State of New York

Supreme Court, Appellate Division

Third Judicial Department

Decided and Entered: November 17, 2016 522762 

________________________________

In the Matter of the Claim of

LESLEY SHINER,

Appellant,

v

SUNY AT BUFFALO et al., MEMORANDUM AND ORDER

Respondents.

WORKERS' COMPENSATION BOARD,

Respondent.

________________________________

Calendar Date: October 20, 2016

Before: McCarthy, J.P., Lynch, Devine, Mulvey and Aarons, JJ.

__________

Law Office of Lindy Korn, PLLC, Buffalo (Richard Perry of

counsel), for appellant.

William O'Brien, State Insurance Fund, Buffalo, for SUNY at

Buffalo and another, respondents.

__________

Mulvey, J.

Appeal from a decision of the Workers' Compensation Board,

filed May 29, 2015, which ruled that claimant's failure to obtain

the consent of her employer's workers' compensation carrier to

the settlement of a third-party action barred her from receiving

further benefits.

One of claimant's supervisors, an associate dean,

reportedly sexually harassed and groped her at an office holiday

party in December 2010. She filed a claim for workers'

compensation benefits, which was established for posttraumatic
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stress disorder and neck injury. Claimant also commenced an

action in federal court against her employer and the associate

dean alleging a hostile work environment, discrimination, battery

and assault. That action settled in August 2013 for $255,000,

with both defendants contributing funds to the settlement and

$65,000 specifically allocated for "back and front pay." 

Thereafter, the employer's workers' compensation carrier, the

State Insurance Fund (hereinafter the carrier), asserted that

claimant should be barred from future workers' compensation

benefits because she had neither sought nor obtained its consent

to the settlement as required by Workers' Compensation Law § 29

(5). Claimant contended that the carrier's consent was not

required because the federal action was not a third-party action

within the meaning of the statute. A Workers' Compensation Law

Judge determined that the federal action was a third-party

action, which claimant had settled without seeking or obtaining

the carrier's consent, and, accordingly, that she forfeited

further benefits as of the date of the August 2013 settlement.

The Workers' Compensation Board affirmed and claimant now

appeals. 

We affirm. "Workers' Compensation Law § 29 (5) requires

either the carrier's consent or a compromise order from the court

in which the third-party action is pending for a claimant to

settle a third-party action and continue receiving compensation

benefits" (Matter of Johnson v Buffalo & Erie County Private

Indus. Council, 84 NY2d 13, 19 [1994]; see Matter of Hulbert v

Cortland County Sheriff's Dept., 69 AD3d 987, 988 [2010], lv

denied 14 NY3d 710 [2010]; Matter of Wright v Golden Arrow Line,

206 AD2d 759, 760 [1994]). Claimant urges that her federal

lawsuit was not a third-party action since the statute addresses

"the negligence or wrong of another not in the same employ"

(Workers' Compensation Law § 29 [1]) and the associate dean who

harassed her had the same employer as her. The Court of Appeals,

however, has recently reiterated that Workers' Compensation Law 

§ 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 a predicate for the payment of

compensation benefits'" (Matter of Beth V. v New York State Off.

of Children & Family Servs., 22 NY3d 80, 91 [2013], quoting
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Matter of Petterson v Daystrom Corp., 17 NY2d 32, 39 [1966]). 

"The Court reasoned that "'[i]t would be unreasonable to read the

statute as mandating a different result merely because the

recovery came out of the pockets of a coemployee [or the

employer] and not from the resources of a stranger'" (Ronkese v

Tilcon N.Y., Inc., 129 AD3d 1273, 1275 [2015], lv dismissed ___

NY3d ___ [Nov. 1, 2016], quoting Matter of Beth V. v New York

State Off. of Children & Family Servs., 22 NY3d at 91). The fact

that claimant included allegations of intentional conduct by a

coemployee in her federal action does not, as urged by claimant,

compel the conclusion that it was not a third-party action (see

Matter of Beth V. v New York State Off. of Children & Family

Servs., 22 NY3d at 91-92; Hanford v Plaza Packaging Corp., 2 NY3d

348, 351, n 3 [2004]; but cf. Matter of Jackson v Richman & Co.,

15 NY2d 877, 878-879 [1965] [exception found where there was a

Board finding that an assault by a company/employer president

was, under the existent narrow circumstances, tantamount to

assault by the employer in furtherance of the employer's

business]).

Here, the Board's finding that, in her federal action,

claimant "sought and received a recovery that was a predicate for

the payment of compensation benefits" is supported by substantial

evidence, including, among other things, the terms of the

stipulation of settlement of that action. Given such finding,

the Board's determination that the federal action was a thirdparty action is consistent with the case law construing Workers'

Compensation Law § 29 notwithstanding the involvement of a

coemployee and allegations of intentional conduct. It is

undisputed that claimant did not seek or obtain the carrier's

consent or a compromise order before settling such action. Under

such circumstances, the Board's determination that claimant

forfeited future benefits by entering into the settlement without

the carrier's consent must be affirmed. The remaining issues

were not raised before the Board and, thus, are not preserved for

our review (see Matter of Duncan v John Wiley & Sons, Inc., 137

AD3d 1430, 1431 [2016]; Matter of Thomas-Fletcher v New York City

Dept. of Corr., 120 AD3d 867, 867 [2014]; Matter of Stewart v NYC

Tr. Auth., 115 AD3d 1046, 1046-1047 [2014]).
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McCarthy, J.P., Lynch, Devine and Aarons, JJ., concur.

ORDERED that the decision is affirmed, without costs.

ENTER:

Robert D. Mayberger

Clerk of the Court