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1109 DOS 09

STATE OF NEW YORK

DEPARTMENT OF STATE

OFFICE OF ADMINISTRATIVE HEARINGS

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In the Matters of the Complaint of

DEPARTMENT OF STATE

DIVISION OF LICENSING SERVICES,

                                                Complainant,                                      

                        -against-

ALLSTATE PRIVATE CAR & LIMOUSINE

SERVICE, INC, MARK SLININ,

and “JOHN DOE’,

                                                Respondents                                                   DECISION

                           -and-

The Application of

ALLSTATE PRIVATE CAR & LIMOUSINE

SERVICE INC. and MARK SLININ,

As a Black Car Fund Operator 

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            The above noted matter came on for hearing before the undersigned, Roger Schneier, on October 19, 2009 at the office of the Department of State located at 123 William Street, New York, New York.

            The respondents were represented by non-lawyer Eddie Slinin, the corporate respondent’s general manager, who appeared without compensation.

            The complainant was represented by staff attorney David Mossberg, Esq.

COMPLAINT

            The complaint alleges that the respondents failed to comply with a financial audit and failed to cooperate with the complainant’s investigation.

FINDINGS OF FACT

            1) Notices of hearing together with copies of the complaint were served by certified and regular first class mail (State’s Ex. 1 and 2).

            2) Since some time prior to September 22, 2003 until September 21, 2008 Allstate Private Car & Limousine Inc., (hereinafter “Allstate”) was registered as a Central Dispatch Facility. The complainant has proposed to deny an application for renewal of the registration for the period ending September 21, 2009. Mark Slinin signed several of Allstate’s renewal applications (State’s Ex. 3).

            3) Sometime in late 2007 Stroz Friedberg investigations (hereinafter “Stroz”) was retained by the law firm of Schlam Stone & Dolan, acting on behalf of the New York Black Car Operators’ Injury Compensation Fund (hereinafter “the fund”), to conduct an audit of Allstate to see if it was in compliance with the fund’s regulations.

            4) Stephen Corinko, an investigator employed by Stroz, and his manager, Anthony P. Valante, met with various Allstate personnel and asked to be provided with various documents. Bank and credit card records were provided, but contact and identifying and tax information for drivers which was requested was not provided. Neither were they provided with copies of the dispatch records which they needed to complete the audit because of suspicions that rides that had been paid for with cash by undercover investigators (State’s Ex. 4) had not been properly reported by Allstate. To view the dispatch records they were required to follow a procedure wherein they told an Allstate employee what date they were interested in and the employee would access the records on a computer (State’s Ex. 5 and 6). According to Mr. Corinko that procedure unduly inhibited the audit. According to Mr. Valante they did, however, determine that the cash rides were not reflected in Allstate’s records.

            5) In April 2009 License Investigator Meghan Salmieri, who was assigned to conduct an investigation of Allstate, met with several representatives of the corporation including Mark Slinin. She was falsely advised that Allstate had provided Stroz with the requested information about its drivers, but also told that it did not disclose certain information about clients because of contractual confidentiality obligations. Mr. Corinko and Mr. Valante had not been given that reason and, therefore, did not have the opportunity to advise the respondents that they could remove the names of their clients from the records.

OPINION AND CONCLUSIONS OF LAW

            I- Being an artificial entity created by law, Allstate can only act through it officers, agents, and employees, and it is, therefore, bound by the knowledge acquired by and is responsible for the acts committed by its officers and employees within the actual or apparent scope of their authority. Roberts Real Estate, Inc. v Department of State, 80 NY2d 116, 589 NYS2d 392 (1992); A-1 Realty Corporation v State Division of Human Rights, 35 A.D.2d 843, 318 N.Y.S.2d 120 (1970); Division of Licensing Services v First Atlantic Realty Inc., 64 DOS 88; RPL § 442-c.

            II- As the signatory on several of Allstate’s applications Mark Slinin is presumed to be an officer of the corporation and, therefore, a responsible person as defined by Executive Law §160-oo[2].

            III- Pursuant to Executive Law §160-jj[6] the fund is authorized to conduct audits of its members, and the members must afford the fund or its agent convenient access at all reasonable hours to all books, records and other documents that may be relevant to such audits. By failing to provide Stroz with all of the pertinent records which its investigators requested Allstate violated that statute. The respondents premise their refusal to provide copies of dispatch records and contact information for their drivers on an asserted obligation to protect the privacy of their clients, a reason that they did not express to the Stroz investigators, and of their drivers, an obligation that is no where recognized in the governing statute. Clearly, proper and efficient government administration would be impossible if registrants were allowed to decide for themselves that degree to which they will cooperate with lawful government audits and investigations. Therefore, the respondent’s defense neither excuses nor mitigates Allstate’s violation.

            IV- Pursuant to Executive Law §160-oo the Secretary of State may charge a registered a Central Dispatch Facility with violations of Executive Law Article 6-F. Implicit in that power is the power to investigate possible violations, which power carries with it an obligation on the part of the registrant to cooperate with the investigation. I find that by falsely advising Investigator Salmieri that the requested information about drivers had been provided Allstate failed to fully cooperate with the complainant’s investigation and thereby violated Executive Law §160-oo.

            V- The complainant seeks to hold Mark Slinin, as a responsible person, personally liable for any monetary penalty imposed in this decision. However, such responsibility is imposed by the statute, Executive Law §160-00[2], only with regards to “assessments owed,” which I construe to mean assessments imposed for the costs of insurance pursuant to Executive Law §160-jj, the only section which imposes assessments. Therefore, as the statute provides for the imposition of a fine on a fund member, and as the registrant Allstate is the fund member, there is no statutory authority to hold the individual respondent liable for any fine imposed on the corporation.

DETERMINATION

            WHEREFORE, IT IS HEREBY DETERMINED THAT Allstate Private Car & Limousine Service Inc. and Mark Slinin have violated Executive Law §§160-jj[6] and 160-oo, and accordingly, pursuant to Executive Law §160-oo, Allstate shall pay a fine of $10,000.00 to the Department of State, and until payment of such fine the registration of Allstate Private Car & Limousine Service Inc. shall not be renewed.

                                                                                   Roger Schneier

Administrative Law Judge

Dated: November 13, 2009