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Aetna Ins. Co. v Capasso

This is a proceeding wherein the plaintiff, NS Auto & Towing, by order to show cause dated 23 April 2007, sought a preliminary injunction to enjoin Defendants, Nassau County and Nassau County Police Department from terminating its towing and impound contract.

On 11 and 12 of June 2007, the issues were set down and witnesses were presented. The plaintiff presented the testimony of Detective SS who submitted an affidavit in opposition to their motion and RS, the mayor of the Incorporated Village of Thomaston. On the other hand, the defendants called NS’s principal, SRB, Sgt. IS of the NCPD Legal Bureau and Sgt. RJ, the administrative supervisor of the Sixth Precinct.

Prior to the hearing, an issue arose with regard to documents subpoenaed by NS. Nassau County argued that the subpoena should be quashed because much of the material sought was necessary for an on-going grand jury investigation of NS. In support, an assistant district attorney appeared to urge that the information sought, if disclosed, would negatively impact the work of the grand jury.

The subpoena was quashed and Nassau County was barred from introducing evidence of any incidents which were the part of the basis of the decision to terminate NS’s towing and impound contract which were not already disclosed in the opposing papers submitted by Nassau County. Nassau County was limited to proof of incidents which occurred prior to the renewal of the Contract in May, 2006.

The court has these findings of facts:

It is noted that on 4 May 2006, NS, a licensed tow operator in a number of local municipalities, and Nassau County entered into a three year towing and impound contract. This Contract was the renewal of an expired towing and impound contract between the parties and the third overall between them. NS has been on a rotational tow list for approximately 30 years.

The Contract allowed the NCPD to call upon NS to remove and impound a vehicle which was involved in an arrest, placed on a detective hold, involved in a felony DWI or felony unlicensed operation of the vehicle, used as a weapon or involved in a crime or which was to be held for further testing, such as brakes or some other investigation. If the vehicle was involved in an accident or became disabled on a road or highway, the vehicle would be towed pursuant to the local municipality’s rotational tow list.

Nassau County is divided into various zones for which towing and impound contracts are given. Pursuant to the terms of the DUI contract with NS, it was permitted to answer calls within its contracted zones as well as adjoining zones.

NCPD sent a letter dated 10 January 2007 terminating the Contract after receiving various complaints against NS. Specifically, the termination letter refers to Contract ¶ 11(a)(ii) and (b)(i) which provide:

“11. Termination. (a) Generally. This Agreement may be terminated … (ii) for “Cause” by the COUNTY immediately upon the receipt by the CONTRACTOR of written notice of termination…
(b) As used in this Agreement the word “Cause” includes:
…(i) a breach of this Agreement…”
Specifically, the termination letter pointed to NS’s breach of ¶ 2(m) of the Contract, which sets forth the impound rates and fixed-sum charges by which the contractor “must abide.”
Further, the letter advised NS could no longer provide towing and impound services for zones 1, 4 and 6.

The termination letter was rejected by NS. A second termination for cause letter was sent by Nassau County on 1 June 2007. It was also rejected. Finally, on 27 June 2007, a third termination letter was sent. This letter terminated the Contract without cause pursuant to ¶ 11(a)(i) of the Contract.

The termination was apparently based upon three instances of overcharging although Det. SS, who submitted an affidavit in opposition to NS’s motion for a preliminary injunction, could not testify from his personal knowledge of any of them. Indeed, the three instances, which predated the 4 May 2006 renewal of the Contract, were not brought to the attention of the Commissioner of Police prior to the renewal. Apparently, the fact that there was an on-going investigation of DWAI NS at that time was not presented to the Commissioner either.

It is to be noted that Sgt. IS, the Commanding Officer of the Legal Bureau of the Nassau County Police Department, acknowledged that the termination of NS was not as a result of the three instances presented during the hearing of this matter.

In addition, NS contends that the instances presented were with regard to impounds in zone 10 which was in the Sixth Precinct and not an area covered by the Contract. However, it appears that zone 10 is adjacent to the zones allowed under the Contract and, therefore, by its terms, was covered. Sgt. IS testified that he directed the termination letter based upon four complaints which originated in the Sixth Precinct and not the Fifth.

The court finds that with regard to the three subject instances, it appears that none of them relate to overcharges and none seemed to affect the general public and the alleged violations were not fully investigated.

To Be Cont…..

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