Cassidy v. Madoff

• Decision Date: 05 November 2018
• Docket Number: 8:18-cv-00394 (BKS/DJS)
• Parties: ROBERT CRAIG CASSIDY d/b/a MOUNTAIN TIME AUCTIONS, ANTIQUES, AND MATTRESSES, Plaintiff, v. ERIC MADOFF, Executive Director, New York State Insurance Fund; NEW YORK STATE INSURANCE FUND; CLARISSA M. RODRIGUEZ, Chair, New York Worker's Compensation Board; NEW YORK WORKER'S COMPENSATION BOARD; JEFF MERSMANN, President, Pioneer Credit Recovery, Inc., a Naviant Company; and PIONEER CREDIT RECOVERY, INC., Defendants.
• Court: U.S. District Court — Northern District of New York

ROBERT CRAIG CASSIDY d/b/a MOUNTAIN TIME AUCTIONS,ANTIQUES, AND MATTRESSES, Plaintiff, v. ERIC MADOFF, Executive Director, New York State Insurance Fund;

NEW YORK STATE INSURANCE FUND;

CLARISSA M. RODRIGUEZ, Chair, New York Worker's Compensation Board;

NEW YORK WORKER'S COMPENSATION BOARD;

JEFF MERSMANN, President, Pioneer Credit Recovery, Inc., a Naviant Company;

and PIONEER CREDIT RECOVERY, INC., Defendants.¹

8:18-cv-00394 (BKS/DJS)

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF NEW YORK

November 5, 2018

Appearances:

Plaintiff pro se:

Robert Craig Cassidy

Rutland, VT 05701

For Defendants Eric Madoff, New York State Insurance Fund,

Clarissa M. Rodriguez, and New York Workers' Compensation Board:

Barbara Underwood

Attorney General of the State of New York

Brian W. Matula

Assistant Attorney General

The Capitol

Albany, NY 12224For Defendants Jeff Mersmann and Pioneer Credit Recovery, Inc.:

Jacqueline M. Aiello

Stradley Ronon Stevens & Young, LLP

100 Park Avenue, Suite 2000

New York, NY 10017

Hon. Brenda K. Sannes, United States District Judge:

MEMORANDUM-DECISION AND ORDER

I. INTRODUCTION

Plaintiff pro se Robert Craig Cassidy, d/b/a Mountain Time Auctions, Antiques, and Mattresses, brings this action against Defendants Eric Madoff, Executive Director of the New York State Insurance Fund ("NYSIF"), the NYSIF, Clarissa Rodriguez, Chair of the New York Workers' Compensation Board ("WCB"), the WCB, Jeff Mersmann, President of Pioneer Credit Recovery, Inc. ("Pioneer"), and Pioneer. (Dkt. No. 1). He alleges denial of his due process and equal protection rights under the U.S. Constitution, which he brings under 42 U.S.C. § 1983, as well as violations of the Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. §§ 1961-1968, the Fair Debt Collection Practices Act ("FDCPA"), 15 U.S.C. § 1692g, and New York law. (Dkt. No. 1). Presently before the Court are Defendants' motions to dismiss under Federal Rule of Civil Procedure 12(b)(6). (Dkt. Nos. 7, 13). Plaintiff opposes Defendants' motions. (Dkt. Nos. 15, 16). The Court held oral argument on the motions via telephone conference. (See November 5, 2018 Minute Entry). For the reasons that follow, the motions are granted in part and denied in part.

II. BACKGROUND²

In 2015, Plaintiff purchased Mountain Time Furniture, a "small auction house" in Ticonderoga, New York, from Richard Harker. (Dkt. No. 1, at 3). On August 19, 2015, Plaintiffand Harker "traveled to Elizabethtown, New York where Harker rescinded Mountain Time Furniture's business certificate and Plaintiff filed a new business registration certificate for Mountain Time Auctions, Antiques, and Mattresses, a personal proprietorship." (Id.).

On or about September 10, 2015, the NYSIF mailed to Harker—which Plaintiff apparently received—a statement regarding workers' compensation for "Richard D Harker DBA Mountain Time Furniture." (Id. at 17). The statement reflected "Workers' Compensation Activity Period - 8/11/2015 to 09/10/205" and indicated a credit of $210.84. (Id.). On September 16, 2015, Plaintiff "mailed back" the statement to NYSIF and crossed out "Richard D Harker DBA Mountain Time Furniture" and wrote in "Robert Craig Cassidy DBA Mountain Time Auctions." (Id.). Plaintiff also wrote that he was "the new owner of the business and building . . . and asked NYSIF to update their records and change workman's compensation policy ownership." (Id. at 3).

In a letter to Plaintiff dated October 29, 2015, NYSIF employee Titian Dion wrote that NYSIF had received Plaintiff's notification that "Richard D Harker DBA" was now "operating under the name" "Robert Craig Cassidy DBA" with respect to "WC Policy: 1351815-4." (Id. at 18). Dion advised that "[i]n order that you may be properly protected under the policy, it is essential that you fill out the enclosed Transfer of Interests forms," including an "Assignment of Interest Agreement," and provide, inter alia, "the name of the new firm, INCLUDING THE FEDERAL ID NUMBER." (Id. at 3, 18). Dion indicated that "[u]pon receipt of this form properly completed, we will issue an endorsement effecting the transfer of the policy, unless the conditions are such that the interest cannot be transferred." (Id. at 18).

On November 3, 2015, Plaintiff completed and mailed the "Assignment of Interest Agreement," indicating that on August 19, 2015, "WC Policy: 1351815-4," "is hereby assignedto" "Robert Craig Cassidy D/B/A Mountain Time Auctions, Antiques, Mattresses," and that the Federal ID number was 47-5236656. (Id. at 4, 19). Plaintiff's insurance agent and Harker also sent the NYSIF Assignment of Interest Agreements. (Id. at 15, 22).

The NYSIF issued bills to "Richard D Harker DBA Mountain Time Furniture" on December 10, 2015 ($246.56), March 10, 2016 ($300.70), and May 10, 2016 ($220.46) for "workers' compensation activity periods" November 11, 2015 to March 10, 2016 and April 12, 2016 to May 10, 2016. (Id. at 4, 23, 23, 28). Plaintiff paid these bills and the NYSIF accepted his payments. (Id.).

On or about March 11, 2016, Plaintiff communicated via email with William Farnan at NYSIF concerning the filing of an "Employers' Report of Injury" for an "incident involving [employee's] accident of 10/28/2015." (Id. at 21). Farnan provided a "Loss ID#" and noted that the policy number was "13518154." (Id.). This claim was "processed" and the claim was settled. (Id. at 4-5).

On July 19, 2016, Plaintiff filed a "Payroll Report" for the time period April 10, 2016 to June 23, 2016 with NYSIF. (Id. at 5, 30). On the form, Plaintiff crossed out "Richard D Harker DBA" and "Mountain Time Furniture" and wrote in "Robert Craig Cassidy, DBA" and "Mountain Time Auctions, Antiques, and Mattresses." (Id. at 30). The form references policy number A 1351815-4, and next to Federal Tax ID # is written 47-5236656. (Id.). On the form, Plaintiff reports two part-time employees and states: "Please note DBA + firm name changes on page 1." (Id. at 31).

On June 2, 2016, the WCB issued Plaintiff a "Notice of Penalty Pursuant to Section 52(5) of the Worker's Compensation Law," ("WCL"), based on Plaintiff's purported failure to procureworkers' compensation insurance coverage and assessed a penalty in the amount of $12,000. (Id. at 32). The Notice reflects a Federal Tax ID number of 475236656 and states:

[T]he Board has determined that:

• Since 09/30/2015, the employer was required to provide workers' compensation insurance coverage for its employees.

• The Board has no record of coverage for the period 09/30/2015 to the present.

Therefore the [WCB] has determined that the employer is in violation of Workers' Compensation Law Section 52(5) for the period 09/30/2015 to the present. A penalty has been assessed for each 10 day period of non-compliance.

. . . The Board strongly recommends that you request a review of this penalty if you were not required to have a policy. You should also request a review, to possibly reduce the penalty amount, even if you were required to have a policy.

(Id.). The WCB did not hold a hearing, receive evidence, employ an "unbiased referee," or provide "written findings of fact" in assessing this penalty. (Id. at 5). Plaintiff notes that the "very day [the WCB] fined Plaintiff $12,000.00 for not having workman's compensation insurance, Plaintiff's premium check [to NYSIF] for May 28, 2016 cleared Plaintiff's bank account." (Id.).

In a letter to the WCB dated July 1, 2016 regarding the $12,000 penalty, Plaintiff wrote:

We formally protest and appeal the penalty levied without evidentiary hearing on this matter.

This business has been in compliance since April 10, 2015, as the attached "Exhibit One" shows.

Premiums have been paid and no less than three [Assignment of Interest] forms have been filed since September 2015.

(Id. at 33).³

In a letter to Plaintiff dated October 7, 2016, the Penalty Review Unit of the WCB wrote that it had reviewed his correspondence and determined that he was "subject to the coverage requirements of the WCL" but that the WCB was unable to consider his request for redetermination because:

The employer is currently not in compliance with the requirements for coverage under the Workers Compensation Law for the above period. No proof of coverage has been received from your insurance company. Your policy with State Insurance Fund is still under your old Federal ID#.

Please be advised that if you are subject to the Workers Compensation Law and have not obtained Workers Compensation coverage, penalties will be issued for all periods in which coverage was not in effect.

Please advise your NYS Workers' Compensation Insurance carrier. [sic] THE STATE INSURANCE FUND to submit your coverage information electronically. This carrier should report this policy using your correct Federal ID# 475233656.

(Id. at 37 (emphases omitted)). The Federal Tax ID number Plaintiff had included on all of his prior correspondence with NYSIF was 47523656.⁴ (See, e.g., id. at 22). Plaintiff asserts that, for nine months, NYSIF "had maliciously denied Plaintiff a change of federal tax number even as it took Plaintiff's funds and refused Plaintiff's attempts to change Harker's Federal account number to Plaintiff's Federal number." (Id. at 6).

On or about December 21, 2016, Plaintiff received a second penalty notice from the WCB "raising the penalty to $22,000.00" without a hearing, evidence, written findings of fact, or an unbiased referee. (Id. at 6, 40). Plaintiff's "gross payroll for the quarter ending December 31, 2016 was less than $2,000" and the WCB's action "put Plaintiff out of business." (Id. at 6).

The same day he received the WCB's penalty notice (December 21, 2016), Plaintiff received "a notice from Pioneer claiming a $4,840.00 fee for collecting Plaintiff's 'delinquent' account." (Id. at 6, 41). In the letter to Plaintiff, Pioneer wrote:

The New York State [WCB] referred your account to our agency for collection. Your delinquent fines and fees totaling $22,000.00 are due in full. Please send payment to Pioneer

...