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Posner v. City of New York

United States District Court, Second Circuit

January 16, 2014

Betty Posner, Plaintiff,
v.
CITY OF NEW YORK et al., Defendants.

OPINION AND ORDER

JESSE M. FURMAN, District Judge.

Plaintiff Betty Posner brings this action, pursuant to Title 4, United States Code, Section 1983, against the City of New York (the "City") and various members of the New York City Police Department (the "NYPD" and, together with the City, "Defendants") alleging violations of her constitutional rights. In particular, Plaintiff brings claims for false arrest, malicious prosecution, malicious abuse of process, and failure to intervene, as well as a claim against the City for municipal liability. Defendants move, pursuant to Rule 56(a) of the Federal Rules of Civil Procedure, for summary judgment on all of Plaintiff's claims. For the reasons stated below, Defendants' motion is GRANTED, and the Complaint is dismissed.

BACKGROUND

The following facts, taken from the Complaint and the admissible material submitted by the parties, are viewed in the light most favorable to Plaintiff, as she is the non-moving party. See, e.g., Gould v. Winstar Commc'ns, Inc., 692 F.3d 148, 157-58 (2d Cir. 2012).

A. The Investigation

On July 15, 2007, the NYPD began investigating the Hot Lap Dance Club ("HLDC"), a night club on the fifth floor of a building located in midtown Manhattan, based on complaints regarding, among other things, prostitution and narcotics sales. (Pollack Decl. (Docket No. 41), Ex. A at 2; Pollack Decl., Ex. B at 1; Passeser Decl. (Docket No. 52), Ex. 0). The investigative team ultimately determined that HLDC operated as an unlicensed all-nude strip club and was the site of narcotics sales and prostitution. (Pollack Decl., Ex. B at 1). Specifically, in the course of the investigation, undercover police officers, while visiting HLDC, were sold narcotics nine times and made several positive agreements for prostitution with HLDC dancers. ( Id. ).

More relevant for present purposes, during the course of their investigation of HLDC, investigators examined various business records. Among other things, they found that HLDC's Internet domain name was registered to a corporate entity called "Web Access, Inc, " which had been dissolved for failure to pay franchise taxes on June 27, 2001. (Pollack Decl., Ex. H at 9). Investigators discovered that, in or about January 2004, Web Access had applied for and obtained a contract to accept credit card charges in payment for services as an existing corporate entity, even though it was not one at the time. ( Id. ). In or about September 2005, Web Access also opened a bank account in its name at what is now Sovereign Bank, listing Plaintiff as its Owner and President and Louis Posner as its Vice President. ( Id. at 10). Plaintiff signed papers submitted to the bank that did not mention that the corporation had been dissolved. ( Id. ).

The investigation also revealed that the credit card application submitted by Web Access stated that the company was doing business as "Voter March, " selling "T shirts, tapes, books and event admissions" through the website "votermarch.com." ( Id. at 9). Investigators learned that Voter March itself had been incorporated as a not-for-profit corporation on February 4, 2002, and that Louis Posner was listed as its agent for service of process. ( Id. at 10). In February 2007, Voter March opened its own corporate bank account at Commerce Bank; a document submitted to the bank (labeled a "Corporate Banking Resolution (For Deposit Account)") listed Louis Posner as President and Plaintiff as Secretary. ( Id. ). The document, which was signed by both Plaintiff and Louis Posner, falsely listed Voter March as a "for profit" corporation. ( Id. ). According to Plaintiff, the document was prepared by a bank representative. (Posner Aff. (Docket No. 46) ¶ 74). In addition, she alleges that Voter March's certificate of incorporation-identifying it as a non-profit corporation - was attached to the document. (Posner Aff. 1175 & Exs. H-I).

Finally, to the extent relevant here, the investigators learned that, on December 12, 2007, "HLD Entertainment Corp." - which was not an actual corporation - applied for and obtained a contract to process credit card companies with First Data Corporation. (Pollack Decl., Ex. H at 12). The application, which listed Plaintiff as the company's contact person, stated falsely that the company had been legally incorporated, that it had been in business for one year, and that its business was "miscellaneous food stores." ( Id. ). On March 3, 2008, HLD Entertainment Corp. also opened a corporate checking account with Sovereign Bank, listing Plaintiff as President and Louis Posner as Vice President and stating that the nature of its business was "catering." (Pollack Decl., Ex. C). Checks from that bank account were used to pay the rent for HLDC's loft space and were written to persons working at HLDC who were involved in prostitution agreements with undercover officers. (Pollack Decl., Ex. H at 11). Additionally, credit card receivables were deposited into Plaintiff's personal account and then moved to HLD Entertainment' Corp's Sovereign Bank checking accounts. ( Id. at 12).

During the investigation, an analyst for the New York County District Attorney's Office ("the D.A.'s Office") specializing in investigating prostitution businesses and money laundering schemes examined the records of thirteen bank accounts in the control of Plaintiff, Louis Posner, and the entities described above. ( Id. at 13). Among other things, the analyst concluded that, dating back to April 2007, Plaintiff and Louis Posner had made unexplained transfers in excess of $260, 000.00. ( Id. ). Further, he uncovered a pattern that, in his judgment, revealed intent to structure transfers to avoid federal currency transaction reporting laws. (Pollack Decl., Ex. F at 201-07; see also Pollack Decl., Ex. H at 13).

B. The Arrest and Prosecution

On the evening of July 17, 2008, almost exactly one year after the investigation had begun, the NYPD Vice Enforcement Division executed a search warrant at the home of Plaintiff and Louis Posner. (Pollack Decl., Ex. D at 1). The NYPD arrested Betty Posner there and she was charged later the same day, in a criminal complaint signed by Defendant Sergeant Christopher Koch, with promoting prostitution in the third degree, in violation of New York Penal Law Section 230.25(1); money laundering in the second degree, in violation of New York Penal Law Section 470.15(3); and falsifying business records in the first and second degrees, in violation of New York Penal Law Sections 175.10 and 175.05(3). (Pollack Decl., Ex. H at 1). The NYPD arrested and charged Louis Posner with the same charges. ( Id. ).

Plaintiff was brought to Manhattan Central booking, arraigned on July 19, 2008, and, unable to post bail, incarcerated thereafter. (Posner Aff. ¶¶ 18, 20-21, 24). On July 23, 2008, she was released because the grand jury had not yet indicted her. ( Id. ¶ 33). On September 4, 2008, however, a second grand jury returned an indictment against both Plaintiff and Louis Posner. (Pollack Decl., Ex. I). The indictment charged Plaintiff with six counts of falsifying business records in the second degree, in violation of New York Penal Law Section 175.05(1). (Pollack Decl., Ex. I at 9-11). It also charged Louis Posner with one count of promoting prostitution in the third degree; six counts of money laundering in the second degree; two counts of falsifying business records in the first degree; and five counts of falsifying business records in the second degree. ( See Pollack Decl., Ex. I).

On December 10, 2008, Plaintiff filed an omnibus motion in New York State Supreme Court seeking, among other things, to dismiss the indictment on the grounds that the evidence against her was insufficient as a matter of law. (Pollack Decl., Ex. K at 1). She raised three arguments in the motion: (1) that the relevant documents were not business records ( id. 4-5); (2) that the falsifications were not made for monetary gain ( id. at 8); and (3) that the alleged misstatements were "innocuous" and immaterial ( id. at 12). On June 11, 2009, the Honorable Michael Obus, New York State Supreme Court Justice, denied her motion. (Pollack Decl., Ex. L). Based on a review of the "extensive testimony and myriad documents introduced before the Grand Jury, " the Court held that ...


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