116-DOS-13
STATE OF NEW YORK
DEPARTMENT OF STATE
OFFICE OF ADMINISTRATIVE HEARINGS
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In the Matter of the Application of
DECISION
NOAH FELICE and SPECTRUM SECURITY
AND INVESTIGATIVE SERVICES, INC.,
For Renewal of a License as a Private Investigator
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The above noted matter came on for hearing before the undersigned, David Treacy, on September 18, 2012 at the office of the Department of State located at 333 East Washington Street, Syracuse, New York, and on October 18, 2012 at the office of the Department of State located at One Commerce Plaza, Albany, New York.
The applicant was represented by Hugh C. Gregg II, Esq., 120 East Washington Street #515, Syracuse, New York.
The Division of Licensing Services (DLS) was represented by Senior Attorney Linda Cleary.
ISSUE
The issue before the tribunal is whether the applicant should be denied the renewal of his private investigator’s license because the facts and circumstances attendant to a DLS disciplinary action, which was pending against him when he submitted his renewal application, indicate a lack of good character and trustworthiness required for licensure.
FINDINGS OF FACT
1) By way of background, Noah Felice (the “applicant”) became licensed as the qualifying officer and president of Spectrum Security and Investigative Services, Inc. (“Spectrum”), a Corporate Private Investigator, on or about March 3, 2006 (State’s Ex. 2).
2) The first disciplinary proceeding commenced by DLS against Noah Felice and Spectrum resulted in a March 11, 2008 Decision by Administrative Law Judge Scott NeJame (“Judge NeJame”). That Decision of this tribunal reprimanded Noah Felice for making a material misstatement on an October 23, 2005 application, in violation of General Business Law §79(1) (300 DOS 08). Judge NeJame determined that the applicant, on his October 23, 2005 application for a license as a private investigator, failed to disclose an April 25, 2002 conviction in Orange County, California on two misdemeanor counts of resisting arrest (State’s Ex. 8).
Judge NeJame also found that the applicant, on a security guard registration application dated May 4, 2005, correctly answered the question regarding previous convictions; he admitted being convicted in 2002 and receiving three years probation. While Judge NeJame noted that the applicant did not fully comply with that conviction question - because he failed to properly provide a written explanation and copies of the requested documentation - Judge NeJame concluded that the applicant’s response did not violate the law; the applicant’s response on the May 4, 2005 application at least put DLS on notice that the applicant had been convicted in 2002 (State’s Ex. 5 - 300 DOS 08).
3) Turning to the matter at hand, by application dated December 1, 2011 and received by the DLS on February 15, 2012, the applicant applied to renew his private investigator’s license as the qualifying officer and president of Spectrum, answering “yes” to question #1, “Since your last application, have you...been convicted of a crime or offense (not minor traffic violation), in this state or elsewhere...? (If yes, enclosed [sic] details.).” Applicant attached a statement indicating in part that: his security guard registration had been denied and was “under a hearing status,” DOS was attempting to revoke his “P.I. license based on false allegations,” and that, under California Penal Code § 1203.4a, he had “no reporting requirements and all charges were dismissed and expunged and according to law, do not require disclosure” (State’s Ex. 42).
4) The DLS, by letter dated April 13, 2012 proposed to deny the applicant’s private investigator’s license renewal application based on the facts and circumstances attendant to a DLS disciplinary action that was pending against him at the time (DLS Disciplinary File #: 2009-1907; State’s Ex. 42) (Decision 85 DOS 13, regarding the disciplinary matter, was issued by the undersigned on March 4, 2013.).
5) Upon DLS’ receipt of applicant’s request for a hearing on the proposed denial of his private investigator’s license application, the present application matter (DLS Application File #: 2012-0965) was added to, and litigated as a part of the ongoing hearing on the disciplinary matter pending at the time (Hearing Transcript of 9/18/12 p.168).
6) A Notice of Hearing together with a Complaint related to the present application matter was served by certified mail on or about June 19, 2012, and delivered to applicant Felice at Spectrum. The hearing originally scheduled for July 5, 2012 was adjourned, continued on September 18, 2012, and finally concluded on October 18, 2012 (State's Ex. 42).
7) The record on the portion of the hearing related to the present application matter, however, was held open until November 7, 2012 in order to allow the applicant additional time to respond to a DLS Motion to Dismiss the private investigator’s renewal application (Hearing Transcript of 10/18/12 p.140).
8) A series of exhibits were offered by the applicant and accepted into evidence during the hearing (and marked as Respondent’s Exhibits C 1 - C 19). The applicant’s stated purpose in offering these exhibits was to illustrate his honesty, trustworthiness and good character. It is noted that, with the exception of a 2007 Fire-Police Course Training Certificate (C 14), a 1993 Certificate of Community Service (C 15), and a 1990 Certificate of Attendance at a Street Gangs Seminar, exhibits marked C 1 - C 19 consist of acknowledgments of applicant’s involvement in community/work programs in the 1980’s, and letters complimenting the applicant’s participation in commendable actions taken while he was employed as a police officer and probation officer in the 1980’s (Hearing Transcript of pp. 15-49).
9) The undersigned concluded on March 4, 2013, in Decision 85 DOS 13, that DLS, by credible testimony of witnesses and presentation of substantial evidence at the hearing, substantiated the following allegations in its disciplinary complaint against Noah Felice and Spectrum Security & Investigative Services, Inc:
a) - Having repeatedly testified before this tribunal of 11/7/07 that he had been unaware of the CA revocation matter, respondent Felice committed perjury and demonstrated incompetence and/or untrustworthiness in violation of §79(1)(d) of the General Business Law (“GBL”).
b) - Respondent Felice’s conviction of 3/2/10 for Offering a False Instrument, considered with the facts and circumstances of same, is a demonstration of incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL.
c) - Respondent Felice’s conviction of 8/19/10 for False Swearing, considered with the facts and circumstances of same, is a demonstration of incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL.
d) - Misleading statements provided by respondent Felice, in correspondence to DLS regarding the status of criminal charges brought against him in Pennsylvania, amount to making material misstatements on an application that was pending at that time, demonstrates incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL, indicates failure to cooperate with a DLS investigation, and evidences intent to deceive the Department (See also State’s Ex’s. 21, 25 & 28).
e) - Failure of respondent Felice to disclose his 1982 criminal conviction demonstrates a lack of good moral character in violation of §89-h(6) of the GBL, and demonstrates incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL.
f) - Failure of respondent Felice to disclose his 1992 criminal conviction demonstrates a lack of good moral character in violation of §89-h(6) of the GBL, and demonstrates incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL.
g) - Failure of respondent Felice to disclose his 2006 pistol license suspension demonstrates a lack of good moral character in violation of §89-h(6) of the GBL, and demonstrates incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL.
h) - Respondent Felice’s indisputable failure to timely document his hiring of two support staff employees constitutes two violations of §81 of the GBL (See also State’s Ex. 27).
i) - Respondent Felice’s failure to cooperate during a DLS interview on 3/10/10 is a violation of §73 of the GBL, further evidences incompetence and/or untrustworthiness in violation of §79(1)(d) of the GBL, and further indicates failure to cooperate with a DLS investigation.
10) The March 4, 2013 Decision of this tribunal regarding the recent disciplinary matter against the present applicants resulted in the revocation of the security guard registration of Noah Felice, UID #10009808388, the revocation of the private investigator licensure of Spectrum Security & Investigative Services, Inc, UID #11000043951, and an order to pay a fine in the amount of $10,000 (85 DOS 13).
OPINION
I- Pursuant to the statutory scheme established by General Business Law Article 7, in order for a corporation to be licensed as a Private Investigator, at least one officer must meet all of the requirements for individual licensure (GBL §72). GBL §81 then sets forth a requirement that the holder of any license be "legally responsible for the good conduct in the business of each and every person...employed." That requirement is further detailed in 19 NYCRR §170.13. Thus, the qualifying officer of a corporate Private Investigator is responsible for the supervision of the activities of that corporation (cf. Department of State v Greenberg, 32 DOS 87, conf'd. Greenberg v Shaffer, 139 AD2d 648, 527 NYS2d 287 (1988)), just as Spectrum - an artificial entity created by law – which can only act through it officers, agents, and employees, is bound by the knowledge acquired by and is responsible for the acts committed by Mr. Felice - the person registered as its qualifying officer - within the actual or apparent scope of his authority.
II- At the close of the hearing on October 18, 2012, this tribunal was reminded by DLS of its pending September 13, 2012 Motion to Dismiss the renewal application. The Motion was based on recently-obtained information purporting to indicate that the corporation (Spectrum) had been dissolved. DLS asserted that such dissolution automatically nullified the license held in the corporate name. DLS argued that since the private investigator license had been nullified, there was nothing to renew and, thus, the renewal application should be dismissed.
This tribunal, having reserved decision on the matter, had the applicant proceed with his presentation to prove that his private investigator renewal application should be granted. At the conclusion of the hearing on October 18, 2012, the undersigned granted applicant’s verbal request for additional time to respond in writing to DLS’ Motion to Dismiss the Renewal Application.
The applicant, by letter dated November 1, 2012 together with Attachments marked A - L, responded to DLS’ Motion to Dismiss. This tribunal also received correspondence from the applicant, dated November 5, 2012, containing a copy of a conditional Letter of Authorization issued by DLS to Spectrum. The conditional Letter authorized the continued operation of Spectrum as a Corporate Private Investigator for up to 6 months from its February 25, 2012 issuance date.
Applicant’s correspondence of November 1, 2012 acknowledged that the New York State Department of Taxation and Finance, on January 25, 2012, by Proclamation/Annulment of Authority, acted to dissolve the corporation known as Spectrum Security and Investigative Services, Inc. However, sufficient documentation provided by the applicant to this tribunal indicated that the Department of Taxation and Finance, pursuant to Tax Law §203-a, subsequently annulled its prior dissolution and transmitted a Certificate indicating same to applicant. Such Certificate was then filed with the Department of State on September 6, 2012 (11/1/12 letter, Attachment I).
In pertinent part, New York State Tax Law §203-a(7) provides that,
“[t]he filing of such certificate of consent shall have the effect of annulling all of the proceedings theretofore taken for the dissolution of such corporation under the provisions of this section and it shall thereupon have such corporate powers, rights, duties and obligations as it had on the date of publication of the proclamation, with the same force and effect as if such proclamation had not been made or published.”
By operation of New York State Tax Law §203-a(7), the nullification of the dissolution was effective retroactively back to the date of dissolution. In consideration of the records submitted by the applicant and the language of the above-cited statutory provision, the Dissolution by Proclamation published by the Department of Taxation and Finance on January 25, 2012, for the purposes of considering the issue at hand, should be treated as if it had never been published. DLS’ Motion to Dismiss, which was based on the proposition that the applicant’s license was not in effect when he submitted his renewal application, is, therefore, denied.
III- The applicant, during the course of the hearing, objected to the admissibility of evidence on the ground of res judicata. These objections were addressed in Decision 85 DOS 13, and are briefly mentioned here as well:
The applicant claimed generally that DLS’ 2007 disciplinary case against him, which since resulted in recent Decision 85 DOS 13, should effectively preclude DLS from submitting or relying on certain evidence it was offering in the present case.
“Under the doctrine of res judicata, a disposition on the merits bars litigation between the same parties or those in privity with them of a cause of action arising out of the same transaction or series of transactions as a cause of action that either was raised or could have been raised in the prior action (citations omitted).” Barbieri v. Bridge Funding, Inc., 5 AD3d 414, 772 NYS2d 610 (2nd Dept. 2004). (With respect to collateral estoppel, “[t]he general rule is that when a determination finally resolves an action, it is not subject to collateral attack if rendered by a court that had jurisdiction of the subject matter and parties.” Ruben v. American and Foreign Insurance Co., 185 AD2d 63, 592 NYS2d 167, 169 (4th Dept. 1992)).
As discussed in Decision 85 DOS 13, the present matter does not involve a consideration or re-consideration of issues that were the subject of the 2007 disciplinary hearing; that disciplinary matter, which resulted in Decision 300 DOS 08, only considered two narrow issues: applicant’s awareness of a 2004 license revocation, and applicant’s responses on two DLS applications submitted in 2005 with respect to his 2002 conviction on two counts of resisting arrest. Those issues, however, and DLS’ evidence at the time related to those issues, are not the subject of the present application matter. The issues related to the present application matter were not litigated in the prior determination.
IV- In the present application matter (unlike the recent disciplinary matter, and resulting Decision 85 DOS 13, where the burden was on the complainant to prove, by substantial evidence, the truth of the charges set forth in the complaint) the burden here is on the applicant to prove, by substantial evidence, that he is honest and of sufficient good character and integrity to be licensed as a private investigator. General Business Law §72(1); State Administrative Procedure Act § 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).