Opinion
32916/04.
Decided March 31, 2006.
Christopher Bragoli Associates, Melville NY, for Petitioner.
Foley Smit, for Respondent.
Petitioner moves, by order to show cause, for an order, pursuant to Workers' Compensation Law (WCL) § 29 (5), to: compromise and settle her third-party action for an accident which occurred on July 22, 2002; and, deem the lien claimed by respondent workers' compensation carrier (CRM) is waived.
The instant petition must be denied for its numerous defects and untimely filing. As a preliminary matter, respondent objects to petitioner's use of an order to show cause instead of a motion on notice to pursue her relief. Despite the other defects to be enumerated below, petitioner's use of an order to show cause in this type of proceeding is proper. WCL § 29 (5) states, in relevant part, that:
A copy of the papers to be used on the application to compromise and settle the claim must be served as directed by the court or in the same manner as provided in the civil practice law and rules for a notice of motion upon . . . the insurance carrier, whose written approval would have been required to compromise such cause of action by the employee or his dependents. This notice shall afford them the opportunity to submit affidavits and to be heard by the court on the application. [emphasis added].
The Court permitted the use of an order to show cause. Respondents were able to submit opposition papers and to be heard. Professor David Siegel, in NY Prac, § 248, at 420 [4th ed], observed that, "[a]n order to show cause is basically only a substitute for a notice of motion." Further, Professor Siegel notes, at 421, that "[t]he CPLR says nothing more about an order to show cause than that it may be used in a proper case', which leaves it entirely to the judge's discretion to determine what a proper case is." Respondent has not been prejudiced by the use of an order to show cause as opposed to a motion on notice and pursuant to the statute, a copy of the "papers to be used on the application to compromise and settle the claim [were] served as directed by the court." [emphasis added]
Background
Petitioner was injured in a July 22, 2002 accident, in the course of her employment as a school bus matron for Jofaz Transportation, when the bus in which she was working was struck in the rear by an automobile insured by Allstate Insurance Company. Petitioner's attorney claims that Allstate offered to settle her third-party action for $7,750.00, on or about December 10, 2003. On that date, petitioner's attorney applied to respondent for approval and "waiver of any and all workers' compensation lien in this matter" [exhibit A of petition — attorney's letter to respondent].
On December 16, 2003, respondent replied [exhibit B of petition — respondent's letter to petitioner's attorney] that it would not consent to the settlement unless petitioner released her workers' compensation claim, pursuant to WCL § 32. On February 19, 2004, CRM forwarded a draft WCL § 32 settlement agreement to petitioner's attorney [exhibit B of petition].
The instant petition, filed more than fifteen months after CRM's denial of consent to the proposed settlement with Allstate, requests approval of the $7,750 settlement with Allstate and that the workers' compensation lien with CRM be deemed waived. The petition, in violation of WCL § 29 (5), fails to state: the address of the petitioner; a general description of the accident; the nature and extent of the damages sustained; the names of attending or consulting physicians; the medical expenses incurred; the period of disability resulting from the accident; the total amount of lost wages; the petitioner's present physical condition; and, the terms of the attorney's retainer. Further, the petition fails to include, as required by WCL § 29 (5), an attorney's affidavit and a physician's affidavit. At a prior court appearance, I adjourned the case for submission of a physician's affidavit. Petitioner's attorney submitted an inadmissible report of a Dr. Vladimir Gressel. Even if it was in admissible form, it fails to include the necessary information required in WCL § 29 (5).
Defects in WCL § 29 (5) Petition
WCL § 29 (5) states:
The petition shall contain the following:
a. The name and residence of the petitioner if the employee, or petitioner's relationship to the deceased;
b. The date of accident and a general description thereof;
c. The nature and extent of the damages sustained, including the name of the physician or physicians attending or consulting in the treatment and the medical expenses incurred, the period of disability resulting from the accident, the total amount of wages lost thereby, and the present physical condition;
d. The terms of the attorney's retainer and of the proposed settlement and petitioner's approval thereof; and
e. Whether any previous application for the settlement of the claim has been made, and if so, the time and the court or justice thereof and the disposition made of same.
As noted above, much of the information, required by WCL § 29 (5) in a petition for judicial approval of a third-party workers' compensation settlement, is lacking from the instant petition. An attorney's affidavit must, according to WCL § 29 (5):
set forth by whom, on what date and under what terms he was retained, the services rendered by him, his fee if the settlement is approved, the acts complained of, the terms of the proposed settlement with a statement of his reasons for recommending the same, and shall state that he has not become concerned in the application or its subject matter at the instance of such defendant directly or indirectly and that he has not received and is not to receive any compensation from such defendant directly or indirectly. The physician's affidavit, pursuant to WCL § 29 (5), must present detailed information with respect to petitioner's medical condition, dates of treatments, the permanency of any disability, and the physician's fees.
Failure to include this necessary information is a basis to disallow the instant petition. Macey v. Uninsured Employers' Fund, 80 AD2d 951 (3rd Dept 1981). In Macey the Court reversed the granting of a settlement in a third-party personal injury action by Supreme Court, Essex County. The Court, at 952, held that "we find the moving the moving papers which prompted the court's favorable action to be woefully inadequate. Since they lack a very considerable portion of the detailed information the statute requires, we are compelled to reverse."
In Snyder v. CNA Insurance Companies, 306 AD2d 677 (3rd Dept 2003), the Court reversed the judicial approval of a third-party personal injury settlement by Supreme Court, Columbia County. The Snyder petition, similar to the instant petition, lacked information about the amount of insurance coverage, the nature of the accident and medical records and opinions. The Court held, at 678-679, that:
the petition failed to include much of the information required by Workers' Compensation Law § 29 (5) and it was supported by only a rather conclusory affidavit from petitioner's counsel. While a liberal standard is applied in determining whether a settlement is reasonable . . . the relevant information in this record is insufficient to support such a conclusion. In light of the dearth of factual information regarding the reasonableness of the settlement (as well as the paucity of proof pertaining to the other issues implicated in a post-settlement application for judicial approval), we conclude that Supreme Court strayed beyond the borders of its discretion in granting the petition upon these papers.
A petitioner has the right to seek judicial approval of a third-party settlement if his or her workers' compensation carrier denies consent to the settlement. Judicial approval preserves the right to subsequent workers' compensation benefits. Johnson v. Buffalo Erie County Private Industry Council, 84 NY2d 13 (1994). See Kusiak v. Commercial Union Assur. Companies, 49 AD2d 122 (4th Dept 1975); Balkam v. Miesemer, 74 AD2d 629 (2nd Dept 1980).
However, in the instant action the petition is untimely. No explanation is provided as to why petitioner waited more than one year from the rejection by CRM to the filing of the petition for judicial approval. Therefore, there is no evidence presented of any good cause for the delay in commencing the instant petition. In Bernthon v. Utica Mut. In. Co., 279 AD2d 728 (3rd Dept 2001), petitioner blamed the carrier for the one year delay in applying for court approval of a settlement of a third-party action. In the instant case, petitioner blames CRM's withholding of consent for the delay in applying for judicial approval. The Bernthon Court noted that the delay in applying for judicial approval is squarely upon petitioner's inaction. The carrier's denial or withholding of consent is not a prerequisite for judicial approval of a settlement. Judicial approval is an alternative method for a petitioner to receive approval of a settlement. See Baiano v. Squires, 113 AD2d 732 (2nd Dept 1985); Harosh v. Diaz, 253 AD2d 850 (2nd Dept 1998); Zamfrino v. Furman, 1 AD3d 591 (2nd Dept 2003); Furtado v. Mario's Bakery, 17 AD3d 527 (2nd Dept 2005).
The instant petition must be denied for petitioner's gross lack of compliance with the provisions of WCL § 29 (5) and petitioner's failure to demonstrate any good cause for the instant petition's untimely filing.
Conclusion
Accordingly, it is
ORDERED, that the petition, by order to show cause, for an order pursuant to Workers' Compensation Law (WCL) § 29 (5) to: compromise and settle petitioner's third-party action for an accident which occurred on July 22, 2002; and, deem the lien claimed by respondent defendant workers' compensation carrier as waived, is denied.
This constitutes the Decision and Order of the Court.