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February 7, 1994

EMMETT L. TURNER, Plaintiff,


The opinion of the court was delivered by: JOHN T. CURTIN

This is an action brought by plaintiff Emmett L. Turner against Hartford Accident & Indemnity Company ("Hartford") pursuant to a settlement in this court between plaintiff and his employer, Niagara Frontier Transportation Authority ("NFTA") and the City of Buffalo, the other defendant. As NFTA's insurance carrier, Hartford provided liability insurance limited to $ 100,000 and workers' compensation coverage.

 Mr. Turner was working aboard a vessel leased by the NFTA from the City of Buffalo when he slipped and fell, sustaining severe permanent injuries. He applied for state workers' compensation and also filed an action in negligence and unseaworthiness under general maritime law and the Jones Act, 46 U.S.C.A. § 688 against the NFTA and the City of Buffalo. See Turner v. NFTA, et al., 748 F. Supp. 80 (W.D.N.Y. 1990).

 The parties signed a settlement agreement on October 30, 1992, which sets forth the monies due the plaintiff from all defendants in return for releases. See Item 63, Ex. A. The agreement left open the question of which statute applies to the availability of attorney fees--the maritime laws in Admiralty Court or the provisions of the New York State Workers' Compensation Act.

 The sole issue before this court is whether Hartford, the compensation insurance carrier for NFTA at the time of plaintiff's accident, must pay attorney fees to Turner out of a lien created by the Workers' Compensation Act to return monies paid in compensation prior to a judgment or settlement. Plaintiff claims that § 29(1) entitles him to attorney fees not only for past medical costs and indemnity, which he has apparently received, but also for the future payments which the indemnifier is saved from paying. Plaintiff seeks an order apportioning approximately $ 900,000 of the $ 1,060,296.30 lien now held in escrow for these additional attorney fees.

 Hartford contends that because Turner settled his suit in admiralty court under maritime law and the agreement provided for $ 1,881,720.60 in attorney fees for plaintiff, Turner cannot pursue any further remedy under the State Workers' Compensation system. As part of the settlement, Hartford agreed to accept only two-thirds of the total lien money of $ 1,590,444.40 it already paid Turner in compensation "without . . . waiving any of its rights or conceding in any way that said payments to Turner constituted payments required under the Workers' Compensation Law. . . ." Item 63, Ex. C; Item 67, PP 6 & 7. Hartford now argues that this settlement under maritime law means it was never obligated to compensate Turner and certainly has not been "saved" from paying any future compensation, as alleged by the plaintiff.

 In the alternative, Hartford argues that even if the settlement payment could be regarded as governed by the State Workers' Compensation Act, authorization under § 29(1) to deduct attorneys fees from Hartford's lien only applies to judgments and settlements resulting from third-party action. Since NFTA, the primary settlor, was Turner's employer, the settlement could not be characterized as resulting from a third-party action and is therefore not covered by this section.


 Hartford contends that the settlement was reached in admiralty court under maritime law, precluding coverage of the WCL. Item 66 at 3-4. Hartford argues that it had never waived its right to contest the question of whether Turner's claim was subject to WCL and that, absent an express joint waiver under WCL § 113, it cannot be held to have done so, especially in light of a previous order in this court determining that no such waiver had occurred. Turner, 748 F. Supp. at 85. Moreover, Hartford claims it won a declaratory judgment in a separate state proceeding that it had not waived any of its rights to contest the question of whether NFTA and Turner are subject to the State's WCL, collaterally estopping all parties to this suit from raising the issue again. Item 67 P 12.

 Hartford maintains that absent this waiver, the court must declare that the settlement was reached pursuant to maritime law and not subject to the WCL. Thus, WCL § 29, which established a lien against the settlement and specifies the extent of repayment to Hartford as compensation carrier, is inapplicable. Instead, the court must read the terms of the settlement agreement as constituting Hartford's full obligation to Turner and order that the lien money now held in escrow be returned to the insurance company.

 In response, plaintiff argues that he never waived his right to either the federal or state workers' compensation remedies. Turner, 748 F. Supp. at 85-86. He points out that Hartford never objected to the jurisdiction of the Workers' Compensation Board prior to the settlement (Item 63, Turner Aff. P 2) and that if the defendant had desired to preserve its objection, it should have done so explicitly on record before the Compensation Board. Hilton v. Truss Systems, Inc., 82 A.D.2d 711, 444 N.Y.S.2d 229 (3rd Dept. 1981). Item 75. He further argues that Hartford's assertion of failure to waive the jurisdictional contest over maritime claims ignores plaintiff's common law maritime and negligence claims and third-party claims against the City, which are not covered by WCL § 113.

 The parties agree that "jurisdiction to award compensation and Jones Act jurisdiction . . . do not overlap," ( Harney v. William Moore, 359 F.2d 649, 651 (2d Cir. 1966)), and argue at great length about whether the settlement was reached under maritime law or is subject to the State Worker's Compensation. *fn1" They seek a post facto judgment by this court regarding which law governs their settlement agreement. However, the court finds it unnecessary to make this determination, because a careful reading of WCL § 29 reveals that it cannot apply to this case even if the agreement as a whole ...

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