New York State Court of Claims

New York State Court of Claims

S & R v. THE STATE OF NEW YORK, #2000-014-104, Claim No. 83396


The claimant sought to recover overpayment of insurance premiums, in connection with workers compensation coverage for a number of individual taxi cab medallion owners under a single policy, because the State Insurance Fund refused to accept applications for separate policies of insurance from the individual taxi cab companies. The claim is dismissed after trial because the claimant did not prove when the separate applications for insurance were submitted.

Case Information

Claimant short name:
S & R
Footnote (claimant name) :

Footnote (defendant name) :
The Court of Claims does not have jurisdiction over the State Insurance Fund as an entity distinct from the State of New York (see, Cardinal v State of New York, 304 NY 400, 404, Matter of James v State of New York, 90 AD2d 342, 343). Thus the Court sua sponte has amended the claim's caption to reflect the proper defendant, and to delete the named State Insurance Fund.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):

Cross-motion number(s):

S. Michael Nadel
Claimant's attorney:
Cobert, Haber & HaberBy: Eugene F. Haber, Esq.
Defendant's attorney:
Eliot Spitzer, Attorney GeneralBy: Ellen S. Mendelson, Assistant Attorney General
Third-party defendant's attorney:

Signature date:
June 9, 2000
New York

Official citation:

Appellate results:

See also (multicaptioned case)


The claimant is a corporation in business as a taxi medallion manager, in which it leases taxis and New York City taxi medallions, as agent for the medallion owners, to individuals who actually operate the vehicles. The claimant manages the operation of the taxi cabs. Among its operating responsibilities, the claimant obtained a policy of Workers' Compensation insurance covering the drivers of the cabs, from the State Insurance Fund, which commenced on October 20, 1988, was renewed on October 20, 1989, and again on October 20, 1990.

The claim seeks to recover $179,524.80, which it is alleged constitutes over payment on premiums from October 20, 1990 to May 5, 1991, when the policy was terminated.

The basis upon which the claimant seeks recovery, as alleged in the claim, is that at some time prior to October 20, 1990, the renewal date of the insurance policy, the claimant sought to obtain individual policies for each taxi medallion corporation, instead of a single policy for all of them. The reason, as testified to at trial by the claimant's principal, was to have the premium rates determined based upon the insurance experience of each taxi cab, rather than having the experience of each of them apply to all of them.

It is the claimant's contention that the State Insurance Fund improperly refused, until May 5, 1991, to accept the individual applications for insurance, and that this delay resulted in the payment of a premium in excess of what would have been paid had the individual applications been accepted at the commencement of the renewal term on October 20, 1990.

In February 1991, the claimant commenced an Article 78 proceeding in Supreme Court, after the State Insurance Fund had notified the claimant that the policy would be terminated on March 3, 1991 if the claimant did not pay an increased premium with respect to all three years of the policy, of which notification was first made in August 1990.[1]
The relief sought by the claimant was to have the policy reinstated at a lower premium (see, Petition, Exhibit A to claimant's Post Trial Brief). The Article 78 proceeding was settled, initially by stipulation entered into on February 28, 1991, under the terms of which the claimant paid the State Insurance Fund $150,000, the policy was reinstated without a lapse in coverage, and negotiations were to take place; and finally on May 5, 1991, when the claimant paid the State Insurance Fund $401,300, the single policy was terminated and new policies of insurance were issued to the individual entities which had theretofore been covered under that policy.[2] This claim was filed thereafter.
At trial the claimant's principal, Mr. Wolkowicki, and an employee, Mr. Korenkov, testified that applications for separate policies of insurance were first submitted in February 1990. Although Mr. Wolkowicki did not testify as to how many applications were submitted, Mr. Korenkov testified that it was 52. In support of their testimony, the claimant offered Exhibit 1, a letter dated February 26, 1990, addressed to the claimant, from Daryl Bowen, Associate Underwriter at the State Insurance Fund, in which it is stated:
"Enclosed are 52 New Business applications and accompanying deposit checks submitted to our office in order to secure separate policies for entities now covered under the above Workers Compensation policy.

"We are unable to consider writing separate policies for these entities due to the large premium due on the above policy.

"We will be pleased to consider your applications at a future date. If and when the balance due on S & R Medallion Corp. has been fully paid you may submit new applications for the entities you wish to be separately insured."
Mr. Wolkowicki and Mr. Korenkov testified that the applications were resubmitted in September 1990. Mr. Wolkowicki said they were not accepted until almost a year later. Mr. Korenkov testified that they were again rejected and returned to the claimant's offices. In the course of his testimony, Mr. Korenkov referred, incorrectly, to Exhibit A as some of the applications which were submitted in September 1990.[3]

Mr. Bowen explained that the date of February 26, 1990 (on Exhibit 1) was an error, and that it must have been 1991. His explanation was credible and supported by other evidence in the record. He testified that he did not hold the title of Associate Underwriter until January 1991, as indicated on a letter informing him of his promotion (Exhibit B), and would not have signed a letter using that title nearly a year earlier. In addition, his letter refers to 52 applications. In February of 1990 the claimant's policy covered 22 separate medallions, and only 3 medallions were added prior to the end of August 1990.
See, Claimant's Exhibit 7. Thus, the claimant was managing far fewer than 52 medallions during the first half of 1990.[4]
In addition, the reference in the letter to a "large premium due" supports Mr. Bowen's testimony that it was written in 1991. The claimant offered into evidence (Exhibit 12) a summary of its account balance for the period in question, which was prepared by the State Insurance Fund. It indicates an outstanding balance of over $300,000 in February 1991, and one of $2,380 in February 1990.
Moreover, if applications had been submitted and rejected in February 1990, the claimant could have submitted separate applications a few weeks later (March 21, 1990), or several months later (May 30, 1990), when, according to Claimant's Exhibit 12, there was no balance due, which have satisfied the objection raised in Mr. Bowen's letter. There was no evidence that this was done.
From the foregoing, the only credible evidence concerning when any applications for separate insurance were submitted, is Mr. Bowen's letter (Exhibit 1) which indicates, in light of his testimony concerning the date it was written, that 52 such applications were returned to the claimant at about the same time that the claimant sought, by way of an Article 78 proceeding, to have the premium reduced on the ground that it was excessive. But the record reflects that at that time there were three times that number of medallions covered by the insurance policy. (
See, footnote 5, supra).
The opinion of the claimant's expert, Mr. Napolitano, added little to the claimant's proof in this regard. While he testified that the defendant should have accepted the separate applications, he also testified that it would depend upon what was in the applications, and that he never saw the applications. In the absence of the applications, therefore, his testimony, as well as other testimony offered by both the claimant and the defendant, concerning the reasons the State Insurance Fund refused to accept separate applications until May 5, 1991, was, in the final analysis, speculative.

Proof that the applications were submitted, and whether and for how long the defendant delayed acting upon them, is a necessary aspect of establishing the claim. The unsubstantiated testimony of Messrs. Wolkowicki and Korenkov, which is contradicted by evidence in the record, does not satisfy the claimant's burden of proof. The claimant did not attempt to meet its burden by offering any documentary evidence from its own business records to substantiate the assertion that applications for separate medallions were submitted, and if so when.
See, e.g., United Consolidated Industries v Mendel's Auto Parts, Inc., 150 AD2d 768; Y. J. D. Restaurant Supply Co., Inc., v Dib, 98 Misc 2d 462.
Thus, the claimant has not met its burden of proving by a preponderance of the credible evidence that separate applications were submitted at any time prior to October 20, 1990, as alleged in the claim.

All motions made at trial and not specifically ruled upon are denied.

In accordance with the foregoing, the claim is dismissed.


June 9, 2000
New York, New York

Judge of the Court of Claims

[1] Much of the claimant's argument concerns the correctness of the premium which was charged for all three years of the insurance policy, apparently as an alternate theory of recovery, which was not alleged in the claim. In any event, the only probative evidence of the correctness or incorrectness of the premium charged is found in Exhibit E (a form bearing the heading "New York Compensation Insurance Rating Board"). The calculations on the form appear to be mathematically correct; the numbers upon which the calculations are based are unrebutted.
[2] As described in Opinion, Claim No. 83396, Motion No. M-47590, Cross Motion No. CM-47688, Weisberg, J. filed March 24, 1994.
[3] Although both counsel at trial also referred to the documents in this exhibit as applications, it is clear that they are not applications for separate coverage. As explained by a defense witness, Mr. Zgombic, Exhibit A consists of 16 requests to add new medallions to the coverage of the existing policy of insurance. Each of the forms is headed "Request for Inclusion of Additional Interest." The first entry on each form (following the date) is the policy number of the claimant's insurance policy. The dates on the forms correspond to the dates each entity was added to the claimant's policy, as reflected in Exhibit 7.
[4] From a review of Exhibit 7, it does not appear that there was any point in time when the policy covered 52 medallions. Immediately prior to the commencement of the renewal period on October 20, 1990, the policy covered 155 medallions. At the end of 1990, and at the time the policy was canceled in May 1991, it covered 152 medallions.