Fried v. City of New York

• Decision Date: 29 February 2012
• Citation: 2012 N.Y. Slip Op. 22050,940 N.Y.S.2d 795,35 Misc.3d 601
• Parties: Shlomit FRIED, by her mother and temporary Art. 81 guardian, Iris Fried, Iris Fried Individually, and Uri Fried, Plaintiffs, v. CITY OF NEW YORK, New York City Economic Development Corporation, Signe Nielsen, Han Padron and Associates Et. al., Defendants.
• Court: New York Supreme Court

2012 N.Y. Slip Op. 22050
35 Misc.3d 601
940 N.Y.S.2d 795

Shlomit FRIED, by her mother and temporary Art. 81 guardian, Iris Fried, Iris Fried Individually, and Uri Fried, Plaintiffs,
v.
CITY OF NEW YORK, New York City Economic Development Corporation, Signe Nielsen, Han Padron and Associates Et. al., Defendants.

Supreme Court, Kings County, New York.

Feb. 29, 2012.

[940 N.Y.S.2d 797]

Paul K. Isaac, Esq., David A. Roth, Esq. Precision Resolution, LLC, for Plaintiffs.

Robert W. Hambrecht, Esq., for The Commissioner of the Department of Social Services of the City of New York.

JACK M. BATTAGLIA, J.

Recitation in accordance with CPLR 2219(a) of the papers considered on Plaintiffs' motion for an order “[d]eclaring as null and void, vacating, and/or invalidating any claimed subrogation right, lien, or other reimbursement claims alleged to exist in favor of the New York City Human Resources Administration, against any settlement proceeds received or to be received by the Plaintiff, Shlomit Fried, in the above captioned matter”:

—Notice of Motion

Affirmation of Counsel

Affirmation of Special Guardian

Supporting Affirmation

Exhibits A–E

—Affirmation in Opposition

Exhibits A–H

—Responding Affirmation

Plaintiffs were represented by Paul K. Isaac, Esq. of Precision Resolution, LLC and David A. Roth, Esq. The Commissioner of the Department of Social Services of the City of New York was represented by Robert W. Hambrecht, Esq.

[35 Misc.3d 603] In the afternoon of July 25, 2001, at Pier 4 of the Brooklyn Army Terminal, plaintiff Shlomit Fried, then 16 years old, was operating a Chevrolet Astro minivan owned by the father of a male friend, Nir Yadgar, 19 years old, who was apparently teaching her to drive, when, for reason or reasons unknown, the van left the Pier, and entered Gowanus Bay. Mr. Yadgar was killed; Ms. Fried suffered catastrophic injuries.

Plaintiff Iris Fried, mother and natural guardian of Shlomit Fried, commenced this action in 2002 on behalf of her infant daughter and on her own behalf. When Shlomit Fried became of age, Iris Fried was appointed her incapacitated daughter's guardian ad litem ( see CPLR 1201 et seq.), and has since been appointed her guardian pursuant to Article 81 of the Mental Hygiene Law. Shlomit Fried's father, Uri Fried, is also a plaintiff. By order dated June 17, 2011, Robert Kruger, Esq. was appointed Special Guardian for plaintiff Shlomit Fried.

Plaintiffs' Second Amended Complaint purported to name 36 different defendants. By the time of trial, the defendants were City of New York (the “City”), New York City Economic Development Corporation (“EDC”); Signe Nielsen Landscape Architect, PC (“Nielsen”); Han–Padron Associates, LLP, Han–Padron Associates, LLC, Han–Padron Associates Consulting Engineers, PLLC, and Padron Associates, Inc. (“Han–Padron” or the “Han–Padron Defendants”); and Iffland Havanagh Waterbury, PLLC, Iffland Kavanaugh & Waterbury PC, Iffland Kavanaugh & Waterbury PC, Inc., and Iffland Kavanaugh Waterbury, PLLC (the “Iffland Kavanagh Defendants”), with the Iffland Kavanaugh Defendants only subject to claims asserted by the City and EDC.

On the record on the eighth day of trial, April 25, 2011, Plaintiffs settled their claims against the City and EDC for $8.25 million, and the City and EDC settled their claims against the Iffland Kavanaugh Defendants on the latters' contribution to the settlement with Plaintiffs. The attorneys for the City and EDC did not participate in the balance of the trial, although the fault of the City and EDC would still be in issue at least for purposes of General Obligations Law § 15–108. The settlement

[940 N.Y.S.2d 798]

has since been approved in this Court's Order Approving Settlement, Counsel Fees and Disbursements dated September 13, 2011 (“the Infant Compromise Order”).

[35 Misc.3d 604] Plaintiffs' fundamental claim at trial was that Pier 4 was negligently designed in that vehicle-resistant barriers were not included at the perimeter, allowing a vehicle to leave the Pier and enter the water. The jury was instructed in accordance with general negligence principles, modified to reflect that Pier 4 was to be treated as a “highway.” ( See decision and order of Hon. David I. Schmidt on motions for summary judgment, dated November 30, 2009, at 22–24; decision and order of Hon. David I. Schmidt on motions for leave to renew and reargue, dated November 10, 2010, at 14–16; see also Groninger v. Village of Mamaroneck, 17 N.Y.3d 125, 927 N.Y.S.2d 304, 950 N.E.2d 908 [2011]; Krausch v. Incorporated Village of Shoreham, 87 A.D.3d 715, 928 N.Y.S.2d 769 [2d Dept 2011].)

Responding to verdict sheet interrogatories, the jury determined that Pier 4 was negligently designed in that vehicle-resistant barriers were not included at the perimeter, and that Han–Padron and EDC were each negligent in not including vehicle-resistant barriers in the design for Pier 4, but that Nielsen was not negligent. The jury also determined that Shlomit Fried was negligent in the operation of the vehicle on Pier 4, and that her negligence was a substantial factor in allowing the vehicle to leave the Pier and enter the water. The City did not appear on the Verdict Sheet, and was not addressed in the charge, as all agreed, at least for these purposes, that the City would be vicariously liable for any negligence by EDC.

The jury also made two allocations of fault, with and without consideration of the fault of Ms. Fried. The jury first determined that EDC was 75% at fault, Ms. Fried 20%, and Han–Padron 5%; and then determined that as between the defendants, EDC was 90% at fault and Han–Padron 10%. Asking the jury to allocate twice was precautionary given the open questions concerning the application of General Obligations Law § 15–108 and CPLR Article 16.

The Han–Padron Defendants moved for an order “setting aside the jury verdict, pursuant to CPLR § 4404(a), and granting [them] judgment as a matter of law; or, in the alternative, ... granting [them] leave to amend [their] Answer responsive to the Second Amended Complaint, pursuant to CPLR 3025(b), to assert the affirmative defense of set-off, pursuant to General Obligations Law § 15–108,” as a result of Plaintiffs' settlement with the City and EDC. (Notice of Motion dated September 30, 2011.)

Plaintiffs moved for an order, “pursuant to CPLR 4404, for judgment notwithstanding the verdict and declaring [the Han–[35 Misc.3d 605] Padron Defendants] 80% responsible, as a matter of law for damages to be awarded and that Han–Padron is only entitled to a set-off in the amount of $8.25 million,” representing the settlement between Plaintiffs and the City and EDC. (Notice of Motion, undated.)

With a Decision and Order dated January 19, 2012, this Court granted the motion of the Han–Padron Defendants only the extent of granting them leave to amend their Answer to the Second Amended Complaint, and denied Plaintiffs' motion, in effect upholding the jury's verdict as to liability and allocation of fault. ( See 34 Misc.3d 1212(A), 2012 N.Y. Slip Op. 50062[U], 2012 WL 163832.) A schedule was set between the Court and counsel for a damages trial and pre-trial in limine motions. The Court has since been advised that the action has been settled

[940 N.Y.S.2d 799]

between Plaintiffs and the Han–Padron Defendants, but an application for a compromise order has not yet been submitted to the Court.

In this motion, Plaintiffs seek to declare null and void, vacate or invalidate “any claimed subrogation right, lien, or other reimbursement claims alleged to exist in favor of New York City Human Resources Administration, against any settlement proceeds received or to be received by the Plaintiff.” ( See Notice of Motion.) At the time this motion was served, there was no settlement between Plaintiffs and the Han–Padron Defendants. As such, this motion relates solely to the validity of a purported Medicaid lien upon settlement proceeds from the settlement between Plaintiffs and the City and EDC. For purposes of this motion and the settlement, the parties make no distinction between the City and EDC, and the Court will not make any such distinction.

Similarly, neither Plaintiffs nor the New York City Department of Social Services addresses whether the validity and enforceability of a Medicaid lien may properly be determined by motion in this action, and neither will the Court, other than to note that the Department is an agency of defendant City of New York, as is the Human Resources Administration.

“The Medicaid program, which provides joint federal and state funding of medical care for individuals who cannot afford to pay their own medical costs, was launched in 1965 with enactment of Title XIX of the Social Security Act (SSA)”, and “its administration is entrusted to the Secretary of Health and Human Services (HHS), who in turn exercises his authority through the Centers of Medicare and Medicaid Services (CMS).” [35 Misc.3d 606] ( See Arkansas Department of Health and Human Services v. Ahlborn, 547 U.S. 268, 275, 126 S.Ct. 1752, 164 L.Ed.2d 459 [2006].) “States are not required to participate in Medicaid, but all of them do. ( Id.) The Federal government pays “ between 50% and 83% of the costs the State incurs for patient care, and, in return, the State pays its portion of the costs and complies with certain statutory requirements for making eligibility determinations, collecting and maintaining information, and administering the program.” ( Id.)

“As a condition of the receipt of Federal program funding, State Medicaid plans must conform with the statutory standards established by Federal law and the regulations promulgated by the Secretary of Health and Human Services.” ( Cricchio v. Pennisi, 90 N.Y.2d 296, 304, 660 N.Y.S.2d 679, 683 N.E.2d 301 [1997]; 42 USC § 1396a; Social Services Law § 363–a[1].) In this regard, “to contain program costs and ensure that Medicaid remains the payor of last resort”, Federal law requires States to “take all reasonable...