2012-03-07
GERALD A. VERGILIS.
KENNETH M. STENGER
ALBERT P. ROBERTS
THOMAS R. DAVIS
STEPHEN E. DIAMOND.....
JOAN F. GARRETT..
VERGILlS, STENGER, ROBERTS, DAVIS & DIAMOND, LLP
ATTORNEYS AND COUNSELORS AT LAW
1136 ROUTE 9
WAPPINGERS FALLS, NEW YORK 12590
OF COUNSEL
KAREN MacNISH
(845) 298-2000
FAX (845) 298-2842
www.Ysrp.com
e-mail: info@vsrp.com
LEGAL ASSISTANTS:
AMY E. DECARLO
SANDRA A. OAKLEY
SARAH SALISBUR Y
CLOSING COORDINATOR:
MARIA L. JONES
KEVIN T. McDERMOTT
ANGEL I. F ALC6N
ANTHONY M. DEFAZIO...
JAMES P. HORAN...
LISA M. COBB
M. ELLEN O'SULLIVAN
MARINA O'NEILL
MELISSA A. MANNA-WILLIAMS
POUGHKEEPSIE OFFICE
By Appointment Only
(845)452-1046
. ALSO ADMITTED IN FLA
"ALSO ADMITTED IN CONN
... ALSO ADMITTED IN NJ
.... ALSO ADMITTED IN FL & MA
March 7, 2012
BY FASCIMILE 845-227-6154
AND FIRST CLASS MAIL
Capital Market Advisors, LLC
North Hopewell Plaza
1075 Route 82 - Suite 4
Hopewell Junction, New York 12533
Attention: Ms. Beth Ferguson
~~CC~~~~lQ)
MAR 0 M 2012
TOWN OF WAPPINGER
TOWN CLERK
Re: Town of Wappinger
Pending and Threatened Litigation
Dear Ms. Ferguson:
Pursuant to your letter request dated February 24, 2012, the following is the status of Material
Pending or Threatened Litigation, Claims and Assessments which could have a material effect on
the financial position of the Town of Wappinger, as known to the best of my knowledge through
the date of this letter.
Please be advised that Tax Certiorari proceedings are assigned to Scott L. Volkman, Esq. with
offices at 75 Washington Street, Poughkeepsie, New York 12601, and I have no knowledge of
the validity of any Tax Certiorari claims that were or are pending against the Town.
Please be advised that upon information and belief there are several tort actions pending against
the Town of Wappinger which are being defended by counsel assigned by the Town's insurance
carriers. I am unaware of the exact number, nature, status or probability of success with respect
to any of those actions.
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March 7,2012
Page 2
PENDING OR THREATENED LITIGATION
(Excluding Unasserted Claims and Assessments):
I hereby report as of the date of this letter, to the best of my knowledge, the only material
Pending or Threatened Litigation matter in which the Town of Wappinger is or may be named as
a party is the case listed below.
PETNY (Public Entity Trust of New York) Deficiency
For the years 2004 through 2007, the Town of Wappinger had been a participant in the Public
Entity Trust of New York, a self insured Trust which was to provide the Town with Workers'
Compensation coverage for its employees. The Trust was terminated in August 2007 by the New
York State Workers' Compensation Board. The Workers' Compensation Board then hired an
independent accounting firm to conduct an audit of the books and records of PETNY and to
calculate what appeared to be significant deficiencies necessary to cover outstanding workers'
compensation claims of the employees of the constituent municipalities. The audit was
conducted by Lumsden & McCormick, LLP, who estimated the PETNY deficiencies to be
approximately $7,557,515.00 and further determined that the Town of Wappinger share of said
deficiency is $283,752.78.
The Town has vigorously opposed payment of this sum but has entered into an interim Tolling
Agreement by which the applicable statute of limitations would be tolled pending the negotiation
of the amounts due. The Town of Wappinger has been joined by several other municipalities
who were also members of PETNY who also opposed the alleged deficiencies. The
investigations made by the constituent municipalities have disclosed a number of deficiencies
and/or discrepancies in the calculations used to determine the Town of Wappinger deficiency.
The matter is still being investigated and negotiation settlements are still pending.
I know of no other material claims or actions pending or threatened, brought or anticipated to be
brought against the Town.
UNASSERTED CLAIMS AND ASSESSMENTS
This letter includes matters that existed as of March 7, 2012.
The undersigned knows of no other unasserted claims or assessments considered to be probable
of assertion and/or if asserted, would have a possibility of an unfavorable material outcome.
However, in the course of performing legal duties for the Town of Wappinger with respect to
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March 7, 2012
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a matter recognized to involve an unasserted possible claim or assessment that may call for
financial statement disclosure, and I have formed a professional conclusion that the Town should
disclose or consider disclosure concerning such possible claim or assessment, as a matter of
professional responsibility to the Town of Wappinger, I will so advise the Town and will consult
with the Town concerning the question of such disclosure and the applicable requirements of
Statement of Financial Accounting Standards No.5.
There are no other potential liabilities or loss contingencies that are required to be disclosed or
accrued in the financial statements, other than the abovementioned matters.
There are no other potential liabilities or loss contingencies which in my professional judgment
are required to be disclosed or accrued in the financial statements. All contingent liabilities set
forth above are as of the date of this correspondence. The scope of this letter includes litigation
commenced against the Town to present, except as noted above.
To the best of the knowledge of the undersigned, there are no actions that have been commenced
against the Town, or threatened to be commenced against the Town, nor are there any actions
pending which would subject the Town to any monetary payment or financial loss, except as
above stated.
The undersigned knows of no other unasserted claims or assessments considered to be probable.
Very truly yours,
VERGILIS, STENGER, ROBERTS, DAVIS & DIAMOND, LLP
ALBERT P. ROBERT
APR/so
cc: Hon. Barbara A. Gutzler, Supervisor (by email andfirst class mail)
Hon. Christine Fulton, Town Clerk (by email andfirst class mail)
Scott L. Volkman, Esq. (by email andfirst class mail)
O:\Wappinger\Town Board\PendingLitigation(.0060)\03-07-121etter to Capital Market Advisors.doc