The Court, in reaching its decision, has read and considered the following
(1) Notice of Motion for Summary Judgment dated March 9, 2004 and filed on March
(2) Affidavit in Support of Warren Atkinson sworn to March 9, 2004 and filed on
March 15, 2004 (Atkinson Affidavit);
(3) Affirmation in Support of Michael A. Rosenberg, dated March 9, 2004 and
filed on March 15, 2004 (Rosenberg Affirmation) with annexed Exhibits
(4) Claimant's Memorandum of Law dated March 9, 2004 and received March 31,
(5) Affidavit of Joyce Pietrowski sworn to June 2, 2004 and filed on June 7,
2004 (Pietrowski Affidavit);
(6) Affidavit of Nicholas J. Ruppino sworn to June 4, 2004 and filed on June 7,
2004 (Ruppino Affidavit);
(7) Affidavit of Roger Deats sworn to June 4, 2004 and filed on June 7, 2004
(8) Affirmation of Pamela Tindall-O'Brien dated June 4, 2004 and filed on June
7, 2004 (Tindall-O'Brien Affirmation) with annexed Exhibits "1-15";
(9) Defendant's Memorandum of Law dated June 4, 2004, received June 7, 2004;
(10) Reply Affidavit of Warren Atkinson, sworn on June 14, 2004 (Atkinson
(11) Reply Affirmation of Michael A. Rosenberg dated June 14, 2004 (Rosenberg
Reply) with annexed Exhibit "A";
(12) Sur-Reply Affirmation of Pamela Tindall-O'Brien dated June 24, 2004 and
filed on June 25, 2004 (Tindall-O'Brien Sur-Reply Affirmation) with
Exhibits "16 and 17".
In the present application the Claimant, Caregivers' Staffing Inc., seeks
summary judgment against the Defendant, the State of New York.
The Claimant and Defendant entered into a contract in August of 1992. The
Claimant was to provide the Office of Mental Health with nurses, who were its
employees. The contract, which had been approved by the Comptroller, ran for a
period of one year and was extended for two additional one-year terms. In 1995
another extension was proposed, from June 1, 1995 to September 30, 1995.
However, it was never approved by the Comptroller because the Claimant was found
to have breached the prior contract. It was alleged, in an audit conducted by
the Office of Mental Health, that the nurses provided by the Claimant were not
its employees, as required by the contract – but rather "independent
As a result, the processing of
the extension was halted and no further monies were paid to the Claimant.
In the present motion, the Claimant argues, inter alia, that it
has stated a valid cause of action for an account stated (Claimant's Memorandum
of Law, pp 5-7); quantum meruit and unjust enrichment (Claimant's Memorandum of
Law pp 8-11); and promissory estoppel (Claimant's Memorandum of Law p 12). The
Claimant also moves for "pre-verdict" interest pursuant to CPLR
The State's opposition is two-fold: (1) numerous issues of fact exist which
require the Court to deny the motion; (2) the application of State Finance Law
§112 and the cases decided thereunder belie the Claimant's alternative
claims that it has stated a cause of action for account stated, quantum meruit,
unjust enrichment and promissory estoppel.
The rule governing summary judgment is well established and those who seek such
a remedy must demonstrate that they are entitled to a judgment as a matter of
law (Winegrad v New York University Medical Center, 64 NY2d 851).
The establishment or showing must be made "by producing evidentiary proof in
admissable form" (Zuckerman v City of New York, 49 NY2d 557, 562) and
will not be granted where there is any doubt in the Court's mind as to the
existence of a material issue of fact (Sillman v Twentieth Century Fox Film
Corp., 3 NY2d 395). The Court must also view all proof in a light most
favorable to the party opposing the motion (Iwaszkiewicz v Callanan
Industries, Inc., 258 AD2d 776).
In applying the above rules to the facts before it, the Court finds that
significant issues of fact exist, necessitating a denial of the motion. The
ultimate issue, of course, is whether the Defendant or the Claimant breached the
contract, however, other material issues of fact exist as well. First, was the
Claimant aware of the requirement that the nurses be employees and not
independent contractors? Second, whether the Claimant was made aware of the
audit conducted by the Office of Mental Health. Finally, whether the nurses
were employees or independent contractors.
On the alternative theories of recovery, the Court finds that they must be
dismissed. By seeking summary judgment, the Claimant exposes itself to a search
of the record and summary judgment may be granted to the Defendant, even in the
absence of a cross-motion (Lansing Research Corporation v Sybron Corporation,
142 AD2d 816; see CPLR 3212 [b]; Siegel, NY Prac §282 at
In seeking summary judgment on its alternative theories, the Claimant
predicates its argument upon the ground that the Defendant, State of New York,
has failed to set forth any defenses, affirmative defenses, setoffs or counter
claims (Rosenberg Reply Affirmation pp 2-3). The Courts have held, however, that
the approval required by Section 112 of the State Finance Law is a condition
precedent to the creation of a contractual relationship.
Section 112(2)(a) states in pertinent part: "[B]efore any contract made for or
by any state agency, department, board, officer, commissioner, or institution
shall be executed or become effective, whenever such contract exceeds ten
thousand dollars in amount, it shall first be approved by the comptroller and
filed in his office ..." (State Finance Law
The purpose of the section was
to protect the State from governmental improvidence and misconduct (City of
New York v State of New York,
87 NY2d 982, 985).
On the theory of "money had and received", the Courts have recognized that the
Court of Claims has jurisdiction over such cases even though they are based upon
(see Parsa v
State of New York,
64 NY2d 143, 148-149; rearg denied
64 NY2d 885).
However, no such action will lie unless the State has received or is holding
monies to which a Claimant is entitled. Here, the State has neither received
such monies nor is it holding such monies to which the Claimant is entitled.
Accordingly, the Claimant has failed to state a cause of action for monies had
and received (Anesthesia Group v State of New York,
Ct Cl, Collins, J.,
Claim No. 103211, Motion No. M-64890 dated June 26, 2002 ).
The Claimant next submitted that the doctrines of quantum meruit and unjust
enrichment require a judgment in its favor. The Claimant argues that a contract
implied in fact or in law applies to its dealings with the Defendant. Neither
theory applies to the case at hand – in the dealings between the parties
there was an expressed promise by both sides constituting a bilateral contract.
The promised consideration for the promise to provide the nurses was that
payment would be made. Both promises were expressed – Claimant cannot
now claim that they were implied. This is true even if the contract is deemed
to be a unilateral contract – a promise (payment) for an act (providing
Where there is an expressed promise that is unfulfilled, the theory of estoppel
is employed to prevent the party who has failed to perform, to deny his promise.
However, that is not the case where the party which has failed to perform is a
government agency, which is relying upon a statutory mandate not to act. New
York State Med. Transporters Assn. Inc. v Perales, 77 NY2d 126, 130;
Matter of Wedinger v Goldberger, 71 NY2d 428, 441, cert
denied 488 US 850.
Accordingly, the Court finds that the above attempts to circumvent the State
Finance Law §112 – even though creative – is unavailing. The
Court also notes that parties who do business with the State or one of its
agencies are chargeable with knowledge of the requirements of the statute
(see Parsa v State of New York, 64 NY2d 143, 147) and those who fail to
exercise the diligence required when dealing with the State do so at their own
risk (see Belmar Contracting Co. v State of New York, 233 NY 189). As
the Courts have stated: "...men must turn square corners when they deal with the
Government." Rock Island A & L.R. Co. v United States, 254 US 141,
Therefore, that portion of the motion seeking summary judgment based upon
breach of contract is denied, and the remaining portions based upon the
alternate equitable theories are hereby dismissed.