Scheer v. City of Syracuse
| Decision Date | 13 March 1967 |
| Citation | 53 Misc.2d 80,277 N.Y.S.2d 866 |
| Parties | Lawrence J. SCHEER, Plaintiff, v. CITY OF SYRACUSE, Defendant. |
| Court | New York Supreme Court |
Plaintiff moves by order to show cause to vacate restraining notices served on defendant by several of his judgment creditors.
The plaintiff was injured during the course of his employment when struck by a motor vehicle owned by defendant and has recovered a substantial settlement from the defendant in this third-party action. After the payment of compensation liens, attorneys' expenses and trial costs from the total settlement, there remained a balance of $39,864.00.
The Workmen's Compensation Board found that plaintiff was permanently disabled as a result of the accident. Pro-rating the balance of the settlement at the statutory rate of compensation, it determined that the proceeds were received in lieu of compensation from January 1, 1967 until December 15, 1980 at which time payments from the compensation carrier would resume.
The question is whether these proceeds are exempt property unavailable for satisfaction of various judgments entered against plaintiff. The proceeds are exempt.
All property owned by a debtor is available to satisfy a judgment debt unless specifically exempt by statute. 22 N.Y.Jur., Exemptions § 1. The parties agree that unless the proceeds are exempt under Workmen's Compensation Law, § 33, they may be used to satisfy these judgments.
Workmen's Compensation Law, § 33 provides: 'Compensation or benefits due under this chapter shall not be assigned, released or commuted except as provided by this chapter, and shall be exempt from all claims of creditors and from levy, execution and attachment or other remedy for recovery or collection of a debt, which exemption may not be waived.'
Plaintiff claims the net proceeds, being in lieu of weekly compensation benefits and analogous to a lump sum benefit, are exempt. Surace v. Danna, 248 N.Y. 18, 161 N.E. 315; DiDonato v. Rosenberg, 221 A.D. 624, 225 N.Y.S. 46; Re Fontheim, 171 Misc. 24, 11 N.Y.S.2d 819, aff'd on rearg. 174 Misc. 477, 27 N.Y.S.2d 452. The judgment creditors, argue that proceeds of the third-party action are not compensation or benefits 'due under' the Workmen's Compensation Law and, therefore, are not exempt from creditors' claims.
Exemption statutes, although in derogation of the common law, are to be construed liberally in favor of the beneficiary. 22 N.Y. Jur., Exemptions § 4. The purpose of the compensation law is to supply an injured workman with a substitute for wages during the term of his disability and prevent him from becoming a charge upon society. The exemption of compensation benefits is for the protection of the workman. Subjecting the proceeds of his recovery to the satisfaction of personal debts...
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