Miszko v. GressMiszko v. Gress
Cross appeals from an order of the Supreme Court (Spargo, J.), entered April 12, 2002 in Ulster County, which, inter alia, partially granted a motion by Finkelstein & Partners L.L.E for disbursement of settlement proceeds in an underlying action and partially denied a cross motion by New York State Insurance Fund to direct payment of its workers’ compensation lien.
Plaintiff Michael Miszkо (hereinafter Miszko) was injured in the course of his employment as a state trooper while trying to apprehend defendant Kenneth J. Fox in 1989. After incurring these injuries, Miszko began receiving workers’ compensation benefits from the New York State Insurance Fund (hereinafter Fund). In order to commence an action against defendants, Miszko signed a retainer agreement form with the law firm now known as Finkelstein & Partners L.L.P (hereinafter Finkelstein), but the blanks on the form were never completed. The form provided for a one-third contingency fee. Plaintiff Susan E. Miszko did not sign the form.
Plaintiffs commenced this action through Finkelstein to recover for Miszko’s personal injuries and his wife’s loss of services and consortium. Defendants offered their full $25,000 insurаnce policy limit to settle the case. To protect his entitlement to workers’ compensation benefits, Miszko was required to obtain the Fund’s consent to the settlement, аs the Fund had a statutory lien on any recovery (see Workers’ Compensation Law § 29). In March 1999, the Fund consented to the $25,000 settlement, with the Fund to receive $14,866.67
In 2002, Finkelstein moved to have plaintiffs declared missing clients, and for an order directing Prudential Insurance Company, defendants’ insurance carrier, to pay counsel fees and disbursements directly to Finkelstein аnd deposit the remainder of the settlement with the Lawyers’ Fund for Client Protection until plaintiffs and the Fund could reach an agreement (see 22 NYCRR 1200.46 [f]). The Fund cross-moved to receive thе remainder of the settlement moneys, rather than turning it over to the Lawyers’ Fund for Client Protection. Plaintiffs cross-moved for an order to, among other things, reduce counsel fees to 25% of the net recovery, hold that the settlement was not subject to any lien, and hold that a portion of the settlement was attributable to Susan Miszko’s derivative claim and not subject to any lien. Supreme Court held that plaintiffs were not missing clients, 30% of the settlement was attributable to the derivative claim, and that portion was not subject to the lien but Miszko’s portion was. Accordingly, the court ordered Prudential to pay $10,027.38 to Finkelstein, $4,491.79 to Susan Miszko, and $10,480.83 to the Fund in satisfaction of its lien (
The Fund had а valid lien on Miszko’s recovery. An individual receiving workers’ compensation benefits is entitled to commence a civil action against a tortfeasor “not in the same emрloy” who caused the injuries giving rise to such benefits (Workers’ Compensation Law § 29 [1]). However, an automatic lien attaches to the proceeds of any recovery, in favor of the Fund, for any amounts that the Fund has paid in compensation benefits, less litigation costs and amounts received in lieu of first party benefits under the no-fault law (see Workers’ Compensation Law § 29 [1], [1-a]; Dietrick v Kemper Ins. Co. [American Motorists Ins. Co.],
Plaintiffs’ further argument that the Fund waived its lien in the March 1999 consent letter represents a misunderstanding of the facts and law. In that letter, in addition to agreeing to satisfaction of its Workers’ Compensation Law § 29 (1) lien upon receiрt of $14,866.67 from the settlement proceeds, the Fund waived its right to a credit or offset under Workers’ Compensation Law § 29 (4). That subdivision provides a means by which the Fund can offset future payments of compensation against proceeds of a third-party action (see Matter of Figelman v Goldfarb,
Supreme Court improperly attributed 30% of the settlement to Susan Miszko’s derivative claim. Miszko was required to оbtain the Fund’s consent prior to settling or obtain a court determination of this lien, or risk forfeiting all future workers’ compensation benefits (see Workers’ Compensation Law § 29 [5]). In each сonsent letter, the Fund agreed to a settlement of $25,000, with the Fund receiving $14,866.67 in satisfaction of its lien. That figure equaled the full settlement amount minus counsel fees and disbursements. Plaintiffs were clearly dissatisfied with the Fund’s terms to settle the lien, as evidenced by their refusal to endorse the settlement check. The court heard their application pursuant to Workers’ Compensation Law § 29 (5) and allocated 30% of the net recovery, after disbursements and counsel fees, to the derivative claim. Considering the extent
Supreme Court properly awarded Finkelstein its disbursements and counsel fees equal to one third of the net recovery for Miszko’s claim. We reject plaintiffs’ аrgument that the disbursements are unverified, since Miszko acknowledged before Supreme Court that he had no problem with the claimed disbursements. Miszko agreed that Finkelstein should be paid something for its services, though he suggested a lower amount of 25%. Miszko also acknowledged that he signed the retainer agreement, which provided for a one-third contingency fеe. The parties’ intent will be gleaned from the language in the retainer agreement, which is clear and unambiguous (see Kooperman v Picoult,
Crew III, J.P., Mugglin, Rose and Lahtinen, JJ., concur. Ordered that the order is modified, on the law and the facts, without costs, by rеversing so much thereof as granted plaintiff Susan E. Miszko 30% on her derivative claim; order Prudential Insurance Company to pay $2,500 to said plaintiff on her derivative claim, $9,194.05 to Finkelstein & Pаrtners L.L.P. for counsel fees and disbursements, and $13,305.95 to the New York State Insurance Fund in satisfaction of its lien; and, as so modified, affirmed. [See
Notes
This figure, representing the net balance of the settlement after subtracting litigation expenses, contains a slight miscalculation due to inaccurate disbursement and counsel fee figures. The correct amount was $14,972.62.