Matter of Rivera v. Superior Laundry Services, LLC ( 2016 )

State of New York
Supreme Court, Appellate Division
Third Judicial Department
Decided and Entered: September 29, 2016 521188
________________________________
In the Matter of the Claim of
EDUARDO RIVERA,
Claimant,
v
SUPERIOR LAUNDRY SERVICES,
LLC,
Respondent, MEMORANDUM AND ORDER
and
GUARANTEE INSURANCE COMPANY,
Appellant.
WORKERS' COMPENSATION BOARD,
Respondent.
________________________________
Calendar Date: September 8, 2016
Before: Garry, J.P., Egan Jr., Lynch, Rose and Aarons, JJ.
__________
Malapero & Prisco, LLP, New York City (Priya P. Patel of
counsel), for appellant.
__________
Rose, J.
Appeal from a decision of the Workers' Compensation Board,
filed November 20, 2014, which ruled that the employer's workers'
compensation policy was not properly canceled.
Claimant was an employee of Brand Management Services, Inc.
(hereinafter BMS), doing business as County Agency, Inc., a
professional employer organization that assigned or leased
claimant's services to its client employers (see generally Labor
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Law art 31; 12 NYCRR 308.3 [g]; Tri-State Empl. Servs. v
Mountbatten Sur. Co., 99 NY2d 476, 481-482 [2003]). After his
services with County Agency ended on May 5, 2012, claimant was
employed directly by one of County Agency's client employers,
Superior Laundry Services, LLC (hereinafter the employer). In
September 2012, claimant was injured while working for the
employer, and he filed a claim for workers' compensation
benefits. The case was controverted by Guarantee Insurance
Company, BMS's designated workers' compensation carrier
(hereinafter the carrier), on the grounds that, among other
things, the policy that it had issued to BMS did not provide
insurance coverage to the employer for its own direct employees,
such as claimant, and that, in any event, the policy had been
canceled in August 2012, prior to claimant's accident, due to a
failure of BMS to pay the premiums owed. Following a hearing, a
Workers' Compensation Law Judge determined that the carrier's
policy covered the employer and that the policy had not been
properly canceled due to the carrier's failure to comply with the
notice requirements of Workers' Compensation Law § 54 (5). Upon
administrative review, the Workers' Compensation Board affirmed,
finding that the carrier failed to submit any proof of proper
cancellation of the policy. The carrier now appeals.
We reverse. While the Board correctly determined that the
carrier did not provide proper notice of its cancellation of the
policy that it had issued to BMS, the Board failed to address the
threshold question of whether the policy at issue provided
workers' compensation insurance coverage to the employer at the
time of claimant's accident. For the following reasons, we find
that it did not.
Here, the insurance policy issued to BMS by the carrier
included an additional insured endorsement, which unambiguously
provided that the policy also applied to specifically named
additional insured entities, "but only with respect to employees
hired by and included on the payroll of the named insured while
performing work for the [a]dditional [i]nsured[]" entities.
County Agency is one of approximately 22 additionally insured
entities listed in the policy's "Schedule of Named Insured."
Significantly, however, the record evidence establishes that at
the time of claimant's accident in September 2012, he was no
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longer an employee of BMS and County Agency (cf. Labor Law § 922
[4]; Matter of RobsonWoese, Inc. [Commissioner of Labor], 42 AD3d
774, 775 [2007]; Matter of Crespo v State of New York, 41 Misc 3d
807, 809 [Ct Cl 2013]). Moreover, Superior Laundry Services was
not included in the schedule of additionally insured entities
under the carrier's insurance policy issued to BMS. Accordingly,
the Board erred in finding that Guarantee Insurance Company is
the proper carrier for the claim and in discharging the Uninsured
Employers' Fund and removing it from notice.
Garry, J.P., Egan Jr., Lynch and Aarons, JJ., concur.
ORDERED that the decision is reversed, without costs, and
matter remitted to the Workers' Compensation Board for further
proceedings not inconsistent with this Court's decision.
ENTER:
Robert D. Mayberger
Clerk of the Court