The following papers were read on the defendant's motion to renew and reargue:
Notice of Motion, Affidavit in Support and Exhibits annexed; Affidavit in
Opposition and Exhibit annexed; Reply Affidavit; Claimants' Memorandum of Law;
Defendant's Memorandum of Law; Claimants' Reply Affidavit; Defendant's Reply
Memorandum. Filed paper: Claim.
By order filed February 22, 2000, the court denied the defendant's pre answer
motion (Motion No. M-60999) to dismiss the claim on the ground that the claim
was served and filed more than six months after its accrual, on the basis that
the motion was not made within the time required for service of an answer.
Court of Claims Act §11(c). At the same time the Court denied the
claimants' cross motion (Cross-Motion No. CM-61107) for permission to file a
late claim, as moot.
On this motion to renew and reargue, the claimants have submitted a copy of a
stipulation by which counsel for the parties agreed to extend the time within
which an answer was to be served. It now appears that the defendant's motion to
dismiss the claim was timely, and were it to be granted, the claimants'
application for permission to file a late claim would not be moot. Although the
claimants oppose the motion for renewal, in the exercise of the Court's
discretion, the motion is granted.
In its opposition to the defendant's motion to dismiss, the claimants did not
dispute that the claim was filed more than six months after its accrual, and, as
noted, cross moved for permission to file a late claim. The defendant's motion
to dismiss the claim as untimely is granted. The claimants' cross motion
seeking permission to file a late claim is no longer moot, and will be
The claimants' application for permission to file a late claim was filed within
the relevant statute of limitation so the Court has jurisdiction to grant relief
under §10(6), and has considered the factors listed therein. See, Bay
Terrace Cooperative Section IV, Inc. v New York State Employees' Retirement
System Policemen's and Firemen's Retirement System, 55 NY2d 979, 981.
The claim seeks indemnification from the State Insurance Fund in connection
with a third party default judgment obtained by the claimant U.W. Marx, Inc.,
against American Wall Systems, Inc., under a policy of workers compensation
insurance American Wall Systems had with the State Insurance Fund. The
underlying claim against U.W. Marx was settled on September 3, 1996, the date on
which the proposed claim accrued.
The only excuse for the delay in filing a claim offered by the claimants is
that the defendant refused, from late 1997 until mid 1998, to respond to
repeated requests for a copy of the pertinent policy of insurance. The delay
was not excusable.
It appears from the submissions of both sides that the defendant was well aware
of the potential claim against it at the time of the settlement of the
underlying matter, was not deprived of an opportunity to investigate, nor has
the delay in filing the claim resulted in substantial prejudice to the
The claimants have not responded to the assertion by the defendant that they
have another available remedy, against the liability insurance carrier for
American Wall Systems.
It is the defendant's contention that the claim does not appear to be
meritorious because the defendant disclaimed coverage under the policy. In
support, a letter dated August 15, 1994, addressed to American Wall Systems
notes that the State Insurance Fund was not notified of the underlying lawsuit
until after a default judgment had been entered against American Wall Systems.
The letter states, inter alia, that "the State Insurance Fund expressly
disclaims any obligation to indemnify your company, and/or provide coverage,
with respect to the subject accident, if the Default Judgment that has already
been entered by the Court is not subsequently vacated." In a second letter,
addressed to American Wall Systems, dated March 5, 1996, written shortly after
the Appellate Division affirmed the default judgment, the defendant disclaimed
The claimants' submission asserts that the first letter was not provided to
them until May 2000, in connection with the defendant's instant motion for
renewal. They argue that the letter does not disclaim coverage with respect to
a theory of common law indemnification.
While disclaimer of coverage may be a defense to the proposed claim herein, for
the purpose of determining the apparent merit of the claim at this stage, the
effectiveness of the defendant's disclaimer, as against the claimants herein, is
clearly at issue. See, e.g., General Accident Insurance Group v Cirucci,
46 NY2d 862; Eagle Insurance Co. v Ortega, 251 AD2d 282; Utica Mutual
Insurance Co. v Gath, 265 AD2d 805; Firemen's Fund Insurance Company of
Newark v Hopkins, 88 NY2d 836; Hartford Insurance Company v County of
Nassau, 46 NY2d 1028. At this stage, the proposed claim appears to be
Having considered the relevant statutory factors, Bay Terrace, supra,
the claimants' application for permission to file a late claim is granted.
The defendant's motion for renewal (Motion No. M-61366) is granted, and upon
renewal the defendant's motion to dismiss the claim (Motion No. M-60999) is
granted. The claimants' cross motion (Cross-Motion CM-61107) seeking permission
to file a late claim is granted.
It is therefore,
ORDERED, that claimants' application for permission to file a late claim
against the State of New York is granted; claimants shall file the proposed
claim in the same form as the claim which has been dismissed, except that it
shall designate the State of New York as defendant, in accordance with the
provisions of Court of Claims Act §§ 11 and 11-a and Rule 206.5 of the
Uniform Rules for the Court of Claims, and serve it, in accordance with the
provisions of Court of Claims Act §11, either personally or by certified
mail return receipt requested, upon the Attorney General, within 45 days of
receipt of a filed copy of this order.