Calendar Date: May 3, 2017
William O'Brien, State Insurance Fund, White Plains
(Rudolph Rosa Di Sant of counsel), for appellants.
Office of Joseph Romano, New York City (Nicholas N. DiSalvo
of counsel), for Nick Lala, respondent.
T. Schneiderman, Attorney General, New York City (Steven
Segall of counsel), for Workers' Compensation Board,
Before: Garry, J.P., Lynch, Rose, Mulvey and Aarons, JJ.
MEMORANDUM AND ORDER
from a decision of the Workers' Compensation Board, filed
December 22, 2015, which ruled that the carrier's credit
under Workers' Compensation Law § 29 (4) was
exhausted on August 20, 2013.
a truck driver, filed a claim for workers' compensation
benefits in connection with injuries that he sustained in an
October 9, 2007 work-related motor vehicle accident. His case
was established for injuries to both knees as well as his
right hip, and his average weekly wage was set at $1, 533.69.
As a result of the accident, claimant commenced a third-party
action that was settled on March 11, 2011 for $100, 000 and
he received a net recovery of $64, 541.51 after deducting
litigation expenses. The employer's workers'
compensation carrier agreed to the settlement and, in its
consent letter, reserved the right to take a credit under
Workers' Compensation Law § 29 (4) for future
compensation awards against claimant's third-party
recovery and also acknowledged its obligation to pay its
proportionate share of claimant's litigation expenses
under Burns v Varriale (9 N.Y.3d 207');">9 N.Y.3d 207 ).
Following a hearing, a Workers' Compensation Law Judge
(hereinafter WCLJ), among other things, awarded claimant
temporary total disability benefits at the maximum rate of
$500 per week and directed the carrier to pay to claimant
35.46% of that amount, or $177.30 per week, as part of its
ongoing obligation under Burns, with the other
$322.70 per week remaining suspended during the holiday
period . This decision was later affirmed by a
panel of the Workers' Compensation Board.
subsequent proceedings, the WCLJ ruled that the carrier's
credit under Workers' Compensation Law § 29 (4), as
reduced pursuant to Burns, was exhausted as of
August 20, 2013 and modified the prior awards accordingly.
This decision was subsequently upheld by a panel of the
Board. The employer and the carrier now appeal.
employer and carrier contend that the Board miscalculated the
amount of the credit and erroneously ruled that it was
exhausted on August 20, 2013. We disagree. It is well settled
that the credit to which a carrier is entitled under
Workers' Compensation Law § 29 (4) does not relieve
it from its responsibility to pay its equitable share of the
litigation expenses incurred by a claimant in bringing a
third-party action, which "may be apportioned on the
basis of the total benefit that the carrier derives from the
claimant's recovery" (Matter of Kelly v State
Ins. Fund, 60 N.Y.2d 131, 135 ; see Matter of
Stenson v New York State Dept. of Transp., 96 A.D.3d
1125, 1127 , lv denied 19 N.Y.3d 815');">19 N.Y.3d 815 ).
The "total benefit" includes not only reimbursement
for compensation that has already been paid, but also relief
from the obligation to pay compensation in the future
(see Matter of Kelly v State Ins. Fund, 60 N.Y.2d at
139-140; Matter of Stenson v New York State Dept. of
Transp., 96 A.D.3d at 1127). Significantly, the Court of
Appeals recognized in Burns that, even in cases in
which the present value of future compensation benefits
cannot be readily ascertained, "the carrier should be
required to periodically pay its equitable share of [counsel]
fees and costs incurred by [the] claimant in securing any
continuous compensation benefits" (Burns v
Varriale, 9 N.Y.3d at 217; see Matter of Stenson v
New York State Dept. of Transp., 84 A.D.3d 22, 25
the WCLJ directed the carrier to make weekly payments of
$177.30 to claimant in accordance with Burns and
relieved the carrier of its obligation to pay the remaining
$322.70 per week during the holiday period. Although the
consent order specifically reserved the carrier's right
to take the credit, it did not clearly set forth the manner
in which the carrier's equitable share of litigation
expenses would be taken into account in calculating the
amount of the credit and this ambiguity may be resolved
against the carrier (see Matter of Brisson v County of
Onondaga, 6 N.Y.3d 273, 279 ; Matter of
Stenson v New York State Dept. of Transp., 84 A.D.3d at
26; compare Matter of McQueer v Adirondack Tank Servs.
Inc., 142 A.D.3d 743, 744-745 ). The WCLJ deducted
the carrier's proportionate share of litigation expenses
directly from claimant's net recovery to determine the
amount of the credit and then divided this figure by $322.70,
the portion of the $500 weekly compensation payments that the
carrier was relieved of paying during the holiday period, to
conclude that the credit was exhausted after 129 weeks -
i.e., on August 20, 2013. The carrier, on the other hand,
used claimant's net recovery from the third-party action
as the amount of the credit without any deduction for its
proportionate share of litigation expenses. This effectively
increased the amount of the credit and extended the holiday
period to 200 weeks - i.e., until January 6, 2015.
carrier's calculation is inconsistent with the case law
as well as the purpose behind the statute, which is to
"stem the inequity to the claimant, arising when a
carrier benefits from an employee's recovery while
assuming none of the costs incurred in obtaining the
recovery" (Matter of Kelly v State Ins. Fund,
60 N.Y.2d at 138; see Burns v Varriale, 9 N.Y.3d at
213-214). Accordingly, under the circumstances presented, we
find no reason to disturb the calculation made by the WCLJ
and adopted by the Board under which the carrier's credit
was exhausted on August 20, 2013.
J.P., Lynch, Rose and ...