Bidwell v New York State Mun. Workers' Alliance
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Bidwell v New York State Mun. Workers' Alliance 2014 NY Slip Op 33382(U) December 12, 2014 Supreme Court, Broome County Docket Number: 2014-2572 Judge: Ferris D. Lebous Cases posted with a "30000" identifier, i.e., 2013 NY Slip Op 30001(U), are republished from various state and local government websites. These include the New York State Unified Court System's E-Courts Service, and the Bronx County Clerk's office. This opinion is uncorrected and not selected for official publication. [* 1] At a Motion Term of the Supreme Court of the State of New York held in and for the Sixth Judicial District in the City of Binghamton, New York, on the 12th day of December, 2014. PRESENT: HON. FERRIS D. LEBOUS Justice Presiding. STATE OF NEW YORK SUPREME COURT : : BROOME COUNTY _______________________________________ DAVID R. BIDWELL, Petitioner, ORDER & JUDGMENT vs. THE NEW YORK SATE MUNICIPAL, WORKERS' ALLIANCE and THE CITY OF BINGHAMTON, NEW YORK, Index No. 2014-2572 RJI No. 2014-1567 Respondents. ________________________________________ APPEARANCES: COUNSEL FOR PETITIONER: HINMAN, HOWARD & KATTELL, LLP BY: PAUL T. SHEPPARD, ESQ., OF COUNSEL 700 SECURITY MUTUAL BUILDING P.O. BOX 5250 BINGHAMTON, NY 13902-5250 COUNSEL FOR RESPONDENTS: MARSCHHAUSEN & FITZPATRICK, P.C. BY: KEVIN P. FITZPATRICK, ESQ., OF COUNSEL 835 OLD COUNTRY ROAD WESTBURY, NY 11590 [* 2] FERRIS D. LEBOUS, JSC Petitioner has commenced this special proceeding seeking to: (1) approve a $145,000 personal injury settlement per Workers' Compensation Law § 29 (5); (2) determining any and all payments to be made from the sum to be received in settlement; and (3) determining that respondents have no lien against the settlement proceeds pursuant to Workers' Compensation Law § 29 (1) and (1-a). Respondents, the New York State Municipal Workers' Alliance and The City of Binghamton, New York oppose the petition in all respects and seek a lien on the entire settlement or, in the alternative, a lien in the amount of $11,053.60. The Court heard oral argument from counsel on December 12, 2014. BACKGROUND At all times relevant herein, petitioner was a police officer employed by the City of Binghamton. On October 31, 2011, at approximately 11:45 p.m., petitioner was operating a police vehicle while on duty when he was involved in a head-on collision with a vehicle operated by Cory Wystozaly and owned by Margaret Johnson. As a result of the accident, petitioner sustained personal injuries including a fracture of the right 5th metacarpal and total loss of the flexor digitorum profundus tendon leaving him permanently unable to flex that finger. Petitioner's medical history will not be set forth here, but suffice it to say that after receiving care from an orthopedic, as well as physical therapy, petitioner ultimately declined to have surgery. -2- [* 3] It is undisputed that from 2011 through 2013, respondents paid a total of $2,413.21 in medical benefits on behalf of petitioner. It is also undisputed that petitioner never lost any time from work, as he returned to work on light duty immediately following the accident and was ultimately cleared to return to full duty in January 2012. On October 11, 2013, the Workers' Compensation Board issued a decision determining petitioner was eligible for a "schedule loss of use award" (SLU) representing a 15% loss of use of his right hand. Inasmuch as the maximum compensation for a hand is 244 weeks, a 15% loss of use award equates to 36.6 weeks. The 36.6 weeks were designated as covering October 31, 2011 through July 12, 2012, although it is undisputed that petitioner did not lose any actual time from work. The award for 36.6 weeks was multiplied by the statutory maximum per week of $772.96 for a total award of $28,290.34. Petitioner hired counsel to pursue a personal injury action against the owner and operator of the other vehicle. In December 2013, a tentative settlement was reached on that claim for $145,000. Petitioner's personal injury attorney contacted respondents to obtain the necessary consents, but respondents have failed and refused to consent to the settlement. Due to the failure of respondents to issue their consent to the settlement and with the limitations period due to expire, petitioner commenced a personal injury action against Wystozaly and Johnson on July 21, 2014 (Bidwell v Wystozaly, et al., Broome County, Index No. 2014-1806). -3- [* 4] On October 20, 2014, this petition was filed when the parties could not agree on the approval and/or lien issues. DISCUSSION I. APPROVAL OF SETTLEMENT Initially, petitioner seeks approval of the proposed settlement of his personal injury action since the respondents have refused to consent thereto. Respondents' counsel conceded at oral argument that there is no valid objection to the reasonableness of the settlement (Matter of Kusiak v Commercial Union Assur. Cos., 49 AD2d 122, 125-126 [4th Dept 1975]). Accordingly, the court grants that portion of the petition that seeks approval of the proposed settlement under Workers' Compensation Law § 29 (5). II. LIEN Next, the petition seeks an order determining that respondents have no lien against the personal injury action settlement proceeds. Petitioner argues his schedule loss of use award constitutes a payment "in lieu of first party benefits" to the extent it does not exceed $50,000 and is not subject to a lien even if the monthly amounts exceeded the $2,000 monthly cap under the No-Fault Law. In opposition, respondents argue they are entitled to a lien on the entire settlement or, at least, to the extent that petitioner was paid in excess of the $2,000 per month set forth in Insurance Law § 5102 (Matter of Goldberg v State Ins. Fund, 202 AD2d 781 [3d Dept 1994]). -4- [* 5] Respondents also emphasize that petitioner himself concedes he never lost any actual wages. To the extent that respondents claim a partial lien, they calculate that petitioner was paid wages of $3,091.84 per month for five months and $3,864.80 for three months and that to the extent that the monthly amount exceeds $2,000, they are entitled to a lien.1 It is well-settled that a workers' compensation carrier has a right to a lien against personal injury action proceeds (WCL § 29 [1]). An exception to that rule, however, is that a carrier shall not have a lien "for compensation and/or medical benefits paid which were in lieu of first party benefits which another insurer would have otherwise been obligated to pay under the [No-Fault Law provisions] of the insurance law" (WCL § 29 [1-a]). First party benefits are defined as basic economic loss which in turn is defined as up to $50,000 for the first three years following the accident including lost wages of up to $2,000 per month (Insurance Law § 5102 [b]). To the extent that respondents rely upon Goldberg, this court finds such reliance to be misplaced. Here, petitioner's SLU award is not an award for actual lost wages even though it was awarded in terms of lost wages. Many courts since Goldberg have recognized the fiction of the weekly designation of SLU awards in terms of wages despite the fact that they are not directly related to actual loss of earnings (Matter of Schmidt v Falls Dodge, Inc., 19 NY3d 178, 182 [2012] ["the allocation of such awards to any particular period of time is arbitrary"]; Matter of 1 Respondents' calculation regarding their purported lien is as follows: $3,091.84 - $2,000 = $1,091.84 x 5 = $5,459.20 $3,864.80 - $2,000 = $1,864.80 x 3 = $5,594.40 $5,459.20 + $5,594.40 = $11,053.60 lien (Fitzpatrick Affirmation, ¶ 24). -5- [* 6] Allen v Enterprise Rent-a-Car, 38 AD3d 970 [3d Dept 2007], lv denied 9 NY3d 802 [2007], rearg denied 9 NY3d 912 [2007] [such awards are deemed to be payments for lost earnings which are actual or presumed"; emphasis added); El Sol Contracting and Const., 2013 NY Wrk. Comp. Lexis 11246 [2013] "[t]he weekly rate and number of weeks in the schedule are merely the measure by which an award is calculated"; "[t]he ...per week rate used in calculating those awards has no direct relation to the claimant's actual monthly loss of earnings during the three year period covered by no-fault insurance, but rather is merely the measure by which an award is calculated under the statute"]). The court also finds that the Court of Appeals' decision in Dietrick v Kemper Ins. Co. (American Motorists Ins. Co.), 76 NY2d 248 (1990), governs here as compared to Matter of Johnson v Buffalo & Erie County Private Indus. Council, 84 NY2d 13 (1994). The Johnson case involved a "continuing permanent partial disability award paid weekly" as compared to Dietrick which involved a "lump sum permanent partial disability award" in the form of a SLU award and serious facial disfigurement which are analogous to the schedule loss of use award involved here. Thus, this court finds that Dietrick controls and not Johnson. As noted in Dietrick, such awards may "[g]enerally be deemed, compensation 'in lieu of first party benefits' because such awards are directly related to plaintiff's basic economic loss, i.e., lost earnings, whether actual or presumed [citations omitted]" (Dietrick, 76 NY2d at 252; emphasis added]). Finally, the court also finds the Third Department's determination in Allen to be dispositive: -6- [* 7] [t]he Court of Appeals has held that awards for permanent partial disability which include schedule loss of use awards fall within the definition of basic economic loss and may therefore be deemed compensation in lieu of first party benefits, regardless of whether the award represents payments for lost earnings which are actual or presumed [citations omitted]. As they are in lieu of first party benefits, the carrier does not have a lien for amounts paid as part of such schedule loss of use awards unless it has paid more than $50,000 or for lost wages covering a period more than three years from the date of the accident (Matter of Allen, 38 AD3d at 971). Suffice it to say, the court finds that respondents have no lien against the settlement proceeds pursuant to Workers' Compensation Law § 29 (1) and (1-a). CONCLUSION In view of the forgoing, the petition is GRANTED in its entirety. The foregoing constitutes an order and judgment of the court. It is so ordered. Dated: December 22, 2014 Binghamton, New York s/ Ferris D. Lebous Hon. Ferris D. Lebous Justice, Supreme Court -7-
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