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Workers’ Compensation Carrier Which Consents to Settlement of Third Party Action Is Entitled to Exercise Its Credit Against the Settlement-Recovery Upon Its Consent

The Third Department determined, where the workers’ compensation carrier has consented to claimant’s settlement in a third-party action, the carrier is entitled to exercise its credit against the recovery when the consent is given:

When a workers’ compensation carrier consents to the settlement of a claimant’s third-party action, the carrier shall have a lien on the proceeds of the recovery equal to the amount of benefits already paid, and may also assert the right to offset future compensation benefits paid until the proceeds of the recovery are exhausted (see Workers’ Compensation Law § 29 [1], [4]…). The issue before us again on this appeal is the point at which a carrier is entitled to exercise its credit. As we observed previously in this matter, “there is no reference in the statute as to when the credit shall commence” (104 AD3d at 1014; see Workers’ Compensation Law § 29 [4]). Cognizant of the fact that the statute in question was enacted in substantial part to prevent a claimant from receiving a double recovery …, we agree with the carrier that its right to exercise its credit must be available, if provided for in the consent letter, at the point at which the carrier provides its consent. To hold otherwise would result in payments made by the carrier that are not subject to either lien or credit rights, i.e., those payments made between the date of consent — at which point the amount of the carrier’s lien is fixed — and the date of actual settlement. This resulting double payment to the claimant would be contrary to the intent of the statute.  Matter of Williams v Lloyd Gunther El Serv Inc, 2014 NY Slip Op 03740, 3rd Dept 5-22-14

 

Professional Photographer Deemed Employee of New York Post

The Third Department determined the claimant photographer demonstrated she was an employee of the New York Post, and therefore was entitled to unemployment benefits:

The existence of an employer-employee relationship presents a factual question for the Board to resolve … . Where, as here, “professionals are involved, the relevant inquiry is whether the purported employer retains overall control of important aspects of the services performed” … . Accordingly, “[a]; determination identifying professional workers as employees will be upheld if substantial evidence in the record demonstrates that the employer had control over important aspects of the services performed, even if the worker[]; retain[ed]; control over the[]; work product and the means of crafting it” … .

Following an initial interview and completion of a trial photography session, which was designed “to see if she was good enough to receive assignments” from NYP, claimant consistently received assignments from NYP by telephone or email and worked a “pretty set schedule” of four days each week. According to an NYP representative, these assignments were distributed based upon NYP’s “view of [claimant’s]; suitability for a particular story or picture situation,” and NYP set claimant’s daily rate of pay. Claimant testified that she was given specific instructions for her assignments “most of the time,” which on occasion included “really specific directions about what kind of picture [NYP]; wanted.” Additionally, claimant was required to call in at the beginning and end of her assignments and “couldn’t just go home” if she finished an assignment early. Although claimant admittedly provided her own equipment, NYP specified — in a March 2006 memorandum — the type of camera lens that claimant was required to use, as well as the quantity and selection of photographs that she was to submit. Similarly, while claimant retained the copyright to her photographs, she was precluded from granting rights to those pictures to any newspaper located within a 75-mile radius of New York City without NYP’s prior express approval. Finally, NYP reimbursed claimant for certain of her expenses.

Such proof, in our view, supports the Board’s finding of an employer-employee relationship as to claimant and others similarly situated … . Matter of Nance…, 2014 NY Slip Op 03720, 3rd Dept 5-22-14

 

Misconduct Serious Enough to Warrant Firing Did Not Disqualify Employee from Receiving Unemployment Benefits

The Third Department affirmed the appeal board’s determination that, although the employee’s misconduct was serious enough to warrant firing, the employee was still entitled to unemployment insurance:

“Not every discharge for cause rises to the level of misconduct disqualifying a claimant from receiving unemployment insurance benefits” … . Here, the Board, in its capacity as the “final arbiter of factual matters involving questions of credibility” …, found it significant that, while claimant did not lock out the machine properly, this was the first time that he was disciplined for violating this procedure, and he “self-reported the matter to the employer.” Although disqualifying misconduct can be found where an employee disregarded “an employer’s established procedures and policies, particularly where it is potentially detrimental to the employer’s best interest” …, here, there was proof in the record confirming that claimant’s lapse in judgment resulted in little risk of injury to him due to the lack of water and paper products in the system during the shutdown. Under the particular circumstances herein, we conclude that there is substantial evidence supporting the Board’s decision, regardless of proof that would support a contrary result… . Matter of Lee (Commissioner of Labor), 2014 Slip Op 03563, 3rd Dept 5-15-14

 

Participation in One’s Own Business, Even If the Business Generates No Income, Can Render One Ineligible for Unemployment Benefits

The Third Department determined claimant’s participation in his own business, even if minimal and the business is not profitable, supports the denial of unemployment benefits:

“A claimant who actively participates in his or her own business will not necessarily be considered totally unemployed even if his or her activities are minimal and the business is not profitable” … . Here, on behalf of the corporation, claimant obtained a credit card and opened a bank account with an initial deposit of $25,000. He wrote checks against the account for office furniture, charged travel expenses and solicited business. Although claimant did not receive any income through the corporation during the time he was collecting benefits, he intended to make money with it, and the record reflects that the corporation was still operating after claimant stopped collecting benefits and it ultimately generated income. Matter of McCann v Commissioner of Labor, 2014 NY Slip Op 03568, 3rd Dept 5-15-14

 

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Codefendant’s Statement Was Admissible—the Fact that the Statement Implicated the Defendant in the Light of Other Trial Evidence Did Not Violate Defendant’s Right of Confrontation

The Third Department determined a co-defendant’s statement, which had been redacted to exclude references to the defendant, was admissible.  The defendant’s argument that the statement implicated him in the light of the trial evidence was rejected:

A defendant’s right to confront witnesses is violated by the admission of “the facially incriminating confession of a nontestifying codefendant” …; however, no such violation occurs where, as here, the codefendant’s statement incriminates the defendant only in light of other evidence produced at trial … . Nor did the use of plural pronouns such as “we” and “they” in the statement necessarily indicate any involvement by defendant … . Accordingly, the statement was admissible, and defendant’s rights under the Confrontation Clause were not violated by the People’s arguments that drew inferences about his participation by linking the statement with other trial evidence … . People v Maschio, 2014 NY Slip Op 03551, 3rd Dept 5-15-14

 

Ambiguous Terms Interpreted to Give Meaning to All Terms—Here Water Damage Caused By Plumbing Backup Originating in Building Was Covered—Water Damage Caused By Plumbing Backup Originating Outside the Building Was Not Covered

The Third Department determined ambiguous terms in an insurance policy concerning whether water backing up through plumbing to cause damage was excluded were properly interpreted by Supreme Court. The ambiguous terms were interpreted to mean that damage from water backing up caused by a problem within the buildings own plumbing is covered, but similar damage caused by a backup originating outside the building (a municipal sewer system, for example) was not covered:

Where an insurer relies on an exclusion to avoid coverage, it has the burden of demonstrating “that the exclusion is stated in clear and unmistakable language, is subject to no other reasonable interpretation, and applies in the particular case” … . Moreover, we are “obligat[ed] to interpret the exclusion in a manner that gives full force and effect to the policy language and does not render a portion of the provision meaningless” … . “While [u]nambiguous provisions of a policy are given their plain and ordinary meaning, where policy language is unclear or subject to multiple reasonable interpretations, such ambiguities are resolved against the insurer” … .

In our view, when the exclusion and coverage provisions at issue here are read together, an ambiguity exists in the insurance policy as to losses resulting from a backup and/or overflow from sewers, drains and/or plumbing systems. Although the resolution of this ambiguity appears to be an issue of first impression in this state, Supreme Court’s analysis — that a plumbing system, as referenced in the coverage provision, includes drains that are on the insured’s property — is consistent with decisions in other jurisdictions that have interpreted the interplay of competing provisions similar to those in question here … . Pichel v Dryden Mut Ins Co 2014 NY Slip Op 03575, 3rd Dept 5-15-14

 

Purchaser of a Hazardous Waste Treatment, Storage or Disposal Facility Was Not Required to Provide Financial Assurance for the Ongoing Performance of Corrective Action Imposed Upon the Prior Owner

The Third Department, reversing the Department of Environmental Conservation Commissioners ruling below on an issue of first impression, determined the subsequent owner of property formerly used as a permitted hazardous waste treatment, storage or disposal (TSD) facility was not required to provide financial assurance for the ongoing performance of corrective action imposed upon the prior owner.  The decision includes an exhaustive analysis of all the relevant statutes and regulations:

In essence, respondents seek to impose strict liability to provide financial assurance, in perpetuity, on all subsequent owners of property on which a former TSD facility was operated. Had this been the Legislature’s intent, rather than relegate us to a strained analysis of multiple regulations in order to reach that conclusion, it would have done so expressly. Indeed, the Legislature did exactly that in the context of New York’s “Superfund Law,” which requires the owner of an inactive hazardous waste disposal site, and/or any person responsible for the disposal of hazardous wastes at such site, to take remedial action … . Other examples of New York statutes imposing “strict liability” on property owners are the Oil Spill Act (see Navigation Law § 181 [1]) and the Scaffold Law (see Labor Law § 240 [1]). Thus, there can be no doubt that, if the Legislature had intended to impose liability on landowners for providing financial assurance under New York’s version of RCRA —[Resource Conservation and Recovery Act] without regard to whether they had ever operated a TSD facility on the property in question — clear language to that effect could easily have found its place in the statute and regulations. While such a result would not be inconsistent with the laudatory environmental purposes of this regulatory scheme, absent such language, we discern no legal basis for the Commissioner to create such a requirement. To the extent that the Commissioner interpreted the regulations otherwise, such interpretation was arbitrary and capricious and affected by an error of law and we, therefore, annul his determination, as well as the penalties imposed on petitioners.  Matter of Thompson Corners LLC v New York State Dept of Envtl Conservation, 2014 NY Slip Op 03556, 3rd Dept 5-15-14

 

Derivative Neglect Finding Reversed—Operative Principles Explained

The Third Department reversed Family Court, finding the evidence insufficient to support an allegation of derivative neglect. The theory below was that the alleged abuse of one child, Dominick, was serious enough to warrant a finding of derivative neglect with respect to a child (Brad) who had not been born at the time of the alleged neglect of Dominick.  In the course of the decision, the court explained the operative principles:

Pursuant to Family Ct Act § 1046 (a) (i), “proof of the abuse or neglect of one child shall be admissible evidence on the issue of the abuse or neglect of any other child of . . . the respondent.” However, “[e]vidence of neglect of one child typically may not serve as the sole basis for a finding of neglect [of another child, unless] the nature of the direct [neglect], notably its duration [and] the circumstances surrounding its commission[,] . . . evidence[s] fundamental flaws in the respondent’s understanding of the duties of parenthood” … . — flaws that are “so profound as to place any child in his or her care at substantial risk of harm” … . Contrary to the father’s assertion, petitioner’s failure to commence a direct neglect proceeding against him with respect to Dominick does not bar petitioner from maintaining this derivative neglect proceeding against him with respect to Brad. Similarly, the fact that Brad had yet to even be conceived — much less born — at the time of the home invasion or the search of the father’s residence is not dispositive, as the relevant inquiry is whether the evidence of the direct neglect of one child, i.e., Dominick, “is so proximate in time to the derivative proceeding that it can reasonably be concluded that the condition still exists” … . Matter of Brad I (Tiana K), 2014 NY Slip Op 03555, 3rd Dept 5-15-14

 

Vocational Factors Not Considered Re: “Temporary Marked Partial Disability Rate”

The Third Department determined the Workers’ Compensation Board applied the correct standards when determining a claimant’s temporary marked partial disability rate.  The claimant argued that the Board should have considered “vocational factors” in determining the compensation rate, i.e., claimant’s level of education and her ability to find other work.  The Third Department, in a detailed analysis of the language of the applicable statutes, disagreed:

As pertinent here, the compensation rate for temporary partial disability resulting in reduced earning capacity is based upon the difference between the claimant’s pre-injury average wages “and his [or her] wage earning capacity after the accident in the same or other employment” (Workers’ Compensation Law § 15 [5]…). In almost identical language, the compensation rate for permanent partial disabilities that are not amenable to schedule awards is based upon the difference between the claimant’s previous wages “and his or her wage-earning capacity thereafter in the same employment or otherwise” (Workers’ Compensation Law § 15 [3] [w]…)). For both temporary and permanent partial disabilities, the “wage earning capacity” of a claimant with no actual earnings is to be set by the Board at a reasonable level not greater than 75% of the claimant’s previous full-time earnings, “having due regard to the nature of his [or her] injury and his [or her] physical impairment” (Workers’ Compensation Law § 15 [5-a]…)). These provisions include no reference to vocational factors. However, when determining a claimant’s “loss of wage-earning capacity” in order to set the duration of permanent partial disability benefits following classification (Workers’ Compensation Law § 15 [3] [w] …), the Board considers not just the nature and degree of the injury, but also “work restrictions, [the] claimant’s age, and any other relevant factors, with the [claimant’s] ‘wage earning capacity’ as its inverse” …).

We reject claimant’s contention that this analysis should be applied to the determination of “wage earning capacity” as the term is used in Workers’ Compensation Law § 15 (5-a). Matter of Canales v Pinnacle Foods Group LLC, 2014 NY
Slip Op 03576, 3rd Dept 5-15-14

 

Slip and Fall On Sidewalk Near Place of Employment Was Not a Work-Related Accident

The Third Department determined a slip and fall on a sidewalk near claimant’s place of employment did not, under the facts, constitute a work-related accident:

Inasmuch as the accident here occurred near claimant’s place of employment, his claim falls within “a gray area where the risks of street travel merge with the risks attendant with employment and where the mere fact that the accident took place on a public road or sidewalk may not ipso facto negate the right to compensation” … . In order for an incident to be compensable under those circumstances, “there must be (1) a special hazard at the particular off-premises point and (2) a close association of the access route with the premises, so far as going and coming are concerned” … .While the public sidewalk here was near the government center, it was open to the public and there was no showing that it was “otherwise controlled by the employer, that workers were encouraged to use it or that it existed solely to provide access to the” workplace … . The ice on the sidewalk, moreover, constituted “a danger that existed to any passerby traveling along the [sidewalk] in that location” and bore no relation to claimant’s employment… . Matter of Trotman v New York State Cts, 2014 NY Slip Op 03002, 3rd Dept 5-1-14

 

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