Response Cos. Inc. v. ADP, LLP
This text of 2024 NY Slip Op 31200(U) (Response Cos. Inc. v. ADP, LLP) is published on Counsel Stack Legal Research, covering New York Supreme Court, New York County primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
Opinion
Response Cos. Inc. v ADP, LLP 2024 NY Slip Op 31200(U) April 8, 2024 Supreme Court, New York County Docket Number: Index No. 655167/2021 Judge: Louis L. Nock Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various New York State and local government sources, including the New York State Unified Court System's eCourts Service. This opinion is uncorrected and not selected for official publication. INDEX NO. 655167/2021 NYSCEF DOC. NO. 30 RECEIVED NYSCEF: 04/08/2024
SUPREME COURT OF THE STATE OF NEW YORK NEW YORK COUNTY PRESENT: HON. LOUIS L. NOCK PART 38M Justice ---------------------------------------------------------------------------------X INDEX NO. 655167/2021 RESPONSE COMPANIES, INC., MOTION DATE 11/01/2021 Plaintiff, MOTION SEQ. NO. 001 -v- ADP, LLC, and ADP TOTALSOURCE GROUP, INC., DECISION + ORDER ON MOTION Defendants. ---------------------------------------------------------------------------------X
The following e-filed documents, listed by NYSCEF document numbers (Motion 001) 6, 7, 8, 9, 10, 11, 12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and 28 were read on this motion to DISMISS .
LOUIS L. NOCK, J.
Plaintiff commenced this action in August 2021 alleging breach of contract and other
causes of action arising out of defendants’ contractual obligation to it “to provide comprehensive
human resource services to its employees” (Complaint ¶ 3). Defendants move to dismiss the
complaint, which contains the following causes of action: breach of contract, fraud, negligence,
and breach of the implied covenant of good faith. The motion is opposed.
Background
In November 2010, an entity known as Response Personnel, Inc. (“Response”),1 entered
into a client services agreement (“CSA” [NYSCEF Doc. No. 18]) with an entity known as ADP
TotalSource, Inc. (“ADPTS”).2 In brief, the complaint alleges that plaintiff hired an employee
named Gary Dolgin in September 2014 who was “offered various benefits by ADP[TS]
including medical insurance coverage” (Complaint ¶ 22); but that he “has always been provided
1 Plaintiff herein is named Response Companies, Inc. 2 The two defendants herein are named ADP, Inc., and ADP TotalSource Group Inc. 655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL Page 1 of 5 Motion No. 001
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medical insurance coverage through his wife’s employer” and that “Mr. Dolgin never authorized
ADP[TS] to provide any medical benefits and continues to remain on his wife’s policy”
(Complaint ¶ 23). However, the complaint alleges that “ADP[TS] unilaterally forced placed
comprehensive medical insurance coverage for Mr. Dolgin, erroneously on a policy for
individuals who were Self-Employed . . . .” (Complaint ¶ 24.) The complaint further alleges that
“the premiums [for said erroneous placement of coverage] were paid 100% by [plaintiff]” (id.).
In sum, it is alleged that Mr. Dolgin “was erroneously and actively enrolled in a policy he never
elected to purchase” and that “this is a blatant error committed by ADP[TS]” but that “ADP[TS]
has refused to indemnify [plaintiff] for any amount of [premium] monies” (Complaint ¶¶ 24, 26).
The complaint alleges those monies to be in a minimum amount of $40,000 for which plaintiff
now seeks reimbursement (plus accrued interest thereon).
Seminal Provisions of the CSA (NYSCEF Doc. No. 18)
Section II (C) provides that “Client [i.e., plaintiff] agrees to identify all self-employed
individuals (“SEI”) to be covered under this Agreement . . . .” Section IV (preamble) provides
that “Client acknowledges that TotalSource’s [i.e., ADPTS’] provision of its Services is
dependent upon the completeness, accuracy, and timeliness of the information that Client
provides to TotalSource.” Section IV (D) provides that “TotalSource will provide Client with a
secure, online human resources website which . . . allows Client to process and report newly
hired” employees.
The Motion to Dismiss
The theory of the complaint is that ADPTS, without any identification by plaintiff of Mr.
Dolgin as a Self-Employed worker seeking health insurance coverage, “unilaterally” and
“erroneously,” placed Mr. Dolgin into coverage status, resulting in at least $40,000 in unjustified
655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL Page 2 of 5 Motion No. 001
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premiums paid by plaintiff over the course of his working period with plaintiff, commencing in
2014 – seven years ago. However, defendants submit the affidavit of their Client Relations
Executive, Juan Tapia (NYSCEF Doc. No. 9), which attests that a personnel department
employee of plaintiff bearing the data entry codename “MLACHAP” expressly identified Mr.
Dolgin, at the outset of his hiring by plaintiff in September 2014, as a recipient for health
insurance coverage, in the ADPTS information system (see, CSA § IV [D] [quoted above]), and
Mr. Tapia annexes a copy of that data entry page (NYSCEF Doc. No. 11). Mr. Tapia also
annexes a portion of the many invoices which plaintiff paid over the years, without objection, in
connection with insurance premiums for Mr. Dolgin (NYSCEF Doc. No. 12).
Defendants move to dismiss on the basis of Mr. Tapia’s affidavit, and its exhibits (CPLR
[a] [1]).3
Discussion
The CSA expressly casts the burden of identifying covered individuals, on the plaintiff
(CSA § II [C]) – not on the defendants. The CSA makes that even clearer in the preamble to
section IV of the CSA by stating that “Client acknowledges that TotalSource’s provision of its
Services is dependent upon the completeness, accuracy, and timeliness of the information that
Client provides to TotalSource.”4 Consequently, if what Mr. Tapia attests to is true – to wit, that
an employee of plaintiff coded as “MLACHAP” informed defendants in 2014 that Mr. Dolgin
was to be provided coverage – defendants were entitled to rely on that information (or
misinformation as the case may be) in providing the coverage and charging plaintiff the
3 Defendants also submit the affidavit of their Human Resource Business Partner, Dave Blomgren (NYSCEF Doc. No. 25), to the effect that the “NY-SEI” coverage underlying this action was to be “100% paid by the employer . . . .” (Id., ¶ 3.) 4 As for “timeliness,” plaintiff’s alleged discovery of Mr. Dolgin’s insurance status comes after numerous years of its acceptance and payment of defendants’ insurance premium invoices. 655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL Page 3 of 5 Motion No. 001
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premiums therefor, and cannot be held to account for plaintiff’s long-standing error in
identifying Mr. Dolgin as a covered worker.
However, in order for Mr. Tapia’s exhibits to acquire the type of evidentiary sufficiency
to warrant dismissal of the complaint at this stage, they must be evident to the court as “utterly
refut[ing]” the claims in the complaint and “conclusively establishing a defense as a matter of
law” (Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v Matthew Bender & Co.,
Inc., 37 NY3d 169, 175, rearg denied 37 NY3d 1020 [2021]). Thus, while Mr. Tapia identifies,
in affidavit form, data enterer “MLACHAP” as “known to ADPTS to have been hired for
employment by [plaintiff]” (NYSCEF Doc. No. 9 ¶ 3), further evidence, perhaps by way of
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2024 NY Slip Op 31200(U), Counsel Stack Legal Research, https://law.counselstack.com/opinion/response-cos-inc-v-adp-llp-nysupctnewyork-2024.