New York State Court of Claims

New York State Court of Claims
PORT CHESTER v. NEW YORK STATE AND/OR NEW YORK STATE INSURANCE DEPT. LIQUIDATION BUREAU, AND/OR NEW YORK LIQUIDATION BUREAU, # 2010-030-522, Claim No. 117670, Motion No. M-77665

Synopsis

Pre-answer motion to dismiss claim granted. New York Liquidation Bureau not a State agency, or a statutorily prescribed entity over which the Court of Claims may exercise jurisdiction.

Case information

UID: 2010-030-522
Claimant(s): THE VILLAGE OF PORT CHESTER AND THE POST CHESTER FIRE DEPT. (RELIANCE ENGINE & HOSE)
Claimant short name: PORT CHESTER
Footnote (claimant name) :
Defendant(s): NEW YORK STATE AND/OR NEW YORK STATE INSURANCE DEPT. LIQUIDATION BUREAU, AND/OR NEW YORK LIQUIDATION BUREAU
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 117670
Motion number(s): M-77665
Cross-motion number(s):
Judge: THOMAS H. SCUCCIMARRA
Claimant's attorney: JOSEPH A. MARIA, P.C.
Defendant's attorney: HON. ANDREW M. CUOMO, NEW YORK STATE ATTORNEY GENERAL
BY: RACHEL ZAFFRANN, ASSISTANT ATTORNEY GENERAL
Third-party defendant's attorney:
Signature date: March 22, 2010
City: White Plains
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

The following papers were read and considered on defendant's pre-answer motion to dismiss:

1,2 Notice of Motion; Affirmation of Rachel Zaffrann in Support of Defendants' Motion to Dismiss, and attached exhibits

3 Filed paper: Claim

No opposition filed

This claim results from a denial of coverage to claimants by the New York Liquidation Bureau [NYLB]. [See Claim No. 117670, 2; Affirmation of Rachel Zaffrann, Exhibit B]. According to the claim, Reliance Insurance Company of Illinois [Reliance] provided coverage to the Village of Port Chester [Village], in connection with a slip and fall accident occurring on January 29, 2000, and the resulting lawsuit to be heard in Westchester County Supreme Court. [Claim No. 117670, 2]. At some point in the litigation, Reliance went into liquidation. [Id.]. The Village submitted a claim to the "NY State Insurance Dept. Liquidation Bureau" in May 2004 and

"communications between NYSLB and the Village (through its counsel) continued to 8/17/09, the date of a letter from NYSLB to the Village, denying coverage to the Village, and refusing to handle the claim any longer." [Id.].

As noted by defendant in the present motion, the Superintendent of Insurance was acting as ancillary receiver for Reliance Insurance Company pursuant to Insurance Law 7403, when the Village filed its claim for reimbursement from the NYLB stemming from the Village's insurance policy with Reliance. [Affirmation of Rachel Zaffrann, 4]. Thereafter, in an August 17, 2009 letter to the Village the NYLB wrote that they had determined Reliance Insurance Company of Illinois was a

"non admitted carrier in New York and not authorized to do business in New York, [thus] the . . . claim does not qualify for coverage under the New York Property and Casualty Security Fund." [Ibid. Exhibit B].

The Village was told that the file would be returned to the Reliance Insurance Company Liquidator's Office, and gave a contact person with telephone number. [Id.]. The present claim challenges the determination of the NYLB.

The Court of Claims is a court of limited jurisdiction, that may only exercise jurisdiction over cases or controversies for money damages in which the State or its agents, or certain statutorily prescribed entities, is a party. Court of Claims Act 9. As noted by the Court of Appeals in connection with a lawsuit finding that the New York State Comptroller did not have the authority to audit the NYLB, the NYLB "does not perform a governmental or proprietary function 'for the state'," and is thus not a state agency, but functions independently of the State Insurance Department with its own separate funding and budget, running the day-to-day operations of private businesses in liquidation. See Matter of Dinallo v DiNapoli, 9 NY3d 94, 103 (2007).(1) By implication, a lawsuit to challenge one of its determinations would not be brought against NYLB in the Court of Claims, since it is neither a State agency, or a statutorily prescribed entity over which the Court of Claims may exercise jurisdiction.

Based on the foregoing, defendant's motion is granted in all respects, and claim number 117670 is hereby dismissed in its entirety.

March 22, 2010

White Plains, New York

THOMAS H. SCUCCIMARRA

Judge of the Court of Claims


1. "Nor do we agree that the Bureau is a 'state agency' subject to audit by the Comptroller pursuant to State Finance Law 8 (2-b) (a). Section 8 (2-b) (a), which was enacted as part of the State Governmental Accountability, Audit and Internal Control Act, permits the Comptroller to audit the 'internal controls and operations of state agencies.' A 'state agency' is defined as '[a]ny . . . board, bureau, division, commission, committee, council, office or other governmental entity performing a governmental or proprietary function for the state' (State Finance Law 2-a [3] . . . The Bureau does not perform a governmental or proprietary function 'for the state,' but rather runs the day-to-day operations of private businesses in liquidation pursuant to Supreme Court order. The Bureau is not part of the Insurance Department's budget, operates without the benefit of state funds, maintains its own errors and omissions coverage, and is represented by its own private counsel, not the Attorney General, as is normally the case when a state agency is sued. Thus, the Bureau is not a 'state agency' within the ambit of State Finance Law 8 (2-b) (a)." Matter of Dinallo v DiNapoli, supra, at 103.