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GREAT AMERICAN INSURANCE COMPANY v. GOVERNMENT EMPLOYEES INSURANCE COMPANY ET AL. (06/27/68)

SUPREME COURT OF NEW YORK, APPELLATE DIVISION, THIRD DEPARTMENT


June 27, 1968

GREAT AMERICAN INSURANCE COMPANY, RESPONDENT,
v.
GOVERNMENT EMPLOYEES INSURANCE COMPANY ET AL., APPELLANTS

Gibson, P. J., Herlihy, Aulisi, Staley, Jr. and Gabrielli, JJ., concur in memorandum by Staley, Jr., J.

Author: Staley

Appeal (1) from an order of the Supreme Court at Special Term, entered December 28, 1967, in Warren County which granted plaintiff's motion for summary judgment, and (2) from the judgment entered thereon. Plaintiff's motion for summary judgment was brought pursuant to CPLR 3213 on the grounds that the action is based upon an instrument for the payment of money only. The defendant James suffered personal injuries in an automobile accident and was represented in his negligence action by his attorney, defendant Hall. During his period of disability, James was paid disability benefits in the sum of $1,101.62 by plaintiff for which payment a lien was filed pursuant to section 227 of the Workmen's Compensation Law in that amount against any recovery from a third party. The negligence action was settled for $9,000 with the defendant, Government Employees Insurance Company, a third-party carrier, which issued a check as part of the settlement payable to James and the plaintiff in the sum of $1,101.62. Defendant Hall has refused, after demand, to deliver this check to the plaintiff contending that the total of the hospital bill, doctor's bill and attorney fee exceeds the recovery and, therefore, the plaintiff's lien was null and void. This contention is based on the provisions of section 227 of the Workmen's Compensation Law which state in part as follows: "The carrier liable for payment of disability benefits under this article * * * shall have a lien on the proceeds of any recovery from such third-party, whether by judgment, settlement or otherwise, after the deduction of reasonable and necessary expenditures, including attorneys' fees incurred in effecting such recovery". By reason of the treatment for his injuries, James has an outstanding doctor's bill of $2,500 which, it is claimed, should be included as a "reasonable and necessary expenditure" incurred in effecting the recovery within the meaning of section 227. The right of payment of the hospital bill out of the proceeds of the recovery is provided by section 189 of the Lien Law, and the right of payment of disability benefits out of the proceeds of the recovery, after payment of certain expenditures, is provided by section 227 of the Workmen's Compensation Law. There is absent any specific statutory provision for the payment of medical expenses in the form of the doctor's bill, and such services rendered bear no relation to effecting the settlement or recovery as contemplated by the statute. That result is legal in nature, and only those expenses attributable to legal procedures are deductible.

Disposition

Judgment and order affirmed, without costs.

19680627

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