The opinion of the court was delivered by: LASKER
In this personal injury diversity action governed by New York State's No-Fault Insurance Laws and Workers' Compensation Laws, Kiyomi Oga seeks to recover from her workers' compensation carrier for injuries she sustained while riding in a taxicab during the course of her employment. She moves for: (1) a court order approving the $60,000 settlement of this action, nunc pro tunc, pursuant to the New York Workers' Compensation Law § 29(5) (McKinney 1965); 2) an order directing her workers' compensation carrier, Tokio Marine & Fire Insurance Company (Tokio) to consent to the settlement; and 3) an order directing Tokio to reimburse plaintiff $5,495 for dental expenses incurred as a result of the accident.
On January 29, 1982 Oga sustained personal injuries while riding as a passenger in defendants' taxicab during the course of her employment. Although all motor vehicle accidents in New York State are covered by New York's no-fault insurance laws, accidents which occur during the course of employment are also covered by the workers' compensation carrier has primary responsibility for compensation. Subsequent to the accident, Tokio, the compensation carrier, paid plaintiff approximately $3,000 for resulting medical injuries and loss of compensation due to her six week absence from work. In addition, plaintiff required extensive dental work which she claimed amount to $7,770. Tokio questioned the cost of the dental work, but after examination of the plaintiff by Tokio's own dentist, authorized performance of dental work for $5,495.
In may 1981 plaintiff also initiated a tort action in this court against the third party, the defendant cab company. In January 1982, shortly before the scheduled start of the trial, the parties settled for $60,000, of which plaintiff received nearly $40,000 after attorneys' fees and disbursements. Tokio was never informed of the settlement, and neither approved nor consented to it.
Tokio learned of the settlement after having authorized but not reimbursed plaintiff for the $5,495 of dental work. On July 28, 1982 Tokio appeared before an Administrative Law Judge who held that under Workers' Compensation Law § 29(5) Tokio would not be liable for future compensation claims because the settlement of the third party action was made without Tokio's consent. The Administrative law Judge closed the case. On October 26, 1983, the Workers' Compensation Board affirmed the Administrative Law Judge's ruling and held that the case was properly closed and the carrier could not be held liable for further awards of compensation inasmuch as the third party action between plaintiff and the cab company was settled without the workers' compensation carrier's consent. On June 11, 1984, eight months after the Board's ruling on the consent issue and two and one-half years after the third party claim was settled, the plaintiff filed the instant motion seeking a court order approving the settlement in lieu of the carrier's consent.
The parties agree that inasmuch as there was a prior $ 60,000 settlement of the third party action in the Southern District of New York, this court has jurisdiction to issue a compromise order pursuant to Workers' Compensation Law § 29(5). Section 29(5) states that a compromise order may issue "from a justice of the court in which the action was pending."
Consent/court order requirement
The parties agree that under the Workers' Compensation Law plaintiff must either obtain written approval (consent) of the third party settlement agreement from Tokio of a compromise order in lieu of consent from the court with jurisdiction. Workers' Compensation Law § 29(5) states in relevant part:
. . . A compromise of any such cause of action . . . shall be made only with the written approval . . . of the insurance carrier. . . . However, written approval of . . . the insurance carrier need not be obtained if the employee . . . obtain[s] a compromise order from a justice of the court in which the third party action was pending.
Failure to obtain either the carrier's consent or court approval in lieu thereof terminates the carrier's obligation for future compensation payments. See Castleberry v. Hudson Valley Asphalt Corp., 70 A.D.2d 228, 237, 420 N.Y.S.2d 911, 917 (Second Dept. 1979); Kusiak v. Commercial Assurance Cos., 49 A.D.2d 122, 124, 373 N.Y.S.2d 714, 716 (Fourth Dept. 1975).
Standards for issuing compromise order nunc pro tunc
While the parties agree that the court may issue a compromise order nunc pro tunc, neither party cites ...