Plaintiff, COMMISSIONERS OF STATE INSURANCE FUND, moves for an order striking the defendant's counter-claim. Defendant, IMR, INC. d/b/a BOBBY SECURITY SERVICE, opposes the motion and cross-moves for an order transferring its counter-claim to the Court of Claims. The motion and cross-motion are determined as follows:

This action arises from alleged non-payment of Worker's Compensation Insurance for the period from May 25, 1994 through January 22, 1996. The action was commenced on or about December 16,1997 and a default judgment in the sum of $31,724.63 was entered on February 24,1998. It appears that plaintiff did not notify the defendant of the default judgment and took no action until June 2006 when plaintiff restrained plaintiff's bank account. Thereafter, defendant immediately moved to vacate the default judgment and, by Short Form Order, dated September 25, 2006, the Court vacated the default and the judgment and directed defendant to serve a formal answer to the complaint on or before October 20, 2006. On the motion to vacate the default, the defendant explained that, in 1998 when the action was commenced, the President of the corporation spoke to plaintiff's attorney and advised that defendant had paid all the premiums, offered to send copies of all payment checks and informed him of a $9,230.00 credit plaintiff had allowed. It was [*2]defendant's belief that the matter had been resolved as plaintiff took no action for over eight (8) years. The Court found that defendant's documentary evidence submitted on the motion demonstrated a meritorious defense of full payment and that defendant's belief that the matter had been taken care of constituted a reasonable excuse, citing Tonawanda School Employees Federal Credit Union v Sack, 242 AD2d 894, 662 NYS2d 885 (4th Dept. 1997). The Court held that it would be improper to permit the judgment to stand unsatisfied in light of defendant's payments to the COMMISSIONER of sums which total more than the amount claimed to be due.

On September 29, 2006, defendant filed its verified answer, which included a counterclaim alleging it had overpaid plaintiff for Workers Compensation Insurance in the sum of $17,138.93, for which it sought reimbursement, together with interest from November 30, 1995, costs and disbursements. On the instant motion to strike defendant's counter-claim, plaintiff contends that claims against the plaintiff may only be made in the New York State Court of Claims, even if styled as a counter-claim to an action initiated by the COMMISSIONER. Moreover, it urges the Court not to transfer the counter-claim because the claim is not viable and is time barred. It is plaintiff's position that, pursuant to Court of Claims Act ( CCA) §10, a claimant must timely file a Notice of Intention and/or a claim in order to proceed in the Court of Claims. As the claim must be filed within six (6) months of accrual or, if the Notice of Intention has been filed, within two (2) years of accrual, plaintiff asserts that an action concerning premiums earned between 1994 and 1996 is time barred.

In opposition to the motion and in support of the cross-motion to transfer the counter-claim to the Court of Claims, defendant acknowledges that, because plaintiff is a state agency, its counter-claim may only be litigated in the Court of Claims. Defendant urges that this Court has authority to transfer the counterclaim to the Court of Claims, citing State v Jacobs, 167 AD2d 876, 561 NYS2d 972 (4th Dept. 1990) and State v Vernooy, 109 AD2d 682, 486 NYS2d 735 (1st Dept. 1985). Additionally, it is the defendant's position that since its counter-claim accrued no earlier that June 19, 2006 when defendant learned of plaintiff's judgment against defendant, making it possible for the first time to ascertain its damages, as required under CCA §10, it is in compliance with CCA §10. See, Bronxville Palmer, Ltd. v State of New York, 36 AD2d 647, 318 NYS2d 412 (3rd Dept. 1971); Waterman v State of New York, 19 AD2d 264, 241 NYS2d 314 (4th Dept. 1963). Defendant argues that its answer with counter-claim, filed on September 29, 2006, was timely interposed and, as the six-month period has not expired, defendant is not in default of the CCA §10 notice requirements.

After a careful reading of the submissions herein, the Court credits the analysis of the defendant and finds that defendants counter-claim is viable and accrued in June 2006 when defendant learned of the judgment entered against it and was able to ascertain its damages. Bronxville Palmer, Ltd. v State of New York, supra . Therefore, the counter-claim is timely and should be transferred to the Court of Claims for determination. State v Jacobs, supra ; State v Vernooy, supra . The Supreme Court lacks jurisdiction to hear defendant's counter-claim because it is clearly one for money damages against the State, over which the Court of Claims has exclusive jurisdiction, notwithstanding its assertion in a counter-claim. The Supreme Court may transfer actions brought therein to any other court having jurisdiction over the subject matter. State v Davey, [*3]260 AD2d 924, 688 NYS2d 840 (3rd Dept. 1999); see, NY Constitution, Article VI §19(a); CPLR § 325(a). Accordingly, it is hereby

ORDERED, that plaintiff's motion to dismiss defendant's counter-claim is denied; and it is further

ORDERED, that defendants's cross-motion for an order transferring its counter-claim to the Court of Claims for adjudication is granted. The Clerk of the Supreme Court, Nassau County, upon service to them of a copy of this order and payment of appropriate fees, if any, is directed to transfer the counter-claim in this action, under Nassau Index Number 034588/97,to the Clerk of the New York Court of Claims; and it is further

ORDERED, that the parties shall appear for a previously scheduled Compliance Conference to be held on May 1, 2007 at 9:30 A.M. before the undersigned.

All further requested relief not specifically granted is denied.

This constitutes the decision and order of the Court.

Dated: March 2, 2007

________________________

William R. LaMarca, J.S.C.

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