Walter Fights State’s Shady Insurance Practices

Assemblyman pushes $23 million refund for Amherst taxpayers
March 2, 2012

Assemblyman Ray Walter (R,C,I- Amherst) is continuing his push to re-coup more than $23 million in Amherst tax dollars wrongfully taken by state government as a result of fraudulent and deceitful insurance practices. Walter is using his capacity as a member of the Assembly Committee on Oversight, Analysis and Investigation to call for an immediate review of the New York State Insurance Fund’s (NYSIF) role in a 10-year personal injury case that cost the town of Amherst $23.4 million. While the New York State Supreme Court has ruled that this money should be repaid to the town, NYSIF has failed to comply. Walter has written to NYSIF Chief Executive Deputy Director Dennis Hayes, who has dodged the issue, and more recently to Oversight Committee Chairman Andrew Hevesi, urging action.

“This is a staggering case of state government abusing local taxpayers, and frankly, the entire situation is shameful,” said Walter. “We’re talking about NYSIF flaunting the Supreme Court and robbing Amherst taxpayers to the tune of $23 million. The town of Amherst already has paid $10 million out of pocket, and the time to make good on the $13.4 million loan taken out to pay the rest is drawing near. When that bill comes, Amherst taxpayers will be the ones that suffer through property tax hikes and other fees. I am calling for a full investigation into NYSIF’s role in this debacle, and demanding full accountability from the state in what I see as a clear violation of not only the law but of my constituents’ trust.”

The issue stems from a 2002 personal injury case in which an employee of a contractor sustained an injury while working on a building maintained by the town. In 2008, the town was ordered to pay $23.4 million to the claimant. The town complied with the court order, and after its insurance carrier picked up $10 million of the claim, it was forced to borrow to pay the remaining balance.

The town brought legal action against the contractor, McGonigle and Hilger Roofing, to recover the amount it paid out for the injury. Multiple Court rulings granted the town’s claim, the most recent being the December 14, 2011 decision by Justice Feroleto referenced above. The State Insurance Fund indemnified the owners of the company, and is, therefore, ultimately liable.

Click here for Assemblyman Walter’s letters to Committee Chair Hevesi and NYSIF Chief Executive Deputy Director Hayes