ALBANY – The Court of Appeals yesterday limited the ability of the State Department of Labor to seize funds for prevailing wage violations. It found in favor of an insurance company on both legal and public policy grounds.

RLI Insurance Co. v. New York State Department of Labor, 11, is a dispute over competing sureties and subrogation rights. It arises from a renovation project at the Queensbury Union Free School District, and the default of its general contractor, D.C. White Company.