Opinion
# 2017-041-009 Claim No. 120451 Motion No. M-89685 Motion No. M-89837
02-22-2017
MARK FABIANO and KATHERINE FABIANO v. THE STATE OF NEW YORK
NONE ROEMER WALLENS GOLD & MINEAUX, LLP By: Matthew J. Kelly, Esq. For New York State Workers' Compensation Board: ANNETTE M. HOLLIS, ESQ. For AIG Claims Services, Inc.: STOCKTON BARKER & MEAD, LLP By: David G. Ochse, Esq.
Synopsis
Defendant's motion to hold nonparty Workers' Compensation Board in contempt for failure to comply with subpoena to testify at collateral source hearing is denied where subpoena was unsigned and witness fee and traveling expenses were not tendered in advance of return date of subpoena; nonparty workers' compensation benefits administrator's motion to quash subpoena to testify at collateral source hearing is granted where benefits administrator's obligation to pay future medical expenses of claimant is statutorily exempt from consideration as a collateral source and irrelevant to the issues before the court in the collateral source hearing.
Case information
| UID: | 2017-041-009 |
| Claimant(s): | MARK FABIANO and KATHERINE FABIANO |
| Claimant short name: | FABIANO |
| Footnote (claimant name) : | |
| Defendant(s): | THE STATE OF NEW YORK |
| Footnote (defendant name) : | |
| Third-party claimant(s): | |
| Third-party defendant(s): | |
| Claim number(s): | 120451 |
| Motion number(s): | M-89685, M-89837 |
| Cross-motion number(s): | |
| Judge: | FRANK P. MILANO |
| Claimant's attorney: | NONE |
| Defendant's attorney: | ROEMER WALLENS GOLD & MINEAUX, LLP By: Matthew J. Kelly, Esq. For New York State Workers' Compensation Board: ANNETTE M. HOLLIS, ESQ. For AIG Claims Services, Inc.: STOCKTON BARKER & MEAD, LLP By: David G. Ochse, Esq. |
| Third-party defendant's attorney: | |
| Signature date: | February 22, 2017 |
| City: | Albany |
| Comments: | |
| Official citation: | |
| Appellate results: | |
| See also (multicaptioned case) |
Decision
Defendant moves (M-89685) "to hold NYS Workers' Compensation Board in contempt for failing to appear at collateral source hearing pursuant to subpoena." Claimants Mark and Katherine Fabiano (claimants) have neither consented to nor opposed the relief sought by defendant. The non-party New York State Workers' Compensation Board (Board), where claimant Mark Fabiano (claimant) filed a claim for benefits following a work-related injury, opposes the defendant's contempt motion.
Non-party AIG Claims Services, Inc. (AIG), the claims administrator for claimant's workers' compensation benefits, moves (M-89837) for an order quashing subpoenas served on AIG by defendant. The subpoenas seek testimony from AIG at the collateral source hearing regarding workers' compensation medical payments made by AIG to claimant. Defendant opposes the motion to quash brought by AIG. Claimants and the Board have neither consented to nor opposed the relief requested by AIG.
By Decision and Order filed October 10, 2013, the Court granted claimants summary judgment as to defendant's liability pursuant to Labor Law 240 (1), regarding injuries suffered by Mark Fabiano on September 21, 2011, when he fell from a scaffold during a painting project at Exit 21 of the New York State Thruway. A trial as to claimants' damages was conducted from June 16, 2015 to June 18, 2015 and the Court's Decision as to damages was filed on April 25, 2016.
The parties were thereafter unable to stipulate to the terms of a judgment based upon the Court's Decision as to damages, in particular with respect to potential collateral source payments in mitigation of damages, and a collateral source hearing was convened on December 19, 2016. The collateral source hearing proceeded until it was adjourned based upon the failure of a witness from the Board, who had allegedly been subpoenaed by defendant, to appear to testify.
Defendant's contempt motion against the Board will be considered first. Defendant alleges that it served a subpoena on the Board on December 15, 2016 requiring its attendance at the collateral source hearing at the Court of Claims in the City and County of Albany but the "Board failed to appear at the collateral source hearing and violated said subpoena."
In response, the Board submits the affidavit of its employee who was served with the subpoena at Board offices located at 328 State Street in the City and County of Schenectady. Upon being served with the subpoena, the employee noted in the Board mail log that the subpoena was "served in person at 328 State St. Schenectady; no fee, no attorney or judge's signature, requesting testimony." The Board's employee further states that she telephoned the defendant's attorney's office and advised that the subpoena was unsigned. The Board employee states in her affidavit that she was told by the "office of Defendant's counsel" that "they [the attorney] did have a signed Judicial Subpoena, but that it was with an attorney who was outside of the office." A copy of the subpoena served on the Board on December 15, 2016 is attached to the Board's opposition papers.
The Board also submits the affidavit of its Records Access Officer who states that the subpoena was addressed to the Board generally and did not "specify an employee, or even a specific department of the Board." The Records Access Officer also states that the Board has "over twelve hundred employees with staff spread throughout multiple Board bureaus." The Board's Records Access Officer further argues that the subpoena is improperly attempting to compel expert testimony from a Board employee, and additionally requests the imposition of costs against defendant for the expenses incurred in defending defendant's contempt motion.
Defendant disputes that the subpoena served on December 15, 2016 was unsigned, insisting that the subpoena was "So Ordered by Hon. Kimberly O'Connor on December 14, 2016." Defendant also asserts that no witness fee was tendered with service of the subpoena because the Board "prevented proper tender of witness fees prior to the collateral source hearing because no witness appeared at the Court of Claims on December 19, 2016."
CPLR 2302, entitled "Authority to issue," at relevant part of subsection (a), requires that:
"Subpoenas may be issued without a court order by the clerk of the court, a judge where there is no clerk . . . an attorney of record for a party to an action."
CPLR 2302 (b) describes the circumstances under which a subpoena must be issued by a judge.
The Court finds that the subpoena served on the Board, as described by the affidavit of the individual served, as recorded in the Board's mail log and as depicted in the Board's exhibit, was not signed, and thus not issued, by either an attorney or by a judge. The subpoena served on the Board contained the hand-written name and telephone number of Matthew J. Kelly (defendant's attorney) but did not state that Mr. Kelly was an attorney, nor was it signed by Mr. Kelly.
CPLR 2303 (a) requires that:
"Any person subpoenaed shall be paid or tendered in advance authorized traveling expenses and one day's witness fee."
The Court additionally finds that defendant failed to pay or tender in advance authorized traveling expenses and failed to tender in advance one day's witness fee.
In Bobrowsky v Bozzuti (98 AD2d 700, 702 [2d Dept 1983]), the court denied a motion for contempt for disobedience of a subpoena because the "subpoena was unaccompanied by any witness fee. Witness fees must be tendered when the subpoena is served or within a reasonable time before it is returnable." Here the subpoena was returnable, according to its terms, "on Monday, December 19, 2016 at 10 A.M." Defendant offers no proof that it tendered either a witness fee or traveling expenses within a reasonable time before the subpoena was returnable (see Jaggars v Scholeno, 6 AD3d 1130 [4th Dept 2004]).
Defendant's assertion that the Board "prevented the tender of the requisite witness fees by failing to appear at the Court of Claims at the designated time" is without merit. Defendant argues, incorrectly and contrary to the statute, that the witness fee and traveling expenses can be paid at the "designated time" that the subpoena is returnable.
As set forth in the statute (CPLR 2303 [a]), the traveling expenses and witness fee are required to be paid "in advance" of the subpoena's return date and time. The Jaggars court makes clear that a witness may not be punished for contempt where "witness fees were not tendered with the subpoena or before it was returnable" (6 AD3d at 1131).
The defendant's motion to hold the Board in contempt is denied. The record supports the Board's contention that it was served with an unsigned subpoena which was not accompanied by either the statutorily required witness fee or traveling expenses paid in advance. The Board was under "no obligation to comply with the subpoena" (Jaggars, 6 AD3d at 1131).
The Board's request for imposition of costs against defendant for expenses incurred in defending defendant's motion for contempt is denied.
Next, AIG moves to quash the subpoenas served by defendant on AIG employees which seek testimony and documents regarding potential future workers' compensation medical payments to claimant. Defendant seeks the testimony and records for presentation at the collateral source hearing in order to potentially reduce defendant's ultimate damages liability to claimants.
Collateral source evidence is governed by CPLR 4545 which provides, at relevant part, as follows:
"(a) Actions for personal injury, injury to property or wrongful death. In any action brought to recover damages for personal injury, injury to property or wrongful death, where the plaintiff seeks to recover for the cost of medical care, dental care, custodial care or rehabilitation services, loss of earnings or other economic loss, evidence shall be admissible for consideration by the court to establish that any such past or future cost or expense was or will, with reasonable certainty, be replaced or indemnified, in whole or in part, from any collateral source, except for life insurance and those payments as to which there is a statutory right of reimbursement" (emphasis added).
Here, the purported collateral source identified by defendant, consisting of future workers' compensation medical benefits payable to claimant, is subject to the CPLR 4545 exception from consideration by the court because there is "a statutory right of reimbursement." Specifically, the workers' compensation insurance carrier (represented here by its benefits administrator AIG) is entitled to a statutory lien for reimbursement of the workers' compensation medical benefits payable by AIG to claimant.
The CPLR 4545 "statutory right of reimbursement" considered here (specifically, a workers' compensation lien) is set forth in Workers' Compensation Law 29 (1):
"If an employee entitled to compensation under this chapter be injured . . . such injured employee . . . may take such compensation and medical benefits and . . . pursue his [civil court] remedy [against a tortfeasor] . . . In such case, the state insurance fund, if compensation be payable therefrom, and otherwise the person, association, corporation or insurance carrier liable for the payment of such compensation, as the case may be, shall have a lien on the proceeds of any recovery from such [tortfeasor] . . . whether by judgment, settlement or otherwise . . . to the extent of the total amount of compensation awarded under or provided or estimated by this chapter for such case and the expenses for medical treatment paid or to be paid by it and to such extent such recovery shall be deemed for the benefit of such fund, person, association, corporation or carrier."
In Matter of Miller v Arrow Carriers Corp. (130 AD2d 279, 281 [3d Dept 1987]), the court explained that:
"Workers' Compensation Law § 29 confers two separate rights on compensation carriers to obtain reimbursement from the proceeds of third-party recoveries: that of a lien against the recovery for the amount of benefits disbursed by a carrier (Workers' Compensation Law §29 [1]), and the right to offset a claimant's future compensation benefits by the amount of the claimant's net recovery in the third-party action (Workers' Compensation Law §29 [4]). To induce settlement, a carrier may waive its lien for less than the amount to which it is entitled, but if it also wishes to retain its right to future offsets it must do so explicitly."
The record shows that AIG reserved "all rights pursuant to Section 29 of the WCL," including its lien for future medical payments, in a settlement agreement of claimant Mark Fabiano's workers' compensation claim entered into between claimant Mark Fabiano and the workers' compensation insurance carrier, and approved by the Workers' Compensation Board.
The attorney for AIG points out that the "amount of the lien is equal to the total amount of compensation awarded under or provided or estimated by Workers Compensation Law and the expenses for medical treatment paid or to be paid by AIG." (Emphasis added).
Kihl v Pfeffer (47 AD3d 154, 167 [2d Dept 2007]) illustrates the interplay between CPLR 4545 and Workers' Compensation Law 29, explaining that a defendant may be entitled to a collateral source reduction for future economic loss where a claimant is entitled to the "indefinite payment of first party worker's compensation benefits that are not subject to a lien in favor of the compensation carrier."
The claimants' damages recovery in this action is, however, subject to the statutory lien provided by Workers' Compensation Law 29 (1) and reserved in the workers' compensation claim settlement agreement. AIG's attorney further points out that AIG (as the benefits administrator for the workers' compensation insurance carrier) has retained its right pursuant to Workers' Compensation Law 29 (4) to an "offset for any future liability" for medical payments to claimant "in an amount equal to the claimant's net recovery from any third-party action," referring to the present claim.
The future workers' compensation medical expense benefits payable to claimant from AIG are therefore excepted from consideration by the Court as a collateral source under CPLR 4545, because of AIG's statutory right of reimbursement and/or offset provided by Workers' Compensation Law 29 (1) and (4).
The Court's conclusion is supported by the holding in Zimnoch v Bridge View Palace, LLC (19 Misc 3d 1107 [A] [Sup Ct, Kings County 2008]), in which the court denied a request for a collateral source hearing because "there is no collateral source when workers' compensation, as in the instant case, asserts a lien."
The defendant there appealed the Zimnoch trial court decision and the Appellate Division, Second Department, in Zimnoch v Bridge View Palace, LLC (69 AD3d 928, 930 [2d Dept 2010]), affirmed the lower court's denial of the request for a collateral source hearing:
"The defendant's contention that the trial court erroneously denied its request for a hearing as to collateral source payments made to Zimnoch by workers' compensation lacks merit. The payments which the plaintiffs received are specifically excluded from consideration by statute (see CPLR 4545 [a]; Workers' Compensation Law § 29 [1])."
As in Zimnoch, the potential future workers' compensation medical payments at issue on this motion are specifically excluded from consideration at the collateral source hearing by statute (see CPLR 4545 [a]; Workers' Compensation Law 29 [1] and [4]).
AIG has sufficiently met its burden to show that the subpoenaed testimony of AIG is "utterly irrelevant to any proper inquiry" regarding the issues before the Court in the collateral source hearing (Kapon v Koch, 23 NY3d 32, 38 [2014]).
Defendant, in its response to AIG's submission in support of its initial burden, has failed to address the explicit statutory language of CPLR 4545 and Workers' Compensation Law 29 (1) and (4) excluding claimant's potential future workers' compensation medical payments from consideration by the Court at the collateral source hearing. Defendant has similarly not addressed any of the cases interpreting the relevant provisions of CPLR 4545 and Workers' Compensation Law 29 (1) and (4) with respect to collateral source hearings.
Consequently, defendant has not established that the subpoenaed testimony is material and relevant to issues properly before the Court at the collateral source hearing.
The motion by AIG for an order quashing the subpoenas served on its employees by defendant is granted.
The collateral source hearing will reconvene on April 10, 2017 at 9:30 a.m.
February 22, 2017
Albany, New York
FRANK P. MILANO
Judge of the Court of Claims
Papers Considered:
1. Defendant's Order to Show Cause (M-89685), filed December 27, 2016; 2. Affidavit of Matthew J. Kelly in support of M-89685, sworn to December 20, 2016, and attached exhibits; 3. Affirmation of Patrick J. Cremo in opposition to M-89685, dated January 25, 2017, and attached exhibits; 4. Affidavit of Virginia Cawthon in opposition to M-89685, sworn to January 24, 2017, and attached exhibits; 5. Reply Affidavit of Matthew J. Kelly in further support of M-89685, sworn to February 7, 2017, and attached exhibit; 6. Affirmation of Annette M. Hollis in opposition to M-89685, sworn to February 13, 2017; 7. AIG's Order to Show Cause (M-89837), filed January 25, 2017; 8. Affidavit of David G. Ochse in support of M-89837, sworn to January 18, 2017, and attached exhibits; 9. Affidavit of Matthew J. Kelly in opposition to M-89837, sworn to January 24, 2017, and annexed exhibits.