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HATHAWAY v. COUNTY OF ESSEX

February 12, 1998

RICHARD HATHAWAY and SHARLEEN HATHAWAY, Plaintiffs,
v.
COUNTY OF ESSEX; TOWN OF TICONDEROGA; RICHARD SYPEK, State Police Investigator; JOHN MCDONALD, Former Essex County District Attorney; RONALD BRIGGS, District Attorney of the County of Essex; MICHAEL CONNERY, Supervisor of the Town of Ticonderoga; MARIE HUNTINGTON, Ticonderoga Town Board Member; MARY GAIL RUSSELL, Chairperson of the Town of Ticonderoga Youth Commission; ANDREW POWVORZNIK, Ticonderoga Town Board Member; ALL INDIVIDUALLY AND IN THEIR OFFICIAL CAPACITIES, Defendants.



The opinion of the court was delivered by: MCAVOY

 In this § 1983 action for malicious prosecution, defendants Town of Ticonderoga, Michael Connery, Marie Huntington, Mary Gail Russell and Andrew Powvorznik move under Fed.R.Civ.P. 12(c) for judgment on the pleadings, or, in the alternative, for summary judgment pursuant to Fed.R.Civ.P. 56.

 I. Background

 A. Facts

 Between February, 1992, and June, 1994, plaintiff Richard Hathaway was investigated, indicted, and tried on charges of official misconduct, petit larceny, grand larceny, and perjury. All of these charges were dismissed before the case went to the jury.

 Defendant Michael Connery has been Town Supervisor of defendant Town of Ticonderoga ("the Town") since January 1, 1990. Defendant Marie Huntington has been a member of the Town Board since January 2, 1992. At all relevant times, defendant Andrew Powvorznik was a member of the Town Board and an appointed member of the governing board of the Town Youth Commission ("Youth Commission" or "Commission"). At all relevant times, defendant Mary Gail Russell was the Chairperson of the Commission, but was not a member of the Town Board.

 Plaintiff Richard Hathaway was the paid director of the Youth Commission from 1986 until his resignation in late January of 1992. The Youth Commission is a program of the Town and Village of Ticonderoga charged with, inter alia, providing recreational opportunities to children and young adults. The Youth Commission is governed by a board consisting of persons appointed by the Town Board.

 All parties acknowledge that prior to 1992, considerable acrimony had developed between plaintiff and certain members of the Youth Commission. Defendants allege the source of the tension was numerous disputes regarding the finances of the Youth Commission and accounts plaintiff had used to pay Commission expenses. Def. Rule 7.1(f) Stat. P 7. Defendants also allege plaintiff was using the same account to operate both the Commission and a private organization with which he was involved, known as "Youth to Youth." Plaintiff, on the other hand, contends the conflicts arose out of allegations of nepotism he raised to the Commission. Pl. Aff. P 16. Plaintiff also alleges it was a vengeful neighbor who first raised the concerns regarding Youth to Youth. Id.

 Part of plaintiff's duties as director of the Commission was to arrange several weekend ski trips during the winter for children and adults in the Ticonderoga area. Def. Rule 7.1(f) Stat. P 8; Pl. Aff. PP 6-10. Participating children skied at a discounted price. The difference between the discounted price and the full price charged by the ski site was paid by the Town Board. Pl. Aff. P 13; Pl. Dep. at 194-95. Plaintiff collected money from the ski participants on the bus during the trip to the ski site. Pl. Dep. at 186-87. The payments were by cash or check, and plaintiff kept no record with respect to the amount collected on a given trip. Id. at 190. The cost of the trip would include, for each individual, the price of a lift ticket. Moreover, children without ski equipment would pay a discounted rental fee, with the Town Board again making up the difference.

 Plaintiff estimates that anywhere from fifty to over one hundred people may have participated in a trip. Pl. Dep. at 205. Moreover, because children who could not afford the trip were allowed to ski free, anywhere from ten to twenty child participants did not pay. Id. The free skiers, combined with the discount, obviously resulted in a shortfall in the amount of money plaintiff collected on each trip compared to the total cost of the trip. The money plaintiff collected from the participants, however, lies at the center of the present dispute.

 Once the money was collected from the participants on the bus, a voucher was turned in to the ski site. The voucher indicated the number of lift tickets used during the trip, for which the Town was billed in the entirety. Pl. Dep. at 200. *fn1" As for the payments collected during the trip, plaintiff testified at his deposition that these amounts were applied during the trip for the rental payments of both discounted and free skiers. Id. at 200-01. *fn2" The cash also was applied to repair broken equipment or purchase new equipment. Id. at 203-04. The checks collected were deposited in the Youth to Youth Account. Id. at 204-05. Plaintiff kept no records or receipts whatsoever regarding the number of children that skied free, amounts expended on equipment purchases or repairs, or any other expenses to which the cash payments were applied.

 On the occasions when plaintiff had cash left over (he doesn't know how many times this occurred), he brought the cash to his home and kept it there. Pl. Dep. at 207. On some occasions, he did not deposit the money for weeks or months. Id.3 He also would use the cash during the 1990-91 period for purposes unrelated to the ski program, i.e., equipment and food for Youth Commission purposes, but he kept no records of any such purchases. Id. at 208. Nor did plaintiff report his use of the money to the Youth Commission. Id. at 209.

 When plaintiff resigned his position as Director of the Youth Commission in January of 1992, Jim Wells took over as supervisor of the ski trips. After the first trip in which Wells took part, the Town Budget Clerk, Sandra Hurlburt, reported to Connery that Wells had turned over to the Town the money he had collected from the participants in the ski trip. Connery Dep. at 30. Connery, apparently wondering why plaintiff never turned such money over, brought the matter to the attention of Town Attorney Gerald Lawson, who told Connery to call a Board meeting. Id. at 29-30. Connery did so; present at the meeting were Huntington, Powvorznik, Connery and Lawson. Id. at 33.

 At the meeting, Lawson advised the Board to contact the District Attorney's office regarding the situation with the ski money, and the Board directed Connery to do so. On March 16, 1993, Connery met with then-District Attorney John McDonald and New York State Police Investigator Richard Sypek. Connery told them it had come to the Board's attention, apparently because Wells turned in the collected ski money, that Hathaway had turned over no such money during his tenure as supervisor of the ski trips. McDonald Aff. P 7. Later that day, McDonald formally requested that Sypek investigate the matter. Id. P 8 and Ex. A. Sypek proceeded with the investigation.

 Meantime, Huntington began an investigation of her own. After reviewing vouchers, receipts and other records, she determined that approximately $ 3,037 was unaccounted for in 1990-91. See Def. Ex. F. *fn4" Sypek, during his investigation, concluded the unaccounted for sum was a minimum of $ 3,787.00. Pl. Ex C at 7. As part of the investigation, Sypek interviewed plaintiff. During that interview, plaintiff tried to explain to Sypek that the free skiers on each trip would have a significant impact on the calculations, and that plaintiff was guilty only of poor bookkeeping. Pl. Dep. at 58.

 After reviewing the results of Sypek's investigation, McDonald decided there was reasonable cause to begin a criminal prosecution of plaintiff by presenting the matter to the Grand Jury. McDonald Aff. P 11. After several postponements in the Fall of 1992, the case finally was presented to the Grand Jury on January 20-21 and March 4, 1993. Sypek, Connery, Huntington, Powvorznik, Hurlburt, Russell and plaintiff, among others, testified. Thereafter, the Grand Jury returned five indictments against plaintiff charging: (1) fifteen counts of Official Misconduct, N.Y. Pen. L. § 195,00(1); (2) fifteen counts of Petit Larceny, N.Y. Pen. L. § 155.25; (3) one count of Grand Larceny, N.Y. Pen. L. § 155.30(1); and (4) one count each of First Degree and Third Degree Perjury, N.Y. Pen. L §§ 210.15, 210.5.

 Plaintiff thereafter moved for dismissal of the indictments. Judge James Dawson denied the motion on November 12, 1993. The case was tried before a jury on June 14-16, 1994. Judge Dawson dismissed the perjury and larceny charges at the close of the People's evidence pursuant to N.Y. Crim. Pro. L. § 290.10(1). At the close of all the evidence but before submitting the case to the jury, Judge Dawson dismissed all ...


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