Summary
In Ostolski, the claimant was physically and mentally incapable of proceeding with the trial, and the case was dismissed for failure to prosecute after a refusal by the carrier to consent to settlement or take over the prosecution of the case.
Summary of this case from Claim of Squires v. Fare Operating Corp.Opinion
October 24, 1967
Appeal by the employer and its insurance carrier from a decision of the Workmen's Compensation Board which affirmed an award to claimant. The claimant, employed as a flagman at an excavation site in Clarence, New York, was injured on January 30, 1961 when he was crushed between a Hi-Lift tractor owned by the employer, and an automobile owned and operated by one Munschauer. The appellant insurance carrier did not controvert his claim for compensation, and payments were made from January 31, 1961 to December 22, 1965 at which time they were suspended. On July 26, 1961 the claimant commenced a negligence action in Supreme Court, Erie County, against Munschauer. The appellant insurance carrier was notified of the commencement of the action. In February, 1965 the claimant's attorney in the negligence action unsuccessfully attempted to obtain the carrier's consent to a settlement of the action, and the case was reached for trial at the April 1965 term of court. On April 6, 1965 the claimant was interviewed by his attorney who found him in such an emotional, excitable condition that he was unable to intelligently discuss the case. On April 9, 1965 claimant's attorney discussed the case with the carrier's representatives advising them of the necessity of drawing a jury and that the claimant's mental and physical condition would prevent him from testifying and sought a consent to settlement or have the carrier take over the trial of the action. The carrier again refused to consent to any settlement and refused to undertake the trial of the action. The claimant's attorney thereupon on April 9, 1967 wrote a letter to the carrier explaining the situation and requesting consent to settlement and offered to assign the case to the carrier for trial which was refused. The case went on the day calendar on April 22, 1965 and on April 28, 1965, upon a motion made by the defendant's attorney, the case was ordered dismissed for failure to prosecute. On May 17, 1965 the order dismissing the case for failure to prosecute was entered. The carrier continued making compensation payments until December 22, 1965 when it filed a notice with the board that it had stopped payments because the "Third-party action dismissed with prejudice to compensation carrier." After a hearing, the Referee found that the carrier was not prejudiced by the dismissal and made an award to claimant. On its application for review by the board, the carrier sought a ruling that the dismissal of the Supreme Court action for failure to prosecute was prejudicial to the carrier, and that further compensation benefits should not be made. The board determined that the claimant has a 75% disability and that "the Referee's decision is properly in accordance with the evidence." Since the issue of prejudice raised before the Referee and the board is a question of fact, substantial evidence sustains their findings. ( Matter of Stout v. Prudential Ins. Co., 251 App. Div. 504; Matter of Mayrhofer v. Texteel Wire Strip Co., 273 App. Div. 934.) The appellants now contend that the judgment of dismissal of the third-party action entered in the Erie County Clerk's office on May 17, 1965 without the consent of the compensation carrier, constitutes a compromise or settlement without consent, and that the provisions of subdivision 5 of section 29 Work. Comp. of the Workmen's Compensation Law relieves the carrier of further liability. The board has equitable powers and "Strict compliance with a legal obligation is not always decreed, particularly when the omission is not prejudicial to an opponent." ( Matter of Stout v. Prudential Ins. Co., supra, p. 505.) Inherent in the board's decision is the finding that the dismissal of the claimant's case was wholly involuntary and that his failure to prosecute was something which could not be avoided. Such a determination is a question of fact within the province of the board. Upon this finding the board would have the power to relieve the claimant from strict compliance with the statute. "A compromise, however, envisages a voluntary act." ( Matter of Husing v. Medical Labs., 285 App. Div. 13, 15.) Having determined that the dismissal of the claimant's action was involuntary, there was no discontinuance or settlement in the accepted sense of that term. In our opinion a carrier may not seek to be discharged from any further obligation where it appears that a claimant is physically and mentally incapable of proceeding with the trial of a third-party action, and the case is dismissed for failure to prosecute after a refusal by the carrier to consent to settlement or take over the prosecution of the case. ( Matter of Husing v. Medical Labs., supra.) As was stated in Matter of Husing (p. 15) "the strictly legalistic position of the appellants is contrary to the spirit and purpose of the Workmen's Compensation Law". This was recognized by the Legislature in its enactment of the amendment to subdivision 5 of section 29 Work. Comp. of the Workmen's Compensation Law (L. 1966, ch. 840), which now permits a claimant to settle a third-party action by order of the court in which the action is pending without consent of the carrier. Decision affirmed, with costs to the Workmen's Compensation Board. Herlihy, J.P., Reynolds, Aulisi, Staley, Jr., and Gabrielli, JJ., concur in memorandum by Staley, Jr., J.