New York State Court of Claims

New York State Court of Claims

McCLELLAN v. New York, #2000-015-029, Claim No. None, Motion No. M-61109


Synopsis


The Court of Claims does not have subject matter jurisdiction of a claim challenging the Comptroller's denial of a death benefit based upon a breach of contract theory.

Case Information

UID:
2000-015-029
Claimant(s):
HAROLD McLELLAN and BARBARA McLELLAN
Claimant short name:
McCLELLAN
Footnote (claimant name) :

Defendant(s):
THE STATE OF NEW YORK
Footnote (defendant name) :
The caption has been amended sua sponte to reflect the State of New York as the only properly named defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
None
Motion number(s):
M-61109
Cross-motion number(s):

Judge:
FRANCIS T. COLLINS
Claimant's attorney:
Michael J. Samol, Esquire
Defendant's attorney:
Honorable Eliot Spitzer, Attorney General
By: Kathleen M. Resnick, EsquireAssistant Attorney General
Third-party defendant's attorney:

Signature date:
April 27, 2000
City:
Saratoga Springs
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

Movants' application for an order pursuant to Court of Claims Act § 10(6) permitting the service and filing of a late claim is denied. On January 30, 1997 Robert McLellan, then a Buffalo police officer, executed an application to become a member of the New York State and Local Retirement System in which he designated his mother, Barbara McLellan, and his brother, Harold McLellan, as his beneficiaries. Robert McLellan was struck and killed by an automobile on February 25, 1998 while in pursuit of criminal suspects in the course of his employment. Harold McLellan and Barbara McLellan applied to the Retirement System for payment of the decedent's death benefit and on June 30, 1998 an employee of the Retirement System wrote to Mrs. McLellan as follows:
Dear Mrs. McLellan:

I have been asked to respond to your June 10, 1998 letter to Governor Pataki regarding your son Robert's death.

First, let me express my sympathy for Robert's untimely death. As a member of the New York State and Local Police and Fire Retirement System, he was covered by both an ordinary death benefit and an accidental death benefit. A brief description of these two benefits follows (only one benefit is payable):

Ordinary death benefit
: A lump sum payment of three times the member's earnings in the twelve months immediately preceding death. This benefit is paid to the beneficiaries designated by the member. You and your son Harold are his designated beneficiaries if the ordinary death benefit is payable.

or

Accidental death benefit
: An annual pension of 50% of the member's final average salary reduced by any benefit payable from Workers' Compensation. In addition, a special accidental death benefit that, when added to the accidental death benefit and Workers' Compensation payments, makes the total annual benefit payable equal to the member's final salary.

The accidental death benefit is mandated by Law if the member dies as the result of an accident sustained in the performance of his duties through no wilful negligence and any of the following beneficiaries exist in the order listed:
1. The member's widow

2. To minor children until the youngest reaches age 18 or if a student, until age 23.

3. A dependent parent

We understand that Robert had children and are in the process of verifying that. If he is survived by minor children by Law, the Retirement System must pursue the accidental death benefit.
On July 5, 1999, movant's counsel wrote to the Comptroller concerning Barbara McLellan's eligibility to receive a death benefit and that letter was responded to by correspondence dated July 20, 1999 from the Director of Retirement Services stating as follows:
Dear Mr. Samol:

This is in reply to your letter of July 5, 1999 addressed to Comptroller McCall in regards to Barbara McLellan's eligibility to receive Officer McLellan's death benefit.

The Federal Social Security Law is not the basis for determining benefits payable from this Retirement System. Section 361 of the New York State Retirement and Social Security Law provides that an accidental death benefit shall be payable on account of a member whose death was the natural and proximate result of an accident sustained while a member and while in the performance of duty.

Section 361 provides that this pension benefit shall be paid to the member's widow or widower, or if there is no such widow or widower, his or her children under age twenty-three. Such pension shall continue until every such child has attained age eighteen, or, if a student, age twenty-three. If there is no widow or widower or child under age eighteen, or, if a student, under age twenty-three, to survive the member then this benefit shall be payable to his or her dependent father or dependent mother.

The beneficiary designation form on which Officer McLellan named his mother as one of his beneficiaries applies only to Ordinary Death benefits. The Accidental Death benefit provides that payment of this benefit shall be payable to certain specific classes of beneficiaries.
The Comptroller continued to investigate whether Officer McLellan had children eligible to receive the accidental death benefit provided by section 361 of the Retirement and Social Security Law and no determination or payment had been made at the time of the return of this motion. By this motion, movants contend that they have a viable breach of contract cause of action against the State of New York based upon the Comptroller's failure to pay them an ordinary death benefit pursuant to section 360 of the Retirement and Social Security Law as the designated beneficiaries of Officer McLellan. The Attorney General opposes the motion arguing that this Court does not have subject matter jurisdiction of an application for payment of a death benefit pursuant to article 8 of the Retirement and Social Security Law and that, in any event, the proposed claim is not yet ripe as the Comptroller has not made a final determination.

Subdivision 6 of section 10 of the Court of Claims Act permits this Court, if the applicable Statute of Limitations set forth in article 2 of the CPLR has not expired, to allow the filing of a late claim upon consideration of the following factors: "whether the delay in filing the claim was excusable; whether the state had notice of the essential facts constituting the claim; whether the state had an opportunity to investigate the circumstances underlying the claim; whether the claim appears to be meritorious; whether the failure to file or serve upon the attorney general a timely claim or to serve upon the attorney general a notice of intention resulted in substantial prejudice to the state; and, whether the claimant has any other available remedy".

This Court has broad discretion in deciding a motion to permit the late filing of a claim (Ledet v State of New York, 207 AD2d 965) and the statutory factors are not exhaustive or one factor controlling (Matter of Gavigan v State of New York, 176 AD2d 1117. The most important factor is whether the potential claim has merit as it would be a futile exercise to permit litigation of a clearly baseless lawsuit (Savino v State of New York, 199 AD2d 254).

In the first instance, it is clear that it is reversible error for this Court to grant a late claim motion in the absence of subject matter jurisdiction (Taylor v State of New York, 160 Misc 2d 120, 122, 123). As a consequence, the issue is whether the Court of Claims possesses subject matter jurisdiction to entertain a claim of the nature presented herein.

Retirement and Social Security Law § 360 creates the ordinary death benefit available to a member of the Retirement System and through subdivision (c) specifically grants to the Retirement System member the right to designate the person or entity to whom the ordinary death benefit will be payable. Paragraph (3) of subdivision (a) of section 360 provides that, "[a]n ordinary death benefit shall not be payable in any case in which an accidental death benefit is payable", with certain exceptions not applicable here. Section 361 of the Retirement and Social Security Law provides an accidental death benefit under certain circumstances for eligible members of the Policemen's and Firemen's Retirement System and specifically enumerates the beneficiaries of the accidental death benefit and their priority of taking. Both sections 360 and 361 are encompassed within article 8 of the Retirement and Social Security Law. Subdivision (b) of section 374 of the Retirement and Social Security Law is also a part of article 8 and provides that, "[t]he comptroller shall have exclusive authority to determine all applications for any form of retirement or benefits provided for in this article". Subdivision (d) of section 374 provides that any final determination of the Comptroller concerning a benefit provided for in article 8 of the Retirement and Social Security Law "shall be subject to review only as provided in article seventy-eight of the Civil Practice Law and Rules". Thus, the Legislature has granted the Comptroller exclusive authority to determine any application for such a benefit and provides that the exclusive means of judicial review shall be pursuant to article 78 of the CPLR.

The Comptroller's exclusive authority to determine applications for death benefits has consistently been recognized by the Third Department (Matter of Sorli v Levitt, 77 AD2d 773; Matter of McDonald v Levitt, 67 AD2d 778). Furthermore, the Third Department has held that the Comptroller may not depart from the statutory death benefit payment system established by the Legislature (Matter of Jacobelli v Regan, 131 AD2d 166), nor may the member on whose behalf the death benefit is payable (Couture v Regan, 110 AD2d 360). Thus, the Comptroller is vested with the exclusive authority to determine who shall receive Officer McLellan's death benefit and the sole means of judicial review of that determination is in Supreme Court by way of an article 78 proceeding. Furthermore, even if the Comptroller and Officer McLellan had wished to enter into a contract altering the death benefit scheme set up by the Legislature they were prohibited from doing so. Therefore, movant's attempt to take this dispute outside the provisions of section 374 of the Retirement and Social Security Law by terming it a breach of contract action must fail as a similar argument was rejected in Kutas v State of New York, 135 Misc 2d 1044, affd 146 AD2d 542. In Kutas, Judge Rossetti specifically held that the Court of Claims lacked subject matter jurisdiction to entertain a breach of contract action based upon the denial of a right created under the Retirement and Social Security Law stating, at page 1048, as follows:
More to the point, the controversy here clearly involves claimant's rights under the Retirement and Social Security Law. As noted, these statutory provisions make up the terms of claimant's retirement contract with the State and just as they are constitutionally binding on the State, they should also be at least legally binding on claimant. Two of these provisions essentially bar the subject claim by themselves. They require that the Comptroller 'have exclusive authority to determine all applications for any form of retirement or benefit' and '[s]uch final determination shall be subject to review only as provided in article seventy-eight of the civil practice law and rules.' (Retirement and Social Security Law § 74 [b], [d]; emphasis added.) It is these provisions that form the basis for defendant's claim of lack of subject matter jurisdiction in this court. It would appear claimant's independent contract remedy is an attempt to circumvent the statutory and hence contractual requirement that disputes involving retirement benefits be judicially determined through the procedural vehicle of an article 78 proceeding. We discern no intendment in this statute or in said constitutional provision to create a duplicate contractual remedy in this court. (Cf., McKinney's Cons Laws of NY, Book 1, Statutes § § 141-144.)
The Legislature has by statute prescribed that the Comptroller shall have exclusive jurisdiction to determine and resolve applications for "any form of retirement or benefit" provided by way of article 8 of the Retirement and Social Security Law (Retirement and Social Security Law § 374 (b)). In the instant matter, the Comptroller has not yet rendered a formal determination with regard to the application for ordinary death benefits submitted by the movants. Once such a determination is made, the statute provides an applicant the opportunity to demand a hearing and redetermination of the application. A final determination rendered following the hearing is "subject to review only as provided in article seventy-eight of the Civil Practice Law and Rules" (Retirement and Social Security Law § 374(d)). In essence, the movants seek to file a claim involving an issue of entitlement to death benefits, an area which the Legislature has explicitly reserved to the Comptroller and to Supreme Court through an article 78 proceeding. The motion for permission to file a late claim is denied as the Court lacks subject jurisdiction.


April 27, 2000
Saratoga Springs, New York

HON. FRANCIS T. COLLINS
Judge of the Court of Claims


The Court considered the following papers:
  1. Notice of motion dated January 20, 2000;
  2. Affidavit of Barbara McLellan sworn to January 20, 2000;
  3. Affidavit of Michael J. Samol sworn to January 20, 2000;
  4. Proposed claim verified January 20, 2000;
  5. Affirmation in opposition of Kathleen M. Resnick dated February 23, 2000;
  6. Affidavit in opposition of Robert E. Coughlin sworn to February 22, 2000;
  7. Affirmation of Michael J. Samol received on March 15, 2000 and entitled "Memorandum of Law", with exhibits;
  8. Sur-reply affirmation of Kathleen M. Resnick dated March 15, 2000.