15 -3455-cv

B ertuglia v. Schaffler

UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

SUMMARY ORDER

R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT

. C ITATION TO A SUMMARY

ORDER FILED ON OR AFTER J ANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE

OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ʹ S L OCAL R ULE 32.1.1. W HEN CITING A

SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT

, A PARTY MUST CITE EITHER THE

F EDERAL A PPENDIX OR AN ELECTRONIC DATABASE ( WITH THE NOTATION ʺ SUMMARY ORDER ʺ ). A

PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY PARTY NOT REPRESENTED

BY COUNSEL

.

At a stated term of the United States Court of Appeals for the Second

Circuit, held at the Thurgood Marshall United States Courthouse, 40 Foley Square, in

the City of New York, on the 6 th day of December, two thousand sixteen.

PRESENT: DENNY CHIN,

SUSAN L. CARNEY,

Circuit Judges

, BRIAN M. COGAN,

District Judge

. *

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ x

ROBERT BERTUGLIA, JR., Individually and as

President of Laro Maintenance Corporation,

Plaintiff

‐ Appellant

,

LARO MAINTENANCE CORPORATION,

Plaintiff

‐ Counter

‐ Defendant

‐ Appellant

,

LARO SERVICE SYSTEMS, INC.,

Plaintiff

‐ Counter

‐ Defendant

v. 15

‐ 3455

‐ cv

* Judge Brian M. Cogan of the United States Distri ct Court for the Eastern District

of New York, sitting by designation.2 JEFFREY SCHAFFLER, Port Authority Supervising

Investigator,

Defendant

‐ Counter

‐ Claimant

‐ Appellee

,

CITY OF NEW YORK, ADA ELYSE RUZOW, ADA

MICHAEL SCOTTO, BERNARD D ʹ ALEO, Port

Authority Contract Administrator, PORT

AUTHORITY INVESTIGATORS JOHN DOES, #1

‐ 5

names and shield numbers whom are unknown at

present, and other unidentified members of the Port

Authority, PORT AUTHORITY INVESTIGATORS

JANE DOES, # 1

‐ 5 names and shield numbers whom

are unknown at present, and other unidentified

memb ers of the Port Authority,

Defendants

,

ROBERT E. VAN ETTEN, Port Authority Inspector

General, MICHAEL NESTOR, Port Authority

Director of Investigations, EDWARD KENNEDY,

Port Authority Investigative Manager, PORT

AUTHORI TY OF NEW YORK AND NEW JERSEY,

FRED FERRONE, Port Authority Forensic Auditor,

Defendants

‐ Counter

‐ Claimants

. *

‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ ‐ x

FOR PLAINTIFFS

‐ APPELLANTS: JON L. NORINSBERG, Law Offices of Jon L.

Norinsberg PLLC, New York, New York, and

Scott A. Korenbaum, New York, New York, on

the brief

.

FOR DEFENDANT

‐ APPELLEE: KATHLEEN GILL MILLER (Sajaa Ahmed, on

the brief ), The Port Authority of New York and

New Jersey

, New York, New York.

Appeal from the United States District Court for the Southern District of

New York (Koeltl, J. ).

* The Clerk of Court is directed to ame nd the official caption as shown above.3 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED that the judgment of the district court is AFFIRMED

.

Plaintiffs

‐ appellants Laro Maintenance Corporation ( ʺ Laro ʺ ) and its

president, Robert Bertuglia, Jr., 1 appeal from a judgment of the district court entered

September 30, 2015, to the extent it granted summary judgment in favor of defendant

‐

counter

‐ claimant

‐ appellee Jeffrey Schaffler 2 on their malicious prosecution, fair trial,

and conspiracy claims. The district court explained its reasoning in an opinion and

order filed September 29, 2015. We assume the parties ʹ familiarity with the underlying

facts, procedural history, and issues on appeal.

In December 2004, Laro entered into a $24 million contract to provide

cleaning services at the Port Aut hority Bus Terminal from January 1, 2005 to December

31, 2007. The contract required that certain cleaning equipment be in ʺ new and unused

condition ʺ at the start of the contract term. J. App. at 166. The cost of the new

equipment was to be offset by a charge built into Laro ʹ s hourly rate over the course of

the contrac t. Laro failed to purchase two pieces of cleaning equipment that were

required at the start of the contract term; nevertheless, Laro billed the full hourly rate

1 The district court action was filed by Bertuglia, Laro, and Lar o Service Systems;

plaintiffs ʹ opening brief, however, references only Bertuglia and Laro.

2 Plaintiffs ʹ opening brief does not spe cify whether they appeal the grant of

summary judgment in favor of all or only certain defendants. Defendants ʹ opposition brief

suggests that plaintiffs ʺ appeal only as to the Port Authority and Jeffrey Schaffler. ʺ Appellee ʹ s

Br. at 1. Plaintiffs ʹ reply brief names Schaffler as the sole app ellee. Accordingly, we construe

plaintiffs ʹ appeal as pursuing claims against only Schaffler.4 each month. By the time the contract ended, the Port Authority had paid Laro at least

$153,000 for use of the two pieces of cleaning equipment that had not been purchased.

In March 2007, Schaffler, an investigator with the Port Authority,

informed Assistant District Attorney ( ʺ ADA ʺ ) Michael Scotto that the Port Authority

was investigating Bertuglia and Laro for overbilling. In May 2007, the New York

County District Attorney ʹ s Office (the ʺ DA ʹ s Office ʺ ) opened a criminal investigation

into Bertuglia and Laro, led by ADA Elyse Ruzow.

In August 2008, a grand jury indicted Bertuglia and Laro on charges of

grand larceny in the second degree, offering false instruments for filing, and falsifying

business records. The Supreme Court, New York County (Zweibel, J. ), dismissed the

indictment as to Bertuglia after finding that the evidence against him was legally

insufficient, and the DA ʹ s Office thereafter dropped the charges against Laro. In April

2009, the grand jury again indicted Bertuglia and Laro for grand larceny in the second

degree, but the second indictment was also dismissed as to both Bertuglia and Laro for,

inter alia

, legally insufficient evidence.

On March 29, 2011, Bertuglia and Laro filed a complaint in the district

court against numerous defendants, including Schaffler, alleging claims of, inter alia

,

false arrest, malicious prosecution, denial of the constitutional right to a fair trial, and

conspiracy to violate civil rights under 42 U.S.C. § 1983. Plaintiffs filed an amended

complaint on July 1, 2011. On March 19, 2012, the district court granted in part motions5 to dismiss by the defendants; certain of plaintiffs ʹ claims against Schaffler, including

malicious prosecution, deprivation of the right to a fair trial, and conspiracy, survived.

On October 17, 2014, plaintiffs moved for partial summary judgment on

their malicious prosecution claim against Schaffler, and on November 21, 2014, Schaffler

cross

‐ moved for summary judgment dismissing plaintiffs ʹ remaining claims. 3 In a

detailed memorandum and order entered September 29, 2015, the district court denied

plaintiffs ʹ motion for partial summary judgment and granted summary judgment to

Schaffler and all other defendants on plaintiffs ʹ remaining claims. Plaintiffs filed this

timely appeal. 4

We review a district court ʹ s grant of summary judgment de novo

,

ʺ resolv[ing] all ambiguities and draw[ing] all inferences against the moving party. ʺ

Garcia v. Hartford Police Dep ʹ t, 706 F.3d 120, 126

‐ 27 (2d Cir. 2013) (per curiam).

ʺ Summary judgment is proper only when, construing the evidence in the light most

favorable to the non

‐ movant, ʹ there is no genuine dispute as to any material fact and the

movant is entitled to judgment as a matter of law. ʹʺ Doninger v. Niehoff, 642 F.3d 334,

344 (2d Cir. 2011) (quoting Fed. R. Civ. P. 56(a)).

3 The other remaining defendants also moved for summary judgment as to all of

plaintiffs ʹ claims.

4 On appeal, Bertuglia and Laro contend that the district court erred in granting

summary judgment in favor of Schaffler on plaintiffs ʹ malicious prosecution, fair trial, and

conspiracy claims. Because plaintiffs do not challenge the grant of summary judgment in favor

of the other Port Authority employee defendants, ADA defendants, or the City of New York,

they have abandoned those claims. See Norton v. Sam ʹ s Club

, 145 F.3d 114, 117 (2d Cir. 1998).6 1. Malicious Prosecution

Under New York law, to succeed on their malicious prosecution claim,

Bertuglia and Laro had to establish: ʺ (1) the initiation or continuation of a criminal

proceeding against plaintiff[s]; (2) termination of the proceeding in plaintiff[s ʹ ] favor; (3)

lack of probable cause for commencing the proceeding; and (4) actual malice as a

motivation for defendant ʹ s actions. ʺ Manganiello v. City of New York

, 612 F.3d 149, 161

(2d Cir. 2010) (internal quotation marks omitted).

The grand jury indictments returned against Bertuglia and Laro cr eate a

presumption of probable cause that is fatal to their malicious prosecution claims. ʺ [T]he

existence of probable cause is a com plete defense to a claim of malicious prosecution in

New York

. . . . ʺ Id. at 161

‐ 62. Under New York law, a grand jury indictment ʺ creates a

presumption of probable cause that can only be overcome by evidence that the

indictment was the product of fraud, perjury, the suppression of evidence by the police

or other po lice conduct undertaken in bad faith. ʺ Bermudez v. City of New York

, 790 F.3d

368, 377 (2d Cir. 2015) (internal quotation marks omitted).

Plaintiffs have proffered no facts from which a reasonable jury could infer

that the indictment was the product of fraud, perjury, the suppressi on of evidence, or

other bad faith conduct on the part of Schaffler. In the voluminous record in this case,

plaintiffs point to three statements made by Schaffler to ADA Ruzow that they contend

are false and evidence bad faith that rebuts the presumption of prob able cause:

Schaffler purportedly told Ruzow that (1) plaintiffs knowingly overbilled the Port7 Authority, (2) Bertuglia was a ʺ thief ʺ and a ʺ crook ʺ who ʺ stole a lot of money, ʺ J. App. at

646

‐ 47, 1631

‐ 33, and (3) Robert Kolakowski, Laro ʹ s onsite manager at the Port Authority,

complained to Bertuglia about the lack of new cleaning equipment.

As an initial matter, Laro in fact billed the Port Authority for equipment it

never purchased, and so Schaffler ʹ s statements were undisputedly true as to that fact.

While Schaffler allegedly went further in his statements to the DA ʹ s Office, accusing

plaintiffs of stealing and knowingly overbilling, plaintiffs point to no record evidence

that those statements reached the grand jury. See Rothstein v. Carriere

, 373 F.3d 275, 283

‐

85, 290 (2d Cir. 2004) (rejecting view that ʺ a person who falsely tells the police that

someone has committed a felony may be liable for malicious prosecution no ʹ matter

what goes on before the grand jury ʹʺ and adopting view that ʺ unless the plaintiff can

demonstrate that the proceedings before the grand jury were tainted, an indictment

extinguishes the claim ʺ ). Moreover, the statements that Bertuglia was a thief and a

crook who stole money clearly were statements of opinion that lacked evidentiary

value. Without more, the district court correctly concluded that a jury could not find

that ʺ the grand jury was defrauded or that its integrity was undermined ʺ by Schaffler ʹ s8 conduct such that the presumption of probable cause was overcome. 5 Special App. at

32.

Furthermore, the dismissals of the indictments due to legally insufficient

evidence did not vitiate the presumption of probable cause created by the indictments.

The New York Court of Appeals has observed that

[t]he rule in New York differs

. . . from that in some jurisdictions which

permit the presumption to be overcome by any evidence tending to show

the absence of probable cause. In this State, the trial court may not weigh

the evidence upon which the police acted or which was before the Grand

Jury after the indictment has issued.

Colon v. City of New York

, 60 N.Y.2d 78, 83 (1983). The Colon court held, inter alia

, that

even the District Attorney ʹ s dismissal of an indictment did not overcome the

presumption because it ʺ constituted no more than an admission that the People lacked

evidence to establish a prima facie case of guilt. ʺ Id. at 84. Accordingly, we decline to

assess whether the prosecution lacked evidence to establish a prima facie case of grand

larceny in the second degree and conclude that plaintiffs have failed to rebut the

presumption of probable cause.

5 The state court judge who dismissed the indictments expressed serious concerns

about misconduct engaged in by the prosecution when presenting the case to the grand jury.

We do not take those concerns lightly. Nonetheless, although prosecutorial misconduct during

grand jury proceedings can provide a basis for rebutting the presumption of probable cause

created by an indictment, we agree with the district court that the misconduct at issue in this

case does not meet the standard set forth by the New York Court of Appeals in Colon v. City of

New York : ʺ The presumption may be overcome only by evidence establishing that the police

witnesses have not made a complete and full statement of facts either to the Grand Jury or to

the District Attorney, that they have misrepresented or falsified evidence, that they have

withheld evidence or otherwise acted in bad faith. ʺ 60 N.Y.2d 78, 82

‐ 83 (1983) (emphasis

added).9 Plaintiffs contend that the Court of Appeals ʹ recent decision in De Lourdes

Torres v. Jones

, 26 N.Y.3d 742 (2016), changes the result. We are not persuaded. The De

Lourdes Torres court held that summary judgment in favor of the defendants was

inappropriate where there was evidence that the defendants falsified a confession from

the plaintiff and forwarded it to the District Attorney ʹ s office to prosecute the plaintiff.

De Lourdes Torres

, 26 N.Y.3d at 767. The court held that such evidence of bad faith

conduct, if credited, could ʺ rebut the presumption of probable cause

. . . by

demonstrating that the evidence of guilt relied upon by the defendant was so scant that

the prosecution was entirely baseless and maliciously instituted. ʺ Id. at 761. To the

extent there was misconduct in the present case, it did not rise to the level of fabricating

a confession.

Thus, because we agree with the district court ʹ s conclusion that a

reasonable jury could not find that the prosecution here lacked probable cause, we

affirm the dismissal of the malicious prosecution claim.

2. Fair Trial

We next turn to plaintiffs ʹ § 1983 claim for denial of the constitutional

right to a fair trial due to fabrication of evidence. A law enforcement officer denies a

defendant a fair trial when he creates ʺ false information likely to influence a jury ʹ s

decision and forwards that information to prosecutors. ʺ Ricciuti v. N.Y.C. Transit Auth.,

124 F.3d 123, 130 (2d Cir. 1997). In Garnett v. Undercover Officer C0039

, 838 F.3d 265, 275

(2d Cir. 2016), we clarified that Ricciuti applies just ʺ as much to a situation where, as10 here, the falsified information was the officer ʹ s account, conveyed to prosecutors, of

what he heard the defendant say or do during the alleged offense. ʺ We also cautioned

that the same limiting principles encompassed by the Ricciuti standard apply

‐‐ namely,

that the evidence must be likely to influence a jury ʹ s decision. Id. at 279

‐ 80.

As discussed above, Schaffler ʹ s opinions about Bertuglia and Laro ʹ s

potential wrongdoing did not constitute evidence. Furthermore, Schaffler ʹ s accusation

that Bertuglia was a thief who had knowingly overbilled could not have been

introduced into evidence without some foundation, and the only foundation provided

by Schaffler was his statement that Kolakowski complained to Bertuglia about the lack

of new cleaning equipment. Even if somehow admissible, Schaffler ʹ s hearsay account of

Kolakowski ʹ s conversation with Bertuglia would not have been material at trial because

a jury would have been able to hear directly from Kolakowski himself. Thus, drawing

all inferences in their favor, plaintiffs fail to raise a triable fact issue as to whether

Schaffler created false information that was likely to influence a jury ʹ s decision.

3. Conspiracy

Finally, we agree with the district court ʹ s grant of summary judgment on

plaintiffs ʹ conspiracy claim. To the extent plaintiffs argue that Schaffler and Ruzow

agreed to deprive plaintiffs of their liberty by maliciously prosecuting them and

denying them the right to a fair trial, we have already determined that a jury could not

decide in favor of plaintiffs on either claim. See Singer v. Fulton Cty. Sheriff

, 63 F.3d 110,11 119 (2d Cir. 1995) ( ʺ [A § 1983 conspiracy claim] will stand only insofar as the plaintiff

can prove the sine qua non of a § 1983 action: the violation of a federal right. ʺ ).

We have considered all of plaintiffs ʹ remaining arguments and find them

to be without merit. Accordingly, for the reasons stated above, we AFFIRM the

judgment of the district court.

FOR THE COURT:

Catherine O ʹ Hagan Wolfe, Clerk