Court Opinion

ID: 5786496
Source: CourtListenerOpinion
Date Created: 2022-01-12 17:59:54.800383+00
Date Added: 2024-06-11T08:42:07.111688
License: Public Domain

Benjamin, J.
(concurring in part and dissenting in part). In my opinion neither the rule of Madden v. Queens County Jockey Club (296 N. Y. 249) nor conversion of this action into a special proceeding bars recovery of damages in this case.
The appellant was organized as a ‘ ‘ non-profit racing assocition ” pursuant to section 1 of chapter 812 of the Laws of 1955. Subdivision 3 of that section gives the appellant “ all the general powers of corporations created under the laws of the state, including the powers and obligations of stock corporations One of these obligations is amenability .. to suit (Business Corporation Law, § 202, subd. [a], par. ‘[2]; Not-For-Profit Corporation Law, § 202, subd. [a], par. [2]). In this respect the appellant is treated as an ordinary domestic corporation. As the majority rightly point out however, the appellant’s business is inextricably intertwined with substantial State involve-*' *95ment. The appellant received a 25-year State franchise to conduct races with pari-mutuel betting. Its trustees must be approved by the State Racing Commission and; may be removed at the commission’s request upon specified grounds (Horse Racing Act, § 1-a, subd. 3; L. 1955, ch. 812, § 1). The State receives as a franchise fee all of the appellant’s taxable income after provision for the payment of Federal taxes and the amortization of approved debt (Horse Racing Act, § 7-a; L. 1955, ch. 812, § 2). Upon the appellant’s dissolution, its assets must be transferred to one or more exempt organizations defined under the Federal Internal Revenue Code, as designated by the Governor (Horse Racing Act, § 1-a, subd. 2; L. 1955, ch. 812, § 1). The Racing Commission exercises strict control over the appellant (Horse Racing Act, §§ 6-a, 7-a, 7-b, 9-a; Pari-Mutuel Revenue Law, §§ 7,15). Again, as the majority point out, these circumstances warrant a finding of State action.
However, these attributes of public involvement do not preclude an award of damages to the respondent as the majority hold. This is so for several reasons. First, the appellant’s private charter and private characteristics are ignored by the majority holding. Second, conversion of the action into a proceeding under article 78 of the CPLR does not preclude damages when damages may be recovered in an ordinary action (CPLR 7806). Third, Madden v. Queens County Jockey Club (296 N. Y. 249, supra) does not bar a common-law action for damages. Madden, decided in 1947, merely held that Queens County Jockey Club was able to exclude one who it had reason to believe was a professional bookmaker, an unlawful occupation. That situation is wholly absent here and, accordingly, Madden is inapplicable to the case at bar. Here, the respondent may lawfully earn his living on the appellant’s premises. He has a license to do so granted to him by the Racing Commission and has duly been allotted stall space in the past. In addition, the racetrack in Madden was operated under entirely different auspices than the racetrack at bar, since it was an entirely private enterprise. To allow the appellant to bar the respondent from racing by denying him stall space is tantamount to overruling the Racing Commission, which has restored the respondent’s license after a short period of suspension. Fourth, the appellant is engaged in a proprietary function (Madden v. Queens County Jockey Club, 296 N. Y. 249, 253, supra). Even if the appellant’s business were operated directly by the State, the State’s liability would be “ determined in accordance with the same rules of law as applied to actions in the supreme court against individuals or *96corporations ” (Court of Claims Act, § 8; Duren v. City of Binghamton, 172 Misc. 580, affd. 258 App. Div. 694, affd. 283 N. Y. 467).
The cases relied upon by the majority for the holding that damages may not be recovered by the respondent herein all hold that no public officer is responsible in a civil suit for a judicial or discretionary act, however wrongly or maliciously motivated. I have no quarrel with this rule, but I find it to be inapplicable ■to the facts of this case. Thus, in Rottkamp v. Young (21 A D 2d 373, affd. 15 N Y 2d 831) the defendant was acting in his capacity of Building Inspector and his refusal to issue a permit was a discretionary and not a ministerial act (p. 376). In Weiss v. Fote (7 N Y 2d 579) the plaintiffs sought to hold the City of Buffalo liable for negligence in the design of a traffic light, a design which was adopted by the city’s Board of Safety after “ considered judgment ” on the “ clearance interval ” (p. 586). In Gross v. State of New York (33 A D 2d 868) the claim for damages was based upon the allegation that the Secretary of State of the State of New York was exercising a purely ministerial (as opposed to a governmental) function in approving or disapproving corporate names. Band v. Town of Colonie (36 A D 2d 785) involved the revocation of a permit by the defendant’s Superintendent, of Buildings, as did Lockwood v. Village of Buchanan (18 Misc 2d 862 [by the defendant’s Building Inspector]). A similar pattern does not appear in this record. Thus, to invest the appellant with accoutrements of sovereign immunity which it does not claim and to which it is not entitled is to give too much weight to the regulatory scheme under which the appellant conducts its business and too little weight to the appellant’s private corporate status and to the proprietary nature of such business.
Accordingly, I vote to affirm the order of the Special Term insofar as a; ipealed from, without modification.