New York State Court of Claims

New York State Court of Claims

WESTCHESTER v. THE STATE OF NEW YORK, #2001-013-507, Claim No. 95194


Synopsis


Westchester County sued New York State in contract for reimbursement of fees it expended to defend the Westchester County Medical Center and two of its employees in a civil rights/medical malpractice claim brought by the estate of a State inmate who died of congestive heart failure after being examined by a Westchester County Medical Center cardiologist. Judge Patti held that the State was obligated to pay for the County's defense costs, but not for the fees the County incurred enforcing its contractual rights against the State. The County was awarded $300,118.21.

Case Information

UID:
2001-013-507
Claimant(s):
THE COUNTY OF WESTCHESTER
Claimant short name:
WESTCHESTER
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
95194
Motion number(s):

Cross-motion number(s):

Judge:
PHILIP J. PATTI
Claimant's attorney:
WILSON, ELSER, MOSKOWITZ, EDELMAN AND DICKER, LLPBY: CHARLES M. FEUER, ESQ.
Defendant's attorney:
HON. ELIOT L. SPITZER
Attorney General of the State of New York
BY: J. GARDNER RYAN, ESQ.Assistant Attorney General
Third-party defendant's attorney:

Signature date:
May 23, 2001
City:
Rochester
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)




Decision



Introduction


Westchester County seeks, in this claim, to recover legal expenses it paid to private counsel to defend a federal civil rights action brought by the administratrix of the Estate of James Smiley. It argues: (1) that it is entitled to recover those fees from the State of New York pursuant to a medical services agreement (the Agreement) between the State and the County dated October 13, 1982; and (2) that the State should be estopped from denying Westchester reimbursement. The State responds: (1) that Westchester has misconstrued the terms of the Agreement; (2) that it is not required to reimburse Westchester because there was no showing that the State was at fault for Mr. Smiley's death, or tortiously or negligently breached the Agreement; and (3) that there should be no estoppel. For the reasons stated below, I find for the County.

Evidence

James Smiley died of congestive heart failure on November 4, 1985. At the time of his death, he was incarcerated in Sing Sing Correctional Facility[1] on a parole violation.

In 1987, his appointed administratrix sued the State of New York and certain of its employees alleging that violations of Smiley's civil rights were responsible for Smiley's death (see, Exhibits A, B and 3). The crux of the Estate's case was that Smiley should not have been returned to prison in 1985 because the parole violation charges were spurious and because Smiley was suffering from potentially fatal heart disease and in need of immediate surgery.

The Estate also alleged that the State violated Smiley's civil rights once it reincarcerated him, by failing to provide adequate medical care (see, Exhibits A, B and 3). It named several state doctors as Defendants. It also named the Westchester County Medical Center (WCMC) and two WCMC's employees, Mr. Bernard Weinstein and Kenneth Lerrick, M.D. (collectively, the County Defendants). Dr. Lerrick allegedly acted with deliberate indifference and committed medical malpractice because he failed to procure a heart operation for Smiley after he evaluated Smiley at WCMC in July and September 1985 (see, Exhibits A, B and 3). Mr. Weinstein, whom the Estate described variously as Administrator of WCMC and Commissioner of Hospitals of Westchester County, allegedly acted with negligence and deliberate indifference because he failed to promulgate rules and regulations and to adequately supervise Smiley's care (see, Exhibits A, B and 3). The Estate apparently also argued that WCMC was vicariously liable for the alleged misconduct of Weinstein and Lerrick.

The Agreement was in effect when WCMC provided medical care for Mr. Smiley. It provided that the County, through the auspices of WCMC, would furnish medical services to State inmates (see, Exhibit 2, Attachments A and E). It also contained the following two paragraphs which represent the basis for this claim:

The State hereby agrees to indemnify and save harmless the County, its officers, employees and agents from and against all liability, loss or damage the County may suffer as a result of any claims, demands, costs, judgments or damage to County property in the care, custody or control of the State, arising directly or indirectly out of the State's negligent or tortious acts or omissions in the performance of this Agreement. The State further agrees to provide defense for and defend any claims or causes of action of any kind or character directly or indirectly arising out of this Agreement at its sole expense and agrees to bear all other costs and expenses relating thereto. The foregoing provisions shall not be construed to cause the State to indemnify the County, its officers, agents or employees from its or their sole negligence.


The County hereby agrees to indemnify and save harmless the State, its officers, employees and agents from and against all liability, loss or damage the State may suffer as a result of any claims, demands, costs, judgments or damage to State property in the care, custody or control of the County, arising directly or indirectly out of the County's negligent or tortious acts or omissions in the performance of this Agreement. The County further agrees to provide defense for and defend any claims or causes of action of any kind or character directly or indirectly arising out of this Agreement at its sole expense and agrees to bear all other costs and expenses relating thereto. The foregoing provisions shall not be construed to cause the County to indemnify the State, its officers, agents or employees from its or their sole negligence.


(Exhibit 2, Attachment A, Article 1, Section 5.) The parties agree that these provisions afforded rights to Westchester that were different in scope than the statutory rights afforded to health care professionals who treat State inmates at the request of the Department of Correctional Services (see, Correction Law §24-a). But, as will be detailed below, they disagree about the scope of those rights and their availability to Claimant here.

From the inception of Smiley in 1987 through October 1990, the County Attorney's Office defended the County Defendants. The County produced no documentary evidence that it tendered the defense of this case to the State during this period or that it asked the State to reimburse it for its defense-related expenses. And no witness came forward to testify that he or she had made a request during this time for the State to defend the County Defendants or to reimburse the County's cost of defending the County Defendants.

Beginning on approximately October 6, 1990, however, the law firm of Wilson, Elser, Moskowitz, Edelman and Dicker (WEMED) began to provide legal services to the County Defendants (see, Exhibit 8D, January 11, 1991 - Itemized Service Bill). It also set out to determine Westchester's rights under the Agreement and to make a demand upon the State for defense and indemnification. WEMED bills reveal that attorney John J. O'Donnell first reviewed the contract documents on October 13, 1990 (id. at 7-8). Four months later, on February 25, 1991, he wrote to Assistant Attorney General Eugene E. Zegarowicz. He advised Mr. Zegarowicz that WEMED was appearing of counsel to the Westchester County Attorney in Smiley and requested copies of the Agreement and any extensions or modifications "at your earliest convenience" (see, Exhibit 6A). It is not clear whether the State responded to this request.

On July 18, 1991, attorney O'Donnell wrote to Assistant Attorney General Charles Davis[2] to follow up on a conversation that the two had apparently had at a Court conference on June 28th. O'Donnell requested copies of two Attorney General opinions regarding the scope of Correction Law §24-a and asked for "the State's current opinion whether Dr. Lerrick, Dr. [sic] Weinstein and Westchester County Medical Center are entitled to defense and indemnification pursuant to Section 24-a of the Corrections [sic] Law" (Exhibit 6B). By letter dated July 31, 1991, Davis provided O'Donnell with copies of the requested opinions and advised O'Donnell that "[t]he State's current opinion on applying section 24-a of the Corrections [sic] Law to defend and indemnify Westchester County Medical Center, and Drs. [sic] Lerrick and Weinstein, is forthcoming" (Exhibit 6C).

For the next three years, WEMED continued to represent the County Defendants. During this time, WEMED attorneys O'Donnell and John M. Flannery continued to ask Mr. Davis and Assistant Attorneys General subsequently involved in the case about defense and indemnification. The record contains ten letters to Davis and other Assistant Attorneys General involved in the case between August 1, 1991 and September 1, 1994 (see, Exhibits 6D-6O). In those letters, WEMED repeatedly asked for the Attorney General's "opinion," "advice," "position," "decision," or "formal opinion" regarding these issues (id.).

None of the letters expressly mentioned the Agreement. One seemed to be limited to the question of statutory defense and indemnification (see, Exhibit 6K). However, the testimony of Mr. Flannery and Mr. Davis establishes that the parties were discussing both contractual and statutory defense and indemnification during this period.[3]

Between August 1991 and September 1994, the Attorney General's office responded only once in writing to WEMED's barrage of letters about defense and indemnification. On May 5, 1994, Davis wrote to Flannery to tell him that he was going to forward Flannery's most recent request to the bureau chief for her attention.

In an opinion and order dated September 20, 1994, Judge Loretta A. Preska of the United States District Court for the Southern District of New York granted summary judgment to Lerrick and Weinstein on the Section 1983 claims, holding that the plaintiff's evidence was insufficient, as a matter of law, to support a finding of deliberate indifference (see, Exhibit 5). Judge Preska declined to exercise supplemental jurisdiction over the Estate's negligence and medical malpractice claims. She entered final judgment on May 14, 1998, after the State settled the claims brought against its own doctors.

In the wake of Judge Preska's decision, Flannery renewed the County's request for reimbursement of attorneys' fees in a letter dated September 27, 1994 (see, Exhibit 6P). Thereafter, he received a phone call from First Deputy Assistant Attorney Golubock. Golubock, Flannery recalled, told him that Davis had not obtained approval to reimburse the County. However, Golubock said that he would look into the issue on the County's behalf. Following up on Flannery's conversation with Golubock, Wayne I. Rabinowitz, a WEMED partner for whom Flannery worked, wrote to Golubock on January 17, 1995, and provided a history of communications and alleged conversations between WEMED and various Assistant Attorneys General regarding defense and indemnification issues (see, Exhibit 6Q).

Mr. Golubock responded in a letter dated February 10, 1995. He reported that the State was considering WEMED's request, but raised a number of issues that might preclude the requested reimbursement (see, Exhibit 6R).

Over the next 15 months, WEMED exchanged letters with both the Attorney General's Office and the Department of Correctional Services in which the State raised, and WEMED sought to resolve, concerns and objections that the State voiced about the County's reimbursement request (see, Exhibits 6S-6W). Finally, in a letter dated May 23, 1996[4], Donald P. Berens, Deputy Attorney General, provided what the parties agree was Defendant's final and definitive response (see, Exhibit 6W). On behalf of the State, Mr. Berens denied the County's request because (1) "[i]t is not reasonable to expect the State to pay for the defense of Lerrick and Weinstein years after the commencement of the action and the defense;" and (2) "It is not required by the contract [because] . . . it appears that whatever argument the County may have that the contract obliges the State to pay for the defense of County and State defendants is matched by an argument that the same contract obliges the County to pay for the defense of State and County Defendants" (see, Exhibit 6W).

Westchester filed and served its claim on November 25, 1996.

The Parties' Positions

The parties offer disparate interpretations of the reciprocal promises to defend found in the Agreement. Westchester asserts that it is entitled to reimbursement under the second sentence of Article I, Section 5 (the defense clause) which states that the State will "provide defense for and defend any claims or causes of action of any kind or character directly or indirectly arising out of this Agreement at its sole expense and agrees to bear all other costs and expenses relating thereto." (see, Exhibit 2, Attachment A, Article I, Section 5). Westchester likens this to the commitment that an insurance carrier makes in a liability insurance policy. Although the quoted sentence does not state what claims the State will defend, Westchester argues that it must be read in context with the sentence that precedes it in which the State agrees to indemnify claims against "the County, its officers, employees and agents."

The State disagrees with the County's interpretation. It maintains that the reciprocal promises oblige each party to diligently defend claims filed against that party "at its sole expense." Construing the promise in the manner proposed by the County, the State urges, would lead to "absurd" results whenever the two entities are sued together. The County would be required to pay for the State's defense and the State would have to underwrite the County's defense. The County acknowledges that this could result under its interpretation of the Agreement, but says this is the only reasonable construction given the phraseology of Section 5 (see, Claimant's Post Trial Memorandum at pp. 13-14). The County also points out that the State's present interpretation of the duty to defend was not one that the State argued when it was negotiating with the County in 1994-1996 (see, e.g., Exhibit 6W). Nor was it a position it took in this case prior to trial.

The parties also differ as to the applicability of the promise to indemnify. Westchester argues that the promise found in the first sentence of Section 5[5] (the indemnity clause) provides an independent basis for reimbursement. In Westchester's view, Judge Preska's summary judgment in favor of the County and the State's subsequent settlement of the claims against it, demonstrate that the claims against the County Defendants arose "directly or indirectly out of the State's negligent or tortious acts or omissions in the performance of [the] Agreement" (see, Exhibit 2, Attachment A, Article I, Section 5).

The State agrees that the reciprocal indemnity provisions afford each party a right to reimbursement of its defense costs in appropriate cases. But the State disagrees with the County's interpretation of when such indemnity may be recovered. The State argues that the promise to indemnify merely confirms that each party has a right to seek common law indemnity if it is held vicariously liable for the negligent or tortious conduct of the other party. The State urges that it is not required to indemnify the County because there was no finding or proof that its neglect or fault occasioned a County loss or liability.


Analysis

When the parties set down their agreement in a clear, complete document, their writing should be interpreted and enforced according to its terms (W.W.W. Associates v Giancontieri, 77 NY2d 157, 162; Matter of Wallace v 600 Partners Co., 86 NY2d 543, 548). Courts may, as a matter of interpretation, carry out the intentions of a contract by transposing, rejecting or supplying words to make the meaning of the contract more clear, but such an approach is appropriate only in those limited circumstances when some absurdity has been identified or the contract would otherwise be rendered unenforceable (Matter of Wallace v 600 Partners Co., supra at 547-548). That a literal construction would yield a result that is novel or unconventional does not render the agreement absurd or trigger the rules governing the construction of a contract, unless the Court first finds an ambiguity (Matter of Wallace v 600 Partners Co., supra at 548).

The question of whether an agreement is ambiguous is resolved by looking within the four corners of the agreement, not to outside sources (Kass v Kass 91 NY2d 554, 566, 568; see also W.W.W. Associates v Giancontieri, 77 NY2d 157, supra). "Courts should examine the entire contract and consider the relation of the parties and the circumstances under which it was executed. Particular words should be considered, not as if isolated from the context, but in the light of the obligation as a whole and the intention of the parties as manifested thereby. Form should not prevail over substance and a sensible meaning of words should be sought." (Kass v Kass, 91 NY2d 554, supra at 566; Atwater & Co. v Panama R.R. Co., 246 NY 519, 524). Where the document makes clear the parties' overall intentions, courts examining isolated provisions should then choose the construction that will carry out the plain purpose and object of the agreement (id. at 567).

1. The State Was Contractually Obligated To Reimburse The County for the Defense of County Agents And Employees


In my decision and order denying summary judgment (M-58341, CM-58626), I found one aspect of the defense clause to be ambiguous. I was then focused on the meaning of the phrases "provide defense for" and "defend." It was not clear, I wrote, whether Section 5 "obliges the State to ‘provide a defense' through the Office of the Attorney General or whether it obliges the State to pay for private attorneys selected by these individuals, or both" (see, May 6, 1999 Decision and Order, p. 9-10).

Whatever the precise meaning of those two phrases might be, it was clear to me at that time, and it is clear to me now, that the defense clause found in the second sentence of Section 5 obliged the State of New York to "provide defense for and defend" the parties mentioned in the first sentence of Section 5, namely "the County, its officers, employees and agents."

Defendant's position -- that the defense clause requires the State to defend itself -- is unreasonable because it ignores the overall organization of Section 5. The unmistakable object of the first and third sentences of the first paragraph of Section 5 is to identify the circumstances under which the County is entitled to indemnification from the State for claims asserted by third parties against the County, its officers, employees or agents. Defendant's construction of the defense clause would sandwich between these two sentences a provision calling upon the State to diligently defend claims asserted by third parties against the State. If this sentence meant what Defendant says it meant, the logical place to include it would have been in the second paragraph of Section 5, between the two sentences dealing with indemnification of claims against the State.

Defendant's construction of the defense clause is also unreasonable when one considers the use of the word "provisions" in the third sentence of Section 5: "[t]he foregoing provisions shall not be construed to cause the State to indemnify the County, its officers, agents or employees from its or their sole negligence" (emphasis added) (Exhibit 2, Attachment A, Article I, Section 5 at p. 6). The use of "provisions" - plural - suggests that the third sentence of the paragraph was intended to limit both the first and second sentences that preceded it.

The need to limit both sentences makes sense only if the second sentence of Section 5 is interpreted in the manner suggested by the County. It is difficult to imagine how a clause obliging the State to defend claims brought against the State by third parties could conceivably be construed to require the State to indemnify the County for claims brought against the County or its officers, agents or employees for their sole negligence. But one can understand the drafters' being concerned that a clause entitling the County to a State defense of "any claims or causes of action of any kind or character directly or indirectly arising out of the Agreement" might conceivably lead to assertions that the County was entitled to indemnification from third party suits even when the claim arose from the County's sole negligence (emphasis added) (see, Exhibit 2, Attachment A, p. 6). I therefore conclude that the defense clause obliges the State to "provide defense for and defend [the County, its officers, employees or agents from and against] any claims or causes of action of any kind or character directly or indirectly arising out of this Agreement."

Presumably, this construction of the reciprocal defense provisions could require the County to defend the State and simultaneously require the State to defend the County. But, a novel or unconventional result, does not render an unambiguous provision absurd or permit the Court to rewrite an improvident agreement under the guise of construction (Matter of Wallace v 600 Partners Co, 86 NY2d, supra at 548).

2. The State's Duty To Defend Extends To The Smiley's Estate's Claims Against County Defendants


Given, the object of the Agreement -- to enable State inmates to get medical care at Westchester County Medical Center -- I conclude that each of the County Defendants are covered by the State's promise to defend. I find also that the claims arose "directly or indirectly" out of the Agreement. The Third Amended Complaint specifically alleges that WCMC and Lerrick provided care to Smiley because of the Agreement (see, Exhibit 3 at para. 6, 7, 34-36, 42, 58-63). It names Weinstein as a party because he signed the Agreement and because he allegedly failed to assure proper performance of its terms (see, Exhibit 3 at para. 7, 38-40, 47, 58-63).

3. The County Defendants Were Entitled to be Represented by Counsel of Their Choosing at State Expense


As discussed above, I found in my motion decision for summary judgment that the phrases "provide defense for" and "defend" were ambiguous because it was not apparent whether the Agreement contemplated defense by the Attorney General or payment of defense expenses by counsel retained by the County Defendants. After hearing the evidence at trial, however, it became clear that the ambiguity was irrelevant because the County Defendants could not be represented by the Attorney General or by private counsel selected by the State.

There was a clear conflict of interest between the County Defendants and the State. It was in the State's interest to avoid any obligation to indemnify by showing that Smiley's death resulted from the "sole negligence" of the County Defendants (see, Exhibit 2, Attachment A, Article I, Section 5). But it was in the County Defendants' interest to argue, as they did in their motion for summary judgment, that they should be absolved from liability because Dr. Lerrick functioned not as Smiley's primary care physician, but as a consultant to Defendant's physicians (see, Exhibit 5 at 28).

Under these circumstances, the County Defendants were entitled to counsel of their own choosing, to be paid for by the State. This would be true whether the primary contractual obligation to "provide defense for and defend" is analogized to statutory indemnification under the Public Officers Law, or whether it is equated with the contractual indemnification ordinarily provided by liability insurance carriers (see, Public Officers Law §17[2][b]; Allstate Insurance Co. v Noorhassan, 158 AD2d 638, 641; Gorman v Pattengell, 145 AD2d 411).

4. The County Provided Timely Notice to the State


Before the State could be legally obligated to pay for the County Defendants' defense, however, the County had to provide timely notice of the pendency of the claim and make a timely request for a defense. Ordinarily, such notice must be provided within the time specified by the controlling statute or contractual provision, or, where no time is specified, within a reasonable time (Reliance Insurance Co of New York v Garsart Building Corp., 131 AD2d 828, lv denied 70 NY2d 610; Thomson v Power Auth. of the State of New York, 217 AD2d 495, 497). "As to what constitutes a reasonable time in which to give notice or furnish proof of loss, no general rule can be stated, since... this question depends upon the facts and circumstances of each particular case" (70A NY Jur 2d, Insurance, §1843; see also, Mighty Midgets v Centennial Insurance Co., 47 NY2d 12, 19-20).

Although the correspondence suggests that WEMED was primarily pursuing statutory defense and indemnification, Mr. Davis's testimony makes clear that the firm asserted a contractual right as well. Mr. Davis, who was generally hazy on dates, recalled the issue arising and being discussed at some point in 1991 or 1992 on Staten Island, and at the deposition of Officer Westby, which, Mr. Davis believed, took place at WEMED's offices on November 1, 1991.

A review of WEMED's contemporaneous billing statements indicates that John O'Donnell attended the deposition of Officer Westby on Staten Island on January 12, 1991. O'Donnell also attended a "meeting/conference w/attorneys in S.I." that same day (see, Exhibit 8 D, April 2, 1991 Statement, p. 2). There is no indication in WEMED's billing statements that a deposition took place on November 1, 1991, or that Mr. Davis was at WEMED's offices for any other reason around that time.

Comparing WEMED's billing statements to the testimony of Davis leads me to conclude that O'Donnell made the first request for contractual reimbursement to Davis on January 12, 1991, when O'Donnell was in Staten Island to attend the deposition of Officer Westby.

Under the circumstances, I conclude that the County made this request to the State within a reasonable time. O'Donnell raised the issue slightly more than three months after WEMED started to review and bill time to the file on October 6, 1990, and within three months after O'Donnell first reviewed Agreement documents on October 13, 1990 (see, Exhibit 8D, January 11, 1991 Statement, pp. 7-8). The date of the request, January 12, 1991, was also one day after WEMED issued its first statements for services to the County for the Smiley case (id.).

It was also reasonable for O'Donnell to make this request to Davis. The County Defendants were also simultaneously pursuing statutory and contractual defense and indemnification from the State. The Public Officers Law makes clear that the Attorney General and his Assistants have primary responsibility for receiving demands for statutory defense and for determining how to respond to them (see generally, Public Officers Law §17). Given the statutory role of the Attorney General, and the ethical constraints upon direct communications between an attorney and the client of another attorney (see, DR 7-104), it was appropriate for O'Donnell to direct the County's request for defense to an Assistant Attorney General. Given the responsibilities that the Attorney General allowed Davis to have for the defense of this case, it was reasonable for O'Donnell and Flannery to address the County's request to Davis.

Of course Smiley had been pending for more than three years when O'Donnell asked for contractual defense and indemnification. But the delay was not unreasonable. Before the County Attorney's Office turned the matter over to WEMED, there was, in fact, little point in demanding a defense. The State was already on notice of the pendency of the lawsuit because it was defending its own employees who were named as parties, and the conflict of interest precluded the State from exercising control over the County Defendants' defense. As long as the County Defendants were defended by the County Attorney's Office, there were no attorneys' fees incurred by the County and no fees to be reimbursed by the State. It was the County's decision to hire WEMED that first made contractual defense an issue.

Once the County demanded a contractual defense in January 1991, the State had a duty to respond to the County's demand and to begin providing a defense within a reasonable time. I find that a reasonable time had elapsed by July 1991 when Mr. O'Donnell had to write to Mr. Davis to renew the County's request for defense and indemnification. By delaying its decision on the County's request for a defense for more than five years, and then ultimately denying the requested defense, the State breached its contractual duty.


5. The County's Claim was Timely


While the State was in breach of its duty in July 1991, the County's claim against the State did not accrue at that time. As I determined in the summary judgment decision, the County's claim for breach of the duty to defend accrued upon final determination of the underlying claim which was, in this case, when Judge Preska entered her final order of dismissal in the Smiley action on May 14, 1998 (Ghaly v First American Title Insurance Co. of New York, 228 AD2d 551, 562; Colpan Realty Corp. v Great American Insurance Co., 83 Misc 2d 730, 732). The County's claim, which was served and filed on November 25, 1996, was therefore timely.


6. The State is Liable for Fees and Expenses the County Paid to WEMED


The County submitted a summary showing billings by WEMED to the County in the amount of $345,821.75 on the Smiley file from the commencement of WEMED's representation in October 1990 through August 1999, a few weeks prior to the commencement of this trial (see, Exhibit 9). As of the September 7, 1999 summary, the County had paid $326,001.22 and had obtained adjustments to reduce the bill by $9,703.59, leaving an outstanding balance of $10,116.94. The outstanding balance represented the amounts that WEMED billed the County for services in its July 19, 1999 and August 19, 1999 statements.

The State has not challenged the reasonableness of the fees relating to the County's defense of the Smiley case. It has, however, questioned whether it should be required to reimburse the County for fees relating to the County's pursuit of this claim. I conclude that the State is not required to reimburse the County for this expense. Under New York law, a party seeking to enforce its rights under a contractual duty to defend is not entitled to recover its attorneys' fees for the successful pursuit of that right (Mighty Midgets v Centennial Insurance Co., 47 NY2d 12, supra at 21-22; Gold v Nationwide Mutual Insurance Co., 273 AD2d 354). Nor can the County recover its fees under the guise of indemnification. To allow the recovery of such fees in this case would violate the rule which interprets general indemnification clauses as limiting fees to those incurred in the defense of the underlying claim (see, Perchinsky v State of New York, 232 AD2d 34, lv denied sub nom. 93 NY2d 812; Hooper Associates v AGS Computers, 74 NY2d 487).

Accordingly, I conclude that the County is entitled to recover the fees that it incurred in the defense of the Smiley case, but not those fees it incurred in the pursuit of the claim. The County is awarded a total of $300,118.16. This represents the adjusted fees incurred by the County between January 1991 and September 1999, reduced by $36,000.00 to represent the fees expended by the County in pursuit of its rights under the Agreement.

Prejudgment interest shall be computed from December 31, 1992, which, I conclude, is a reasonable intermediate date (see, CPLR 5001[b]).

Claimant's Motion No. M-59901 is denied on the ground that it is moot. All other motions not heretofore ruled upon are also denied.

LET JUDGMENT BE ENTERED ACCORDINGLY.



May 23, 2001
Rochester, New York

HON. PHILIP J. PATTI
Judge of the Court of Claims




  1. [1]For a time during its long history, Sing Sing was known as the Ossining Correctional Facility. I have elected to refer to it by its original and present name.
  2. [2]Mr. Davis played a unique role in this matter. He was named as a defendant in Smiley . Although Mr. Davis denied at trial that he was the attorney to whom the State's defense of the Smiley case was assigned, he conceded that he sometimes appeared at depositions and conferences. While he said that these appearances were solely in his own behalf as a party, he was sometimes the only representative of the Attorney General's Office who appeared on behalf of the State at those proceedings. He also had supervisory authority and was more senior than other Assistant Attorneys General involved in the case.
  3. [3]Flannery and the Assistant Attorneys General who testified at trial strongly disagree about what the Assistant Attorneys General said during this period in response to the requests for contractual and statutory defense and indemnification. Flannery maintains that the Assistants promised him on numerous occasions that the State would indemnify the County Defendants and pay WEMED's legal fees. The Assistants flatly deny making such representations. For reasons that will be made clearer below, I do not have to resolve these conflicting accounts.
  4. [4]In its summary judgment papers, the County averred that WEMED received this letter on May 26, 1996 (see, Rabinowitz Affidavit dated December 9, 1998, ¶41).
  5. [5]The State hereby agreed to indemnify and save harmless the County, its officers, employees and agents from and against all liability, loss or damage the County may suffer as a result of any claims, demands, costs, judgments or damage to County property in the care, custody or control of the State, arising directly or indirectly out of the State's negligent or tortious acts or omissions in the performance of this agreement.