Martin v. Agway Petroleum Corp.
| Decision Date | 11 May 1990 |
| Citation | 555 N.Y.S.2d 946,161 A.D.2d 1129 |
| Parties | Avis W. MARTIN, Individually and as Executrix of the Estate of Eugene C. Martin, Deceased, Respondent, v. AGWAY PETROLEUM CORPORATION and the Heil Company, Defendants. AGWAY PETROLEUM CORPORATION, Third Party Plaintiff, v. A.R. GUNDRY, INC., Third Party Defendant. The HEIL COMPANY, Third Party Plaintiff, v. A.R. GUNDRY, INC., Third Party Defendant, and the State Insurance Fund, Workers' Compensation Lienor-Appellant. |
| Court | New York Supreme Court — Appellate Division |
Raymond C. Green by James Fiedler, New York City, for appellant.
Eugene C. Tenney by Laura Doolittle, Buffalo, for respondent.
Before CALLAHAN, J.P., and DENMAN, PINE, BALIO and DAVIS, JJ.
As workers' compensation carrier for plaintiff's decedent's employer, appellant State Insurance Fund paid decedent the sum of $23,040 in disability and wage benefits and $109,362.10 in medical benefits. Following decedent's death, appellant paid an additional $62,442.63 in death benefits and funeral expenses to plaintiff, decedent's widow, and became obligated to pay plaintiff future death benefits of $171.66 per week. During trial of plaintiff's third-party personal injury and wrongful death actions, plaintiff obtained a full settlement of $600,000. Five hundred seventy-five thousand dollars was allocated to the personal injury claim and $25,000 to the wrongful death claim. Appellant, as liability carrier for third-party defendant employer, did not contribute to the settlement, and would not agree to waive its workers' compensation lien in its entirety. As a result of that dispute concerning the proper amount of the carrier's lien against the settlement proceeds, plaintiff made an application pursuant to Workers' Compensation Law § 29(1) for an order apportioning the reasonable and necessary costs and attorney's fees incurred in effecting the settlement. After Supreme Court assessed the carrier's equitable share of the costs of litigation against the carrier's total lien, it reduced the carrier's net lien in its entirety, 143 Misc.2d 627, 541 N.Y.S.2d 309. We conclude that such assessment and reduction were erroneous.
Initially, the court erred in treating the settlement for the personal injury action and that for the wrongful death action as one amount for the purpose of determining the lien and offset rights of the carrier. The two causes of action are separate and distinct (see, Matter of Schwabacher v. International Salt Co., 272 App.Div. 173, 70 N.Y.S.2d 370, affd. 298 N.Y. 726, 83 N.E.2d 140; see also, Matter of Petterson v. Daystrom Corp., 17 N.Y.2d 32, 40, 268 N.Y.S.2d 1, 215 N.E.2d 329; Matter of Cresci v. Krasilousky Trucking, 5 A.D.2d 569, 172 N.Y.S.2d 322, overruled on other grounds in Matter of McDowell v. LaVoy, 63 A.D.2d 358, 408 N.Y.S.2d 148, affd. 47 N.Y.2d 747, 417 N.Y.S.2d 255, 390 N.E.2d 1179).
The portion of the third-party settlement allocated to plaintiff's wrongful death claim was $25,000. Since appellant had already paid death benefits in the amount of $62,442.63, its lien exceeds plaintiff's recovery; thus, this portion of the recovery must be treated as a deficiency case. In such case, the carrier assumes the entire cost of obtaining the recovery and is entitled to recover the net amount remaining after deducting the cost of obtaining the recovery (Matter of Kelly v. State Ins. Fund, 60 N.Y.2d 131, 138-139, 468 N.Y.S.2d 850, 456 N.E.2d 791). Allocating attorney's fees and disbursements of $8824.91 to the wrongful death action and deducting that amount from the $25,000 recovery leaves a net lien of $16,175.09 which appellant is entitled to recover.
The portion of the settlement allocated to the personal injury claim is $575,000. The total litigation costs allocable to this action are $202,973.05. Appellant has paid $132,402.10 in disability, wage and medical benefits. Deducting its proportionate share of attorney's fees and disbursements, appellant is entitled to recover $85,664.61 as its net lien against the personal injury settlement.
Applying a strict mathematical formula, appellant is entitled to recover the following lien amounts:
Net lien against wrongful death action $ 16,175.09
Net lien against personal injury action 85,664.61
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Total net lien $101,839.70
The determination of the amounts constituting equitable apportionment of costs has been left to the courts (Matter of Kelly v. State Ins. Fund, supra, at 138, 468...
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Comm'rs of the State Ins. Fund v. Augusto Garcia, Scalzi & Nofi PLLC
...to insure “... that a compensation carrier assumes its fair share of the costs of litigation” (Martin v. Agway Petroleum Corp. 161 A.D.2d 1129, 1131, 555 N.Y.S.2d 946 [4th Dept.1990]citing, Kelly v. State Ins. Fund, supra ). To that end, the Court is mindful of its obligation to sit in equi......