New York State Association of Self Insured Counties. 2014 Spring Conference Best Western Plus Captain’s Quarters Hotel & Conference Center April 30, 2014 – May 2, 2014.
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2014 Spring Conference
Best Western Plus Captain’s Quarters Hotel & Conference Center
April 30, 2014 – May 2, 2014
How to Be a “Lien”, Mean, Subrogating Machine – Advanced Section 29 IssuesPresented by Melissa A. Day, Esq.Thursday, May 1, 2014, 1:30 PM
Claimant was a passenger in a car accident during the course of his employment. A co-worker was driving, her husband owned the vehicle. Claimant was awarded workers’ compensation benefits and brought a third party action against the other driver in 2009. The driver from the other vehicle sought to shift liability back to the owner of the car, the claimant’s employer.
The Second Circuit certified the following question to the New York Court of Appeals:
Whether a defendant may pursue a third-party contribution claim under New York Vehicle and Traffic Law § 388 against the owner of a vehicle, where the vehicle driver’s negligence was a substantial factor in causing the plaintiff’s injuries, but the driver is protected from suit by the exclusive remedy provision of Workers’ Compensation Law §29(6).
The Court of Appeals answered in the affirmative. “Read together, these statutes render workers’ compensation benefits the exclusive remedy of an injured employee, thereby baring the employee from recovering against a negligent coemployee or employer…we hold that a defendant may not pursue a third-party contribution claim under vehicle and traffic law… against a vehicle owner where the driver’s negligence was a cause of the plaintiff’s injuries, but the driver is insulated from a lawsuit under workers’ compensation law.”
If the injured worker has not commenced an action within one year from when the action accrues or six months after the awarding of compensation, whichever comes first, this amounts to an assignment of the COA to the employer
The injured worker must be given notice in writing by personal service or by certified mail that the failure to commence an action within 30 days will operate as an assignment of the claim to the employer.
$1,200,000 recovery pending
$200,000 lien at the time of recovery
Claimant is about to be classified with a PPD and LWEC of 95%
AWW of $1,263.12
Date of accident > 7/1/14
Total Costs are $400,000
Net benefit from third party available to all parties is $800,000
Employer’s benefit is $600,000 (Lien + Future Benefit from Credit: $200,000 + $400,000 = $500,000)
Employer’s benefit is $600,000.
Employer’s share of costs is $200,000 (COL 33.33% * $600,000 benefit)
Employer’s lien available to satisfy its attorney’s fee - $200,000
Lien Recovery? ZERO
Total Costs are $200,000
Net benefit from third party available to all parties is $400,000
Employer’s potential benefit is $500,000 (Lien + Future Benefit from Credit: $100,000 + $400,000 = $500,000)
Employer’s benefit is $400,000.
Employer’s share of costs is $133,333.33 (COL 33.33% * $400,000 benefit)
Employer’s lien available to satisfy its attorney’s fee - $100,000
Fresh Money owed to claimant? $33,333.33.
AWW of $900.00 and Date of accident 1/1/10 (TT rate $600.00)
$1,200,000 recovery proposed
Parties agree that it looks like claimant will be classified with a PPD and LWEC of 75% entitling her to $450.00 per week for 425 weeks.
Burns Obligation - $150.00 per week for another 425 weeks – $63,750.00.
$1,200,000 recovery on 6/1/14
$200,000 recoverable lien (%COL 33.33%, $300k lien - $100k COL = $200k)
Agree to reduce lien recovery by future Burns obligation to close out the indemnity.
Labor Law 240
Lien rights are limited to payments made which are not in lieu of first party benefits a.k.a No-Fault.
Employer does have a lien for anything paid which is NOT in lieu of No-Fault
Payments not to exceed $50,000 for:
Accident related medical expenses;
Lost wages up to $2,000 per month for not more than three years after a motor vehicle accident;
Other reasonable and necessary expenses.
Payments in excess of $50,000 OR:
Lost wages of MORE than $2,000 per month;
Lost wages MORE than three years after a motor vehicle accident.
AWW $1600 (TT $808.65)
Award 7/1/14 – 7/31/14 at $808.65 TT
“Monthly” payment is $3,504.15 ($808.65*52/12)
Payment not in lieu of 1st party benefit? $1,504.15
No lost time, minimal medical treatment until 7/1/14. Total payments as of 7/1/14 are $3,000
Claimant undergoes arthroscopic surgery knee surgery on 7/2/14 and is out of work from 7/2/14 until 9/2/14
Not a payment in lieu of first party benefit
Payment not in lieu of 1st party benefit? $1,504.15
Allows an employer who pays workers compensation benefits to an employee injured in a motor vehicle accident to collect no-fault benefits from the other party’s no-fault carrier if one of the vehicles involved is over 6,500 pounds or a vehicle for hire.
Irrelevant which vehicle is > 6,500 pounds or for hire
The right to loss transfer is wholly separate from the compensation carrier’s lien on third party actions.
Although plaintiff insurance company entered into settlement agreement with other insurance companies and agreed to waive amount of its workers' compensation lien, record did not support conclusion that plaintiff insurance company waived its right to pursue loss-transfer claim to recover payments made in lieu of first-party benefits and, absent express waiver, plaintiff insurance company had right to pursue such claim in arbitration. Allstate Ins. Co. v Manfredi Motor Transit Co. (1990, 4th Dept) 159 App Div 2d 969, 552 NYS2d 770.
This case was brought under several causes of action against her employer and the State of New York; (1) 42 USC § 1983, (2) a hostile work environment under Executive Law § 290, and (3) failure to investigate and remedy harassing and inappropriate conduct under 42 USC § 2000e.
The claimant, an OCFS employee who was sexually assaulted, beaten, and kidnapped by a juvenile resident claimed both Workers’ Compensation benefits and sued OCFS. After approving a settlement of $650,000.00 in compensatory damages, the carrier sought to reserve its right under WCL § 29(4) and take credit against the Claimant’s future benefits via cutoff.
The court’s disposition with respect to WCL § 29 was that “a civil lawsuit against an employer or a person in the same employ for sexual harassment or other intentional tort is a third-party action to which WCL § 29 applies.” And, that “Section 29 read in its entirety and in context, clearly reveals a legislative design to provide for reimbursement of the compensation carrier whenever a recovery is obtained in tort for the same injury that was the predicate for the payment of compensation benefits.”
This case was brought as several civil rights claims including; unlawful discrimination, a hostile work environment, sexual harassment, and retaliation. The carrier asserted a lien under WCL § 29(4) against the claimant’s entire third party settlement.
With respect to WCL § 29 (4), the Board found that the parties had not submitted a settlement statement within the specifics of how the amount was to be allocated, thus no determination on a lien could be made. However, the Board did say that only those awards which compensate the plaintiff for personal physical and mental injuries suffered as a result of the work injury will be subject to the lien.
This case deals with exclusivity, but has inference applicable to Third Party Recovery. Claimant, a nurse at a Correctional Facility, was injured in a motor vehicle accident in the course of her employment. The tortfeasor driver was an inmate, a non-employee, but the tortfeasor’s vehicle was owned by Claimant’s employer. Claimant sued her employer relying on WCL § 29 (1) and argued “…although this sort of derivative claim would be barred by Workers' Compensation Law § 29(6) if the driver of the other vehicle had been a co-employee, the fact that the other driver was an non-employee of the State permits her to seek damages directly from the State by operation of its responsibility under Vehicle and Traffic Law § 388.”
The court, citing Shutter Display held such a strained interpretation of WCL §29(1) could not be accepted. The court looked to the definition of “such other” as it appears in WCL §29(4) and further held “There does not appear to be any reading of Section 29(1), or Section 29 as a whole, that allows the Court to come to the conclusion that the negligent acts of a non-employee create another exception to the exclusivity provision provided to employers by WCL §11.”
In this case the primary issue is choice of law, but it is relevant here because it implies that a New York State Workers’ Compensation lien will not attach to a legal malpractice recovery. \
Claimant engaged an attorney to handle a third-party action arising out of a motor vehicle collision. That attorney did not timely file the action and as a result the Claimant sued for malpractice and promptly settled. Because the Claimant received New Jersey Workers’ Compensation benefits, New Jersey law applied and the Carrier was entitled to a lien. However, the Supreme Court (affirmed by 1st Dep’t) held “New York law is to the contrary, and holds that workers’ compensation lien applies ‘only against recoveries from third-party tortfeasors who are responsible for the claimant’s injuries.”
An action based on conduct designed to deprive the employee from obtaining WC benefits.
Action alleging harassment and intimidation which caused resignation.
Discrimination based on age, gender or race
Hostile work environment
Intentional torts by the employer
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