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Sayres v. August Feine & Sons Co.

Supreme Court of New York, Appellate Division

March 31, 1954

In the Matter of the Claim of ARTHUR SAYRES, Respondent,
v.
AUGUST FEINE & SONS CO. et al., Respondents, and SPECIAL FUND FOR REOPENED CASES, Appellant. WORKMEN'S COMPENSATION BOARD, Respondent.

Page 548

APPEAL (1) from a decision of the Workmen's Compensation Board, filed on May 25, 1951, which reversed a decision of a workmen's compensation referee and directed that the award which was to be made on a reopened claim should be paid by the Special Fund for Reopened Cases and not by the workmen's compensation insurance carrier, and (2) from a decision and award made in conformity with such prior decision and filed on August 8, 1952.

COUNSEL

John M. Cullen for appellant.

Morgan F. Bisselle and Warren C. Tucker for August Feine & Sons Co. and another, respondents.

Nathaniel L. Goldstein, Attorney-General, for Workmen's Compensation Board, respondent.

IMRIE, J.

Claimant was injured May 12, 1939. On May 3, 1940 the State Industrial Board made a schedule award for permanent partial disability for 90% loss of use of his right arm and 35% loss of use of his right leg, in addition to a period of protracted temporary total disability, in total 400.1 weeks, and closed the case. The award included compensation due to May 11, 1940, and for 348 weeks into the future. At claimant's request payment of a lump sum of $2,800 advance from the tail end of the schedule award was approved November 20, 1942, and the payment made April 20, 1943. The record contains a request for an actuarial computation and the actuary's note that 'A lump sum advance of $2,800 as of 11/29/42 entitles the carrier to deduct 195.38 weeks from the end of the award.'

On December 2, 1949, more than seven years after the accident, claimant applied for a reopening of his claim. The reopening was allowed January 5, 1950, the Workmen's Compensation Board's memorandum decision stating that the question of disability due to the back condition was not finally disposed of. The decision also included the statement, 'The schedule award covering 348 weeks runs to May 3, 1947 and three years therefrom do not expire until May 3, 1950.' Subsequently, in a decision reversing the referee, the board awarded claimant compensation charged against the Special Fund for Reopened Cases under section 25-a and discharged the carrier. The decision reads, in part, 'Upon review the Board finds that the provisions of Section 25-a (7) relative to the allocation of lump sum settlements does not apply to accelerated payments of

Page 549

a schedule award, but only to settlements effected in accordance with Section 15, subdivision 5b of the law. Inasmuch as the last payment of compensation was made herein on April 20, 1943 there has been a lapse of more than three years prior to the filing of the claimant's application for reopening; as there has also been a lapse of more than seven years from the date of accident the Special Fund for Reopened Cases under Section 25-a must be held liable and the carrier relieved of liability. The Board so finds.'

The Special Fund has appealed to this court from the decision and award, and for review of the referee's decision. It contends that subdivision 7 of section 25-a of the Workmen's Compensation Law was not originally intended to apply only to lump sum settlements under subdivision 5-b of section 15, a provision of statute not existing in 1942, but applies to any lump sum settlement of whatever nature.

Subdivision 5-b of section 15 was inserted in the law by chapter 778 of the Laws of 1945. Matter of Cretella v. New York Dock Co. (289 N.Y. 254), decided December 3, 1942, subsequent to the approval of the lump sum settlement in this case, ruled that periodical payments could be commuted to one or more lump sum payments (ยง 25) but that there could be no valid compromise of the amounts due a claimant under the Workmen's Compensation Law. Subdivision 5-b of section 15 contains no specification that it is retroactive, nor is there any apparent reason for treating it as designed to restore the status quo ante with respect to prior settlements effected other than on the basis of commutation under the terms of section 25.

The substance of subdivision 7 became a part of section 25-a by chapter 482 of the Laws of 1935 and was set up in its present form by chapter 686 of the Laws of 1940. It antedated subdivision 5-b of section 15 by some ten years. Thus (see Matter of Cretella v. New York Dock Co., supra, p. 258) it was then applicable in the consideration and treatment of any lump sum payment then permissible under the law. The subdivision makes no distinction between types of lump sum payments. It reads now as it did before the enactment of subdivision 5-b of section 15.

Section 25-a provides the scheme for reopened cases and is the parent of the Special Fund. In cases such as this, liability of the fund attaches only when the reopening is 'after a lapse of seven years from the date of the injury or death and also a lapse of three years from the date of the ...


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