Majewski v. Broadalbin-Perth Cent. School Dist.

• Citation: 169 Misc.2d 429,653 N.Y.S.2d 822
• Decision Date: 19 November 1996
• Docket Number: BROADALBIN-PERTH
• Parties: , 116 Ed. Law Rep. 354 Thomas MAJEWSKI, Plaintiff, v.CENTRAL SCHOOL DISTRICT, Defendant and Third-Party Plaintiff, v. ADIRONDACK MECHANICAL CORPORATION, Third-Party Defendant.
• Court: New York Supreme Court

Page 822

653 N.Y.S.2d 822

169 Misc.2d 429, 116 Ed. Law Rep. 354

Thomas MAJEWSKI, Plaintiff, v. BROADALBIN-PERTH CENTRAL SCHOOL DISTRICT, Defendant and Third-Party Plaintiff, v. ADIRONDACK MECHANICAL CORPORATION, Third-Party Defendant.

Supreme Court, Fulton County.

Nov. 19, 1996.

James P. O'Connor, New York City, and Thuillez, Ford, Gold & Conolly, L.L.P., Albany (Dale M. Thuillez of counsel), for third-party defendant.

Maynard, O'Connor, Smith, Catalinotto & D'Agostino, Albany (Brendan F. Baynes of counsel), for defendant and third-party plaintiff.

Caputo, Aulisi & Skoda, Gloversville (Richard T. Aulisi of counsel), for plaintiff.

STEPHEN A. FERRADINO, Justice.

On December 26, 1994, Plaintiff Thomas Majewski, while in the employ of Adirondack Mechanical Corporation (hereinafter "Adirondack"), was performing repair work on the premises of the Broadalbin-Perth Central School District. For reasons not presently relevant, he fell from a ladder, allegedly sustaining a comminuted fracture of the right wrist, a bruised chest, left hip pain, 100% chance of future degenerative arthritis in the right wrist, lumbar strain, and resultant scarring. Barred by the state's Workers' Compensation Law from bringing an action against his employer, he brought suit against the school district. In turn, on January 18, 1996, the district commenced a third-party action against Adirondack for contribution and/or indemnification, permitted by the holding of Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288, codified in Article 14 of the Civil Practice Law and Rules. All would have proceeded as hundreds of similar cases have since Dole, except that, on September 10, 1996, Governor George Pataki signed legislation amending § 11 of the Workers' Compensation Law. The effect of the legislation was that all third-party actions for common law indemnification and contributions against an employer were barred, except when the employee sustains a "grave injury" as defined by § 2 of the Omnibus Workers' Compensation Reform Act of 1996 (L.1996, ch. 635). Pursuant to that definition, a grave injury "shall mean only one or more of the following: death, permanent and total loss of use or amputation of an arm, leg, hand or foot, loss of multiple fingers, loss of multiple toes, paraplegia or quadriplegia, total and permanent blindness, total and permanent deafness, loss of nose, loss of ear, permanent and severe facial disfigurement, loss of an index finger or an acquired injury to the brain caused by an external physical force resulting in permanent total disability". Important to the case at bar, Section 88 of the act provides for an audit by the superintendent of insurance "of all workers' compensation insurance carriers licensed to do business in this state ... to determine the value as of December 31, 1996 of any reduction in reserves ... required to be established for losses or claims ... that result from the application of provisions established pursuant to sections two through nine of this act and the application of section 90 to these provisions". Section 90 provided that the legislation was to take effect "immediately". However, though the governor's message accompanying his approval of the bill states that the intent of the bill was to bar pending claims, the legislation itself did not specifically refer to pending claims.

Adirondack has now moved for summary judgment on the ground that, first, the plaintiff did not sustain a grave injury within the meaning of the amendment, and, second, that the third-party action is now barred by Workers' Compensation Law § 11 (as amended by L.1996, ch. 635). Without seriously disputing that the plaintiff did not sustain a grave injury within the meaning of the statute, a threshold truly difficult to reach, both the school district and plaintiff oppose the motion on the ground that the amendment to § 11 of the Workers' Compensation Law has no retroactive effect, and does not apply to pending actions.

Initially, the Court must address the issue of whether the school district possesses a vested right to its cause of action. Though much of the parties' arguments revolve around whether it was the legislature's intent to give the amendment retroactive effect, if the district possesses a vested right to its cause of action for indemnification and or contribution, due process restraints would prevent retroactive elimination of that cause of action (Periconi v. State, 91 Misc.2d 823, 398 N.Y.S.2d 959; People ex rel. Reibman v. Warden of County Jail at Salem, 242 App.Div. 282, 275 N.Y.S. 59).

A right to contribution or indemnification may be distinguished from a vested right. A vested right "has been defined as a right complete and consummated, and of such character that it cannot be divested without the consent of the person to whom it belongs and is fixed or established and no longer open to controversy" (Sochor v. Int. Business Machines, 90 A.D.2d 442, 445, 457 N.Y.S.2d 317, citing State ex rel. Milligan v. Ritter's Estate, 46 N.E.2d 736, 743 [Ind.App.] ). A right to contribution or indemnification may be characterized as contingent and inchoate, rather than vested, for if the defendant is not found to be liable and pays no money to an injured plaintiff, there is no obligation to which a party must contribute or indemnify (Cubito v. Kreisberg, 69 A.D.2d 738, 419 N.Y.S.2d 578, affd 51 N.Y.2d 900, 434 N.Y.S.2d 991, 415 N.E.2d 979; Lasker-Goldman v. Delma Engineering Corp., 32 A.D.2d 513, 298 N.Y.S.2d 747). With no vested right to indemnification or contribution, the school district possesses no constitutional right of property precluding the elimination of the third-party inchoate claims pending on the effective date (Gange Lumber Co. v. Rowley, 326 U.S. 295, 66 S.Ct. 125, 90 L.Ed. 85; Clark v. Rockowitz, 54 A.D.2d 698, 387 N.Y.S.2d 293; Weber v. Kowalski, 85 Misc.2d 349, 376 N.Y.S.2d 996).

Having found no constitutional barrier to the application of the amendment to pending claims, the Court must turn to an analysis of whether the amendment was intended to apply to such claims. To that end, the parties have urged the Court to apply various rules of statutory construction.

Majewski and the school district rely upon the presumption that statutes are to operate prospectively, not retroactively (McKinney's Cons.Laws of N.Y., Book 1, Statutes, § 51c). It has been held that the legislature must state specifically that a statute would have retroactive effect (Simonson v. International Bank, 14 N.Y.2d 281, 251 N.Y.S.2d 433, 200 N.E.2d 427; Shielcrawt v. Moffett, 294 N.Y. 180, 61 N.E.2d 435), and that the statement that an amendment is to take effect immediately does not give it retroactive application (Moynihan v. New York State Employees' Retirement System, 192 A.D.2d 913, 596 N.Y.S.2d 570; Murphy v. Board of Educ. of North Bellmore Union Free School Dist., 104 A.D.2d 796, 480 N.Y.S.2d 138, affd 64 N.Y.2d 856, 487 N.Y.S.2d 325, 476 N.E.2d 651). Though statutes can be read to have retroactive effect, such application is usually limited to legislation relating to procedure, and not to that affecting substantial rights (Matter of Johnson v. American Machinery & F. Co., 230 App.Div. 585, 246 N.Y.S. 48).

To the contrary, Adirondack relies upon what it sees as the legislative intent to have the amendment applied retroactively as indicated in the governor's message. Additionally, Adirondack points to § 88 (L.1996, ch. 635), and its audit procedures, which are to be implemented at the end of 1996. If the amendment, signed into law so late in 1996, is not made applicable to pending actions, § 88 and its audit procedures would be rendered ineffective, a construction not favored (McKinney's Statutes § 144).

The Court finds that the general rules of construction relied upon by the school district and Majewski are not determinative of this motion, and it finds that the amendment is applicable to pending claims, and bars such claims.

Initially, the Court rejects the contention that the right to contribution and indemnification is so substantial a right as to preclude its retroactive demise. In Cooney v. Osgood Machinery, Inc., 81 N.Y.2d 66, 595 N.Y.S.2d 919, 612 N.E.2d 277, the Court of Appeals was faced with a choice of law question. The State of Missouri does not recognize the right of contribution against an employer, the right originally recognized in this jurisdiction in Dole, supra. In determining the law to be applied, that of New York or Missouri, the Court was required to make an analysis of conflicting interests. At pages 79-80, ...