1825 DOS 07
STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
----------------------------------------X
In the Matter of the Application of
AL ROSSY INVESTIGATIONS, INC. private investigator,
LARRY J. EVANGELISTA, qualifying officer DECISION
For a license as a Private Investigator
----------------------------------------X
The above noted matter came on for hearing before the undersigned, Patrice M. Le Melle, on August 14, 2007, at the office of the Department of State located at 123 William Street, New York, New York.
The applicants, having been advised of their right to have hired counsel, chose to represent themselves.
The Division of Licensing Services (hereinafter "DLS") was represented by Senior Attorney Kenneth Golden.
ISSUE
The issue before the tribunal is whether the applicant's application a license as a private investigator should be denied because applicants (1) engaged in the business of private investigator without a license; (2) submitted a false and misleading renewal application; (3) closed its New York office, removed its license certificate to an office in New Jersey, failed to notify DLS of the closure of its New York office and failed to submit its license certificate to DLS within twenty four hours immediately following such removal; (4) and failed to maintain a principal place of business in New York .
FINDINGS OF FACT
1) By application, dated February 25, 2007 and received on March 16, 2007, the applicants applied for renewal of their license as a private investigator (State's Ex. 8). The applicants were originally licensed effective April 25, 2005 through April 24, 2007 pursuant to an application dated December 22, 2004( State’s Ex. 3).
2) The original place of business on record was 100 Somerston Road, Yorktown Heights, New York, 10598 . On May 31, 2006, the applicants filed a Change Notice changing its address from 100 Somerston Road, Yorktown Heights to 17 Battery Place Suite 223, New York, New York . On February 7, 2007, the applicants filed a Change Notice changing their address from17 Battery Park Place, Suite 223, New York, New York to 330 East 39th Street, New York, New York. In its February 25, 2007 renewal application, the applicants listed their Parsippany, New Jersey address as its new place of business. (State's Ex. 2, 5, 9,Transcript pg.46).
-2-
3) At some point in time (which time was not identified during the hearing), DLS received an email from a former employee of Al Rossy, Inc., John Grenawalt, who stated that he had been employed by the applicant from April, 2004 through April 9, 2005, and had permitted the applicant to use his residential address on the applicant’s application for a private investigator license. He complained, however, that because he was no longer employed by the applicant he wanted his address removed from the Department of State records. He claimed that he had so requested of the applicant but that his request was either rejected or ignored. The applicant received a Conditional Authorization letter for its private investigator license on April 4, 2005 (State’s Ex. 4, Transcript pgs 9-11).
4) During the course of the ensuing investigation, Investigator Jack Bilello from DLS interviewed Mr. Grenawalt who stated to Investigator Bilello that he performed investigative work for the applicant during the time of his employment. Investigator Bilello also interviewed Mr. Evangelista who said, according to Investigator Bilello, that Mr. Grenawalt reported to Al Rossy directly, but that his duties were to interview parties involved in automobile accidents, take photographs of accident scenes, interview witnesses and prepare investigative reports, all for one insurance company that was a client of the applicant. Mr. Rossy later clarified during the hearing that Mr. Grenawalt did conduct investigations related to claims adjusting but that he did not conduct accident recreations. He explained that in-house counsel for that insurance company that was their New York client advised them that the tasks Mr. Grenawalt was performing were not tasks that were “licensable by private detective standards”. The applicants then submitted to the tribunal an opinion letter from the New York State Insurance Department which opinion answered the question “Must an insurance company’s field investigator whose duties are limited to ‘taking statements from various parties concerning an accident, taking photographs of accident scenes, obtaining police reports and speaking with potential witnesses’ become licensed as an independent adjuster pursuant to New York Insurance Law Sec. 21108( McKinney 2000 [sic])?”(emphasis added). The answer given in the opinion was that this activity does not require an independent adjuster’s license under New York State Insurance Law because it is viewed as clerical in nature. The applicants testified that, at first, their client and the client’s lawyer advised them that they could rely on this opinion as also applying to the private investigator license law, but then when the client changed its interpretation of the opinion, the applicant sought a private investigator’s license in late November of 2004 (Transcript pgs. 12, 13, 38-42, Appl. Ex. A))
5) Investigator Bilello also testified that during his inquiry, Mr. Evangelista also said that, as of April, 2005, Al Rossy Investigations, Inc. no longer maintained a place of business in New York State, that the license certificate had been removed and taken to New Jersey. The complainant said that it had not been notified of this change. The notice the complainant received was the May 31, 2006 notice of the change of address from 100 Somerston Road in Yorktown Heights to the 17 Battery Park Place address (Transcript pg. 12-16). The applicant admitted that they did not inform DLS within twenty four hours of the change of address, but that there was no move to New Jersey. The license certificate was merely returned to the applicants at their New Jersey office by Mr. Grenawalt after his departure from the company.. The applicants had been in the process of securing another venue for their New York operations that
-3-
they were hoping to reestablish. Finally, they entered into to an arrangement with Command Security for the space located at 17 Battery Park Place in Manhattan for a term commencing February 1, 2006. As mentioned, the corresponding Change Notice was not sent to DLS until May 31, 2006 (State’s Ex. 5, 10, Transcript pg.39) .
6) The applicants testified that it was necessary for them to move from the Command Security office after the term of their sublease ended in January 1, 2007 because Command Security got the wrong impression after the DLS investigator made inquiries about the applicants and removed their license certificate from the wall which caused Command Security to believe the applicants were not a reputable outfit (Transcript pg. 44).
7) The applicants then entered into an arrangement to have space at 330 East 39th Street. They did not submit Change Notice until February 7, 2007.During the hearing, it was conceded that the applicant did not have any personnel at the office in Battery Park Place nor at 330 East 39th Street, nor any records at either place. The applicant admitted that the latest address for their place of business was the residential address of a colleague, Kevin Karey, who is in the same field but who does not work for the applicants. The applicants testified that they have yet to receive any work in New York State since the insurance company client . They are hoping to do so after this matter with the Department of State is resolved (State’s Ex. 9, Transcript pgs. 46- 56).
8) By letter dated March 28, 2007, the applicants were advised by DLS that it proposed to deny their application because the facts and circumstances attendant to the investigation conducted by DLS found that they were in violation of Article 7 of the General Business Law of the State of New York and such findings indicate a lack of good character and trustworthiness required for licensure, and that they could request a hearing, which they did by letter, dated April 19, 2007. Accordingly, notice of hearing was served on the applicants by registered mail delivered at the address on their application on or about June 15, 2007(State's Ex. 1).
OPINION AND CONCLUSIONS OF LAW
I- As the individuals who requested the hearing, the burden is on the applicants to prove, by substantial evidence, that they are qualified to be licensed as a private investigator firm. State Administrative Procedure Act (SAPA), §306(1). Substantial evidence is that which a reasonable mind could accept as supporting a conclusion or ultimate fact. Gray v Adduci, 73 N.Y.2d 741, 536 N.Y.S.2d 40 (1988). "The question...is whether a conclusion or ultimate fact may be extracted reasonably--probatively and logically." City of Utica Board of Water Supply v New York State Health Department, 96 A.D.2d 710, 465 N.Y.S.2d 365, 366 (1983)(citations omitted).
-4-
II- Pursuant to General Business Law, §70[2], no person, firm or company shall engage in the business of private investigator, notwithstanding the fact that other functions and services may also be performed, without having first obtained from the Department of State a license to do so for each office or branch office owned, managed or maintained by such person firm or company for the conduct of such business. The applicants mistakenly, perhaps foolishly, relied on the opinion of their client and its in-house counsel and engaged in unauthorized private investigator activity. They subsequently sought to correct their mistake by applying for and obtaining their initial license to operate a private investigation company. While it was perhaps foolish to rely on such counsel’s opinion, which was apparently based on the New York State Insurance Department opinion relating to insurance adjuster activities and not private investigator activities, such behavior did not amount to sufficient untrustworthiness and incompetency as to deny the renewal of their license.
III- In its complaint, the complainant contends that the applicants submitted a false and misleading renewal application to the Department of State by contending that they maintained a business address at 100 Somerston Road, Yorktown Heights, New York and thereby practiced fraud, deceit and misrepresentation. Pursuant to General Business Law, §79[c], the Department of State shall have the power to deny any applicant that has made a material misstatement in the application for renewal of his license. The Change Notice, filed by the applicants changing the business address from 17 Battery Park Place to 330 East 39th Street in Manhattan was filed February 7, 2007. Two weeks later, however, the renewal application, dated February 25, 2007, lists the applicants’ address in Parsippany, New Jersey as the new place of business. The applicants do, in fact , maintain a business address in Parsippany, but they were continuing to try to establish an office in New York. Even if ill-advised, I find credible Mr. Rossy’s testimony that he submitted his New Jersey office address on the renewal application (not the 100 Somerston Road address as stated in the complainant’s complaint) because he had submitted a Change Notice only a short time earlier and was concerned about receiving mail from DLS in a timely fashion during this period of inquiry. Such ill-advised behavior did not, in this instance, rise to such a level of fraud, deceit and misrepresentation as to deny the applicants renewal of their license.
IV- Pursuant to General Business Law, §77, if a private investigator licensee closes or moves an office or branch office to a location other than which is on record with the Department of State, such licensee must give written notice of within 24 hours with the appropriate address and dates. The applicants admit that they did not comply with this statute on each occasion that they moved.
V- The complainant alleges that the applicants failed to maintain a place of business in New York State in violation of 19 NYCRR 170.05. After the applicants’ initial New York client, the insurance company, the applicants have had no New York clients, and thus, other than maintaining an office space, have had no records or employees in New York, but hope to obtain such clients in the near future. The applicants did not violate that regulation.
-5-.
DETERMINATION
WHEREFORE, IT IS HEREBY DETERMINED THAT the application of Al Rossy Investigators, Inc. and Larry J. Evangelista for a license as a private investigator is granted and immediately after it is granted, pursuant to General Business Law, §79, the applicants, now registrants, shall submit upon receipt of this Determination a corrected Change Notice with the proper new business address and shall pay on or before October 14, 2007, a fine of $900.00 for violations of General Business Law, §§70[2], 79[c], and 77, and should they fail to submit such Change Notice or to pay such fine by that date, their license certificate shall be revoked. They are directed to send a corrected Change of Notice and send a certified check or money order for the fine payable to “Secretary of State” or their license certificate and pocket card, to Kathy Scarcella, Customer Service Unit, Department of State, Division of Licensing Services, 80 South Swan Street, P.O. Box 22001, Albany, New York 12201-2201.
Patrice M. Le Melle
Administrative Law Judge
Dated: September 14, 2007