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GOLD v. LOMENZO

July 15, 1970

David C. GOLD, Plaintiff,
v.
John P. LOMENZO, individually and as Secretary of State of the Department of State of the State of New York, the Department of State of the State of New York and Howard R. Leary, individually and as Police Commissioner of the Police Department of the City of New York, Defendants



The opinion of the court was delivered by: POLLACK

Pollack, District Judge.

A three-judge district court has been convened pursuant to 28 U.S.C. §§ 2281 and 2284 on the complaint of David C. Gold against John P. Lomenzo, individually and as Secretary of State of New York State, et al. The complaint seeks an injunction against the suspension of Mr. Gold's real estate brokerage license by the Secretary of State on the ground that this was not authorized by state law and unconstitutional on a variety of federal and state grounds. Defendant Lomenzo has moved to dismiss the suit as devoid of legal merit.

For the reasons given in the following opinion, this Court will abstain from reaching the merits of plaintiff's claims but will deny the motion to dismiss the suit at this time and will retain jurisdiction pending consideration of the matter by the New York State Courts and a final determination with respect to the authority of the Secretary under State law.

 Plaintiff, David C. Gold, held a real estate broker's license issued under § 441 of the New York Real Property Law, McKinney's Consol. Laws, c. 50. On July 24, 1969 a hearing officer of the Department of State determined (after a full hearing) that Gold's real estate broker's license should be suspended for "demonstrated untrustworthiness" within the meaning of § 441-c. (1). *fn1" This determination was concurred in by the Secretary of State. Suspension was ordered to commence on August 15, 1969 and to terminate only if Gold satisfied certain conditions, to wit: refunded to four clients amounts aggregating $585.85; filed statements that he had deleted an objectionable clause in his lease and that in the future he would not charge more than one month's rent as commission.

 On September 2, 1969, plaintiff sought an injunction in the District Court, pendente lite, enjoining and restraining the Secretary of State from suspending his real estate broker's license, and sought an order convening a statutory court to consider the constitutionality of § 441 of the New York Real Property Law and the Secretary's application thereof.

 The District Court denied a preliminary injunction and refused to convene a three-judge court. Gold v. Lomenzo, 304 F. Supp. 3 (S.D.N.Y. 1969).

 On appeal, the decision of the District Court was reversed. The Court of Appeals held that the claim that the limitation on Gold's fee was confiscatory raised a question to be administered by a three-judge court rather than by a single Judge. Gold v. Lomenzo, 425 F.2d 959 (2d Cir. 1970). *fn2"

 Accordingly, on remand from the Court of Appeals, the District Court granted plaintiff's motion to convene a three-judge court pursuant to 28 U.S.C. §§ 2281 and 2284.

 While review of the district court decision refusing to convene a three-judge court was pending before the Court of Appeals, plaintiff commenced an Article 78 proceeding in New York Supreme Court, Albany County, contesting the state suspension order. That proceeding was dismissed on the merits on December 30, 1969 by Mr. Justice De Forest C. Pitt, who ruled that the questioned statute was neither vague nor overbroad and that its application to plaintiff did not result in the impairment of contract. Upon reargument on February 13, 1970, Mr. Justice Pitt adhered to his original decision, stating among other things:

 
It should, perhaps, be noted that the court in its original determination of this proceeding was not of the opinion that it was in any manner bound by the determination of the United States District Court in the companion litigation. References to the opinion of that court are to be considered as indicative of this court's approval of the rationale and law quoted.

 Plaintiff filed a notice of appeal to the Appellate Division, Third Department, from the dismissal of the Article 78 proceeding, and that appeal is pending but has not as yet been perfected.

 On October 31, 1969, the Department of State held a second hearing, after which plaintiff's license was revoked on the ground that he had continued to operate his brokerage business in violation of the Secretary's order of suspension.

 On oral argument before the three-judge court plaintiff asserted that his license had by its terms expired on October 31, 1969.

 Plaintiff did not bring an Article 78 proceeding in connection with the alleged revocation of October 31, 1969 and presumably the statute of limitations now bars ...


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