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May 23, 1980

LIBERTY MUTUAL INSURANCE CO., as subrogee of the Estate of Maria Vasquez, Antonio Vasquez, Administrator, Plaintiff,

The opinion of the court was delivered by: PLATT


Plaintiff, Liberty Mutual Insurance Co. ("Liberty Mutual"), as "subrogee of the Estate of Maria Vasquez", has sued the United States for medical expenses incurred by Ms. Vasquez as the result of an accident allegedly involving a truck owned by the United States Postal Service. The accident assertedly occurred September 15, 1976, in Jamaica, New York, and involved Ms. Vasquez, a pedestrian, and the Postal Service vehicle, which was then being driven by a Postal Service employee acting within the scope of his employment. The gravamen of Liberty Mutual's complaint is that it paid $ 7212.00 in medical expenses on behalf of Ms. Vasquez, as a member of the household of its insured, one William Gonzalez, which sum it now seeks to recover from the United States pursuant to the Federal Tort Claims Act, 28 U.S.C. §§ 2671 et seq. (1976), and its jurisdictional counterpart, 28 U.S.C. § 1346(b) (1976).

 After filing an answer, the United States has moved pursuant to Fed.R.Civ.P. 12(c) for judgment on the pleadings and dismissal of the complaint. By so moving, the United States has temporarily removed the problem of contested issues of fact *fn1" and has put squarely before this Court the dispositive legal issue in this case, to wit, whether the law of New York, specifically the State's No-Fault Insurance Act, Insurance Law §§ 670 et seq. (McKinney's Cum.Sup.1979), provides an insurer with a cause of action against the United States for the recovery of first-party benefits paid to its insured as a result of the allegedly negligent operation of a vehicle owned by the United States. For the reasons outlined below, we hold that the applicable law precludes such a claim, necessitating the dismissal of Liberty Mutual's complaint.


 Two threshold questions here are whether the United States may be sued at all for a claim of this sort and if so, what law is to apply. It is well settled that the United States may not be sued without its consent. See, e.g., Affiliated Ute Citizens of the State of Utah v. United States, 406 U.S. 128, 92 S. Ct. 1456, 31 L. Ed. 2d 741 (1972), reh. denied, 407 U.S. 916, 92 S. Ct. 2430, 32 L. Ed. 2d 692 (1972); Soriano v. United States, 352 U.S. 270, 77 S. Ct. 269, 1 L. Ed. 2d 306 (1957); Larson v. Domestic & Foreign Commerce Corp., 337 U.S. 682, 69 S. Ct. 1457, 93 L. Ed. 1628 (1949); Huntington Towers, Ltd. v. Franklin Nat'l Bank, 559 F.2d 863 (2d Cir. 1977). Additionally, the United States, acting through congressional enactments, may define the conditions under which it will permit actions against it and waive its immunity. See, e. g., Honda v. Clark, 386 U.S. 484, 87 S. Ct. 1188, 18 L. Ed. 2d 244 (1967).

 In 1946, Congress enacted the Federal Tort Claims Act, Title IV, 60 Stat. 812, 842 (1946), which waived the Government's immunity to the extent that it recognized the general principle that the United States shall be liable for the negligence of Government employees acting within the scope of their employment, "where the United States, if a private person, would be liable to the claimant in accordance with the law of the place where the (negligence) occurred." 28 U.S.C. § 1346(b) (1976). Limiting this waiver of immunity is the concomitant mandate that the tort liability of the United States shall be assessed "in the same manner and to the same extent as a private individual under like circumstances . . . ." 28 U.S.C. § 2674 (1976). *fn2"

 Viewing the facts of this case in light of this limited waiver of immunity, it is apparent that the law to be applied is that of New York as the alleged negligence occurred here and the liability of the United States is to be determined as it would be for an individual defendant under the same circumstances. In these circumstances, an individual would face Article 18 of New York's Insurance Law, the Comprehensive Automobile Insurance Reparations Act (the "Act"), added in 1973, popularly known as the "No-Fault" Insurance Act. The Act, intended (1) to render irrelevant an automobile operator's negligence while compensating injured persons, and (2) to reduce the cost of liability insurance, has largely abrogated the common law governing automobile accident liability in New York. See N.Y.Const. Art. I, § 14; Montgomery v. Daniels, 38 N.Y.2d 41, 378 N.Y.S.2d 1, 340 N.E.2d 444 (1975); Liberty Mutual Ins. Co. v. State, 94 Misc.2d 676, 405 N.Y.S.2d 945 (Ct.Cl.1978); Marc-Charles v. Krug, 93 Misc.2d 603, 403 N.Y.S.2d 658 (Civ.Ct.N.Y.1978). This abrogation was not meant to be wholesale, however, and New York's courts have stressed that the Act's provisions are to be strictly construed. See, e.g., Hughes v. Nationwide Mutual Ins. Co., 98 Misc.2d 667, 414 N.Y.S.2d 493 (Livingston Cty. 1979); Scarpelli v. Marshall, 92 Misc.2d 244, 399 N.Y.S.2d 1001, 399 N.Y.S.2d 1001 (Nassau Cty. 1977). The Act must be interpreted only as it is expressly written, and the common law is to be changed only to the extent that the "clear import of the statutory language absolutely requires" it. Abbasi v. Galluzzo, 88 Misc.2d 926, 927, 390 N.Y.S.2d 514, 515 (App.Term, 2d Dept. 1976); Scarpelli, supra; Cucinella v. Cooper, 82 Misc.2d 877, 371 N.Y.S.2d 620 (Monroe Cty. 1975).

 We are thus mindful of the limited extent to which we may range in applying the Act to the United States. Where the Act, by its express terms, cannot be made pertinent to the United States "in the same manner and to the same extent as (to) a private individual under like circumstances," we must take refuge in the common law. Where the Act does apply, however, we are obligated to follow it.


 "In essence," the Act is "two-pronged": " . . . (o)ne prong deals with compensation; the other with limitation of tort actions." Montgomery v. Daniels, supra, 38 N.Y.2d at 46, 378 N.Y.S.2d at 4. *fn3" The first prong requires every owner of a "motor vehicle" (defined to exclude motorcycles and emergency vehicles) to provide for compensation for himself, members of his household, operators, occupants, and pedestrians for "basis economic loss" resulting from injuries arising from the operation of that vehicle in New York, regardless of fault. Ins.L. § 672 (McKinney's, Cum.Sup.1979) (hereinafter referred to only by section number). "Basic economic loss" is defined in § 671(1)(a-c) to include expenses for medical treatment, lost earnings, and other reasonable and necessary expenses on a per diem basis for no more than one year. Basic economic loss is expressly subject to a maximum of $ 50,000. "First party benefits", defined in § 671(2)(a-c) as basic economic loss reduced by a stated percentage of lost earnings and by other ascertainable amounts, become payable by the insurer "as the loss is incurred" and "are overdue if not paid within thirty days after the claimant supplies proof of the fact and amount of loss sustained." § 675(1). *fn4"

 The second prong of the Act arises from § 673(1). This section, applicable only to actions between "covered persons" (as that term is defined in § 671(10)), imposes two limitations on tort recovery for personal injuries: (1) the injured party has no cause of action against the allegedly negligent party for duplicative recovery of basic economic loss; and (2) the injured party has no right of recovery for "non-economic loss" (i. e., pain and suffering), except in the case of a "serious injury", as defined in § 671(4). Thus, in the case of covered persons, the only conventional tort actions left to the common law are those for basic economic loss in excess of $ 50,000, for pain and suffering associated with a serious injury, and for property damage.

 Moreover, the Act leaves intact all common law causes of action by covered or non-covered persons against non-covered persons. As a corollary, § 673(2) provides that, in an action by or on behalf of a covered person against a non-covered person, "an insurer which paid or is liable for first-party benefits on account of (injuries occasioned by the negligence of the non-covered person) shall have a lien against any recovery to the extent of benefits paid or payable by it to the covered person." Additionally, if the covered person in such a situation should choose not to commence an action against the non-covered party within two years after the accrual of the cause of action, the insurer's lien becomes an independent cause of action by the insurer against the negligent party. § 673(2). Thus, the Act redefines the rights of the injured covered party's insurer against the liable non-covered party without reference to the formerly controlling concept known as "subrogation." *fn5"

 Our task, then, is to determine whether this statutory arrangement provides a cause of action in favor of Maria Vasquez's insurer against the allegedly negligent party, the United States, for the recovery of medical expenses paid to Ms. Vasquez for the treatment of her alleged injuries. Two definitional questions may be resolved easily. First, the amounts paid to Ms. Vasquez by Liberty Mutual clearly represent "basic economic loss" and "first-party benefits" as those terms are defined in § 671(1) and (2). And second, Ms. Vasquez is a "covered person", according to § 671(10), because of her status as a pedestrian at the time of the accident and as a member of the household of Liberty Mutual's insured, William Gonzalez.

 The next and critical issue is whether the United States is a covered person. If it is, this action would seem to be barred by the unequivocal language of § ...

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