Torts, Insurance and Compensation Law Weblog

On June 24, 2009 the New York State Court of Appeals decided a case involving the proper statute of limitations when a person seeks to sue a doctor who performed an Independent Medical Examination (IME) performed pursuant to CPLR §3121. The case was Bazakos v. Lewis, 2009 NY Slip Op 05199. The action was commenced two years and eleven months after the examination when the plaintiff alleged that he was injured by the IME during the examination. The case was brought as a regular negligence action rather than a medical malpractice action because at the time the suit was brought the two year six month statute of limitations for medical malpractice had already expired. In a 4-3 decision the Court held that the medical malpractice statute of limitations in CPLR §214-a is the appropriate statute of limitations and dismissed the suit as untimely.

In an opinion by Judge Robert Smith the majority stated that in an IME there is a limited doctor – patient relationship between the plaintiff and the IME. Although, the court found that there was logic to the plaintiff’s position it was of the opinion that to accept the plaintiff’s argument would create an arbitrary result. Judge Smith indicated that the claim brought by the plaintiff was a claim that the doctor failed to perform his task with the required specialized skill expected of a doctor.

The plaintiff claimed that the defendant injured him by manipulating a body part. The court stated that when the plaintiff was seen for the legally mandated examination the doctor was performing “medical treatment” and that the negligent performance of that treatment led to the injury and eventual law suit. The majority saw “no good reason” to treat the plaintiff in this any differently than a person who went to a doctor to be treated on a regular basis. The court went on to indicate that there is a limited physician – patient relationship between the plaintiff and a doctor performing an IME.

In the end the majority ruled that the claim of the plaintiff was that the doctor “breached his duty "to perform the examination in a manner not to cause physical harm to the examinee." That is a claim for medical malpractice, and it is governed by the 2 year, 6 month statute of limitations.”

In a stinging dissent Chief Judge Jonathan Lippman took a sharply different approach to the situation and would have affirmed the Appellate Division’s decision allowing the three year statute of limitations for a regular negligence action under CPLR §214(5). The dissent argued that there was no medical treatment provided by the defendant because none was intended nor was any provided. The examination was a “disclosure device in litigation” and that the benefit was not for the plaintiff but in fact for the defendant in the underlying personal injury action. They added that the conduct of the defendant “during his examination … is not amenable to [a] description of medical malpractice within the meaning of CPLR §214-a.”

The dissent added that allowing the two year six month statute of limitations to apply in this situation is not consistent with the intent of CPLR §214-a. The shortened statute of limitations for medical malpractice was “to address the threat to the health and welfare of New Yorkers posed by the "inability of health care providers to get malpractice insurance at reasonable rates" and to help assure that "the adequate delivery of health care services" would not be impaired (citation omitted).” The shorter statute of limitations in CPLR §214-a was not intended to afford protection to those doctors engaged in litigation support.

The dissent went on to add it makes sense to treat a doctor who is actively treating a person and another who is providing litigation support differently under the law. The risks facing a doctor treating an individual on a regular basis is clearly different than the risks involved for a doctor in a non-treating context. The defendant’s duty to the plaintiff was only to not harm him. “[H]e had no medical duty competently to diagnose, inform or, indeed, to treat the [plaintiff].”

The dissent was troubled by the majority’s acceptance of medical malpractice in the absence of medical treatment. It stated

[t]he majority must accept what it purports to reject, namely, that what will be malpractice in the context of ongoing medical treatment may not, no matter how glaring the breach, be malpractice in the context of an exam understood by the parties thereto to have no medical treatment objective. Indeed, most of what would be malpractice in the former context is not even actionable in the latter.

The dissent added that since the only duty the defendant owed to the plaintiff was to not harm him. The breach of that duty does not sound in medical malpractice but in negligence. The obligation of the doctor to the examinee to not harm the examinee is ordinary negligence. The examination, despite what it is called, is far from independent in the ordinary sense of the word and is paid for and controlled by the plaintiff’s adversary.

The dissent’s contempt for the majority can be seen in the penultimate paragraph of the dissent.

The cause of action the majority now recognizes for medical malpractice is not only still-born in this action, but, I will venture, will never possess viability as an actual claim for relief. I am confident that the majority has not the slightest intention to open the vistas of malpractice so wide as to actually permit such claims in the absence of anything cognizable as treatment. What is involved then is simply the arbitrary creation of an exception for a group of practitioners who, as a group, neither seek nor are entitled to the protection properly afforded and reserved to those engaged in the delivery of medical care and treatment.

Judge Smith was joined in the majority by Judges Ciparick, Graffeo and Read. Chief Judge Lippman was joined in the dissent by Judges Pigott and Jones.

The Appellate Division decided one of the most important cases in years recently involving the rights of undocumented workers to receive workers' compensation benefits. The case is Amoah v. Mallah Management, LLC.

In this case the claimant used phony documents to get his job. The claimant entered the country legally but was not permitted to work. He then stayed longer in the country than his visa permitted him stay. After he was injured he filed a workers' compensation claim and filed a PI case under his roommate’s name, whose name and Social Security number he used. The roommate eventually demanded a piece of the workers' compensation benefits and the negligence recovery. The claimant balked at this. The claimant eventually told this story to the workers' compensation carrier on a voluntary basis.

After this the workers' compensation carrier sought to suspend his benefits because of the use of fraudulent documents used to get the job. After development of the record the Law Judge ruled that the claimant was still entitled to workers' compensation benefits. On appeal within the Workers' Compensation Board a Board Panel affirmed the Law Judge and the workers' compensation carrier appealed to the Appellate Division. The employer and workers' compensation carrier contended that the Immigration Reform and Control Act of 1986 (see 8 USC § 1324a et seq.) (hereinafter IRCA), as interpreted by the United States Supreme Court in Hoffman Plastic Compounds v National Labor Relations Bd. (535 US 137 [2002]).*

The court analyzed the potential conflict between the New York State Workers' Compensation Law and IRCA. The analysis led it to be of the opinion that IRCA did not preempt the New York State Workers' Compensation Law under the Supremacy Clause of the United Constitution. Part the basis for this was that occupational health and safety is historically an exercise of state police powers and that Congress did not intend to supplant state law in this area. Also the Court of Appeals had already ruled in Balabuena v. IDR Realty, LLC, 6 N.Y. 3d 338 (2006) that IRCA did not take away an undocumented worker’s right to collect damages in a personal injury case.

The court also indicated that the mere fact that a person is an undocumented worker is not a bar to receiving basis workers' compensation benefits based upon the decision of the Court of Appeals in Ramroop v. Flexo-Craft Printing, 11 N.Y. 3d 160 (2008) and Testa v Sorrento Rest., 10 AD 2d 133, 135, lv denied 8 NY2d 705 (1960)

The court went on to say that IRCA was intended to deter employers from hiring undocumented workers. The court then reasoned that to allow employers who hire undocumented workers to avoid having their workers' compensation carriers pay indemnity for lost time would encourage the hiring of undocumented workers and to defeat the purpose of IRCA. It should also be noted that in this case the court found no evidence that the employer tried in any way to confirm the eligibility of the injured worker to work in the United States.

Hoffman Plastics was then distinguished in that Hoffman Plastics involved a claim for unpaid wages and for personal injury. The court then considered that the payment of workers' compensation benefits was a contractual right as a form of consideration that was part of the contract for services already performed. The court then stated that since the claimant was totally disabled and under no obligation under New York law to look for work he should not be barred from continuing to receive workers' compensation benefits. Had the claimant had a partial disability and would therefore, have been required to look for work the result may have been different. If the claimant had a partial disability New York law requires him to remain attached to the labor market. Since it would have been illegal for him to obtain employment the court may have denied his claim for ongoing benefits, which he would have been able to collect if he returned to his home country and produced medical evidence of a disability and attachment to the labor market in his home country.

The decision of the Appellate Division was a unanimous affirmance of the Workers' Compensation Board. Therefore, there is no appeal of right to the New York State Court of Appeals, New York’s highest court. The next step in this case can be either a motion to the Court of Appeal for permission to appeal to the court or an appeal directly to the United States Supreme if the workers' compensation carrier seeks to continue their fight.

* Justice Bryer wrote a dissent in Hoffman Plastics.

The Appellate Division – Third Department limited the amount of benefits that a claimant can receive in any one week to the maximum allowed by the Workers' Compensation Law. The Appellate Division had previously indicated that there may have been a way for an injured worker to actually collect over the maximum rate allowed by law. The court reached its decision in the case of Lamantia v. Midland Elevator Company, 2009 NY Slip Op 01379 (February 26, 2009)

Mr. Lamantia stopped working when he sustained a back injury. As a result of that injury the claimant never returned to work. When he stopped working he also realized that he had developed carpal tunnel syndrome and filed a separate claim for that condition.

On the day that the claimant was classified as having a permanent partial disability he was also awarded a scheduled loss of use for his hands. The State Insurance Fund objected to paying the scheduled loss of use since for the “weeks it covered” the claimant was already paid the maximum rate of $400.00 per week in the back case.

The Workers' Compensation Board affirmed the Law Judge and the State Insurance Fund took the case up to the Third Department. This was a full frontal attack on the Miller v. North Syracuse Central School District, 1 A.D. 3d 691 (2003) case. The Court of Appeals had already questioned the viability of Miller in the LaCroix v. Syracuse Executive Air Service, Inc., 8 N.Y. 3d 348 (2007) case.

The Third Department was able to read the tea leaves from the Court of Appeal and all but overruled Miller. The Third Department now indicates that a person’s benefits are limited to the maximum rate in §15(6) of the Workers' Compensation Law for the date of accident and that it is an overall limit of money that is paid every week. No longer can a claimant collect benefits for temporary and permanent disability for the same week and have the benefits exceed the maximum rate for the date of accident and/or disability.

As a result of this case there will be the end of awarding full benefits for a hearing loss where the worker eventually stops working because of an accident as in this case or from an OD such as asbestosis.

Currently there is legislation pending in both houses of the Legislature to attempt to resolve this matter. The “Same As” bill numbers are A2021 sponsored by Assemblywoman Susan John and S2776 sponsored by State Senator George Onorato.

On October 21, 2008 the Court of Appeals decided the case of Sorbara Construction Corporation v. AIU Insurance Company. In this case the court ruled that notice to Sobrara’s workers' compensation carrier is not sufficient to serve as notice of a potential claim to its liability carrier, even when the workers' compensation carrier and the liability carrier is the same insurance company. The Court was of the opinion that each policy requires a separate notice to the appropriate part of the insurance company. The result of this is that Court of Appeal upheld the liability carrier’s disclaimer of responsibility when the employer was impleaded in the liability action under §11 of the Workers' Compensation Law.

Submitted by Ronald Balter.

The New York Court of Appeals recently addressed at oral argument the following certified question in Briggs Avenue LLC v. Insurance Corp. of Hanover.  Here is the issue:

When an injured party begins its suit against an insured by serving process on the Secretary of State, who, under New York corporate and limited liability company law, is the insured's agent for such service, does this service suffice to trigger the provisions in the relevant insurance policy that require the insured to inform its insurer in a timely manner that a suit has been brought, where: (a) the insurance policy does not expressly refer to notice that a suit has been brought being (a) the insurance policy does not expressly refer to notice that a suit has been brought being given to an insured's "representative" rather than the insured itself, and (b) the insured plausibly argues that - due to its failure to update its address with the Secretary of State - it had not received actual notice that the suit had been brought?

Briggs Avenue LLC, the owner of an apartment building at 2570 Briggs Avenue in the Bronx, was informed when part of the ceiling in one of the apartments fell down in May 2003, but apparently it was not informed that Nelson Bonilla, the son of the tenant, had been injured.  Briggs did not notify its liability insurer, Insurance Corporation of Hannover (ICH), of the incident.  When Bonilla filed a $2 million negligence suit against Briggs in July 2003, he served the complaint on New York's Secretary of State, who serves as Briggs's agent for service of process under New York law.  The Secretary of State forwarded copies of the complaint to the address it had on file for Briggs, but the company did not receive them.  Briggs had moved its office and failed to advise the Secretary of State of its new address. 

Briggs became aware of the lawsuit in late March or early April of 2004, when Bonilla moved for a default judgment and directly served the papers on Briggs at its new address.  Briggs then notified ICH of the lawsuit.  ICH disclaimed coverage, contending that Briggs violated the notification conditions of the policy by failing to notify ICH for eleven months after the ceiling fell and eight months after the suit was filed.  The policy required Briggs to notify ICH "as soon as practicable of an 'occurrence' or an offense which may result in a claim," notify it "as soon as practicable" when a suit is filed, and "immediately" send ICH any papers received in connection with a lawsuit.

 

TO: All Law School Career Center Staff

FROM: Dan Gerber, Chair of the Torts, Insurance & Compensation Law Section - New York State Bar Association

Please be advised that the Torts, Insurance & Compensation Law Section of the New York State Bar Association (NYSBA) is sponsoring a Law Student article writing contest for the Torts, Insurance & Compensation Law Journal. The winner of this contest will have his/her article printed in the Torts, Insurance & Compensation Law Journal and win $250, plus a free admission to the NYSBA annual meeting in January.

The subject of the article must be about recent changes to New York Insurance Law § 3420 and how the other states across the country apply the issue of prejudice to insurance companies who seek to disclaim coverage for late notice of claims. On July 21, 2008, New York Governor David Paterson signed into law Chapter 388 of the Laws of New York 2008. This legislation contains amendments to §3420 of New York's Insurance Law and §3001 of the New York Civil Practice Law and Rules that, among other things, changes New York law on late notice of insurance claims from a “no prejudice” standard to a standard which requires insurance companies to show prejudice. The article should contemplate what will constitute prejudice in New York.

The deadline for entries is November 30, 2008. All submissions are to be sent in Microsoft Word via e-mail to either Paul Edelman at pedelman@kreindler.com or David Glazer at DGlazer@shaferglazer.com.

Thank you for you assistance. If you have any questions, please feel free to contact Paul Edelman or David Glazer at the email addresses listed above.

You are invited to view the Torts Insurance & Compensation Law Section in action. On October 7th, the Section's Executive Committee will hold its quarterly meeting at the New York Bar Center. The first hour of this meeting will be broadcast over the internet and available for viewing at www.nysba.org/TICLWebcast. To view the webcast, simply access the link above on the day of the meeting and follow the directions on the screen.

Among the items on the agenda will be the Section's consideration and proposal of legislation to amend Insurance Law 3420(d). Also known as the disclaimer statute, the Executive Committee will examine whether it should require a policyholder or claimant show prejudice when an insurer's disclaimer is late, but otherwise valid. The Executive Committee will also address adoption of a strategic plan, and upcoming Section events.

This will be the first webcast by any NYSBA Section of one of its events. Our goal is to allow our members to view how the Section works, and afford to become more involved.

Practitioners often grumble about the New York Court of Appeals' holding in Brill v. City of New York -- i.e., the outside time limit for a summary judgment motion is 120 days after the filing of the note of issue, unless good cause is shown for the delay.  During the first Session of the Court's new Term, the Court will revisit what constitutes "good cause" under CPLR 3212.

The Essex County Bar Association extends an invite to all members of the Torts, Insurance and Compensation Law 4th District to the ECBA’s summer meeting on August 15, 2008, in Lake Placid. The summer meeting will start with a two hour Ethics CLE program for $50 (the proceeds to benefit the ECBA scholarship fund), lunch at the Crowne Plaza and Golf at the Lake Placid Resort Mountain Course, to be followed by a cocktail reception which we are going to sponsor. Here is a memo on the CLE, the details of the meeting, and the golf outing.

A preview of the issues at stake in the case of Ramroop v. Flexo-Craft Printing was previously posted.

The Court of Appeals in affirming the result of the decision of the Third Department in the case of Ramroop v. Flexo-Craft Printing on different grounds than the Appellate Division decision denies an entire segment of the work force in New York State the additional benefits available under §15(3)(v) of the Workers' Compensation Law. Under either theory the Mr. Ramroop, an undocumented alien, has been barred from receiving additional benefits. The Court of Appeals decision was 5-2 with the dissenting opinion finding that the majority took a narrow view of the Workers' Compensation Law and also was of the opinion that the record was in sufficiently developed to allow the Court to make a decision on the issue.

The majority was of the opinion that the claimant not entitled to the §15(3)(v) benefits because he is unable to participate in a “Board approved rehabilitation program”. The Court stated that no rehabilitation program could admit the claim because of his undocumented status and that he could not be legally employed in the United States.

The court went on to say that the legislature in enacting §15(3)(v) of the Workers' Compensation Law did not intend to restore to employment a person who is legally unemployable. Because of that the court felt constrained to deny the claimant benefits under §15(3)(v).

Section 17 was raised by the claimant starting at the Law Judge level to try to save the claimant’s right to the benefits. The court indicated that §17 of the Workers' Compensation Law as it has been amended exists so as to not deny a person who is entitled to an award just because they leave the United States or Canada. The court found §17 inapplicable to this situation because there was no denial of benefits to the claimant because he was leaving the United States for a country other than Canada. The court’s language in dealing with the §17 arguments raise questions as to what happens if an undocumented alien leaves the United States and returns to work in another country earning less than they did when injured. Once out of the country according to the court the claimant cannot have any of the benefits they are entitled to receive diminished because they are out of the country. This person would apparently be entitled to receive benefits under §15(3)(v) of the Workers' Compensation Law.

The court’s decision seems to be self contradictory. Although the claimant cannot be retrained and returned to the work force to make him eligible to receive the additional benefits under §15(3)(v) the court looked favorable upon two prior decisions on related issues. The first case favorable cited by the court was Balabuena v. IDR Realty, LLC, 6 N.Y. 3d 338 (2006). In Balabuena the court held that the New York State Labor Law protects undocumented aliens despite the federal Immigration Reform and Control Act of 1986. The court also let stand a 1960 decision of the Appellate Division which allowed the payment of basic workers' compensation benefits to undocumented aliens. Testa v. Sorento Restaurant, 10 A.D. 2d 133 lv to appeal denied 8 N.Y. 2d 705 (1960).

The dissent agreed with the majority’s interpretation of §17 of the Workers' Compensation Law in that it could not save the claimant to receive the awards under §15(3)(v). However, as to the merits the dissent by Judge Ciparick, which included Chief Judge Kaye, felt the court acted prematurely. The courts decision was based upon the fact that the New York State Education Department’s Office for Vocational and Educational Services for Individuals with Disabilities could not retrain the claimant because of his status. However, neither the claimant’s attorney nor the attorney for the employer and its workers' compensation carrier was aware if there was another agency or organization that would accept the claimant for retraining and rehabilitation. The dissent wanted the case to be referred back to the Workers' Compensation Board to determine if there is a program that would accept the claimant.

The dissent was believes that the legislative history of §15(3)(v) is such that only medical impairments to participating in a rehabilitation program could act to bar a claimant from receiving the supplemental benefits.

The dissent in its conclusion raised the difficult issue that is confronted in this case.

The purpose of section 15 (3) (v) is to re-employ the worker and maximize the worker's earning capacity (see Governor's Program Bill, Bill Jacket, L. 1970, ch 286, at 3). For this Court to now hold that a worker's earning capacity is diminished because of a lack of authorization to work in this country when the lack of authorization existed pre-injury defeats this legislative purpose.

The majority today forecloses the availability of additional compensation for severely injured workers solely because they may lack permanent residency status or authorization to work in this country, ignoring the history of our Workers’ Compensation Law and this State's commitment to protect all workers, irrespective of immigration status (see Balbuena v IDR Realty LLC, 6 NY3d 338, 358-359 [2006]).

Although this case results in a defeat for the injured workers’ of New York there may be a silver lining in the decision. The silver lining may be in footnote one in the majority decision with the application of the Reform Bill of 2007. The footnote describes four types of injuries, permanent total disability, temporary total disability, permanent partial disability and temporary partial disability. Under the reform bill limits were imposed as to how long a claimant can collect benefits in case where the claimant is found to have permanent partial disability. The Court of Appeals says that in addition to the four previously mentioned types of cases they are also cases that are

called schedule loss of use awards because the statue assigns – as by a ‘schedule’ – a fixed number of lost weeks compensation according to the bodily member injured. . . . Schedule loss of use awards “compensate for loss of earning power” and, like all other compensation awards “are intended to provide a limited and certain, not full but uncertain remedy regardless of the fault of the employer, and to continue the wage income as nearly uniform as the provisions of the law would permit after the employee’s injury. (Citations omitted)

This can lead to a beneficial interpretation as to how the now limited permanent partial disability benefits are to be paid to injured workers. The amendments to §15(3)(w) of the Workers' Compensation Law in the reform bill now puts a limit on the length of time that person can collect permanent partial disability benefits. This makes those awards similar to awards under §15 (3)(a) through §15(3)(l). As an example a person with a $900.00 average weekly wage who was injured on July 2, 2007 and found to have 1% permanent partial disability would be entitled to 225 weeks of additional benefits after a finding of permanency. The question is what rate those 225 weeks should be paid. A 1% disability on a $900.00 average weekly wage is a rate of $6.00. The Workers' Compensation Law mandates a minimum rate of $100.00 in such a case. The issue that will have to be decided first by the Workers' Compensation Board and eventually the courts is whether that award should be paid at $100.00 per week or at $500.00 per week. The $500 rate is the rate at which a scheduled loss of use under §15 (3)(a) through §15(3)(l) would be paid. If the Workers' Compensation Law is to continue to make sure that all injured workers “continue the wage income as nearly uniform as the provisions of the law would permit after the employee’s injury” as stated in the footnote the $500.00 rate would be the logical rate at which to pay the individual. This interpretation would as the dissent pointed out would be in the tradition of Judge Cardozo who stated that the Workers' Compensation Law was enacted to make sure that injured workers are saved from becoming one of the derelicts of society, a fragment of human wreckage. (Dissent at page 2.)

Post by Ronald Balter