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.
RAPID DEMOLITION COMPANY, INC.
Footnote (claimant name)
THE STATE OF NEW YORK
Footnote (defendant name)
FRANCIS T. COLLINS
Georgoulis & Associates, PLLCBy: Jennifer A. Redmond, Esquire
Honorable Eliot Spitzer, Attorney General
EsquireAssistant Attorney General
December 2, 2003
See also (multicaptioned
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
. 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
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] , 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
December 2, 2003
Springs, New York
HON. FRANCIS T. COLLINS
Judge of the Court of
The Court considered the following papers:
Notice of motion dated September 8, 2003;
Affirmation of Eidin Beirne dated September 8, 2003 with exhibits;
Affirmation of Jennifer A. Redmond dated September 24, 2003 with
.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.