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Auqui v. Seven Thirty One Ltd. Partnership

New York Court of Appeals

February 14, 2013

Maria Auqui, & c., et al., Respondents,
Seven Thirty One Limited Partnership, et al., Appellants.

Richard J. Montes, for appellants.

Annette G. Hasapidis, for respondents.

New York State Trial Lawyers Association, amicus curiae.


The order of the Appellate Division should be reversed, with costs, defendants' motion to preclude plaintiffs [1] from litigating the issue of plaintiff Jose Verdugo's accident-related disability beyond January 24, 2006 granted, and the certified question answered in the negative.

Plaintiff, a food service deliveryman, was injured on December 24, 2003 when a sheet of plywood fell from a building under construction owned by defendant Seven Thirty One Limited Partnership. Plaintiff was compensated for treatment of his head, neck, and back injuries, as well as post-traumatic stress disorder and depression. While receiving Workers' Compensation (WC) benefits, plaintiff commenced this personal injury action in Supreme Court in 2004. The following year, in December 2005, while this action was pending, the insurance carrier for plaintiff's employer moved the Workers' Compensation Board (WCB) to discontinue plaintiff's benefits on the grounds that he was no longer disabled as a result of the accident. In January 2006, in a WC proceeding, an Administrative Law Judge (ALJ) reviewed the evidence and expert testimony submitted by the plaintiff and the insurance carrier. The ALJ found that Jose Verdugo no longer suffered any disability as of January 24, 2006 and terminated his benefits. Plaintiff appealed, but on February 1, 2007, a full panel of the WCB affirmed the finding that plaintiff's disability ended on January 24, 2006, and that plaintiff required no further medical treatment thereafter, other than for post-traumatic stress disorder.

In April, 2009, the defendants in the instant personal injury action moved to preclude plaintiffs from relitigating the duration of his work-related injury on the grounds that the issue was already fully litigated and decided in the WC administrative proceeding. While the motion was pending in Supreme Court, the plaintiffs' attorney commenced a separate Mental Hygiene Law article 81 proceeding to appoint a guardian for Jose Verdugo. This proceeding was uncontested and a guardian was appointed.

The doctrine of collateral estoppel is applicable to determinations of quasi-judicial administrative agencies such as the WCB (Brugman v City of New York, 102 A.D.2d 413, 415 [1st Dept 1984], affd 64 N.Y.2d 1011 [1985]). Collateral estoppel applies if the identical issue sought to be precluded was necessarily decided in an earlier action, at which the party opposing preclusion had a full and fair opportunity to contest the issue (id. at 415-16). Although legal conclusions and conclusions of mixed law and fact are not entitled to preclusive effect, findings of fact that are necessary for an administrative agency to reach are entitled to such effect (see Hinchey v Sellers, 7 N.Y.2d 287, 293 [1959]; Matter of Engel v Calgon Corp., 114 A.D.2d 108, 110 [3d Dept 1986], affd 69 N.Y.2d 753 [1987]). The issue disputed on this appeal is whether the WCB decided a necessary issue of fact about the duration of Jose Verdugo's disability and, if so, whether the plaintiffs had a full and fair opportunity to contest the determination (see D'Arata v New York Cent. Mut. Fire Ins. Co., 76 N.Y.2d 659, 664 [1990]).

The determination of the WCB should be given preclusive effect as to the duration of plaintiff's disability, relevant to lost earnings and compensation for medical expenses. The issue of continuing benefits before the administrative agency necessarily turned upon whether Jose Verdugo had an ongoing disability after a certain date, which is a question of fact, as distinguished from a legal conclusion and a conclusion of mixed law and fact.

We also find that plaintiffs had a full and fair opportunity to litigate the issue of ongoing disability in the 2006 WC proceedings. Plaintiff was represented by counsel, submitted medical reports, presented expert testimony, and cross-examined the defendants' experts regarding the issue of whether or not there was an ongoing disability.

Plaintiffs attempt to use the guardianship order in this appeal to buttress the contention that Jose Verdugo is still disabled and argue that such an order raises an issue of fact as to the duration of his disability. We disagree. The issue of plaintiff's incapacity was not opposed at the guardianship proceeding (in which defendants were not a party) and was based on evidence presented only by plaintiffs.

PIGOTT, J. (dissenting).

Following workers' compensation hearings, held in March through May 2006, a Workers' Compensation Law Judge ("WCLJ") ruled that plaintiff Jose Verdugo had no "causally related disability since January 24, 2006, " the date on which benefits had been stopped pending the proceeding. The WCLJ refused to credit the testimony of a neurologist and a psychiatrist that Verdugo suffered from disorders that include post-concussion syndrome, depression, and post-traumatic stress disorder, and is "totally disabled." Both experts had testified that Verdugo had extreme anxiety about walking, with one specifying that his agitation was especially strong near construction sites.

On appeal, the Workers' Compensation Board ("WCB") rescinded the denial of Verdugo's claim of post-traumatic stress disorder, but denied his claims of depression and for injuries to the head, neck, and back, accepting the WCLJ's credibility determinations. The Board concluded that Verdugo "had no further disability after January 24, 2006 and no further need for treatment."

Based on the Board's ruling, defendants seek to estop Verdugo from litigating the issue of whether he "was no longer disabled after January 24, 2006, " in a personal injury action. The majority holds that Verdugo is precluded from litigating the duration of his work-related disability, "relevant to lost earnings and compensation for medical expenses" (memorandum at 4) [2]. The majority implicitly allows that Verdugo may still litigate lost earnings and medical expenses from the accident date to January 24, 2006, as well as all other consequences of defendants' alleged negligence after January 24, 2006, whether it be ongoing pain and suffering, loss of enjoyment of life and his wife's claim for loss of society ...

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