| Len v State of New York |
| 2010 NY Slip Op 05307 [74 AD3d 1597] |
| June 17, 2010 |
| Appellate Division, Third Department |
| Edward J. Len, as Administrator of the Estate of Michael E. Len,Deceased, Appellant, v State of New York et al., Respondents. |
—[*1] Andrew M. Cuomo, Attorney General, Albany (Kathleen M. Treasure of counsel), forrespondents.
Spain, J. Appeal from an order of the Court of Claims (Hard, J.), entered February 23, 2009,which, among other things, granted defendants' motion to dismiss the claim and/or for summaryjudgment dismissing the claim.
On December 7, 2006, decedent tragically fell to his death from one of the movable dams atLock 9 of the Erie Canal on the Mohawk River. At the time, decedent was employed bydefendant New York State Canal Corporation as the chief lock operator for the Green IslandBridge in the City of Troy, Rensselaer County, but—on that morning—he had beendirected to report to Lock 9 to assist in raising the lock's movable dams, a task that wasperformed seasonally to allow for winter ice flow. Positioned on a catwalk below the bridgedecking, decedent was using a pole to clear a small tree lodged in the dam's upper gate when hefell, landing in the Mohawk River and subsequently drowning. Decedent's father, in his capacityas administrator of decedent's estate, commenced this action against the Corporation, defendantState of New York and defendant New York State Thruway Authority alleging both wrongfuldeath and conscious pain and suffering.[*2]
Asserting, among other things, that all of the claims arebarred by the exclusivity provision of Workers' Compensation Law § 11, defendantsmoved to dismiss the action and/or for summary judgment. Conceding only that his claimsagainst the Corporation are barred, claimant otherwise opposed the motion and cross-moved toamend his claim as against the State and the Authority to allege Labor Law violations. The Courtof Claims granted defendants' motion, holding that the claims against the Authority—byvirtue of its parent-subsidiary relationship with the Corporation—were barred by theexclusivity provision of Workers' Compensation Law § 11. The court further held that theclaims against the State, including the proposed Labor Law violations, lacked merit and, thus,dismissed the complaint and denied claimant's motion to amend his complaint as moot. Onclaimant's appeal, we now affirm.
"As a general rule, when an employee is injured in the course of his [or her] employment, his[or her] sole remedy against [the] employer lies in his [or her] entitlement to a recovery under theWorkers' Compensation Law" (Billy v Consolidated Mach. Tool Corp., 51 NY2d 152,156 [1980]; see Workers' Compensation Law § 11). Accordingly, we mustdetermine whether the Authority should be deemed decedent's employer for workers'compensation purposes. "It is established that '[a] parent corporation may be deemed to be anemployer of an employee of a subsidiary corporation for [w]orkers' [c]ompensation purposes ifthe subsidiary functions as the alter ego of the parent' " (Constantine v Premier CabCorp., 295 AD2d 303, 303 [2002], quoting Dennihy v Episcopal Health Servs., 283AD2d 542, 543 [2001]; see Shine v Duncan Petroleum Transp., 60 NY2d 22, 27 [1983];Smith v Roman Catholic Diocese of Syracuse, 252 AD2d 805, 806 [1998]). Here, as it isboth undisputed and statutorily established that the Corporation is a wholly owned subsidiary ofthe Authority (see Public Authorities Law § 382 [1]), we must decide whether theCorporation is also an alter ego of the Authority.
Although the standard for finding an alter ego relationship is high, requiring "directintervention by the parent in the management of the subsidiary to such an extent that 'thesubsidiary's paraphernalia of incorporation, directors and officers' are completely ignored"(Billy v Consolidated Mach. Tool Corp., 51 NY2d at 163, quoting Lowendahl vBaltimore & Ohio R.R. Co., 247 App Div 144, 155 [1936], affd 272 NY 360[1936]), here we find that the Corporation is but an arm of the Authority, justifying a finding thatthe Corporation is the Authority's alter ego. Indeed, the statutory framework establishing theexistence of both entities demonstrates, as a matter of law, that the Corporation was formed forthe sole purpose of carrying out the Authority's duty to maintain the State's canal system onbehalf of the people of New York State (see Canal Law §§ 5, 6 [1]; PublicAuthorities Law § 382 [1]). Specifically, when the Legislature transferred managementand control of the canal system—on behalf of the State—to the Authority, itspecifically stated that the Authority would exercise its control "through the [C]orporation"(Canal Law § 6 [1]). The Corporation's board members "shall be the same persons holdingthe offices of members of the [A]uthority" (Public Authorities Law § 382 [3]) and "[n]oofficer or member of the . . . [C]orporation shall receive any additionalcompensation" for serving as a member of the Corporation in addition to the Authority (PublicAuthorities Law § 382 [4]). In addition to the sharing of management between the twoentities, the Corporation provides funding to the Authority and the Authority is the only entitythat can raise revenue for the Corporation (see Public Authorities Law § 382 [2],[10]).
We conclude that this evidence of shared purpose, intermingling of finances and unity ofmanagement is sufficient, on this record, to uphold the Court of Claims' finding that, for thepurposes of canal operations, the Authority is indistinguishable from the Corporation and, as aresult, is entitled to assert the exclusivity provisions of the Workers' Compensation Law (see[*3]Smith v Roman Catholic Diocese of Syracuse, 252 AD2dat 807; Pappas v Greek Archdiocese of N. & S. Am., 178 AD2d 104, 105 [1991];Carusone v Three Ctrs. [OLROHO] Assoc., 124 AD2d 317, 318 [1986]; cf.Longshore v Davis Sys. of Capital Dist., 304 AD2d 964, 965 [2003] [entities formed fordifferent purposes and neither a subsidiary of the other]; Wernig v Parents & Bros. Two,195 AD2d 944, 945 [1993] [same]; butcf. Buckmann v State of New York, 64 AD3d 1137, 1139 [4th Dept 2009] [findinginsufficient evidence to determine, as a matter of law, that Corporation is not an alter ego of theAuthority]).
We are mindful that the language of Public Authorities Law § 382 (5), on its face,seems to dictate a contrary result. That statute states that "[t]he employees of the. . . [C]orporation . . . generally shall not be deemed to be employeesof the [A]uthority by reason of their employment by the . . . [C]orporation."However, the language is not absolute as it states only that Corporation employees "generally"shall not be deemed employees of the Authority. Further, "[w]hen confronting an issue ofstatutory interpretation, [the Court's] primary objective is to 'ascertain and give effect to theintention of the Legislature' " (Matter ofEmigrant Bancorp, Inc. v Commissioner of Taxation & Fin., 59 AD3d 30, 33 [2008],quoting Riley v County of Broome, 95 NY2d 455, 463 [2000]). Here, legislative historyexists suggesting that the language was intended to differentiate Corporation employees fromother Authority employees simply to protect the seniority rights and privileges of Department ofTransportation employees who were transferred to the Corporation when jurisdiction of the canalsystem was transferred to the Authority (see NY Assembly Debate on Assembly Bill12138-A, July 28, 1992, at 41-42). Finding no evidence in the statute's legislative history to thecontrary and since case law confirmed that Corporation employees are treated as Authorityemployees in other contexts (see e.g. Matter of Lamphron v State of N.Y. ThruwayAuth., 239 AD2d 860, 861 [1997] [suit for unpaid vacation time]; Matter of Weir v Stateof N.Y. Thruway Auth., 231 AD2d 836, 837 [1996] [petition for wrongful termination]), wehold that the language of Public Authorities Law § 382 (5) does not operate to precludethe Authority from asserting the exclusivity defense of the Workers' Compensation Law.Accordingly, the claims against the Authority were properly dismissed.
With respect to his claims against the State, claimant asserts that he should have beenpermitted to amend the complaint to include claims under Labor Law § 240 (1) and§ 241 (6).[FN1]The decision to grant leave to amend pleadings "rests within the sound discretion of the trialcourt and, absent a clear abuse of discretion, will not be lightly cast aside" (Pagan v Quinn, 51 AD3d 1299,1300 [2008]). We discern no abuse of discretion here, as the proposed Labor Law§§ 240 and 241 claims lack merit (see Nelson v State of New York, 67 AD3d 1142, 1143 [2009]).
Claimant asserts first that, at the time of his fall, decedent was engaged in "altering" the damas opposed to "routine maintenance," thereby triggering the protection afforded by Labor Law§ 240 (1) (Pakenham v Westmere Realty, LLC, 58 AD3d 986, 987 [2009]). Here,debris routinely became caught in the movable dam parts necessitating its removal each time thedam sections were lifted or lowered and, thus, decedent's actions at the time of his fall can onlybe characterized as the type of routine maintenance that will not trigger Labor Law § 240(1) (see [*4]Kirk v Outokumpu Am. Brass, Inc., 33 AD3d 1136, 1138[2006]; Jones v Village ofDannemora, 27 AD3d 844, 846 [2006]; Barbarito v County of Tompkins, 22 AD3d 937, 938 [2005]; Detraglia v Blue Circle Cement Co., 7AD3d 872, 873 [2004]).
Claimant's contention that decedent was altering the dam because opening the pans changesthe structure from a dam to a bridge is unavailing. The Court of Appeals has held that "altering,"as intended under Labor Law § 240 (1), "requires making a significant physicalchange to the configuration or composition of [a] building or structure" (Joblon v Solow,91 NY2d 457, 465 [1998]; see Hodgesv Boland's Excavating & Topsoil, Inc., 24 AD3d 1089, 1091 [2005], lv denied 6NY3d 710 [2006]; cf. Cox v International Paper Co., 234 AD2d 757, 758-759 [1996]). Incontrast to situations where a change is made to permanently alter the physical structure involved(see e.g. Smith v Innovative Dynamics,Inc., 24 AD3d 1000, 1001 [2005] [installation of solar-powered infrared camerasystem]; Tassone v Mid-Valley Oil Co., 291 AD2d 623, 624 [2002], lv denied100 NY2d 502 [2003] [mounting a satellite dish on the roof of a building]), implementing achange to a structure that is inherent to the structure itself—such as moving the movableparts of the dam—cannot be deemed an "alteration" under Labor Law § 240 (1)(see e.g. Hodges v Boland's Excavating & Topsoil, Inc., 24 AD3d at 1091; see also Smith v CSX Transp., Inc., 30AD3d 1003, 1004-1005 [2006]).
Likewise, claimant failed to state a cause of action under Labor Law § 241 (6). Thatstatute is inapplicable outside of the specific contexts of construction, excavation or demolitionwork (see Esposito v New York CityIndus. Dev. Agency, 1 NY3d 526, 528 [2003]). Claimant's characterization of the workperformed at Lock 9 in order to lift and pull down the dams in the winter and spring as"construction" is unpersuasive (seeAlexander v Hart, 64 AD3d 940, 944 [2009]; Pakenham v Westmere Realty,LLC, 58 AD3d 986, 988 [2009]; Kirk v Outokumpu Am. Brass, Inc., 33 AD3d 1136, 1138 [2006];12 NYCRR 23-1.4 [b] [13]).[FN2]Accordingly, the Court of Claims properly found that claimant's proposed claims under LaborLaw § 240 (1) and § 241 (6) lack merit.
In light of this conclusion, we need not address the State's proposed alternative ground ofaffirmance, namely that it is also entitled to assert the defense of workers' compensation. Finally,we reject claimant's alternative argument that the granting of the State's summary judgmentmotion was premature (see CPLR 3212 [f]). Claimant "has failed to identify anyevidence that might . . . [be] developed if additional discovery . . . [is]conducted that would . . . serve[ ] to bar [the Court of Claims] order granting [theState's] motion" (DeLorenzo v St.Clare's Hosp. of Schenectady, N.Y., 69 AD3d 1177, 1180 [2010]).
Mercure, J.P., Lahtinen, Malone Jr. and Kavanagh, JJ., concur. Ordered that the order isaffirmed, without costs.
Footnote 1: Claimant has not addressed, andthus abandoned, any argument that his common-law negligence and Labor Law § 200claims were improperly dismissed.
Footnote 2: Further, claimant failed to pleadthe violation of a specific rule or regulation promulgated by the Commissioner of Labor tosupport his Labor Law § 241 (6) claim (see Desharnais v Jefferson Concrete Co., Inc., 35 AD3d 1059,1061 [2006]).