New York State Court of Claims

New York State Court of Claims
McGINNIS v. STATE OF NEW YORK NYS DOL, # 2021-038-505, Claim No. 135179, Motion No. M-96196

Synopsis

Defendant's motion to dismiss the claim for lack of subject matter jurisdiction granted. Exclusive remedy for challenging a determination regarding unemployment insurance claims is to appeal to the Appellate Division, Third Department.

Case information

UID: 2021-038-505
Claimant(s): PAUL McGINNIS
Claimant short name: McGINNIS
Footnote (claimant name) :
Defendant(s): STATE OF NEW YORK NYS DOL
Footnote (defendant name) :
Third-party claimant(s):
Third-party defendant(s):
Claim number(s): 135179
Motion number(s): M-96196
Cross-motion number(s):
Judge: W. BROOKS DeBOW
Claimant's attorney: PAUL McGINNIS, Pro se
Defendant's attorney: LETITIA JAMES, Attorney General
of the State of New York
By: Anthony Rotondi, Assistant Attorney General
Third-party defendant's attorney:
Signature date: January 12, 2021
City: Saratoga Springs
Comments:
Official citation:
Appellate results:
See also (multicaptioned case)

Decision

Claimant pro se filed this claim alleging that the New York State Department of Labor (DOL) has fraudulently denied his claims for unemployment benefits. Defendant now moves to dismiss the claim for lack of subject matter jurisdiction and failure to state a cause of action. Claimant opposes the motion, which will be granted for the reasons that follow.

The claim alleges that "[s]tarting in May 2018 . . . DOL has willfully committed fraud against [claimant] for the purpose of denying [his] valid claim for unemployment benefits" (Claim No. 135179, ¶ 2). The claim alleges that "DOL has now denied three valid claims since May 9, 2019" and "has ignored credible evidence in the form of [claimant's] earnings statements from Motivate LLC" (id.). The claim further alleges that "Motivate LLC produced false financial records saying [claimant's] first quarter 2018 earning[s] were only $824.18" when his earnings "for the first quarter of 2018 shows $2,240.06" (id.). The claim alleges that "[f]or more than a year DOL has failed to correct the record [and] pay [claimant's] benefits and take action against Motivate LLC" (id.), and that "DOL is still denying [claimant's] claim just filed June 1, 2020 for the same fraudulent reasons," which "cost [claimant] extended benefits [he is] entitled to" (id. at ¶ 4). The claim asserts damages in the form of "[l]ost benefits, money, stress, [and] credit damage" and seeks $25,000 in damages (id. at ¶ 5; see id., Damages Clause).

Defendant now moves to dismiss the claim, arguing that the Court lacks subject matter jurisdiction over the claim on the ground that pursuant to Article 18 of the New York State Labor Law, "[c]laimant's sole and exclusive remedy for the denial of unemployment benefits is to request a hearing and, if dissatisfied with the result, submit an application to the Appellate Division Third Department for review of the denial" (Rotondi Affirmation, ¶ 10). Defendant further argues that the claim must be dismissed for failure to state a cause of action because it does not comply with CPLR 3016 (b), which requires that an allegation of fraud be pleaded in detail, and that "[h]ere, there is nothing more than a conclusory allegation of fraud, devoid of any factual basis" (id. at ¶ 11).

In an unsworn submission in opposition to the motion, claimant asks that the Court "disregard the motion made by the Defense and proceed to trial at the earliest available date" because he has "been defrauded out of [his] rightful claim to unemployment insurance benefits since May 2019," and that "[t]he appeals process has been exhausted and suing is [his] only remedy now" (McGinnis Affidavit, dated Oct. 17, 2020).(1) Claimant further argues that DOL "employees have acted with negligence, ineptitude and blatant disregard for their duty . . . for more than a year despite [his] objections, warnings and appeals," and that "[t]he lack of concern and failure to act on their collective job duty of preventing fraud and holding employers responsible for their record keeping and reporting makes [DOL] culpable for the fraud committed against [him]" (id.). Claimant asks that defendant "be held accountable" for the alleged fraud and the resulting "damage caused when it wasn't quickly corrected" and argues that the Court has jurisdiction over the claim because it "is a personal injury lawsuit against a State Agency" (id.).

Article 18 of the Labor Law - the Unemployment Insurance Law - provides, as relevant here, that "[a] claimant who is dissatisfied with an initial determination of his or her claim for benefits . . . may, within thirty days after the mailing or personal delivery of notice of such determination, request a hearing" (Labor Law § 620 [1] [a]), which "shall be held by a referee who shall render his or her decision within five days after the hearing is concluded," written notice of which "shall be promptly given to the claimant or employer" (Labor Law§ 620 [3]). The Unemployment Insurance Law further provides that "[w]ithin twenty days after the mailing or personal delivery of notice of the decision of a referee on contested benefits claims, the claimant . . . may appeal to the appeal board by filing a notice of appeal in the local state employment office in accordance with such rules as the appeal board shall prescribe" (Labor Law § 621 [1]). The referee's decision, "if not appealed from, shall be final on all questions of fact and law," and "[a] decision of the appeal board shall be final on all questions of fact and, unless appealed from, shall be final on all questions of law" (Labor Law § 623 [1]). The Unemployment Insurance Law permits "any . . . party affected" by the appeal board's decision to "appeal questions of law involved in such decision to the appellate division of the supreme court, third department" within thirty days of the mailing or personal delivery of notice of the decision (Labor Law § 624). Finally, and as pertinent here, the Unemployment Insurance Law provides that "[t]he procedure herein provided for hearings before referees with respect to any determination, rule, or order of the commissioner, and for decisions thereon and for appeals therefrom, first to the appeal board and thereafter to the courts, shall be the sole and exclusive procedure notwithstanding any other provision of law" (Labor Law § 626 [emphasis added]).

As the Appellate Division, Third Department, has held, "the sole and exclusive procedures for challenging determinations rendered with respect to unemployment insurance claims are set forth" in the foregoing provisions of the Labor Law (Vartanian v Research Found. of State Univ. of N.Y., 227 AD2d 744, 746 [3d Dept 1996], appeal dismissed 88 NY2d 1053 [1996], lv dismissed in part & denied in part 89 NY2d 965 [1997]), which "do[] not contemplate review by the Court of Claims" (Prowse v State of New York, 4 AD3d 581, 582 [3d Dept 2004]). The documents submitted in support of the claim here appear to indicate that claimant did engage in the administrative hearing and appeal (see Claim No. 135179, attachments [DeMeo Correspondence, dated Nov. 13, 2019]) as contemplated by the statute. Thus, his exclusive remedy following the conclusion of that process was to file an appeal with the Appellate Division, Third Department, and this Court lacks jurisdiction over the claim, requiring its dismissal (see Prowse, 4 AD3d at 582; Black v NYS DOL Unemployment Appeals Div., UID No. 2018-038-502 [Ct Cl, DeBow, J., Jan. 4, 2018]; Starker v State of New York, UID No. 2010-030-510 [Ct Cl, Scuccimarra, J., Jan. 25, 2010]; Babitch v State of New York, UID No. 2005-032-016 [Ct Cl, Hard, J., Feb. 23, 2005]).

Inasmuch as the Court has determined that the claim must be dismissed for lack of subject matter jurisdiction, defendant's additional argument that the claim fails to state a cause of action sounding in fraud need not be considered.

Accordingly, it is

ORDERED, that defendant's motion number M-96196 is GRANTED, and claim number 135179 is hereby DISMISSED.

January 12, 2021

Saratoga Springs , New York

W. BROOKS DeBOW

Judge of the Court of Claims

Papers considered:

1. Claim No. 135179, filed August 7, 2020, with attachments;

2. Amended Notice of Motion to Dismiss, dated October 1, 2020;

3. Affirmation of Anthony Rotondi, AAG, in Support of Amended Motion to Dismiss, dated October 1, 2020, with unenumerated attachments;

4. "Affidavit" of Paul McGinnis in Opposition of Motion to Dismiss, dated October 17, 2020.


1. Claimant's affidavit in opposition to the motion is lacking in evidentiary value inasmuch as it is unsigned and unsworn.