Held v. State Workers' Comp. Bd.

• Decision Date: 28 February 2013
• Parties: In the Matter of William HELD Jr., as Chair of Contractors Compensation Trust, et al., Appellants, v. STATE of New York WORKERS' COMPENSATION BOARD et al., Respondents.
• Court: New York Supreme Court — Appellate Division

103 A.D.3d 1063

960 N.Y.S.2d 542

2013 N.Y. Slip Op. 01308

In the Matter of William HELD Jr., as Chair of Contractors Compensation Trust, et al., Appellants,

v.STATE of New York WORKERS' COMPENSATION BOARD et al., Respondents.

Supreme Court, Appellate Division, Third Department, New York.

Feb. 28, 2013.

Phillips Lytle, LLP, Albany (Kenneth A. Manning of counsel), for appellants.

Eric T. Schneiderman, Attorney General, Albany (Paul Groenwegen of counsel), for respondents.

Before: MERCURE, J.P., ROSE, LAHTINEN and GARRY, JJ.

ROSE, J.

Appeal from a judgment of the Supreme Court (O'Connor, J.), entered July 22, 2011 in Albany County, which dismissed petitioners' application, in a proceeding pursuant to CPLR article 78, to vacate certain assessments made pursuant to Workers' Compensation Law § 50(5).

Petitioners are group self-insured trusts (hereinafter GSITs) formed pursuant to Workers' Compensation Law § 50(3–a). They commenced this proceeding to challenge assessments levied upon them by respondent Workers' Compensation Board pursuant to Workers' Compensation Law § 50(5). The assessments are levied quarterly based upon the Board's estimate of its expenses for the current fiscal year and are designed to allow the Board to continue to pay workers' compensation benefits for GSITs that have become insolvent ( seeWorkers' Compensation Law § 50[5][c], [e], [g] ). A “fifth quarter” or “true-up” assessment is issued later to reconcile the estimated quarterly assessments with actual expenses ( seeWorkers' Compensation Law § 50[5] [e] ). In an earlier proceeding commenced by petitioners, Supreme Court vacated the assessments for the first two quarters of 2008 on the ground that the Board levied them without first satisfying certain statutory prerequisites ( Matter of Held v. New York State Workers' Compensation Bd., 58 A.D.3d 971, 972, 871 N.Y.S.2d 465 [2009] ). We later denied petitioners' challenges to the constitutionality of the statute and the Board's authority to impose the assessments ( Held v. State of New York Workers' Compensation Bd., 85 A.D.3d 35, 921 N.Y.S.2d 674 [2011],appeal dismissed and lv. denied17 N.Y.3d 837, 930 N.Y.S.2d 532, 954 N.E.2d 1157 [2011],cert. denied––– U.S. ––––, 132 S.Ct. 1906, 182 L.Ed.2d 770 [2012] ). On March 10, 2009, petitioners commenced this proceeding challenging the Board's assessments for 2007, 2008 and 2009. They also sought discovery pursuant to CPLR 408. Supreme Court denied petitioners' request for discovery, determined that certain of petitioners' challenges were time-barred and otherwise concluded that the Board did not violate any statute or regulation in levying the assessments and did not act in an arbitrary and capricious manner. Petitioners appeal and we affirm.

Supreme Court properly determined that discovery pursuant to CPLR 408 was not needed here because of the predominately legal nature of petitioners' challenges and their receipt of sufficient information from respondents. Respondent Chair of the Board and the Board's Director of Financial Administration provided detailed affidavits in response to the petition. Additional information was provided to petitioners in response to their lengthy notice to admit and their Freedom of Information Law request ( see Public Officers Law art. 6). Under these circumstances, Supreme Court did not abuse its broad discretion by denying petitioners' motion for disclosure ( see Matter of Morris Bldrs., LP v. Empire Zone Designation Bd., 95 A.D.3d 1381, 1385, 943 N.Y.S.2d 678 [2012],lv. denied19 N.Y.3d 812, 2012 WL 4017771 [2012];Matter of Dallio v. Goord, 15 A.D.3d 803, 804, 790 N.Y.S.2d 614 [2005],lv. denied5 N.Y.3d 709, 803 N.Y.S.2d 29, 836 N.E.2d 1152 [2005];Matter of Grossman v. McMahon, 261 A.D.2d 54, 57, 699 N.Y.S.2d 582 [1999] ).

Nor did Supreme Court err in finding that petitioners' challenges to the quarterly assessments for 2007 and for the third quarter of 2008 were time-barred. While petitioners do not dispute that this proceeding was commenced more than four months after these quarterly assessments were levied ( seeCPLR 217[1]; Matter of Best Payphones, Inc. v. Department of Info. Tech. & Telecom. of City of N.Y., 5 N.Y.3d 30, 34, 799 N.Y.S.2d 182, 832 N.E.2d 38 [2005];Matter of North Dock Tin Boat Assn., Inc. v. New York State Off. of Gen. Servs., 96 A.D.3d 1186, 1187, 947 N.Y.S.2d 626 [2012] ), they argue that these assessments can be timely challenged by commencing a proceeding within four months of the later “true-up” assessment. We disagree. Inasmuch as the quarterly assessments were each final and binding when levied, any subsequent adjustment or credit received as part of the “true-up” assessment would not alter petitioners' obligation to pay the quarterly assessments when issued ( seeWorkers' Compensation Law § 50[5] [c], [e]; see e.g. Matter of Best Payphones, Inc. v. Department of Info. Tech. & Telecom. of City of N.Y., 5 N.Y.3d at 34, 799 N.Y.S.2d 182, 832 N.E.2d 38). To the extent that petitioners also challenge the validity of the Board's regulation defining insolvency ( see12 NYCRR 317.20), that challenge is time-barred as well because it was not brought within four months of when the regulation became effective ( see Via Health Home Care, Inc. v. New York State Dept. of Health, 33 A.D.3d 1100, 1101–1102, 823 N.Y.S.2d 243 [2006] ).

We also disagree with petitioners' claim that the remaining 2008 assessments are affected by an error of law. As Supreme Court correctly held, they do not violate its prior order vacating the...