The Times
  • Court of Appeals to hear Herkimer case

  • The village of Herkimer's case regarding the Herkimer County Self-Insurance Plan will be going before the New York Court of Appeals.

    The Court of Appeals on June 6 granted Herkimer's motion to appeal a 2011 trial court ruling on the matter.

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  • The village of Herkimer's case regarding the Herkimer County Self-Insurance Plan will be going before the New York Court of Appeals.
    The Court of Appeals on June 6 granted Herkimer's motion to appeal a 2011 trial court ruling on the matter.
    An Appellate Division, Fourth Department, of the state Supreme Court ruling, issued Feb. 1, unanimously upheld the trial court ruling in the seven-year legal challenge brought by local municipalities against Herkimer County individually and as administrator of the Herkimer County Self-Insurance Plan.
    The attorney representing the village of Herkimer in the case advised the village to appeal that ruling to the Court of Appeals and he sees the court's decision to hear the case as “very positive news.”
    “The Court of Appeals grants leave to appeal in very few cases,” said attorney Michael Longstreet, of the Syracuse law firm of Longstreet & Berry. He said the court requires that the matter be of significant public importance. “Once the court sees an issue like the one involved here and grants leave to appeal, there's cause for optimism,” Longstreet said, adding, “Several hundred thousand dollars are involved.”
    He said while there is no question the county was entitled to some compensation when the village pulled out of the self-insurance program, he questioned the amount, saying the trial court granted interest on future damages and refused to discount those damages “charging the village hundreds of thousands more than we felt they should have.”
    All of the other municipalities that were involved in the lawsuit eventually settled with the county. The village of Herkimer is the only one that did not.
    As for the timetable for this appeal, Longstreet said, “We filed a preliminary statement. The court will review it. My guess is all the briefs will be filed by early fall and the court will give us a term where the arguments will be held - probably in the fall or early next year.”
    Steven Billings, Herkimer County personnel officer and administrator of the county workers' compensation self-insurance plan, could not be reached for comment Friday afternoon. He noted in an interview after the Appellate Division ruling the lawsuit was initially brought by seven municipalities in 2006 and he stepped into his current position the following year. He added the plan has spent more than $250,000 in legal fees and expert witness fees to defend the claims and allegations of mismanagement brought by the municipalities.
    The trial court judgment had determined the villages of Herkimer and Ilion and the town of Frankfort were responsible to pay more than $6,000,000 to cover their obligations to the Herkimer County Workers' Compensation Self-Insurance Plan, which terminated Dec. 31, 2005. The village of Herkimer's liability was set at $2,451,108.87; the village of Ilion, $1,667,704.09; and the town of Frankfort, $2,074,711.44. In addition, the local municipalities were responsible for paying statutory interest of 9 percent per year until the judgments were paid.
    Page 2 of 2 - The village of Herkimer appealed the $2.4 million judgment, but the Appellate Court stated the award of pre-judgment interest was fair compensation for the period in which the village held money that rightfully belonged to the county.
    The self-insurance plan was formed in 1956. Under the plan, Herkimer County and all participating municipalities chose to band together in a self-insurance plan to cover the cost of workers' compensation coverage for municipal employees throughout the county. After nearly 50 years, the plan was terminated at the end of 2005. All participants were responsible for paying their proportionate share of the future liabilities of the plan which, at the time of the termination, included more than 200 open workers' compensation cases for employees of participating members.
    The villages of Herkimer, Ilion, Frankfort and Newport and the towns of Frankfort, Webb and Salisbury sued Herkimer County as administrator of the plan, alleging the county had mismanaged the plan over its nearly 50 years. The villages of Newport and Frankfort and towns of Webb and Salisbury eventually settled their obligations and withdrew from the litigation.
    After an eight-day trial before Supreme Court Justice Anthony Paris, an Oneida County jury unanimously dismissed all of the claims of the remaining three municipalities and ruled in favor of the county.
    Later Paris ruled in addition to the more than $4 million sought by the county, the local municipalities were required to pay approximately $2 million of interest resulting in combined judgments exceeding $6 million.
    He stated in his ruling despite attempts to resolve the indebtedness of the three municipalities to the plan, they “steadfastly resisted and refused to accept any reasonable compromise.” Paris said the municipalities had “produced no credible evidence of plan mismanagement.”