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Shermar, Inc. v. State

Court of Claims
Apr 3, 2006
2006 N.Y. Slip Op. 50770 (N.Y. Ct. Cl. 2006)

Opinion

111664.

Decided April 3, 2006.

Ann W. Manion, Esq. Defendant's attorney: Hon. Eliot Spitzer, NYS Attorney General By: Joel L. Marmelstein, Assistant Attorney General, Of Counsel.


In November 2005, claimant filed this action seeking payment for $71,000.00 in alleged overcharges for workers' compensation insurance premiums. Claimant alleges that it obtained workers' compensation insurance through the SIF. After an audit conducted by the SIF, it billed claimant for premiums for certain individuals whom claimant characterizes as independent contractors. Claimant now brings this action alleging it overpaid and continues to be billed for these individuals, and seeking reimbursement.

It is well settled that when an action concerns the review of an adverse State agency determination, and recovery of damages is incidental to the primary claim, a CPLR article 78 proceeding in Supreme Court is the proper forum for relief ( see Matter of Gross v. Perales, 72 NY2d 231. When a party seeks only monetary relief against the State, the proper forum for such an action is the Court of Claims ( see id.). In keeping with this framework, the Third Department noted that "[w]hen the damage allegedly sustained arises from a breach of the contract by a public official or governmental body, then the claim must be resolved through the application of the traditional rules of contract law" ( Safety Group No. 194-New York State Sheet Metal Roofing A.C. Contrs. Asson. v. State of New York, 298 AD2d 785, 786 [3rd Dept 2002], quoting Abiele Contr v. New York City School Constr. Auth., 91NY2d 1, 7-8 [1997]). "However, when a party seeks to annul an agency's determination because it was arbitrary and capricious, then a CPLR article 78 proceeding is appropriate" ( id.).

Here, claimant clearly avers that SIF's determination, requiring premium payments for independent contractors/owner-operators, was erroneous. It does not allege that a breach of contract has occurred. As such, claimant is required to seek redress through a CPLR article 78 proceeding.

Accordingly, defendant's motion M-71072 is granted and the claim is dismissed.


Summaries of

Shermar, Inc. v. State

Court of Claims
Apr 3, 2006
2006 N.Y. Slip Op. 50770 (N.Y. Ct. Cl. 2006)
Case details for

Shermar, Inc. v. State

Case Details

Full title:SHERMAR, INC., Claimant, v. STATE OF NEW YORK, Defendant

Court:Court of Claims

Date published: Apr 3, 2006

Citations

2006 N.Y. Slip Op. 50770 (N.Y. Ct. Cl. 2006)