Court Opinion

ID: 4082812
Source: CourtListenerOpinion
Date Created: 2016-10-07 23:38:24.236844+00
Date Added: 2024-06-11T14:33:17.585402
License: Public Domain

SUPREME COURT OF THE STATE OF NEW YORK
           Appellate Division, Fourth Judicial Department

1392
CA 13-01879
PRESENT: SCUDDER, P.J., SMITH, CARNI, LINDLEY, AND SCONIERS, JJ.

DORSIE KLEM, PLAINTIFF-RESPONDENT,

                    V                             MEMORANDUM AND ORDER

SPECIAL RESPONSE CORPORATION, DEFENDANT.
----------------------------------------
ZURICH INSURANCE COMPANY, APPELLANT.

WHITE FLEISCHNER & FINO, LLP, NEW YORK CITY (JARED T. GREISMAN OF
COUNSEL), FOR APPELLANT.

LAW OFFICE OF JACOB P. WELCH, CORNING (ANNA CZARPLES OF COUNSEL), FOR
PLAINTIFF-RESPONDENT.

     Appeal from an order of the Supreme Court, Steuben County
(Marianne Furfure, A.J.), entered September 4, 2013. The order,
insofar as appealed from, directed that the settlement proceeds be
distributed to plaintiff and plaintiff’s attorney, precluded Zurich
Insurance Company from exercising any lien over the settlement
proceeds, determined that any liens held by Zurich Insurance Company
arising out of the subject accident are null and void and determined
that Zurich Insurance Company is not entitled to a future offset.

     It is hereby ORDERED that the order insofar as appealed from is
unanimously reversed on the law without costs, the second through
eighth ordering paragraphs are vacated, and the matter is remitted to
Supreme Court, Steuben County, for further proceedings in accordance
with the following Memorandum: Plaintiff injured her ankle in the
course of her employment with Corning Hospital when she exited a van
operated by defendant, Special Response Corporation (Special
Response), which transported employees to and from a parking lot. As
a result of plaintiff’s injuries, appellant Zurich Insurance Company
(Zurich), the workers’ compensation insurer for plaintiff’s employer,
paid wage and medical benefits to plaintiff in the amount of $114,028
and claimed a lien in that amount (see Workers’ Compensation Law § 29
[1]). Plaintiff commenced a personal injury action against Special
Response and ultimately sought the approval of Supreme Court for a
$70,000 settlement offer in the action. Insofar as relevant to this
appeal, plaintiff also sought an order directing that any lien imposed
by Zurich against the proceeds of the settlement be declared null and
void or, in the alternative, an order determining the amount of such
lien (see id.). The court determined, inter alia, that Zurich was not
entitled to assert a lien against the settlement proceeds. We note at
the outset that, contrary to plaintiff’s contention, Zurich has
                                 -2-                          1392
                                                         CA 13-01879

standing to pursue this appeal (see Alam v Taxi Wheels to Lease, Inc.,
57 AD3d 457, 458; Castleberry v Hudson Val. Asphalt Corp., 70 AD2d
228, 241-242).

     Turning to the merits, Zurich contends that it was entitled to
assert a lien against the settlement proceeds for amounts paid in
workers’ compensation benefits, reduced by $50,000 as benefits paid in
lieu of first-party benefits (see Workers’ Compensation Law § 29 [1-
a]; see generally Matter of Buck v Graphic Arts Mut. Ins. Co., 19 AD3d
966, 967). We agree with Zurich that the court erred in determining
that it is not entitled to a lien against the proceeds of the
settlement that plaintiff received as a result of her personal injury
action, and we therefore vacate the fifth through eighth ordering
paragraphs. Where an individual receiving workers’ compensation
benefits commences a civil action against a tortfeasor “not in the
same employ who caused the injuries giving rise to such benefits . .
. , an automatic lien attaches to the proceeds of any recovery, in
favor of the [worker’s compensation carrier], for any amounts that the
[carrier] has paid in compensation benefits, less litigation costs and
amounts received in lieu of first[-]party benefits under the no-fault
law” (Miszko v Gress, 4 AD3d 575, 577, lv denied 3 NY3d 606 [internal
quotation marks omitted]; see § 29 [1-a]).

     Here, plaintiff received $114,028 in workers’ compensation
benefits. Consequently, Zurich was entitled to a lien against the
$70,000 settlement proceeds. The amount of such lien is calculated by
subtracting from the total amount paid in wage and medical benefits,
the $50,000 in payments that Zurich made in lieu of first-party
benefits, as well as Zurich’s share of an equitable apportionment of
“reasonable and necessary expenditures” including attorneys’ fees (see
Workers’ Compensation Law § 29 [1], [1-a]; Matter of Kesick v Ulster
County Self Ins. Plan, 245 AD2d 752, 752-753; see generally Kelly v
State Ins. Fund, 60 NY2d 131, 139-140). Although the court determined
that certain “disbursements” simply listed by plaintiff without
supporting documentation or explanation were “reasonable,” we conclude
that the record is not sufficient for us to review, or to determine
ourselves, the amount of Zurich’s share of “reasonable and necessary
expenditures, including attorney’s fees, incurred in effecting such
recovery” (§ 29 [1]). We therefore vacate the second through fourth
ordering paragraphs, and we remit the matter to Supreme Court for
further proceedings to establish and equitably apportion those
“reasonable and necessary” expenditures and arrive at a final
valuation of the lien in accordance herewith.

     We have reviewed Zurich’s remaining contention and note that
whether it is entitled to future offsets against the settlement
proceeds cannot be determined until the amount of its lien is
established (see Workers’ Compensation Law § 29 [1], [4]).

Entered:   February 13, 2015                    Frances E. Cafarell
                                                Clerk of the Court