Decided on October 9, 2012
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and subject to revision before publication in the Official Reports.
Saxe, J.P., Sweeny, Renwick, DeGrasse, JJ.
Order and judgment (one paper), Supreme Court, New York County (Jane Solomon, J.), entered May 25, 2010, which, in this hybrid CPLR article 78/declaratory judgment proceeding, granted petitioner's article 78 petition, annulled and declared invalid the determination of the Attorney General denying nonparty state employee Melanie Fudenberg's request for indemnification, and declared that petitioner, as receiver for Fudenberg, was entitled to payment from the State in the amount of $2,372,988 pursuant to Public Officers Law § 17(3), reversed, on the law, without costs, the petition denied, respondents' determination reinstated, and it is declared that Melanie Fudenberg has no right to be indemnified by the State of New York for petitioner-plaintiff's judgment against her.
Petitioner Mark Komlosi, as receiver for nonparty Melanie Fudenberg, commenced this proceeding to compel the State respondents to indemnify Fudenberg for a judgment that was rendered against her in a federal action that Komlosi, in his individual capacity, had brought pursuant to 42 USC § 1983 alleging, inter alia, malicious prosecution (see Komlosi v Fudenberg, 2000 WL 351414, 2000 US Dist LEXIS 4239 [SD NY 2000]). That action arose after Fudenberg falsely accused Komlosi of having sexually abused a mentally disabled resident of a facility at which both worked in 1985.
The State's determination declining to indemnify Fudenberg is supported by a rational basis (see Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County, 34 NY2d 222, 231 ). The jury's finding that Fudenberg "knew with absolute certainty" that the allegations of sexual misconduct between Komlosi and the mentally disabled resident were false rationally supports the State's conclusions that Fudenberg was acting beyond the scope of her employment, and that she was engaged in intentional wrongdoing (see Public Officers Law § 17  [a]; Dykes v McRoberts Protective Agency, 256 AD2d 2 ).
Komlosi's argument that the Attorney General is estopped from arguing that Fudenberg's acts fell beyond the scope of her employment is unavailing. The Attorney General's prior position was proffered during its defense of Fudenberg, and the State's duty to defend is broader than the duty to indemnify (see Matter of Lo Russo v New York State Off. of Ct. Admin., 229 AD2d 995 ; see also Matter of Barkan v Roslyn Union Free School Dist., 67 AD3d 61, 67 ).
Komlosi's argument, as Fudenberg's receiver, adopted by the dissent, that the jury's finding in the federal action (see Komlosi v New York State Off. Of Mental retardation Dev. Disabilities, 1990 WL 29352, 1990 US Dist Lexis 2659[SD NY 1990]) was based on an erroneously worded and expansive interrogatory, was not preserved by any party at the trial. At trial, counsel for both sides negotiated the words to be used in the verdict sheet, and neither objected when the court submitted the final interrogatory to the jury. Further, the interrogatory comported with the theory of the case of intentional conduct that Komlosi proffered at trial.
Moreover, irrespective of the jury's finding in the federal action, the State's determination, made pursuant to Public Officers Law § 17[a], that Fudenberg engaged in intentional wrongdoing has ample support in the record. The irrefutable fact remains that the sexual abuse charges that resulted in Komlosi's arrest and indictment were dropped in the middle of the trial when the alleged victim, Rosenberg, revealed to the prosecutor that Fudenberg had forced him to lie about them. The dissent, however, argues that Rosenberg's recantation is not credible because "he did not respond at all to the question of how she forced him" to lie. But the dissent cannot seriously argue that such recantation was not credible when it forced the prosecution to drop the sexual abuse charges against Komlosi. Under the circumstances, it cannot be said that the Attorney General lacked a factual basis to discredit Fudenberg's allegations, as noted by the dissent, that she "sincerely [but] misguidedly believed that by leading [the alleged victims] to press what she perceived as their legitimate grievances of sexual abuse[s], she was protecting them."
We have reviewed the remaining contentions and find them unavailing.
All concur except Saxe, J.P.,who dissents in a memorandum as follows. SAXE, J.P. (dissenting)
The question we must answer on this appeal is whether the State should be required to indemnify former state employee Melanie Fudenberg for a $2,372,988 judgment that plaintiff Mark Komlosi obtained against her for actions she took in the course of her employment as a state Mental Hygiene Therapy Aide. I would require the State to do so. The rationale provided by the State to justify its refusal is insufficient and an improper basis for that refusal. When the complete record is considered, it is apparent that Fudenberg's conduct indeed fell within the parameters of Public Officers Law § 17(a)(3), and therefore the State should pay Komlosi's judgment.
Komlosi was working as a psychologist for the New York State Office of Mental Retardation and Developmental Disabilities (OMRDD) for several years when, in 1982, he was assigned to the Williamsburg Rehabilitation and Training Center (WRTC), a residential facility for developmentally disabled adults. This proceeding arises out of an ultimately-dismissed criminal prosecution brought against him in 1985 based on allegations that he had sexually abused one of the residents at WRTC.
David Rosenberg, the complainant in the dismissed criminal prosecution, is a developmentally disabled adult resident at WRTC, with an IQ of approximately 72 and a complex clinical diagnosis that included a tendency to fabricate stories and a preoccupation with sex that regularly prompted him to leave the facility without permission and attend pornographic films at 42nd Street movie theaters.
Melanie Fudenberg was employed at WRTC at the time in the job title of Mental Hygiene Therapy Aide. It was she and two other staff members who brought the criminal charge of sexual abuse that David Rosenberg made against Komlosi to the attention of supervisory personnel, although this was not the first such complaint that Fudenberg brought to supervisory attention. To understand the dynamic that led to the criminal complaint, it is necessary to discuss the previous incidents in which Fudenberg brought to the attention of senior administrative staff purported abuse by Komlosi, and to note that Komlosi was cleared after investigation in each instance.
On August 14, 1984, Fudenberg accompanied a resident named Marion Greengrass to the WRTC Chief of Services, Arthur Fogel, and Greengrass told Fogel that Komlosi had sex with her. After Komlosi was placed on administrative leave, the charge was investigated, and was ultimately determined to have been fabricated. Investigator George Young reported that ...