Court Opinion

ID: 5725403
Source: CourtListenerOpinion
Date Created: 2022-01-12 16:15:57.777552+00
Date Added: 2024-06-11T08:40:47.238637
License: Public Domain

Herlihy, J. (dissenting).
Whatever rights the plaintiff has stem from the injuries suffered by its employee. There was no privity between the employee and the appellant and under our present existing law, there could be no claim for breach of warranty by the employee. (Canter v. American Cyanamid Co., 12 A D 2d 691.)
The plaintiff’s cause of action against the appellant is based on contract to. recover for sums spent in compensating the employee for her injuries.
The query is — Does an employer and/or insurer have an action of its own, exclusive of the Workmen’s Compensation Law, for recovery of sums paid to an injured employee against a third party on an ex contractu theory as distinguished from an ex delicto theory where the third party is one against whom an action could not be maintained by the employee?
The respondent has cited numerous cases which provide for recovery over from a wrongdoer of sums for which a party has been liable because of some obligation to the injured party. (Boston Woven Hose & Rubber Co. v. Kendall, 178 Mass. 232; Wanamaker v. Otis Elevator Co., 228 N. Y. 192; London Guar, & Acc. Co. v. Strait Scale Co., 322 Mo. 502; Dunn v. Uvalde Asphalt Paving Co., 175 N. Y. 214.) As Prosser states, “it is generally agreed that there may be indemnity in favor of one who is held responsible solely by imputation of law because of his relation to the actual wrongdoer * * * A similar rule has been applied to indemnity against a supplier of goods, or a contractor making improvements and repairs, when liability to a third person is incurred by reason of negligent reliance upon his proper care.” (Prosser, Torts [2d ed.], § 46, p. 250.) '
None of these cases, however, deal with or invoke the assignment and subrogation provisions of section 29 of the Workmen’s Compensation Law.
Matter of Zirpola v. Casselman, Inc. (237 N. Y. 367), relied upon by the majority, is not controlling, the decision being limited to deciding the right of distribution in a death case.
Special Term in denying the motion relied upon Midvale Coal Co. v. Cardox Corp. (152 Ohio St. 437). In that case' the employer sought not to recover compensation paid to the injured employee but to recover the increased cost of' compensation insurance paid as a result of the claim of the injured employee. It was held that where a single act causes a breach of two duties, one in contract and one in tort, the doctrine of double recovery *367is not applicable. But the real distinction between that case and the present one is that under the Workmen’s Compensation Act of Ohio, there was no assignment or subrogation provision such as we have in New York. The prevailing rule has been succinctly stated in Larson’s Workmen’s Compensation Law (vol. 2, § 77.00, pp. 243, 244): “ When a state in its third-party statute has provided a statutory method whereby the employer or insurer may be reimbursed for compensation expenditures caused by the third party’s negligence, this statutory method is exclusive, and the employer may therefore not bring a separate action against a third party claiming damages to the amount of compensation paid as the result of the third party’s furnishing defective supplies which led to the employee’s injury.” It then states the rule which governs the Midvale case: “ Such an action has been allowed, however, where no subrogation is available.”
Where the Legislature, as in New York, has provided in the Workmen’s Compensation Law for an assignment and subrogation clause in favor of the employer, the intendment was that it should be the sole and exclusive remedy for any recovery by the employer resulting from liability consequential to the employee’s injury. The fact that here there is a novel situation of a fourth party—appellant — does not alter or extend the right of recovery. The remedy is based upon ex delicto theory and not on an ex contractu theory which is the basis of the breach of warranty action.
The case that is persuasive is United States Cas. Co. v. Hercules Powder Co. (4 N. J. 157). In that case the defendant Hercules Powder was both the manufacturer and the seller — as distinguished from the present facts — and the Workmen’s Compensation Act of New Jersey had an assignment and subrogation clause similar to the one in New York State. In an action brought to recover the compensation paid, and referring to the assignment and subrogation clause of the Compensation Law, the court said at page 165: “In the method devised to accomplish this legislative plan we perceive a purpose to restrict the employer and his insurance carrier to the method of reimbursement provided for in the act, i.e., through the right of the injured employee or his dependents against the third party wrong-doer in tort, and not, as here, through the medium of the employer’s direct cause of action against such third party, ex contractu, for breach of an implied warranty.”
Under the common law, an injured employee had a right of action against the employer arising out of alleged acts of negligence. With the adoption of the statutory Workmen’s Com*368pensation Law, the employee was- allowed to reserve his common-law right of action against a third party but surrendered such right as against his employer. The employer in return agreed to pay benefits as established by the Compensation Law.
Section 29 of the law governs the reservation of the employee to sue a third party. It goes further and — in the event of the failure to commence such action by the employee within one year — assigns and subrogates that action to the employer, giving him the same cause of action as the injured employee. The employer herein has exercised that right in the first cause of action in the complaint.
The employee in this action has no claim for breach of warranty against the appellant because there is no privity of contract existing between them. Concededly the plaintiff might have a right of action for a breach of warranty against the appellant herein if the damages were measured in some other way than by the amount of compensation paid the injured employee. To put it simply, the employer’s sole and exclusive remedy in this case is governed by section 29 of the Workmen’s Compensation Law which may not be construed to provide an action for breach of warranty. The employer is not entitled to a right of action which it does not derive from its employee when it seeks to recoup compensation paid to the employee. Any extension of the employer’s right to sue in the place and stead of the employee must come from legislative action. The damages here sought are statutory and the plaintiff is restricted solely to the rights given thereunder. The benefits of the Compensation Law are primarily for the protection of the employee.
The employer has been given a right of subrogation and assignment under the law. Prior thereto he had no right of action to recover compensation payments or any benefits under the Compensation Law. After all these years he should not now be given some further benefits by judicial interpretation. If the employee started a third-party action and was unsuccessful, he would have no further remedy except his compensation benefits. If the employer started such action after assignment and likewise was unsuccessful, he should be given no greater rights by way of a second action in warranty not available to the employee. The right to recover compensation payments by an employer is governed by section 29 of the statute and is exemplified by the fact that the said employer had no right of action to recover medical expenses or funeral charges until section 29 was so supplemented in 1922.
*369The order appealed from should be reversed and the complaint for breach of warranty against, the appellant dismissed, with costs.
Bergan, P. J., Coon, Gibson and Reynolds, JJ., concur in Per Curiam opinion; Herlihy, J., dissents and votes to reverse in opinion.
Order affirmed, with $10 costs.