IN RE: DARR CONSTRUCTION EQUIPMENT CORP. (2026)

DECISION & JUDGMENT

Proceeding pursuant to CPLR article 78 to review a determination of the Executive Director of the New York State Department of Economic Development, Division of Minority and Women's Business Development, dated November 7, 2022.  The determination adopted in part and rejected in part the findings and recommendations of an Administrative Law Judge dated August 30, 2022, made after a hearing, and affirmed the denial of the petitioner's application for recertification as a woman-owned business enterprise.

ADJUDGED that the determination is confirmed, the petition is denied, and the proceeding is dismissed on the merits, with costs.

The petitioner is a construction company that had been certified as a woman-owned business enterprise (hereinafter WBE) since 1989, with Maureen Cannetti allegedly owning 51% of the petitioner and her brother-in-law, Michael Cannetti, owning 49%.  In 2015, the petitioner applied for recertification as a WBE. By letter dated September 13, 2018, the New York State Department of Economic Development, Division of Minority and Women's Business Development (hereinafter the Division), denied the petitioner's application on the grounds that it failed to satisfy the requirements set forth in 5 NYCRR former 144.2(a)(1), (b)(1), (b)(3), and (c)(2).  Thereafter, the petitioner appealed that determination, and in a determination dated August 30, 2022, an Administrative Law Judge (hereinafter the ALJ), after a hearing, reversed so much of the September 13, 2018 determination as was based on former 5 NYCRR 144.2(c)(2) but otherwise affirmed that determination.  By determination dated November 7, 2022, the Executive Director of the Division (hereinafter the Director) reinstated 5 NYCRR 144.2(c)(2) as a basis of denial but otherwise adopted the ALJ's findings and denied the petitioner's application.  Thereafter, the petitioner commenced this proceeding pursuant to CPLR article 78 to review the Director's determination, alleging, inter alia, that the determination was not supported by substantial evidence.  The Supreme Court transferred the proceeding to this Court pursuant to CPLR 7804(g).

“Substantial evidence is a ‘minimal standard’ requiring ‘less than a preponderance of the evidence’ ” (Matter of Vega [Postmates Inc.-Commissioner of Labor], 35 N.Y.3d 131, 136, 125 N.Y.S.3d 640, 149 N.E.3d 401, quoting Matter of Haug v. State Univ. of N.Y. at Potsdam, 32 N.Y.3d 1044, 1045, 87 N.Y.S.3d 146, 112 N.E.3d 323).  “Substantial evidence consists of ‘such relevant proof as a reasonable mind may accept as adequate to support a conclusion or ultimate fact’ ” (P.C. v. Stony Brook University, 43 N.Y.3d 574, 580, 238 N.Y.S.3d 150, 264 N.E.3d 1281, quoting Matter of Ridge Rd. Fire Dist. v. Schiano, 16 N.Y.3d 494, 499, 922 N.Y.S.2d 249, 947 N.E.2d 140).  “Where substantial evidence exists, the reviewing court may not substitute its judgment for that of the agency, even if the court would have decided the matter differently” (Matter of Haug v. State Univ. of N.Y. at Potsdam, 32 N.Y.3d at 1046, 87 N.Y.S.3d 146, 112 N.E.3d 323).

Here, the Director's determination that Maureen Cannetti's earnings were disproportional to her alleged ownership interest in the petitioner was supported by substantial evidence.  The record as a whole established, and the petitioner did not dispute, that Maureen Cannetti received less than 51% of the petitioner's available distributions (see Executive Law § 310[15][a];  5 NYCRR 144.2[b][3];  Matter of Upstate Elec., LLC v. New York State Dept. of Economic Dev., 179 A.D.3d 1343, 1346, 118 N.Y.S.3d 253;  Matter of C.W. Brown, Inc. v. Canton, 216 A.D.2d 841, 843, 628 N.Y.S.2d 851).

Accordingly we confirm the Director's determination affirming the denial of the petitioner's application for recertification as a WBE.

The petitioner's remaining contentions either need not be reached in light of our determination or are without merit.

LASALLE, P.J., CHAMBERS, WOOTEN and VOUTSINAS, JJ., concur.