Opinion
# 2013-009-038 Claim No. 104755 Motion No. M-81459 Cross-Motion No. CM-81470
11-22-2013
GULF INSURANCE COMPANY a/s/o ALASKAN OIL INC. v. THE STATE OF NEW YORK
Claimant's attorney: KATZ & RYCHIK, P.C. BY: Abe M. Rychik, Esq., Of Counsel. Defendant's attorney: HON. ERIC T. SCHNEIDERMAN Attorney General BY: Timothy P. Mulvey, Esq., Assistant Attorney General, Of Counsel.
Synopsis
Defendant's cross motion to dismiss certain causes of action for untimely service of the claim was granted, and claimant's motion to compel discovery was therefore denied as moot.
Case information
UID: 2013-009-038 Claimant(s): GULF INSURANCE COMPANY a/s/o ALASKAN OIL INC. Claimant short name: GULF INS. Footnote (claimant name) : Defendant(s): THE STATE OF NEW YORK Footnote (defendant name) : Third-party claimant(s): Third-party defendant(s): Claim number(s): 104755 Motion number(s): M-81459 Cross-motion number(s): CM-81470 Judge: NICHOLAS V. MIDEY JR. KATZ & RYCHIK, P.C. Claimant's attorney: BY: Abe M. Rychik, Esq., Of Counsel. HON. ERIC T. SCHNEIDERMAN Attorney General Defendant's attorney: BY: Timothy P. Mulvey, Esq., Assistant Attorney General, Of Counsel. Third-party defendant's attorney: Signature date: November 22, 2013 City: Syracuse Comments: Official citation: Appellate results: See also (multicaptioned case) Decision
Claimant has brought this motion for an order compelling the defendant to produce certain documents pursuant to its previously served Discovery Demands. Defendant has responded with a cross motion, not only opposing the relief sought in claimant's motion, but also for an order dismissing certain causes of action as untimely.
The following papers were considered by the Court in connection with these motions:
Notice of Motion, Affirmation in Support, with Exhibits (M-81459) 1, 2This claim was brought by Gulf Insurance Company as Subrogee of Alaskan Oil, Inc. (Alaskan) following an accident in which an Alaskan tractor-trailer overturned at the intersection of Route 342 and US Route 11 in Jefferson County on May 10, 2001, spilling more than 10,000 gallons of petroleum.
Memorandum of Law In Support (M-81459) 3
Notice of Cross Motion, Affirmation in Support, with Exhibits (CM-81470) 4, 5
Claimant's Affirmation in Opposition and in Reply, with Exhibits 6
Claimant's Memorandum of Law in Opposition and in Reply 7
Defendant's Reply Affirmation 8
Defendant's Reply Memorandum of Law 9
Claimant's Affirmation in Sur-Reply, with Exhibits 10
Claimant's Memorandum of Law in Sur-Reply 11
Correspondence dated April 4, 2013 from claimant's attorneys 12
Claimant, as the Subrogee of Alaskan, filed its claim with the Clerk of the Court of Claims on August 20, 2001, and this claim was served upon the Attorney General on August 23, 2001. An Amended Claim was filed with the Clerk of the Court of Claims on August 23, 2001, and served upon the Attorney General on August 27, 2001. In its claim, claimant alleges that payments have been made by claimant to claimant's insured commencing on May 21, 2001, and that payments are continuing.
Both the claim and amended claim allege that the State failed to properly design, maintain, excavate and drain the roadway intersection; that it failed to properly clean up the materials which were spilled in this accident; that it failed to properly supervise private contractors working there; and that it failed to properly test and clean up the subject roadway.
Discovery in this claim has been painstakingly slow, most of it attributable to claimant's attempts to obtain documents and records pertaining to a road-widening project at this intersection which the State undertook in the year 2000. The State has claimed a privilege under federal law (23 USC § 409) contending that the documents and records are privileged under this statute since the project received federal funding. Claimant argues, on the other hand, that the State has not established this privilege, that it has not been established that the project received federal funding, and that there is no proof that the documents requested were collected or compiled for highway safety purposes under Section 409, or to obtain funding under Section 152 of the "Federal Hazard Elimination Program".
Claimant contends that during the latest round of depositions, the existence of certain records and documents was discovered that were believed to have been destroyed, and has therefore brought this motion seeking to compel the production of these records and documents, and any other documents which the State has previously withheld. Defendant has responded with a cross motion seeking to dismiss a significant portion of this claim as untimely and that claimant's motion to compel is thereby rendered moot.
The Court will therefore first address defendant's cross motion.
The State's motion is based upon its contention that any causes of action specifically based upon the accident itself are untimely, in that the claim was not served and filed within 90 days of the accident which occurred on May 10, 2001. Therefore, defendant argues that any cause of action that accrued more than 90 days prior to service and filing of the claim are untimely and should be dismissed. Defendant concedes that any causes of action that are based upon activities occurring within 90 days of the service and filing of the claim are timely and will survive its motion.
Pursuant to Court of Claims Act § 10 (3), a claim against the State based upon negligence (as this claim is) must be filed with the Clerk of the Court of Claims and served upon the Attorney General within 90 days of accrual of such claim, unless within such 90-day period the claimant serves a notice of intention to file a claim upon the Attorney General. In such cases, a claim must then be filed and served within two years after the date of accrual.
Additionally, and pursuant to Court of Claims Act § 11 (c), any defense based upon untimely service and/or filing must be raised, with particularity, either in a pre-answer motion to dismiss or in defendant's answer, and if not it is waived.
In this particular matter, there is no indication, nor does claimant allege, that claimant served a notice of intention to file a claim upon the Attorney General. Furthermore, there is no dispute that the accident which forms the basis of this claim occurred on May 10, 2001; that the claim was filed with the Clerk of the Court of Claims on August 20, 2001; and that the claim was served upon the Attorney General on August 23, 2001. Therefore, there is no question (and no dispute) that the claim was not served or filed within 90 days of the accident which occurred on May 10, 2001.
Additionally, this Court finds that in its Verified Answer, defendant raised the defense of untimely service. In it Fifth Affirmative Defense, defendant alleged "[t]hat some or all of the damages alleged in the Claim are time-barred and, as to the same, this Court lacks subject-matter jurisdiction to hear and/or determine the same since the claimant(s) failed to serve and/or file a Notice of Intention to File Claim or a Claim within ninety (90) days of the occurrence giving rise to the claimant(s)' liability herein." In its Sixth Affirmative Defense, defendant alleged "[t]hat the Court lacks personal jurisdiction over the Defendant in that no Notice of Intention to File Claim or Claim was served within ninety (90) days of the occurrence giving rise to the claimant(s)' liability herein." (Defendant's Verified Answer, par. 10).
The Court finds that this language is sufficiently particular to preserve the defense of untimely service as required by Court of Claims Act § 11 (c).
Claimant contends, however, that its cause of action did not accrue on the date of the accident, but rather did not accrue until payment was made to the Subrogor (Alaskan) on its policy (Ross v Pawtucket Mut. Ins. Co., 13 NY2d 233 [1963]). In other words, claimant contends that as Subrogee, it did not have any right to bring an action without first making payment, since it is the actual payment that triggers its right of subrogation. Claimant has attached payment records to establish that payments on the insurance claim commenced on May 18, 2001, that payments were ongoing at the time the Claim and Amended Claim were filed and served (Exhibits A-D to Item 6), and that payments on the insurance claim were not completed until April 24, 2002.
This Court agrees with claimant's contention that the right of subrogation in this matter arose when claimant, as Subrogee, made payment to its Subrogor (Alaskan) for the injury or loss allegedly caused by the State (id., North Star Reins. Corp. v Continental Ins. Co., 82 NY2d 281 [1993]).
However, it is also well settled that the nature of a subrogation claim is derivative of the underlying tort action, and therefore the cause of action against the State accrues from the date of the accident, not the date of payment (Allstate Ins. Co. v Stein, 1 NY3d 416 [2004]; Matter of Nationwide Mut. Ins. Co. v Motor Veh. Acc. Indem. Corp., 190 AD2d 798 [2d Dept 1993]). In Allstate, the Court specifically stated that "the subrogee acquires only the rights that the subrogor had, and so any subrogee may find its claim defeated by a defense based on the subrogor's action or inaction" (Allstate Ins. Co. v Stein, at 423).
Based on the foregoing, therefore, this Court finds and determines that the time period in which claimant was required to commence his action against the State for any cause of action directly related to the accident which occurred on May 10, 2001 began to run from that date, and therefore any claim against the State to recover damages for that accident had to be filed and served within 90 days of that date, or by August 8, 2001, as required by Court of Claims Act § 10 (3) (Ivy v State of New York, 27 AD3d 1190 [4th Dept 2006];North Country Insurance Company v State of New York, UID No.2006-028-544 [Sise, J. Ct Cl, Apr. 12, 2006]).
Unpublished decisions and selected orders of the Court of Claims are available via the Internet at http://www.nyscourtofclaims.state.ny.us.
The failure to comply with either the filing or service provisions of the Court of Claims Act deprives the Court of subject matter jurisdiction and requires dismissal of the claim (Lichtenstein v State of New York, 93 NY2d 911, 913 [1999]; Dreger v New York State Thruway Auth., 81 NY2d 721, 723-724 [1992]; Hatzfeld v State of New York, 104 AD3d 1165, 1166 [4th Dept 2013]), and as a result this Court does not have the discretion to cure or overlook defects in the time or manner of service and filing. Therefore, even though this Court is dismayed at the length of time it took defendant to institute its motion for dismissal, defendant has in fact raised a jurisdictional defect which cannot be disregarded by this Court. Accordingly, the cause of action asserting negligence against the State in the design, building and maintenance of this roadway and intersection where the accident occurred, and which allegedly was a proximate cause of the accident involving claimant's insured, must be dismissed.
On the other hand, it appears to the Court that the other causes of action asserted by claimant, including the failure to properly clean up spilled materials, the failure to properly supervise private contractors presumably involved in that cleanup, and the failure to properly test and clean up the roadway at the site of the accident, are timely, assuming that such actions took place within 90 days of service of the claim on August 23, 2001. These causes of action, therefore, to the extent that they took place after May 25, 2001 (90 days from the date of service of August 23, 2001) are timely and are not affected by this decision.
With regard to claimant's motion to compel discovery, it appears to this Court that the records and documents sought by claimant all pertain to the cause of action based upon negligent design, building, and maintenance, which has been dismissed herein. Therefore, claimant's motion seeking additional disclosure is denied as moot.
It further appears to this Court that with the determination of this motion and cross motion, discovery is now complete. Accordingly, claimant is hereby directed to serve and file its note of issue and certificate of readiness within 60 days from the filing date of this decision and order. If claimant is of the opinion that outstanding discovery issues pertaining to cleanup activities remain unresolved, claimant's attorneys should bring such issues to the attention of this Court within such 60-day period. Upon service and filing of the note of issue, a conference will then be scheduled for purposes of scheduling a trial in this matter.
Based on the foregoing, therefore, it is
ORDERED, that motion No. M-81459 is hereby DENIED, as moot; and it is further
ORDERED, that Cross Motion No. CM-81470 is hereby GRANTED; and it is further
ORDERED, that any causes of action accruing more than 90 days from the date of service of this claim upon the Attorney General on August 23, 2001 are hereby DISMISSED, with particular reference to the cause of action based upon negligent design, building, and maintenance of the subject roadway and intersection; and it is further
ORDERED, that claimant is hereby directed to serve and file its note of issue and certificate of readiness within 60 days from the date of filing of this decision and order.
November 22, 2013
Syracuse, New York
NICHOLAS V. MIDEY JR.
Judge of the Court of Claims