Hudleasco, Inc. v. State

90 Misc. 2d 1057, 396 N.Y.S.2d 1002, 22 U.C.C. Rep. Serv. (West) 545, 1977 N.Y. Misc. LEXIS 2219
CourtNew York Court of Claims
DecidedJuly 19, 1977
DocketClaim No. 60813
StatusPublished
Cited by18 cases

This text of 90 Misc. 2d 1057 (Hudleasco, Inc. v. State) is published on Counsel Stack Legal Research, covering New York Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Hudleasco, Inc. v. State, 90 Misc. 2d 1057, 396 N.Y.S.2d 1002, 22 U.C.C. Rep. Serv. (West) 545, 1977 N.Y. Misc. LEXIS 2219 (N.Y. Super. Ct. 1977).

Opinion

Albert A. Blinder, J.

Claimant moves by motion No. M-19549 for an order pursuant to CPLR 3212 granting summary judgment to claimant on the issue of liability and further ordering an immediate trial of the issues of fact relating to the amount of damages.

The defendant moves by cross motion No. M-19621 for an order pursuant to CPLR 3211 (subd [a], pars 2, 5, 7) and sections 8 and 10 of the Court of Claims Act, dismissing the claim on the grounds that the claim fails to state a cause of action and it was untimely served and filed.

The claim, which was filed on January 14, 1977, alleges that the Secretary of State erred on April 20, 1973 when he issued a certificate that stated that there was no financing statement filed involving Leasemore Equipment, Inc. as of April 9, 1973 when, in fact, such a financing statement was on record. Airway Equipment Rental Company, Inc., a company which had been merged into Hudleasco, Inc., the claimant, allegedly acted in reliance on the certificate and purchased certain property from Leasemore Equipment, Inc. As a result, it alleges it suffered damages in the sum of $14,060 from an action brought against it by a secured party, which had been [1058]*1058named in the financing statement filed on or about January 18, 1972.

The damages, it is alleged, arose from the defective, erroneous and mistaken certificate issued by the Secretary of State pursuant to section 9-407 of the Uniform Commercial Code.

The claim alleges that it was filed within 90 days after the claim accrued, as required by law, stating that the claim accrued on or about November 5, 1976 when the claimant’s damages became ascertainable.

The defendant, by its verified answer filed on March 24, 1977, admits that "on or about April 20, 1973 the office of the Secretary of State of New York issued a certificate which recited that there was 'no record’ of any financial statement as of April 9, 1973, when in fact, there was.” The verified answer sets forth two affirmative defenses; (1) that the claim was untimely filed and (2) that the acts complained of are within the prerogative of the sovereign for which liability was not waived by section 8 of the Court of Claims Act.

The court will first review the question of timeliness of filing. As above stated, the claim alleges the receipt on or about April 20, 1973, of a defective certificate reciting that there was no record of any financing statement, as of April 9, 1973 when, in fact, such a financing statement was on record with the Secretary of State.

An examination of the affidavit submitted in support of the claimant’s motion, as well as the exhibits attached thereto, indicates that the claimant suffered damages by virtue of an action brought by Industralease Automated & Scientific Equipment Corp. The Industralease action was initiated by an order to show cause dated September 3, 1974 seeking to replevy certain chattels. In conjunction with the replevin action a complaint was served seeking damages in the sum of $25,000 on behalf of Industralease, as plaintiff, against the claimant, Hudleasco, Inc., as defendant. Hudleasco’s answer was dated November 5, 1974. Thereafter, the parties entered into a stipulation of settlement and discontinuance dated November 5, 1976. Claimant asserts that November 5, 1976 is the date that the claim accrued since it was not until the execution of the stipulation that it could ascertain the full extent of its damages. It is clear that if the claim accrued on November 5, 1976, it is timely filed (filed with the Clerk of the [1059]*1059Court on January 14, 1977 and served on the Attorney-General on January 21, 1977).

The defendant contends that the wrong complained of occurred in April of 1973 and that, in any event, when the claimant was served in the action by Industralease it was on notice that it was liable for a maximum of $25,000 plus interest. Therefore, it is argued, the receipt of those pleadings marked the date the claim accrued. As authority the defendant cites Heritage Corp. of N. Y. v New York State Thruway Auth. (44 AD2d 869). The Heritage case involved an issue which arose out of certain leases of real property to the New York State Thruway Authority. A controversy existed as to damages due to the condition of the premises leased and certain conditions under the leases. The Third Department held (p 869) "that damages were readily observable and ascertainable as of the date the premises were surrendered, albeit they might have been indefinite to some extent. Accordingly, the claimant failed to file the claim within the six-month period required by the Court of Claims Act.” The defendant also cites Davis v State of New York (84 Misc 2d 597, revd 54 AD2d 126) which involved a situation where, as a result of the wrongful release of confidential information by the State Division of Licenses, claimant was fired from his job as a security guard. In Davis this court held that the claim accrued when the information was released and not when the claimant discovered its wrongful release.

The claimant cites authorities for the proposition that the claim accrued when it matured, and it did not mature, for purposes of filing, until the extent of the damages could be ascertained. One of these is Edlux Constr. Corp. v State of New York (252 App Div 373, affd 277 NY 635). Edlux held that claim accrued does not mean and is not identical with the expression cause of action accrued. Rather, the Third Department stated, a claim accrues when it matures and that the words "claim accrued” have the same meaning as "damages accrued”. (Also see Otis Elevator Co. v State of New York, 52 AD2d 380, 382.)

In cases involving continuing torts, it has often been held that the 90-day time period does not start to run until the extent of the damages can be ascertained. (See Taylor v State of New York, 302 NY 177; Chartrand v State of New York, 46 AD2d 942; Terry Contr. v State of New York, 27 AD2d 499.) However, similar results have been obtained in cases where [1060]*1060no element of continuing wrong existed. (Waterman v State of New York, 19 AD2d 264, 266, cited for this proposition in Bronxville Palmer v State of New York, 36 AD2d 647, 648.)

In commenting on the various rules of accrual of claims under the Court of Claims Act, Judge Breitel stated in Boland v State of New York (30 NY2d 337, 342) "[t]hus, the accrual of claims under the Court of Claims Act has received various kinds of treatment, artificial but effective to save claims or to permit early assertion [citations omitted]”.

In the case at bar, in view of the foregoing, for the court to adopt the defendant’s contention it must hold that the claim accrued when claimant was served with papers in the replevin action in August of 1974. Such a result would be illogical. The pleading and moving papers in the original action would, at most, have contained allegations subject to verification. This would not be sufficient notice to predicate the applicability of section 10 of the Court of Claims Act.

After careful consideration of the facts and the case law, it is the court’s opinion that the claim accrued and ripened for purposes of filing a notice of intention or a claim for damages on November 5, 1976. This is the first date upon which the claimant could ascertain the extent of its damages.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Signature Health Center, LLC v. State
28 Misc. 3d 543 (New York State Court of Claims, 2010)
Ferrer v. State
172 Misc. 2d 1 (New York State Court of Claims, 1996)
Marine Midland Bank, N. A. v. State
195 A.D.2d 871 (Appellate Division of the Supreme Court of New York, 1993)
Bell v. State
140 Misc. 2d 778 (New York State Court of Claims, 1988)
Ford Motor Credit Co. v. State
133 A.D.2d 980 (Appellate Division of the Supreme Court of New York, 1987)
Perez v. Government of the Virgin Islands
23 V.I. 220 (Virgin Islands, 1987)
Borg Warner Acceptance Corp. v. KANSAS SECRETARY OF ST.
731 P.2d 301 (Supreme Court of Kansas, 1987)
Johnson v. State
131 Misc. 2d 630 (New York State Court of Claims, 1986)
Adam v. State
380 N.W.2d 716 (Supreme Court of Iowa, 1986)
Herman v. State
126 Misc. 2d 1019 (New York State Court of Claims, 1984)
Chung v. State
122 Misc. 2d 676 (New York State Court of Claims, 1984)
Fitzpatrick v. Bank of New York
124 Misc. 2d 732 (Appellate Terms of the Supreme Court of New York, 1983)
Fitzpatrick v. Bank of New York
118 Misc. 2d 771 (Civil Court of the City of New York, 1983)
ITT Diversified Credit Corp. v. State
115 Misc. 2d 716 (New York State Court of Claims, 1982)
Pecenik v. City of New York
109 Misc. 2d 777 (Civil Court of the City of New York, 1981)
Bivas v. State
97 Misc. 2d 524 (New York State Court of Claims, 1978)
Hudleasco, Inc. v. State
63 A.D.2d 1042 (Appellate Division of the Supreme Court of New York, 1978)

Cite This Page — Counsel Stack

Bluebook (online)
90 Misc. 2d 1057, 396 N.Y.S.2d 1002, 22 U.C.C. Rep. Serv. (West) 545, 1977 N.Y. Misc. LEXIS 2219, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hudleasco-inc-v-state-nyclaimsct-1977.