Preview
FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22
NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023
STATE OF NEW YORK
SUPREME COURT COUNTY OF ALBANY
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RASHBI MANAGEMENT, INC.
Plaintiff,
SUPPLEMENTAL AFFIRMATION
v. Index No. 908120-22
Golden Gate Rehabilitation & Health Care Center,
Oriska Insurance Company
Defendants.
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STATE OF NEW YORK )
COUNTY OF ONEIDA ) ss
Frank Policelli, an attorney duly licensed to practice law before the Courts of New
York, affirms the following to be true under penalties of perjury pursuant to CPLR 2106:
1. As the attorney for plaintiff Rashbi Management, Inc. (Rashbi) in the above
captioned case, I make this supplemental affirmation in support of Rashbi’s amended motion
for summary judgment and motion to disqualify Mr. Christopher Buckey.
2. I ask this Court to recognize that now, the New York Workers’ Compensation
Board (WCB), in its Amended Memorandum of Board Panel Decision issued on February 21,
2023, which was received by Rashbi on February 25, 2023, held that under the Stipulation
of Settlement dated September 24, 2013 (Settlement) (NYSCEF Doc No. 4, exhibit B to the
Complaint), losses are to be reimbursed as retrospective premium, by the insured
employers/policyholders (including Golden Gate) as and when the losses are paid as benefits
to injured workers of the insured employers/policyholders (including Golden Gate). The
WCB decision defined or otherwise referred to the retrospective premium as the
Retrospectively Rated Premium under the Settlement. The above WCB decision is consistent
with the Settlement.
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3. I now place before this Court the above unanimous WCB Board Panel ruling
on the Settlement and the Trust Agreement (exhibits B and C to the Complaint, respectively),
holding that the premium referenced in the Settlement is in fact the losses under a
Retrospective Rated Program. 1 The WCB Panel ruled specifically with regard to the
Settlement (NYSCEF Doc No. 4, exhibit B to the Complaint) and the Trust Agreement
(NYSCEF Doc No. 5, exhibit C to the Complaint) at issue herein.
4. The WCB Panel has referred the issues on retrospective premium relating to
the WCB decisions, awards, and orders set forth in exhibit A of the Complaint (NYSCEF Doc
No. 3) to a forum outside of the WCB. This Court is precisely such a forum with jurisdiction
to quantify and determine paid losses, which is the Retrospective Premium referred to by
the WCB in its above decision, subtracting the amount paid by Golden Gate toward such
losses as premiums to compute the net due from Golden Gate, the payment of which is
guaranteed by Rashbi as the surety for Golden Gate under the Settlement.
5. The best illustration of the Retrospective Program attributed here to Golden
Gate and related companies is in the U.S. Southern District of New York decision in Wausau
Bus. Ins. Co. v. Sentosa Care LLC, 10 F. Supp. 3rd 444, decided on March 28, 2014, on the
Retrospective Rated Workers’ Compensation for Golden Gate et al. (reversed for lack of
diversity jurisdiction), a case in which herein defendant Golden Gate was directly involved. 2
The workers’ compensation coverage of Golden Gate and its co-defendants in that case
immediately preceded and was replaced by the coverage at issue here, intending to duplicate
1
A copy of the WCB Panel decision (in redacted form in compliance with WCL 110-a) is attached as exhibit 1
hereof.
2
A copy of the decision in Wausau Bus. Ins. Co. v. Sentosa Care LLC, 10 F. Supp. 3rd 444, is attached as exhibit 2
hereof.
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the prior Retrospective Rated Program involved in that case. We know this from the
affidavits submitted in opposition to an attempt by herein defendant Oriska Insurance
Company (Oriska) to cancel the policies for nonpayment of premium. The policies that were
canceled by Oriska, resulting in the litigation in Kings County before Justice Bunyan. See the
Order of Restraint (NYSCEF Doc No. 6, exhibit D to the complaint) and Decision and Order
(NYSCEF Doc No. 7, exhibit D to the complaint).
6. The above WCB decision of February 21, 2023, now makes sense of the
Program set forth in the Settlement. An essential consideration for Golden Gate's (and the
other insured employers/policyholders) entering into the Settlement was its seeking to
continue the Retrospective Rating Program and LRRO that they had with expiring coverage
involving all of the insured employers/policyholders who were parties to the Settlement and
identified as such in the Settlement, as represented by Schlesinger/Allstate as Policy
Manager. See the list of insureds included as an attachment to the Settlement (NYSCEF Doc
No. 4, exhibit B of the complaint). These are the very same insured employers/policyholders
who were the defendants in Wausau v. Sentosa, supra, sued for the enforcement of the
Retrospective Rated Program involved in this case.
7. Evident in the Wausau case is that the insured employers/policyholders like
herein defendant Golden Gate follow the same modus operandi in evading payment of
Retrospective Premium evident in the Wausau case. By failing and refusing to reimburse
losses as a Retrospective Rated Premium pursuant to the Settlement, Golden Gate is again
using the same specious arguments of the supposed illegality of the policies and/or failure
by the Carrier to show that it performed. In all instances there is no evidence or even a
scintilla of proof that the Carrier Oriska failed to pay claims of the injured workers of Golden
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Gate (similar to Wausau). All the claims of the injured workers made against the insured
employers/policyholders like Golden Gate as indicated in the WCB decisions and orders
(NYSCEF Doc No. 3) have been paid by Oriska (the same as the Carrier in Wausau v. Sentosa,
supra). Thus, Golden Gate must be compelled to reimburse losses paid to its injured workers,
i.e., the Retrospective Rated Premium, which it obligated itself to do so under the Settlement.
8. The WCB has exclusive, continuing jurisdiction under section 123 of the
Workers’ Compensation Law (WCL). Due deference is accorded to the WCB as the NYS
agency in recognition of its expertise and jurisdiction in matters involving issues of workers’
compensation by the NYS Department of Financial Services (DFS) and even by the courts of
the State of New York, including the Appellate Division 3rd Department, where issues of
workers’ compensation are heard. Pursuant to the above decision of the WCB Panel that
reviewed the Settlement and the Trust herein, it ruled that “premium is losses.” Losses are
payments of benefits to Golden Gate's injured workers determined retrospectively by
looking back at losses that have occurred, i.e., losses on a look back from the point in time
when the action was commenced. The Settlement itself makes no less than 11 references to
the Retrospective Premium Program. Now the WCB Panel has, in the exercise of its exclusive,
continuing jurisdiction under WCL 123, by ruling that premium equals actual paid losses,
identified Retrospective Premium per its above decision (exhibit 1 hereof).
Procedural Background And Supporting Documents
9. All documents attached to this affirmation as exhibits are made an integral
part hereof to support Rashbi’s above motions and to establish/substantiate Rashbi’s claims
and arguments as stated herein.
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10. This action is before this Court by enforcement of a forum selection clause by
the US District Court for the NDNY in dismissing a federal lawsuit where herein plaintiff
Rashbi, defendant Golden Gate, and related skilled nursing home defendants were
defendants. I attach here copies of the Amended Complaint and the Decision and Order in 18
CV 1030 as exhibits 3 and 4 hereof, (NDNY Index 18-CV-1030, Doc No. 8 and Doc No. 146)
respectively, whereby the Northern District of New York Federal Court referred the same
Settlement involved in the case at bar, i.e., the September 24, 2013 Stipulation of Settlement,
to state court by enforcing the forum selection clause. In doing so, Judge Hurd accepted the
facts pled as proven.
11. On October 28, 2022, I filed on behalf of Rashbi the complaint in the above-
captioned case (NYSCEF Doc No. 2 and 19) .
12. Defendant Golden Gate filed its answer to the complaint on January 17, 2023
(NYSCEF Doc No. 11).
13. On January 25, 2023, I filed on behalf of Rashbi the following papers in support
of its motion for partial summary judgment: (a) the Notice of Motion dated January 25, 2023
(NYSCEF Doc No. 12; (b) Memo of Law dated January 25, 2023 (NYSCEF Doc No. 13), (c)
Statement of Undisputed Material Facts dated January 25, 2023 (NYSCEF Doc No. 14), (d)
Affirmation of Frank Policelli dated January 24, 2023 (NYSCEF Doc No. 15), (e) a copy of the
decision of WCB Judge Pantzer (NYSCEF Doc No. 16, exhibit A of Policelli affirmation), (f) a
copy of the General Counsel’s opinion (NYSCEF Doc No. 17, exhibit B of Policelli affirmation),
(g) Affidavit of Euripides Kavazis dated January 24, 2023 (NYSCEF Doc No. 18), and (h) the
documents attached to the Kavazis affidavit (NYSCEF Doc No. 19-25, exhibits A-G of the
Kavazis affidavit), respectively.
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Per WCB Decision, the Settlement Covers Workers’ Compensation Policies that Are
Subject to Retrospectively Rated Premium (Final Premium Based on Actual Losses)
14. I respectfully amend Rashbi’s motion in light of the above decision of the WCB.
15. Rashbi’s complaint against Golden Gate identifies, at paragraph 44 thereof, the
paid losses for each and every injured worker by WCB claim number, giving credit by
applying payments made by Golden Gate against the oldest paid losses, coming forward until
all funds paid by Golden Gate are exhausted, leaving a net unreimbursed paid losses being
the unpaid Retrospectively Rated Premium by Golden Gate to the oldest losses, coming
forward until all amounts paid by Golden Gate were exhausted, this action seeking
reimbursement of paid losses that were not reimbursed. These calculations have been
updated yo reflect the WCB Panel Decision, the affidavit of Kavazis
16. Applying the above WCB Panel Decision, Exhibit 1 hereto, on to the
Retrospectively Rated Program set forth in the Settlement, the portion of the $495,959
referred to in paragraph 12 of the Settlement applicable to Golden Gate was applied to the
actual losses of Golden Gate, leaving a balance of unreimbursed losses which is the balance
of the retrospective premium due from Golden Gate. Thus, on the amount of the
Retrospectively Rated Premium remaining due as pled in the Complaint. See pars. 44 and 48
of the Complaint; Kavazis Supplemental Affidavit, pars. 11 and 14; the Kavazis Affidavit dated
January 24, 2023 (NYSCEF Doc No. 18), exhibit 13 hereof, pars. 9 and 10.
17. Rashbi, as the guarantor of Golden Gate, has direct rights of action against
Golden Gate under common law surety rights for reimbursement, indemnity and
exoneration by the principal obligor Golden Gate, as well as breach of the Settlement by
Golden Gate’s failure to pay for the lost wages, medical care and expenses claimed by its
workers injured on the job, liability under WCL 10 as adjudicated by the WCB on each of the
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claims enumerated in paragraph 16 of the Complaint and in exhibit A to the Complaint
(NYSCEF Doc No. 3 and 19) where Golden Gate was named and notified as a party.
18. The rights of the surety are well established in common law. “Suretyship is a
contractual relationship whereby one person, the surety, agrees to be answerable for the
debt, default, or miscarriage of another, with the surety defined as one who undertakes to
pay money or do any other act in the event that its principal fails to do so” (28A N.Y. Prac.,
Contract Law § 25:23). See Chem. Bank v. Meltzer, 93 N.Y.2d 296 (1999); George Negri, Inc. v.
Milford Const. Corp., 15 Misc. 2d 1029, 182 N.Y.S.2d 953 (Sup 1958); Restatement (Third) Of
Suretyship & Guaranty § 22, 23 (Am. Law Inst. 1996).
19. Rashbi’s amended motion for summary judgment places before this Court the
above decision of the WCB Panel, received by Rashbi on February 25, 2023, which was not
available to Rashbi when it submitted its motion for partial summary judgment. The above
WCB decision is determinative of Rashbi’s motion and will lead to a summary judgment in
favor of Rashbi as a matter of law because: (a) it conclusively establishes that the workers’
compensation policies covered by and subject of the Settlement, including the policies issued
to Brookhaven, are part of a Retrospective Rating Program (final premium based on actual
losses) with a Large Risk Rating Option, which secured the liability of the employer with
respect to paying the final premium based on the employer’s actual costs; and (b) it
irrefutably debunks Golden Gate’s assertion that paragraph 12 of the Settlement fixes the
amount of premium payable by Golden Gate at $495,959.75 per month, and therefore, based
on payments already made, Golden Gate has fully paid the premiums due under the
Settlement. The nature of the retrospective premiums payable under the Settlement as found
by the WCB, i.e., a final premium based on actual losses, establishes beyond doubt that
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paragraph 12 of the Settlement does not provide for, fix, or determine the amount of
premium that Brookhaven is liable to pay under the Settlement, but only the manner in
which the final, adjusted premium (the amount of which is to be determined retrospectively
at the end of the year on the basis of actual losses or claims paid) is to be paid. To put it
simply, paragraph 12 only provides for the manner or terms of payment, and has nothing to
do with the total amount of premium liability. It requires that payment of premium is to be
paid by fixed monthly installments of $495,959.75 until the final, adjusted premium (the
amount of which is to be determined at a later date on a retrospective basis upon an
accounting of actual losses or claims paid) is fully paid regardless of how much that total
retrospective premium payable will eventually be. I am therefore amending Rashbi’s earlier
motion for partial summary judgment based on my submission herewith of Exhibit 1, the
controlling decision of the Panel of the WCB of February 21, 2023, which Rashbi received on
February 25, 2023.
20. In its above decision (exhibit 1 hereof), the WCB Board Panel unanimously
held that the underlying workers’ compensation policies subject of and covered by the
Settlement sought to be enforced in this case (which includes the workers’ compensation
policies issued to defendant Golden Gate here) were “part of a Retrospective Rating Program
(final premium based on actual losses) with a Large Risk Rating Option (allowing the
employer to negotiate the parameters of the Retrospective Rating Plan with the carrier)” (id.
at 4) and, thus, “Rashbi Trust was securing the liability of the employer with respect to
paying the final premium based on the employer’s actual costs.” (id.).
21. The above decision was rendered by the WCB pursuant to its exclusive,
continuing jurisdiction under WCL 123 with respect to matters concerning the application
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of the New York Workers’ Compensation Law, and is determinative of the nature of Golden
Gate’s obligations under the Settlement that Rashbi seeks to enforce in this case. The above
findings of the WCB in the exercise of its exclusive, continuing jurisdiction over issues arising
under the WCL deserve judicial deference and are entitled to great respect.
Res Judicata Does Not Apply to Bar Rashbi’s Claims
22. Golden Gate has pleaded res judicata in its answer here. To be sure, this
defense is raised by Golden Gate on the basis of the very same past decisions involving Oriska
that Brookhaven had raised in the related Brookhaven Case. For the reasons mentioned
below, res judicata does not and cannot apply to preclude Rashbi from enforcing its claims
under the Settlement against Golden Gate as a matter of law.
23. In a February 28, 2023 decision rendered by the Court in the related
Brookkhaven Case (NYSCEF Doc No. 312, Rashbi v. Brookhaven Rehabilitation & Health
Carecenter, LLC, Albany County, Index: 909306-21), a copy of which is attached as exhibit 5
hereof, the Court dismissed Rashbi’s amended complaint on the ground that Rashbi was
precluded by res judicata from pursuing its claims under the Settlement upon its finding that
Rashbi is in privity with Oriska and therefore bound by the 2017, 2018, and 2020 cases cited
by Brookhaven that dismissed cases filed by Oriska for payment of premiums due under the
Settlement and barred Oriska from seeking judicial relief for the collection of these
premiums.
24. The above decision of the WCB was rendered in the exercise of its exclusive,
continuing jurisdiction over issues arising under the WCL and therefore the findings of the
WCB therein deserve judicial deference and are entitled to great respect. Such findings show
that if there was any privity at all, it is between Golden Gate as the principal obligor with
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respect to its obligation to pay the final premiums (based on actual employer’s costs) to
herein defendant Oriska as the Carrier arising from the underlying workers’ compensation
policies covered by the Settlement, and Rashbi as the guarantor of Golden Gate’s obligation
to pay the final premiums (based on actual losses) arising from those workers’ compensation
policies. Far from being in privity with each other, Rashbi and Oriska are actually adverse or
counter-parties insofar as the obligation to pay the final premiums under the said policies
are concerned: on one side, Oriska stands as the obligee; while on the other side, the principal
obligors are the employers (including Brookhaven) with Rashbi as their surety/secondary
obligor.
25. In order to find res judicata applicable to Rashbi based on Judge MacRae's
decisions against Oriska denying Oriska's lawsuits to collect premium on the settlement
stipulation, the settled law on res judicata requires that Oriska could be precluded only if it
had a full and fair opportunity to litigate the merits of its claims in regards to the Settlement
and that Rashbi was in privity with Oriska, for purposes of res judicata preclusion, and
neither one of the requirements have been met to preclude Rashbi from enforcing the
Settlement.
26. With regard to the full and fair opportunity to litigate the claim: On August 19
2020, an argument was raised in a hearing held before Judge MacRae, exhibit 6 pages 139
through 141 and 186, where Judge MacRae and attorney Buckey vehemently took the
position that Mr. Kernan was a fact witness in the lawsuit involving the settlement
stipulation and as a fact witness would not be in violation of any orders that prohibited him
from taking part in the litigation of Oriska because he was not a party to the litigation or a
lawyer in the litigation. The court insisted that a witness is not taking a role in the litigation.
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As a result of this ruling Oriska sought to introduce an affidavit from Mr. Kernan in
opposition to the summary judgment motion filed by the defendants based on Judge
MacRae's ruling that Mr. Kernan could be a "fact witness." On November 16, 2020, exhibit 3,
pages 37 through 39 and 48. during oral arguments, Judge MacRae ruled that Mr. Kernan
could be a fact witness for the defendants, but could not be a fact witness for the plaintiff
because he said by submitting a voluntary affirmation of Mr. Kernan, he would be taking a
role in the litigation, but being a subpoenaed witness would not be taking a role in the
litigation. This blatantly, ridiculous, unfair ruling (the likes of which I have never
encountered in 47 years of litigation) prevented Oriska from litigating the merits of the case
and allowed Judge MacRae to rule against Oriska Insurance Company based on the Ins Law
1310 Order of February 1, 2013. This clearly prevented Oriska from a full and fair
opportunity to litigate its claim.
27. The supposed privity between Oriska and Rashbi: Privity is an amorphous
concept that has different meanings in different contexts. In the context of res judicata, it
requires that Rashbi have the exact same interest that Oriska had in the prior litigation
dealing with the Settlement. Oriska is in fact adverse to Rashbi in the Settlement and is not
barred from pursuing its interests in its own claims. The WCB decision makes clear that
Oriska is concerned with the collection of premiums to fulfill its obligations of paying claims,
but Rashbi is a surety for the employers and seeks reimbursement as well to enforce its
rights under the agreement. Accordingly, res judicata should not apply to Rashbi.
28. Considering the WCB Decision, any issue with respect to the existence of any
privity between Oriska and Rashbi for purposes of applying res judicata against Rashbi,
should have been become irrelevant and pointless because in its January 14, 2022 Decision
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in the Brookhaven Case, a (NYSCEF Doc No. 61), a copy of which is attached as exhibit 8
hereof, this Court itself categorically found that the past 2017, 2018, and 2019 decisions
involving Oriska did not fairly and fully adjudicate the merits of Oriska’s claims and were not
resolutions on the merits of these claims. Before arriving at a decision with respect to the res
judicata/collateral estoppel defense raised by Brookhaven in its motion to dismiss, this
Court itself set the stage for a resolution of the issue of the merits of the res judicata defense
raised by said defendant: “Here, the issue distills to whether there has been a full and fair
adjudication on the merits of the subject claim, and, if so, whether there is privity of interests
between Oriska and Petitioner” (id. at 9) (emphasis supplied). Having laid the necessary
predicate for its resolution of the res judicata issue, the Court expressly held that res judicata
does not apply because “[t]he Common theme in the foregoing litigations is that Oriska's
claims were effectively barred as violative of the DFS Order, and correspondingly, the merits
of the claim were not fully and fairly litigated and resolved on the merits. . . .” (id. at 10)
(emphasis supplied). The only possible logical meaning to the Court’s “and, if so” language in
page 9 of the Decision is that the question of any privity of interests between Oriska and
Rashbi had become unnecessary given its conclusion (in page 10 of the Decision) that the
merits of Oriska’s claims were neither fairly and fully litigated nor resolved on the merits.
Even the existence of any privity between Rashbi and Oriska (assuming arguendo that there
be any) will not make res judicata applicable here in light of the Court’s finding that the prior
decisions did not fairly and fully litigate Oriska’s claims and were not resolutions on the
merits. And neither could the Court change its resolution on the res judicata issue because
that had become the law of the case. Indeed, the Court itself had declared this to be so in its
decision and order of April 14, 2022 (NYSCEF Doc No. 110, Brookhaven Case), exhibit 9
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hereof, when it again rejected exactly the same res judicata defense that the defendant
Brookhaven raised in its motion to have the amended complaint dismissed.
Statute of Limitations Does Not Apply to Bar Rashbi’s Claims
29. For the reasons mentioned below, the defense of statute of limitations
asserted by Golden Gate in its answer here is sham, absolutely meritless in fact and in law,
and deserves scant consideration.
30. The decision of the WCB finding that the policies are part of a Retrospective
Rating Program) with a Large Risk Rating Option with an obligation of the employers to pay
final premium based on actual losses prevents Golden Gate from arguing that Rashbi is time-
barred from recovering the premiums due under the Settlement. The nature of a
retrospective rating program is such that final premiums payable are determined on the
basis of actual losses sustained as determined subsequently on a retrospective basis. The
statute of limitations cannot be reckoned (as the Court erroneously did in the Brookhaven
Case) from the time invoices for premium payments were issued because the final premiums
payable can be demanded and acted upon only after the actual losses sustained have been
determined. And as cited below, the settled law is that it is only when losses are paid then
looking back at that point when the statute of limitations begins to run because it is only at
that point when the obligation of Golden Gate to pay restrospective premiums arises.
31. At earliest, the statute of limitations on this action runs from the last partial
payment made by Golden Gate, which was January, 2018. Determination of retrospective
premium is a snapshot in time as losses continue to be paid to injured workers. Successive
lawsuits may need to be brought due to Golden Gate and the other insured
employers/policyholders not paying the retrospective premium and this continues long into
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the future. The statutory limits under the Workers’ Compensation Law require that injured
workers be paid lifetime benefits for lost wages, medical care and expenses for on-the-job
injuries or illnesses, unless earlier settled.
32. In Hahn Auto. Warehouse, Inc. v. Am. Zurich Ins. Co., 18 N.Y.3d 765 (2012), an
action involving claims for the payment of retrospective premiums, the New York Court of
Appeals held that the six-year statute of limitations applicable to insurers' breach of contract
counterclaims against insured began to run when they acquired the right to demand payment
of retrospective premiums allegedly owed under their policies, not when they issued invoices
for such payments where insurers' right to payment was not unambiguously conditioned on
their own demand. As a general principle, the statute of limitations begins to run when a
cause of action accrues, that is, “when all of the facts necessary to the cause of action have
occurred so that the party would be entitled to obtain relief in court” (Aetna Life & Cas. Co. v.
Nelson, 67 N.Y.2d 169, 175, 501 N.Y.S.2d 313, 492 N.E.2d 386 [1986]. “When the right to final
payment is subject to a condition, the obligation to pay arises and the cause of action accrues,
only when the condition has been fulfilled” (John J. Kassner & Co. v. City of New York, 46 N.Y.2d
544, 550, 415 N.Y.S.2d 785, 389 N.E.2d 99 [1979]).
33. Defendant who moves to dismiss a complaint on the ground that it is barred
by the statute of limitations bears the initial burden of proving, prima facie, that time in
which to sue has expired. Artup v. Simeone, 189 A.D.3d 1143 (2d Dept 2020). When a
defendant seeks dismissal under CPLR § 3211(a)(5) on statute of limitations grounds, he or
she bears “the initial burden of establishing, prima facie, that the time in which to sue has
expired.” Benn v. Benn, 82 A.D.3d 548, 548 (1st Dept. 2011) (internal quotation marks and
citation omitted). “To meet its burden, the defendant must establish, inter alia, when the
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plaintiff’s cause of action accrued.” Lebedev v. Blavatnik, 144 A.D.3d 24, 28 (1st Dept. 2016)
(internal quotation marks and citation omitted). In the Brookhaven case, the Court found
that Rashbi’s claims were time-barred without any shred of evidentiary support from
Brookhaven whatsoever to establish the facts necessary to prove that the period under
statute of limitations has lapsed. Here, Golden Gate has failed to allege in its answer or
otherwise establish any facts showing exactly when Rashbi’s cause of action accrued.
34. In retrospective rated coverage, the right to enforce premium payments
accrues when the amount of retrospectively rated premium is determined upon the payment
of actual losses sustained. Hahn Auto. Warehouse, Inc. v. Am. Zurich Ins. Co., 18 N.Y.3d 765
(2012). In its above February 28, 2022 decision in the Brookhaven Case, the Court belabored
(wrongly) that all of the facts necessary to the accrual of Rashbi’s cause of action was
complete when Rashbi issued its invoices. See Decision, at 12, footnote 39 (citing the above
quoted portion of Brookhaven’s memo of law, par. 48 to 81 of the amended complaint, and
the answer to the amended complaint). There was no basis for the Court in its February 28,
2023 decision in the Brookhaven Case to find evidentiary value in the amended complaint to
establish the dates the invoices for the premiums were issued by Brookhaven for the
purpose of determining the merits of Brookhaven’s motion for summary judgment’s statute
of limitations defense, and then in the same breath not accord any evidentiary value to the
very same Amended Complaint for the purpose of supporting the sufficiency of Rashbi’s
motion for partial summary judgment insofar as it established the amount of premiums that
Brookhaven has failed to pay.
35. Besides, the very pendency of the very 2017, 2018, and 2020 Oriska actions
invoked by the defendant in the Brookhaven Case and herein defendant Golden Gate here to
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raise the res judicata defense against Rashbi on the basis of its supposed privity with Oriska
defeats the statute of limitations defense. The period during which these cases were
admittedly pending should have tolled the statute of limitations on the enforcement of the
Settlement. It is settled law that the statute of limitations is tolled during the pendency of
litigation. New York Cent. Mut. Fire Ins. Co. v. Amica Mut. Ins. Co., 162 A.D.2d 1009 (4th Dept
1990).
36. While the Court in the Brookhaven Case considered (incorrectly) the res
judicata effect of these Oriska cases against Rashbi on the ground that Oriska and Rashbi are
in privity -- and, in so doing, completely contradicted itself and reversed the law of the case
that it had established in its decisions of January 14, 2022 (NYSCEF Doc No. 61, Brookhaven
Case; also exhibit 8 hereof) and April 14, 2022 (NYSCEF Doc No. 110, Brookhaven Case; also
exhibit 9 hereof) -- it did not even deign to consider that, by the same token, the pendency of
these very same cases should have tolled the statute of limitations on Rashbi. For example,
Oriska v. Bay Park Center, Oneida County Index No.: EFCA2018 001376 was invoked by the
defendant in the Brookhaven Case to claim res judicata. This case was pending for at least 1
year, 7 months, and 28 days: the action was initiated by the filing of the complaint on May 9,
2018, and terminated on January 7, 2020, by the denial of Oriska’s motion to reargue. The
defendant in the Brookhaven Case also cited Oriska Insurance Company v. Absolut Center for
Nursing and Rehabilitation at Allegany, LLC et al, Index No.: EFCA2020-001276, Oneida
County Supreme Court, to claim res judicata. This case was pending for at least 1 year, 6
months, and 8 days: the case was commenced by the filing of the complaint on February 18,
2020, and terminated by a decision on August 26, 2021 granting the defendants’ motion to
dismiss (which, incidentally, also denied Rashbi’s motion to intervene). Thus, the pendency
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of these cases in the trial courts alone, without even taking into account the time during which
any appeals taken therefrom (if any) may have been pending, should have tolled the statute of
limitations on Rashbi by at least 3 years, 2 months, and 6 days. The periods during which
these cases were litigated in the trial court level and on appeal will and should defeat the
statute of limitations defense that Golden Gate has raised in this case.
37. Common law has developed the rule that partial payment of an acknowledged
debt tolls the statute of limitations or start it running anew. Bernstein v. Kaplan, 67 A.D.2d
897, 898 (2d Dept 1979) (holding that “to toll the statute or start it running anew, it must be
shown that the payment was of a portion of an admitted debt under circumstances
amounting to a clearly demonstrated intention to pay the balance”). Here, through the
affidavit of Mr. Kavazis dated January 24, 2023 (NYSCEF Doc No. 18), the complaint (a copy
of which is attached to the Kavazis affidavit, NYSCEF Doc No. 19), and the Supplemental
Affidavit of Mr. Kavazis, Rashbi provides sufficient evidence of partial payments made by
Golden Gate on estimated final premiums for reimbursement of payments made on the
underlying workers’ compensation claims and repeated written assurances of full payment
in writing by Golden Gate of the obligations. Such partial payments coupled with Golden
Gate’s repeated, written assurances of payment of the entire amount had the legal effect
under the common law of tolling the statute of limitations or made it run anew.
38. Clearly, based on the above reasons, Brookhaven cannot seek refuge under the
protective cloak of the statute of limitations.
Rashbi’s Cause of Action for Breach of Contract Established
39. The WCB in its above decision establishes that policies subject of the
Settlement, such as those issued to Golden Gate here, are covered by a retrospective rating
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program that requires final premiums to be paid on the basis of actual costs of losses of the
employer Golden Gate on the underlying workers compensation claims. The Settlement did
not fix and could not stipulate on pre-determined amounts as final premium because the
amounts thereof are dictated by the costs and losses actually sustained by the insured
employer during the period of the policy and which are determined at the end of a given
period (here, annually) retrospectively. Besides, for as long as the injured workers of Golden
Gate who are covered by the policies included in the Settlement sustain injuries and are
entitled to benefits under the WCL (which is the nature of workers’ compensation to be paid
during an injured worker’s entire lifetimes, called statutory liability -- in other words no limit
on liability), each and every covered claim is a loss or cost that will have to be borne by
Golden Gate under the policies and for which it will have to pay retrospective final premiums
to Oriska that, under the Settlement, is guaranteed by Rashbi, the Settlement limiting this
only at paragraph 9 to the final adjusted premium. The Settlement provides for the manner
in which the amounts of final premium are determined, e.g., paragraphs 9 and 13 of the
Settlement. Golden Gate breached the Settlement by its failure to pay for the lost wages,
medical care and expenses claimed by its workers injured on the job, liability und WCL 10
ruled by the WCB on each of the claims in paragraph 16 of the Complaint and as enumerated
in the WCB Decisions (exhibit A to the Complaint) in cases where Golden Gate was named
and notified as a party. This is the import of the above WCB decision. Therefore, in a very
real sense, it is virtually impossible for Golden Gate to fully pay the final retrospective
premiums under the policies covered by the Settlement until all of its injured employees
have died and there are no continuing benefits to an injured employee’s family based on an
award by the WCB that the cause of death is deemed to be on-the-job injuries.
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40. What Rashbi seeks here is a reimbursement of the cost of “actual losses” 3 of
the employer that it guarantees as the surety for Golden Gate under the Settlement. Through
the above cited statements in the affidavit of Mr. Kavazis, Rashbi has sufficiently established
the unreimbursed amounts on the underlying workers’ compensation claims that Golden
Gate has failed to pay. Therefore, Golden Gate cannot assert that it has fully paid the final
premiums due under the Settlement thereby exonerating Rashbi of exposure for claims paid
on the underlying workers’ compensation claims of the injured workers of Golden Gate.
41. Golden Gate’s defense that Rashbi has not performed all its contractual
obligations under the Settlement deserves no credence because Golden Gate has not
identified any obligation under the Settlement that Rashbi has supposedly breached, much
less adduce evidence of any breach of that obligation. Rashbi is the backup to Golden Gate as
Golden Gate’s surety and guarantor. Rashbi’s duty to pay only arises if Golden Gate fails to
perform its underlying settlement obligations. In other words, Rashbi must prove that
Golden Gate failed to pay “actual losses” up to the limit at paragraph 9 of the Settlement of
annual Adjusted Premium for Rashbi’s guarantee to come into play. To be sure, Golden Gate
has not advanced any counter-claims for damages in its answer arising from any breach by
Rashbi of any obligation under the Settlement. On the other hand, Rashbi has proved,
through the affidavit of Kavazis, and the amended complaint, that it has reimbursed the
Carrier for payments made by the latter on the underlying workers’ compensation claims of
the injured workers of Golden Gate establishing the breach of the Settlement by Golden Gate
thus invoking the Rashbi guarantee of Golden Gate. See the Kavazis affidavit, at paragraph 7
(NYSCEF Doc No. 18), stating that: “Golden Gate failed to pay the premiums that became due
3
WCB Decision
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Preview
FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 STATE OF NEW YORK SUPREME COURT COUNTY OF ALBANY ---------------------------------------------------------------- RASHBI MANAGEMENT, INC. Plaintiff, SUPPLEMENTAL AFFIRMATION v. Index No. 908120-22 Golden Gate Rehabilitation & Health Care Center, Oriska Insurance Company Defendants. ---------------------------------------------------------------- STATE OF NEW YORK ) COUNTY OF ONEIDA ) ss Frank Policelli, an attorney duly licensed to practice law before the Courts of New York, affirms the following to be true under penalties of perjury pursuant to CPLR 2106: 1. As the attorney for plaintiff Rashbi Management, Inc. (Rashbi) in the above captioned case, I make this supplemental affirmation in support of Rashbi’s amended motion for summary judgment and motion to disqualify Mr. Christopher Buckey. 2. I ask this Court to recognize that now, the New York Workers’ Compensation Board (WCB), in its Amended Memorandum of Board Panel Decision issued on February 21, 2023, which was received by Rashbi on February 25, 2023, held that under the Stipulation of Settlement dated September 24, 2013 (Settlement) (NYSCEF Doc No. 4, exhibit B to the Complaint), losses are to be reimbursed as retrospective premium, by the insured employers/policyholders (including Golden Gate) as and when the losses are paid as benefits to injured workers of the insured employers/policyholders (including Golden Gate). The WCB decision defined or otherwise referred to the retrospective premium as the Retrospectively Rated Premium under the Settlement. The above WCB decision is consistent with the Settlement. 1 1 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 3. I now place before this Court the above unanimous WCB Board Panel ruling on the Settlement and the Trust Agreement (exhibits B and C to the Complaint, respectively), holding that the premium referenced in the Settlement is in fact the losses under a Retrospective Rated Program. 1 The WCB Panel ruled specifically with regard to the Settlement (NYSCEF Doc No. 4, exhibit B to the Complaint) and the Trust Agreement (NYSCEF Doc No. 5, exhibit C to the Complaint) at issue herein. 4. The WCB Panel has referred the issues on retrospective premium relating to the WCB decisions, awards, and orders set forth in exhibit A of the Complaint (NYSCEF Doc No. 3) to a forum outside of the WCB. This Court is precisely such a forum with jurisdiction to quantify and determine paid losses, which is the Retrospective Premium referred to by the WCB in its above decision, subtracting the amount paid by Golden Gate toward such losses as premiums to compute the net due from Golden Gate, the payment of which is guaranteed by Rashbi as the surety for Golden Gate under the Settlement. 5. The best illustration of the Retrospective Program attributed here to Golden Gate and related companies is in the U.S. Southern District of New York decision in Wausau Bus. Ins. Co. v. Sentosa Care LLC, 10 F. Supp. 3rd 444, decided on March 28, 2014, on the Retrospective Rated Workers’ Compensation for Golden Gate et al. (reversed for lack of diversity jurisdiction), a case in which herein defendant Golden Gate was directly involved. 2 The workers’ compensation coverage of Golden Gate and its co-defendants in that case immediately preceded and was replaced by the coverage at issue here, intending to duplicate 1 A copy of the WCB Panel decision (in redacted form in compliance with WCL 110-a) is attached as exhibit 1 hereof. 2 A copy of the decision in Wausau Bus. Ins. Co. v. Sentosa Care LLC, 10 F. Supp. 3rd 444, is attached as exhibit 2 hereof. 2 2 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 the prior Retrospective Rated Program involved in that case. We know this from the affidavits submitted in opposition to an attempt by herein defendant Oriska Insurance Company (Oriska) to cancel the policies for nonpayment of premium. The policies that were canceled by Oriska, resulting in the litigation in Kings County before Justice Bunyan. See the Order of Restraint (NYSCEF Doc No. 6, exhibit D to the complaint) and Decision and Order (NYSCEF Doc No. 7, exhibit D to the complaint). 6. The above WCB decision of February 21, 2023, now makes sense of the Program set forth in the Settlement. An essential consideration for Golden Gate's (and the other insured employers/policyholders) entering into the Settlement was its seeking to continue the Retrospective Rating Program and LRRO that they had with expiring coverage involving all of the insured employers/policyholders who were parties to the Settlement and identified as such in the Settlement, as represented by Schlesinger/Allstate as Policy Manager. See the list of insureds included as an attachment to the Settlement (NYSCEF Doc No. 4, exhibit B of the complaint). These are the very same insured employers/policyholders who were the defendants in Wausau v. Sentosa, supra, sued for the enforcement of the Retrospective Rated Program involved in this case. 7. Evident in the Wausau case is that the insured employers/policyholders like herein defendant Golden Gate follow the same modus operandi in evading payment of Retrospective Premium evident in the Wausau case. By failing and refusing to reimburse losses as a Retrospective Rated Premium pursuant to the Settlement, Golden Gate is again using the same specious arguments of the supposed illegality of the policies and/or failure by the Carrier to show that it performed. In all instances there is no evidence or even a scintilla of proof that the Carrier Oriska failed to pay claims of the injured workers of Golden 3 3 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 Gate (similar to Wausau). All the claims of the injured workers made against the insured employers/policyholders like Golden Gate as indicated in the WCB decisions and orders (NYSCEF Doc No. 3) have been paid by Oriska (the same as the Carrier in Wausau v. Sentosa, supra). Thus, Golden Gate must be compelled to reimburse losses paid to its injured workers, i.e., the Retrospective Rated Premium, which it obligated itself to do so under the Settlement. 8. The WCB has exclusive, continuing jurisdiction under section 123 of the Workers’ Compensation Law (WCL). Due deference is accorded to the WCB as the NYS agency in recognition of its expertise and jurisdiction in matters involving issues of workers’ compensation by the NYS Department of Financial Services (DFS) and even by the courts of the State of New York, including the Appellate Division 3rd Department, where issues of workers’ compensation are heard. Pursuant to the above decision of the WCB Panel that reviewed the Settlement and the Trust herein, it ruled that “premium is losses.” Losses are payments of benefits to Golden Gate's injured workers determined retrospectively by looking back at losses that have occurred, i.e., losses on a look back from the point in time when the action was commenced. The Settlement itself makes no less than 11 references to the Retrospective Premium Program. Now the WCB Panel has, in the exercise of its exclusive, continuing jurisdiction under WCL 123, by ruling that premium equals actual paid losses, identified Retrospective Premium per its above decision (exhibit 1 hereof). Procedural Background And Supporting Documents 9. All documents attached to this affirmation as exhibits are made an integral part hereof to support Rashbi’s above motions and to establish/substantiate Rashbi’s claims and arguments as stated herein. 4 4 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 10. This action is before this Court by enforcement of a forum selection clause by the US District Court for the NDNY in dismissing a federal lawsuit where herein plaintiff Rashbi, defendant Golden Gate, and related skilled nursing home defendants were defendants. I attach here copies of the Amended Complaint and the Decision and Order in 18 CV 1030 as exhibits 3 and 4 hereof, (NDNY Index 18-CV-1030, Doc No. 8 and Doc No. 146) respectively, whereby the Northern District of New York Federal Court referred the same Settlement involved in the case at bar, i.e., the September 24, 2013 Stipulation of Settlement, to state court by enforcing the forum selection clause. In doing so, Judge Hurd accepted the facts pled as proven. 11. On October 28, 2022, I filed on behalf of Rashbi the complaint in the above- captioned case (NYSCEF Doc No. 2 and 19) . 12. Defendant Golden Gate filed its answer to the complaint on January 17, 2023 (NYSCEF Doc No. 11). 13. On January 25, 2023, I filed on behalf of Rashbi the following papers in support of its motion for partial summary judgment: (a) the Notice of Motion dated January 25, 2023 (NYSCEF Doc No. 12; (b) Memo of Law dated January 25, 2023 (NYSCEF Doc No. 13), (c) Statement of Undisputed Material Facts dated January 25, 2023 (NYSCEF Doc No. 14), (d) Affirmation of Frank Policelli dated January 24, 2023 (NYSCEF Doc No. 15), (e) a copy of the decision of WCB Judge Pantzer (NYSCEF Doc No. 16, exhibit A of Policelli affirmation), (f) a copy of the General Counsel’s opinion (NYSCEF Doc No. 17, exhibit B of Policelli affirmation), (g) Affidavit of Euripides Kavazis dated January 24, 2023 (NYSCEF Doc No. 18), and (h) the documents attached to the Kavazis affidavit (NYSCEF Doc No. 19-25, exhibits A-G of the Kavazis affidavit), respectively. 5 5 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 Per WCB Decision, the Settlement Covers Workers’ Compensation Policies that Are Subject to Retrospectively Rated Premium (Final Premium Based on Actual Losses) 14. I respectfully amend Rashbi’s motion in light of the above decision of the WCB. 15. Rashbi’s complaint against Golden Gate identifies, at paragraph 44 thereof, the paid losses for each and every injured worker by WCB claim number, giving credit by applying payments made by Golden Gate against the oldest paid losses, coming forward until all funds paid by Golden Gate are exhausted, leaving a net unreimbursed paid losses being the unpaid Retrospectively Rated Premium by Golden Gate to the oldest losses, coming forward until all amounts paid by Golden Gate were exhausted, this action seeking reimbursement of paid losses that were not reimbursed. These calculations have been updated yo reflect the WCB Panel Decision, the affidavit of Kavazis 16. Applying the above WCB Panel Decision, Exhibit 1 hereto, on to the Retrospectively Rated Program set forth in the Settlement, the portion of the $495,959 referred to in paragraph 12 of the Settlement applicable to Golden Gate was applied to the actual losses of Golden Gate, leaving a balance of unreimbursed losses which is the balance of the retrospective premium due from Golden Gate. Thus, on the amount of the Retrospectively Rated Premium remaining due as pled in the Complaint. See pars. 44 and 48 of the Complaint; Kavazis Supplemental Affidavit, pars. 11 and 14; the Kavazis Affidavit dated January 24, 2023 (NYSCEF Doc No. 18), exhibit 13 hereof, pars. 9 and 10. 17. Rashbi, as the guarantor of Golden Gate, has direct rights of action against Golden Gate under common law surety rights for reimbursement, indemnity and exoneration by the principal obligor Golden Gate, as well as breach of the Settlement by Golden Gate’s failure to pay for the lost wages, medical care and expenses claimed by its workers injured on the job, liability under WCL 10 as adjudicated by the WCB on each of the 6 6 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 claims enumerated in paragraph 16 of the Complaint and in exhibit A to the Complaint (NYSCEF Doc No. 3 and 19) where Golden Gate was named and notified as a party. 18. The rights of the surety are well established in common law. “Suretyship is a contractual relationship whereby one person, the surety, agrees to be answerable for the debt, default, or miscarriage of another, with the surety defined as one who undertakes to pay money or do any other act in the event that its principal fails to do so” (28A N.Y. Prac., Contract Law § 25:23). See Chem. Bank v. Meltzer, 93 N.Y.2d 296 (1999); George Negri, Inc. v. Milford Const. Corp., 15 Misc. 2d 1029, 182 N.Y.S.2d 953 (Sup 1958); Restatement (Third) Of Suretyship & Guaranty § 22, 23 (Am. Law Inst. 1996). 19. Rashbi’s amended motion for summary judgment places before this Court the above decision of the WCB Panel, received by Rashbi on February 25, 2023, which was not available to Rashbi when it submitted its motion for partial summary judgment. The above WCB decision is determinative of Rashbi’s motion and will lead to a summary judgment in favor of Rashbi as a matter of law because: (a) it conclusively establishes that the workers’ compensation policies covered by and subject of the Settlement, including the policies issued to Brookhaven, are part of a Retrospective Rating Program (final premium based on actual losses) with a Large Risk Rating Option, which secured the liability of the employer with respect to paying the final premium based on the employer’s actual costs; and (b) it irrefutably debunks Golden Gate’s assertion that paragraph 12 of the Settlement fixes the amount of premium payable by Golden Gate at $495,959.75 per month, and therefore, based on payments already made, Golden Gate has fully paid the premiums due under the Settlement. The nature of the retrospective premiums payable under the Settlement as found by the WCB, i.e., a final premium based on actual losses, establishes beyond doubt that 7 7 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 paragraph 12 of the Settlement does not provide for, fix, or determine the amount of premium that Brookhaven is liable to pay under the Settlement, but only the manner in which the final, adjusted premium (the amount of which is to be determined retrospectively at the end of the year on the basis of actual losses or claims paid) is to be paid. To put it simply, paragraph 12 only provides for the manner or terms of payment, and has nothing to do with the total amount of premium liability. It requires that payment of premium is to be paid by fixed monthly installments of $495,959.75 until the final, adjusted premium (the amount of which is to be determined at a later date on a retrospective basis upon an accounting of actual losses or claims paid) is fully paid regardless of how much that total retrospective premium payable will eventually be. I am therefore amending Rashbi’s earlier motion for partial summary judgment based on my submission herewith of Exhibit 1, the controlling decision of the Panel of the WCB of February 21, 2023, which Rashbi received on February 25, 2023. 20. In its above decision (exhibit 1 hereof), the WCB Board Panel unanimously held that the underlying workers’ compensation policies subject of and covered by the Settlement sought to be enforced in this case (which includes the workers’ compensation policies issued to defendant Golden Gate here) were “part of a Retrospective Rating Program (final premium based on actual losses) with a Large Risk Rating Option (allowing the employer to negotiate the parameters of the Retrospective Rating Plan with the carrier)” (id. at 4) and, thus, “Rashbi Trust was securing the liability of the employer with respect to paying the final premium based on the employer’s actual costs.” (id.). 21. The above decision was rendered by the WCB pursuant to its exclusive, continuing jurisdiction under WCL 123 with respect to matters concerning the application 8 8 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 of the New York Workers’ Compensation Law, and is determinative of the nature of Golden Gate’s obligations under the Settlement that Rashbi seeks to enforce in this case. The above findings of the WCB in the exercise of its exclusive, continuing jurisdiction over issues arising under the WCL deserve judicial deference and are entitled to great respect. Res Judicata Does Not Apply to Bar Rashbi’s Claims 22. Golden Gate has pleaded res judicata in its answer here. To be sure, this defense is raised by Golden Gate on the basis of the very same past decisions involving Oriska that Brookhaven had raised in the related Brookhaven Case. For the reasons mentioned below, res judicata does not and cannot apply to preclude Rashbi from enforcing its claims under the Settlement against Golden Gate as a matter of law. 23. In a February 28, 2023 decision rendered by the Court in the related Brookkhaven Case (NYSCEF Doc No. 312, Rashbi v. Brookhaven Rehabilitation & Health Carecenter, LLC, Albany County, Index: 909306-21), a copy of which is attached as exhibit 5 hereof, the Court dismissed Rashbi’s amended complaint on the ground that Rashbi was precluded by res judicata from pursuing its claims under the Settlement upon its finding that Rashbi is in privity with Oriska and therefore bound by the 2017, 2018, and 2020 cases cited by Brookhaven that dismissed cases filed by Oriska for payment of premiums due under the Settlement and barred Oriska from seeking judicial relief for the collection of these premiums. 24. The above decision of the WCB was rendered in the exercise of its exclusive, continuing jurisdiction over issues arising under the WCL and therefore the findings of the WCB therein deserve judicial deference and are entitled to great respect. Such findings show that if there was any privity at all, it is between Golden Gate as the principal obligor with 9 9 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 respect to its obligation to pay the final premiums (based on actual employer’s costs) to herein defendant Oriska as the Carrier arising from the underlying workers’ compensation policies covered by the Settlement, and Rashbi as the guarantor of Golden Gate’s obligation to pay the final premiums (based on actual losses) arising from those workers’ compensation policies. Far from being in privity with each other, Rashbi and Oriska are actually adverse or counter-parties insofar as the obligation to pay the final premiums under the said policies are concerned: on one side, Oriska stands as the obligee; while on the other side, the principal obligors are the employers (including Brookhaven) with Rashbi as their surety/secondary obligor. 25. In order to find res judicata applicable to Rashbi based on Judge MacRae's decisions against Oriska denying Oriska's lawsuits to collect premium on the settlement stipulation, the settled law on res judicata requires that Oriska could be precluded only if it had a full and fair opportunity to litigate the merits of its claims in regards to the Settlement and that Rashbi was in privity with Oriska, for purposes of res judicata preclusion, and neither one of the requirements have been met to preclude Rashbi from enforcing the Settlement. 26. With regard to the full and fair opportunity to litigate the claim: On August 19 2020, an argument was raised in a hearing held before Judge MacRae, exhibit 6 pages 139 through 141 and 186, where Judge MacRae and attorney Buckey vehemently took the position that Mr. Kernan was a fact witness in the lawsuit involving the settlement stipulation and as a fact witness would not be in violation of any orders that prohibited him from taking part in the litigation of Oriska because he was not a party to the litigation or a lawyer in the litigation. The court insisted that a witness is not taking a role in the litigation. 10 10 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 As a result of this ruling Oriska sought to introduce an affidavit from Mr. Kernan in opposition to the summary judgment motion filed by the defendants based on Judge MacRae's ruling that Mr. Kernan could be a "fact witness." On November 16, 2020, exhibit 3, pages 37 through 39 and 48. during oral arguments, Judge MacRae ruled that Mr. Kernan could be a fact witness for the defendants, but could not be a fact witness for the plaintiff because he said by submitting a voluntary affirmation of Mr. Kernan, he would be taking a role in the litigation, but being a subpoenaed witness would not be taking a role in the litigation. This blatantly, ridiculous, unfair ruling (the likes of which I have never encountered in 47 years of litigation) prevented Oriska from litigating the merits of the case and allowed Judge MacRae to rule against Oriska Insurance Company based on the Ins Law 1310 Order of February 1, 2013. This clearly prevented Oriska from a full and fair opportunity to litigate its claim. 27. The supposed privity between Oriska and Rashbi: Privity is an amorphous concept that has different meanings in different contexts. In the context of res judicata, it requires that Rashbi have the exact same interest that Oriska had in the prior litigation dealing with the Settlement. Oriska is in fact adverse to Rashbi in the Settlement and is not barred from pursuing its interests in its own claims. The WCB decision makes clear that Oriska is concerned with the collection of premiums to fulfill its obligations of paying claims, but Rashbi is a surety for the employers and seeks reimbursement as well to enforce its rights under the agreement. Accordingly, res judicata should not apply to Rashbi. 28. Considering the WCB Decision, any issue with respect to the existence of any privity between Oriska and Rashbi for purposes of applying res judicata against Rashbi, should have been become irrelevant and pointless because in its January 14, 2022 Decision 11 11 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 in the Brookhaven Case, a (NYSCEF Doc No. 61), a copy of which is attached as exhibit 8 hereof, this Court itself categorically found that the past 2017, 2018, and 2019 decisions involving Oriska did not fairly and fully adjudicate the merits of Oriska’s claims and were not resolutions on the merits of these claims. Before arriving at a decision with respect to the res judicata/collateral estoppel defense raised by Brookhaven in its motion to dismiss, this Court itself set the stage for a resolution of the issue of the merits of the res judicata defense raised by said defendant: “Here, the issue distills to whether there has been a full and fair adjudication on the merits of the subject claim, and, if so, whether there is privity of interests between Oriska and Petitioner” (id. at 9) (emphasis supplied). Having laid the necessary predicate for its resolution of the res judicata issue, the Court expressly held that res judicata does not apply because “[t]he Common theme in the foregoing litigations is that Oriska's claims were effectively barred as violative of the DFS Order, and correspondingly, the merits of the claim were not fully and fairly litigated and resolved on the merits. . . .” (id. at 10) (emphasis supplied). The only possible logical meaning to the Court’s “and, if so” language in page 9 of the Decision is that the question of any privity of interests between Oriska and Rashbi had become unnecessary given its conclusion (in page 10 of the Decision) that the merits of Oriska’s claims were neither fairly and fully litigated nor resolved on the merits. Even the existence of any privity between Rashbi and Oriska (assuming arguendo that there be any) will not make res judicata applicable here in light of the Court’s finding that the prior decisions did not fairly and fully litigate Oriska’s claims and were not resolutions on the merits. And neither could the Court change its resolution on the res judicata issue because that had become the law of the case. Indeed, the Court itself had declared this to be so in its decision and order of April 14, 2022 (NYSCEF Doc No. 110, Brookhaven Case), exhibit 9 12 12 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 hereof, when it again rejected exactly the same res judicata defense that the defendant Brookhaven raised in its motion to have the amended complaint dismissed. Statute of Limitations Does Not Apply to Bar Rashbi’s Claims 29. For the reasons mentioned below, the defense of statute of limitations asserted by Golden Gate in its answer here is sham, absolutely meritless in fact and in law, and deserves scant consideration. 30. The decision of the WCB finding that the policies are part of a Retrospective Rating Program) with a Large Risk Rating Option with an obligation of the employers to pay final premium based on actual losses prevents Golden Gate from arguing that Rashbi is time- barred from recovering the premiums due under the Settlement. The nature of a retrospective rating program is such that final premiums payable are determined on the basis of actual losses sustained as determined subsequently on a retrospective basis. The statute of limitations cannot be reckoned (as the Court erroneously did in the Brookhaven Case) from the time invoices for premium payments were issued because the final premiums payable can be demanded and acted upon only after the actual losses sustained have been determined. And as cited below, the settled law is that it is only when losses are paid then looking back at that point when the statute of limitations begins to run because it is only at that point when the obligation of Golden Gate to pay restrospective premiums arises. 31. At earliest, the statute of limitations on this action runs from the last partial payment made by Golden Gate, which was January, 2018. Determination of retrospective premium is a snapshot in time as losses continue to be paid to injured workers. Successive lawsuits may need to be brought due to Golden Gate and the other insured employers/policyholders not paying the retrospective premium and this continues long into 13 13 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 the future. The statutory limits under the Workers’ Compensation Law require that injured workers be paid lifetime benefits for lost wages, medical care and expenses for on-the-job injuries or illnesses, unless earlier settled. 32. In Hahn Auto. Warehouse, Inc. v. Am. Zurich Ins. Co., 18 N.Y.3d 765 (2012), an action involving claims for the payment of retrospective premiums, the New York Court of Appeals held that the six-year statute of limitations applicable to insurers' breach of contract counterclaims against insured began to run when they acquired the right to demand payment of retrospective premiums allegedly owed under their policies, not when they issued invoices for such payments where insurers' right to payment was not unambiguously conditioned on their own demand. As a general principle, the statute of limitations begins to run when a cause of action accrues, that is, “when all of the facts necessary to the cause of action have occurred so that the party would be entitled to obtain relief in court” (Aetna Life & Cas. Co. v. Nelson, 67 N.Y.2d 169, 175, 501 N.Y.S.2d 313, 492 N.E.2d 386 [1986]. “When the right to final payment is subject to a condition, the obligation to pay arises and the cause of action accrues, only when the condition has been fulfilled” (John J. Kassner & Co. v. City of New York, 46 N.Y.2d 544, 550, 415 N.Y.S.2d 785, 389 N.E.2d 99 [1979]). 33. Defendant who moves to dismiss a complaint on the ground that it is barred by the statute of limitations bears the initial burden of proving, prima facie, that time in which to sue has expired. Artup v. Simeone, 189 A.D.3d 1143 (2d Dept 2020). When a defendant seeks dismissal under CPLR § 3211(a)(5) on statute of limitations grounds, he or she bears “the initial burden of establishing, prima facie, that the time in which to sue has expired.” Benn v. Benn, 82 A.D.3d 548, 548 (1st Dept. 2011) (internal quotation marks and citation omitted). “To meet its burden, the defendant must establish, inter alia, when the 14 14 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 plaintiff’s cause of action accrued.” Lebedev v. Blavatnik, 144 A.D.3d 24, 28 (1st Dept. 2016) (internal quotation marks and citation omitted). In the Brookhaven case, the Court found that Rashbi’s claims were time-barred without any shred of evidentiary support from Brookhaven whatsoever to establish the facts necessary to prove that the period under statute of limitations has lapsed. Here, Golden Gate has failed to allege in its answer or otherwise establish any facts showing exactly when Rashbi’s cause of action accrued. 34. In retrospective rated coverage, the right to enforce premium payments accrues when the amount of retrospectively rated premium is determined upon the payment of actual losses sustained. Hahn Auto. Warehouse, Inc. v. Am. Zurich Ins. Co., 18 N.Y.3d 765 (2012). In its above February 28, 2022 decision in the Brookhaven Case, the Court belabored (wrongly) that all of the facts necessary to the accrual of Rashbi’s cause of action was complete when Rashbi issued its invoices. See Decision, at 12, footnote 39 (citing the above quoted portion of Brookhaven’s memo of law, par. 48 to 81 of the amended complaint, and the answer to the amended complaint). There was no basis for the Court in its February 28, 2023 decision in the Brookhaven Case to find evidentiary value in the amended complaint to establish the dates the invoices for the premiums were issued by Brookhaven for the purpose of determining the merits of Brookhaven’s motion for summary judgment’s statute of limitations defense, and then in the same breath not accord any evidentiary value to the very same Amended Complaint for the purpose of supporting the sufficiency of Rashbi’s motion for partial summary judgment insofar as it established the amount of premiums that Brookhaven has failed to pay. 35. Besides, the very pendency of the very 2017, 2018, and 2020 Oriska actions invoked by the defendant in the Brookhaven Case and herein defendant Golden Gate here to 15 15 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 raise the res judicata defense against Rashbi on the basis of its supposed privity with Oriska defeats the statute of limitations defense. The period during which these cases were admittedly pending should have tolled the statute of limitations on the enforcement of the Settlement. It is settled law that the statute of limitations is tolled during the pendency of litigation. New York Cent. Mut. Fire Ins. Co. v. Amica Mut. Ins. Co., 162 A.D.2d 1009 (4th Dept 1990). 36. While the Court in the Brookhaven Case considered (incorrectly) the res judicata effect of these Oriska cases against Rashbi on the ground that Oriska and Rashbi are in privity -- and, in so doing, completely contradicted itself and reversed the law of the case that it had established in its decisions of January 14, 2022 (NYSCEF Doc No. 61, Brookhaven Case; also exhibit 8 hereof) and April 14, 2022 (NYSCEF Doc No. 110, Brookhaven Case; also exhibit 9 hereof) -- it did not even deign to consider that, by the same token, the pendency of these very same cases should have tolled the statute of limitations on Rashbi. For example, Oriska v. Bay Park Center, Oneida County Index No.: EFCA2018 001376 was invoked by the defendant in the Brookhaven Case to claim res judicata. This case was pending for at least 1 year, 7 months, and 28 days: the action was initiated by the filing of the complaint on May 9, 2018, and terminated on January 7, 2020, by the denial of Oriska’s motion to reargue. The defendant in the Brookhaven Case also cited Oriska Insurance Company v. Absolut Center for Nursing and Rehabilitation at Allegany, LLC et al, Index No.: EFCA2020-001276, Oneida County Supreme Court, to claim res judicata. This case was pending for at least 1 year, 6 months, and 8 days: the case was commenced by the filing of the complaint on February 18, 2020, and terminated by a decision on August 26, 2021 granting the defendants’ motion to dismiss (which, incidentally, also denied Rashbi’s motion to intervene). Thus, the pendency 16 16 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 of these cases in the trial courts alone, without even taking into account the time during which any appeals taken therefrom (if any) may have been pending, should have tolled the statute of limitations on Rashbi by at least 3 years, 2 months, and 6 days. The periods during which these cases were litigated in the trial court level and on appeal will and should defeat the statute of limitations defense that Golden Gate has raised in this case. 37. Common law has developed the rule that partial payment of an acknowledged debt tolls the statute of limitations or start it running anew. Bernstein v. Kaplan, 67 A.D.2d 897, 898 (2d Dept 1979) (holding that “to toll the statute or start it running anew, it must be shown that the payment was of a portion of an admitted debt under circumstances amounting to a clearly demonstrated intention to pay the balance”). Here, through the affidavit of Mr. Kavazis dated January 24, 2023 (NYSCEF Doc No. 18), the complaint (a copy of which is attached to the Kavazis affidavit, NYSCEF Doc No. 19), and the Supplemental Affidavit of Mr. Kavazis, Rashbi provides sufficient evidence of partial payments made by Golden Gate on estimated final premiums for reimbursement of payments made on the underlying workers’ compensation claims and repeated written assurances of full payment in writing by Golden Gate of the obligations. Such partial payments coupled with Golden Gate’s repeated, written assurances of payment of the entire amount had the legal effect under the common law of tolling the statute of limitations or made it run anew. 38. Clearly, based on the above reasons, Brookhaven cannot seek refuge under the protective cloak of the statute of limitations. Rashbi’s Cause of Action for Breach of Contract Established 39. The WCB in its above decision establishes that policies subject of the Settlement, such as those issued to Golden Gate here, are covered by a retrospective rating 17 17 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 program that requires final premiums to be paid on the basis of actual costs of losses of the employer Golden Gate on the underlying workers compensation claims. The Settlement did not fix and could not stipulate on pre-determined amounts as final premium because the amounts thereof are dictated by the costs and losses actually sustained by the insured employer during the period of the policy and which are determined at the end of a given period (here, annually) retrospectively. Besides, for as long as the injured workers of Golden Gate who are covered by the policies included in the Settlement sustain injuries and are entitled to benefits under the WCL (which is the nature of workers’ compensation to be paid during an injured worker’s entire lifetimes, called statutory liability -- in other words no limit on liability), each and every covered claim is a loss or cost that will have to be borne by Golden Gate under the policies and for which it will have to pay retrospective final premiums to Oriska that, under the Settlement, is guaranteed by Rashbi, the Settlement limiting this only at paragraph 9 to the final adjusted premium. The Settlement provides for the manner in which the amounts of final premium are determined, e.g., paragraphs 9 and 13 of the Settlement. Golden Gate breached the Settlement by its failure to pay for the lost wages, medical care and expenses claimed by its workers injured on the job, liability und WCL 10 ruled by the WCB on each of the claims in paragraph 16 of the Complaint and as enumerated in the WCB Decisions (exhibit A to the Complaint) in cases where Golden Gate was named and notified as a party. This is the import of the above WCB decision. Therefore, in a very real sense, it is virtually impossible for Golden Gate to fully pay the final retrospective premiums under the policies covered by the Settlement until all of its injured employees have died and there are no continuing benefits to an injured employee’s family based on an award by the WCB that the cause of death is deemed to be on-the-job injuries. 18 18 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM INDEX NO. 908120-22 NYSCEF DOC. NO. 33 RECEIVED NYSCEF: 03/15/2023 40. What Rashbi seeks here is a reimbursement of the cost of “actual losses” 3 of the employer that it guarantees as the surety for Golden Gate under the Settlement. Through the above cited statements in the affidavit of Mr. Kavazis, Rashbi has sufficiently established the unreimbursed amounts on the underlying workers’ compensation claims that Golden Gate has failed to pay. Therefore, Golden Gate cannot assert that it has fully paid the final premiums due under the Settlement thereby exonerating Rashbi of exposure for claims paid on the underlying workers’ compensation claims of the injured workers of Golden Gate. 41. Golden Gate’s defense that Rashbi has not performed all its contractual obligations under the Settlement deserves no credence because Golden Gate has not identified any obligation under the Settlement that Rashbi has supposedly breached, much less adduce evidence of any breach of that obligation. Rashbi is the backup to Golden Gate as Golden Gate’s surety and guarantor. Rashbi’s duty to pay only arises if Golden Gate fails to perform its underlying settlement obligations. In other words, Rashbi must prove that Golden Gate failed to pay “actual losses” up to the limit at paragraph 9 of the Settlement of annual Adjusted Premium for Rashbi’s guarantee to come into play. To be sure, Golden Gate has not advanced any counter-claims for damages in its answer arising from any breach by Rashbi of any obligation under the Settlement. On the other hand, Rashbi has proved, through the affidavit of Kavazis, and the amended complaint, that it has reimbursed the Carrier for payments made by the latter on the underlying workers’ compensation claims of the injured workers of Golden Gate establishing the breach of the Settlement by Golden Gate thus invoking the Rashbi guarantee of Golden Gate. See the Kavazis affidavit, at paragraph 7 (NYSCEF Doc No. 18), stating that: “Golden Gate failed to pay the premiums that became due 3 WCB Decision 19 19 of 25 FILED: ALBANY COUNTY CLERK 03/15/2023 03:12 PM