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Court: Suffolk County can’t recoup $7.8M from insurers

Suffolk sought to recoup the money after losing a federal lawsuit for refusing to honor a contract to allow installation of solar panels.

Commuters wait at the Long Island Rail Road's

Commuters wait at the Long Island Rail Road's Ronkonkoma station on April 5, 2017. Photo Credit: James Carbone

A state Supreme Court justice has denied Suffolk County’s effort to recoup $7.8 million from its insurance companies after losing a federal lawsuit for refusing to honor a contract to allow a private firm to install solar panels at the Ronkonkoma Long Island Railroad station.

State Supreme Court Justice David T. Reilly in a seven-page decision found the county is “clearly not entitled to the relief” because it “intentionally breached the lease agreement” to permit EDF Renewable Development Inc. of San Diego to build solar carports at the 3,000-car parking lot.

“The county of Suffolk’s intentional breach of the lease agreements with EDF was not and cannot be construed as a neglient act which would implicate insurance policy considerations,” said Reilly.

“Each of the policies specially exclude recovery for actions for breach of contract,” Reilly wrote.

Suffolk, which is self-insured for claims up to $3 million but carries coverage for catastrophic claims, sued insurers Ironshore Indemity Inc., Lexington Insurance Co. and Starr Indemnity and Liability Co., claiming they failed to issue proper notices denying the county claims.

Suffolk in November paid EDF $3 million in cash and got legislative approval to borrow the remaining $7.8 million, with hopes of recouping insurance money in the lawsuit. Reilly’s ruling was dated March 28, shortly before County Executive Steve Bellone launched a surprise initiative for a 17,000 seat mega-sports arena on the same property.

Legis. Tom Cilmi, leader of the Republican caucus, said the losses will total nearly $15 million when interest costs, legal fees and lost revenues from the electricity that was to be produced are added in.

“The bottom line is that this is a disaster for our taxpayers,” Cilmi said. “The Democrats on the legislature seem intent to let this unbelievably irresponsible decision slide, but $15 million is a lot of money to flush down the toilet. And someone needs to be held responsible ... the buck stops with the county executive.”

Presiding Officer DuWayune Gregory could not be reached for immediate comment.

Jason Elan, a spokesman for Bellone, said the county will appeal the insurance ruling.

“We take comfort in knowing that multiple private sector parties have submitted billion dollar proposals to unlock the true potential of one of the most significant economic development sites in the region,” Elan said.

The dispute arose when Bellone, shortly after taking office in 2012, balked at using the Ronkonkoma site as one of seven county parking sites in a $120 million deal negotiated by GOP predecessor Steve Levy.

Bellone, a Democrat, feared the solar project would interfere with the 1,450 unit transit-related Ronkonkoma Hub. Efforts to find an alternative site stalled and EDF sued in 2013. In 2016, EDF won the lawsuit, which was upheld on appeal in July 2017.

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