| D'Angelo v State Ins. Fund |
| 2008 NY Slip Op 01097 [48 AD3d 400] |
| February 5, 2008 |
| Appellate Division, Second Department |
| Santo D'Angelo et al., Respondents, v State InsuranceFund, Appellant. |
—[*1] Pellegrini & Associates, LLC, New York, N.Y. (Frank L. Pellegrini and Juan C.Restrepo-Rodriguez of counsel), for respondents.
In an action, inter alia, for a judgment declaring that the plaintiff Santo D'Angelo is entitledto benefits under a policy of workers' compensation insurance issued to the plaintiff S & VFoods, Inc., the defendant appeals, as limited by its brief, from so much of an order of theSupreme Court, Queens County (Dorsa, J.), entered March 20, 2007, as denied that branch of itsmotion which was to dismiss the complaint pursuant to CPLR 3211 (a), and granted theplaintiffs' cross motion for leave to amend the complaint pursuant to CPLR 3025 (b) to add acause of action to recover damages for breach of contract.
Ordered that the order is reversed insofar as appealed from, on the law, without costs ordisbursements, that branch of the motion which was to dismiss the complaint is granted, and thecross motion for leave to amend the complaint is denied.
In this action, the plaintiffs seek to relitigate an issue already determined against the plaintiffSanto D'Angelo in proceedings before the Workers' Compensation Board (hereinafter the Board).Specifically, they seek to relitigate the validity of the exclusion of D'Angelo, the president of theplaintiff S & V Foods, Inc. (hereinafter S & V), from the coverage provided by a policy ofworkers' compensation insurance (hereinafter the policy) issued to S & V by the defendant. Asthe defendant correctly contends, this action is barred by the doctrine of collateral estoppel.
In order to invoke the doctrine of collateral estoppel, a party must establish that the issue on[*2]which preclusion is sought is identical to a material issuenecessarily decided in the prior proceeding, and that the party against whom the doctrine isasserted had a full and fair opportunity to contest this issue in the prior proceeding (see Jeffreys v Griffin, 1 NY3d 34,39 [2003]; Parker v Blauvelt Volunteer Fire Co., 93 NY2d 343, 349 [1999]; Altegra Credit Co. v Tin Chu, 29AD3d 718, 719 [2006]). The burden of proving that the issue sought to be litigated in thesecond proceeding was identical to a material issue necessarily decided in the prior proceeding ison the party asserting the doctrine, here, the defendant. The burden of establishing the absence ofa full and fair opportunity to contest the issue is on the party seeking to avoid preclusion, here,the plaintiffs (see Jeffreys v Griffin, 1 NY3d at 39; Parker v Blauvelt Volunteer FireCo., 93 NY2d at 349; see generally Siegel, NY Prac § 462, at 777 [4th ed]).While the defendant met its burden, the plaintiffs failed to meet theirs.
The essence of this action is D'Angelo's contention that the defendant's exclusion of himfrom coverage under the policy was not valid, and thus erroneous. However, in deciding whetheror not D'Angelo was entitled to benefits under the policy for an accident that occurred on August26, 2003, the Board was specifically presented with that argument, i.e., that his exclusion fromthe policy was invalid and erroneous. The Board's determination that D'Angelo was not entitledto benefits under the policy because he was excluded from coverage necessarily determined theessential issue of this action—the validity of his exclusion—against him. Since theplaintiffs failed to meet their burden of establishing that they did not have a full and fairopportunity to contest that issue (see Allied Chem. v Niagara Mohawk Power Corp., 72NY2d 271, 276 [1988], cert denied 488 US 1005 [1989]; Schwartz v Public Adm'r ofCounty of Bronx, 24 NY2d 65, 72 [1969]; Altegra Credit Co. v Tin Chu, 29 AD3d at719; McRae v Sears, Roebuck &Co., 2 AD3d 419, 419-420 [2003]; Rigopolous v American Museum of NaturalHistory, 297 AD2d 728, 729 [2002]), the Supreme Court erred in denying that branch of thedefendant's motion which was to dismiss the complaint pursuant to CPLR 3211 (a) (5).
The Supreme Court further erred in granting the plaintiffs' cross motion for leave to amendthe complaint to add a cause of action to recover damages for breach of contract. Leave to amenda pleading " 'should be freely granted unless the amendment sought is palpably improper orinsufficient as a matter of law, or unless prejudice and surprise directly result from the delay inseeking the amendment' " (Yemini vGoldberg, 46 AD3d 806 [2007], quoting Maloney Carpentry, Inc. v Budnik, 37 AD3d 558, 558 [2007]; see Alatorre v Hee Ju Chun, 44 AD3d596 [2007]). Here, however, the amendment sought was "palpably improper" because theSupreme Court lacks subject matter jurisdiction over a cause of action to recover damages forbreach of contract against the defendant. A claim for money damages against the State must belitigated in the Court of Claims (see Court of Claims Act § 9 [2]). The StateInsurance Fund is a state agency, and, consequently, claims against it for money damages mustbe litigated in the Court of Claims, rather than in the Supreme Court (see Sukup v State ofNew York, 19 NY2d 519, 520 [1967]; Commissioners of State Ins. Fund v Photocircuits Corp., 20 AD3d173, 176 [2005]; Commissioners ofState Ins. Fund v Trio Asbestos Removal Corp., 9 AD3d 343, 345 [2004];Commissioners of State Ins. Fund v J.D.G.S. Corp., 253 AD2d 368, 369 [1998];Commissioners of State Ins. Fund v Mathews & Sons Co., 131 AD2d 301, 301-302[1987]). Although the defendant did not raise this issue in the Supreme Court, a court's lack ofsubject matter jurisdiction may not be waived and may, in fact, be raised at any time (seeMatter of Fry v Village of Tarrytown, 89 NY2d 714, 718 [1997]; Morrison v BudgetRent A Car Sys., 230 AD2d 253, 257-260 [1997]; see generally Siegel, NY Prac§ 8, at 11; § 260, at 441 [4th ed]). Consequently, the cross motion for leave toamend the complaint should have been denied. Spolzino, J.P., Florio, Miller and Dickerson, JJ.,concur.