Mossberg v City of New York

[*1] Mossberg v City of New York 2006 NY Slip Op 51963(U) [13 Misc 3d 1223(A)] Decided on October 6, 2006 Supreme Court, Kings County Hinds-Radix, J. Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. As corrected in part through October 20, 2006; it will not be published in the printed Official Reports.

Decided on October 6, 2006
Supreme Court, Kings County

Blima Mossberg and Herschel Mossberg, Plaintiffs,

against

The City of New York, Defendant.



46850/02

Sylvia Hinds-Radix, J.

Upon the foregoing papers, plaintiffs Blima Mossberg and Herschel Mossberg (hereinafter "plaintiff") move, by order to show cause, for an order, extinguishing the purported liens and/or subrogation rights asserted by Healthcare Recoveries, an agent for Group Health Incorporated (GHI).

On December 18, 2001, Plaintiff Blima Mossberg allegedly slipped and fell on a public sidewalk in Brooklyn. Thereafter, she and her spouse, derivatively, commenced a personal injury action against defendant The City of New York, seeking damages for injuries allegedly sustained as a result of the accident.

Healthcare Recoveries Inc., a third party organization acting as agent for GHI in order to recover medical payments made on plaintiff's behalf, oppose the plaintiff's application. Healthcare Recoveries contend that plaintiff Blima Mossberg was enrolled as a member in an insured health plan enacted in accordance with the Employment Retirement Income Security Act of 1974 ("ERISA"). The ERISA plan provided benefits to plaintiff covering the medical expenses of comprehensive health care services provided under the plan. Pursuant to the plan, GHI provided health insurance benefits to plaintiff covering medical expenses totaling $10, 611.00. Thereafter, Healthcare Recoveries acting as an agent for GHI sought recovery for the medical expenses paid on plaintiff's behalf in accordance with "ERISA." Healthcare Recoveries sent letters to plaintiff's attorney notifying him of GHI's rights of subrogation and reimbursement for the monetary benefits paid by the plan on plaintiff's behalf, relating to the December 18, 2001 accident.

Plaintiff now moves to extinguish any liens or subrogation rights asserted by [*2]Healthcare Recoveries to recover medical expenses incurred on plaintiff's behalf.Plaintiff's primary argument in support of the application is founded upon CPLR 4545, "Admissibility of Collateral Source Payment." Under CPLR 4545 "if the court finds that any cost or expense was or will. . . . be replaced or indemnified from any collateral source, it shall reduce the amount of the award by such finding, minus an amount equal to the premiums paid by the plaintiff for such benefits for the two years immediately proceeding the accrual of such actions and minus an amount equal to the projected future cost to the plaintiff of maintaining such benefits."

The issue before the court is whether the New York's collateral source rule as effected by CPLR 4545 operates to negate GHI's right of subrogation and reimbursement.

Subrogation is the principle by which an insurer, having paid [the claims] of its insured, is placed in the position of its insured so that it may recover from the third party legally responsible for the loss" (Winkelmann v. Excelsior Ins. Co., 85 NY2d 577, 578). Plaintiff asserts that since plaintiff has no rights to recover that portion of the medical bills paid by the Healthcare Recoveries, then Healthcare Recoveries cannot have a lien or subrogation with respects to those payments. Plaintiff further maintains that the lien/subrogation rights which have been asserted on behalf of GHI cannot be recognized, as "CPLR 4545(c) limits plaintiff's ultimate recovery to that portion of the medical expenses which plaintiff has actually paid out of his/her own pocket." In further support of the application, plaintiff submitted a single page document which appears to be part of a GHI's insurance policy contract. To the extent that the document is incomplete the court will not consider it in support of plaintiff's application.Plaintiff relies on the case of Humbach v Goldstein , 229 AD2d 64 lv. dismissed 91 NY2d 921, where the issue before the court was the insurer's right to assert a lien under the terms of its policy (id 68-69). There the insurer claimed it is "subrogated to the plaintiff's right to recover medical expenses paid from responsible third parties," and is "entitled to reimbursement to the extent of the benefit payments made to plaintiff pursuant to contract with the plaintiffs." The Appellate Division, Second Department cited Teichman but held that where an insurer moved to intervene prior to trial, its claim for subrogation and entitlement to reimbursement were premature because it had not reserved to itself any right to veto any proposed settlement between the plaintiff and defendants. The Hambach court noted that intervention by health insurance carriers could impermissible allow insurer's to dictate the course of the insured's litigation (Berry v. St. Peter's Hospital, 173 Misc 2d 214). The court in Hambach also held that a lien existed in the insurer's favor as to third party payments which were specifically identified as amounts paid for health care services or benefits due to plaintiff's injuries in the accident, thus adequately protecting the insurer's rights.

In the instant case, Healthcare Recoveries argued that the Humbach case is distinguished from the instant case in that Humbach deals with the principle of equitable subrogation whereas in the present case, GHI's claim is based upon contractual subrogation [*3]theories. Healthcare Recoveries rely on the case of Teichman v Community Hospital, 87 NY2d 514 to support their rights of subrogation and reimbursement for the monetary benefits paid by the plan on plaintiff's behalf.

In Teichman, the Court of Appeals had before it an application by Metropolitan Life Insurance Company (MetLife) to intervene in an infant's compromise to assert a claim against the settlement for medical expenses which it had paid as a result of the injuries sustained by the infant. There, the plaintiff opposed the application and argued that they had not sought recovery for past medical expenses. In Teichman, the insurer did not have a lien on the funds but claimed a right of refund under its insurance contract. The Court concluded that the insurer was nevertheless entitled to intervene "to establish its contractual right to reimbursement of any medical expenses actually included in the settlement (87 NY2d 518). The Teichman Court further held that "allowing MetLife to seek a refund of any medical expense payments included in the settlement both prevent a potential double recovery by plaintiffs and assures that tortfeasors, not ratepayers, will ultimately bear the expenses" (Teichman at 523; see also, Kelly v, Seager, 144 Misc 2d 458, aff'd 163 AD2d 877).

Other courts have recognized that CPLR 4545 was enacted in 1986 in order to prevent duplicate recoveries for, among other things, the costs of medical care (see, Blue Cross and Blue Shield of NJ, v Phillip Morris USA, 3 NY3d 200) [where the Court held that CPLR 4545 (c) would not prevent a health care insurer from pursuing subrogation claims against tobacco companies for the provable costs incurred in providing medical treatment for its smokers.

In so doing, the Court noted that CPLR 4545 was "enacted in 1986 in order to prevent duplicate recoveries for, among other things, [the] costs of medical care" (id. at 208, 785 NYS2d 399 ), and "does not alter [the health insurer's] traditional remedy because a defendant may still be held responsible in subrogation." Likewise, in Excellus Health Plan v Federal Express Corp., 5 Misc 3d 727, the court also held that "collateral source rule did not prevent health insurance provider from directly enforcing its subrogation rights against alleged tortfeasor to recover cost of medical expenses paid by provider on behalf of its insured."

This court finds that as noted by the Court of Appeals in Teichman v Community Hospital, 87 NY2d 514 , the purpose of section 4545 (c) is to prevent plaintiffs from recovering windfalls and double recoveries for the same loss (see also, Fisher Qualico Contr. Corp., 98 NY2d 534, 537). This court also finds that under the facts in the instant case, plaintiff's request for an order extinguishing the purported liens and/or subrogation rights asserted by Healthcare Recoveries is premature. This court has no information as to whether a settlement has being reached or offered in the instant personal injury action.

Moreover, plaintiff's papers submitted in support of the application are defective in that plaintiff failed to attach a complete copy of the insurance policy contract upon which plaintiff refers to in support of the application.

Accordingly, plaintiff's request for an order, extinguishing the purported liens and/or [*4]subrogation rights asserted by Healthcare Recoveries in the instant case is denied.

The foregoing constitutes the decision and order of this court.

E N T E R,

J. S. C.