Dinnigan v. ABC Corp.

• Decision Date: 27 March 2012
• Docket Number: No. 14432–07.,14432–07.
• Citation: 2012 N.Y. Slip Op. 50717,951 N.Y.S.2d 85,35 Misc.3d 1216
• Court: New York Supreme Court
• Parties: Robert DINNIGAN as F/N/G of Amanda Dinnigan, an infant, Plaintiff, v. ABC CORPORATION, 123 Inc., XYZ Corp., XYZ Inc., XYZ2 Inc., XYZ3 Inc., XYZ Holdings, Inc., Daniel J. Coll and Arlene Dinnigan, Defendants. Iron Workers Locals 41, 361, & 417 Health Fund, Intervenor, plaintiff.

35 Misc.3d 1216

951 N.Y.S.2d 85

2012 N.Y. Slip Op. 50717

Robert DINNIGAN as F/N/G of Amanda Dinnigan, an infant, Plaintiff,

v. ABC CORPORATION, 123 Inc., XYZ Corp., XYZ Inc., XYZ2 Inc., XYZ3 Inc., XYZ Holdings, Inc., Daniel J. Coll and Arlene Dinnigan, Defendants.Iron Workers Locals 41, 361, & 417 Health Fund, Intervenor, plaintiff.

No. 14432–07.

Supreme Court, Suffolk County, New York.

March 27, 2012.

Lipsig, Shapey, Manus et al., New York, for plaintiff.

Wechsler & Cohen, LLP, New York, for Defs. XYZ Defendants.

Zaklukiewicz, Puzo, et al., Islip Terrace, NY, for Def. Coll.

Colleran, O'Hara & Mills, LLP, Garden City, for Intervenor, Iron Workers.

THOMAS F. WHELAN, J.

Upon the following papers numbered 1 to 34 read on the motion (No.041) to approve a compromise; and two cross motions (# 042) & (# 043) for declaratory and other equitable relief; Proposed Infant Compromise Order and supporting papers 1–3; Affirmations/Affidavits Memos and supporting papers 4–5; 6–7; 8–9; 10–11; Reply papers 12–13; Notice of Cross Motion (# 042) and supporting papers by the intervenor plaintiff 14–18; Answering Affirmations/Affidavits and supporting papers 19–20; 21–22; Replying papers 23–24–25–26; 27–28; Second Notice of Cross Motion (# 043) and supporting papers by plaintiffs 29–32; Answering Affirmations/Affidavits Memos and supporting papers 29–30; Replying papers 31–32; 33–34; Other Short Form Order dated December 29, 2011; (and after hearing counsel in support and opposed to the motion) it is,

ORDERED that in view of the compromise of the claims interposed by and against Coll plaintiffs under the terms of orders issued herein on April 27, 2011 and May 18, 2011, as supplemented and amended by orders dated May 4, 2011 and June 8, 2011 (Jones, J.), the court severs and continues the claims by and between the remaining parties; and it is further

ORDERED that to reflect the severance and in furtherance of certain confidentiality agreements and orders, the caption of this action is amended to delete therefrom, the Coll plaintiffs and to rename the corporate defendants, fictitiously, as ABC Corporation; 123 Inc., and XYZ Corp., XYZ Inc., XYZ2 Inc., and XYZ Holdings, Inc., as set forth in the caption above; and it is further

ORDERED that the plaintiffs' motion (# 041) for an order pursuant to CPLR 1206, 1207 and 1208, is granted as the court hereby approves the amount of this proposed compromise together with the amount of counsel fees and disbursements requested and payment of the sum of $23,436.77 to the Suffolk County Department of Social Services in partial satisfaction of its Medicaid lien, together with distribution of the net proceeds remaining to the Trustee of the Amanda Dinnigan Supplemental Needs Trust, to the extent set forth in the final order of compromise to be entered hereon; and it is further

ORDERED that the plaintiff, Robert Dinnigan, as parent and natural guardian of Amanda Dinnigan and his individual capacity, is authorized to execute releases of the type contemplated by CPLR 5003–a; and such other papers plaintiff's counsel deems necessary and proper to effectuate the settlement; and it is further

ORDERED that the XYZ defendants and the Coll defendants shall pay their respective portions of the compromise funds, in accordance with CPLR 5003–a, to the plaintiff's counsel, who shall immediately deposit these funds into a separate escrow account where they shall remain until the distribution thereof is directed in the final order of compromise to be entered herein; and it is further

ORDERED that the derivative claims, if any, of plaintiff Robert Dinnigan, to the extent asserted against the XYZ and Coll defendants, are dismissed as abandoned; and it is further

ORDERED that plaintiff, Robert Dinnigan, in his capacity as Trustee of the Supplemental Needs Trust of Amanda Dinnigan, shall post a bond in the amount of $5,000,000.00 with the Clerk as contemplated by CPLR Article 25, prior to his receipt of any settlement funds, and maintain said bond by the payments associated therewith until further order of the court and he shall file all annual accountings of all monies received and disbursed for each year since the inception of said trust with the Clerk of the Article 81 guardianship part and with the Suffolk County Department of Social Services; and it is further

ORDERED that the cross motion (# 042) by the intervenor plaintiff for an order declaring the validity of its equitable lien and/or right of reimbursement and its entitlement to recovery of the health care expenditures it paid on behalf of the infant plaintiff in the form of medical, pharmaceutical and hospital benefits and directing the payment thereof out of these settlement funds and those on deposit in an escrow account is denied for want of subject matter jurisdiction; and it is further

ORDERED that the cross motion (# 043) by the plaintiffs for summary judgment dismissing the intervenor's claims for recovery of benefits paid and denying said intervenor's claims for recovery out of the settlement proceeds or from the segregated escrow account, is denied for want of subject matter jurisdiction; and it is further

ORDERED that the funds on deposit in the existing escrow account established by the prior order of the court dated February 18, 2011 (Jones, J.) shall be released and distributed in accordance with the terms of the final order of compromise to be entered herein.

This personal injury action arises out of single car accident that occurred on February 21, 2007, in which the two of several child passengers were seriously injured. Presently before the court are three applications. The first (# 041), is an application by the Dinnigan plaintiffs for: 1) an order approving a compromise of the claims of the infant plaintiff against defendants XYZ Corp. and the individual defendants Coll and Dinnigan in accordance with terms spread upon the record during the trial of this action; 2) directing payment by XYZ Corp. of amounts demanded as reimbursement of disbursements paid and approval of the legal fees of plaintiff's counsel in the amounts demanded; 3) directing defendant XYZ Corp. to pay the sum of $23,436.77 in partial satisfaction of the outstanding Medicaid lien of the Suffolk County Department of Social Services which is now in excess of $350,000.00; and 4) an order directing distribution of the net remaining proceeds into an existing supplemental needs trust established by the parents of the infant plaintiff, Amanda Dinnigan in 2007.

The second application pending before the court is a cross motion (# 042) by the intervenor plaintiff for summary judgment on its complaint in which it seeks equitable relief pursuant to 29 U.S.C. § 1132(a)(3) to recoup all medical, hospital and pharmaceutical benefits paid on behalf of the infant plaintiff under the terms her father's union welfare benefits plan. In response thereto, the plaintiffs interposed a cross motion (# 043) for summary judgment denying on the merits, the intervenors' asserted right of reimbursement and dismissing its complaint.

The record reflects that the plaintiffs struck settlements with various defendants prior to the trial of this action, over which, this court presided for some thirty days beginning in October of 2011 and ending with a proposed compromise of the claims that were the subject of the trial. The record further reflects that the prior, pre-trial settlements with defendants ABC Corporation and 123 Inc. were memorialized in infant compromise orders issued by the IAS Justice prior to the assignment of the action to the undersigned for trial of the remaining claims. Under the terms of a February 18, 2011 pre-trial compromise order (Jones, J) issued in connection with the prior partial settlements, the sum of $1,224,758.11 was placed in escrow pending the resolution of the federal claims of reimbursement asserted by the intervenor (hereinafter the “Health Fund”). The monies deposited into this escrow account were equivalent to the amounts expended by the Health Plan from 2007 through December 31, 2010 for medical, pharmaceutical and hospital services rendered to the infant plaintiff.

The record further reflects that Suffolk County Department of Social Services is an interested party by virtue of its possession of a Medicaid lien for medical care and pharmaceutical benefits incurred by the infant plaintiff Amanda Dinnigan. While the public lienor has not been served with any of the above described applications, the plaintiff's counsel and the Suffolk County Attorney's office on behalf of SCDSS have agreed to a partial compromise of the current lien which is in excess of $350,000.00 by payment of the sum of $23,436.77 out of the proceeds of this proposed compromise. This agreement, while not binding on this court, is premised upon SCDSS' previous receipt of a partial payment of its lien under the terms of two prior, pretrial compromise orders entered herein and the preservation of its right to recoup all remaining and future amounts expended by the designation of SCDSS as the first remainderman of the corpus of the Amanda Dinnigan Supplemental Needs Trust established by her parents in 2007.

Court Approval of the Amount of the Proposed Compromise:

Those portions of the plaintiffs' motion (# 041) wherein they seek court approval of the proposed compromise of the claims against the XYZ corporate defendants and the Coll defendants is granted. Having presided over the month long, quasi-unified trial on liability and damages, at which the monies that now comprise the proposed settlement funds were offered and having observed the infant plaintiff during her trial testimony, this court is fully familiar with the facts and circumstances surrounding the accident, the injuries sustained, the current condition of the infant plaintiff, her need for future medical assistance and the relative strengths and weaknesses of the claims and defenses interposed by and between the parties...