McKay v. Town of West Seneca

• Decision Date: 01 April 1976
• Parties: Claim of Terry T. McKAY, Appellant, v. TOWN OF WEST SENECA et al., Respondents, Workmen's Compensation Board, Respondent.
• Court: New York Supreme Court — Appellate Division

Page 892

381 N.Y.S.2d 892

51 A.D.2d 373

Claim of Terry T. McKAY, Appellant, v. TOWN OF WEST SENECA et al., Respondents, Workmen's Compensation Board, Respondent.

Supreme Court, Appellate Division, Third Department.

April 1, 1976.

Harrison & Gruber, Buffalo (John J. Gruber, Buffalo, of counsel), for appellant.

Brown, Kelly, Turner, Hassett & Leach, Buffalo (Marvin H. Mason, Buffalo, of counsel), for Town of West Seneca and another, respondents.

Louis J. Lefkowitz, Atty. Gen. (Daniel Polansky, New York City, of counsel), for Workmen's Compensation Board, respondent.

Before KOREMAN, P.J. and GREENBLOTT, SWEENEY, KANE and MAHONEY, JJ.

KOREMAN, Presiding Justice.

The claimant, a police officer in the Town of West Seneca, was injured in an automobile accident on December 10, 1967 while in the course of his duties. He brought a third-party action against the owner and operator of the car involved in the accident, and filed a form C--121 Claim for Compensation and Notice of Commencement of Third Party Action. That action was settled at a pre-trial conference for $10,000, the policy limits of the third-party's insurance coverage.

The employer Town continued to pay the claimant's full regular salary during the period of his disability, as it was required to do by section 207--c of the General Municipal Law. That statute also imposed a liability on the Town for payment of all medical treatment and hospital care required by reason of claimant's injuries. The compensation carrier paid claimant's medical expenses in the amount of $2,825.18, filed a notice that the right to compensation was not controverted, and also filed notices of lien for any compensation or medical expenses incurred by the carrier pursuant to section 29 of the Workmen's Compensation Law.

Following the settlement of the third-party action, claimant commenced an action for a declaratory judgment in Supreme Court, Erie County, on June 15, 1971 to establish his entitlement to the full amount of the $10,000 settlement free of any liens or claims. A stay of all further proceedings in that action was granted pending a determination of all outstanding issues affecting the rights of the compensation carrier before the Workmen's Compensation Board.

The board has determined that the third-party action was settled without the consent of the carrier, and that, therefore, 'pursuant to section 29 of the Workmen's Compensation Law, no compensation is payable.' Claimant filed a notice of appeal from that decision on September 29, 1972. All parties agree that the issues of law presented on this appeal are (1) whether police officers are covered by the Workmen's Compensation Law, (2) whether section 207--c of the General Municipal Law is the sole and exclusive remedy of the Town for the recovery of medical expense and/or full wages paid police officers, and (3) whether the lien of section 29 of the Workmen's Compensation Law is applicable to police officers. The decision of the board makes clear that it determined that the Workmen's Compensation Law applied to police officers, and that it held by implication that the carrier's lien filed pursuant to section 29 applies to claimant's settlement of the third-party action.

Pursuant to the provisions of section 207--c of the General Municipal Law, a police officer injured in the performance of his duties is entitled to receive his regular wages in full during the period of his disability, and the municipality is also made liable for payment of all expenses for medical treatment and hospital care incurred as a result of his injuries. It does not follow, however, that this protection afforded police officers under that statute indicates that the general provisions of the Workmen's Compensation Law are not applicable to such officers, as claimant argues. The Workmen's Compensation Law (group 19 of subdivision 1 of section 3) permits an employer such as the Town to bring police officers within the coverage of that law, the Town chose to have Workmen's Compensation insurance coverage for them, and clearly, the insurance carrier considered that the claimant was covered under its policy when it filed the 'Notice that Right to Compensation is Not Controverted' with the board. Furthermore, subdivision 3 of section 30 of the Workmen's Compensation Law makes specific provision that any wages or the cost of any medical treatment or hospital care paid by a municipality pursuant to section 207--c of the General Municipal Law shall be credited against any award of compensation benefits made to a member of the police force. There can be no question, therefore, that the claimant was covered for workmen's compensation, and was eligible for benefits payable under the Workmen's Compensation Law.

By virtue of the provisions of subdivision 6 of section 207--c of the General Municipal Law a cause of action accrues to the municipality for reimbursement in such sums actually paid as wages to a police officer and/or for his medical treatment and hospital care as against any third party against whom the officer shall have a cause of action for the injury sustained by him. This provision is not inconsistent with the right of a carrier to enforce any lien it may have pursuant to section 29 of the Workmen's Compensation Law. There is no statutory provision granting a direct cause of action to the carrier such as is granted to the municipality, and a dispute arises as to what proceeds the carrier's lien for medical benefits may be applied.

While an injured police officer is entitled to a continuation of payment of his wages and payment of medical expenses by the municipality, he is not barred from asserting a cause of action against the third party. However, he may not recover in that suit brought 'for the injury sustained' the amounts for wages and for medical or hospital treatment as elements of damage if, in fact, he lost no wages nor paid any medical bills (Szybura v. City of Elmira, 28 A.D.2d 1154, 284 N.Y.S.2d 190). The manifest intent of section 207--c of the General Municipal Law is to benefit injured police officers, continuing their wages in full and relieving them of the responsibility for medical expenses. By the terms of section 29 of the Workmen's Compensation Law, a carrier is entitled to a lien on the proceeds of any recovery to the extent of total compensation and medical expenses paid by the carrier. Since this claimant's cause of action for the injuries he sustained does not include damages for wages or medical expenses, he having suffered no such damages (City of Buffalo v. Maggio, 47 Misc.2d 971, 975, 263 N.Y.S.2d 603, 607, revd. on other grounds, 27 A.D.2d 635, 275 N.Y.S.2d 698, affd., 21 N.Y.2d 1017, 291 N.Y.S.2d 1, 238 N.E.2d 494), it would appear to be clearly inequitable to permit a carrier's lien for medical expenses to be asserted against the amount of the settlement of the cause of action that the claimant has against the third party. If, however, it is established that the police officer received payment in the settlement of the third-party suit for special damages, such as wages lost or medical expenses incurred, which he did not actually suffer due to the fact that payment of his full wages continued and his medical expenses were paid, then those who made such payments (municipality or carrier) to or on behalf of the claimant should be entitled to a lien on the proceeds of the settlement pursuant to section 29 of the Workmen's Compensation Law. Since it is clear in the instant case that the municipality paid the claimant's wages and the carrier paid the medical expenses, it should not be assumed that a recovery for such amounts was included in the settlement of the third-party action. To hold otherwise would impose on the police officer the responsibility for seeking and obtaining payment of medical bills for and on behalf of the carrier.

It appears that the municipality's cause of action against the third party, pursuant to section 207--c of the General Municipal Law, has not been pursued and is now time-barred. Neither that fact, nor the fact that the carrier is unable to obtain reimbursement for payment of medical expenses should result in the diminution in the amount of the claimant's settlement of his cause of action for the injuries he sustained and for the accompanying pain and suffering.

The decision should be modified by reversing so much thereof as determined that the carrier is entitled to a lien on the claimant's settlement, and, as so modified, affirmed, without costs.

Decision modified by reversing so much thereof as determined that the carrier is entitled to a lien on the claimant's settlement, and, as so modified, affirmed, without costs.

SWEENEY and KANE, JJ., concur.

GREENBLOTT and MAHONEY, JJ., dissent and vote to affirm in an opinion by MAHONEY, J.

MAHONEY, Justice (dissenting).

We respectfully dissent. The majority's holding that the compensation carrier does not have a lien (Workmen's Compensation Law, § 29) on the proceeds of the settlement effected between claimant and the third-party defendant, to the extent of monies paid claimant for his medical expenses, is premised on a completely untenable assumption. Since the appeal is from a decision of the Workmen's Compensation Board, which determined that claimant's third-party action was settled without consent of the carrier and, therefore, no deficiency compensation is payable to claimant, and not from any order of settlement in the third-party action nor from any order, decision or judgment in claima...