TROY- The city codes official who had a five count indictment against him thrown out after a city judge ruled the state attorney general’s office’s case was factually and legally insufficient is preparing to sue the attorney general’s office and the State Police.

James Lance III's notice of claim accuses the AG and troopers of malicious prosecution. He filed the claim in the state Court of Claims last month through his attorney Marc Pallozzi. Pallozzi said Lance had gone through hell since he was arrested in September 2018. He was accused of improperly signing off on paperwork in a city land sale to Troy's now former engineer.

“He lost friends, professional opportunities and people’s trust," Pallozzi said. "He spent his entire life doing the right things … and the attorney general’s office tried taking that all away without any reasonable basis in fact or law.”

The filing gives Lance a nine-month window in which to file a lawsuit.

Lance was indicted in February along with the former city engineer, Andrew Donovan, as part of a state probe into the 2015 land sale.

Rensselaer County Court Judge Jennifer Sober dismissed the indictments July 29, ruling that the case, brought by the Attorney General’s Public Integrity Unit and led by Assistant Attorney General Bridget Holohan Scally, was factually and legally insufficient to support the charges against the two men.

Sober also concluded that prosecutors had improperly instructed the grand jury as it considered whether to bring certain charges against Lance. “The People ... instructed the Grand Jury to go back and continue to deliberate not once, but twice using an improper charge intended for a trial jury,” Sober wrote.

The grand jury ultimately indicted Donovan on six counts, and Lance on five. Lance was indicted on tampering with public records; offering a false instrument for filing; falsifying business records; criminal facilitation and official misconduct.

Representatives from the state attorney general’s office did not return a request for comment. The State Police declined to comment.

The attorney general's office launched an investigation after Republican members of the City Council filed a complaint following Times Union stories detailing Donovan's purchase and sale of a previously city-owned lot on Cemetery Road, Lansingburgh.

The council approved the $3,500 sale of the undeveloped land to Donovan in June 2015, and the deed went to the city codes department for an inspection. Lance did the inspection of the property at Donovan’s request. As part of the sale, the property had to meet city code within six months of the sale.

Prosecutors contended that Lance and Donovan improperly used their positions to clear the title and bypass a reverter clause designed to ensure that the new owner of a formerly city-controlled lot fulfills pledges to meet city code. Mayor Patrick Madden signed off on the cancellation of the reverter clause on the Cemetery Road property.

Attorneys for Lance and Donovan argued that there had been no violation of the reverter clause because building code requirements apply only to properties that have existing structures on them.

Sober agreed, and said in her decision the theory behind the prosecution’s argument was flawed.

Sober's decision concluded prosecutors gave the grand jury instructions that while “not patently coercive” were “legally incorrect” as they tried to get a stronger indictment.