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Workers’ Compensation Board’s Finding Re: Extent of Disability Should Not Be Given Collateral-Estoppel Effect in Related Negligence Action

The Court of Appeals, in a full-fledged opinion by Judge Lippman, determined that collateral-estoppel effect should not be given to a finding by the Workers’ Compensation Board in a related negligence action.  Plaintiff, a delivery person, had been struck by a piece of plywood which fell from a building under construction in 2003.  The Workers’ Compensation Board found that plaintiff’s disability from the accident ceased as of January, 2006. In the related negligence action, the defendant sought to limit plaintiff’s proof of disability to the period prior to January, 2006.  The court held “that there is no identity of issue and that collateral estoppel therefore should not be applied:”

…[D]efendants have failed to meet their burden of establishing that the issue decided in the workers’ compensation proceeding was identical to that presented in this negligence action.  We have observed that the Workers’ Compensation Law “is the State’s most general and comprehensive social program, enacted to provide all injured employees with some scheduled compensation and medical expenses, regardless of fault for ordinary and unqualified employment duties” … .  The purpose of awarding such benefits is to provide funds on an expedited basis that will function as a substitute for an injured employee’s wages … .  We have observed that the term “disability,” as used in the Workers’ Compensation Law, “generally refers to inability to work” … .  In addition, the Board uses the term “disability” in order to make classifications according to degree (total or partial) and duration (temporary or permanent) of an employee’s injury … .  The focus of the act, plainly, is on a claimant’s ability to perform the duties of his or her employment.

By contrast, a negligence action is much broader in scope.  It is intended to make an injured party whole for the enduring consequences of his or her injury — including, as relevant here, lost income and future medical expenses. Necessarily, then, the negligence action is focused on the larger question of the impact of the injury over the course of plaintiff’s lifetime.  Although there is some degree of overlap between the issues being determined in the two proceedings, based on the scope and focus of each type of action, it cannot be said that the issues are identical. Auqui v Seven Thirty One Limited Partnership, 212, CtApp 12-10-13

 

Worker’s Compensation Carrier Was Entitled to Credit for Amount Claimant Recovered in Civil Suit against Employer and Co-employees

In a full-fledged opinion by Judge Read, over a dissent, the Court of Appeals determined the worker’s compensation carrier, the NYS Insurance Fund (SIF), was entitled to a credit against the claimant’s future worker’s compensation benefits in the amount of her recovery in a lawsuit against her employee and a co-employee:

Workers’ Compensation Law § 29 (1) provides that an employee injured by “the negligence or wrong of another not in the same employ” may commence an action against “such other.”  If the employee has received workers’ compensation benefits, SIF or the other entity or person liable for the payment of these benefits

“shall have a lien on the proceeds of any recovery from such other, whether by judgment, settlement or otherwise, after the deduction of the reasonable and necessary expenditures, including attorney’s fees, incurred in effecting such recovery, to the extent of the total amount of compensation awarded under or provided or estimated . . . for such case and the expenses for medical treatment paid or to be paid by it and to such extent such recovery shall be deemed for the benefit of”

SIF or the other entity or person liable for the payment of compensation benefits (Workers’ Compensation Law § 29 [1]). Concomitantly, section 29 (4) specifies that “[i]f such injured employee . . . [shall] proceed against such other,” SIF or the other entity or person liable for the payment of compensation benefits “shall contribute only the deficiency, if any, between the amount of the recovery against such person actually collected, and the compensation provided or estimated . . . for such case” (Workers’ Compensation Law § 29 [4]).

Section 29 (4) is referred to as the carrier’s credit against or right to offset the proceeds of a lawsuit brought pursuant to section 29 (1).  The lien and offset provisions in sections 29 (1) and (4), respectively, “cushion[] the inflationary impact of the cost of compensation insurance and avoid double recovery by the claimant for the same predicate injury”… . Matter of Beth V v NYS Office of Children & Family Services…, 202, CtApp 11-19-13

 

Stroke Not Work-Related

The Third Department affirmed the determination that claimant’s stroke was not work-related:

Inasmuch as it is undisputed that claimant’s stroke occurred while he was at work, he was entitled to the statutory presumption that his stroke arose out of and in the course of his employment (see Workers’ Compensation Law § 21… ). The employer, however, may rebut that presumption with substantial evidence to the contrary … . Here, the employer’s medical expert opined that claimant’s stroke was not related to his employment, but was directly related to certain preexisting conditions, including cerebral vascular disease, hypertension, diabetes, hypercholesterolemia and a prior transient ischemic attack, which combined to put claimant “at extreme risk for a stroke.”Claimant’s medical expert, although unaware of certain of claimant’s preexisting conditions that he testified may be predisposing factors for a stroke, concluded that claimant’s stroke was caused by job related exertion and fatigue. * * *Inasmuch as the Board is vested with the authority to credit the opinion of one medical expert over another …, its determination that there was no causal relationship between claimant’s stroke and his employment is supported by substantial evidence and will not be disturbed. Matter of Pengal v Chloe Foods Corporation…, 513003, 3rd Dept 11-14-13

 

Home Attendant for Elderly Injured Walking from One Client’s Home to Another Was Covered by Workers’ Compensation

The Third Department affirmed the determination that a home attendant for the elderly, who was injured walking from one client’s home to another client’s home, was entitled to workers’ compensation:

While “injuries sustained during travel to and from the place of employment” are generally not compensable under the Workers’ Compensation Law, an outside employee “who does not have a fixed worksite[] may be compensated for injuries sustained in the course of” work-related travel … .  The employer and carrier contend that claimant was not an outside employee, but “[t]he distinguishing feature of outside employees is that they do not work at a fixed location and are required to travel between work locations” … .  The employer here assigned claimant to care for two clients in different locations and, thus, substantial evidence supports the Board’s determination that she “became an outside employee when [s]he left” one work site and proceeded to another… . Matter of Bedmark v Caring Professionals Inc…, 515870, 3rd Dept 11-7-13

 

Music Teachers Are Employees Not Independent Contractors

In finding that music teachers were employees [of Musika, LLC], not independent contractors, the Third Department wrote:

Claimant offered guitar lessons for Musika LLC, a business that matches music teachers it deems qualified with students. Musika required its teachers to execute a contract that set the fee for lessons, prohibited them from competing with Musika or soliciting its students, and obliged teachers to perform any services “reasonably requested” by it. The teachers were required to report their work activities to Musika which, in turn, billed the students and paid the teachers by check. Moreover, teachers were expected to notify Musika if they were unavailable to work and could not use a substitute teacher without prior approval. Notwithstanding the proof in the record that could support a contrary result, the above constitutes substantial evidence for the determination of the Unemployment Insurance Appeal Board that claimant and those similarly situated were Musika’s employees and not independent contractors… . Matter of Tekmitchov…, 516112, 3rd Dept 10-24-13

 

As Long As Work-Related Injury Was A Cause of Death, Death Benefit Must Be Paid—No Apportionment Between Non-Work-Related and Work-Related Causes of Death

In a full-fledged opinion by Judge Read, the Court of Appeals determined death benefits under the Workers’ Compensation Law (section 16) could not be apportioned between work-related and non-work-related causes of death.  As long as the work-related injury or illness is a cause of death, the benefit must be paid.  In a concurring opinion, Judge Pigott agreed that the benefit cannot be apportioned, but concluded the result in this case, where the claimant’s (Hroncich’s) death was primarily related to non-work-related thyroid cancer, should be that no death benefit was available.;

Importantly, there is no language in section 16 to suggest that the Board should apportion death benefits to workrelated and non-work-related causes when fashioning an award. Presumably, if the legislature had wanted this to be the case, it would have said so.  Instead, however, the legislature made employers joint-and-several insurers of their injured employees’ lives, subject to a prescribed schedule of payments.  The death benefit is not about replacing lost wages, but rather compensates for a life lost at least partly because of work-related injury or disease (see e.g. Bill Jacket, L 1990, ch 296 [authorizing $50,000 in death benefits to non-dependent survivors]).  Matter of Hroncich v Con Edison…, 145, CtApp 10-15-13

 

Retroactive Transfer of Liability to Special Fund Proper

The Third Department affirmed the board’s determination that retroactive transfer of liability to the Special Fund to a time within seven years of the underlying injury was proper:

Pursuant to Workers’ Compensation Law § 25-a, liability is transferred to the Special Fund “when an application to reopen a closed case is made more than seven years from the date of injury and more than three years after the last payment of compensation” (…see Workers’ Compensation Law § 25-a [1]).  Here, there is no dispute that these conditions have been met and the only issue before us is whether the Board properly transferred liability to the Special Fund retroactively to a period of time prior to the lapse of seven years following claimant’s injury.

While the retroactive transfer of liability to the Special Fund is limited to no longer than two years prior to the date of the application to reopen (see Workers’ Compensation Law § 25-a [1-a]…), there is no statutory requirement that there be a seven year lapse from the date of a claimant’s injury prior to the date of a retroactive transfer of liability (see Workers’ Compensation Law § 25-a [1-a]).  Accordingly, we conclude that the Board’s determination, that Workers’ Compensation Law § 25-a does not preclude a retroactive transfer of liability to the Special Fund to a time period within seven years of the underlying injury, is not unreasonable, irrational or inconsistent with the purpose of the statute …, and the Board has set forth sufficient reasons for no longer following any prior decisions to the contrary. Canfora v Goldman Sachs…, 515529, 3rd Dept 10-3-13

 

Criteria for Payment from Special Fund Explained

In finding there was insufficient evidence to determine if claimant was entitled to be paid workers’ compensation benefits from the Special Fund (for previously closed cases), the Third Department wrote:

“Worker’s Compensation Law § 25-a provides for the transfer of liability to the Special Fund ‘when an application to reopen a closed case is made more than seven years from the date of injury and more than three years after the last payment of compensation'” … .  “Advance payments that are made voluntarily, in recognition of an employer’s liability, are payments of compensation” for purposes of Workers’ Compensation Law § 25-a … .  Thus, even where the requisite time periods have elapsed, if a claimant has – during the relevant time period – received advance payment of benefits in the form of full wages for the performance of light or limited duty work, liability is not appropriately shifted due to those advance payments … .  Here, the record contains numerous progress reports from claimant’s chiropractor indicating that she has been working for the employer since November 2004 with restrictions. Inasmuch as the record does not contain an affidavit or testimony of claimant or any other evidence regarding whether claimant was performing light or limited duties and, if so, whether she received full wages, we find that the Board’s decision is not supported by substantial evidence and the matter must be remitted for further development of the record… . Matter of Capodagli…, 516177, 3rd Dept 9-19-13

 

Applying New Jersey Law—Removal of Safety Guard from Machine Did Not Destroy the Applicability of Workers’ Compensation as the Exclusive Remedy

The First Department, over a two-justice dissent, reversed Supreme Court and dismissed a complaint alleging that a work-related injury was the result of an “intentional wrong” by the employer and, therefore, workers’ compensation was not the exclusive remedy.  The case required the application of New Jersey’s Workers’ Compensation Act, and the interpretation of the statutory term “intentional wrong” pursuant to New Jersey case law.  The injury to plaintiff’s fingers occurred on a machine from which a safety guard had been removed.  The First Department wrote:

…[I]n the present case there were no prior incidents or injuries caused by this machine; there is no evidence of deliberate deceit or fraudulent conduct on defendant’s part; and there were no OSHA violations issued to defendant prior to this incident. Although plaintiff testified that he requested on a number of occasions that the safety guard be replaced, he and other employees continued to use the machine without incident. Significantly, the accident would not have occurred absent plaintiff’s decision to retrieve a piece of stuck leather with his hand, rather than using a long-handled brush or long-handled screwdriver, which was the normal procedure to clear machine jams over the past 13 years that the machine had been in use. In fact, plaintiff testified at his deposition that he used such a long-handled screwdriver over the years to clear jams in the machine. … Thus, there is an insufficient basis for finding that defendant knew that its conduct in not replacing the safety screens was “substantially certain” to result in plaintiff’s injury …, or that there was a “virtual certainty” of injury … . The probability or knowledge that such injury “could” result, or even that an employer’s action was reckless or grossly negligent, is not enough… . Lebron v SML Veteran Leather, LLC, 2013 NY Slip Op 05664, 1st Dept 8-20-13

 

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Contract Between Town and Employer of Injured Employee Did Not Allow Indemnification of Town by Employer

In a Labor Law action seeking damages for a fall from the roof of a building under construction, the Fourth Department determined Supreme Court should have dismissed the town’s motion for contractual indemnification against plaintiff’s employer because the contract was not intended to be retroactive to the day of the injury.  The Fourth Department explained the applicable law as follows:

“Workers’ Compensation Law § 11 prohibits a third-party action against an employer unless the plaintiff sustained a grave injury or there is ‘a written contract entered into prior to the accident or occurrence by which the employer had expressly agreed to contribution or indemnification of the [third party plaintiff]’ ”… .  The Town concedes that plaintiff did not suffer a “grave injury,” and that it is entitled to indemnification only if it can demonstrate the existence of a written contract.  “When a party is under no legal duty to indemnify, a contract assuming that obligation must be strictly construed to avoid reading into it a duty which the parties did not intend to be assumed” … .  Meabon v Town of Poland…, 634, 4th Dept 7-19-13

 

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