Battista v Dong Zhu Wu
Annotate this CaseDecided on March 14, 2018
Supreme Court, Bronx County
Richard Battista
against
Dong Zhu Wu AND JOHN DOE (name being unknown and fictitious)
20204/2013E
Attorneys for Plaintiff: Bisogno & Meyerson, LLP.
(George D. Silva, Esq.)
Attorneys for Defendants: Sclar Law Group, LLP.
(Richard W. Berne, Esq.)
Mary Ann Brigantti, J.
The following papers numbered 1 to _2_ Read on this motion, _MISCELLANEOUS noticed on November 20, 2017 and duly submitted on the Motion Calendar of November 20, 2017:
PAPERS NUMBERED
Notice of Motion- Exhibits and Affidavits Annexed 1,2
Answering Affidavit and Exhibits (Cross-Motion)
Upon the foregoing papers, the plaintiff Richard Battista ("Plaintiff") moves for an order (1) restoring this case to active status, (2) vacating and rendering null any and all potential liens by the non-party workers' compensation insurer, American Zurich Insurance Company ("Zurich") against the recovery from the third-party personal injury claim on behalf of Richard Battista as sanctions against Zurich; (3) setting the carrier's equitable share of costs of litigation, including attorney's fees, incurred by Plaintiff in securing repayment of Zurich in accordance with Workers' Compensation Law §29 at 34%; (4) allowing for the immediate settlement of Plaintiff's personal injury action; (5) setting the Zurich lien payback at $36,228.80, and (6) granting Plaintiff fees and costs, as well as imposing sanctions against non-party Zurich, pursuant to CPLR 8303-a for their frivolous conduct in necessitating this application, together with such other and further relief as the court deems just and proper. The motion is unopposed.
Background
Plaintiff was allegedly injured in a motor vehicle accident. He thereafter received workers' compensation benefits from Zurich, his workers' compensation insurance carrier. This matter proceeded to trial. After the liability phase was completed, the defendants' counsel offered $93,000 to settle the matter. Plaintiff asserts that this offer was acceptable in light of the fact that going forward with the damages phase of the trial would cost at least $10,000, and moreover, the defendants' maintained $100,000/$300,000 in insurance coverage.
Plaintiff's counsel states that when the settlement offer was conveyed, Zurich had already [*2]made a total of $132,346.42 in payments. Plaintiff's counsel asserts that, since this is a motor vehicle accident, there is an offset of $50,000, reducing the gross remaining lien to $82,346.42. Counsel states that after applying the statutory reduction of 33%, Zurich would be entitled to a lien of $54,892.12. Counsel states that his office contacted an individual "Ms. Patel" from Zurich's office in order to compromise this lien. His office proposed splitting the settlement proceeds 1/3 to Plaintiff, 1/3 to Zurich, and 1/3 to Plaintiff's counsel, which would be customary when the lien is greater than Plaintiff's share. Ms. Patel allegedly refused to reduce the lien and refused to have counsel from Zurich contact Plaintiff's counsel's office.
Plaintiff argues that in light of Zurich's wilful conduct, this lien should be rendered null and void. At a minimum, this court "should unilaterally reduce the lien beyond that which is legally mandated because of the cost and prejudice to Plaintiff." In the alternative, Plaintiff states that the lien as discussed should be reduced by 34%. Plaintiff also asserts that Zurich's frivolous conduct warrants Plaintiff's application for costs, sanctions, and attorney's fees. Plaintiff argues that Zurich acted intentionally and purposefully here to compel unjust and unfair concessions.
Applicable Law and Analysis
Plaintiff's request to summarily deem the lien null and void is denied, as Plaintiff does not present any legal authority demonstrating that the Court has the ability to grant such relief in these circumstances. Plaintiff's request in the alternative to reduce the lien is granted to the extent provided herein. Workers' Compensation Law §29(1) provides: "Should the employee or his dependents secure a recovery from [a third party], whether by judgment, settlement or otherwise, such employee or dependents may apply on notice to such lienor to the court in which the third party action was instituted, or to a court of competent jurisdiction if no action was instituted, for an order apportioning the reasonable and necessary expenditures, including attorney's fees, incurred in effecting such recovery. Such expenditures shall be equitably apportioned by the court between the employee or his dependents and the lienor." This statute requires a workers' compensation carrier to pay for the benefits it receives as a result of the claimant's efforts to recover money in a third party action by contributing its equitable share of the claimant's litigation expenses, including counsel fees (see Hammer v. Turner Constr. Corp., 39 AD3d 705, 705 [2nd Dept. 2007], quoting Burns v. Varriale, 34 AD3d 59, 61 [3rd Dept. 2006], aff'd, 9 NY3d 207 [2007]). "The carrier must ... contribute the costs of litigation in proportion to the benefit it has received" (id., quoting Matter of Kelly v. State Ins. Fund, 60 NY2d 131, 140 [1983]).
Plaintiff here states that workers compensation carrier Zurich has made total payments amounting to $132,346.42. Zurich is not entitled to a lien on "the proceeds of any recovery received pursuant to [Insurance Law § 5104(a) ] 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 article fifty-one of the insurance law" (Workers Compensation Law §29[1-a]), thus Zurich may only have a lien on payments made in excess of Plaintiff's "basic economic loss" of $50,000 (see Insurance Law §5102[a]; [b]; Kesick v. Ulster County Self Ins. Plan, 245 AD2d 752, 753 [3rd Dept. 1997]). The remaining gross workers' compensation lien is therefore $82,346.42. Plaintiff's counsel states that the total costs and fees associated with filing this action was $31,959.73 ($1,444.17 in expenses + fee of $30,515.56), which is 34% of the settlement amount of $93,000. The gross lien of $84,346.42 should therefore be reduced by 34%, which constitutes Zurich's equitable share of the litigation expenses. The remaining lien is therefore $54,348.64 ($82,346.42 x .34 = $27,997.78) ($82,346.42 - $27,997.78 = $54,348.64).
This Court is without the authority to further reduce the lien, or in other words, "to strike, waive, or reduce any portion of the [Zurich] lien, beyond its share of the litigation expenses, including attorney's fees, so that plaintiff could recover more" (see Fernandez v. Toyota Lease Trust, 156 AD3d 435 [1st Dept. 2017]). Furthermore, Plaintiff cannot rely on CPLR 8303-a or 22 NYCRR 130-1.1 to impose costs, fees, and/or sanctions against nonparty Zurich, as those [*3]provisions only authorize Supreme Court to impose sanctions against a party or attorney (see Saastomoinen v. Pagano, 278 AD2d 218 [2nd Dept. 2000]).
Accordingly, Plaintiff's order to show cause is granted only to the extent provided herein. Any relief requested but not granted is specifically denied. The above constitutes the Decision and Order of this Court.
Dated: March 14, 2018
_________________________________
Hon. Mary Ann Brigantti, J.S.C.
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