Court of ClaimsJan 11, 2006
816 N.Y.S.2d 701 (N.Y. Misc. 2006)
816 N.Y.S.2d 7012006 N.Y. Slip Op. 50389


Decided January 11, 2006.

Claimant's attorney: Harder, Silber and Bergan, By: George W. Harder, Esq.

Defendant's attorney: Hon. Eliot Spitzer, NYS Attorney General, By: C. Michael Reger, Assistant Attorney General, Of Counsel.

Claimant commenced this action in September 2000, seeking interest on unemployment insurance benefits for the period June 23, 1980 through August 11, 1999. The claim alleges that in December 1981, the Unemployment Insurance Appeal Board [hereinafter Board] denied claimant benefits and that the Board reversed this denial 18 years later, on August 11, 1999. In reversing its prior decision, the Board awarded claimant $3,250.00 in benefits. The award did not include an award for interest, and claimant did not appeal the Board's decision. Claimant now seeks interest from the date his benefits were effective until the date the Board awarded benefits.

In 1983, a consent judgment was entered in a Federal class action against the Board regarding certain practices by the Board. As a result, the Board reconsidered over 59,000 unemployment benefit claims, including claimant's benefit application. Claimant's application was reopened in 1997, and an award of benefits was made in August 1999.

The record is unclear on the effective date of the benefit award. In his claim, claimant states that the Board awarded benefits effective June 23, 1980. The determination by the Board states that the effective date was August 29, 1981, the date after claimant's termination from employment.

In support of its motion, defendant argues that the claim fails to state cause of action because there is no provision for interest on awards of unemployment insurance benefits. Further, defendant argues that judicial review of decisions by the Board resides exclusively with the Appellate Division, Third Department and, therefore, this Court does not have jurisdiction to hear the claim. Moreover, claimant did not avail himself of the review process and, therefore, the Board's decision is res judicata. In opposition, claimant does not recite any statutory provision providing for interest on unemployment benefit awards. Rather, claimant contends that he received a judgment against the State and, therefore, he is entitled to statutory interest on this judgment pursuant to State Finance Law § 16. Alternatively, he contends that even if the award is not considered a judgment, it is an "accrued claim" within the purview of State Finance Law § 16.

On a motion for summary judgment, the movant must establish that, viewing the evidence in the light most favorable to the opponent, the movant is entitled to judgment as a matter of law ( see, Alvarez v. Prospect Hosp., 68 NY2d 320; Crosland v. New York City Transit Auth., 68 NY2d 165). The burden then shifts to the opponent to establish a genuine issue of fact ( see Zuckerman v. City of New York, 49 NY2d 557).

Initially, Labor Law article 18 and regulations promulgated thereunder provide the mechanism for payment of unemployment insurance benefits. This mechanism provides for a review process in the event that an applicant is aggrieved by a decision, culminating with direct review by the Appellate Division, Third Department ( see Labor Law § 624). Given that this process is the exclusive remedy available to claimant ( Matter of MacGilfrey v. Pugh, 217 AD2d 888, 889 [3rd Dept 1995], lv denied 88 NY2d 813), this Court does not have jurisdiction to review the Board's failure to award interest. Even if the Court could review the Board's decision, the claim would fail.

Labor Law article 18 and its supporting regulations do not provide for the payment of interest on an award of unemployment insurance benefits. Next, although State Finance Law § 16 provides for the payment by the State of a statutorily prescribed rate of interest on judgments and accrued claims, claimant's award is neither a judgment nor an accrued claim within the meaning of the statute. A judgment is the determination of the rights of the parties in an action or special proceeding and is signed and filed by the clerk of the court ( see CPLR 5011, 5016). Here, claimant's award is the result of a determination by an administrative agency and, thus, does not constitute a judgment of a court after an action or special proceeding. Likewise, claimant is not entitled to interest under the theory that his award is an accrued claim. In certain actions, an aggrieved party is entitled not only to post-judgment interest, but also pre-judgment interest. When a party is entitled to interest on an accrued claim, the party is entitled to interest from certain specified events until the date of judgment ( see e.g. Metropolitan Transp. Authority v. American Pen Corp., 94 NY2d 154; McGale v. Metropolitan Transp. Authority, 76 AD2d 38 [1st Dept 1980], appeal denied, 52 NY2d 862, appeal denied 52 NY2d 703); Acme Bldrs. v. County of Nassau, 36 AD2d 317 [2nd Dept 1971], affd 31 NY2d 924). For example, in a contract action, a party's claim accrues typically at the time of the breach and, therefore, pre-judgment interest is awarded on the accrued claim from the date of breach until the date of judgment ( see Acme Bldrs. v. County of Nassau, supra). As previously stated, claimant's administrative award is not the equivalent of a judgment entered in a court. Since there is no judgment to calculate post-judgment interest or pre-judgment interest on the accrued claim, there can be no award of interest under the authority of State Finance Law § 16.

Based on the foregoing, defendant has established that it is entitled to summary judgment as a matter of law and claimant has failed to demonstrate a genuine issue of fact. As such, the claim must be dismissed. Accordingly, defendant's motion M-70040 is granted.

Let judgment be entered accordingly.