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New York Court of Appeals Agrees with Third Department in Burns v. Varriale

Agreeing with the Appellate Division, Third Department, the New York Court of Appeals last week in Burns v. Varriale held that the value of future workers'compensation benefits for a claimant with a nonschedule permanent partial disability is speculative, that the present value of these benefits cannot be ascertained at the time claimant recovers damages in a third-party action, and that claimant is not entitled to an apportionment of attorney's fees based on such future benefits.  Here is the Third Department's decision below.

Comments (2)

This case will have a huge impact against workers' compensation carriers. Under the prior Kelly decision the workers' compensation carrier was entitled to suspend all benefits once the persona injury action was resolved. Now under Burns it appears that the workers' compensation carriers will continue to pay weekly benefits to the injured worker. The workers' compensation carrier will continue to pay the claimant at the percentage of the weekly rate equal to the percentage of the fee plus disbursements of the gross amount of the settlement. The workers' compensation carrier will continue to pay this reduced rate until they have paid the equivalent of the attorney fee in the personal injury action. Burns has the effect of shifting the entire cost of the third party action to the workers' compensation carrier be requiring it basically pay the injured worker back the fee he paid his attorney in the personal injury action.

The key issue outstanding is how will this new liability be enforced against a workers' compensation carrier. In the original Third Department decision indicated that the resolution of the Burns’ payments would take place at the Workers' Compensation Board. However, the Court of Appeals seems to be directing that the direction come from the justice in the trial court. This sets up a conflict between the attorney in the personal injury action and the attorney in the workers' compensation case. One may have to do work for the other without any method of being paid for that additional work. Also if the directions are made in the trial court will any direction be binding against the workers' compensation carrier or the Workers' Compensation Board since they are not parties to the action (unless the employer was successfully impleaded under Dole v. Dow Chemical and the 1996 amendments to §11 of the Workers' Compensation Law).

It will be interesting to see how this plays out over time.

nick stasi:

does anyone know if court of appeal wcb has a time line when a case has to be ruled on

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