Court Opinion

ID: 9959900
Source: CourtListenerOpinion
Date Created: 2024-04-12 20:11:43.18245+00
Date Added: 2024-06-11T08:18:59.367172
License: Public Domain

Response Cos. Inc. v ADP, LLP
               2024 NY Slip Op 31200(U)
                      April 8, 2024
           Supreme Court, New York County
        Docket Number: Index No. 655167/2021
                  Judge: Louis L. Nock
Cases posted with a "30000" identifier, i.e., 2013 NY Slip
 Op 30001(U), are republished from various New York
 State and local government sources, including the New
  York State Unified Court System's eCourts Service.
 This opinion is uncorrected and not selected for official
                       publication.
                                                                                                                     INDEX NO. 655167/2021
  NYSCEF DOC. NO. 30                                                                                           RECEIVED NYSCEF: 04/08/2024

                                   SUPREME COURT OF THE STATE OF NEW YORK
                                             NEW YORK COUNTY
            PRESENT:             HON. LOUIS L. NOCK                                              PART                              38M
                                                                                      Justice
            ---------------------------------------------------------------------------------X   INDEX NO.          655167/2021
                RESPONSE COMPANIES, INC.,
                                                                                                 MOTION DATE         11/01/2021
                                                         Plaintiff,
                                                                                                 MOTION SEQ. NO.         001
                                                 -v-
                ADP, LLC, and ADP TOTALSOURCE GROUP, INC.,                                         DECISION + ORDER ON
                                                                                                         MOTION
                                                         Defendants.
            ---------------------------------------------------------------------------------X

            The following e-filed documents, listed by NYSCEF document numbers (Motion 001) 6, 7, 8, 9, 10, 11,
            12, 13, 14, 16, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, and 28
            were read on this motion to                                                            DISMISS                         .

            LOUIS L. NOCK, J.

                       Plaintiff commenced this action in August 2021 alleging breach of contract and other

            causes of action arising out of defendants’ contractual obligation to it “to provide comprehensive

            human resource services to its employees” (Complaint ¶ 3). Defendants move to dismiss the

            complaint, which contains the following causes of action: breach of contract, fraud, negligence,

            and breach of the implied covenant of good faith. The motion is opposed.

            Background

                       In November 2010, an entity known as Response Personnel, Inc. (“Response”),1 entered

            into a client services agreement (“CSA” [NYSCEF Doc. No. 18]) with an entity known as ADP

            TotalSource, Inc. (“ADPTS”).2 In brief, the complaint alleges that plaintiff hired an employee

            named Gary Dolgin in September 2014 who was “offered various benefits by ADP[TS]

            including medical insurance coverage” (Complaint ¶ 22); but that he “has always been provided

            1
                Plaintiff herein is named Response Companies, Inc.
            2
                The two defendants herein are named ADP, Inc., and ADP TotalSource Group Inc.
                655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL                                              Page 1 of 5
                Motion No. 001

                                                                           1 of 5
[* 1]
                                                                                                   INDEX NO. 655167/2021
  NYSCEF DOC. NO. 30                                                                       RECEIVED NYSCEF: 04/08/2024

            medical insurance coverage through his wife’s employer” and that “Mr. Dolgin never authorized

            ADP[TS] to provide any medical benefits and continues to remain on his wife’s policy”

            (Complaint ¶ 23). However, the complaint alleges that “ADP[TS] unilaterally forced placed

            comprehensive medical insurance coverage for Mr. Dolgin, erroneously on a policy for

            individuals who were Self-Employed . . . .” (Complaint ¶ 24.) The complaint further alleges that

            “the premiums [for said erroneous placement of coverage] were paid 100% by [plaintiff]” (id.).

            In sum, it is alleged that Mr. Dolgin “was erroneously and actively enrolled in a policy he never

            elected to purchase” and that “this is a blatant error committed by ADP[TS]” but that “ADP[TS]

            has refused to indemnify [plaintiff] for any amount of [premium] monies” (Complaint ¶¶ 24, 26).

            The complaint alleges those monies to be in a minimum amount of $40,000 for which plaintiff

            now seeks reimbursement (plus accrued interest thereon).

            Seminal Provisions of the CSA (NYSCEF Doc. No. 18)

                   Section II (C) provides that “Client [i.e., plaintiff] agrees to identify all self-employed

            individuals (“SEI”) to be covered under this Agreement . . . .” Section IV (preamble) provides

            that “Client acknowledges that TotalSource’s [i.e., ADPTS’] provision of its Services is

            dependent upon the completeness, accuracy, and timeliness of the information that Client

            provides to TotalSource.” Section IV (D) provides that “TotalSource will provide Client with a

            secure, online human resources website which . . . allows Client to process and report newly

            hired” employees.

            The Motion to Dismiss

                   The theory of the complaint is that ADPTS, without any identification by plaintiff of Mr.

            Dolgin as a Self-Employed worker seeking health insurance coverage, “unilaterally” and

            “erroneously,” placed Mr. Dolgin into coverage status, resulting in at least $40,000 in unjustified

             655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL                                Page 2 of 5
             Motion No. 001

                                                           2 of 5
[* 2]
                                                                                                                INDEX NO. 655167/2021
  NYSCEF DOC. NO. 30                                                                                   RECEIVED NYSCEF: 04/08/2024

            premiums paid by plaintiff over the course of his working period with plaintiff, commencing in

            2014 – seven years ago. However, defendants submit the affidavit of their Client Relations

            Executive, Juan Tapia (NYSCEF Doc. No. 9), which attests that a personnel department

            employee of plaintiff bearing the data entry codename “MLACHAP” expressly identified Mr.

            Dolgin, at the outset of his hiring by plaintiff in September 2014, as a recipient for health

            insurance coverage, in the ADPTS information system (see, CSA § IV [D] [quoted above]), and

            Mr. Tapia annexes a copy of that data entry page (NYSCEF Doc. No. 11). Mr. Tapia also

            annexes a portion of the many invoices which plaintiff paid over the years, without objection, in

            connection with insurance premiums for Mr. Dolgin (NYSCEF Doc. No. 12).

                      Defendants move to dismiss on the basis of Mr. Tapia’s affidavit, and its exhibits (CPLR

            [a] [1]).3

            Discussion

                      The CSA expressly casts the burden of identifying covered individuals, on the plaintiff

            (CSA § II [C]) – not on the defendants. The CSA makes that even clearer in the preamble to

            section IV of the CSA by stating that “Client acknowledges that TotalSource’s provision of its

            Services is dependent upon the completeness, accuracy, and timeliness of the information that

            Client provides to TotalSource.”4 Consequently, if what Mr. Tapia attests to is true – to wit, that

            an employee of plaintiff coded as “MLACHAP” informed defendants in 2014 that Mr. Dolgin

            was to be provided coverage – defendants were entitled to rely on that information (or

            misinformation as the case may be) in providing the coverage and charging plaintiff the

            3
              Defendants also submit the affidavit of their Human Resource Business Partner, Dave Blomgren (NYSCEF Doc.
            No. 25), to the effect that the “NY-SEI” coverage underlying this action was to be “100% paid by the
            employer . . . .” (Id., ¶ 3.)
            4
              As for “timeliness,” plaintiff’s alleged discovery of Mr. Dolgin’s insurance status comes after numerous years of
            its acceptance and payment of defendants’ insurance premium invoices.
                655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL                                          Page 3 of 5
                Motion No. 001

                                                                  3 of 5
[* 3]
                                                                                                  INDEX NO. 655167/2021
  NYSCEF DOC. NO. 30                                                                       RECEIVED NYSCEF: 04/08/2024

            premiums therefor, and cannot be held to account for plaintiff’s long-standing error in

            identifying Mr. Dolgin as a covered worker.

                   However, in order for Mr. Tapia’s exhibits to acquire the type of evidentiary sufficiency

            to warrant dismissal of the complaint at this stage, they must be evident to the court as “utterly

            refut[ing]” the claims in the complaint and “conclusively establishing a defense as a matter of

            law” (Himmelstein, McConnell, Gribben, Donoghue & Joseph, LLP v Matthew Bender & Co.,

            Inc., 37 NY3d 169, 175, rearg denied 37 NY3d 1020 [2021]). Thus, while Mr. Tapia identifies,

            in affidavit form, data enterer “MLACHAP” as “known to ADPTS to have been hired for

            employment by [plaintiff]” (NYSCEF Doc. No. 9 ¶ 3), further evidence, perhaps by way of

            deposition or other discovery mechanisms, would be necessary for the court to reach that factual

            conclusion. But for now, the issues of fact raised by the complaint, juxtaposed against the Tapia

            affidavit, cannot be resolved on this motion to dismiss (e.g., Correa v Orient-Express Hotels,

            Inc., 84 AD3d 651 [1st Dept 2011]).

                   Accordingly, it is

                   ORDERED that the motion is denied; and it is further

                   ORDERED that defendants may file an answer to the complaint on or before 30 days

            from the date of filing hereof.

             655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL                               Page 4 of 5
             Motion No. 001

                                                           4 of 5
[* 4]
                                                                                                     INDEX NO. 655167/2021
  NYSCEF DOC. NO. 30                                                                           RECEIVED NYSCEF: 04/08/2024

                   This will constitute the decision and order of the court.

                                    ENTER:

                    4/8/2024                                                               $SIG$
                     DATE                                                           LOUIS L. NOCK, J.S.C.
            CHECK ONE:                  CASE DISPOSED                  X   NON-FINAL DISPOSITION

            APPLICATION:
                                        GRANTED

                                        SETTLE ORDER
                                                         X    DENIED       GRANTED IN PART

                                                                           SUBMIT ORDER
                                                                                                    □   OTHER

            CHECK IF APPROPRIATE:       INCLUDES TRANSFER/REASSIGN         FIDUCIARY APPOINTMENT
                                                                                                    □   REFERENCE

            655167/2021 RESPONSE COMPANIES, INC. vs. ADP, LLC ET AL                                  Page 5 of 5
            Motion No. 001

                                                             5 of 5
[* 5]