New York State Court of Claims

New York State Court of Claims

RODGERS v. THE STATE OF NEW YORK, #2004-030-504, Claim No. 101505, Motion Nos. M-67421, CM-67483


Synopsis


Case Information

UID:
2004-030-504
Claimant(s):
JESSICA M. RODGERS, INDIVIDUALLY AND AS ADMINISTRATRIX OF THE ESTATE OF IAN BASIL DELONG RODGERS, DECEASED
Claimant short name:
RODGERS
Footnote (claimant name) :

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

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
101505
Motion number(s):
M-67421
Cross-motion number(s):
CM-67483
Judge:
THOMAS H. SCUCCIMARRA
Claimant's attorney:
POWERS & SANTOLA, LLPBY: JOHN H. FISHER, ESQ.
Defendant's attorney:
HON. ELIOT SPITZER
ATTORNEY GENERAL
BY: PINO & ASSOCIATES, LLP
BRIAN W. COLISTRA, ESQ. AND
VINCENT C. ANSALDI, ESQ., OF COUNSEL.
Third-party defendant's attorney:

Signature date:
February 3, 2004
City:
White Plains
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)


Decision

The following papers numbered 1 to 7 were read on Defendant's application, brought by


Order to Show Cause, for an additional stay based upon different considerations than those


present when a stay was first imposed by this Court on May 13, 2002, and continued on July 9,


2002; and on Claimant's Cross-Motion to lift any stay:

1,2 Order to Show Cause; Affirmation in Support of Order to Show Cause by Brian W. Colistra, of Pino & Associates, LLP, counsel for the Defendant, State of New York, and accompanying exhibits

3,4 Notice of Cross-Motion; Affirmation of John H. Fisher, of Powers & Santola, LLP, counsel for the Claimant

  1. Affirmation of Vincent C. Ansaldi, of Pino & Associates, LLP, counsel for Defendant, State of New York, and accompanying exhibits
6,7 Filed Papers: Claim, Answer

After carefully considering the papers submitted, the prior Orders of this Court and the pertinent law, the applications are disposed of as follows:
BACKGROUND
The Commonwealth Court of Pennsylvania issued an Order on March 28, 2002 granting the Petition of the Insurance Commissioner of the Commonwealth of Pennsylvania to place Legion Insurance Company (hereafter Legion) - the Protective Liability and Commercial General Liability carrier for the general contractor, A. Servidone, Inc., and the entity paying for the defense of the State of New York - in "rehabilitation", effective April 1, 2002, pursuant to that state's laws. In addition to staying "all court actions . . . currently or hereafter pending against Legion . . . ", the Order further stays " . . . [a]ll court actions, arbitrations and mediations currently or hereafter pending against an insured of Legion in the Commonwealth of Pennsylvania or elsewhere . . . for ninety (90) days from the effective date of this Order or such additional time as the Rehabilitator may request."[1] Out of deference to the Pennsylvania Court, this Court had granted an initial ninety (90) day stay and subsequent extensions.

In the Interim Decision and Order containing this Court's initial determination granting a stay of the half-completed liability trial of this Claim - incorporated herein by reference - the Court noted that there would come a time when the imposition of a stay would no longer be just. [See, Rodgers v State of New York, Claim No. 101505, Interim Decision and Order, UID No. 2002-030-038 (Scuccimarra, J., May 13, 2002) ;[2] Exhibit C; Affirmation of Brian W. Colistra]. Thereafter, the Court determined that the imposition of a stay was no longer just, lifted the stay, and directed that the trial of the matter commence on May 19, 2003. [See, Rodgers v State of New York, Claim No. 101505; Motion No. M-66007, Decision and Order, UID #2003-030-508, (Scuccimarra, J., January 16, 2003); Exhibit F, Affirmation of Brian W. Colistra].

Defendant served and filed a Notice of Appeal, with a Request for Appellate Division Intervention, with regard to this Court's January 16, 2003 Decision and Order, and had until September 15, 2003 to perfect the appeal. [Exhibit F, Affirmation of Brian W. Colistra].

This Court's January, 2003 decision to lift the stay was effectively reversed by the Appellate Division, when that Court determined that the Defendant's application for a stay of all trial proceedings pending its appeal of this Court's determination was "unnecessary," presumably because the provisions of the automatic stay contained in Civil Practice Law and Rules §5519(a)(1) applied. [Rodgers v State of New York, Claim No. 101505; 2003-02344, Appellate Division, Second Department May 14, 2003].

In the meantime, on July 25, 2003 the Commonwealth Court of Pennsylvania declared Legion insolvent, lifted the Rehabilitation stay, and ordered liquidation. [Exhibit G, Affirmation of Brian W. Colistra]. All assets of Legion were to be placed in the custody of the Liquidator and all litigation was stayed absent the consent of the Liquidator. [id].

The appeal of this Court's Decision and Order to the Appellate Division was still pending when, in an Order dated August 22, 2003, the Honorable Nicholas Figueroa of New York County Supreme Court granted the petition of the New York State Superintendent of Insurance and appointed an Ancillary Receiver of Legion. [Exhibits A and H, Affirmation of Brian W. Colistra, dated September 11, 2003]. See Insurance Law Article 74.

CURRENT APPLICATION FOR A STAY

When Justice Figueroa appointed an Ancillary Receiver, he also imposed a stay for a period of one hundred eighty (180) days from the date of entry of his order. The language in the Order provides: "All parties to lawsuits, in which LEGION is obligated to defend a party pursuant to or by virtue of an insurance policy or in which LEGION is the excess or umbrella layer of insurance and the primary or other underlying insurer has tendered or offered its full policy limits or where said policy limits have been exhausted by payment of the underlying insurer's aggregate, are enjoined and restrained from proceeding in all actions at law, suits in equity, special, or other proceeding for 180 days from the date of entry of this order, including, but not limited to, proceedings with any discovery, pre-trial conference, trial, application for judgment, or proceedings on judgment or settlement." [Ibid, page 3, ¶6]. The Order was entered on August 23, 2003. The stay imposed therein is due to expire on February 19, 2004.

The present Order to Show Cause, asks for a stay of the trial of this matter based on the New York County Supreme Court Order, noting that the more elusive balancing concerns of comity required by deference to the Pennsylvania Court Order no longer apply, and this Court can simply determine whether Justice Figueroa intended to address claims such as the one before this Court. This Court cannot help but agree that the intent of the Order is to avoid any preference being given over one claim concerning Legion over any other, and to provide for the orderly administration of Legion's assets. To that end, the Ancillary Receiver should not be divested of the statutory powers called for in §§7407 and 7410 Insurance Law.

The Court notes that the Claimant did not address the State Supreme Court Order and instead served and filed a cross-motion to be addressed below. Accordingly, and as troubling as it is to this Court, it is hereby

ADJUDGED, the Defendant's motion number M-67421 is granted in part and it is hereby

ORDERED, that all proceedings and the continued trial of the present claim is hereby stayed until March 26, 2004; and it is further

ORDERED, that in the interim, should the stay imposed by Justice Figueroa be continued or expire without renewal, or should any other activity occur with respect to the proceedings by the Ancillary Receiver, the parties are directed to immediately advise the Court, in writing, of the status, and to make whatever further application is warranted under the circumstances.
CLAIMANT'S CROSS-MOTION
Claimant cross-moves for an Order "vacating the stay with respect to the resumption of the continuation of the liability phase of the trial . . . " [Notice of Cross-Motion]. Claimant argues that the Defendant's failure to perfect its appeal of this Court's January, 2003 Decision and Order lifting any stay and scheduling the trial results in the abandonment of the appeal, precluding Defendant from now seeking any further stay. Defendant states that it did not "abandon" the appeal, but rather withdrew it, although at the time of the submission of the motion the Defendant did not know whether the withdrawal had been countenanced by the Appellate Division.

More pertinently, Defendant argues that the application for the stay at this juncture is based on different facts, namely the appointment of the Ancillary Receiver by a New York State Court on August 22, 2003. This Court agrees with Defendant that Stinson v Hance, 2002 WL 31834464 (US Dist Ct, SD NY, Dec. 17, 2002, Pitman, J.), a case relied upon by Claimant herein, concerning the denial of an application for a stay of a federal court negligence action based upon the defendant's insurer's reorganization proceedings in Pennsylvania does not apply here, where federalism concerns are not implicated.

Accordingly, Claimant's cross-motion number CM-67483 is in all respects denied.



February 3, 2004
White Plains, New York

HON. THOMAS H. SCUCCIMARRA
Judge of the Court of Claims





[1] id., ¶24.
[2] The stay originally entered by this Court on May 13, 2002 was extended to October 2, 2002 by Order filed July 19, 2002. Thereafter, during the pendency of the appeal of this Court's January 16, 2003 Decision and Order, the stay was also in effect.