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A business owner who lost $75,000 to a crooked bookkeeper can sue the New York State Department of Labor for failing to properly screen the employee as it had promised to do under a special program, a divided appeals court in Brooklyn ruled Thursday. The 3-2 ruling from the Appellate Division, 2nd Department, in Bryant v. State of New York, 2004-03868, reversed a decision by the Court of Claims that had dismissed the claim. In an effort to lure out-of-state businesses to New York, the department maintained a program to recruit and screen employees for business owners. The plaintiff in this suit, William Bryant, ran a small company in New Jersey that manufactured large refrigeration units. It had been in business since 1978, according to Bryant’s attorney, Christopher D. Watkins of Thornton, Bergstein & Ullrich. When Bryant agreed to set up shop in Orange County, N.Y., in 1999, the Department of Labor said it would recruit, screen and interview prospective employees free of charge. However, it did not tell Bryant that some of those candidates were part of an early-release program from prison and had been referred to the department by their probation officers. One employee, Tina Raymond, was on probation for embezzlement. Bryant did not check her references, assuming the state agency had done so, and hired her as a bookkeeper. She stole $75,000. Bryant sued, but the Court of Claims found that he had failed to establish that the Department of Labor’s negligence was a proximate cause of his loss. It concluded that the agency did not misrepresent the nature or scope of the services it intended to provide and that the loss was caused by Bryant’s failure to check the woman’s background. In reversing, the majority of the 2nd Department said the Department of Labor had failed to exercise due care. “Furthermore, given that contact with the employer listed on Raymond’s resume could have revealed a history of embezzlement, the defendant’s failure to do so constituted a proximate cause of the losses sustained by the claimant,” wrote the majority, which included Justices Robert W. Schmidt, Gloria Goldstein and Steven W. Fisher. The court said any contributory negligence on the part of Bryant would not bar recovery but reduce the amount of damages he could win. In a dissent, two justices said the majority’s decision was “ill-conceived.” “The claimant’s failure to make the inquiries within his authority and ability caused him to hire an embezzler,” Justice Sondra Miller wrote for the dissent. “The Department of Labor did not force the claimant to hire Raymond. It was his decision.” Justice Miller was joined in dissent by Justice Gabriel M. Krausman. The majority, however, said the dissent wanted to affirm the Court of Claims on the basis of a narrow interpretation of the scope of the department’s offer to “screen” employees. While the dissent cited several cases in which a recommendation of employment did not sustain a negligence claim, the majority concluded that the agency did more than recommend candidates (see Jonathan A. v. Board of Educ. of City of New York, 8 AD3d 80; Hayes v. Baker, 232 AD2d 371). “Indeed, it was this affirmative representation to screen the candidates on behalf of the claimant which distinguishes this matter from the cases cited by the dissent,” the majority wrote. Stephen Bergstein of Thornton Bergstein also represented Bryant. Assistant Attorneys General Peter H. Schiff and Michael S. Buskus represented the Department of Labor.

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