Opinion
56826
09-02-2020
Mary K. BRADLEY, Plaintiff, v. Elizabeth D. COLE, Defendant.
DeLorenzo, Grasso & Dalmata, LLP, Schenectady (Paul E. DeLorenzo of counsel), for plaintiff. Stockton, Barker & Mead, LLP, Troy (John B. Paniccia of counsel), for the Golub Corporation.
DeLorenzo, Grasso & Dalmata, LLP, Schenectady (Paul E. DeLorenzo of counsel), for plaintiff.
Stockton, Barker & Mead, LLP, Troy (John B. Paniccia of counsel), for the Golub Corporation.
Robert J. Muller, J.
On August 9, 2009, plaintiff — an employee of the Golub Corporation (hereinafter Golub) — was working as a cart attendant in the parking lot of the Price Chopper supermarket located in the Village of Lake George, Warren County. Defendant was attempting to park her car when she backed into plaintiff, pinning her against another vehicle. Plaintiff suffered several injuries as a result of the accident and was out of work until December 2, 2009, when she returned on a part-time basis with disability restrictions. She was then "pulled out of work" by Golub in September 2011 because of these restrictions but returned with accommodations in September 2012, continuing to work on a part-time basis until July 17, 2019. She has not worked since that time. Martin, Harding & Mazzotti, LLP filed a claim for workers' compensation benefits on plaintiff's behalf on September 11, 2009, which benefits were awarded. DeLorenzo, Grasso & Dalmata, LLP then commenced this third-party action on plaintiff's behalf on June 26, 2012, with plaintiff ultimately agreeing to a settlement of $20,000.00 with defendant's insurance carrier — State Farm Mutual Automobile Insurance Company (hereinafter State Farm). This settlement was placed on the record on October 21, 2015 and a stipulation of discontinuance was then filed on November 6, 2015. At the time of the settlement, Golub — which is self-insured with respect to workers' compensation benefits — had paid a total of $38,927.40 in combined indemnity and medical expenses. It is undisputed that plaintiff neither obtained the written consent of Golub nor judicial approval of the settlement within three months, as required under Workers' Compensation Law § 29 (5). Presently before the Court is plaintiff's motion for judicial approval of the settlement nunc pro tunc.
"[A] plaintiff seeking a nunc pro tunc order must establish the reasonableness of the settlement, the lack of any fault or neglect in applying for approval and the lack of any prejudice to the carrier" ( Lindberg v. Ross , 105 AD3d 1186, 1187 [2013] ; see DeRosa v. Petrylak , 290 AD2d 596, 598 [2002], lv dismissed and denied 98 NY2d 643 [2002] ; Matter of Stiffen v. CNA Ins. Cos. , 282 AD2d 991, 992 [2001], lv denied 97 NY2d 612 [2002] ). "The timeliness of the application is also a relevant factor to be considered" ( Matter of Rifenburgh v. James , 297 AD2d 901, 901 [2002] ; see Matter of Lautenschuetz v. AP Greene Indus., Inc. , 48 AD3d 948, 950 [2008] ; Matter of Taylor v. Continental Ins. Co. , 9 AD3d 657, 658 [2004] ; Matter of Gilson v. National Union Fire Ins. Co. , 246 AD2d 897, 897 [1998] ), with the ultimate determination "directed to the discretion of the court" ( Lindberg v. Ross , 105 AD3d at 1187 ; see Matter of Bernthon v. Utica Mut. Ins. Co. , 279 AD2d 728, 729 [2001] ; Matter of Gilson v. National Union Fire Ins. Co. , 246 AD2d at 898 ).
To the extent that plaintiff filed this motion on March 13, 2020, the Court will turn first to the issue of whether plaintiff has succeeded in demonstrating that the nearly 4 ½-year delay in filing resulted from something other than her own fault or neglect. In this regard, plaintiff has submitted the affirmation of Paul E. DeLorenzo, Esq., her attorney in this third-party action. DeLorenzo states that "[a]t the time the settlement was negotiated, [he] verbally notified the adjuster for Golub, Angela Taddeo[,] of the amount of the settlement[, and] Golub raised no objection ...." He further states that plaintiff "rescinded her agreement to the settlement right before trial, resulting in the Court awarding $4,500.00 in expert fees to defendant" — following which plaintiff reconsidered and once again agreed to the settlement. According to DeLorenzo, "due to the circumstances and confusion that ensued around the time that the settlement occurred [his] office did not obtain written consent from Golub ... and did not obtain Court approval." Based upon this, plaintiff requests that the delay in filing the instant application be excused under CPLR 2005, which authorizes the Court to "exercis[e] its discretion in the interests of justice to excuse delay or default resulting from law office failure."
In opposition, Golub has submitted the affidavit of Taddeo, its Claims Operations Manager for Insurance Support Services. While Taddeo does not expressly deny having been notified of the settlement amount, she is adamant that "Golub was not advised that [plaintiff] was going to settle the lawsuit filed against the driver" and that "[n]either [plaintiff] nor her attorney sought Golub's consent to settle the lawsuit." Taddeo further states as follows:
"Golub was not asked whether it was asserting a lien against any proceeds from settlement of the lawsuit against the driver.
"Golub's statutory lien has not been addressed or satisfied.
"Golub would have promptly responded to [plaintiff] and/or her attorney regarding any request for consent to settle that lawsuit.
"Golub was not aware that [plaintiff] settled her lawsuit against the driver in October, 2015.
"It was not until October, 2018 that Golub first learned that [plaintiff] had settled her lawsuit against the driver.
Indeed, the record demonstrates that Golub served a request for further action upon the Workers' Compensation Board (hereinafter WCB) and plaintiff on October 26, 2018, which request stated as follows: "Claimant's [third-]party suit was settled in 2015 without consent from [workers' compensation] carrier. State Farm rep[resentative] confirmed settlement paid out on 10/29/15 with final judgment rendered 11/6/15. [M]ove to suspend/receive credit against awards." In response, the WCB scheduled a hearing for December 19, 2018, at which time all parties appeared and the case was continued for a second hearing on February 13, 2019 — with plaintiff directed to produce evidence that Golub consented to the settlement prior to the next hearing date. Plaintiff failed to do so, however, and was again directed to produce such evidence at the second hearing. A third hearing was then held on June 24, 2019, following which the WCB issued a decision stating, in pertinent part: "No present evidence of carrier's consent to settle the third-party action. No further action is planned by the Board at this time."
Golub then served a second request for further action upon the WCB and plaintiff on September 17, 2019, which request stated: "Carrier requests hearing on ... suspension [of] benefits due to [third] party settlement [with] no carrier consent. No resolution [or] ruling yet; [plaintiff] is now out of work." In response, the WCB scheduled a hearing for November 20, 2019, following which a decision was issued finding that "due to the settlement of the [third-party action] without consent, Golub ... is not responsible for future indemnity payments and/or medical bills associated with this case."
Significantly — and as aptly observed by Golub — plaintiff has offered no explanation whatsoever for the 1 ½-year delay between when she received the October 2018 request for further action and when she filed the instant motion. Indeed, even accepting that her initial failure to obtain either the written consent of Golub or the approval of the Court resulted from the confusion surrounding her settlement, this confusion had most certainly abated by October 2018. In this regard, it must also be noted that plaintiff does not deny having received the October 2018 notice — which was sent to both her personally and to Martin, Harding & Mazzotti, who continued to represent her throughout the WCB proceedings.
It is unclear from the record when DeLorenzo, Grasso & Dalmata was apprised that Golub was seeking to suspend workers' compensation benefits based upon plaintiff's failure to comply with Workers' Compensation Law § 29 (5).
Insofar as DeLorenzo's alleged verbal notification of the settlement amount to Taddeo is concerned, the Court finds that — even if such notification was given — it is insufficient. There is no allegation that Taddeo verbally consented to the settlement; DeLorenzo simply states that no objection was raised (compare Matter of Cosgrove v. County of Ulster , 51 AD3d 1326, 1327 [2008] ). This could potentially mean that he left Taddeo a voicemail message advising that the action may settle for $20,000.00 and had not received a return telephone call — which would certainly fall far short of the written consent required under Workers' Compensation Law § 29 (5). In any event, as explained by Martin Minkowitz in the Practice Commentaries (McKinney's Cons Laws of NY, Book 64, Workers' Compensation Law § 29 ): "Any agreement of the employer ... to waive its right to offset against the recovery, should be clear and in writing or it may not exist. A dispute between the parties as to whether there was any agreement between the employer and the claimant will be settled by the WCB." Here, the WCB found no such agreement and it does not appear that this determination has been appealed.
Under the circumstances, plaintiff has failed to demonstrate that the delay in filing the instant motion resulted from anything other than her own fault or neglect (see Matter of Lautenschuetz v. AP Greene Indus., Inc. , 48 AD3d at 950-951 ; Matter of Rifenburgh v. James , 297 AD2d at 902-903 ; Matter of Taylor v. Continental Ins. Co. , 9 AD3d at 659 ; Matter of Gilson v. National Union Fire Ins. Co. , 246 AD2d at 897-898 ; compare Matter of Wojciechowski v. First Cardinal, LLC , 79 AD3d 1487, 1487 [2010] ; Matter of Cosgrove v. County of Ulster , 51 AD3d at 1327 ).
To briefly address the issue of prejudice, under Workers' Compensation Law § 1-a, a workers' compensation carrier is precluded from asserting a lien "on the proceeds of any recovery received pursuant to [ Insurance Law § 5104 (a) ], whether by judgment, settlement or otherwise for compensation and/or medical benefits paid which were in lieu of first party benefits which another insurer would have otherwise been obligated to pay under [Insurance Law article 51]." According to plaintiff, first-party benefits are defined under Insurance Law § 5102 "as payments of up to $50,000.00 for basic economic loss ..., including lost earnings and medical expenses" and — because the total value of Golub's liability at the time of settlement was only $38,927.40 — it was precluded from asserting a lien and cannot claim prejudice. This argument is without merit, however, as Insurance Law § 5102 (a) (2) limits the definition of basic economic loss to three years after the motor vehicle accident. Here, plaintiff's settlement was reached six years after the accident. As such, Golub could have asserted a lien with respect those payments made from August 9, 2012 to October 21, 2015 (see Matter of Johnson v. Buffalo & Erie County Private Indus. Council , 84 NY2d 13, 18 [1994] ), and defrayed a portion of the total $57,655.03 paid to date in combined indemnity and medical expenses. The Court thus finds that Golub has been prejudiced by plaintiff's delay in filing the instant motion (see Matter of Taylor v. Continental Ins. Co. , 9 AD3d at 659 ).
It must also be noted that the reasonableness of the settlement is debatable. While plaintiff had returned to work on a part-time basis at the time the settlement was reached and some of her injuries were linked to degenerative changes — thus suggesting the settlement was reasonable — there are several factors which suggest otherwise. Specifically, defendant's liability was clear, plaintiff was found to have a permanent partial disability by the WCB on January 17, 2013 — prior to settling — and she continues to experience symptoms to date. Finally, plaintiff settled for less than defendant's policy limit (compare Lindberg v. Ross , 105 AD3d at 1187 ; Matter of Stiffen v. CNA Ins. Cos. , 282 AD2d 991, 992-993 [2001], lv denied 97 NY2d 612 [2002] ).
Based upon the foregoing, plaintiff's motion for judicial approval of the settlement nunc pro tunc is denied in its entirety.
Therefore, having considered the Affirmation of Paul E. DeLorenzo, Esq. with exhibits attached thereto, undated, submitted in support of the motion; Petition for Approval Nunc Pro Tunc of Mary Bradley, dated January 14, 2020, submitted in support of the motion; Affidavit of Michael Bell, dated February 7, 2020, submitted in support of the motion; Memorandum of Law of Paul E. DeLorenzo, Esq., dated February 6, 2020, submitted in support of the motion; Affirmation of John B. Paniccia, Esq., dated May 1, 2020, submitted in opposition to the motion; and the Memorandum of Law of John B. Paniccia, Esq., dated May 1, 2020, submitted in opposition to the motion, it is hereby
While this written statement is labeled an "affidavit," it was not sworn to before a person authorized to administer an oath and, as such, does not qualify as an affidavit (see CPLR 2309 [a] ). The Court must also note that it does not appear to qualify as an affirmation, as it was not "subscribed and affirmed by [Dr. Bell] to be true under the penalties of perjury" (CPLR 2106 [a] ).
The Court notes that the Affidavit of Angela Taddeo is attached to this Affirmation as Exhibit "A."
ORDERED that plaintiff's motion for judicial approval of the settlement nunc pro tunc is denied in its entirety.
The original of this Decision and Order has been filed by the Court together with the Notice of Motion dated February 2, 2020 and the submissions enumerated above. Counsel for the Golub Corporation is hereby directed to serve the Decision and Order with notice of entry in accordance with CPLR 5513.