Pellegrino v New York City Tr. Auth.
Annotate this CaseDecided on February 5, 2016
Civil Court of the City of New York, Kings County
Joseph Pellegrino, Claimant,
against
New York City Transit Authority, Defendant.
TS-300178-13/KI
Attorney for Plaintiff
Zaremba Brownell & Brown PLC
40 Wall Street, 28th Floor
New York, NY 10005
Attorney for Defendant(s)
Lawrence Heisler
Executive Assistant General Counsel
The New York City Transit Authority
130 Livingston Street
Brooklyn, NY 11201
Attention: Anna J. Ervolina, Esq.
Katherine A. Levine, J.
Plaintiff Joseph Pellegrino ("plaintiff") brought an action against the New York City Transit Authority ("TA" or "defendant") for injuries he sustained when the bus he was on jolted. On February 23, 2015, following a trial before this Court, the jury returned a verdict in favor of plaintiff in the amount of $132,776.43 for medical expenses incurred as a result of the incident; $400,000.00 for pain and suffering up to the date of the verdict; and $360,000, which, according to the verdict sheet, was to be paid over six years, for future pain and suffering and for the permanent effect of the injury.
On May 22, 2015, plaintiff's attorney made an ex parte request to Judge Steven Z. Mostofsky for immediate entry of judgment because Pellegrino was over 80 years old, and was concerned about extending defendant's time to appeal. Judge Mostofsky directed the Clerk "to [*2]process the application for a judgment and enter it, if appropriate." Without the knowledge of this Court, plaintiff then submitted an ex parte judgment to a clerk of the court which included a one page judgment and a complicated proposal for amortization of future earnings from a structured settlement company. The clerk filled out the judgment awarding $892,776.43 plus interest at the rate of 9% in the sum of $39,624.60 and costs and disbursements in the sum of $1,392.20, for a total sum of $933,793.23. This judgment did not distinguish between past and future damages and did not include spaces for the amortization of future damages over $250,000 over six years as contained in the proposal. Carol Alt, Chief Clerk of the Civil Court issued a civil judgment form, dated June 3, 2015, which indicated that on that date judgment was entered in Kings County Civil Court in the total amount of $933,793.23, and that an "Annuity contract submitted by plaintiff" was attached. After judgment was entered, the one page judgment form with the Clerk's handwriting was submitted to this Court for signature. Having never been apprised that this whole process had been initiated by plaintiff on an ex parte basis, and thus being unaware that the defendant had not been notified of the judgment, this Court signed the judgment. On June 5, 2015, plaintiff's attorney served the one page judgment, dated June 3, 2015, with Notice of Entry, upon the attorneys for defendant; the annuity contract apparently was not included in this service.
By Order to Show Cause dated July 21, 2005, defendant moved to vacate the judgment on the grounds that "it is a nullity," as it fails to comply with CPLR § 5041(e)'s dictate that any award for future damages in excess of $250,000 be amortized, that it contained the wrong interest rate, and that it was obtained ex parte. The affidavit in support of this motion focused almost entirely on the trial court's obligation to ensure, pursuant to CPLR § 5041(e) that any award for future damages in excess of $250,000 be structured in periodic installments. It is not disputed that defendant failed to appeal the judgment with notice of entry within 30 days of receipt and to date has not appealed the judgment.
Plaintiff opposed the motion on the ground that defendant cannot use a motion to vacate a judgment as a means of getting around its failure to perfect an appeal within 30 days of service of the notice of entry of judgment. Plaintiff contends that defendant's recourse is to either appeal the judgment pursuant to CPLR § 5513, which it can no longer do, or seek modification or amendment to the already filed and executed judgment It also argues that the grounds upon which a motion to vacate can be granted pursuant to CPLR § 5015(a) are not present in the instant matter. Plaintiff conceded in its papers, and during subsequent oral arguments, that the proper interest rate to attach to the judgment is three percent, not nine percent, pursuant to Public Authorities Law § 1212(6), which provides that the "rate of interest to be paid by the authority, or by its officers or employees whose liability has been assumed by the authority... upon any judgment or accrued claim against the authority or such officer or employee, shall not exceed three per centum per annum." See, Soltero v City of New York, 2015 NY App. Div. LEXIS 7782, 1-2 (1st Dept. 2015). Plaintiff also now concedes that any judgment for future damages in excess of $250,000 must be structured.
The Clerk's failure to apply the three percent interest rate or to enter a judgment in the [*3]form of an annuity for future damages in excess of $250,000 in accordance with CPLR § 5041(e) are not proper grounds for vacating the judgment. Pursuant to CPLR § 5015, vacatur may only be granted where the movant shows excusable default; newly discovered evidence; fraud, misrepresentation, or other misconduct of an adverse party; lack of jurisdiction to render the judgment or order; or reversal, modification or vacatur of a prior judgment or order upon which it is based. Defendant has not demonstrated that any of the above criteria have been satisfied. While the court does not condone plaintiff's submission of an ex parte order to the clerk, it cannot, based upon the record, find that this conduct rises to the level of fraud or misrepresentation as plaintiff did include the annuity contract as part of its submission to the clerk Furthermore, as set forth below, defendant had sufficient time to contest the entered judgment by appealing it, which it failed to do.
The proper vehicle in which to ensure that the judgment includes a properly structured annuity and the proper interest rate is to amend the judgment rather than vacate it since the inclusion of these two items will not affect a substantial right of the parties. CPLR § 5019(a) provides that a judgment "shall not be stayed, impaired or affected by any mistake, defect or irregularity in the papers or procedures in the action not affecting a substantial right of a party" and that the Court "may require the mistake, defect or irregularity to be cured." See, People v. Francis, 132 AD3d 893 (2d Dept. 2015) (Courts "should not, after the final judgment, by amendment, change a ruling upon the law, or alter the decision upon the merits, for, by so doing, the substantial rights of the adverse party would be really affected").
Since the proper interest rate to attach to the judgment is three percent, not nine percent, pursuant to Public Authorities Law § 1212(6), no substantial right of the parties is affected by amending the judgment to include the lower interest rate. See, Kiker v. Nassau County, 85 NY2d 879, 881 (1995) (Judgment against Transit Authority properly amended to reflect 3% interest rate dictated by statute; no substantive right of the parties is affected as plaintiff's right to a 9% interest on his judgment never existed); Williams v. City of New York, 111 AD3d 420 (1st Dept. 2013) (Same). Similarly, no substantial right of the parties is affected by amending the judgment to amortize the $110,000.00 over six years because future damages in excess of $250,000 must be in the form of an annuity, as mandated by CPLR § 5041(e) and plaintiff's right to a lump sum for future damages in excess of $250,000 never existed. No substantive right of the Transit Authority would be affected by amending the judgment to include an amortized structure, because payment of an annuity is mandated by statute and the verdict sheet, and the Transit Authority is under an obligation to ultimately pay the sum of $360,000 for future damages, albeit on an amortized basis. Cf Chmelovsky v. Country Club Homes, Inc., 111 AD3d 874 (2d Dept. 2013) (Motion to resettle an order of the court, pursuant to CPLR § 5019 to reinstate the plaintiff's third cause of action asserted against the defendant was seeking to change a substantive matter rather than mere ministerial mistake defect or irregularity; relief should be sought through direct appeal or motion to vacate pursuant to CPLR § 5015(a)); Mount Sinai Hosp. v Country Wide Ins. Co., 81 AD3d 700, 701 (2nd Dept. 2011) (In seeking to change the judgment amount on the ground that the insurance policy limits were nearly exhausted, the insurer was not seeking to correct a mere clerical error, but rather to change the judgment on a [*4]substantive matter; therefore, amending the judgment pursuant to §5019 was not the proper vehicle).
The jury rendered a verdict which indicated that future damages should be paid out over six years, which evinced the jury's intent that plaintiff receive annuity payments from the date of its verdictIt is well established that "future damages are a debt owed entirely as of the date of the liability verdict,' and the structured judgment schemes of articles 50-A and 50-B do not delay liability.'" Brown v. City of New York, 297 AD2d 771, 773 (2nd Dept. 2002) quoting Rohring v City of Niagara Falls, 84 NY2d 60, 70 (1994). Given the circumstances of the instant matter where the jury awarded substantial damages, after trial, to an elderly man who was jolted in a bus and where defendant erred by not filing a timely appeal, this Court's interest in justice lies in amending the judgment as opposed to vacating it. See, Stinton v. Robin's Wood, Inc., 45 AD3d 203, 211 (2nd Dept. 2007).
Accordingly, this Court directs the parties to expeditiously settle an amended judgment and submit it to Court within 30 days of this Decision/Order. The proposed order shall meets the requirements of CPLR § 5041(e) and the rate of interest against the TA may be no more than 3% pursuant to Public Authorities Law § 1212(6).
This constitutes the Decision and Order of the Court.
DATED: February 5, 2016
_____________________________
KATHERINE A. LEVINE
Acting Justice, Supreme Court
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