Niurka Andino, Respondent-Appellant,v.Ronald Mills, et al., Appellants-Respondents. (And a Third-Party Action.)

Brief

N.Y.April 24, 2018

Reproduced on Recycled Paper APL-2017-00067 To be argued by: JULIE STEINER 15 minutes requested Court of Appeals State of New York NIURKA ANDINO, Respondent-Appellant, against RONALD MILLS AND NEW YORK CITY TRANSIT AUTHORITY, Appellants-Respondents. RONALD MILLS AND NEW YORK CITY TRANSIT AUTHORITY, Third-Party Plaintiff, against NEW YORK CITY POLICE DEPARTMENT AND RAFAEL VILLEGAS, Third-Party Defendants. BRIEF FOR AMICUS CURIAE CITY OF NEW YORK RICHARD DEARING SCOTT SHORR JULIE STEINER of Counsel March 16, 2018 ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney for Amicus Curiae City of New York 100 Church Street New York, New York 10007 Tel: 212-356-0844 or -0852 Fax: 212-356-2509 jsteiner@law.nyc.gov TABLE OF CONTENTS Page i TABLE OF AUTHORITIES ....................................................... iii INTEREST OF THE CITY OF NEW YORK .............................. 1 STATEMENT OF THE CASE .................................................... 5 A. How accident disability retirement benefits replace lost employment income and lost pension benefits. ........................................................... 5 1. How a police officer becomes eligible for ADR benefits ............................................................. 5 2. How ADR benefits are calculated ............................. 7 B. What the Legislature has done to prevent double recoveries ........................................................ 10 C. How Supreme Court and the Appellate Division used ADR benefits to offset the jury award .......................................................................... 11 ARGUMENT ............................................................................. 13 ADR BENEFITS SHOULD OFFSET JURY AWARDS FOR BOTH LOST EARNINGS AND LOST SERVICE PENSION BENEFITS ......................... 13 A. Using ADR benefits to offset jury awards for lost earnings and lost pension benefits effectuates the Legislature’s intent to preclude double recoveries. ....................................................... 13 B. ADR benefits satisfy this Court’s collateral source offset test. ........................................................ 17 TABLE OF CONTENTS (cont’d) Page ii 1. ADR benefits replace earnings the retired police officer would have received had she remained in public service. ..................................... 19 a. Tax-free ADR benefits are paid as soon as the police officer’s regular salary ends. ............................................... 20 b. Because ADR benefits replace lost earnings, they are subject to reduction if the recipient earns employment income. ................................. 25 2. After the date when a police officer proves she would have retired with a service pension, ADR benefits replace pension benefits. ................................................................... 30 C. Andino’s arguments to the contrary are unavailing. .................................................................. 33 CONCLUSION .......................................................................... 40 CERTIFICATE OF COMPLIANCE .......................................... 41 TABLE OF AUTHORITIES Page(s) iii Cases Bryant v. New York City Health & Hosps. Corp., 93 N.Y.2d 592 (1999) ..................................................... 22, 23, 37 Gonzalez v. Iocovello, 249 A.D.2d 143 (1st Dep’t 1998), aff’d on other grounds, 93 N.Y.2d 539 (1999) ............................ 18 Iazzetti v. City of New York, 256 A.D.2d 140 (1st Dep’t 1998), rev’d on other grounds, 94 N.Y.2d 183 (1999) ........................... 32 Iazzetti v. City of New York, 94 N.Y.2d 183 (1999) ................................................................. 16 Johnson v. N.Y.C. Transit Auth., 88 A.D.3d 321 (1st Dep’t 2011) ...................................... 18, 27, 32 Oden v. Chemung Cnty. Indus. Dev. Agency, 87 N.Y.2d 81 (1995) ........................................................... passim Ryan v. City of New York, 228 N.Y. 16 (1920) ....................................................................... 5 Seiferheld v. Kelly, 16 N.Y.3d 561 (2011) ................................................................. 26 Terranova v. N.Y.C. Transit Auth., 49 A.D.3d 10 (2d Dep’t 2007), lv. denied, 11 N.Y.3d 708 (2008) ................................................ 22 Walsh v. Scoppetta, 18 N.Y.3d 850 (2011) ................................................................ 34 TABLE OF AUTHORITIES (cont’d) Page(s) iv Statutes, Codes and Regulations 26 U.S.C. § 104(a)(1)................................................................... 7, 21 26 CFR 1.104-1(b) ........................................................................... 21 CPLR § 4545 ................................................................................. passim § 4545(a) .................................................................... 3, 10, 13, 15 § 4545(b) .................................................................................... 16 § 4545(c) ................................................................... 10, 15, 21, 22 Retirement and Social Services Law § 212 ............................................................................................ 9 § 443 ............................................................................................. 7 Workers’ Compensation Law § 11 ............................................................................................. 14 § 29(6) ....................................................................................... 14 New York City Administrative Code § 13-247 ............................................................................ 7, 25, 38 § 13-252 ....................................................................................... 5 § 13-254 .............................................................................. passim § 13-255(1) ................................................................................... 9 § 13-258 ........................................................................ 6, 9, 20, 22 TABLE OF AUTHORITIES (cont’d) Page(s) v § 13-258(3) ................................................................................... 7 § 13-264 ...................................................................................... 21 New York City Charter § 1117 ........................................................................................... 9 Other Authorities L 1984, ch 701 ............................................................................... 13 Memorandum of the Assembly Rules Committee, New York State Legislative Annual, L 1984, ch 701 ........... 14, 15, 33 L 1986, ch 438 ............................................................................... 28 Governor’s Approval Memorandum, New York State Legislative Annual, L 1986, ch 438 ........................................... 29 Budget Report on Bills, Bill Jacket, L 1986, ch 438 ..................... 29 Governor’s Veto Message, August 4, 1984, Bill Jacket, L 1986, ch 438 ........................................................................... 28 Governor’s Veto Message, August 8, 1984, Bill Jacket, L 1986, ch 438 ........................................................................... 29 Governor’s Program Bill Memorandum, New York State Legislative Annual, L 2009, ch 494 ................................ 17 Mayor’s Approval Letter, Bill Jacket, L 2009, ch 494 .................. 16 In the Matter of the Application of Robert Walsh, Brief for Petitioner-Appellant, 2011 WL 7452111 ............................ 34 INTEREST OF THE CITY OF NEW YORK The City of New York files this brief to explain why the accident disability retirement (ADR) benefits it provides to respondent-appellant Niurka Andino should offset her jury awards for future lost earnings and future lost pension benefits. Some uniformed service members sustain a line-of-duty injury, retire on accident disability, receive ADR benefits, and assert a personal injury claim against their employer. In the tort action, the ADR recipient may seek to prove that, if not for the line-of-duty injury, she would have remained in public service until eligible to retire with a service pension or later. During the proven period of intended service, ADR benefits replace lost earnings. To the extent the ADR recipient proves that she would have received a service pension after a service retirement, ADR benefits replace lost service pension benefits. Accordingly, unless ADR benefits offset jury awards for lost earnings and lost pension benefits, the ADR recipient would recover twice for the same economic loss. This result would contravene CPLR 4545, the collateral source offset provision. 2 The City appears as amicus here because the ADR-offset issue recurs in many of our cases. The City is a defendant in nearly 400 pending tort actions in which the plaintiff is a current or former uniformed employee potentially entitled to receive ADR benefits based upon the injury that is the subject of the lawsuit. Allowing those plaintiffs to recover both jury awards and ADR benefits for the same economic losses would overcompensate them at significant public expense, contrary to legislative intent. Preventing double recoveries seems like common sense, but offsetting jury awards to prevent double recoveries is a legislative departure from the common-law rule. At common law, a tort plaintiff could recover twice for the same injury: for example, both health insurance proceeds and a damages award against the tortfeasor. That is because the common-law rule disallowed offsets of personal injury awards from “collateral sources”—that is, compensation the plaintiff received from a source other than the tortfeasor. In 1975, the Legislature started working to limit the collateral source rule so as to prevent double recoveries. Those limits are now codified in CPLR § 4545. 3 At the urging of the City and thousands of other public employers, the Legislature amended CPLR § 4545 in 2009 to clarify that in personal injury cases brought against public employers and other defendants, jury awards for both past and future economic losses are subject to collateral source offsets. CPLR § 4545(a). Denying ADR offsets from jury awards for past and future lost earnings and future lost pension benefits would contravene the Legislature’s clearly expressed intent. The record in this case demonstrates that ADR benefits function as a substitute for lost earnings during the period when the recipient proves that she would have remained in public service if not for the injury. As an earnings replacement, ADR benefits are paid as soon as the recipient is certified as being disabled, and—like workers’ compensation benefits—are received tax-free. As an earnings replacement, ADR benefits are also reduced during the period of service necessary to become entitled to a service pension if the recipient’s actual or potential employment income exceeds a statutory cap. 4 When the ADR recipient would have been eligible to retire, or at a later date when retirement with a service pension was planned, according to the trial proof, ADR benefits would serve a different function: providing a replacement for a lost service pension. During that proven service pension period, ADR benefits—like traditional pension benefits—are no longer subject to reduction in the event the recipient earns employment income. Applying this analysis, this Court should affirm the Appellate Division’s order in part, and reverse in part. The Appellate Division’s holding that ADR benefits offset Andino’s jury award for lost future pension benefits was correct and should be affirmed. But the Appellate Division erred in declining an ADR offset from the jury’s award for lost future earnings. A partial reversal is thus needed to effectuate the Legislature’s intent to preclude ADR recipients who assert personal injury claims against their employers from obtaining two taxpayer-funded recoveries for their loss of future income. 5 STATEMENT OF THE CASE A. How accident disability retirement benefits replace lost employment income and lost pension benefits. For many public employees who can no longer perform their work because of an on-the-job injury, workers’ compensation provides the exclusive remedy. But New York City police officers— like City firefighters and sanitation workers—are not covered by workers’ compensation. See Ryan v. City of New York, 228 N.Y. 16, 20 (1920). Instead, disabled police officers are entitled to receive ADR benefits, provided they meet the statutory criteria, and may also pursue available tort remedies. 1. How a police officer becomes eligible for ADR benefits A finding of entitlement to ADR benefits results from a three-step process. First, there must be a medical determination that an accidental work-related injury rendered the police officer physically or mentally unable to perform her duties. New York City Administrative Code § 13-252. Next, the Medical Board of the Police Pension Fund certifies to the Fund’s Board of Trustees that 6 the officer is disabled as the result of an accidental injury received in City service. Id. And finally, after that certification, the Board of Trustees must “retire [the officer] for accident disability forthwith.” Id. Payment of ADR benefits begins upon the police officer’s retirement on accident disability. Code § 13-258. In other words, a police officer starts receiving ADR income immediately upon, but never before, the cessation of her salary as a police officer. Here, for example, Andino was injured on duty at the age of 36, when a Transit Authority vehicle struck the police vehicle she was riding in (Record on Appeal [R.] 33a, 44a, 130b-31b, 640, 642). After Andino applied for ADR benefits, the Medical Board determined that her line-of-duty knee injury left her disabled from continuing her employment as a police officer (R. 642-53, 941). The Board of Trustees approved Andino’s accident disability retirement in August 2009, the same month she began receiving ADR benefits (R. 935-39, 941). 7 2. How ADR benefits are calculated ADR recipients generally receive ADR benefits for life. With certain additions not relevant here, the amount of the annual benefit is 75% of the recipient’s final average salary as defined in section 443 of the Retirement and Social Services Law. See Code § 13-258(3). The Legislature has made clear that, initially, ADR benefits function as a replacement for lost earnings. See Code § 13-254. In light of this objective, the Legislature has crafted a mechanism to reduce ADR benefits by amounts earned or earning capacity. Id. During the period before the ADR recipient would have been eligible for a service retirement, tax-free ADR benefits approximate the taxable income the recipient would have received had she remained in City service. See 26 U.S.C. § 104(a)(1). Given the inherent uncertainty about when a particular employee would have retired absent the injury, the Legislature has used the pension eligibility date—usually 20 years after City service began (see Code § 13-247)—as the benchmark for applying this reduction mechanism. Thus, during the period before an officer’s 20th anniversary, ADR benefits are subject to reduction if the member 8 earns (or has the opportunity to earn from the City) employment income that exceeds a defined maximum. Code § 13-254. To determine whether an ADR recipient is earning enough employment income to trigger a benefits reduction, the Police Pension Fund requires recipients to file an annual financial disclosure form (R. 60, 67). To determine an ADR recipient’s ability to earn employment income, the Board of Trustees is also entitled to require recipients to undergo a yearly medical examination. Code § 13-254. If the Board determines that the recipient can engage in “a gainful occupation,” that person’s name is certified to the appropriate state or municipal civil service commission and placed on the eligible preferred list of candidates for suitable positions. Id. If an ADR recipient is engaged in a gainful occupation or offered City service as a result of her name being placed on a civil service list, her ADR benefits may be reduced. Code § 13-254. When combined with her ADR benefit, the recipient’s actual or potential employment income may not exceed a defined cap. The cap is determined by comparing: (1) the recipient’s annual ADR 9 benefit plus her actual or potential employment earnings; and (2) “the current maximum salary for the title next higher” than the ADR recipient held at the time of retirement. Id. If the former number exceeds the latter, ADR benefits must be reduced. Id. Once the ADR recipient would have been eligible for a service pension, ADR benefits are not reduced if she earns or has the capacity to earn income from employment, just as a regular service retirement pension is not subject to reduction if the pensioner receives outside income. Code § 13-254. ADR benefits equal 75% of the recipient’s final average salary. Code § 13-258. By contrast, a regular service pension police officers can receive after completing 20 years of service is generally 50% of the officer’s final average salary. Id. § 13-255(1).1 1 At any point after a police officer retires on accident disability, ADR benefits are suspended if the recipient starts working for New York State or one of its subdivisions. See New York City Charter § 1117. While ordinary disability and service retirement benefits are also subject to § 1117, service retirees may elect, under RSSL § 212, to earn up to $30,000 a year from public employment up until age 65 without a reduction in their pension benefit; after the age of 65, there is no earnings limitation. Section 212 is inapplicable to disability retirees. 10 B. What the Legislature has done to prevent double recoveries At common law, the collateral source rule precluded the reduction of a personal injury award by the amount of compensation a plaintiff received from sources other than the tortfeasor. As a result, plaintiffs who were injured on the job could obtain two recoveries for their lost future income and lost future pension benefits: one from the tortfeasor and one from a non- tortfeasor. In 1984, legislative limits on the collateral source rule were codified in CPLR 4545. Formerly, CPLR 4545 required courts to reduce jury awards for past or future economic loss by the amount that “was or will be replaced or indemnified, in whole or in part, from any collateral source,” including “workers’ compensation or employee benefits.” See former CPLR 4545(c).2 The intended effect was to prevent injured plaintiffs from being compensated twice for the same economic loss. 2 Because Andino commenced this action before CPLR 4545 was amended in 2009, former 4545(c) governs here. But the analysis would be the same under the currently effective CPLR 4545(a). 11 C. How Supreme Court and the Appellate Division used ADR benefits to offset the jury award After finding the Transit Authority solely at fault for Andino’s accident, a jury made lump-sum damage awards for the earnings and pension benefits the jury found she would lose over the next 37 years of her expected life (R. 1452b-53b, 905-06). The parties stipulated to modify the jury’s verdict to $2,392,512 in future lost earnings and $2,490,000 in future lost pension benefits (R. 77-78, 92-93, 1008). The stipulated award for future lost earnings covered the 19.24-year period from the date of the jury verdict to the statistical retirement age of 63.9 (for all workers in Andino’s demographic group—not just police officers) (R. 697b, 767b, 92-93, 1008). The stipulated award for future lost pension benefits covered the 17.7 years Andino was expected to live after reaching the age of 63.9 (R. 92-93, 1008). During the subsequent collateral source hearing, the Transit Authority argued that Andino’s ADR benefits replaced the earnings she would have received up to her service retirement, had she not been injured, and then replaced the pension benefits 12 she would have received upon her service retirement. But Supreme Court, Bronx County (Gonzalez, J.), declined to find that Andino’s ADR benefits offset the jury’s awards for future lost earnings and pensions benefits (R. 27a). The court reasoned that there was no “direct match” between Andino’s ADR benefit and either award, because the ADR benefit was made available to any public servant who was injured in the line of duty and was guaranteed for life, instead of ending at Andino’s expected retirement age of 63 (R. 27a). The Appellate Division, First Department, affirmed Supreme Court’s collateral source ruling as it related to the future lost earnings award, but reversed as to the lost pension award (R. 1041-42). The court held that the jury’s award for future lost pension benefits should be offset by the total amount of ADR benefits Andino was projected to receive, “effectively reducing that category of damages to zero” (id.). 13 ARGUMENT ADR BENEFITS SHOULD OFFSET JURY AWARDS FOR BOTH LOST EARNINGS AND LOST SERVICE PENSION BENEFITS A. Using ADR benefits to offset jury awards for lost earnings and lost pension benefits effectuates the Legislature’s intent to preclude double recoveries. The history of CPLR § 4545 demonstrates a strong legislative intent for benefits like ADR to offset jury awards for all lost economic benefits that result from retirement due to an on- the-job injury, including both lost future earnings and lost future pension benefits. Such offsets prevent improper double recoveries for the same losses.3 As originally enacted in 1984, former CPLR 4545(a) permitted collateral source offsets when juries awarded damages for past economic loss in medical malpractice cases. In a memorandum submitted with L 1984, ch 701, the Assembly Rules Committee admonished that “[d]ouble compensation for the same 3 Although this case is limited to future lost earnings and pension benefits, CPLR 4545 would also require an ADR offset from a jury award for past lost earnings. 14 injury is unjustifiable by any policy consideration and results in costly injustice to the taxpayer.” Memorandum of the Assembly Rules Committee (“Committee Memorandum”), New York State Legislative Annual, L 1984, ch 701, at 252. What is more, the rules committee specified ADR benefits as an example of a qualifying offset. See Committee Memorandum, at 251. ADR benefits “may not be regarded as a payment for an employee’s past service,” the rules committee wrote, because those benefits are awarded regardless of the length of service, provided only that the disability was causally related to an accident during service. Id. at 252. The rules committee further noted that several City employees, including police officers, were not entitled to workers’ compensation, which generally provides the “exclusive” remedy to employees injured in the course of employment. Id. at 251; see also Workers’ Compensation Law §§ 11; 29(6). As a result, police officers injured in the course of employment could receive “generous sick leave and accident disability retirement allowances,” and also bring actions against the City for work- related injuries. See Committee Memorandum, at 251. 15 The bill that became CPLR 4545(a) would “correct this situation by permitting” ADR payments to offset jury awards, so as to “prevent a public employee from being compensated twice for the same injury.” Committee Memorandum, at 252. Even 35 years ago, near the beginning of legislative efforts to scale back the common-law rule permitting double recoveries, the Legislature recognized that ADR benefits should offset corresponding jury awards. The collateral source offset provisions of CPLR 4545 have been amended several times since 1984. The most recent amendment, in 2009, clarified the Legislature’s intent to prevent injured public employees, in particular, from obtaining double taxpayer-funded recoveries for the same economic loss. Before 2009, CPLR 4545(c) required courts to consider evidence that a jury award to a personal injury or wrongful death plaintiff, for past or future economic loss, “was or will be replaced or indemnified, in whole or in part, from any collateral source,” including “workers’ compensation or employee benefits.” See former CPLR 4545(c). This Court held that in personal injury and 16 wrongful death actions brought by public employees against their employers, a different provision, CPLR 4545(b), limited collateral source offsets to jury awards for past economic loss only. Iazzetti v. City of New York, 94 N.Y.2d 183, 189 (1999). The Legislature responded by amending CPLR 4545 in 2009 to repeal subsection (b). The 2009 amendment ensured that both public and private employers would obtain appropriate offsets from jury awards for both past and future economic losses. In a letter to the Governor supporting the 2009 amendment, then Mayor Michael Bloomberg expressed his understanding that the amendment would close the door to double recoveries that Iazzetti had opened. Because of Iazzetti, the Mayor explained, “the City pays twice, first through the pension, and then through the personal injury award.” See Mayor’s Approval Letter, Bill Jacket, L 2009, ch 494, at 12-13. The repeal of CPLR 4545(b), however, would allow a public employer to offset any collateral source— including “accident disability pension benefits subsidized by the employer”—against future economic damages, as well as past. Id. Expressing his own support for the 2009 amendment, the 17 Governor reaffirmed the purpose of CPLR 4545: to “eliminate the windfall of double recoveries.” See Governor’s Program Bill Memorandum, New York State Legislative Annual, L 2009, ch 494, at 302. B. ADR benefits satisfy this Court’s collateral source offset test. This Court’s decision in Oden v. Chemung Cnty. Indus. Dev. Agency, 87 N.Y.2d 81 (1995), explains how the legislative intent behind CPLR 4545 is effectuated. Oden held that a collateral source payment may be offset against a jury award if the payment “represents reimbursement for a particular category of loss that corresponds to a category of loss for which damages were awarded.” Id. at 83. Further explaining the test, this Court stated that the collateral source payment must “duplicate” or “correspond” to the particular category of loss for which damages were awarded in the civil action. Id. at 88. Applying this Court’s holding in Oden, ADR benefits properly offset jury awards for lost earnings because, to the extent such benefits replace the City income a police officer proves she 18 would have earned in active service absent the accident and resulting disability, ADR benefits duplicate a jury award for lost earnings. Under Oden, ADR benefits also properly offset a jury award for future lost pension benefits because, to the extent ADR benefits replace the service pension the officer would have received after her intended date of retirement, ADR benefits duplicate a jury award for such lost benefits. When it articulated its collateral source offset rules in Oden, this Court anticipated that “matching up a collateral source to an item of loss” would be “simply a matter of proof and factual analysis.” Oden, 87 N.Y.2d at 88. Despite the simple factual comparisons this Court anticipated, however, purported evidentiary shortcomings have often prevented public employers from obtaining collateral source offsets that should reasonably have been afforded under CPLR 4545. See, e.g., Johnson v. N.Y.C. Transit Auth., 88 A.D.3d 321, 328 (1st Dep’t 2011) (insufficient evidence that ADR benefits replace police officer’s lost earnings); Gonzalez v. Iocovello, 249 A.D.2d 143, 144 (1st Dep’t 1998) (insufficient evidence that ADR benefits replace jury awards for 19 past and future lost earnings), aff’d on other grounds, 93 N.Y.2d 539 (1999). There are no such evidentiary gaps here. Record evidence, statutory provisions, legislative history, and precedent all support the conclusion that a police officer’s ADR benefits should offset jury awards for lost future earnings and lost future pension benefits. 1. ADR benefits replace earnings the retired police officer would have received had she remained in public service. Several features of ADR benefits demonstrate that the Legislature intended that, under current CPLR 4545 and its predecessors, such a benefit replaced lost earnings proved for the period when the recipient would have remained in public service if not for the line-of-duty injury. The timing and amount of ADR benefits provided by the City pension system supports this conclusion, as does the ADR benefits’ similarity to workers’ compensation benefits and the Legislature’s inclusion of a 20 mechanism for reduction of ADR benefits if the recipient earns employment income above a defined maximum. a. Tax-free ADR benefits are paid as soon as the police officer’s regular salary ends. The statutory trigger for the payment of ADR benefits provides a clear signal that they are intended to replace lost earnings during the proved period of intended service. Under Code § 13-258, the payment of ADR benefits begins immediately upon a disability determination and consequent retirement from service. Here, for example, Andino received her regular salary until her last day of City employment, and began receiving ADR benefits immediately after that (R. 52-53). The statutory structure requiring that ADR payments begin as soon as the recipient’s regular salary ends demonstrates the legislative intent to ensure that the retired police officer’s income stream continues, uninterrupted, upon disability retirement. As further evidence that ADR benefits are intended to replace an injured worker’s lost earnings, both federal and state law treat ADR benefits received during the minimum service 21 period required for entitlement to a service pension as analogous to workers’ compensation benefits. Workers’ compensation is an earnings-replacement benefit to which police officers are not entitled. Like workers’ compensation benefits, but unlike service retirement pension benefits, ADR benefits are largely exempt from federal income taxation. See 26 U.S.C. § 104(a)(1).4 That is because workers’ compensation statutes and statutes “in the nature of” workers’ compensation statutes provide financial “compensation to employees for personal injuries or sickness incurred in the course of employment.” 26 CFR 1.104-1(b). Indeed, former CPLR 4545(c), applicable here to Andino’s claims, specified both “workers’ compensation or employee benefit programs” as collateral sources that must be offset against jury awards for lost economic benefits. 4 Some components of a Tier 2 ADR benefit—for those officers who joined the pension system between July 1, 1973 and June 30, 2009—are subject to federal income taxation. See 26 CFR 1.104-1(b). State and local income tax is generally not owed on public pension benefits—whether service retirement benefits or ADR benefits—or on workers’ compensation benefits. See Code § 13-264. 22 Because ADR benefits received during the 20-year minimum service period for service pension eligibility are free from income taxation, those benefits approximate the recipient’s former taxable City income, even though they provide only 75 percent of the recipient’s former salary. Code § 13-258. This further confirms that ADR benefits provide a substitute for the earnings the recipient would have received if she had continued in City service until eligible for a service retirement or later. For all of these reasons, the amount of ADR benefits received during the period when the retired plaintiff proves she would have continued working should offset a jury award for lost future earnings. See Terranova v. N.Y.C. Transit Auth., 49 A.D.3d 10, 13, 19 (2d Dep’t 2007) (under CPLR 4545(c), a New York City firefighter’s line-of-duty ADR benefits, which has a statutory structure materially identical to that of a police officer, “correspond directly with” and offset the jury’s award for future lost wages), lv. denied, 11 N.Y.3d 708 (2008). This Court’s decision in Bryant v. New York City Health & Hosps. Corp., 93 N.Y.2d 592 (1999), supports the conclusion that 23 ADR benefits should be used to offset jury awards for lost future earnings. In Bryant, this Court—applying Oden—held that Social Security child survivor benefits offset a jury award providing compensation for a deceased parent’s future lost earnings. 93 N.Y.2d at 607-08. As support for its holding in Bryant, this Court cited legislative history showing that the purpose of the underlying Social Security program was to provide benefits for dependent relatives who “lose support, or a potential source of support, when the worker’s earnings are cut off.” 93 N.Y.2d at 608. Because Congress intended child survivor benefits to compensate for a parent’s lost earnings, this Court reasoned, there is a “‘close correspondence between the collateral source payment and the item of pecuniary loss to be replaced’.” Id. at 607-08 (quoting Oden, 87 N.Y.2d at 89). Bryant also recognized and effectuated the legislative intent behind CPLR 4545: to eliminate duplicative recoveries. 93 N.Y.2d at 607-08. Allowing the survivor in Bryant to retain both a full jury award for future lost earnings and Social Security survivor 24 benefits would provide double compensation for the same economic loss: the cessation of her deceased mother’s financial support. Id. at 608. Applying the same principles here, ADR benefits should have offset the jury’s award for lost future earnings. Like Social Security child survivor benefits, ADR benefits replace a terminated stream of income—the income an injured police officer would have earned if she had remained in public service. Just as CPLR 4545 prevents a child from receiving both survivor benefits and a full jury award for her deceased parent’s future lost earnings, CPLR 4545 should prevent a police officer from receiving both ADR benefits and a full award for lost income. Despite their sufferings and our sympathies, neither orphans nor injured uniformed officers are entitled to double compensation for the same economic loss. 25 b. Because ADR benefits replace lost earnings, they are subject to reduction if the recipient earns employment income. The Legislature provided additional evidence that ADR benefits are intended to replace lost earnings immediately following a police officer’s accident disability retirement. Until the point when a police officer would have been eligible for service retirement had she not been injured, ADR benefits are subject to reduction if the recipient earns, or has the opportunity to earn from the City, significant employment income. Code § 13-254. As noted above (at page 7), because it is not known when a particular employee would have retired absent the injury, the Legislature has used the pension eligibility date—usually 20 years after City service began (see Code § 13-247)—as the benchmark for determining when an ADR recipient’s benefits become subject to reduction. Applying the rationale of Oden, this statutory limit on outside employment income further demonstrates that ADR benefits are intended to provide a substitute for lost earnings. In Oden, an injured private-sector ironworker obtained jury awards for both future lost earnings and lost service pension 26 benefits. 87 N.Y.2d at 84. This Court held that the disability retirement benefits provided to the worker by his private pension system properly offset the jury award for lost pension benefits, but not the award for lost future earnings. Id. at 88. The latter offset was disallowed because the employer (a third-party defendant) had not proved that the disability pension benefits it provided actually replaced the worker’s lost earnings or corresponded to his future loss of earning capacity. Id. at 88. “[N]otwithstanding his retirement as an ironworker,” this Court reasoned, the plaintiff’s disability pension left him “free to earn income from his labor in other capacities without loss of his disability retirement pension benefits.” Id. at 89. Here, by contrast, Code § 13-254 would require a reduction in Andino’s ADR benefits if, during the minimum 20-year service period, she earned (or had the opportunity to earn from the City) enough employment income to exceed the statutory cap. As this Court recognized in Seiferheld v. Kelly, 16 N.Y.3d 561, 566-67 (2011), § 13-254 subjects a police officer’s ADR benefits to reduction based on either “outside earnings” or “the amount 27 earned … or earnable in any city job that is offered” until such time as the officer would have been eligible to retire with a service pension. The absence of such a limit on the plaintiff’s private pension disability benefits in Oden led this Court to deny an offset from the jury’s award for lost future earnings. 87 N.Y.2d at 89. In Johnson, 88 A.D.3d 321, Justices Friedman and Andrias recognized this key distinction between the private-sector disability pension at issue in Oden and the police officer ADR benefits at issue here. Under the City’s “readily distinguishable” system, Justice Friedman wrote, Code § 13-254 requires a reduction in ADR benefits if the recipient “actually earns, or manifests the ability to earn, a level of income exceeding a defined maximum amount.” 88 A.D.3d at 334 (Friedman, J., dissenting in part). “Arguably,” Justice Friedman continued, § 13-254 “demonstrates that police ADR benefits are “intended to replace the salary [the officer] would have earned but for the disability resulting from her service-connected injury.” Id. The legislative history of the latest amendment to Code § 13- 254 further demonstrates that ADR benefits are intended to 28 replace the recipient’s lost employment earnings. See L 1986, ch 438. Like the current § 13-254, the predecessor provision had capped (albeit at a different level) the amount of employment income a police officer could earn without triggering a reduction in disability pension benefits. Before § 13-254 was amended, the Governor vetoed several bills that would have removed the cap on employment earnings. The Governor’s veto message of the prior bills, submitted with L 1986, ch 438, noted that the “purpose of the restriction on earnings while disabled is to insure that only individuals who are actually disabled, that is, unable to engage in a gainful occupation, receive a disability benefit.” See Governor’s Veto Message, August 4, 1984, Bill Jacket, L 1986, ch 438, at 15. The message also highlighted that other public benefits, such as workers’ compensation, “are intended to provide an income because of inability to work or obtain employment” and “are diminished by earnings of any gainful occupation.” Id. Because the prior no-cap bills would have placed disability retirees in a better position than similarly situated employees who continued to work, 29 and potentially provide “pensions that are not necessary to replace lost earnings,” the Governor vetoed them. Id.; see also Governor’s Veto Message, August 8, 1984, Bill Jacket, L 1986, ch 438, at 16. The enacted bill retained and raised the cap on employment income. Code § 13-254. The Division of the Budget, when outlining and ultimately recommending the bill, explicitly noted that “disability allowance was intended to replace lost income because of the reduced earning capability of the individual.” See Budget Report on Bills, Bill Jacket, L 1986, ch 438, at 20. As the Governor acknowledged, the increase in the § 13-254 cap “more accurately reflects increases in earnings reasonably anticipated by a working employee.” Governor’s Approval Memorandum, New York State Legislative Annual, L 1986, ch 438 at 207 (noting the new “new limitation on earnings”). Under the former § 13-254, the cap was based upon the salary the police officer earned at the time of her accident disability retirement. As noted above, the current version of § 13-254 raised the cap to align with “the current maximum salary for the title next higher” than the officer held at the time of retirement. 30 The retention of a cap recognizes that only police officers who are actually disabled should receive a disability benefit that replaces their lost income. At the same time, the higher cap creates a better fit between a disabled police officer’s lost earnings and the ADR benefits received during the service period. The higher cap reflects the presumption that, had the officer not been injured, she would have received a promotion to a higher position with higher pay. 2. After the date when a police officer proves she would have retired with a service pension, ADR benefits replace pension benefits. While Oden shows why the Appellate Division was wrong to deny an ADR offset from the jury’s award for lost future earnings, it also shows why the Appellate Division was right to grant an ADR offset from the jury’s award for lost future pension benefits. During the period when an ADR recipient proves that she would have qualified for, and retired on, a service retirement had she remained in City service, ADR benefits provide a substitute for 31 the regular service pension to which the recipient otherwise would have been entitled. Like other police officers who retire on accident disability, Andino will continue to receive ADR benefits through the end of her life (R. 59, 64). During the stipulated 17.7-year period when she would have received a service pension, ADR benefits are not subject to reduction for alternate employment earnings or demonstrated earnings capacity, just as regular service pension benefits are not reduced in the event the pensioner earns employment income. See Code § 13-254. The same was true of the disability pension benefit at issue in Oden; it did “not necessarily correspond to any future earning capacity [the] plaintiff might have had.” 87 N.Y.2d at 88. Like ADR benefits provided during Andino’s proved service pension period, the disability pension in Oden replaced service pension benefits, and thus served to offset the jury’s award for future lost pension benefits. Id. at 88-89. * * * Relevant precedent, statutes and legislative history all support the same conclusion. During the period when an ADR 32 recipient proves that she would have continued working as a police officer, ADR benefits replace her lost City earnings. And during the period when the ADR recipient proves she would have received a service pension, ADR benefits replace her lost service pension. Under Oden, this means that ADR benefits “represent[] reimbursement” for two particular categories of loss—lost employment earnings and lost service pension benefits—that correspond to two categories for which the jury awarded Andino damages: lost future earnings and lost future pension benefits. Oden, 87 N.Y.2d at 83. Applying the Oden test, the Appellate Division should have used Andino’s ADR benefits to offset both jury awards, as proven and stipulated by the parties. See Iazzetti v. City of New York, 256 A.D.2d 140, 140 (1st Dep’t 1998), rev’d on other grounds, 94 N.Y.2d 183 (1999). Disallowing either offset would bestow upon Andino “the windfall of double compensation for a portion of … her economic loss.” Johnson, 88 A.D.3d at 335 (Friedman, J., dissenting in part). 33 As this Court observed in Oden, “[i]f just compensation is the main end toward which tort law is directed, it makes little sense to perpetuate a damages rule that tolerates two or more recoveries for the same injury.” 87 N.Y.2d at 88. It is those unwarranted multiple recoveries that CPLR 4545 was always—and remains— designed to prevent. C. Andino’s arguments to the contrary are unavailing. This Court should reject Andino’s attempts to minimize or negate the offsets for ADR benefits required under CPLR 4545. Andino argues that ADR benefits do not “directly correspond” to the jury’s awards for future lost earnings and future lost service pension benefits because ADR benefits reward injured members of the City’s uniformed services in gratitude for their sacrifices (Andino Br. at 37-39, 46). Legislative history directly contradicts this argument. As the Assembly made clear before enacting CPLR 4545, ADR benefits “may not be regarded as a payment for an employee’s past service.” See Committee Memorandum, New York State Legislative Annual, L 1984, ch 701, at 252. So, while 34 gratitude for extraordinary sacrifices may well have influenced legislative decisions about the appropriate level of ADR benefits, that has no effect on the function ADR benefits serve: to provide a substitute for income streams lost as a result of injuries sustained in the line of duty. Andino’s attempt to conflate the motive for ADR benefits with the purpose of ADR benefits is not advanced by her reliance on the City’s brief in Walsh v. Scoppetta, 18 N.Y.3d 850 (2011) (Andino Br. at 38-39 & n.7). In Walsh, the City contended that a firefighter was not entitled to ADR benefits for an injury he sustained while participating in an alcohol-fueled brawl in a firehouse kitchen. In the Matter of the Application of Robert Walsh, Brief for Petitioner-Appellant, 2011 WL 7452111 at *8-10. ADR benefits, the City argued, pay a “debt of gratitude” to public servants who make extraordinary sacrifices while performing their job duties; they should not reward firefighters who are injured while committing serious misconduct far removed from their duties. Id. at *8, 11. 35 Identifying the underlying rationale for ADR benefits helps illuminate the sometimes elusive distinction between accidental and non-accidental workplace injuries, see Kelly v. DiNapoli, ___ N.Y.3d ___, 2018 N.Y. LEXIS 181, *15 (Feb. 13, 2018) (Wilson, J., dissenting in part). It does not contradict the City’s point here that ADR benefits should offset corresponding jury awards. The legislative judgment to secure a higher level of benefits for ADR recipients in the absence of a tort recovery does not imply that the Legislature intended those recipients to obtain a partial double recovery when they receive an award in tort. The pertinent legislative history, indeed, confirms otherwise. Next, Andino argues that ADR benefits do not “directly correspond” to jury awards for future lost earnings and future lost pension benefits because ADR benefits do not match those awards perfectly, completely, and dollar-for-dollar (Andino Br. at 40-44). For example, Andino notes, she or her heirs will receive the jury’s award for future lost earnings in monthly installments for 19.24 years, but if she chose to receive the maximum ADR benefit, the payment of ADR benefits would end at her death (id. at 41-42). 36 Several flaws undermine Andino’s argument. First, the point merely reflects that jury awards are calculated based on actuarial predictions about how long the recipient is likely to live, and that money judgments are not later adjusted if those predictions prove to be wrong. The odds that any particular tort plaintiff may die prematurely (likely resulting in overcompensation) or outlive the actuarial tables (likely resulting in under-compensation) is irrelevant to the question presented here: whether ADR benefits replace earnings lost as the result of a line-of-duty injury. They do. Second, it is of no moment that a jury may calculate its award for lost pension benefits based upon the amount of the service pension the plaintiff proves she would have received, instead of the higher percentage ADR benefits paid to police officers who retire on accident disability (see Andino Br. at 44-46). Even though the pension portion of an ADR benefit may exceed a jury award for lost service pension benefits, the resulting offset in no way disadvantages the personal injury plaintiff: she will remain entitled to ADR benefits in excess of what she would have 37 received from a service pension, or from a jury award calculated on the basis of a lost service pension. Third, and most fundamentally, Andino’s argument ignores this Court’s holding in Oden: offsets are required when collateral source payments “represent[] reimbursement for a particular category of loss that corresponds to a category of loss for which damages were awarded.” Oden, 87 N.Y.2d at 84 (emphasis added). In other words, Oden requires a direct correspondence between categories of losses, not a perfect match between each dollar of a collateral source payment and each dollar of a jury award. This Court made that point in Bryant: Social Security child survivor benefits offset a jury award for future lost earnings even though the benefits “[did] not duplicate or correspond to” the amount of future lost earnings. 93 N.Y.2d at 607. A narrower rule, requiring an identical match between a collateral source payment and a component of a jury award, would defeat the purpose of CPLR 4545. For similar reasons, this Court should reject Andino’s “temporal matching” argument, which seeks to exploit the 38 difference between the retirement date the parties selected for purposes of divvying up the jury’s award (between future lost earnings and future lost pension benefits) and the retirement eligibility date contemplated by the police pension system. The police pension system provides that police officers are eligible for service retirement on their 20th anniversary of service. See Code § 13-247. But after the jury rendered its verdict in Andino’s case, the parties agreed to use a different dividing line: it was stipulated that Andino’s award for lost future earnings would cover the 19.24-year period from the date of the verdict until she reached the statistical retirement age of 63.9, while the award for lost future pension benefits would cover the remaining 17.7 years of her life expectancy (R. 1008). Yet, in Andino’s view, because she would have been eligible for a service retirement three years after the jury’s verdict, her ADR benefits should offset, at most, the portions of the jury award attributable to the first three years and the last 17.7 years of the 37-year period covered by the jury’s awards for future economic loss (Andino Br. at 49, 57, 60, 62). Only during those periods, 39 Andino argues, is there a “temporal match” between the jury awards for future economic loss and the purpose of the ADR benefits she is due to receive (id. at 60). Andino’s temporal matching theory is inconsistent with Oden, which requires a direct correspondence between categories of compensated losses, not time periods of compensated losses. 87 N.Y. 2d at 83. Because ADR benefits compensate police officers for both lost earnings and lost pension benefits, they offset jury awards for both lost earnings and lost pension benefits, regardless of how the jury (or the parties) draw the temporal line between the period of future lost earnings and the period of future lost pension benefits. Similarly irrelevant to the compensatory purpose and function of ADR benefits are the pension system’s requirements for service pension eligibility. Not surprisingly, Andino’s temporal matching theory would provide a double recovery for the same economic loss. She would receive the jury’s award for 37 years’ worth of future lost earnings and future lost pension benefits, offset by only 20.7 years of ADR benefits. The 16-year gap would provide a double recovery, of both 40 the jury award and ADR benefits. That overcompensation would directly contravene CPLR 4545. CONCLUSION This Court should rule that ADR benefits offset jury awards both for lost earnings and for lost pension benefits. Dated: New York, NY March 16, 2018 RICHARD DEARING SCOTT SHORR JULIE STEINER of Counsel Respectfully submitted, ZACHARY W. CARTER Corporation Counsel of the City of New York Attorney for Amicus Curiae City of New York By: __________________________ JULIE STEINER Assistant Corporation Counsel 100 Church Street New York, NY 10007 212-356-0844 jsteiner@law.nyc.gov 41 CERTIFICATE OF COMPLIANCE I hereby certify that this brief was prepared using Microsoft Word 2010, and according to that software, it contains 6,986 words, not including the table of contents, the table of cases and authorities, this certificate, and the cover. ____________________________________ JULIE STEINER