Court backs Gary Melius rival, reverses lower-court decision

A New York State appeals court has reversed a lower-court decision that awarded Oheka Castle owner Gary Melius control of a company that makes ignition-locking devices designed to curb drunken driving.

The appellate division ruled Dec. 28 that state Supreme Court Justice Thomas Whelan erred in failing to hold a jury trial requested by Interceptor Ignition Interlocks founder John Ruocco and should not have granted a summary judgment in favor of Melius.

In that Dec. 24, 2013, decision, Whelan stripped Ruocco and his sister, Rosemarie Sylvester, of most of their ownership shares and granted the bulk of the shares to Melius’ company KNET Inc.

“The appellate court found that there were a series of errors by the court below,” said Elliott S. Martin, the attorney who brought the appeal on behalf of Sylvester. “It is a pretty complete vindication of the position that we had on appeal.”

Melius’ law firm, Certilman, Balin, Adler and Hyman, did not respond to requests for comment.

Martin said the ruling restored control of the company to Ruocco, who founded it in 2000. Ruocco said he needs to decide what his next steps will be.

Ruocco designed and patented the ignition interlock device — which tests a driver’s blood alcohol content before allowing the vehicle to start — after a relative was killed by a drunken driver. In 2010, he signed an agreement with Melius that would give him shares in the company if he helped get laws passed or changed that would aid Interceptor in winning public contracts.

Both Nassau and Suffolk counties tailored policies in a way that effectively helped Interceptor secure business, and the company’s market share rose.

Later, the men had a falling out over control of the company and took their dispute to court. When Whelan ruled in Melius’ favor, he did not disclose his close ties to state Independence Party leader Frank MacKay, whom Melius attempted to place on the board of Interceptor. MacKay is Whelan’s longtime political benefactor, and Whelan is godfather of MacKay’s daughter.

After Newsday reported those ties, Whelan recused himself from the case.

Since Whelan’s ruling, the company has played a role in other high-profile legal cases on Long Island.

Former Suffolk Conservative leader Edward Walsh attended a company shareholders’ meeting in Shirley at a time when he was supposed to be at his job as a lieutenant at the Suffolk County Jail. That meeting became evidence when federal investigators successfully prosecuted Walsh for earning more than $200,000 in pay for activities outside the jail. He is awaiting sentencing.

Three days after the meeting, Melius was shot in the head as he was getting into his car. Melius survived, and the shooting remains unsolved. A judge sealed the business dispute between Melius and Ruocco, saying he did so “to avoid impairing the integrity” of the shooting investigation. The case was later unsealed, and Ruocco’s attorney said he had nothing to do with the botched murder attempt.