Department of State Ordered to Reimburse Appraisers’ Legal Bills in One of the Largest Awards of its Kind in NYS History

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MMJ Founders Steven M. Knobel and Jeffrey Jackson again Prevail Against NYS

Messrs. Knobel and Jackson “most definitely prevailed in the underlying proceeding” and “that the State’s position was unjustified.”

NYS Supreme Court Justice Alice Schlesinger, in an opinion (NYS Supreme Court Index 100753/2013) dated September 13, 2016 (State appeal deadline October 28, 2016), awarded Knobel and Jackson, the founders of Mitchell, Maxwell & Jackson, Inc. (MMJ), $115,579.89 in legal fees reimbursement representing one of the largest awards of its kind to any appraiser in New York State history. The award, which included an additional fee upon a fee, was granted in full.

Justice Schlesinger in her well reasoned decision reiterated that there was “a clear and serious violation of the petitioner’s fundamental right to a fair hearing“ and that the reimbursement was justified as Messrs. Knobel and Jackson “most definitely prevailed in the underlying proceeding” and “that the State’s position was unjustified.”

The award stems from an annulled Administrative hearing brought by the State against Knobel and Jackson. In an earlier decision, dated January 31, 2014, Schlesinger chastised the State indicating that there was “a complete paucity of proof that Knobel and Jackson were individually or jointly behind this so-called nefarious scheme and /or reaped large benefits from it.” She later in the decision questioned the “propriety” of the actions of the Secretary of State in their “de novo” review of the matter.

Stuart Shaw, of Shaw & Binder, PC, who handled the Article 78 proceeding against the State, noted that he was, “Delighted to be part of the vindication of the MMJ founders and achieve some justice for them.”

“Although we were sophisticated enough to serve some of the largest financial institutions in the nation, we were at heart a small business,” added Jackson. He went on to say that, “This case is particularly sad since we were forced to lay off many qualified professionals and loyal employees. Much of the business processed in New York is now being handled by Appraisal Management Companies (AMC’S) from other states.”

In the second part of Justice Schlesinger’s seven page decision, the State was ordered to turn over documents that it improperly withheld from a valid Freedom of Information Law (FOIL) request. Justice Schlesinger noted that “the burden is always on the State to show why the exemption is valid. In all of the pages I designated, they have failed to meet this burden.”

Some documents received after the onset of the FOIL request show that the State knew that their own internal investigators had found no violations by Knobel and Jackson. “The State chose not only to ignore their own staff investigator’s report, and not call their own investigator as a witness in the hearing, but also crossed an even broader line by apparently improperly suppressing the investigator’s report at the hearing and then subsequently withholding it from a FOIL request to cover their malfeasance,” noted Knobel. “Not surprising they didn’t appeal, and as of today, this report and other documents haven’t been provided, violating the judge’s order calling for a 20 day production from September 13, 2016,” he added.

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Nicole Noonan
Mitchell, Maxwell & Jackson, Inc.
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