Opinion
L97-09.
Decided August 25, 2010.
Andrew M. Cuomo, Attorney General, Attorney for Plaintiff (Mark D. Brody, of counsel) The Capitol, Albany, New York.
Murphy, Burns, Harder Murphy, LLP, Attorneys for Defendant, (Peter G. Barber, of counsel), Albany, New York.
By this action, Thomas P. Dinapoli, Comptroller of the State of New York ("the Comptroller"), suing in his capacity as the sole trustee of the New York State and Local Retirement System ("NYSLRS" or "Retirement System"), seeks to collect a prior year adjustment in pension costs from defendant Town of New Scotland ("the Town"). The Comptroller now moves for summary judgment on his complaint. The Town opposes the motion and cross-moves for summary judgment dismissing the complaint as barred by the statute of limitations and the equitable doctrine of laches.
BACKGROUND
The facts relevant to this action are straightforward and not in dispute. The Town is a longstanding member of NYSLRS. On or about May 2, 2006, Walter Myers, a truck driver for the Town, applied for a service retirement. Upon review of his application, the Retirement System discovered that the Town had not paid the employer contributions associated with Myers' service for the period from September 1, 1972, when Myers became employed by the Town, through March 31, 1973, when Myers applied for membership in the Retirement System. While Myers' membership application did disclose that he started employment with the Town on September 1, 1972, the Retirement System claims that the Town failed to report Myers as an employee and remit contributions for the disputed seven-month period.
In May 2006, after receiving Myers' retirement application and obtaining confirmation from the Town that Myers was, in fact, a Town employee entitled to mandatory membership in the Retirement System commencing on September 1, 1972, the Retirement System granted Myers credit for this service. On or about November 6, 2007, the Retirement System sent the Town its annual invoice for NYSLRS contributions for the fiscal year ending March 31, 2008. This invoice included a charge in the amount of $10,310 for "prior years adjustment", reflecting the cost of Myers' service credit for the disputed period, together with actuarially appropriate interest.
By this motion, the Comptroller seeks summary judgment on its claim that the Town, as a participating employer in NYSLRS, is obliged to pay the Retirement System the mandated employer contributions for Myers' employment for the period from September 1, 1972 through March 31, 1973, together with interest. In opposition, the Town contends that under the applicable six-year statute of limitations, this action was required to have been commenced by September 1, 1978, six years after Myers started employment. The Town further argues that even if this action had been commenced within the applicable limitations period, it is barred by the equitable defense of laches.
ANALYSIS
"Generally, any Statute of Limitations begins to run when a cause of action accrues" ( Ely-Cruikshank Co. v Bank of Montreal, 81 NY2d 399, 402, citing CPLR 203 [a]). The parties agree that this action is governed by the residual six-year limitations period established by CPLR 213. Thus, resolution of the instant motion turns on when the Comptroller's cause of action accrued.
The Retirement System argues that its cause of action accrued in May 2006, when the Town acknowledged that Myers was entitled to credit for the period from September 1, 1972 through March 31, 1973. Upon learning of this uncredited service, the Retirement System began the process of determining the amount of the employer contribution owed by the Town.
The Town argues that accrual of the Comptroller's cause of action depends on when the Retirement System learned of Myers' uncredited service. According to the Town, this service was disclosed to NYSLRS on March 31, 1973, when Myers submitted an application for membership in the Retirement System stating that he started employment on September 1, 1972. Further, the Town submits a letter from the Retirement System, dated April 12, 1973, reciting a "date of membership" for Myers of "9/1/72".
In reply, the Retirement System argues that it relies upon employer reports in determining whether to grant service credits to members, and the Town failed to report Myers as an employee entitled to mandatory membership at any time prior to April 1, 1973. Further, the Retirement System explains that it does not, in the ordinary course, conduct audits to determine whether participating employers erred in failing to report an employee as a member of the Retirement System for the full duration of their public employment. It was not until Myers submitted his retirement application in 2006, claiming credit for the period from September 1, 1972 through March 31, 1973, that the prospective retiree's work history was reviewed.
Ultimately, the Court does not find either party's arguments to be persuasive. Both theories of accrual are based on when the Retirement System discovered (or should have discovered) Myers' uncredited service. However, the subdivisions of CPLR 213 applicable to this case do not take into account when the plaintiff discovered the facts giving rise to liability ( compare CPLR 213, [2] and [6] with id. [5] and [8]). And contrary to the Town's contention, CPLR 203 (g) is not an independent source of authority for a discovery rule, as it applies only in cases "where the time within which an action must be commenced is computed from the time when facts were discovered or from the time when facts could with reasonable diligence have been discovered, or from either of such times."
Rather, to determine when the Comptroller's claim accrued, the starting point must be Retirement and Social Security Law ("RSSL") § 17, the statute under which the plaintiff sues. Subdivision (a) of the cited statute requires the Comptroller to annually "determine the amount which each participating employer is required to pay to the retirement system to discharge its obligations" for the fiscal year. This amount shall include "any additional obligation, plus interest on such amount, for fiscal years preceding the current fiscal year" ( id.). The participating employer "shall appropriate a sum sufficient to pay [the foregoing] amount" ( id. [b]). "Payment of the amount specified in the comptroller's statement shall be made . . . within seventy-eight days after the receipt of such statement" from the Retirement System or the next succeeding February 1st, whichever is later ( id. [c]). "The comptroller shall have full power and authority to bring suit in the supreme court against any participating employer to recover any sum, payment of which is not made" in accordance with the foregoing provisions ( id. [e]).
The record establishes that on or about November 6, 2007, the Retirement System sent the Town its annual invoice, which included the prior year adjustment at issue. This invoice represents the Comptroller's final determination under RSSL § 17 (a), and it was at that point when the Town became obliged to pay the invoiced amount in the manner and within the time frame established in the statute. Upon the Town's failure or refusal to pay the full amount of the invoice within the prescribed period, interest began to run and the Comptroller's right to prosecute this action accrued ( see id. [d], [e]).
Thus, insofar as the Town disputes the Comptroller's November 6, 2007 determination regarding assessment of the prior service costs associated with Myers or the accrued interest thereupon, its remedy was to commence a challenge to this administrative determination pursuant to CPLR article 78 within four months of receipt thereof ( see State of New York v County of Nassau, 120 AD2d 881 [3d Dept 1986]). Upon the expiration of the four-month limitations period, the Comptroller's determination no longer is subject to judicial review. Further, under RSSL § 17 (e), the Comptroller's right to bring this action for non-payment on the invoice accrued on or about February 1, 2008, when the Town neglected or refused to pay the November 6, 2007 invoice in full within the statutory period. Based on the foregoing, the Court concludes that the Town's statute of limitations defense is without merit.
Finally, as the Comptroller brings this proceeding in his governmental capacity, the Town's reliance on the equitable doctrines of laches and estoppel are unavailing ( see State v County of Nassau, supra). In any event, given the role of the Town's own failures to report Myers as an employee and to remit the associated mandatory employer contributions for the disputed period, as well as the important public policy interests at stake in ensuring that participating employers bear the costs of retirement benefits for their employees, the Court would find the Town's reliance on these equitable doctrines unavailing.
As to the merits of the action, the Comptroller's moving papers, including the affidavit of Melanie Whinnery, Director of the Member and Employee Services Bureau of NYSLRS, and the documentation annexed thereto, are sufficient to demonstrate plaintiff's prima facie entitlement to judgment as a matter of law. In opposition, the Town has failed to demonstrate a triable issue of fact. Accordingly, it is
ORDERED that plaintiff's motion for summary judgment is granted; and it is further
ORDERED that defendant's cross-motion for summary judgment is denied; and it is further
ORDERED that plaintiff is entitled to judgment in the amount of $10,310, plus statutory interest pursuant to RSSL § 17 (d) from February 1, 2008 and costs; and finally it is
ORDERED that plaintiff shall settle judgment accordingly.
This constitutes the Decision and Order of the Court. The original Decision and Order is being returned to counsel for plaintiff; all other papers are being transmitted to the Albany County Clerk. The signing of this Decision and Order shall not constitute entry or filing under CPLR Rule 2220, and counsel is not relieved from the applicable provisions of that Rule.