Guri v. Atlanta Intern. Ins. Co.
| Citation | 169 Misc.2d 952,646 N.Y.S.2d 781 |
| Parties | Zorina GURI, Plaintiff, v. ATLANTA INTERNATIONAL INSURANCE COMPANY et al., Defendants. |
| Decision Date | 06 August 1996 |
| Court | New York City Court |
Herzfeld & Rubin, P.C., New York City, for State Insurance Fund, defendant.
Wilson, Elser, Moskowitz & Dicker, New York City (Edward J. O'Gorman, of counsel), for Atlanta International Insurance Company, defendant.
Elaine D. McKnight, Brooklyn, for plaintiff.
This motion raises the novel issue about whether a post judgment agreement assigning a defendant's right to reimbursement from a third party defendant is void as against the public policy of the Workers' Compensation Law (sometimes "WCL") where the original plaintiff and the third party defendant are employee and employer. The material facts, although complicated, are not in dispute.
In 1981 Theodore Crawford was severely injured while he was performing demolition work as an employee of B.C. Enterprises, Inc. Mr. Crawford was precluded by the Workers' Compensation Law from suing his employer for personal injuries. WCL sec. 11. Mr. Crawford did, however, bring a Supreme Court action in Bronx County against the City of New York, Jimmie L. Williams and Geneval K. Williams ("Bronx action"). The Williamses were the owners of the premises which were being demolished at the time plaintiff was injured. Defendants each commenced third party actions against Crawford's employer, B.C. Enterprises, Inc. There is no dispute that the third party actions were authorized pursuant to Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972). 1
After a jury trial in the Bronx action, Theodore Crawford obtained a verdict in the amount of $1,223,787.50 against Jimmie L. Williams and Geneval K. Williams. 2 Jimmie L. Williams and Geneval K. Williams obtained a verdict for 100% contribution from third party defendant B.C. Enterprises, Inc. The judgment for contribution was contingent upon the Williamses actually paying out on the judgment rendered against them. CPLR sec. 1403; Klinger v. Dudley, 41 N.Y.2d 362, 393 N.Y.S.2d 323, 361 N.E.2d 974 (1977). The judgment, entered on July 28, 1992, provides in pertinent part:
"ADJUDGED, that the defendants, JIMMIE L. WILLIAMS and GENEVAL K. WILLIAMS, have judgment against the Third-Party defendant/Second Third-Party defendant, B.C. ENTERPRISES, INC. for the full amount of any monies paid by them to the plaintiff in satisfaction of this judgment."
In October 1994 Theodore Crawford, Jimmie L. Williams, Geneval K. Williams and Zorina Guri (the plaintiff in this action) entered into an agreement ("assignment agreement") which forms the basis for the action at bar. Under the material terms of the assignment agreement:
1. Guri loaned the Williamses $10,000.00 which was to be repaid to Guri with interest calculated at 5%. The loan was guaranteed by Crawford.
2. The Williamses agreed to pay the entire $10,000.00 to Crawford in partial satisfaction of Crawford's judgment against them in the Bronx action. Upon receipt of the $10,000.00 Crawford was to deliver a partial satisfaction of judgment to the Williamses.
3. The Williamses assigned the partial satisfaction of judgment to Guri. In addition the Williamses assigned all of their rights and interest in the Bronx action judgment, including the judgment for contribution, to Guri.
4. To the extent that Guri had any recovery against B.C. Enterprises under the assignment, Guri would retain the first $10,000.00 of the recovery with the remainder to go to Crawford.
Pursuant to the assignment agreement, the $10,000 loan was made; the monies were immediately turned over to Crawford; Crawford delivered a partial satisfaction of judgment and the partial satisfaction and assignment of judgment were turned over to Guri.
Defendant State Insurance Fund ("SIF") is a New York State agency which provides employers with insurance pursuant to WCL sec. 76. SIF issued an insurance policy to B.C. Enterprises, Inc. against personal liability or injury sustained by B.C. Enterprises, Inc.'s employees.
Defendant Atlanta International Insurance Company ("AIIC") is a private insurance company. AIIC issued an insurance policy to B.C. Enterprises, Inc. against liability for personal injury claims.
Guri commenced this action against both SIF and AIIC claiming that pursuant to the Bronx judgment, the partial satisfaction of judgment, the assignment of judgment and the insurance policies each defendant issued, they are required to reimburse her for the $10,000 paid to Crawford in satisfaction of the judgment against the Williamses.
SIF moves for summary judgment dismissing the complaint against it on the ground that the assignment agreement is void and unenforceable pursuant to the public policy of the Workers' Compensation Law. Guri cross-moves for summary judgment against both defendants. SIF claims that in effect the assignment agreement is a scheme by which an employer (or its insurer) is forced to compensate its employee beyond that which is otherwise allowed under the Workers' Compensation Law. Guri claims that the assignment agreement is a bona fide transaction, recognized as valid in the Court of Appeals in the case of Feldman v. New York City Health & Hosps. Corp., 56 N.Y.2d 1011, 453 N.Y.S.2d 683, 439 N.E.2d 398 (1982).
AIIC also cross-moves for summary judgment dismissing the complaint against it on the same grounds as SIF and on the additional ground of late notice.
Although summary judgment is a drastic remedy because it deprives a litigant of a day in court, it should be granted where there are no disputed material issues of fact. CPLR sec. 3212; Andre v. Pomeroy, 35 N.Y.2d 361, 362 N.Y.S.2d 131, 320 N.E.2d 853 (1974). The enforceability of an unambiguous contract is generally a question of law, appropriate for a court to determine. Deering Milliken, Inc. v. Clark Estates, Inc., 43 N.Y.2d 545, 402 N.Y.S.2d 987, 373 N.E.2d 1212 (1978); Hartford Accident and Indemnity Co. v. Wesolowski, 33 N.Y.2d 169, 350 N.Y.S.2d 895, 305 N.E.2d 907 (1973). This case, which concerns the enforceability of the assignment agreement, is ripe for a summary judgment determination.
Preliminarily it is important to understand that although this action concerns only $10,000.00 the parties acknowledge that the ultimate decision regarding the validity of the assignment agreement will affect the collectability of the entire $1.2 million dollar judgment. Guri intends to use any recovery made in this action to further satisfy Crawford's judgment against the Williamses creating a new enforceable debt against the defendants. These payments against the judgment and consequent indebtedness would continue until the judgment was paid or the insurance coverage was depleted.
It is well established that the legislature, in enacting the Workers' Compensation Law, intended that the administrative proceeding under the statute be the sole and exclusive remedy of an employee against his or her employer for injuries sustained during the course of employment. WCL sec. 11; WCL sec. 29(6). Fixed compensation is guaranteed to the injured employee regardless of fault and in exchange for reducing the costs and risks of litigation. Gonzales v. Armac Industries, Ltd., 81 N.Y.2d 1, 8, 595 N.Y.S.2d 360, 611 N.E.2d 261 (1993).
In Dole v. Dow, 30 N.Y.2d 143, 151, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972) the Court of Appeals carved out an exception to the exclusivity provisions of the WCL. Dole v. Dow permits a defendant to recover contribution from a plaintiff's employer for a work related injury. The exclusion, however, has been construed narrowly by the courts. See: Billy v. Consolidated Mach. Tool Corp., 51 N.Y.2d 152, 159, 432 N.Y.S.2d 879, 412 N.E.2d 934 (1980); Heritage v. Van Patten, 59 N.Y.2d 1017, 1019, 466 N.Y.S.2d 958, 453 N.E.2d 1247 (1983).
Notwithstanding the narrow construction of the Dole v. Dow exception to the exclusivity of remedies under the WCL, at the time the Williamses sought contribution and obtained a third party judgment against Crawford's employer, B.C. Enterprises, Inc., in the Bronx action, the narrow exception applied. 3
In a context wholly apart from the Workers' Compensation Law, the Court of Appeals approved the validity of assignment agreements like the one between Guri, the Williamses and Crawford. In Feldman v. NYCHHC, 56 N.Y.2d 1011, 453 N.Y.S.2d 683, 439 N.E.2d 398 (1982) the Court of Appeals upheld the validity of post judgment assignment agreements by reversing the Appellate Division and reinstating the order of the Supreme Court for the reasons stated in the opinion of Justice Irving S. Aronin (107 Misc.2d 145, 437 N.Y.S.2d 491 [Sup.Ct., Kings Co., 1981]. Mr. Feldman had loaned certain defendants money in order to satisfy a judgment that had been rendered against the defendants in a separate action. The defendants had obtained a judgment of contribution against third party defendant NYCHHC. In connection with the loan Feldman obtained an assignment of defendants' rights under the third party judgment. Feldman sued NYCHHC for recovery. Justice Aronin held that the loan transaction was bona fide and enforceable. In so holding Justice Aronin expressly rejected any argument that the loan agreement violated the Court of Appeals decision in Klinger v. Dudley, 41 N.Y.2d 362, 393 N.Y.S.2d 323, 361 N.E.2d 974 (1977). Klinger prohibits a plaintiff from collecting against a third party judgment where the defendant has not paid the judgment in the first instance.
Defendants argue that the combination of the permissible WCL exclusion of Dole v. Dow with an otherwise enforceable post judgment assignment agreement creates an unenforceable exclusion to the Workers' Compensation Law. This court disagrees.
Defendants' liability in this case stems from a straightforward application of the Dole v. Dow exception to the ...
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Guri v. Atlanta Intern. Ins. Co.
...J. Gische, J.) affirmed, with $10 costs, for the reasons stated in the decision of Judith J. Gische, J. at the Civil Court (169 Misc.2d 952, 646 N.Y.S.2d 781) (see also, Reich v. Manhattan Boiler & Equipment Corp., 240 A.D.2d 262, 659 N.Y.S.2d ...