New York State Court of Claims

New York State Court of Claims

ALASKAN OIL, INC. v. THE STATE OF NEW YORK, #2008-032-119, Claim No. N/A, Motion No. M-75188


Case Information

1 1.The caption has been amended to reflect the State of New York as the properly named defendant.
Claimant short name:
Footnote (claimant name) :

Footnote (defendant name) :
The caption has been amended to reflect the State of New York as the properly named defendant.
Third-party claimant(s):

Third-party defendant(s):

Claim number(s):
Motion number(s):
Cross-motion number(s):

Claimant’s attorney:
Neil M. Gingold, Esq.
Defendant’s attorney:
Hon. Andrew M. Cuomo, NYS Attorney GeneralBy: Cornelia Mogor, Assistant Attorney General, Of Counsel
Third-party defendant’s attorney:

Signature date:
September 29, 2008

Official citation:

Appellate results:

See also (multicaptioned case)


Movant Alaskan Oil, Inc. has submitted a proposed claim which alleges that in 1994 it began a process leading to the acquisition of a number of properties owned by Parrish Energy Fuels, Inc. and Webber Oil Company. Some of these properties were suspected of having been contaminated with petroleum as a result of spills which occurred in connection with past petroleum operations at those locations, and in late 1994 or early 1995, movant began discussions with the New York State Department of Environmental Conservation (DEC) regarding DEC’s Voluntary Cleanup Program (VCP). The goal of the VCP, according to movant, was to assist the private sector in remediating petroleum contaminated properties that would otherwise have to be cleaned up by the public sector or simply left abandoned. Movant purchased the properties in question and, after negotiations that took more than a year, executed a Voluntary Cleanup Agreement (VCA). This agreement covered over 40 sites in upstate New York. Although some of the parcels were located in other regions[2], DEC’s Region 7 office was given oversight responsibility. The proposed claim alleges that despite the agreement, staff from DEC’s Region 6 interfered with movant regarding the properties physically within that area, making it difficult if not impossible for movant to complete its part of the VCA.

According to movant, there were numerous meetings with DEC to attempt to resolve these issues but no solution found. On September 5, 2007, the date that movant says its cause of action arose, DEC sent to movant a written termination of the Voluntary Cleanup Agreement (Gingold affidavit, Exhibit B).[3] Despite the termination letter, however, there were further meetings in which the parties attempted to resolve the issues. Movant seeks damages in the amount of $1,300,000.00 to compensate it for the losses it claims arose from this breach of contract: remediation expenses, legal expenses, lost business opportunities, and impaired business dealings with its bank.

This motion was brought less than a year after the proposed claim arose, and a like action against a citizen would not be barred by the applicable statute of limitations (CPLR 213). In determining a motion for permission to file a late claim, the Court must consider, among other relevant factors, the six factors set forth in subdivision 6 of section 10 of the Court of Claims Act: 1) whether the delay in filing the claim was excusable; 2) whether the State had notice of the essential facts constituting the claim; 3) whether the State had an opportunity to investigate the circumstances underlying the claim; 4) whether the claim appears to be meritorious; 5) whether the failure to file or serve a timely claim or serve a timely notice of intention resulted in substantial prejudice to the State; and 6) whether the movant has another available remedy. The Court in the exercise of its discretion balances these factors, and the presence or absence of any one factor is not dispositive (Bay Terrace Coop. Section IV v New York State Employees’ Retirement Sys. Policemen’s and Firemen’s Retirement Sys., 55 NY2d 979 [1982]).

Movant failed to timely initiate an action in this Court because, immediately after receiving the termination letter, it began trying to contact DEC about resolving their differences. It reportedly “took weeks” for the appropriate people to be contacted, and then several meetings were held. On January 10, 2008, after it became apparent that there would be no resolution, movant commenced an article 78 proceeding against DEC, seeking to determine if DEC had acted within its authority. Only after that proceeding was commenced and answering papers received did movant’s counsel learn that contract actions against the State had to be commenced in the Court of Claims (Gingold affidavit, ¶ 11). The article 78 proceeding was discontinued on May 8, 2008 (id, ¶ 16) and this motion brought shortly thereafter. Ignorance of the law on the part of either a claimant or an attorney does not provide an acceptable excuse for delay (see e.g. Olsen v State of New York, 45 AD3d 824 [2d Dept 2007]; Robinson v State of New York, 35 AD3d 948 [3d Dept 2006]; Matter of Lynch v State of New York, 2 AD3d 1002, 1003 [3d Dept 2003]). Accordingly, the Court finds that this factor weighs against the movant.

Movant further asserts, and the Court accepts, that the State had timely notice of the essential facts constituting the claim, notice of movant’s intention to bring an action, and a full opportunity to investigate the matter because of the article 78 proceeding that was instituted well within the six-month period in which a Court of Claims action should be commenced (Court of Claims Act § 10[4]). Defendant is entitled to no greater notice than that, even where the passage of time may, as a practical matter, have created some difficulties in the investigation and assessment (Nyberg v State of New York, 154 Misc 2d 199 [Ct Cl 1992]; Matter of Crawford v City Univ. of N. Y., 131 Misc 2d 1013
[Ct Cl 1986]). Consequently, permitting the filing of an untimely claim would not result in substantial prejudice to the State. Further, it appears movant does not have an alternative remedy against a party other than the State in the circumstances presented here.

A movant must also succeed in establishing that the proposed claim is not patently groundless, frivolous, or legally defective and that there is reasonable cause to believe that a valid cause of action exists (Matter of Santana v New York State Thruway Auth., 92 Misc 2d 1 [Ct Cl 1977]). Permitting a defective claim to be filed, even if the other factors in Court of Claims Act § 10(6) supported the granting of movant's motion, would be meaningless and futile (Walter v State of New York, 235 AD2d 623 [3d Dept 1997]; Prusack v State of New York, 117 AD2d 729 [2d Dept 1986])
The proposed claim’s factual allegations of wrongdoing are as follows:
[The Voluntary Cleanup Agreement (VCA)] covered 40 sites in upstate New York, and was put within the exclusive control and oversight of the Region 7 technical staff of the DEC, despite the fact that the sites were located within the control of a number of different regional offices of the DEC. Despite the intent to make it easier for [movant] to bring the 40 sites to appropriate standards, and to have the VCA exclusively controlled by the Region 7 Office of the DEC, the VCA made it more difficult for [movant] to upgrade the 40 sites to appropriate standards, the Region 6 technical staff constantly interfered with the VCA sites located within the Region 6 geographical area, the interference caused tremendous problems for [movant] in conducting day to day business with DEC on many issues unrelated to the VCA, and such interference and breach of the VCA by the DEC caused or contributed to [movant’s] inability to meet the terms and conditions of the VCA. . . .
It is alleged, therefore, that the actions of the technical staff of DEC Region 6 interfered with movant’s ability to fulfill its obligations under the VCA. In an affidavit, movant’s president states that Region 6 technical staff were frequently “present” on those properties located in Region 6 and that on more than one occasion they cited movant for violation of DEC regulations (Neugebauer affidavit, ¶ 10). In addition, it is alleged that Region 6 staff members held movant to a higher standard than that applied to other firms, requiring them to clean to a greater degree both on the properties governed by the VCA and on other unrelated properties.

In opposition to the motion, counsel for defendant argues that the proposed action lacks merit because disputes between the Region 6 staff and movant were not a part of the VCA agreement and that, despite the VCA, Region 6 personnel still had the responsibility for enforcing many other statutes and regulations not affected by the VCA. (Lesser affirmation, ¶¶ 11, 12). This argument does not address the facial merit of the proposed claim but focuses on questions of fact that would have to be resolved as the action proceeded. The question that must be answered on a motion for permission to file a late claim is whether, assuming the allegations of the proposed claim were proven at trial, movant would be entitled to recovery. In this case, movant has alleged that the actions of Region 6 personnel caused the disputes and inefficiencies that brought about termination of the VCA. That cause of action is not “patently groundless, frivolous, or legally defective”, and thus has sufficient appearance of merit to warrant granting the requested relief.

Taking into account the six statutorily prescribed factors, the Court finds them to weigh in favor of granting movant’s motion for permission to file a late claim. Movant is therefore directed to file and serve a properly captioned claim identical to the proposed claim submitted in support of this motion and to do so in conformity with the requirements of Court of Claims Act §§ 10, 11 and 11-a within sixty (60) days after this Decision and Order is filed.

September 29, 2008
Albany, New York

Judge of the Court of Claims

Papers Considered:
1. Notice of Motion and Supporting Affidavit of Neil M. Gingold, Esq., with annexed Exhibits;

2. Affidavit of Richard A. Neugebauer in support of the motion, with annexed Proposed Claim (captioned “Notice of Claim”);

3. Affirmation in Opposition of  Michael J. Lesser, Esq., New York State Department of Environmental Conservation, with annexed Exhibits;

4. Memorandum of Law of Cornelia Mogor, AAG;

5. Reply Affirmation of Neil M. Gingold, Esq. with Memorandum of Law;

6. Reply Affidavit of Richard A. Neugebauer.

Filed papers: None

[2].According to the President of movant corporation, the properties in question were located in four DEC regions: Region 5 (Ray Brook), Region 6 (Watertown), Region 7 (Syracuse), and Region 8 (Avon).

Counsel for defendant asserts that the facts upon which movant is attempting to base the claim “are not related to DEC’s termination of [movant] in connection with the VCA” and consequently that the date of the termination letter could not be the date of accrual (Lesser affirmation, ¶ 23). That issue goes to the merit of the proposed claim, however, since movant is alleging that there was a connection. See discussion below.