Public Authorities Law; and . (d) This proceeding is accordingly barred saidied the provisions of Section 7801 subdivision 1, CPLR, and this court does not have jurisdiction * the subject matter. in this proceeding. Dated: New York, ‘October 20, 1965. . Yours, ete., si re ayy Harry Levy | _ Ruzow & Lipner, Esqs. Attorney for Respondents . Attorneys for Petitioner on v Ausert A. Buinver, of Counsel ee ; * ¢ . A30 Order and Judgment Dismissing the Petition _ At a Special Term, Part I of the Supreme Court | of the State of New York, held in and for the County of New York, at the County Court- house thereof, on the 14th day of December, 1965. j Present: Hon. Georcr T1uzer, Justice. ‘Index No. 6987/65 ee In the Matter of the Application of Grorce CAMPBELL ParntiNnG Corp., , _ Petitioner, against ata. | Wruuiam Rei, FRancis V. Manican, Ina S. Rossrns, mem- bers of the New York City Housing Authority, Tue NEw Yorx Crry Housinc AUTHORITY, ; Respondents, | ” For a Review pursuant to Article 78 of the Civil Practice Law and Rules. i ee Petitioner, by its attorneys, Ruzow & Lipner, having duly petitioned for an order annulling the determination - : by respondents barring and otherwise disqualifying peti- tioner from future bidding on public contracts for a period A31 . Order and Judgment Dismissing the Petition of five years, respondents having cross-moved to dismiss the petition, and said petition and cross motion having regularly come on to be heard, Now, upon reading and filing the notice of petition, © dated October 4, 1965, the petition verified October 2, 1965, by Marian Campbell Rizzi, secretary of petitioner, in sup- port of the motion with exhibits annexed and upon the notice of cross motion dated October 20, 1965, and after hearing Ruzow & Lipner, Esqs., Albert A. Blinder, Esq., of counsel, in support of the petition, and in opposition to the cross motion, and Harry Levy. Esq., Paul W. Hessel, and I. Stanley Stein, Esq., of counsel, in opposition to the petition and in support of the cross motion, and after due deliberation having been had hereon, Now, upon motion of Ruzow & Lipner, attorneys for petitioner, it is. Orveren, that the petition is denied and the cross motion granted and it is further OrpERED, ADJUDGED AND Decreep that the petition be and the same hereby is dismissed, that the foregoing be witk- out prejudice to petitioner commencing a plenary action for .the same or similar relief requésted in the petition herein. ‘Enter /s/ George Tilzer . 3 a.m O° James McGunam, Clerk Filed Jan. 10, 1963 at 10:45 A.M. County Clerk’s Office of New York County A32 Opinion of Tilzer, J. (48 Mise. 2d 544, 265 N.Y.S. 2d 304) This is an article 78 proceeding instituted by petitioner for an order annulling the determination made by respond- ent New York City Housing Authority barring and other- ‘wise disqualifying petitioner from future bidding on public contracts for a period of’ five years. Respondent cross- © moves, prior to answer, to dismiss the petition on multiple grounds. The proceeding stems: from the refusal of ‘an alleged . former officer of petitioner, George Campbell, Jr., to sign a waiver of immunity when called before a grand jury of New York County, in its investigation to determine whether the crime of bid rigging on public contracts, among others, had occurred in New York County. ° The petition alleges that, George | Jr., resigned on March 26, 1965,.as an officer’or director of petitioner, and on or about that date divested himself of his stock- holdings. That-since that date, he had-been employed as an estimator by petitioner, . a position which does not en- tail any management functions. ° That thereafter, on April 13, 1965, he was served with a subpoena to appear before , the grand jury on April 14, 1965; that’ he did appear on said date, but refused to sign a waiver of immunity and was not questioned by the grand Jury. Such alleged resighation ‘and ie of his stock _ interest in the corporation by George Campbell, Jr., prior to his refusal to waive immunity, appears to be the basis for this proceeding. ~ A33 Opinion of Tizer, J. The question for determination is whether the petitioner presents a proper case for an article 78 proceeding. Re- spondents contend that petitioner has an adequate remedy at law. They rely.on Public Authorities Law, section 2601, requiring that a clause bhall-be inserted in all contracts with any pytblic authority\created by the state for work or © services performed or to be performed or goods sold or _to be sold, that upon the refusal of any person when called to testify before a grand jury concerning any transaction or contract had with the state, public authority, &., to sign a waiver of immunity, such person, and any firm, partner- ship or corporation of which he is a member, partner, di- _ rector or officer, shall be disqualified from thereafter sell- ing to or submitting bids to or receiving awards from or entering into any contracts with any public authority for _ goods, work or services for a’ period of five years after such refusal. The provision, mandated by section 2601, is con- tained in each of respondent’s contracts with petitioner, under section 38 of the amendments to the general condi- tions thereof. y) Respondent received a letter from the District Attorney of New York Courity stating that said George Campbell, Jr., of the petitioner corporation had refused to sign a _ waiver of immunity before the grand jury. Upon receipt of the district. attorney’s letter, the authority canceled the painting contracts with petitioner, and disqualified peti- tioner, as well as said George Campbell, Jr. , and any other firm, partnership or corporation of which he is a member, . partner, director or officer, from entering into contracts with the authority for a period of five years. Petitioriér was so informed by letter of the Authority. This letter states that such action was. taken pursuant ‘to. section 38 Pe) Opinion of Tileer, J. of the General'Conditions of the contracts. Thus respond- ent argues that the disqualification is pursuant to contract with petitioner and if it was erroneous, petitioner’s remedy . is by way of penery suit base@ on the contract. The fact that ection 38 of the General Ciafiiens of the contracts was incorporated therein by reason of the mandate of section 2601 of the Public Authorities Law does not make its provisions any the less a purely -con- _ tractual matter between the Authority and the petitioner. Here it appears that petitioner has a remedy based upon contracts with respondent. The scheme of the Public Authorities Law provides not one, but two means by which the penalty of disqualification may be invoked against a recalcitrant contractor Tefusing to cooperate in a grand jury investigation involving public _eontracts, Thus, section 2601 provides for the mandatory contract provision whereby:both cancellation and disquali- fication may be applied as a matter of contractual agree- ment between a public authority and such contractor. Sec- tion 2602, on the other hand, provides a purely statutory - basis solely for disqualification even’if such contractual provision were non-existent. - The court is not persuaded that this is a proper case for a proceeding under article 78. It is available only in ‘hose situations where there are no other remedies and the conditions surrounding its use are not found in the ordi- _ nary plenary suit (Matter of Wilson v. Board of Educa- tion, &., 276 App. Div. 482). Accordingly, the application is denied and the cross- motion is granted dismissing the petition without prejudice ‘ toa er suit. Settle judgment. A385 ° Stipulation as to Prior Proceedings SUPREME COURT OF THE STATE OF NEW YORK APPELLATE Division—F rst DEPARTMENT —_—E-~ ee In the Matter of the Application of Grorce CamPBeui Parnzine Corp., : Petttioner-Appellant, agamst Wuisam Rew, Francis V. Mapican; Ina 8S. Rossins, mem- bers of the New York City Housing Authority, and. THe ‘New Yorx Crry Hovusine Avurnosrrry, © Respondents-Respondents. For a Review pursuant to Article 78 of the Civil Practice Law and Rules. i ee A ’ Ir Is Heresy StrpvLaTep AND Acreep by and between the attorneys: for the respective parties hereto that the Notice of Respondents’ Cross-Motion appearing at page 33 Ne of this record referring to ‘‘all the proceedings heretofore had herein’’ relates to an Article 78 proceeding also bear- ing Index No. er /e but having as its caption the fol- lowing : A386 Stipulation as‘ to Prior 1 Proceedings _ Index No. 6987/65. In the Matter of the Application | of GrorcE CAMPBELL ParInTING CorpP.,, 7 ‘ Petitioner, For a Review Pursuant to Article 78 of the Civil Practice Law and Rules and Section 103(c) of the General Munici- pal Law, against Wim Rei, Francis V. Mapican, Ina S. Rossrns, mem- - bers of The New York City Housing Authority, Taz New York Crry Housine Aurnority, Louis J. Lerxowrrz, Attor- ney General of the State of New York and Frank S. Hogan, Dinteret Attorney of the County of New York, : | | Respondents. —_—e . Ir Is Furruer SrreutatTep AND AGREED, subject to the approval of this Court that either party has the right to. refer to this prior proceeding i in briefs or on the argument. in the interest of justice since it was referred to in the briefs and argument before Mr. Justice Tilzer whose order ° and judgment is the subject of this appeal. Upon the argument of this appeal, the original file in said prior proceeding will be subpoenaed from the’ Clerk of New York County to be made available to this Court. Dated: New York, April 11, 1966. .. Ruzow & Lipner. : Attorneys for Plaintiff-Appellant . Harry’ Levy Attorney for Defendants-Respondents So ORDERED: © = | BB -A37 Order of Affirmance At a term of the Appellate Division of the Su- preme Court held.in and for the First Judicial Department in the County of New York, on the 3rd day of November, 1966. Present: Hon.: Charles D. Breitel, Justice Presiding — Hon. Benjamin J. Rabin, ~— ) Hon. Harold A. Stevens, ) Justices Hon. Louis J. Capozzoli, ) Hon. Earle C. Bastow, ) G 10763 ec In the Matter of the Application of GEORGE CAMPBELL PainTIne Corp., Petitioner-Appellant, - against Wim Ren, Francis V. Manican, Ira S. Rosprns, mem- bers of the New York City Housing Authority, THe Naw York City Housinc AUTHORITY, Respondents-Respondents, For a Review pursuant to Article 78 of the Civil Practice Law and Rules. —— — — An appeal having been taken to this Court by the peti- tioner-appellant from the order and judgment (one paper) a ”~ A38 Order of A jprmenes of the Supreme Court, New York Oueaty, entered on Janu- ary 10, 1966, granting iestimeccunal cross-motion to dismiss the petition, And said appeal having been argued by Mr. Albert A. Blinder of counsel for the appellant, by Mr. Paul W. Hessel of counsel for respondents-respondents, by Mr. Robert E. Hugh of counsel for Hon. Louis J. Lefkowitz, Attorney General of the State of New York, appearing pursuant to- Executive Law, §71, and a brief: amicus curiae having been | filed on behalf of the District Attorney, New York County; and due deliberation having. been had thereon, It is unanimously ordered and adjudged that the order and judgment (one paper) so appealed from be and the . same is hereby, in all things, affirmed; and that the respond-. ents recover of the appellant $50 costs and disbursements of this appeal. Enter: - Hyman W. Gamso | Clerk. Opinion of the Appellate Division 275 N.Y.S. 2d 363 (not officially reported) Order and judgment (one paper) unanimously affirmed, with $50 costs and disbursements to the respondents. No opinion. a filed. | A39 Remittitur from Court.of Appeals No. 115 . : COURT OF APPEALS State or New York, ss: Puzas in the Court of Appeals, held at Court of Appeals Hall, in the City of Albany, on the 7th day of July in the year of our Lord one . thousand nine hundred and sixty-seven, before — _ the Judges of said Court. Witness, ; The Hon. Stantey H. Fuxp, Chief. Judge, Presiding. Raymonp J. Cannon, Clerk. Remittitur July 7, 1967 i ee ‘No.115 ; A51 Affidavit of George Morvan : oS, , a last ten years are listed in paragraph ‘ act Creer Section 38 of the amendments to General Conditions of Contract Nos: PD65- - 5A (McKinley, Morris & Morrisania)’; PD65-10C (First & _ Riis [F & C]); and PD65-14B (Lehman & Taft), between plaintiff and defendants, the contract provision inserted pursuant to Section 2601 of the Public Authorities Law which provides a five year disqualification from bidding on public contracts to any person who refuses when duly _ requested, to sign a ‘‘ Waiver of Immunity’’. Further, any ~ firm or corporation of which such person is a partner, — member, officer or director is similarly disqualified. 8. Defendants’ claim that the refusal of George Camp- * bell, Jr. to sign a ‘‘Waiver of Immunity’’ on April 13, 1965, thereby results in the disqualification of plaintiff, even though George Campbell, Jr. was not then an officer, director or —— of the — corporation. | 9. On or iad iis 26, 1965, George Campbell, Jr., who, upon the death of George Campbell, Sr: in August, 1964, assumed the presidency of intiff, became aware of the pendency of: an investigation }by the Grand Jury , A52 Affidavit of George Morvan - which promised to encompass numerous contracts between ., | plaintiff and various New York City Agencies. - > 10. Both-George Campbell, Jr. and all of the other, officers and members of the Board of Directors of plain- tiff, including your deponent, were advised by counsel that they could expect to be subpoenaed and requested ta 1 waive | _| statutory immunity. . © ee tA : 11. We were further advised by counsel of the penal- ¢ ties that would result if any of us refused to waive im- . _ munity. Counsel laid special emphasis ‘on the fact that - if for any personal reason any of the officers or directors of the plaintiff did not deem it in his or her interest to waive immunity, that it was their duty to inform the Board and suitable arrangements made for their resignation be- ‘~~ ~eause* of the conflict between their persanal interest and the plaintiff ’s best interest. ney, 5 aaa a 12. Of all of the officers and directors of plaintiff, jae George Campbell, Jr., then only twenty-four years, of age, and having the fewest years of service with the company, _deemed it advisable to refuse to waive immunity, and he— was therefore _Tequested_ to and did resign. He also dis- -posed of his stock i in — aes ~ 13. On April 9, 1965, the Board of Directors of plain- tiff met and accepted the resignatién of George Campbell, ' _ Jr. (Exhibit ‘‘A’’ annexed hereto), and a letter was sent to defendants so informing them (Exhibit ‘*B’’ annexed . hereto). . 14. Upon information and belief, the aforesaid Grand Jury met on April 13, 1965, George Campbell, Jr. was sub- poenaed to testify, refused to sign a ‘‘Waiver of Immu- nity’’, and defendants were so informed in due course. a = an Affidavit of George ‘Morvan 15. On April 20, 1965, your deponent, and upon in- formation and _belief, other officers and directors of plain- - tiff, appeared before the aforesaid Grand Jury’and, when asked, signed ‘‘ Waivers of Immunity’ and testified. 16. The following day plaintiff received from defend- / ants a notice of disqualification (Exhibit ‘‘C’’ annexed hereto). i ‘ ) 17. By letter, hand délivered, on April 23, 1965 (Ex- hibit ‘‘D’’ annexed hereto), counsel for ‘plaintiff attempted disabuse defendants of. the numerous factual errors . _ €ontained in their notice of disqualification; the most sig- nificant of. which was the fact ‘that the\said George Camp- -: bell, Jr. was not an officer or director of plaintiff a¢ de- fendants’ notice alleged. ° . ’ Marian C. Rizzi _ Sworn to before me this | yw" 2nd day of July 1965 ~ Harry LIPner. _ - Notary Public State.of New York No. 41-7564430° Queens County Term Expires March 30, 1966 Pt en nner en tI ° A75 Notice of . Cross Motion SUPREME COURT OF THE STATE OF NEW YORK County or Naw York _ -% Index No. 247/1966 [Same Trre] Sirs: PLEASE Taxn Notice, that upon the artnexed affidavit ot Paul W. Hessel, sworn to the 31st day of January, 1966, and’ all the papers, documents and exhibits thereto annexed and — therein referred to, plaintiff’s motion for an injunction pendente lite, brgught on by Order to Show Cause dated January 7, 1966, and the complaint herein,.a cross motion will be made by the defendants pursuant to Rule 2215 of the Civil Practice Law and Rules, upon the argument of . seplaintiff’s said motion for an injunction pendente lite; re- turnable at a Special Term, Part I, of this Court, to be held “ fn and for the County of New York, at the Courthouse, 60 “ Centre Street, in the Borough of Manhattan, City, County and State of New York, on February 15, 1966, at 9:30 in the forenoon of that day or as soon thereafter as counsel can be - _ heard, for judgment, dismissing thg complaint herein pur- ° suant to: 1,- CPLR 3211 (a) 1. on the ground that one or more a3 ; complete defenses to the cause‘of action alleged a in the complaint have been established by docu- mentary evidence. .2. CPLR 3211 (a) 2. on the ground that the Court — - has not jurisdiction of the subject matter of this Pet eee, we ATE ated? pn i Notice. of Cross Motion action in that plaintiff has ‘available another ex- clusive and adequate remedy provided by law for the relief demanded in the complaint. 3. CPLR 3211 (a) 4. on the ground that there is an- _ ‘other proceeding pending between these parties for the same cause of action alleged in the com- plaint herein. 4. €PLR 3211 (a) 7. on the ee that the com- plaint fails to state facts sufficient to constitute a cause of action. Awe for such oles and further relief as to the Coutt may seem just and proper. Pease TAKE FurtHer nies that pursuant to 2214 (b) CPLR you are required to serve any answering affidavits in opposition to this cross motion at least five (5) days before y / the return date hereof. Dated: New York, N. Y., January 31, 1966. _ Yours, ete. Harry Levy Attorney for Defendants. To: Ruzow & Lipner, Esgqs., Attorneys fo Plaintiff Albert A. Blinder, Of Counsel _ Ce AT77 Affidavit of Paul W. Hessel in Opposition to Motion and in. Support.of Cross Motion SUPREME COURT OF THE STATE OF NEW YORK County or New York. Index No. 247/1966 . [Same Trre] State of New York ) County of New York ) ss.: Paut W. HeEssEx, being duly sworn, deposes and Says: 1. I am an attorney at law and Deputy Counsel of the New York City Housing Authority (hereinafter referred to as the ‘‘Authority’’), the defendant above named, and am associated as such with Harry Levy, Counsel to the Author- ity and its attorney of record herein. I am fully familiar with all of the facts relating ‘to the subject matter of this action, having personally handled all of the prior proceed- ings in this Court.with respect thereto hereinafter referred to. I make this affidavit upon my own knowledge of the facts herein set forth, based upon the papers and proceed- ings had in such proceedings, and upon documents, data and records of the Authority available to me. | 2. This affidavit is submitted in opposition to plaintiff’s motion for an injunction pendente lite and such other relief as-is set forth in the Order to Show Cause herein; and in support of defendant’s cross motion to dismiss plaintiff” s .complaint contained in the foregoing Notice thereof. 3. This is the third litigation’ instituted by this plain- tiff in this Court for substantially ‘the same’ relief as is ~- A78 Affidavit of Paul W. Hessel sought by the complaint and the present motion in this ac- tion. The first was brought on by petition verified May 4, 1965. wherein, in addition to the Authority, thgre were named as parties respondent the Attorney General of the State of New York and the District Attorney of New. York . County. Two ‘‘proceedings’’ were therein alleged: \first, - an Article 78 proceeding, and second, a proceeding ‘‘—pur- suant to Section 103 (c) of the Generat Municipal Law and Article 4 of the Civil Practice Law and Rules.’’ The relief sought was annulment ‘‘—ofgthe determination of the re- spondents cancelling petitioner’s contracts with the New York City Housing Authorityfand barring it from future bidding for a period of five (5) years—’’.° Plaintiff on its own motion voluntarily discontinued the proceeding pursu- ant to Section 103 (c) of the General Municipal Law. The Article 78 proceeding was dismissed by this Court for fail- ure of petitioner to file with the Authority, as a condition precedent thereto, a Notice of Claim pursuant to Section 157 of the Public Housing Law, but with leave to renew. 4. Plaintiff having served the Notice of Claim referred © to in paragraph ‘‘20’’ of its complaint herein and annexed thereto as Exhibit A, it instituted a second litigation pur- suant to Article 78 CPLR by petition verified October 2, 1965. This time it omitted the demand for reinstatement of its cancelled contracts, and sought only an annulment of the determination barring it from future bidding upon Author- ity contracts for a period of five years. This proceeding was also dismissed by this Court on motion of the Author- ity, without prejudice to petitioner commencing a plenary . - action for the same or similar relief. Plaintiff has served _a Notice of Appeal to the Appellate Division from ‘the judgment entered thereon, and this appeal is now pending. _§. The proceedings described in the foregoing para- graphs 3 and 4 are on file in this Court under Index No. / AT79 Affidavit of Paul W. Hessel 6987-1965. e papers therein will be requisitioned for the information of the Court in connection with the present mo-_ tion and cross motion, and are hereby referred to and sub- . mitted as part of the documentary evidence upon which ’ the branch of the cross motion under CPLR 3211 (a) (1) is based. ‘From such papers, and the additional documen- tary evidence annexed as Exhibits hereto or hereinafter referred to, the further facts npeovent to this present litiga-. tion are as set forth below. 6. Plaintiff is a major painting contractor who, after public bidding as required by the Public Housing Law, entered into three written contracts with the Authority prior to March 26, 1965 for maintenance painting of its public housing projects. Such contracts are specified in paragraph ‘‘7’’ of plaintiff’s moving affidavit. of George Morvan. They are hereby referred to and submitted as if " annexed as Exhibits hereto. 4 7. The bids for éach of such contracts, the contracts themselves, and the Performance and Payment Bonds made part thereof, were executed and acknowledged on behalf of plaintiff by one George Campbell, Jr. as its president, and otherwise expressly set forth therein that said George Campbell, Jr. was at the time of such execution the presi- » dent of plaintiff. 8. Plaintiff was then and now is basically a family? corporation, fifty percent of whose.stock i» owned by the ‘.- estate of said Gearge Campbell, Jr.’s‘late father (of which estate George Campbell, Jr. is a beneficiary). The remain- ing fifty percent was, at the time of the execution of said contracts and up to at least April 9, 1965, owned by said . George — Jr. and his sisters. A80 pa R Affidavit of iota W. Hessel. 9, At the time of the acai of said contracts said George Campbell, Jr. was, also a director of plaintiff, and continued as such fantil at least March 26, 1965. ~ , 10. Each of such contracts contained the following _ standard provisions set forth in Section 38 of the Amend- ments to the General Conditions thereof : ‘638. Ceninthailes and Disqualification for Failure to Waive Immunity Upon the refusal by a person, when called before a Grand Jury to testify concerning any transaction - or contract had with the State, any political subdivi- sion thereof, a public authority or with any public department, agency or official of the State or of any political subdivision thereof or of a public authority, to sign a waiver of immunity against subseqyent criminal prosecution or to answer any relevant ques- tion concerning such transaction or contract. A. Such person and any firm, partnership, or corporation of which he is a member, partner, direc- tor or officer shall be disqualified from thereafter ‘selling or submitting bids to or receiving awards from or entering into any contracts with the Au- thority for goods, work or services, for a period of five (5) years after such refusal, and _ B. This Contract and any and all other coritracts made with the Authority on or after July 1, 1959, by such person and by any firm, partnership or corpora- tion of. which he is a-member, partner, director or officer may be cancelled or terminated by the Author- ity, without incurring any penalty or damages on account of such cancellation or termination, but mon- N ine Rb = 6 en A ete Affidavit of Paul W. Hegsel : v0 a jes owing by the Authority, for goods delivered or work done prior to the concellation or termination. shall be paid.’’ 4 11. Like other standard provisions of such public con- tracts required to be incorporated therein by various stat- - utes, this provision was mandated by Section 2601 of the Public Authorities Law, reading as follows:. **2601 Ground for Cancellation of Contract by Public Authority . ‘ A clause shall’ be inserted in all specifications or contracts hereafter:made or awarded by any publlic authority or by any official of any public authority created by the state or any political subdivision, for work or services performed or goods sold or to be sold, to provide that upon the refusal by a person, . when called before a grand jury to testify congern- « ing any transaction or contract had ‘with the state, . any/ political subdivision thereof, a public authority or,with any public department, agency or official of the state or of any political subdivision thereof or of a public authority, to sign a waiver of immunity against subsequent criminal prosecution or to an- swer ary relevant question concerning such trans- action or contract. (a) Such person, ‘and any firm, ‘estate or corporation of which he is a member, partner, di- rector or officer’ shall be disqualified from thereafter | selling to or submitting bids to or, receiving awards from or entering into any contracts with any public authority or official thereof, for goods, work or serv- ices, for a period of five years after such refusal, and to provide also that A82 Affidavit of Paul W. Hessel (b) any and all contracts made with any public . authority or official thereof, since the effective date of this law, by such person and by any firm, part- nership or corporation of which he is a member, partner, director or officer may be cancelled or termi- nated by the public authority without 1 incurring any penalty or damages on account of such cancellation ‘or termination, but any monies owing by the public authority for goods delivered or work done prior to the cancellation or termination shall be paid.’’ ‘- The subsequent Seetionl 2602 and 2603 of the Public Authorities ‘Law read as follows: “$2602 Disqualification to Contract with Public Authority Any person who, when called before a grand jury to testify concerning any transaction or contract had with the state, any political subdivision thereof, a public authority or with a public department, agency or Official 6f the state or of any political subdivision thereof or of a public authority, refuses to sign a. waiver of immunity against subsequent criminal prosecution or to answer any relevant question con- - - cerning such transaction or contract, and any firm, partnership or corporation, of which he is a member, partner, director or officer shall be disqualified from thereafter selling to or submitting bids to or receiv- ing awards from or entering into any contracts with _any public authority or any official of any public au- . thority created by the state or any political subdi- vision, for goods, work or services, for a period of five years after such refusal or until a disqualification shall be removed pursuant to. the provisions of sec- tion — Six hundred three of this title. a ee ee ee 2 agp a acne Sow ating Barone A93 | \: Affidavit of Paul W. Pressel Morvan presently designates himse]f in the moving affidavit as the president, and the complaint (par. ‘*9’’) implies that he became such almost immediate- ly upon the resignation of George Campbell, Jr. on March 26,.1965, it is a fact that as late as. October : 2, 1965, ‘the corporation was still without a president and George Morvan was still only’ Executive Vice- © President. This appears in par. ‘‘21’’ of the peti- tion of that date, verified by Marian C. Rizzi, as Secretary, instituting the Article 78 Proceeding above referred to. (d) Such petition of Ouicbee 2, 1965 (par. 10”) alleges that on or about March 26, 1965, togethér with his resignation George. Campbell, Jr. ‘‘—divested himself of ‘his stockholdings’’. The present moving affidavit of George Morvan (par. ‘‘12’’) also recites that at the time of his resignation George Campbell, Jr. ‘‘—also disposed of his stock in plaintiff’’. The complaint herein (par. ‘‘9’’) is to the same effect. But the Minutes of the Special Meeting of. April 9, 1965 state that it was at that time and place that George Campbell, Jr. ‘‘—surrendered Stock Certifi- cate No. 6 in the amount of 10 shares transferred to George Campbell Painting Corp. to the Directors of George Campbell Painting Corp, at the meeting’. (e) This stock was undoubtedly of great valud if _.the allegations of the vast nature and. volume of plaintiff’s husiness are to be credited. It will be noted that its Notice of Claim herein (Exhibit A - annexed to the complaint) asserts one million dollars as damages against the Authority alone. Yet there is not a word in these Minuté’ as to the consideration or arrangements for the payment for such stock. Section 513 of the, Business Corporagion Law pro- i ae Afdouit of Paul W. Hessel hibits a corporation from purchasing its own shares, ~ - except out.of surplus. Yet there is no statement in these Minutes of the existence of such a surplus, or any reference thereto, or of any financial statement before the Meeting: showing whether or not such a surplus existed. 26. After receiving the Notice of Claim of July 2, 1965 (Exhibit A annexed to the complaint, par. ‘‘20’’), the Au- thority served upon plaintiff and-its attorneys’ a Notice Tequiring it to submit to examination thereon pursuant to Section 157, subdivision 3 of the Public Housing Law. A copy thereof is hereto annexed as Exhibit B-1. It, will be noted that it requires the submission to such examination » of any officer, director or employee having knowledge of or being acquainted with each item of the claim, including, specifically, George Campbell, Jr. The complaint herein expressly alleges (par. 10°?) that since his purported resignation as officer and director on March 26, 1965 George Campbell, Jr. ‘‘—has been employed as an estimator by plaintiff—’’. Certainly he was the one best. in a position to testify as to the circumstances, good faith, validity and effectiveness of his purported resignation and divestiture of his stock, which constituted the very foundation of the claim. Yet not only did George Campbell, Jr. not appear for such examination but. neither did any officer of the corporation active in its affairs and having full knowledge thereof—not even Marian Rizzi, its secretary, and who veri- fied the Notice of Claim. The only person who did appear was Theodore M. Ruzow, who, it will be noted, is one of the _attorneys of record for the plaintiff herein, and who .sub- | mitted to examination as a director of the corporation. At ‘the examination there also appeared Harry Lipner, Esq., his law partner as attorney for the plaintiff, and Albert A. ee ee i! ; A95 Affidavit of Paul W. Hessel - Blinder, Esq., who stated that he: was representing the ab- sent George Campbell, Jr. as an individual. _ 27. The'record of this examination, held at the Author- ity’s offices on August 5, 1965, is quite revealing with re- spect to the matters hereinabove discussed. It will be - furnished to the Court on the argument of these motions, . and is hereby referred to as part of the documentary -evi- dence upon which the cross-motion is based.’ Apart from the evasions, bickering with Authority counsel, refusals to answer, and denials of knowledge of material facts with which the examination is replete, some of the testimony which was given is herewith set forth, for the convenience of the Court, to demonstrate the inconsistencies and un- believable assertions attending the purported resignation of and surrender of his stock to George Campbell, Jr. ‘Page | numbers below set forth are those of the reece record of the examination. At pages 45 through 47 the following questions were put to arid answered by Mr. Ruzow: Q. What consideration was paid ‘dieias W. Campbell, Jr. on March 26, 1965, for the transfer of George Campbell Painting Corporation ten shares . of stock? A. To my knowledge, no consideration was paid to him at that time. Q. As a director of the corporation, are you fa- ‘ mniliar with the nature of this transfer? A. Yes. Q. Will you state the circumstances under which .. he surrendered the ten shares of stock denominated _ as’ No. 6 in the stock certificate book? A. He decided to endorse the certificate to the corporation at the _. Same time as he resigned as ‘an officer and a director. These things were done. Q. Did you ask him why? A. I didn’t specifically ask him why, no. A96 Affidavit of Paul W. Hessel Q. Were you surprised? .A. I don’t want to characterize my.emotions. I don’t recall them. Q. No; but, as a director of the corporation, -when the President comes over to. you and says ‘‘I resign as an officer; I resign as President; here are my ten shares of stock’’; now, isn’t-it only normal to ask ‘‘What’s the idea? What for? What’s the reason’’? A. I don’t recall making such inquiry of recall any specific conversation where we developed the reasons at that time for his conduct. I recall ‘subsequent conversations where we discussed it at a greater length. At pages 48 through 50 the following appears: Q. As a director, you don’t know that Mr. George W. Campbell, Jr. appeared with Mr. Lipner, your associate, at the office of District Attorney Phillips prior to March 26, 1965? A. In spite of the apparent facetiousness of your questions, I don’t recall that . I was informed, in my capacity as a director. Of . course, I was made aware by my partner, Mr. Lipner, that he did visit the District saree s office with Mr. Campbell, yes. Q. When March 26, 1965 came around and Mr. _ Campbell, Jr. handed i in his resignation as an officer and director and he asked to sign the certificate of shares of stock, No. 6, for transfer, you then knew that he, before that, was at the District - Attorney’s office, is that correct? A. I would say © generally that I did, yes. There is a striking simi- larity between. your questions and the District At- ' torney’s questions. I don’t know now whether I am being questioned by the District Attorney’s office Q. Did you make any inquiry of him? A. I don’t. WEE ne ti eid ath iy Aenea Ms —_— ie ae ee he a ees . A97 Affidavit of Paul W. Hessel or the New York City Housing: Authority, but I’m prepared to answer all valid questions, nevertheless. Q. Is it a valid question to ask you to tell the circumstances under which George .W. Campbell, — Jr. resigned on March. 26th and at.the same time transferred his interest of ten shares of No. 6 cer- tificate to the Campbell Painting Corporation? A. Yes, it is, and if you would ask me that question I would be happy. to answer it. Q. I am asking you that question. State all the facts and. circumstances. A. The answer is that Mr. Campbell expressed his conclusion to me that -+he wanted to resign as an officer and director and _ Surrender his stock and he prepared a resignation, it was given to me, the stock certificate was en- dorsed and that was also given to me, and it was properly recorded in the corporate books, and that’s it. * . Q. You said he -prepared the resignation. He cannot type; can he? A. I think he can. At pages 51 to 52: Q. Can you tell me who drew the resifnation A. I cannot for sure. Q. Is your name listed as a witness to that sig- nature? A. My name and Mr. Lipner’s appear as witnesses. I know that this was signed at my office, . which was then 501 Fifth Avenue. I just can’t tell, you—I. don’t see the pertinency of it but you are a ‘better judge of that, but I just don’t know who ac- tually prepared the document or typed it. Q. When was that resignation put into the min- ute book, what date? A. Shortly thereafter. It was attached to the minutes of a special “meeting A98 Affidavit of Paul W. Hessel of the Board of Directors of: the corporation, which took place on the 9th sed of — at 10:30 A.M. at my office. At page D0: Q. When did George Caiapbel Painting Corpo-. ration stop paying George Campbell, Jr., for his .¢ services to the corpor ation, .if they did stop? A/In what capacity, sir? | ° Tn any capacity? As president? A. As” presi- dent, upon his resignation. Q. And upon the transfer of the rang was he paid in cash for the transfer of the stock? A. I have not testified that any ean has been made to him for the stock. aa 'Q. Is there.an agreement as to any payment - be made to him? A. Orally or written? | ' -Q. Is there an agreement? A. To the present time, no formal agreement has been entered into. Q. What informal agreement has been made and between whom has it been made and when? A. I have not said’ there was a formal agreement. I ~ merely said there wasn’t a formal agreement. . | Q. All right. Was there an informal agreement! A. No informal agreement has been concluded. — -. QQ. What was stated with reference to’ payment for the stock?) A. The matter has just been gen-~ erally discussed. : Q. Between whom? . A. Among’. ihe directors. - Q. Name them, please. A. The directors of the corporation. * Q. And what was Siatnitiinils A. No conclusion - was reached. | Q. Was any price suggested by Mr. ‘George W.: Campbell, Jr.?° A. No. eens bene whale CoN sce aidan ari Gia in ie want ree i Bn Sane ade Ra ache iv ido ‘ 4 1: hh in eb cle laa eet ttts 0S WL eee sian NNT “a Aah A99 Affidavit of Paul W. Hessel Q. Was any price offered “ the directors? AL _ No. Q. He was to receive no wiemadion for the - stock? A. No definite conclusion was reached. . Q: Any par ticular reason why? A. I cannot ex- press an opinion. _Q. Asadirector? A. I cannot express an opinion. Q. Asa director,: ‘you mean you cannot express an opinion? A. As a director, I cannot express an opinion. _ Q. Who employed George, W. Campbell, Jr., as‘an employee of George Campbell Painting Corporation? A. The officers of the corporation. Q. Which officers employed him? A. I don’t know’ the specific officer who — him, but it . would be one of the officers. At page 60: Q Will you please state the circumstances under which George W. Campbell, Jr. was - -employsd by, . ‘George Campbell Painting’ Corporation, indicating. the place, the time and the conversations or agree- ments? A. ‘I have no direct knowledge and I ex- pressed the opinion, inasmuch as you have asked me for an opinion, that no such formalities. as you have indicated took place. This is still a fairly small busi- ness and rfot the New York City Housing Authority. At page 61: Q. Now, can. you tell me the Givuminneen under which he was employed, when, how, who and. the amount of compensation he is receiving for .that em- ployment? A. [cannot tell you more than this :'That he was employed after his resignation as an ‘officer and director. I don’t know his exact salary. I be- \ A100 s . Affidavit of Paul W. Hessel lieve it to be substantially less than the salary he earned as president of the corporation. I don’t know _ if any specific interview took place for the purpose of hiring. _-At page 62 through 64: Q. Some officer employed him, and I think the offi- cer who employed him knows more about him than you do; right? A. I have testified that he has been employed by an officer of the corporation, that he is employed, that he receives a salary. Now, what else do you qant to ask me? ; Q. I will ask you, will you sities the officer who employed him? A. I will not. You have asked for testimony. You have gotten the testimony you have -asked for. Q. I am _ not getting the testimony I’ asked for. ‘because I asked for officers and I did not get the an- _ swer as'to who employed him. .A. Mr. Stein— Q. You are a director of the corporation? A.I am a director and; as director, I told you that he has been properly and politely employed. | Q: What do, you base your conclusion — A. Conversations. Q. With whom? A. With the. officers of vos cor- poration. | Q. Name them. A. We went pices this sient = minutes ago. ; - Q. You may not have spoken to all of them at the same time. A. I have not spoken to-them at one time but we are satisfied to continue Mr. Campbell’s em- - ployment. . . - Q. Will you state the time these conversations took place? A. No. I don’t recall the specific time. We did not call a mae to discuss it. Aus lad. 2» * nik \ochtnein atid mesiaed lind “Al0k Affidavit of Paul W. Hessel _Q. When was the last time you spoke with George Campbell, Jr.? A. A week ago. , Q. Did you ask him anything about his employ- ment? A. No, There was no need to. 7 . “At page 40, the Certificate of Stock for ten axes i in plain tiff corporation allegedly ‘‘surrendered’”’ or “disposed of’’ by George Campbell, Jr. was marked.in evidence, and the following colloquy with respect thereto appears: Q. .I have before me a certificate of George Camp- bell Painting Corporation; No. 6, which has typed in above the face of the certificate the following: ‘‘The sale or other disposition of these shares are- restricted pursuant to terms of a stockholders’ agreement dated ” the ninth day- of Janggry 1964; a copy of which i is on file with the office of@e corporation.”’ I now ask you, was Ggorge W. Campbell, JT. a. ‘party to this agreement? A. Yes. Q. May,I see that agreement, please? A. I re- fuse to.show you the agreement. -. 29. ‘A mere comparison of the foregoing testimony with _ the allegations in plaintiff’s present moving affidavit and complaint will, it is respectfully submitted, show their glaring inconsistencies, and the lack of genuineness, good — faith and even validity of the alleged resignation of and“ ‘disposition or surrender of his stock by George Campbell, .. Jr. As to the latter, most striking is not only the lack of able stock, but tie fact that its *‘sale or other disposition’’ was expressly prohibited by a stockholders’ agreement re- . ferred to by endorsement on its face, and which plaintiff’s. any provision a date for payment for this very valu- attorney and director refused to produce: Further, while iM various of the inconsistencies, contradictions, evasions and. ‘ineredible assertions pointed to above may individually seem. small matters, taken as a whole and. together they a A102 Affidavit of Paul W. Hessel - ¢ ’ > should, it is respectfully submitted, persuade this Court that in seeking equitable relief in this matter of such major | public importance, plaintiff does: not come before it with _candor, frankness and comptete honesty—in a word, with ‘*clean hands’’. 30. In addition to what has been stated above, “a ts --a further substantially conclusive reason why plaintiff’s motion must be denied and its complaint dismissed. Both George Campbell, Jr. and plaintiff itself. have been indicted upon three counts of perjury in the first degree in that, in ‘ submitting the bids to the Authority for the very contracts here in issue, they falsely swore therein that such bids were genuine and not collusive or sham. A copy of such _indictment is annexed hereto'as Exhibit ©. A motion. to dismiss such indictment and for a bill of particulars-there- of was,denied. by Hon. Justice Brust of this Court (N. Y. L. J., Oct. 6, 1965, Special and Trial Term, Part XXIX)- - The indictment is now pending. As will be amply demon-— strated in the Memorandum of Law to be submitted here-. with, it has been settled that under these circumstances this — ‘ public agency would be fully justified in rejecting such a bidder as not- qualified or responsible, and will not be en- joined from doing so. 31. Plaintiff’s complaint states in conclusory terme that — ‘‘__as a direct result of defendant’s aétion—”’ it will lose countless opporffinities to bid upon contracts with public agencies throughout the United States_ (Complaint, par. ‘*24’’). But the only specitic fact it sets forth in this re- spect is a letter of rejection from the New Jersey State Highway Department, which states, as the reason there- fore ‘‘—that your firm was banned by_executive order of ' . the Mayor of New York until April 27, 1970.” (Complaint, ar. ‘‘23’’). A copy sf 9 Bxecntve Order_i¢.annexed ae : ; a. Supsect: DisquaLiFicaTION oF Certain ConTRACTING Firms ~ Official notification has been received from the. District _ Attorney of New York County that the following persons’ have refused to sign waivers of immunity when subpoenaed to testify before the Grand Jury of New’ York County: ‘1. Vincent B. Turecamo, of Ryan and Turecamo, Inc., 275 Madison Avenue, New York, N. Y. ‘2. George Campbell, of George Campbell Painting Corp., 40-11 149th-Street, Flushing, New York : 3. Norman *traus, of Hubbard Painting: Decorating, ‘172 Neptune Avenue, Brooklyn 35, New York 4, Meyer Peskim, of Pelham Painting Co., Inc., 524 Southern Boulevard, Bronx 55, New York ‘In aecordance with the policy set forth in Executive Order No. 138 all City Departments and Agencies are di- rected to take the necessary appropriate action immedi- ately. Rosert EF’. WaGNeER Mayor NSP ee Pe Os ia a hy OE YR ny, Bee er ae ee _ A119 | Reply and Anewalnn Affidavit of George Morvan in Support of Motion and in os astm to Cross Motion _ SUPREME COURT OF THE STATE OF NEW YORK County or New York [Same TrrLE] — ~ State of New York ) County of New York )‘ss.: —~ Gzonce Morvan, being duly sworn, says: 1. 5 am the President of plaintiff wal submit. this affi- davit to reply to certain statements contained in defend- | ants’ answering and cross-moving affidavit. -2. Defendants’ cross-moving papers conceded that the relevant facts are not disputed and that the only relevant _ - issue is one of interpreting the contract» between the par- ties. However, they move to dismiss on the ground of ‘unclean. hands, and purport to support this solely by specu- lation, innuendo and supposition concerning matters as to which defendants have actual knowledge contrary to their speculations. 3. If defendants were not aware of the true facts their position would not be as reprehensible and offensive. 4. Defendants know and have often done business with . plaintiff. They know that young George Campbell, Jr. | was only 23 years old in August, 1964 when his father, : plaintiff’s founder, died. They know that when he was ap- pointed President, he had less'than a year’s experience: in A120 ° Reply and Answering Affidavit of George Morvan mee Ton the business and never actually assumed all of the duties_ and responsibilities of chief executive officer. 5). Defendants know that your deponent and a dozen or so other experienced executive employees, were all help- ing to train young Mr. Campbell, with a view toward his one © Gay assuming full command. 6. Defendants know that hardly half.a year had gone by when the youth had to resign aid -did Tesign under ; the circumstances set forth in the moving papers. ve Defendants may not have known that Your deponent was named President on December 1, 1965,- but they. cer- tainly knew that your deponent ‘was executive vice Presi- dent. 8. Defendants know that: the rest of the Campbell family have an independent and conflicting interest with young om Jr., and that they owned more stock than - he did. ? ~~ 9. tom not a “front”? for George Camphell, Jr. {now 25 years old). Plaintiff is not a ‘‘front’’ for George Camp- bell, Jr. Obviously, the Campbell family regrets his in--. . ability to succeed his father, but his(decision to fefuse to — sign a waiver of immunity left them no alternative—he had to step down and out.’ : 10. Defendants imply a sinister motive to the fact that . no agreement has been reached as to the amount of con- sideration to be paid for the ten percent stock interest surrendered by George Campbell, Jr. In the first place, non-controlling stock ownership by a disqualified person is not one of the criteria in the statute that defendants ca 4 A121 Reply and Answering Affidavit of George Morvan could hav» used to disqualify plairitiff. In the sééond place, this ohvious reason for not fixing the. fair value of the stock is the inability of anyone to determine its fair value — until the conclusion, of all Re lovestigations 11. If there is bad faith involved i in this case, it is the submission by defendants of an affidavit that deliberately ignores the true facts in order to as as fact what is known to be specious. Ce eee Maile | ——_ “Morvan: a iow. to: February 1 14, 11966.) .* : : / Order ‘Staying the Action Ata Special Term, Part I of the Sencune Court | of the State of New York, held-in and for the ~ County of New York, at the-County Court- ~ -house thereof, on the 18 day of March, 1966. Present: : ; “~~ Hon. Miroxmuz D. ee, Sastice | ° a . | GEORGE Campagne, Parntine Cokp., Plaintiff, against _.% , Wrasas Ren, Francis V. Mapican, Ina S. Rossrns, mem- bers of the New York City Housing scone and THE NEw Yorx Crry Houstne Autnorrry, Defendants. Plaintiff, by its attorneys, Ruzow & Lipner, having - moved by Order to Show Cause dated January 7, 1966 for an order enjoining pendente lite defendants from barring or disqualifying plaintiff from future biddixg and directing the restoration of its name to the qualified bidder list, or, _ alternatively, directing that the issues raised herein be set down for an immediate trial, and the defendants having cross moved by Notice of Cross Motion dated January 31 1966, for.an order dismissing the complaint, and the ‘said. motion and cross motion having regularly come on to be, - heard, 7 Now, on, reading and filing the Order to Show Cause - dated January 7, 1966, the affidavit of George Morvan, © ‘sworn to January 6, 1966, the summons and complaint veri- “ i 5 Ssh Sabi eh oc poached a ——————_ ~~ - . e . a A123 Order Staying the Action fied aid George Morvan on J anuary 6, 1966, with ex- ‘hibits annexed thereto and the affidavit of George Morvan sworn to Feb. 14, 1966, in support of the motion_and in opposition to the cross motion,-and upon reading and filing the Notice of Cross Motjon, dated January 31, 1966, the affidavit of Paul W. Hessel, sworn to the 31st day of Janu- ary, 1966, with exhibits annexed, in opposition to the mo- tion and in support of the cross motion, and after hearing | Ruzow & Lipner, Esqs., Albert A. Blinder, of counsel, in support of the motion and in opposition to the cross motion, ' and Harry Levy, Esq., Paul W. Hessel and I. Stanley Stein, Esgqs., of counsel, in opposition to the motion and in support ‘of the cross motion, and after due deliberation ne been had herein, — Now, upon motion of Ruzow & Lipner, attorneys for plaintiff, itis * ? 5) . _OppERED, that the cross mation’ is granted insofar as and only to the extent of staying the instant action pending final determination after appeal or termination. in’ any ‘fashion-of plaintiff’s appeal from the order of this court, per Hon. George Tilzer, dated December 14, 1965, and filed in the office of the Clerk of .New York ounty on January 10, 1966 ; and it i is further " ORDERED, that leave is hereby ‘granted to plaintiffyand defendants to renew at an eeape time the instant motion and cross motion. Enter, /s/ Mrrcnett D. Scuwerrzer a J. S.C. Mar 21 1966 ; New York -¢ | County Clerk’s Office Ald Opinion of Schweitzer, J. _ (N.Y.L.J. March 8, 1966) _ Plaintiff-painting contractor instituted this action for a@ permanent injunction of the enforcement by defendant the New York City Housing Authority of the disqualifica- tion and barring of plaintiff from bidding on public con- tracts with the aforesaid authority for a period of five, years. At this initial stage of the lawsuit, plaintiff applies ' for a preliminary injunction which would, during the in-. terim trial period, afford plaintiff the same relief as the _ ultimate remedy sought. Defendant has crossed-moved for an, order dismissing the complaint upon, amongst other bases, the ground that another action is pending between - the same parties for the same cause of action (CPLR 3211 - [a] 4). An article 78 proceeding had been instituted by plaintiff in‘ the instant action for an order: annulling the subject determination by the New York City Housing Au- - thority, and examination by both pleadings lends support to the contention by defendant. The application was de- nied and the -petition dismissed without prejudice to a plenary suit as the court was convinced that an article 78 proceeding was not appropriate. At present, an appeal is pending from this judgment of dismissal. Logic and the rationale of fairness underlying. CPLR 3211(a)4 require : that, under the present circumstances, we adopt the view - that ‘** *.* an action in which a judgment has been ren- déred is deemed to continue to exist ding an appeal * * *) (Apelbaum v. Apelbaum, 16 Misc. 2d 636, 638; see 4 Weinstein-Korn-Miller, New York: Civil Practice, pars. . 3211.25-3211.21). Accordingly, defendant’s cross-motion is granted in so far as it has been interposed parsuant to S .* A125 Opinion of Schweitzef, J, ie ° CPLR 3211(a)4 and only to the extent of staying the in- | stant action pending final determination after appeal or termination, in any fashion, of the aforesaid appeal or ter- mination, in any fashion, of the aforesaid 73 proceeding. Within the context of the foregoing disposition, the appli- cation by plaintiff and the remainder of the relief #quested in the cross-motion are, consonant with the foregoing, not _ considered, and leave is granted to renew at any appropri- ate time. ° Settle order. \ *S of wv - A126 Notice of Glose-Appesl SUPREME COURT OF THE STATE OF NEW YORK County OF New Youx Index No. 247/1966 4 Grorce CaMPseLL Paintine Corp., ; Plaintiff, agannst °. Wuuum Ren, Francis V. Mapican, Ira S. Ropsrns, mem- bers of the New York City Housing Authority, and THE New York Crry Hovusine AUTHORITY, Defendants. Sirs: Pease Take Notice that the above-named defendants ° _ hereby cross-appeal to the Appellate Division of the Su- ‘ preme Court, First Judicial Department, from the order made in this action dated March 18, 1966, and entered ‘in the office of the Clerk of the County of New York on the 21st day of March, 1966, and from each and every part of said a Notice of Cross-Appeal | order insofar as it ‘aii to and affects defendants’ cross- motion dated January 31, 1966. Dated: April 7, 1966 . 4 . ps \ _ Yours, ete. | | an . Harry Levy. a ‘s, Attorney for Defendants _ 250 Broadway . New York, New York 10007 433-5010 . To: * CLERK or THE County or New York Ruzow & Lipner, Esqs. Attorneys for Plaintiff 201 KE. 42nd Street , New York, New York 10017 697-7780 eee ee Order of Modification of the Appellate Division At a term of the Appellate Division of the Su- preme Court held in and for the First Judicial Department in the County of New York, on _ _ the 3rd day of a 1966. Present— | , Hon. Charles D. Breitel, Justice Presiding Hon. Benjamin: J. Rabin, | Hon. Harold A. Stevens, . Hon. Louis J. Capozzoli, .» Hon. Earle C. Bastow, Justices 10764 Grorce Campset. Parntine Corp., Plawtiff-A ppellant-Respondent, vs. WruimM Ren, Francis V. Mapican, Ira.S. Ropsins,. mem- bers of the New York City Housing Authority, THz New: York City Hovusine AUTHORITY, _Defendants-Respondents-Appellants. “ Cross-appeals having been taken to this Court by the plaintiff-appellant-respondent from so much of the-order __ - Of the Sup: eme Court, New York County, entered on March . 21, 1966, as grants defendants’ cross-motion to the extent of staying the instant action pending final determination after appeal or termination in any fashion of plaintiff’s shah Labia Asie ‘ PST OREN oc te a ee ° oe Bw sh see E l= ottimeblein dei icity tam J yi dd hanes ata SLi aay rt wee ROS aS beh A A 2, Als - “Order of Modification of the Appellate Division appeal en the wuiee end judgment, (one paper) of the. . Supreme Court, New York County, entered on January 10, 1966, and by the defendants-respondents-appellants from so much of the aforesaid order as relates to and affects de- - fendants’ cross-motion dated January 31, 1966, © And said appeals having been argued by Mr. Albert A. Blinder of-counsel for plaintiff-appellant-respondent, ‘by Mr. Paul W. Hessel of counsel for defendants-respondents- appellants, by Mr. Robert E. Hugh of counsel. for Hon. Louis J. Lefkowitz, Attorney General of the State of New York, appearing pursuant to Executive Law, §71, and a . brief amicus curiae having been filed on behalf of the Dis- ' trict Attorney, New York County; and due deliberation. ~ having been had thereon; and upon the memorandum de- - cision of this Court filed herein, It is unanimously ordered that the order so appealed from be and the:same is hereby modified, on the law and on the fais, with $50 eosts and disbursements to defénd- ants-respondents-appellants, so as to grant defendants’ — cross-motion to dismiss the complaint, with $10 costs, and the Clerk is directed to enter judgment in favor of the de- fendants dismissing the complaint, with costs. : Enter: - | Hyruan W. @amso Clerk. A130 | Opirion of the Appellate Division 26 A.D.2d 365, 275 NYS. 2d 365 Order, entered on March 21, 1966, granting. defendants’ cross-motion to dismiss the eomplaint pursuant to CPLR: 3211(a) to the extent only of staying the action for a permanent injunction, pending a final determination of the article 78 proceeding instituted by plaintiff in-this action against defendarts-in this action, unanimously modified on the law and on the facts, with $50 costs and disbursements to defendants-respondents-appellants and complaint dis- missed. The complaint is insufficient because plaintiff is ' subject to the contractual ‘agreements it made and because on the present allegations plaintiff does not establish a case for. equitable relief. Order filed. . tee Shs et Mita le achat pM esc OA AS NOAM LRY - Race erential Reel ME ES Si , a ? ~ SN ARLYN ATRL LAA ae, _ A131 - Remittitur from Court. of Appeals — COURT OF APPEALS State or New York; 88 : . ° Peas in the Court of Appeals, held at Court of Appeals Hall, in the City of Albany, on .the 7th day of July in the year of our Lord one thousand nine hundred and sixty-seven, before the J udges of said Court. | Witness, The Hon. Stanutey.H. Fup, Chief Judge, Presiding Raymonp J. Cannon, Clerk. _ Remittitur July 7, 1967 a le | No. 116. | 67 George Campbell Painting Corp., © aevae-s _ Appellant, ° vs. : | William Reid, & ors., &, ~& ano., . Respondents. Br 1t RememBereD, That on the 12th day of March in _ the year of our Lord one thousand nine hundred and sixty- seven, George Campbell Painting Corp., the appellant in this cause, came. here unto the Court of Appeals, by Ruzow 7 A132 = / Remittitur from Court of Appeals & Lipner, its attorneys,‘and filed in the said Court a Notice: . of Appeal and return thereto from the order of the Appel- late Division of the Supreme Court in and for the First dicial Department. And William Reid, & ors., &., & 0., the respondents in said cause, afterwards appeared in - gaid Court.of Appeals by Harry Levy, their attorney. Which said Notice of Appeal and the return thereto, a filed as aforesaid, are hereunto annexed. ~ = WHeEREvPON, The said Court of Appeals having sis . this cause argued by Mr. Albert A Blinder, of counsel. for the appellant, and by Mr. Paul W. Hessel, of counsel for the respondents; and by Mr. Salauel A. Hirshowitz, of counsel for the. Attorney General, brief filed by amicus curiae, and after due deliberation had thereon gid order — and adjudge that the order of the Appellate Division of the ‘Supreme Court appealed from herein be and the same here- _ by is affirmed, with costs. And it was also further ordered that the records afore- _ said, and the proceedings in this Court, be remitted to the ' Supreme Court of the State of New York, there to. be " proceeded upon according to law. “THEREFORE, it is considered that the said order be af. firmed, with costs, as aforesaid. And hereupon, as well the Notice of Appeal and return thereto aforesaid as the judgment of the Court-of Appeals aforesaid, by it given in the premises, are by the said Court of Appeals remitted into the Supreme Court of the State of New York before the Justices thereof, according to the form of the statute in such case made and provided, to be ~ . . . . e kixe 2 m Nad a . “ Ps Leen Foe jill gi Ubu OY Oe Ee aot es ee LE eMPS EC Ree CMCOMn Pree Tent. Mra rw raat) Srl we ad aa ; : . . A133 Remittitur from :Court of Appeals enforced according to law, and which record now remains — in the said Supreme Court, before the Justices thereof, &. Court of Appeals, Clerk’s Office, Raymon J. Cannon. -Clerk of the Court of Appeals of the State of New York ei J uly 7, 1967. [sEaL] . fa a o I Heresy Certiry, that the aicinidis record contains a correct transcript . of the proceedings i in said cause in the Court of Appeals, with the pa- pers originally filed rr at-. tached thereto. Raymonp J. Cannon : Clerk Opinion of Court of Appeals, State of New York | 20 N. Y. 2d 370 283 N.Y.S. 2d 31 "299 N.E. 2d 602 Strats or New York COURT OF APPEALS [Same TitLE]} Per Curmm: This is an action to nullify a determination of the New York City Housing Authority disqualifying the appellant corporation from bidding on future contracts with the Au- thority. An addition the appellant seeks’ an injunction against the Authority’s enforcement of its decision. The disqualification is mandated by the Public Authorities Law §2601 since the appellant’s former president appeared be- fore a grand jury investigation nesterne and refused to _ sign a waiver of immunity. We hold that section 2601 of the Public Authorities Law is constitutional (Matter of Gardner v. Broderick, 20 N Y 2d 227, 282 N.Y.S. 2d 487, 229 N.E. 2d 184, de- cided herewith): and that the disqualification imposed .on the appellant corporation is valid. The fact that the appellant’s dfficer resigned his position and that the res- ignation was accepted prior to his appearance before the grand jury and his refusal to sign a waiver of im- munity is not controlling. * Where the termination of the relationship of the individual officer with the corporation occurs almost contemporaneously with his refusal to sign a waiver of immunity or where it is obvious that the resig- nation was tendered and accepted solely for the purpose Seidman scan... Devan cerntricsinnissibinetcsaiwient nian) oi bib a 58 0-0 NANT NC O00 Sonitae leo + . ‘A135 | Opinion of Court of Appeals, State of New York of avoiding the statutory disqualification, the person so resigning or otherwise departing shall be deemed to have acted in his capacity as & — officer when he refused to sign the waiver. ; There may be times when the statute will operate to penalize a corporation which had severed its connection with the recalcitrant officer.and which has otherwise been cooperative. The Legislature has, however, recognized this problem and has specified a procedure by which the disqualification can be removed under such circumstances. (Public Authorities Law §2603). The appellant’s exclusive . remedy is the procedure outlined in that statute. e orders of the Appellate Division should be affirmed with costs. Fux; C.J., and Van Vooruis, Burke, Scizprr, Bercan and Kzatrne, JJ., concur. BRE!ITEL, J., taking no part. Orders affirmed. A136 Notice of Appeal to the Supreme Court of the United States SUPREME COURT OF THE STATE OF NEW YORK County or New York Invex No. 247/66 a rf — eee ~ Grorce CAMPBELL ParntiIne Corp., Plamtiff-A ppellant, against ie ~Wuius Ren, Francis V. Manican, Ira S. Beane, Mem- bers of the New York City Housing Authority, Taz New York Crry Houstne AurnHonity, | oa Defendants-A ppellees. L. Notice is hereby given that Gzorce Campsen. Parnt- mvc Corp., the Appellant above named, hereby appeals to the Supreme Court of the United States from the final judg- ment of the Court of Appeals dismissing its complaint en- tered in this action on July 7, 1967. | This appeal i is taken pursuant to 28 U.S. C. §1257 (2). IL. The clerk will please prepare a transcript of the entire record in this cause, for transmission to the Clerk « A137 & , - Notice of Appeal to the Supreme Court of the United States . of the Supreme Court of the United ste and include in _ said transeript the following: ¥ 1. =" of the Court of Appeals dated July 7, 967 2/ Opinion of the Court of Appeals. Notice of Appeal to the Court of Appeals. — Order of Modification of the Appellate Division. Opinion of the Appellate Division. - a ™ Notice of Appeal to the Appellate Division. Notice of Cross Appeal to the vine Division. Order of Special Term. Opinion of Schweitzer, J. 10. Order to Show Cause. | 11. Affidavit of George Morvan with Exhibits ‘“‘A”— **D”’ annexed thereto. 12. Summons. 13. Verified Complaint | with Exhibit ‘*A”? annexed thereto. . CON A _ 14. Reply and- Answering Affidavit of George Morvan. 15. Notice of Cross Motion. ~~ 16.. Affidavit of Paul W. Hessel with Exhibits ‘‘A’’— ‘*—D”’ annexed thereto. Ill. The following Questions are presented by this ap- peal: : | 1. Is the 14th Amendment offended by New: York . State’s Public Authorities Law, §2602, which disqualifies Notice of Appeal to the Supreme Court,of the United States | a corporation from eligibility to bid on public contracts if one of its officers or directors asserts his privilege against self incrimination when called before a grand jury? - City of New York To: Cumx, ini Court of the State of New York County of New York. Harry Levy ‘Attorney for onne Agger 250 Broadway —_ _ New York, New York - | ; Lous J. Lerxowrrz . a _ New York appearing pursuant to ' Executive Law #71 A138 %. a) If not, does the fact that the reealcitrant witness : resigned his office and surrendered his control of the i company’s affairs prior to being called as a witness ' make a difference? 2. Is New York State’s statutory ingooiiia, Public Authorities Law §2601, that all public contracts contain an agreement to waive the privilege against self incrimination an unconstitutional condition of doing business with the state and. its agencies? ° Ruzow & Lirner Attorneys for Petitioner _ Appellant ' Office & Post Office Address: ' * 122 East 42nd Street Borough of Manhattan Attorney General of the State of Albany, New York 11224 . ; A139 Order Noting Probable Jurisdiction : BO GE icseicrveas , October Term, 1967 RR A Grorce CAMPBELL PAINTING Conr., Appellant, v. WILLIAM Ret, et al. Appgat from the Court of Appeals of the State of New © | York. 7: . The statement of jurisdiction in this case having been . submitted and eonsidered by the Court, probable jurisdic- tion is noted._, The case is placed on the summary calendar and set for oral argument immediately following No. 635. January 29, 1968 --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386413_0021%3A01. Public record. Not legal advice.