New York State Court of Claims

New York State Court of Claims

TRAVELERS v. THE STATE OF NEW YORK, #2000-001-059, Claim No. None, Motion No. M-62158


Synopsis


Claimants' motion seeking permission to file a late claim is denied.

Case Information

UID:
2000-001-059
Claimant(s):
TRAVELERS PROPERTY CASUALTY, as Subrogee of 41 STATE STREET, LLC, and McCLUNG, PETERS & SIMON
Claimant short name:
TRAVELERS
Footnote (claimant name) :

Defendant(s):
STATE OF NEW YORK and DEPARTMENT OF STATE
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
None
Motion number(s):
M-62158
Cross-motion number(s):

Judge:
Susan Phillips Read
Claimant's attorney:
Law Offices of Steven I. HilsenrathBy: Leslie A. Lombard, Esq., Of Counsel
Defendant's attorney:
Hon. Eliot Spitzer, NYS Attorney GeneralBy: Frederick H. McGown, III, Esq., Assistant Attorney General, Of Counsel
Third-party defendant's attorney:

Signature date:
October 27, 2000
City:
Albany
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

The following papers were read and considered on claimants' motion seeking permission to file a late claim pursuant to Court of Claims Act § 10 (6): Notice of Motion to File a Late Claim, dated August 4 and filed August 7, 2000; Affirmation in Support of Leslie A. Lombard, Esq., dated August 4 and filed August 7, 2000, with annexed Exhibits A-C; Affidavit in Support of Charlene M. Tinney, sworn to July 18 and filed August 7, 2000; Affirmation in Opposition of Frederick H. McGown III, Esq., AAG, dated September 5 and filed September 5, 2000, with annexed Exhibits A-B. Pursuant to a policy of insurance, claimant Travelers Property Casualty ("claimant") reimbursed its insured, the building owner and manager of 41 State Street, LLC, and a tenant of the building, McClung, Peters & Simon, for property damage caused by flooding on January 4, 1999 (Affidavit in Support of Charlene M. Tinney, sworn to July 18 and filed August 7, 2000 ["Tinney Aff."], ¶¶ 3-6). The flooding occurred because an employee of defendant State of New York ("defendant" or "the State"), which also leased space in the building, left a sink faucet open during a temporary interruption of water service. The sink overflowed when service was restored, causing water damage to the building's eighth and seventh floors (Tinney Aff., ¶¶ 3-4; Exh. A).

Claimant, as subrogee of 41 State Street, LLC and McClung, Peters & Simon, now seeks permission to file this late claim against defendant (Affirmation in Support of Leslie A. Lombard, Esq., dated August 4 and filed August 7, 2000, with annexed Exhibits A-C ["Lombard Aff."], Exh. C [Proposed Claim]). Claimant attributes its delay in filing a notice of intention or claim to its status as an insurer whose claim arises in subrogation: until an investigation was completed and the case referred to its attorney, claimant was unaware of its failure to comply with the notice requirements of the Court of Claims Act (Lombard Aff., ¶ 5; Tinney Aff., ¶ 7). Defendant opposes claimant's motion, arguing that the proposed claim fails to state a cause of action because defendant is an additional insured under the policy giving rise to claimant's subrogation rights (Affirmation in Opposition of Frederick H. McGown III, Esq., AAG, dated September 5 and filed September 5, 2000, with annexed Exhibits A-B ["McGown Aff."]).

This Court in its discretion may authorize the filing of a late claim "at any time before an action asserting a like claim against a citizen of the state would be barred under the provisions of article two of the civil practice law and rules" (Court of Claims Act § 10 [6]). In order to determine whether to grant an application for permission to file a late claim, the Court must consider, among any other relevant factors, the six statutory factors set forth in Court of Claims Act § 10 (6): (1) whether the delay in filing the claim was excusable; (2) whether the State had notice of the essential facts constituting the claim; (3) whether the State had an opportunity to investigate the circumstances underlying the claim; (4) whether the claim appears to be meritorious; (5) whether the failure to file or serve a timely claim or serve a timely notice of intention resulted in substantial prejudice to the State; and (6) whether the claimant has another available remedy. The Court in the exercise of its discretion balances these factors.

While the presence or absence of any one factor is generally not dispositive (see, Bay Terrace Coop. Section IV v New York State Employees' Retirement Sys. Policemen's and Firemen's Retirement Sys., 55 NY2d 979), the most critical factor is the apparent merit of the proposed claim (see, Plate v State of New York, 92 Misc 2d 1033). A claimant need only establish that the proposed claim is not patently groundless, frivolous, or legally defective and that there is reasonable cause to believe that a valid cause of action exists (see, Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1). If a claimant cannot meet this low threshold and the claim is patently without merit, it would be meaningless and futile for the Court to permit its filing, even if all the other factors enumerated in Court of Claims Act § 10 (6) weighed in favor of claimant's request (see, Savino v State of New York, 199 AD2d 254; Prusack v State of New York, 117 AD2d 729). Here, defendant correctly argues that the antisubrogation rule bars any potential subrogation action by claimant against the State (McGown Aff.).

Generally, the equitable doctrine of subrogation "entitles an insurer to ‘stand in the shoes' of its insured to seek indemnification from third parties whose wrongdoing has caused a loss for which the insurer is bound to reimburse" (North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281, 294); however, the antisubrogation rule bars such an action against a party who is an insured for a claim arising from the very risk for which the insured was covered under the policy (see, id., at 294-295; Pennsylvania Gen. Ins. v Austin Powder Co., 68 NY2d 465). Sound public policy considerations inform the antisubrogation rule; chiefly, to allow an insurer to reach beyond third parties to its own insured, "would permit an insurer, in effect, ‘to pass the incidence of loss * * * from itself to its own insured and thus avoid the coverage which its insured purchased' " (Pennsylvania Gen. Ins. v Austin Powder Co., supra, at 471, quoting Home Ins. Co. v Pinski Bros., 160 Mont. 219, 226; accord, Jones Lang Wootton USA v LeBoeuf, Lamb, Greene & MacRae, 243 AD2d 168, 180-181, lv dismissed 92 NY2d 962).[*] In addition, the antisubrogation rule vitiates the otherwise present risk that a conflict of interest "may affect the insurer's incentive to provide a vigorous defense for its insured" (North Star Reins. Corp. v Continental Ins. Co., supra, at 295; see also, Brown & Goode, Conflicts of Interest in Subrogation Claims, 22 Tort & Ins. L. J. 16, 29-30 [Fall 1986]).

Defendant's documentary exhibits establish that the lease governing the State's tenancy in the building at 41 State Street required the landlord to maintain a general liability insurance policy naming the State as an additional insured (McGown Aff., Exh. A, ¶ 35a). The landlord, following the dictates of the lease agreement, purchased just such a policy from claimant, which was effective during the flood and named defendant (Office of General Services) as an additional insured (McGown Aff., Exh. B). Under these circumstances, claimant's potential subrogation action would not survive a CPLR 3211 motion to dismiss; therefore, the Court denies claimant's motion for permission to file a late claim pursuant to Court of Claims Act § 10 (6) (see, Savino v State of New York, 199 AD2d 254, supra; Rosenhack v State of New York, 112 Misc 2d 967, 969).

October 27, 2000
Albany, New York

HON. SUSAN PHILLIPS READ
Judge of the Court of Claims




[*]
Although an "additional insured" does not pay the insurer directly, an insured is likely to pass along its insurance costs to the additional insured in the form of, for example, increased rent (see, e.g., Pennsylvania Gen. Ins. v Austin Powder Co., 68 NY2d 465, 471).