New York State Court of Claims

New York State Court of Claims

CAREGIVER'S v. THE STATE OF NEW YORK, #2004-028-561, Claim No. 106033, Motion No. M-68243


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:
Defendant's attorney:
BY: Cornelia MogorAssistant Attorney General
Third-party defendant's attorney:

Signature date:
September 13, 2004

Official citation:

Appellate results:

See also (multicaptioned case)


The Court, in reaching its decision, has read and considered the following papers:

(1) Notice of Motion for Summary Judgment dated March 9, 2004 and filed on March 15, 2004;

(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 "A-K";

(4) Claimant's Memorandum of Law dated March 9, 2004 and received March 31, 2004;

(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 (Deats Affidavit);

(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 Reply);

(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 contractors".[1] 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 §5001(a).

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 339).

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 §112).[2] 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 equitable considerations[3] (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 the nurses).

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: " must turn square corners when they deal with the Government." Rock Island A & L.R. Co. v United States, 254 US 141, 143.

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.

September 13, 2004
Albany, New York

Judge of the Court of Claims

[1] Other breaches, such as failure to pay taxes and insurance for the nurses, were also alleged.
[2] The threshold figure triggering §112 was raised to $15,000.00 effective July 1, 2000. The prior amount was $5,000.00, which was in effect until September 1, 1992.
[3] And Section 112 of the Finance Law does not apply since the action is not based upon a contract.