New York State Court of Claims

New York State Court of Claims

NAB CONSTRUCTION v. THE STATE INSURANCE FUND a/k/a THE NEW YORK STATE INSURANCE FUND, and THE STATE OF NEW YORK, #2006-016-059, Claim No. None, Motion No. M-71640


Synopsis



Case Information

UID:
2006-016-059
Claimant(s):
NAB CONSTRUCTION CORPORATION
Claimant short name:
NAB CONSTRUCTION
Footnote (claimant name) :

Defendant(s):
THE STATE INSURANCE FUND a/k/a THE NEW YORK STATE INSURANCE FUND, and THE STATE OF NEW YORK
Footnote (defendant name) :

Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
None
Motion number(s):
M-71640
Cross-motion number(s):

Judge:
Alan C. Marin
Claimant’s attorney:
Russ & Russ, P.C.By: Jay Edmond Russ, Esq.
Defendant’s attorney:
Eliot Spitzer, Attorney GeneralBy: Ellen Matowik Russell, Esq., AAG
Third-party defendant’s attorney:

Signature date:
September 19, 2006
City:
New York
Comments:

Official citation:

Appellate results:

See also (multicaptioned case)



Decision

NAB Construction Corporation (“NAB”) moves for permission to file a late claim pursuant to §10.6 of the Court of Claims Act (the “Act”). In the proposed claim, NAB seeks to recover $495,167.56 in “additional premiums” which it paid to the State Insurance Fund. The State Fund assessed such additional premiums following an audit of NAB in connection with a contract that NAB had entered into with Consolidated Edison Company of New York for a project known as the “East River Station Buildings Alterations Project.” According to NAB, the additional premiums were assessed because NAB’s subcontractor had allegedly failed to maintain required workers’ compensation insurance. NAB has sued the subcontractor in Supreme Court to recover the premiums it paid to the State Fund.[1] Ordinarily, in determining whether to grant such a motion, the six factors enumerated in the Act would be considered: whether (1) defendant had notice of the essential facts constituting the claim; (2) defendant had an opportunity to investigate the circumstances underlying the claim; (3) the defendant was substantially prejudiced; (4) the claimant has any other available remedy; (5) the delay was excusable and (6) the claim appears to be meritorious.

In this case, however, a threshold issue must be addressed – whether this Court has jurisdiction over the proposed claim.[2] In Shermar, Inc. v State of New York, Ct Cl, April 3, 2006 (unreported, claim no. 111664, motion no. M-71072, Hard, J., UID #2006-032-031[3]), the State Insurance Fund had conducted an audit and billed claimant for unpaid premiums. Claimant payed the premiums and then sued in the Court of Claims, arguing that it had been wrongfully charged because the individuals for whom it paid such premiums were in fact independent contractors. The court dismissed the claim, stating that:
It is well settled that when an action concerns the review of an adverse State agency determination, and recovery of damages is incidental to the primary claim, a CPLR article 78 proceeding in Supreme Court is the proper forum for relief . . . the Third Department noted that “[w]hen the damage allegedly sustained arises from a breach of . . . contract . . . then the claim must be resolved through the application of the traditional rules of contract law” . . . “However, when a party seeks to annul an agency’s determination because it was arbitrary and capricious, then a CPLR article 78 proceeding is appropriate” . . . Here, claimant clearly avers the SIF’s determination, requiring premium payments . . . was erroneous. It does not allege that a breach of contract has occurred. As such, claimant is required to seek redress through a CPLR article 78 proceeding.


Id
. (citations omitted). In view of the foregoing, the appropriate venue for the relief sought by claimant is an Article 78 proceeding against the State Fund in Supreme Court.

Accordingly, having reviewed the submissions[4], IT IS ORDERED that motion no. M-71640 be denied.


September 19, 2006
New York, New York

HON. ALAN C. MARIN
Judge of the Court of Claims



  1. [1]In such action, NAB has also sued its subcontractor’s sureties, a subcontractor of the subcontractor, and the State Fund, as to which it pleads an alternative theory of recovery, i.e., that the State Fund’s assessment of premiums was “inappropriate and wrongful.” See exhibit A to claimant’s notice of motion.
  2. [2]In addition, it should be noted that NAB characterizes its claim as “contingent in nature, ” i.e., it does not wish to proceed in this court unless “the Supreme Court determines after trial that NAB is not entitled to indemnification and reimbursement from [its subcontractor et al.] because [they] maintained Workers’ Compensation insurance policies . . .” See ¶17 of the April 25, 2006 affirmation of Jay Edmond Russ. Claimant has supplied no authority to suggest that this court may grant a late claim motion for a “contingent” claim.
  1. [3]This and other decisions of the Court of Claims may be found on the court’s website: www.nyscourtofclaims.state.ny.us.
  2. [4]The following were reviewed: claimant’s notice of motion with affirmation and affidavit in support and exhibits 1 and 2 and A through H; defendant’s affirmation in opposition; and claimant’s reply affirmation with exhibit A.