New York State Court of Claims

New York State Court of Claims

RAPID DEMOLITION v. THE STATE OF NEW YORK, #2003-015-367, Claim No. 105069, Motion No. M-67362


Court denied State's motion to dismiss a contract claim on grounds that claimant's assignee failed to seek substitution pursuant to Court of Claims Act § 15. Here assignment occurred prior to commencement of the action. Court did grant alternative relief by allowing defendant to amend its answer to assert defense of payment to claimant's assignee.

Case Information

Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):
Cross-motion number(s):

Claimant’s attorney:
Georgoulis & Associates, PLLCBy: Jennifer A. Redmond, Esquire
Defendant’s attorney:
Honorable Eliot Spitzer, Attorney General
By: Eidin Beirne, EsquireAssistant Attorney General
Third-party defendant’s attorney:

Signature date:
December 2, 2003
Saratoga Springs

Official citation:

Appellate results:

See also (multicaptioned case)


The defendant's motion to dismiss the claim pursuant to CPLR 3212 [sic] due to the failure to substitute Lumbermens Mutual Casualty Company (Lumbermens) as assignee of claimant pursuant to Court of Claims Act § 15 is denied. Defendant's alternative relief seeking an order granting leave to amend the defendant's answer to assert a defense of payment to claimant's assignee is granted. By decision and order dated August 14, 2003 (filed August 26, 2003) this Court in part granted defendant's prior motion for partial summary judgment by dismissing the fifth cause of action set forth in the claim. The court denied that portion of the motion which sought dismissal of the first, third and fourth causes of action. The Court also denied claimant's cross-motion to strike the defendant's second affirmative defense (i.e., failure to comply with the subject contract's dispute resolution and disputed work provisions) and likewise denied claimant's motion for partial summary judgment on the first, second and fourth causes of action.

The claim, which seeks damages arising out of a contract between Rapid Demolition Company, Inc. (Rapid) and the New York State Department of Transportation (DOT) in connection with a project known as the "Removal of the Wantagh State Parkway Bridge over Sloop Channel and Bikeway Resurfacing (Contract No. D 257962) in the Town of Hempstead, Nassau County, New York", was described in detail in the prior decision and order and such detail need not be repeated here. It is sufficient to say that Rapid entered into a contract with DOT and later executed an assignment of all claims arising out of the contract to Lumbermens. The assignment was filed with the New York State Comptroller (Comptroller) on April 2, 2001 and thereafter an order on contract related to the relocation of a crane was submitted and approved for payment by DOT. The comptroller allegedly made payments to Lumbermens in the amount of $105,318.20 on March 22, 2002, $7,260.00 on May 7, 2002 and $45,000.00 on April 16, 2003 pursuant to the filed assignment and in full or partial satisfaction of the order on contract related to the crane's removal[1]. The claim was filed on October 16, 2001 and served upon the Attorney General on that same day.

By the instant motion defendant seeks an order of the Court dismissing the claim upon the failure of claimant's surety to comply with the provisions of Court of Claims Act § 15 relating to the substitution of certain parties. In the alternative, defendant requests leave to amend its answer to assert a defense of payment with regard to the claim's second and third causes of action for damages arising from DOT's forced removal of the crane from the project site.

Court of Claims Act § 15 provides:
§ 15. Substitution of assignee or legal representative of claimant.

In the event of the death of the claimant or of one of the claimants named in a claim of any nature against the state, heretofore or hereafter filed in the court of claims, and also in the event that by assignment or by operation of law, some person other than the claimant named in the claim has succeeded to the interest of one of the claimants named in such a claim, it shall be the duty of the personal representative of said claimant or of the person who succeeded claimant in interest to said claim or any interest therein within six months after he becomes invested with the title to said claim or any interest therein, to secure from the court of claims and serve upon the attorney-general an order substituting him as party to said claim instead of the party named in said claim, to whose right, title and interest he has succeeded, and in the event that he fails so to do, the court of claims on motion of the attorney-general, on such notice as the court may require, to all parties who have appeared in said action or proceeding or to the assignee or successor of the claimant may dismiss said claim.

First, Court of Claims Act § 15 specifically provides that a motion to dismiss a claim pursuant thereto shall be made "on such notice as the court may require, to all parties who have appeared in said action or proceeding or to the assignee or successor of the claimant." The Court was not consulted concerning the issue of notice and there is no proof that the motion papers were served upon claimant's assignee. Even were the Court to determine that section 15 applied on the facts of this case the failure to properly serve the motion would provide ample basis for denying the motion (see, Cawthorn v State of New York, 205 Misc 234). Secondly, it is well settled that New York courts disfavor multiple motions for summary judgment in the absence of newly discovered evidence (see, LaFreniere v Capital Dist. Transp. Auth., 105 AD2d 517; Hughes v City of Niagara Falls, 245 AD2d 1118) and the defendant's motion may be denied on that basis alone.

Defendant alleges on this motion that Lumbermens' failure to comply with the assignee substitution requirement of section 15 should result in dismissal of the claim. Claimant opposed the motion arguing that by its language section 15 was designed to apply only in cases where an assignment of claimant's interest in a claim occurred subsequent to the filing of a claim and not in a situation where the assignment was effected prior thereto. The Court agrees.

In response to the defendant's motion the Court has consulted the legislative history underlying Court of Claims Act § 15 and has found no specific discussion or reference to its applicability to assignments occurring prior to the filing of a claim. In the absence of both relevant legislative history and controlling case authority, the Court agrees with the claimant that the language of Court of Claims Act § 15 on its face applies only to substitutions or assignments which occur subsequent to the filing of a claim.

According to the affidavit of Bruce Dickstein, who states that he acts on behalf of Lumbermens pursuant to a Power of Attorney, claimant's surety has "consented to Rapid's filing of the claim against DOT (Claim No. 105069, the "Claim") for recovery of losses in connection with the Project and agreed to be paid for its losses from moneys recovered from the Claim" (Dickstein affidavit, paragraph 5). Although seemingly unusual in approach it does not appear that the pursuit of a claim by an assignor is prohibited absent a determination by the court upon a proper and timely motion that the assignor lacks standing. In this matter, however, the Court's earlier decision clearly found that the State failed to raise the issue of Rapid's standing to sue in either a pre-answer motion to dismiss on that ground or in its answer to the claim as required by CPLR 3211 [a] [3], CPLR 3211 [e] and that such failure constituted a waiver of the standing issue (see, Dougherty v City of Rye, 63 NY2d 989, 991; Matter of Prudco Realty Corp. v Palermo, 60 NY2d 656; National Assn. of Ind. Insurers v State of New York, 207 AD2d 191, 197; Muchnick v Alcamo Supply & Contr. Corp., 169 AD2d 711).

As a result, the claimant may continue to maintain the instant action and the defendant's motion must be denied insofar as it seeks to dismiss the claim for failure to substitute an assignee pursuant to Court of Claims Act § 15.

To the extent that defendant's motion may be viewed as a motion to renew its prior motion on the issue of standing, it is also denied. Motions to renew are governed by CPLR 2221 [e] which in relevant part provides:
(e) A motion for leave to renew:

1. shall be identified specifically as such;

2. shall be based upon new facts not offered on the prior motion that would change the prior determination or shall demonstrate that there has been a change in the law that would change the prior determination; and

3. shall contain reasonable justification for the failure to present such facts on the prior motion.
Defendant has not characterized the instant motion as one brought pursuant to CPLR 2221 as that section requires. Nor has the defendant offered any new facts which were either not in existence or unavailable on the initial motion and, it is further noted, has not sought leave to reargue the prior motion pursuant to that same section of the CPLR. The standing issue, which the Court has previously held was waived by the defendant, is not subject to further attack except upon appeal.

Defendant has argued in its memorandum of law submitted on this motion that a judgment in favor of Rapid would not insulate the State from subsequent attack by the assignee if Lumbermens failed to receive a sufficient share of the judgment proceeds. Any such fears should be allayed, however, by the fact that based upon the allegations contained in the affidavit of Bruce Dickstein, mentioned above, Lumbermens' recovery, if any, will be limited by the extent of its losses and by the damages which Rapid recovers. There can be no double recovery and a separate claim by Lumbermens against the State for damages arising out of the subject contract would be subject to dismissal based upon Lumbermens' espoused position on both this and the prior motion. In this regard, Mr. Dickstein's authority to act on Lumbermens' behalf has not been controverted or refuted.

Finally, claimant has not specifically opposed the defendant's alternative request for leave to amend the answer to include a defense of payment. Leave to amend a pleading is governed by CPLR 3025 (b) which provides:
(b) Amendments and supplemental pleadings by leave. A party may amend his pleading, or supplement it by setting forth additional or subsequent transactions or occurrences, at any time by leave of court or by stipulation of all parties. Leave shall be freely given upon such terms as may be just including the granting of costs and continuances.

The decision as to whether to grant leave to amend a pleading is vested in the Court's discretion (see, Edenwald Contr. Co. v City of New York, 60 NY2d 957). The factors to be considered include whether there would be any prejudice to the opposing party; what effect if any the amendment would have on the orderly prosecution of the action; whether the moving party unduly delayed in seeking to add the new allegations; and whether the proposed amendment is palpably improper or insufficient as a matter of law (see, Village of Saranac Lake v State of New York, Ct Cl [Claim No. 103732, Motion No. M-66075] January 21, 2003, UID # 2002-032-025, Hard, J., unreported; see also, Johnson v State of New York, Ct Cl [Claim No. 106508, Motion No. M-65903] December 9, 2002, UID # 2002-019-595, Lebous, J, unreported).

Upon consideration of all of the above factors it appears to the Court that leave to amend the answer to assert a defense founded upon payments allegedly made to claimant's assignee should be allowed.

Defendant's motion is denied except to the extent that leave to amend the answer is granted on condition that an amended answer incorporating the defense of payment be filed and served within 30 days of the filing of this decision and order.

December 2, 2003
Saratoga Springs, New York

Judge of the Court of Claims

The Court considered the following papers:
  1. Notice of motion dated September 8, 2003;
  2. Affirmation of Eidin Beirne dated September 8, 2003 with exhibits;
  3. Affirmation of Jennifer A. Redmond dated September 24, 2003 with exhibits.

[1].The Court previously determined that there was a material issue of fact as to whether the payment by DOT satisfied claimant's demand for damages attributable to the forced removal of the crane from the job site.