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RLI INS. CO. v. LABOR DEPT.

97 N.Y.2d 256 (2002)

766 N.E.2d 934

740 N.Y.S.2d 272

In the Matter of RLI INSURANCE COMPANY, SURETY DIVISION, Appellant, v. NEW YORK STATE DEPARTMENT OF LABOR et al., Respondents.

Court of Appeals of the State of New York.

Decided February 7, 2002.

Attorney(s) appearing for the Case

Ernstrom & Dreste LLP, Rochester (Theodore M. Baum, Michael F. Dehmler and John W. Dreste of counsel), for appellant.

Eliot Spitzer, Attorney General, New York City (M. Patricia Smith, Caitlin J. Halligan, Michael S. Belohlavek and Daniel J. Chepaitis of counsel), for New York State Department of Labor and another, respondents.

Wolff & Samson, P.A., New York City (Armen Shahinian and Scott D. Baron of counsel), for Surety Association of America, amicus curiae.

Chief Judge KAYE and Judges SMITH, CIPARICK, WESLEY, ROSENBLATT and GRAFFEO concur.

OPINION OF THE COURT

LEVINE, J.

Petitioner RLI Insurance Company, as surety, posted performance and payment bonds on a public improvement project. RLI now claims subrogation rights after fully completing the construction on behalf of the defaulting contractor and paying all subcontractors, laborers and suppliers. At issue is whether RLI's right to funds still in the possession of the project owner is superior...

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