City of New York v. Wing

12 A.D.3d 180, 783 N.Y.S.2d 465, 2004 N.Y. App. Div. LEXIS 13053

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: November 4, 2004
• Status: Published

Opinion

Order and judgment (one paper), Supreme Court, New York County (Faviola A. Soto, J.), entered February 4, 2004, which, in a CPLR article 78 proceeding by the City against the State, granted the State’s cross motion to dismiss the petition for lack of subject matter jurisdiction, unanimously affirmed, without costs.

Certain funds that the City was otherwise required to remit to the State (18 NYCRR 608.2) were withheld by the City on the ground that the State’s negligent programing of its computers, and ensuing delay in fixing the problem after learning of it, caused the City to pay Medicaid benefits to a number of ineligible persons, costing the City millions of dollars. The State advised the City that such withholdings were improper and that, if the City did not remit the funds, the State would recoup the withholdings by withholding certain other funds that the State otherwise owed the City. The City then commenced the instant article 78 proceeding challenging the State’s “determination” to demand repayment of the withheld funds. The motion court correctly dismissed the proceeding on the ground that it essentially seeks to recover money damages on the ground of negligence (see Matter of Gross v Perales, 72 NY2d 231, 235-236 [1988]). That the City instituted a self-help remedy by withholding funds it owed the State does not make its claim fundamentally one to review a State determination that the withholdings were improper. The City’s argument would permit any tort claimant against the State to simply withhold taxes, and when the State demanded the taxes, to assert the tort claim in an article 78 proceeding rather than a Court of Claims action where it belongs. Concur—Mazzarelli, J.P., Williams, Friedman, Gonzalez and Catterson, JJ.