Burns v. VarrialeBurns v. Varriale
Sullivan, Cunningham, Keenan, Mraz, Oliver & Violando, L.L.P., Albany (Michael V. Violando of counsel), for appellant.
O'Connell & Aronowitz, Albany (Cornelius D. Murray of counsel), for Owen F. Burns III and another, respondents.
Steven M. Licht, Special Funds Conservation Committee, Albany (Melissa A. Day of counsel), for Special Funds Conservation Committee.
OPINION OF THE COURT
Mercure, J.P.
The primary issue on this appeal is whether the value of future workers' compensation benefits to be awarded to a claimant with a nonschedule permanent, partial disability is speculative. We hold that it is and therefore reverse Supreme Court's apportionment of counsel fees under
In January 2003, plaintiff Owen F. Burns III (hereinafter plaintiff), a traffic safety investigator for the Town of Colonie Police Department, was injured during the course of his employment when his police vehicle was struck by a vehicle driven by defendant. As a result of the accident, plaintiff was designated permanently partially disabled by the Workers' Compensation Board. St. Paul/Travelers Insurance Company (hereinafter Travelers), the workers' compensation carrier, was directed to pay plaintiff a weekly sum at a rate of $400. Thereafter, plaintiff and his wife, derivatively, commenced a negligence action against defendant. The parties in that action agreed to a settlement in the amount of $300,000.
Travelers ultimately consented to the settlement while reserving its right to take a credit for payment of future compensation against plaintiff's net recovery and to seek satisfaction of its existing lien for benefits it had paid, after deduction of its pro rata share of counsel fees (see
The statute requires that the carrier pay for the benefits it receives as a result of a claimant's efforts in a third-party action by contributing its equitable share of the litigation expenses, including counsel fees, incurred by the claimant (see
In contrast, where "the value of the future benefit derived by [the carrier] as a result of [a claimant's] recovery in the action against the third party cannot be ascertained and is entirely speculative," an apportionment of counsel fees based on such future benefits is not feasible (Matter of Briggs v Kansas City Fire & Mar. Ins. Co., 121 AD2d 810, 812 [1986]). That is, where the carrier's "obligation to pay future benefits . . . cannot be quantified 'by actuarial or other reliable means' . . . [,] the present value of the estimated future compensation payments that [the carrier] would have become obligated to make cannot be ascertained" by the courts (Matter of McKee v Sithe Independence Power Partners, 281 AD2d 891, 891 [2001], quoting Matter of Briggs v Kansas City Fire & Mar. Ins. Co., supra at 812). Travelers and the Special Funds Conservation Committee assert that such a situation is presented when, as here, a claimant receives a permanent partial disability award, as opposed to an award for death benefits, permanent total disability or schedule loss of use. We agree.
An award for death benefits, permanent total disability or schedule loss of use does not fluctuate and the duration of the benefits is predictable. For example, the present value of death benefits to be paid to a dependent spouse may be calculated with the use of actuarial tables that take into account the spouse's life expectancy and probability that he or she will remarry (see Matter of Kelly v State Ins. Fund, supra at 139).
When a claimant has a permanent partial disability, however, neither the duration nor the amount of an award is readily predictable because the award may or may not continue for the rest of the claimant's life and the weekly benefit of an award can change based upon the claimant's actual earnings (see generally Matter of Leeber v LILCO, 29 AD3d 1198 [2006]; Matter of Tipping v National Surface Cleaning Mgt., Inc., 29 AD3d 1200, 1201 [2006, Carpinello, J., concurring]). While a finding of permanent partial disability gives rise to an inference that a reduction in wages is related to the disability, the initial burden remains on the claimant to demonstrate that "reduced earning capacity is [not] due to age, general economic conditions or other factors unrelated to the disability"—i.e., that the reduction was involuntary (Matter of Meisner v United Parcel Serv., 243 AD2d 128, 130 [1998], lv dismissed 93 NY2d 848 [1999], lv denied 94 NY2d 757 [1999]; see Matter of Rothe v United Med. Assoc., 18 AD3d 1093, 1094 [2005]; Matter of Thompson v Saucke Bros. Constr. Co., 2 AD3d 993, 993 [2003], lv denied 2 NY3d 703 [2004]; Matter of Scarpelli v Bevco Trucking Corp., 305 AD2d 892, 893 [2003]). Despite a classification as having a permanent partial disability and receipt of benefits in the past, a claimant who voluntarily withdraws from the labor market entirely loses entitlement to future benefits (see Matter of Rothe v United Med. Assoc., supra at 1094; Matter of Scarpelli v Bevco Trucking Corp., supra at 893; Matter of Capezzuti v Glens Falls Hosp., 282 AD2d 808, 810 [2001]; see also Matter of Coneys v New York City Dept. of Mental Health, 299 AD2d 602, 602-603 [2002]). Further, even where a claimant has retired and that retirement is found by the Workers' Compensation Board to be involuntary, the carrier remains free to return before the Board "to demonstrate by 'direct and positive proof that something other than the disability [is] the sole cause of claimant's reduced earning capacity after retirement'" (Matter of Leeber v LILCO, supra at 1199, quoting Matter of Pittman v ABM Indus., Inc., 24 AD3d 1056, 1058 [2005]; see Matter of Pepe v City & Suburban, 29 AD3d 1184 [2006]). Thus, unlike an award for permanent total disability, the duration of which is to last for the rest of a claimant's life, the duration of an award for permanent partial disability is not readily predictable because it depends on factors unconnected with the disability—such as general economic conditions or a claimant's desire to cease working—that are not readily ascertainable (see Matter of Rothe v United Med. Assoc., supra at 1094; Matter of Yamonaco v Union Carbide Corp., 42 AD2d 1014, 1014-1015 [1973]).
Moreover, if the claimant meets his or her burden of demonstrating that a diminution in earnings is related to disability "and 'actual earnings during the period of the disability are established, wage earning capacity must be determined exclusively by the actual earnings of the injured employee without evidence of capacity to earn more or less'" (Matter of Meisner v United Parcel Serv., supra at 131, quoting Matter of Matise v Munro Waterproofing Co., 293 NY 496, 500 [1944] [emphasis added]; see generally Matter of Pittman v ABM Indus., Inc., supra at 1057 [explaining that once a claimant establishes that retirement is involuntary because a disability caused or contributed to his or her decision to retire, a failure to seek employment despite capacity to do so will not result in a denial of benefits]; Matter of Jiminez v Waldbaums, 9 AD3d 99, 100-101 [2004] [same]). The amount of the benefit awarded to a permanently partially disabled claimant is two thirds of the "difference between his [or her] average weekly wages and his [or her] wage-earning capacity thereafter in the same employment or otherwise" (
Contrary to Supreme Court's conclusion, there is no inference of a permanent and total loss of wages upon a finding of a permanent, partial disability, as opposed to a permanent, total disability. While it may be reasonably concluded that a claimant who is permanently and totally disabled will suffer a total loss of income in the future, such a conclusion is not warranted in the case of a claimant with a permanent, partial disability who
We note that if, upon plaintiff's application, the Workers' Compensation Board determines—in the same manner that it would after the carrier's offset is exhausted—that he is entitled to continued compensation benefits, the Board shall direct further reimbursement of counsel fees by Travelers based on the amount of those benefits and the 34.82% rate that we have determined to be the carrier's equitable share of the cost incurred in obtaining the benefits to the carrier (see Matter of Russo v New York City Dept. of Correction, 9 AD3d 528, 530 [2004]; see also
In light of our determination, the parties' remaining arguments are academic.
Spain, Carpinello, Rose and Kane, JJ., concur.
Ordered that the order is modified, on the law, without costs, by reversing so much thereof as directed St. Paul/Travelers Insurance Company to pay $18,960.92 in "fresh money" to plaintiffs; plaintiffs are directed to pay $30,323.86 to St. Paul/Travelers Insurance Company; and, as so modified, affirmed.