39 N.Y.2d 397 | NY | 1976
Lead Opinion
In 1969 the plaintiff Shirley Baker, then 16 years old, was hit by an automobile and, as a result, lost her right leg and suffered internal injuries. At the time of the accident she was the beneficiary of public assistance and her
On appeal by the Department the Appellate Division reversed the order vacating the lien and remanded "for further proceedings, including a determination as to whether the settlement of the infant’s cause of action included reimbursement for the medical and hospital expenses incurred and, if appropriate, the reasonableness of the asserted lien based upon such assistance.” The Appellate Division also granted the Department’s motion for leave to appeal and certified the following question for our review: "Was the order of this Court, which reversed the order of the Supreme Court, properly made?”
The order of the Appellate Division should be affirmed and the certified question answered in the affirmative.
At common law the recipient of public assistance was not obliged to repay, and no action could be brought to recover sums expended for his care and maintenance (City of Albany v McNamara, 117 NY 168; see, also, Graham, Public Assistance: The Right to Receive; The Obligation to Repay, 43 NYU L Rev 451, 478). In 1901 the Legislature altered the common-law rule by enacting section 57 of the Poor Law (L 1901, ch 664), the first statute in this State empowering welfare agencies to recover amounts paid for public assistance. Section 104 of the Social Services Law, the current version of the original statute, provides in part: "1. A public welfare official may bring action or proceeding against a person discovered to have real or personal property, or against the estate or the executors,
Subdivision 2 of this statute—originally enacted in 1936 (L 1936, ch 463)—imposes certain limitations on the agency’s right to recover from infants, public assistance paid on their behalf. Prior to 1974 subdivision 2 read as follows: "2. No right of action shall accrue against an infant by reason of the assistance or care granted to him unless at the time it was granted the infant was possessed of money and property in excess of his reasonable requirements as described in section one hundred one.”
In 1964 the Legislature added a new section which empowered the agencies to establish a lien in personal injury actions when the injured party had received public assistance after the injury (L 1964, ch 382). Section 104-b of the Social Services Law states, in pertinent part: "1. If a recipient of public assistance and care shall have a right of action, suit, claim, counterclaim or demand against another on account of any personal injuries suffered by such recipient, then the public welfare official for the public welfare district providing such assistance and care shall have a lien for such amount as may be fixed by the public welfare official not exceeding, however, the total amount of such assistance and care furnished by such public welfare official on and after the date when such injuries were incurred.” Once the notice and filing requirements are satisfied the lien attaches to the proceeds of any judgment or settlement, including a settlement obtained prior to commencement of the suit (Social Services Law, § 104-b, subd 3). This statute contains no exceptions or other special provisions relating to infants’ judgments or settlements.
The plaintiff urges that the two statutes must be read together. The limitation on recovery against infants’ funds should apply whenever the Department seeks reimbursement, whether by direct action or proceeding pursuant to section 104
The Department on the other hand urges that the two statutes create "independent and distinct actions” so that the restrictions imposed in one have no bearing on the other. Its right to enforce the lien is governed solely by section 104-b which contains no special rules exempting an infant’s judgment or settlement from the operation of the lien. The right is subject only to the general limitation that the lien shall not exceed the total amount of public assistance and care furnished on or after the date the injuries were incurred. Here the Department has complied with the requirements of the statute and it claims a lien against the plaintiffs settlement for the full amount of the hospital expenses. The statute says that the lien attaches to the "proceeds”, and that includes the general proceeds; not just the amount of the settlement which represents reimbursement for hospital expenses.
Thus according to the Department, if the lien is large and the settlement relatively small because of insurance policy limitations, an infant seriously and permanently injured may well recover nothing. The lien would consume all the proceeds even though the claim for hospital expenses actually represents a small portion of the final settlement. The Department concedes that this approach "may well work a hardship” in particular cases. However it urges that this should rarely occur because the agency can generally be expected to exercise restraint in such a case by agreeing to reduce its lien.
Initially we note that section 369 of the Social Services Law prohibits the Department from recovering for medical assistance "correctly paid” except against the estate of a recipient who was over 65, and then only under certain limited circumstances (Social Services Law, § 369, subd 1, par [b]). The statute also provides, in paragraph (a) of subdivision 1 that: "(a) no lien may be imposed against the property of any individual prior to his death on account of medical assistance paid or to be paid on his behalf under this title, except
This statute went into effect on April 30, 1966. Several months later the Legislature amended subdivision 1 by adding the following caveat: "nothing contained in this subdivision shall be construed to alter or affect the right of a public welfare official to recover the cost of medical assistance provided to an injured person in accordance with the provisions of section one hundred four-a [now 104-b] of this chapter.”
The Federal Government has similar statutes generally prohibiting recovery for medical assistance from the property of a recipient (US Code, tit 42, § 1396a, subd [a], par [18]; Social Security Act, tit XIX, § 1902), but permitting recovery in tort cases when a third party is liable "to pay for care and services (available under the plan) arising out of the injury” (US Code, tit 42, § 1296, subd [a], par [25]). Apparently in section 369 of the Social Services Law the State has adopted the restrictions imposed by Federal law in order to qualify for Federal grants. Reading the general provisions together with the caveat it appears that although a recipient’s property is generally immune from recovery for medical assistance, a recipient’s cause of action for personal injuries is not the type of "property” which was intended to be protected by this particular statute or its Federal counterparts. Thus this section, which applies to infants and adults alike, does not preclude the Department from recovering medical payments from the proceeds of the plaintiff’s suit. The primary question then is whether section 104 of the Social Services Law imposes limitations on the agency’s right to recover medical expenses because of the plaintiff’s infancy.
As indicated, the Department argues that it does not because in its view, section 104-b creates a new right of recoupment independent of the infancy restriction found in section 104. We disagree.
Long before the lien statute was enacted the public welfare agencies, relying entirely on section 104 and its predecessors, had been able to recover from the proceeds of personal injury actions, amounts paid to persons who had received public assistance. This right was apparently universally accepted in practice, particularly where the agency had obtained an assignment not of the claim itself, but of the proceeds of the claim (NY Legis Ann, 1964, p 316). Thus there was no need
What was needed, according to the agencies, was simply "more effective recovery proceedings” in the form of a lien so that "persons becoming in need of public assistance because of personal injuries received as a result of negligence of another [would not be] able to frustrate the attempts of public welfare officials to make recovery from the proceeds of a suit brought as a consequence of the personal injuries.” (Memorandum Accompanying Comments on Bills Before the Governor for Effective Action, New York State Department of Social Welfare, March 31, 1964.)
In short section 104-b is purely procedural. "It relates to the remedy rather than to the right” and the scope of the remedy is governed by the terms of the statute creating the right (Department of Welfare of City of N. Y. v Siebel, 6 NY2d 536, 545). Consequently, whether the agency seeks to recover directly in an action or proceeding, or indirectly by enforcing a lien in the recipient’s suit, its right to recover is subject to the limitations imposed by section 104.
This means that when the Department seeks recovery from an infant for public assistance he has received, no right will accrue, and no lien will attach unless the infant possessed money or property in excess -of his needs at the time the assistance was granted. The first question then is whether the infant possessed "property” at the time he became a recipient, and the second is whether the property, or any portion of it, can be considered excess funds.
If the infant’s property consists of a cause of action for personal injury (Mnich v American Radiator Co., 263 App Div 573, affd 289 NY 681), then the first requirement is met if the cause of action accrued prior to the time he became a recipient. And if he has obtained a judgment compensating him for the personal injuries and medical expense, actually paid by the Department, that portion of the award representing reimbursement for medical expenditures must be considered "excess property” under the statute.
An award for personal injuries simply compensates the infant for his loss by providing a fund to satisfy his anticipated needs occasioned by the injury. By definition this fund can never be considered "money or property in excess of his
The same rules apply to the settlement of an infant’s claim. That portion of the settlement which represents a compromise of the claim for medical expenses is subject to lien and recovery by the Department. That portion representing a compromise of the infant’s claim for personal injury is beyond the Department’s reach. Since the record in this case does not indicate whether the settlement of the claim included reimbursement for medical and hospital expenses, the Appellate Division properly remanded to the trial court with directions to make the determination. And since the court is required to determine "the propriety and reasonableness of the proposed settlement of an infant’s claim” (Vladimer v Mount Vernon Hebrew Camps, 9 NY2d 21, 24; CPLR 1208), the Appellate Division properly instructed the trial court to review "if appropriate, the reasonableness of the asserted lien based upon such [medical] assistance.”
Finally we note that the question posed by this case, although a common one, has not lead to a common solution. It has bred conflicting views in the lower courts and indeed in this court as well. The problem is that the Legislature throughout the century has haphazardly enacted a series of statutes, couched in general terms, which were intended to carry out shifting or evolving concepts of social need. Older statutes based on policies dimly stated, unstated or later greatly modified, perhaps even abandoned, have been re-enacted and left to stand beside more recent enactments based on new, and apparently conflicting notions of social justice, some in fact imported from Federal law. Courts seeking a precise solution to a particular problem have been utterly frustrated in their efforts to discover an integrated or workable statutory scheme or a paramount legislative concern which would provide consistent guidance through the maze.
The order appealed from should be affirmed.
Griffin v Cox
Memorandum. The order of the Appellate Division should be modified by remitting the case to Special Term to determine whether the settlement of the infant’s cause of action included reimbursement for medical and hospital expenses incurred and, if appropriate, the reasonableness of the asserted lien. (See Baker v Sterling, 39 NY2d 397, decided herewith.)
Marsh v La Marco
Memorandum. The order of the Appellate Division should be affirmed. Since reimbursement for medical expenses was not included in the settlement of the infant’s claim, the Department’s lien was properly vacated. (See Baker v Sterling, 39 NY2d 397, decided herewith.)
. This notice of lien claims $38,000 for "public assistance and care furnished since the occurrence of said injuries to such recipient”. In its brief to this court the Department states: "In this appeal, the extent of the statutory lien is limited to the expenses incurred during the period of hospitalization”, i.e., $10,579.49. Accordingly, our decision is limited to the claim asserted for hospital expenses.
. When the age of majority was changed to 18 years, the statute was amended so that it would continue to include persons under 21 years of age (L 1974, ch 909, § 4-a, eff Sept. 1, 1974). For convenience throughout this opinion all such persons will be referred to as infants.
Concurrence Opinion
These three cases all involve attempts by local Departments of Social Services to assert medical assistance liens pursuant to section 104-b of the Social Services Law against personal injury recoveries by infants. In each case, the fund recovered was inadequate to cover all of the claims asserted. In two of the cases, this inadequacy was so severe that, were all liens honored, the plaintiffs would be left with little or nothing in the way of recovery for their injuries. In the third case, while the settlement is more substantial, so also is the extent of the injury, which is permanent in nature and would almost indisputably have produced a much larger jury verdict had there been no limitations on the defendant’s financial responsibility.
Our task is, of course, to interpret the statutes under which recoupment of public assistance is authorized so as to effectuate their purposes and intent. That intent, I believe, was to permit the courts below to determine, within the limits here
Title I of article 5 of our Social Services Law sets forth the general principles under which aid is to be given to all persons in need. Subdivision 1 of section 131 states: "It shall be the duty of social services officials, insofar as funds are available for that purpose, to provide adequately for those unable to maintain themselves, in accordance with the requirements of this article and other provisions of this chapter. They shall, whenever possible, administer such care, treatment and service as may restore such persons to a condition of self-support or self-care, and shall further give such service to those liable to become destitute as may prevent the necessity of their becoming public charges. ” (Emphasis added.)
The statute thus places upon welfare officials a duty which gives rise to a corresponding right to receive benefits whenever eligibility requirements are met (Fleming v Nestor, 363 US 603). Additionally, it directs that the aid be given in such a manner as will enable the recipient to become self-sustaining or will prevent his becoming a public charge. In so doing, it states a concept which goes well beyond a mere stop-gap provision for those who have become destitute.
These principles apply to both AFDC and MA programs. It is against that background that it is especially noteworthy that the AFDC provisions, pursuant to which care is provided for infants whose parents are unable to support them, specify:
"Aid to dependent children shall be given to a parent or other relative as herein speciñed for the beneñt of a child under eighteen years of age, or of a child under twenty-one years of age [who is a full-time student] * * * if in the judgment of the administrative agency:
"1. the granting of an allowance will be in the interest of such child, and
*409 "2. the parent or other relative is a fit person to bring up such child so that his physicalmental and moral well-being will be safeguarded, and
"3. disregarding so much of the earned income or other income of the child as may be permitted to be set aside for his future identiñable needs by regulations of the department, aid is necessary to enable such parent or other relative to do so. ” (Social Services Law, § 349, subd A; emphasis added.)
This language of the AFDC sections, so clearly casting the State in loco parentis, presents a striking contrast to the bulk of the provisions contained in the Social Services Law. As a whole, the statute is replete with concern that able-bodied adults not be permitted to cheat the system by receiving benefits when not truly needed. For example, except for certain special categories of adults, such as the aged and disabled, there is little provision for exemption of income against future needs. Thus, for them, eligibility criteria seem directed more at keeping out those who are not destitute than to advancing the "best interests” of such persons, given their "physical, mental and moral well-being”. So the only concerns manifested as to employability are directed to that of the adult parent, not the child. The child’s condition is one of blamelessness.
This dichotomous attitude toward adult and child recipients of public assistance is not new. It descends to us from the old English Poor Laws and is reflected in the welfare statutes of most of the States. (See, generally, Graham, Public Assistance: The Right to Receive; The Obligation to Repay, 43 NYU L Rev 451.) It is characteristic of welfare statutes that, whatever degree of suspicion they direct toward the ne’er-do-well parents, they reflect concern that the children of such persons be brought up with as little stigma as possible and as much encouragement to become self-supporting adults as is possible within the limitations of budget (see Graham, supra, at pp 456-475; Characteristics of State Public Assistance Plans Under the Social Security Act, Public Assistance Report No. 50 [US Dept of Health, Education and Welfare, 1964 ed]).
Subdivision 2 of section 104, however, continues the limitation upon recovery from infants. It states that: "No right of action shall accrue against a person under twenty-one years of age by reason of the assistance or care granted to him unless at the time it was granted the person was possessed of money and property in excess of his reasonable requirements, taking into account his maintenance, education, medical care and any other factors applicable to his condition.” (Emphasis added.)
Thus, the statute differentiates infants from adults not only in its limitation to situations in which the infant possessed funds at the time aid was granted but also, crucial to the cases before us, in its limitation of recoupment to funds in excess of his "reasonable requirements”, a term which it construes rather broadly.
Moreover, while recoupment from adults, under New York’s statute, is explicitly based on a theory of implied contract, no such basis is urged for recoupment from infants.
Section 104-b, which creates the Department’s liens here, by its very terms attaches them to causes of action in personal injury suits belonging to "recipients” of aid. That raises the question as to whether section 104-b creates a new and separate right of action or whether it merely facilitates an existing right of recoupment under section 104 itself and is, thus, subject to the limitations on recoupments from infants set forth in subdivision 2 of section 104. From a review of both statutes and the legislative history of section 104-b, the conclusion appears irresistible that the latter section is but facilitative in nature and therefore not free of the substantive restrictions found in subdivision 2 of section 104.
In the first place, statutory liens, absent some clear indication to the contrary, do not create causes of action. Rather, they set priorities and identify specific sources of property against which pre-existing rights may be asserted (see 53 CJS, Liens, § 1, pp 829-830, and cases cited therein).
More important, when the bill which became section 104-b was before the Governor for his approval, the Department itself characterized the enactment as facilitative, stating that: "Experience has shown that persons becoming in need of public assistance because of personal injuries received as a result of the negligence of another have been able to frustrate the attempts of public welfare officials to make a recovery from the proceeds of a suit brought as a consequence of the personal injuries. The failure of attorneys representing recipient to fully cooperate with public welfare officials and the difficulty of learning as soon as possible, of the making of a settlement or of the payment of a judgment, have been the principal reasons for the recipient to obtain a windfall, which has been spent before the public purse could be reimbursed.
It was thus the Department’s own perception, at the time the bill was passed, that it already possessed the right to obtain reimbursement from holders of personal injury claims.
This perception is further substantiated by information contained in the memorandum on the bill prepared by the Association of the Bar of the City of New York. That association disapproved of the bill, chiefly on the basis of some semantic confusion which it felt might well be detrimental to the priority of attorneys’ liens, but it added:
"The probable inconsequence of the bill arises from the fact that public welfare officials have been authorized, for many years, by Section 104 of the Social Welfare Law [now Social Services Law] to bring actions against recipients of public welfare assistance who possess real or personal property to the extent of the total cost of such assistance. Despite Section 41 of the Personal Property Law [now section 13-101 of the General Obligations Law], which prohibits the transfer of any claim to recover damages for personal injuries, a few public welfare districts, notably the New York City Department of Welfare, have utilized with great success assignments, not of the claim, hut of the proceeds of such claim. * * * These assignments have been honored, with but few exceptions, with the result that substantial funds have been returned to the public welfare districts. Subdivision 1 of the new Section 104-a [now section 104-b] of this bill would create a lien limited to the amount of such assistance rendered after the accident.
"Since subdivision 10 [now 11] provides that such assignments shall not be adversely affected, the New York City Department of Welfare has advised this Committee that, even if the bill becomes law, it intends to continue the assignment practice to recoup public assistance rendered both before and after the accident. Presumably, most other welfare districts will follow the same course.” (NY Legis Ann, 1964, p 316; emphasis added; see, also, Policies Governing the Administration of Public Assistance, City of New York, Department of Welfare, § 184, extant at the time § 104-b was enacted.)
Any other interpretation would be at odds with the pattern, running through the statute as a whole, of consistent differentiation between the obligations of adults and the conditions under which they may receive aid, on the one hand, and the considerations attached to aid for infants, on the other. For example, under subdivisions 1 and 2 of section 104, distinctions are made between the inheritances of adults and those of infants, distinctions which favor infants in great degree. Therefore, given the utterly gratuituous nature of such bequests when compared to the compensatory and substitutive nature of an award for pain, suffering, and often permanent handicap, it would unnecessarily and impermissibly strain any sense of statutory symmetry to graft on to the facilitative function of section 104-b a substantive purpose to afford infants less protection in their recoveries for bodily injury than in their gifts or bequests.
I turn next to the special requisites of medical assistance recoupment. On constraint of Federal law, no lien against the property of a recipient of medical assistance is permitted. Indeed, reimbursement itself is also severly limited (US Code, tit 42, § 1396a, subd [a], par [18]; Social Security Act, tit XIX, § 1902). Subdivision 1 of section 369 of New York’s Social
In July of 1966, however, the Legislature appended the proviso that: "Nothing contained in this subdivision shall be construed to alter or affect the right of a public welfare official to recover the cost of medical assistance provided to an injured person in accordance with the provisions of section one hundred four-a of this chapter.” (L 1966, ch 800.)
The apparent conflict between Congress’ seemingly mandated bar to liens and the above proviso can be resolved by reading section 104-b as authroizing recoupment from a defendant rather than from the recipient. So read, the Department may pursue a lien for those of its medical expenditures which are directly connected to the injury in suit, but not for those which are unrelated to the injury. That reading of the statutes appears correct, especially since Federal law requires States to seek recoupment from third parties whose negligence makes them responsible for the costs incurred (US Code, tit 42, § 1296, subd [a], par [25]).
We must thus determine the extent to which the lien provisions of section 104-b, within the confines of subdivision 2 of section 104 may be used to recover medical assistance payments directly connected to the injury itself.
Preliminarily, it should be noted that subdivision 2 of section 104 authorizes recovery only out of funds which the infant possessed at the time aid was granted to him. While this obviously precludes recovery for medical assistance granted prior to the injury, when such assistance is granted between the injury and the eventual settlement, it is reimbursable because a claim in a personal injury suit is "property” within the meaning of the statute (see Matter of Walton, 20 AD2d 386, 389; Mnich v American Radiator Co., 263 App Div 573, affd 289 NY 681; Citron v Mangel Stores Corp., 50 NYS2d 416, affd 268 App Div 905). Consequently, a right of recoupment lies from the time that the infant’s cause of action accrues.
The range of that right to recoupment is not as broad, however, as is, for instance, that which a hospital obtains under section 189 of the Lien Law. Subject only to its ability
In its in loco parentis status, the Department instead is the primary obligor against whom the hospital must seek payment before asserting liens on the recovery of the infant (see Social Services Law, § 398, subd 6, par [c]; Mount Sinai Hosp. v Brinn, 73 Misc 2d 1; Knickerbocker Hosp. v Downing, 65 Misc 2d 278). For the Department has the legal duty to provide medical care to the child when its parents cannot do so (Social Services Law, § 398). This statutory duty is unlike that of a neutral third party whose claim for reimbursement in connection with the injury must be honored to the full amount of the infant’s recovery if it cannot be paid out of the parent’s derivative action (see Natoli v Board of Educ. of City of Norwich, 101 NYS2d 128; Matter of Wilson Mem. Hosp. v Puskar, 26 Misc 2d 281).
Premised as it is upon subdivision 2 of section 104, the Department’s right to recoup medical expenses against a negligent defendant is subject to the requirements of that statute. Significantly, the language of subdivision 2 of section
Thus, the medical care cost expenditures accrued or incurred up to the time of an infant’s full receipt of damages are reimbursable only in fair proportion to the infant’s other "reasonable requirements”. That is not to say that medical assistance liens are rarely expected to be paid in full. Most often, where a settlement or recovery is ample and in proportion to the lien, or where an infant’s injuries are not permanent, or not of such a nature that they will have any significant effect on an infant’s "requirements”, the lien may be expected to be reimbursed. However, in the face of such circumstances as, for example, a substantial reduction in the sum the infant receives occasioned by a desire to compromise disputed liability questions or other elements of uncertainty attendant upon litigation, or where the tort-feasor involved in a particular case is inadequately insured and of insufficient financial responsibility, the Department’s right to recoup may become vulnerable to reduction. Were that not so, the infant rather than the defendant might in fact end up bearing the burden, and this, as noted, is forbidden by Federal law, the recoupment right being based on the theory that the medical expenditures ultimately will come from the tortious defendant.
It therefore becomes necessary for the court in each such case to decide what are the infant’s needs, how much, if any, of the settlement or recovery exceeds those needs and, if there are less than sufficient funds to meet such needs, how much is fairly to be earmarked for medical needs and how much for the other areas of need authorized by the statute. Any excess beyond needs is, of course, available to satisfy the lien. To the extent that it is not, the court does not compromise the Department’s lien; rather it determines how much of the settlement may be defined as funds against which a lien is enforceable under subdivision 2 of section 104. These determinations should not prove burdensome to the courts. Mostly they fall well within the range of the ones which courts are. already required to examine into in any event before approving the settlement of infants’ claims pursuant to CPLR 1208.
Examination of the three cases before us reveals that in
However, as appears from Judge Jones’ dissenting opinion, three of my colleagues read section 104-b as creating a new and substantive right in the Department. On their theory, the lien would be paid in full from infants’ recoveries, irrespective of the latter’s other requirements and, therefore, would be, I respectfully suggest, less protective of infants and more so of the Department than the statute intends.
On the other hand, as appears from Judge Wachtler’s opinion, I am in agreement with my other three colleagues that section 104-b is purely facilitative. But that opinion favors dispositions, which, while not as favorable to the Department or as unfavorable to the infants as is the dissent, are yet at odds with those which, for the reasons I have already outlined, are required by law and practicality. Thus, in limiting the application of the Department’s lien to "that portion of an infant’s award or settlement representing reimbursement for medical expenses”, it ignores the fact that rarely does an infant’s award include medical expenses. Absent a special statute, such expenses are the obligation of the parent charged with providing them and not that of the infant. Save under exceptional circumstances, only the former and not the latter may sue the tort-feasor for their recovery. When the Department, acting in loco parentis, pays them, it may not bring such an action; its sole recourse is under
Such limitation would also multiply incentive for the collusive inclusion in an infant’s general settlement of funds which in truth have been paid by a tort-feasor or its insurance carrier on account of medical expenses due a parent, thus putting the funds beyond the practical reach of the Department’s ability to identify and recoup them. These cases are especially vulnerable to such abuse since it is only the rare tort-feasor or his carrier, as the source of the funds, who has any concern with how the total it has agreed to pay is distributed. The limitation may also have the unfortunate effect of impairing the much needed power of the trial courts to prevent arbitrariness or unfairness on the part of intransigent lienors.
Further, Judge Wachtler’s opinion, without telling us how one is to divine how much of an infant’s undifferentiated award is to be regarded as reimbursement for medical expenses, insists that such expenses, despite the express "medical care” language of subdivision 2 of section 104 to the contrary, are to be regarded as "property in excess of his reasonable requirements”. And hardly anything could be more opposite to the provisions of that section than the opinion’s statement that, when an infant becomes "possessed of money” constituting the proceeds of his recovery, it can never be regarded as "money or property in excess of his reasonable requirements”. The "reasonable requirements” spoken of by the statute are not synonymous with the items of damage flowing from a tort for which an infant may recover; that statute merely requires that, though the two are not identical, the one is to be taken into account when the proceeds of the other are disposed of. In my view, it is these clear departures from the comprehensive and comprehensible scheme of the legislation that will leave confusion and not any illogic or asymmetry in the statutes themselves. Indeed, it is noteworthy that the dissenters, while they would prefer to treat section 104-b as substantive rather than facilitative, do not find the statutory scheme confusing.
Accordingly, since, for the reasons already indicated, I believe the disposition articulated in Judge Wachtler’s opinion gives at least some recognition to the kind of balancing of the legitimate concerns of infants with those of the local Departments required by subdivision 2 of section 104, I will
. In that spirit, when the age of majority was lowered to 18 (General Obligations Law, § 1-202), the Legislature expressly provided for a continuation of AFDC benefits to persons over 18 but under 21 who were full-time students. (L 1974, ch 909.)
. Recovery from adults has been based upon various theories, including debt, loan, express contract, and implied contract. (See Graham, Public Assistance: The Right to Receive; The Obligation to Repay, 43 NYU L Rev, pp 485-489; but see City of Albany v McNamara, 117 NY 168 [holding all such aid charitable in nature and hence not recoverable even from the estate of an adult recipient]; see, generally, Characteristics of State Public Assistance Plans Under the Social Security Act, Public Assistance Report No. 50 [US Department of Health, Education and Welfare, 1964 ed].)
. Countless courts have noted that the child’s recovery is intended to recompense him for the physical handicaps and personal suffering the defendant visited on him and to place him on a more equal footing with persons not injured—whether permanently or otherwise—and is not a resource available for his basic support (Galante v Doe, 68 Misc 2d 295; Smith v Lavine, 78 Misc 2d 776; Matter of Woods v Mason, 32 Misc 2d 745; Conigliaro v Rosa, 24 Misc 2d 15; Zambrana v Railway Express Co., 11 Misc 2d 553; Gans v Epstein, 149 NYS2d 80; Leon v Walker, 1 Misc 2d 219; Gaffney v Constantine, 87 NYS2d 131; Matter of Groom, 203 Misc 574; Matter of Stackpole v Scott, 9 Misc 2d 922; Matter of Taff, 61 Misc 2d 602).
. At common law, the infant had no cause of action for medical expenses incurred. Since the duty to supply these necessaries was the parent’s, the infant was permitted to assert the claim only where the parent could not or would not do so. (Natoli v Board of Educ. of City of Norwich, 101 NYS2d 128; 32 ALR3d 1058-1059.) Obviously, where the parent recovers the cost of medical treatment in a derivative suit, the Department may in turn recoup these moneys, treating the parent as a conduit through which a recovery from the defendant is passed. In most cases involving welfare liens, however, and in each of the cases before us, the defendant’s financial responsibility was limited and the parent waived his or her cause of action, leaving us with the problem of the extent to which, if any, recoupment against the defendant may be sought out of funds also claimed by the infant.
It should be noted that, given the statutory authorization to invade the infant’s funds provided to the Department by subdivision 2 of section 104, albeit within limitations, nothing turns on whether the infant has formally pleaded a cause of action for his medical expenses or not. Under a proper reading of subdivision 2 of section 104, moreover, a parent who waived his or her own cause of action for these medical expenditures in order to put funds not really needed by the infant out of the reach of the Department would not succeed, since such funds would be considered "in excess” of the infant’s reasonable requirements as these are defined in subdivision 2 of section 104.
Dissenting Opinion
We would hold that, where an infant who has been the beneficiary of public assistance and care has a claim against a third person for personal injuries, the local Department of Social Services may assert a lien under section 104-b of the Social Services Law against the proceeds of such claim to the full extent of medical assistance furnished to the infant with respect to such injuries. In our view the right to assert and enforce this lien should not in any way depend on a showing that an identifiable portion of such proceeds was attributable to the medical and hospital expenses of the infant.
Subdivision 1 of section 104-b provides: "1. If a recipient of public assistance and care shall have a right of action, suit, claim, counterclaim or demand against another on account of any personal injuries suffered by such recipient, then the public welfare official for the public welfare district providing such assistance and care shall have a lien for such amount as may be fixed by the public welfare official not exceeding, however, the total amount of such assistance and care furnished by such public welfare official on and after the date when such injuries were incurred.” Other subdivisions provide for an effort to discover the identity of any liability insurance carrier of the one responsible for the injuries; require service of written notice of the lien on the one responsible and the carrier prior to payment of moneys to the injured party as a prerequisite to the effectiveness of the lien; provide for filing of a copy of the lien in the county clerk’s office; cover service and filing of amended notice of lien; require service on the public welfare official of notice of intention to make payment on the personal injury claim by one having notice of the lien and permit amendment of the notice of lien thereafter; authorize enforcement of the lien by action by the public welfare official against one alleged to be liable for the injuries; continue the effectiveness of the lien until released; establish a public welfare lien docket in the office of the county clerk;
We find nothing in the detailed and full provisions of this section to suggest, much less to prescribe, that claims of infant recipients for personal injuries are to be treated differently from similar claims of adult recipients, or in either instance that a lien may be asserted for medical assistance only if and to the extent that a portion of the proceeds of the claim has been expressly identified as attributable to medical and hospital expenses.
The courts below and now the majority in this court (as well as the infant recipients) purport to find the mandate for such difference in treatment and such attribution requirement by cross reference to the provisions of subdivision 2 of. the preexisting section 104 of the Social Services Law. We would find no such statutory interrelation.
Section 104, first enacted in 1940 (L 1940, ch 619) and sometimes referred to as the "discovery section”, was enacted to authorize local welfare officials, for the benefit of the public treasury, to recover amounts which had been paid for public assistance and care where it later came to their attention that a recipient had property of his own, whether previously concealed or later acquired. In creating this general right of recoupment, however, the Legislature saw fit to impose a specific limitation on recoveries sought from infant welfare recipients. No right of recovery would accrue in such cases unless at the time the public assistance or care was granted the infant recipient was "possessed of money and property in excess of his reasonable requirements”. (§ 104, subd 2.)
Experience under section 104 showed, however, that the proceeds of tort claims of welfare recipients for personal injuries (of increasing economic significance) too often escaped the reach of section 104 recovery actions. Accordingly in 1964 the Legislature gave welfare officials a new recovery authorization directed exclusively to the proceeds of personal injury claims by the enactment of a new section, then numbered 104-
Obviously there is no express cross reference in section 104-b to section 104 or to any subdivision of section 104. Nor is any distinction drawn between the personal injury claims of infant and adult recipients. Sections 104 and 104-b were not components of an integrated statutory pattern and were not enacted at or near the same time. The two sections address different, though somewhat related, subjects. Section 104 describes an implied contract cause of action (without a lien) for recoupment of welfare benefits from after acquired or after discovered assets of any kind; section 104-b, under which the Social Services Departments are proceeding, creates a separate lien and cause of action with respect to claims arising out of personal injuries. The latter section stands independent and self-contained, granting a lien on a particular asset—the claim of the welfare recipient—complete with all the implementing provisions already described, including authorization of an action to enforce the lien, which of course would have been unnecessary if section 104-b were simply a facilitating arm of section 104 and not to be read discretely from it. If it were intended to make special provision with respect to the lien on personal injury claims accruing to infant welfare recipients, language was at hand and it would have been easy to do so. Without the incorporation of some such language in section 104-b, however, we find no justification for importing into it any aspect of subdivision 2 of section 104. Even superficial appeal to the plausibility of associating sections 104 and 104-b because of their numerical proximity in the Social Services Law fades when it is observed that in 1971 the Legislature interposed a new section 104-a between section 104 and what then became section 104-b. The interposed section erects a presumption that the voluntary transfer of any property within one year of the transferor’s application for public assistance or care was made for the purpose of qualifying for such assistance. This section deals with eligibility for prospective welfare benefits only; it has nothing to do with recovery
Even if it be accepted, arguendo, that the provisions of subdivision 2 of section 104 are somehow to be imported into section 104-b where the plaintiff in the tort action is an infant, we understand that it is not proposed in the present cases exactly to apply the limitation of subdivision 2. To apply such limitation after its transfer to section 104-b would require a determination in each case that the proceeds of the particular claim for personal injuries were sufficiently large that it could be said in consequence that the infant recipient "was possessed of money and property in excess of his reasonable requirements, taking into account his maintenance, education, medical care and other factors applicable to his condition” (§ 104, subd 2, as amd by L 1968, ch 448, eff May 31, 1968). The lien would stand only after a finding of such excess. Nothing in subdivision 2 of section 104 would imply, as concluded by the majority, that funds attributed to past medical care would automatically become excess if it appeared that there were no unpaid medical expenses. What of the infant’s needs for "maintenance, education * * * and any other factors applicable to his condition,” or indeed for medical care in the future? We find no suggestion to support any such categorical compartmentation of needs and associated assets. Moreover even under such a theory might not that portion of the proceeds of a personal injury settlement attributable to conscious pain and suffering also be exposed to the imposition of the lien as in excess of future medical and personal requirements? The records before us contain no proof with respect to the reasonable requirements of these infant recipients, nor do we understand it to be the purpose or within the scope of the remittals now ordered to develop any such proof. Any application of the precise limitation which is set forth in subdivision 2 of section 104 seems somehow wholly to have been ignored.
As we understand it, the majority would make the existence of the departmental lien for medical assistance turn on whether, on examination of the terms of the settlement of the infant’s claim for personal injuries,it appeared that an identifiable portion of the total amount of the settlement was in fact earmarked as attributable to the particular medical and hospital expenses which formed the basis for the asserted departmental lien. We see no predicate for the imposition of any
To construct such a condition precedent not only constitutes innovative judicial legislation; its implementation will serve to emasculate section 104-b with respect to liens for medical assistance furnished infant recipients. Departmental recoupment will depend on the precise form in which the particular settlement is cast or in which the particular verdict following jury trial is returned. As a practical matter, in the future it will be necessary only to omit any specific attribution to medical and hospital expenses to thwart a departmental lien. The effective elimination of such liens will defeat the very purposes for which section 104-b was adopted. The granting of needed medical assistance will be chilled; as important, the public treasury will be denied recoveries to which the Legislature surely thought it entitled.
We further see an even more fundamental difficulty. We acknowledge that the amount of medical and hospital expenses, as well as the amount of other items of special damages, has a very real impact on the size of any settlement or verdict in an action for personal injuries. It must also be recognized, however, that the right to recover for medical and hospital expenses already incurred belongs to the parent and not to the infant. (Clarke v Eighth Ave. R. R. Co., 238 NY 246; Ann., 32 ALR2d 1060, 1069; PJI 2:318; 7A Warren’s Negligence, Damages, § 4.05, subd [3], p 325.) Thus, the third-party tort-feasor in settlement negotiation or by requested jury charge may properly insist that no part of the infant’s settlement or verdict include any amount with respect to medical and hospital expenses already incurred. The rule announced by the majority today can only be understood in its legal aspect then as precluding all departmental liens for medical assistance, unless through inadvertence or otherwise there is included in the infant’s settlement or verdict a component of damages which is not properly includible therein. The ultimate consequence, since the parent in welfare instances will not be able to prove the payment prerequisite to his right to recover, will be that the local Social Services Departments will be denied recovery, the infant will derive no benefit, and the third-party tort-feasor will enjoy a windfall. We cannot think that this result was intended by the Legislature or that the Legislature will long allow section 104-b as so construed to stand on the statute books without clarifying amendment.
Accordingly, we would sustain the liens asserted by the local Department in these three cases, in toto.
Chief Judge Breitel and Judges Gabrielli and Fuchsberg concur with Judge Wachtler; Judge Fuchsberg concurs in result in a separate opinion; Judge Jones dissents and votes to reverse in another opinion in which Judges Jasen and Cooke concur.
In Baker v Sterling: Order affirmed, without costs. Question certified answered in the affirmative.
Chief Judge Breitel and Judges Gabrielli, Wachtler and Fuchsberg concur; Judge Fuchsberg concurs in result in a separate opinion; Judge Jones dissents and votes to reverse in another opinion in which Judges Jasen and Cooke concur.
In Griffin v Cox: Order modified, without costs, and case remitted to Supreme Court, Kings County, for further proceedings in accordance with the memorandum herein, and, as so modified, affirmed.
In Marsh v La Marco: Order affirmed, without costs, in memorandum.
We limit our consideration and discussion to medical assistance provided for hospital and medical expenses because that is the only form of assistance for which liens are sought in these cases. Although in Baker v Sterling a lien was originally filed for general assistance as well, the Department has abandoned that claim in this court, so no issue is before us as to the Department’s right to the broader lien.
