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In re Claim of Crespo

Court of Claims of New York

July 31, 2013

In the Matter of the Claim of Mercedes CRESPO, Claimant,
v.
The STATE of New York, Defendant. No. 120468.

[972 N.Y.S.2d 437] Langsam Law, LLP by Elise Langsam, Esq., for claimant.

Eric T. Schneiderman, New York State Attorney General by Daniel Chu, Assistant Attorney General, for defendant.

DAVID A. WEINSTEIN, J.

This action was commenced by a claim filed on October 14, 2011, in which claimant Mercedes Crespo alleged that at or about 5:30 p.m. on September 6, 2011, she tripped and fell in a hole due to defective pavement in the area behind 94 Amity Street in Brooklyn, New York. The claim alleges that the defect was the result of negligence by the State University of New York (" SUNY") and Downstate at LICH Holding Company, whom she named as defendants. Since the only proper defendant in this action is the State of New York (see Court of Claims Act § 9; N.Y. Const., art. VI, § 9), I will refer below to a single " defendant" in this action, or to " the State," and the caption is amended accordingly.

By decision and order dated May 23, 2012, I granted a motion by defendant to amend its answer to add the following affirmative defense: " Claimant allegedly injured during the course of her employment, has her remedy under the Worker's [sic] Compensation Law." Claimant has filed her note of issue, and defendant now moves for summary judgment on the ground that the claim is barred by the exclusive remedy provisions of the Workers' Compensation Law.

Defendant's submission indicates the following: Crespo worked for Long Island College Hospital (" LICH") until 2011 (Mot. Ex. L [" Crespo Dep." ] at 8-9). In May 2011, LICH was acquired by SUNY, as provided for by an Asset Purchase Agreement (" APA") between LICH, SUNY and various other entities (Mot. Ex. G). According to defendant's motion papers, the status of those previously employed by LICH was governed at the time of the accident by the terms of a Professional Employer Agreement (" PEA") entered into by SUNY and Staffco of Brooklyn, LLC (" Staffco" [1]) (Mot. Ex. H). Defendant supports its motion in chief with various documents, including the APA and PEA, and the deposition testimony of Crespo, security guard and [972 N.Y.S.2d 438] Staffco employee Gregory Frame, and director of facilities management and development (also employed by Staffco) Eamon Quirke.

The PEA recites that Staffco is registered in New York State as a Professional Employer Organization (" PEO"). A PEO is an entity to which the " client" outsources its payroll and human resource responsibilities, including payment of wages and employment taxes as well as other employment-related matters (see Tri-State Empl. Servs. v. Mountbatten Sur. Co., 99 N.Y.2d 476, 481, 758 N.Y.S.2d 595, 788 N.E.2d 1023 [2003]). In 2002, New York enacted chapter 565 of the Laws of 2002, the Professional Employer Act, codified in article 31 of the Labor Law (" Article 31"). This statute governs the legal status of PEOs and their employees.

Of particular note here, Article 31 provides as follows in regard to workers' compensation:

" Both the client and the professional employer organization shall be considered the employer for the purpose of coverage under the workers' compensation law and both the professional employer organization and its client shall be entitled to protection of the exclusive remedy provision of the workers' compensation law irrespective of which entity secures and provides such workers' compensation coverage"

(Labor Law § 922[4]).

In a nutshell, defendant argues that under Article 31, as well as the PEA, SUNY and Staffco were claimant's co-employers for purposes of workers' compensation, and claimant's remedy for injuries suffered in the course of her employment is therefore through the workers' compensation system, not in tort.

Defendant cites two provisions of the PEA in particular in support of its argument. First, it cites ¶ 5(c) of the PEA, which provides in relevant part:

" StaffCo agrees to secure and provide required workers' compensation and disability coverage for the StaffCo Employees, naming SUNY as an additional insured, it being understood that both SUNY and StaffCo shall be (i) considered the employer of the StaffCo Employees for the purpose of coverage under the workers' compensation law, and (ii) entitled to protection of the exclusive remedy provision of the workers' compensation law."

(PEA at 4; see also id. ¶ 24[a] [Staffco employees are independent contractors and not employees of SUNY " [e]xcept for purposes of coverage under the workers' compensation law" ]). Defendant submits a certificate of workers' compensation insurance coverage, initially listing the insured as Staffco, and the " entity requesting proof of coverage" as SUNY Downstate Medical Center (Mot. Ex. I). The same document later names the insured as " Staffco of ...


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