Opinion
January 8, 1940.
Action to recover damages for personal injuries. By section 29 Work. Comp. of the Workmen's Compensation Law, as amended by chapter 328 of the Laws of 1935, in force when the plaintiff was injured, applied to the facts herein, the injured employee having elected to take compensation, his cause of action against the third party became the property of the insurance carrier and the latter not only had the right to sue the third party but out of any recovery was entitled to one-third over the amount paid out for compensation, medical expenses and costs of the recovery, and the employee was entitled to two-thirds. The third party was subject to suit by the carrier but not by the employee, could make settlement with the carrier and was not required to deal with the employee. Under section 29 Work. Comp. of the Workmen's Compensation Law, as amended by chapter 684 of the Laws of 1937, subject to certain limitations, the employee is not required to elect, but may take compensation and also sue the third party. In the event of a suit against the third party by the employee the insurance carrier has a lien on the proceeds of a recovery after deducting therefrom the reasonable expenses, including attorney's fees, incurred in effecting the recovery, to the extent of the compensation awarded or estimated under the act and medical expenses. Thus, aside from the fact that the insurance carrier has lost a cause of action and is deprived of the right to litigate against or settle with the third party, it is not entitled to receive one-third of any surplus of recovery over compensation, etc., as it was under the former law. In litigating or settling, the third party is required to deal with the employee and not, as formerly, with the carrier. It thus appears that if section 29 Work. Comp. of the Workmen's Compensation Law, as amended by chapter 684 of the Laws of 1937, were applicable, there would be a material change, not in procedure, but in vested rights accrued under chapter 328 of the Laws of 1935. In the absence of language in the act of 1937 so indicating, its provisions here considered may not be deemed retroactive. Order denying motion for leave to serve a supplemental answer reversed on the law, with ten dollars costs and disbursements, and motion granted, without costs, supplemental answer to be served within ten days after the entry of the order hereon. Lazansky, P.J., Adel and Close, JJ., concur; Carswell and Johnston, JJ., dissent and vote to affirm.