New York State Court of Claims

New York State Court of Claims
ASSAF v. THE STATE OF NEW YORK, # 2010-015-197, Claim No. None, Motion No. M-78613


Late claim relief was denied. Proposed claim alleging misconduct by the NYS Higher Education Services Corp. did not have the appearance of merit and negligence cause of action was untimely.

Case information

UID: 2010-015-197
Claimant short name: ASSAF
Footnote (claimant name) :
Footnote (defendant name) : The caption is amended sua sponte to reflect the only properly named defendant.
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): None
Motion number(s): M-78613
Cross-motion number(s):
Claimant's attorney: Assaf & Mackenzie, PLLC
By: Michael D. Assaf, Esquire
Defendant's attorney: Honorable Andrew M. Cuomo, Attorney General
By: Thomas R. Monjeau, Esquire
Assistant Attorney General
Third-party defendant's attorney:
Signature date: December 6, 2010
City: Saratoga Springs
Official citation:
Appellate results:
See also (multicaptioned case)


For the reasons set forth below, the application of movants, Laura and Michael Assaf, to serve and file a late claim pursuant to Court of Claims Act 10(6) is denied.

Based upon a review of the proposed claim (movants' Exhibit D), the affidavit of movant, Laura Assaf (hereinafter Laura), and the Reply Affirmation of Michael, the facts of this case, though convoluted, are summarized as follows:

Laura's former husband, James Gibney (hereinafter James), entered into a consolidation loan with "Nelnet" in 2002 in his name and Laura's name, allegedly without Laura's consent. James told Laura that the loan was "a credit card consolidation loan" (Affidavit of Laura, 7). Laura wrote checks, at some point during the marriage, making payments on the Nelnet loan (id.). In reality, the loan was a student loan consolidation loan guaranteed by New York State Higher Education Services Corporation (hereinafter NYSHESC). In December 2006, Laura and James entered into a Separation and Settlement Agreement (hereinafter Agreement), which was incorporated but not merged into the Judgment of Divorce dated December 10, 2006 (Affidavit of Laura, 4). Under Schedule B of the Agreement, there is an entry of a debt to "Nelnet" in the amount of $42,780.07 that is listed, among others, as the sole responsibility of James (id. at 5 and Exhibit A attached to proposed Claim). It appears that the loan with Nelnet was made under the Federal Family Education Loan Program (hereinafter "FFELP"). Laura asserts in her affidavit at paragraphs 13 and 14:

"13. Upon information and belief, [in] or about 2007, [Laura] first came into possession of the FFELP Note memorializing the loan subject of this litigation by virtue of [Laura's] interaction with [NYSHESC], when [NYSHESC] attempted to collect a school loan from me beginning in late 2006.

14. In 2007, [Laura] received a copy of the FFELP Note, which appears to memorialize a consolidation of certain SALLIE MAE student loans all of which were made under the social security number of [James] "

Since 2006, Laura has been attempting to obtain a release of liability from NYSHESC (id., 17). Laura also obtained two small student loans while married to James (id., 18). However, Laura avers that none of the loans consolidated under the FFELP Note were under her Social Security number or correspond to loans that she signed for or of which she was aware (id., 20).

Movants commenced an action in Supreme Court against James, Nelnet and NYSHESC in February 2010 in response to movants' placement in the Treasury Offset Program by NYSHESC, which caused their 2008 federal tax refund to be seized and applied to the outstanding debt (id., 28 and proposed Claim, 28 & 29). James defaulted in answering the complaint and a default judgment was entered against him on March 17, 2010 (Affirmation of Michael, 4). Nelnet moved to dismiss the Supreme Court action on the basis that the causes of action alleged against it are barred by the applicable statutes of limitations (id., 5). NYSHESC also moved to dismiss on this basis and also contended that Supreme Court lacked subject matter jurisdiction over the action (id., 6). The outcome of these motions is unknown.

The proposed claim asserts three causes of action. The first seeks a declaratory judgment that movants have no responsibility for repayment of the debt and are entitled to monies and property wrongfully taken from them. The second and third causes of action allege negligence on the part of NYSHESC.

The Court notes that it lacks jurisdiction over movants' first cause of action seeking a declaratory judgment as the Court of Claims "is not the appropriate forum in which to seek declaratory relief" (Shelton v New York State Liquor Auth., 61 AD3d 1145, 1151 [3d Dept 2009]; see Fehlhaber Corp. & Horn Constr. Co. v State of New York, 69 AD2d 362 [3d Dept 1979]; CPLR 3001; Court of Claims Act 9).

Turning to the remaining causes of action, Court of Claims Act 10 (6) permits the filing of a late claim, in the Court's discretion, if the applicable statute of limitations set forth in Article 2 of the CPLR has not expired. Thus, the first issue for determination upon any late claim motion is whether the application is timely. Causes of action for negligence are controlled by a three-year statute of limitations (CPLR 214). "For purposes of the Court of Claims Act, a claim accrues when damages are reasonably ascertainable" (Prisco v State of New York, 62 AD3d 978, 978 [2009], lv denied 13 NY3d 706 [2009]). Movants contend that Laura's negligence causes of action accrued in "late 2006 and early 2007" when she "discovered the existence of the FFELP Note as well as [NYSHESC's] attempt to collect the same" (Reply Affirmation of Michael, 17). The applicable statute of limitations therefore expired in late 2009 or early 2010. The instant motion filed August 3, 2010 is therefore untimely with respect to the negligence causes of action.

To the extent the first cause of action in the proposed claim may be read to include a cause of action for conversion, Michael alleges that it did not accrue until 2009 when his federal tax return was seized and placed in the Treasury Offset Program (Reply Affirmation of Michael, 23, 25). Inasmuch as the applicable statute of limitations for a conversion cause of action is three years (CPLR 214 [3]; Beesmer v Besicorp Dev., Inc., 72 AD3d 1460, 1463 [2010]), the claim is not barred by the applicable statute of limitations. Nevertheless, the claim is meritless to the extent it may be read to allege a conversion cause of action. Michael alleges in this regard that he "is not in any way responsible for repayment of the FFELP Note and his property in the form of the 2008 Tax Refund taken under the Treasury Offset Program was wrongfully converted from him by the defendant" (defendant's Exhibit A, proposed claim, 39). "A conversion takes place when someone, intentionally and without authority, assumes or exercises control over personal property belonging to someone else, interfering with that person's right of possession . . . Two key elements of conversion are (1) plaintiff's possessory right or interest in the property . . . and (2) defendant's dominion over the property or interference with it, in derogation of plaintiff's rights" (Colavito v New York Organ Donor Network, Inc., 8 NY3d 43, 49-50 [2006]). Movants here failed to sufficiently establish the second element necessary to prevail on a conversion claim.

In Shabtai v United States Department of Education (2003 WL 21983025 [SD NY 2003]) the Court stated that "[t]he [Treasury Offset Program] is a centralized debt collection program, authorized pursuant to the Debt Collection Improvement Act, developed and run by the United States Department of Treasury . . . to help federal agencies collect delinquent debts owed to the federal government" (at * 2; citing inter alia 31 USC 3716, et seq.). The applicable statutes and regulations make clear that the Treasury Offset Program was created to collect a debt owed to a federal agency, such as the Department of Education (see 31 USCA 3720A [a] [c]; 26 USCA 6402 [d] [1] [B]; 34 CFR 30.33; 34 CFR 682.409). While movants contend that NYSHESC initiated the federal offset, they failed to establish, even remotely, that such initiation was improper or in derogation of movants' rights (see 34 CFR 682.410 [b][5] [iii]; 682.410 [b] [6] [v]). Accordingly, to the extent the proposed Claim against NYSHESC alleges a conversion cause of action, it is patently lacking in merit (United States v Hunter, 2007 WL 2122052 [ED NY 2007]; cf. Bell v State of New York, 277 AD2d 854 [2000]). Since it would be a futile exercise to permit litigation of a clearly baseless claim (Savino v State of New York, 199 AD2d 254 [1993]), late claim relief with respect to any conversion cause of action would not be appropriate.

Based on the foregoing, the movants' application to serve and file a late claim is denied.

December 6, 2010

Saratoga Springs, New York


Judge of the Court of Claims

The Court considered the following papers:

  1. Notice of motion dated July 30, 2010;
  2. Affidavit of Laura A. Assaf sworn to July 30, 2010;
  3. Notice of claim dated July 30, 2010;
  4. Affirmation of Michael D. Assaf dated July 30, 2010 with exhibits;
  5. Affirmation of Thomas R. Monjeau dated August 17, 2010 with exhibits;
  6. Reply Affirmation of Michael D. Assaf dated September 7, 2010.