Maria Auqui,, et al., Respondents,v.Seven Thirty One Limited Partnership, et al., Appellants.BriefN.Y.January 8, 2013APL-2011-00309 New York County Clerk’s Index No. 100232/04 Court of Appeals STATE OF NEW YORK MARIA AUQUI, as Guardian of the Property of JOSE VERDUGO, and MARIA VERDUGO, Plaintiffs-Respondents, against SEVEN THIRTY ONE LIMITED PARTNERSHIP, BOVIS LEND LEASING LMB, INC., and NORTH SIDE STRUCTURES, INC., Defendants-Appellants. >> >> BRIEF ON BEHALF OF THE NEW YORK STATE BAR ASSOCIATION AS AMICUS CURIAE DAVID M. SCHRAVER, ESQ. Attorney for Amicus Curiae New York State Bar Association and President thereof One Elk Street Albany, New York 12207 518-463-3200 Date Completed: October 4, 2013 i TABLE OF CONTENTS Page TABLE OF AUTHORITIES .................................................................................... ii PRELIMINARY STATEMENT ............................................................................... 1 STATEMENT OF THE CASE .................................................................................. 2 QUESTION FOR REVIEW ...................................................................................... 3 POINT I WCB DETERMINATIONS OF FURTHER CAUSALLY RELATED DISABILITY SHOULD NOT HAVE PRECLUSIVE EFFECT ........................................... 4 POINT II ALLOWING THE AUQUI DECISION TO STAND AS DECIDED WOULD UNDERMINE THE WORKERS’ COMPENSATION SYSTEM .......................................... 8 CONCLUSION ........................................................................................................ 10 ii TABLE OF AUTHORITIES State Cases Akgul v. Prime Time Transp., 293 A.D.2d 631 (2d Dep’t 2002) .............................. 4 Balcerak v. County of Nassau, 94 N.Y.2d 253 (1999) ..........................................6, 7 Brugman v. City of New York, 102 A.D.2d 413 (1st Dep’t 1984) ........................... 4 Casas v. Consolidated Edison Co. of New York, Inc., 105 A.D.3d 471 (1st Dep’t 2013) ........................................................................... 8 Crosby v. State Workers’ Compensation Bd., 57 N.Y.2d 305 (1982) ...................... 8 Jeffreys v. Griffin, 1 N.Y.3d 34 (2003) ..................................................................... 6 Matter of Engle v. Calgon Corp., 114 A.D.2d 108 (3d Dep’t 1986), aff’d “for the reasons stated” below, 69 N.Y.2d 753 (1987) ................................. 4 O’Connor v. Midiria, 55 N.Y.2d 538 (1982) ............................................................. 4 O’Gorman v. Journal News Westchester, 2 A.D.3d 815 (2d Dep’t 2003) ................ 4 Ott v. Barash, 109 A.D.2d 254 (2d Dep’t 1985) ........................................................ 7 Shanahan v. Monarch Engineering Co., 219 N.Y. 469 (1916) .................................. 8 Werner v. State, 53 N.Y.2d 346 (1981) ..................................................................... 4 State Statutes General Municipal Law §207-c .............................................................................6, 7 Workers’ Compensation Law §123 .......................................................................6, 7 Workers’ Compensation Law §15 ............................................................................. 5 1 PRELIMINARY STATEMENT The New York State Bar Association (“NYSBA”) submits this amicus curiae brief in support of the appeal of plaintiffs-appellants Maria Auqui, as Guardian of the property of Jose Verdugo, and Maria Verdugo, said appeal concerning the application of the doctrine of collateral estoppel to a Workers’ Compensation Board’s (“WCB”) determination as to the duration of disability suffered by an injured plaintiff. This Court’s Decision and Order dated February 14, 2013 correctly held that “[c]ollateral estoppel applies if the identical issue sought to be precluded was necessarily decided in an earlier action” but that “legal conclusions, and conclusions of mixed law and fact, are not entitled to preclusive effect.” For the reasons set forth herein, it is the position of the NYSBA that the decision of the WCB as to duration of disability necessarily addressed mixed questions of law and fact and therefore should not be given preclusive effect in a third party action. Further, if this Court were to reaffirm its decision in this case by granting preclusive effect to disability determinations of the WCB, the effect will likely be withdrawals by claimants from the workers compensation system altogether. This presumably unintended result would frustrate the legitimate and salutary public policy of allowing for a fault free compensatory system for job related injuries. 2 STATEMENT OF THE CASE On Christmas Eve, 2003, plaintiff Jose Verdugo was seriously injured when, in the course of his employment, he was struck by a piece of plywood which fell from a building owned by defendant Seven Thirty One Limited Partnership. Mr. Verdugo received Workers’ Compensation (WC) benefits covering his medical treatment, and concurrently commenced this personal injury action in Supreme Court. In 2005, the insurance carrier for Mr. Verdugo’s employer moved the WCB to discontinue benefits. Following hearings in 2006, a Workers’ Compensation Law Judge (“WCLJ”) ruled that, as of the decision date, plaintiff had “no causally related disability.” The WCB affirmed the WCLJ’s finding that Mr. Verdugo’s disability had ended and that he required no further treatment. This Court, in its February 14, 2013 Decision and Order, held that the WCB’s ruling was entitled to collateral estoppel effect, precluding Mr. Verdugo’s claim for lost earnings and compensation for medical expenses. However, on June 27, 2013, this Court granted plaintiffs-appellants’ motion for re-argument. 3 QUESTION FOR REVIEW Whether a decision of the Workers’ Compensation Board as to a plaintiff’s causally related disability should be granted preclusive effect, entitling defendants to an Order collaterally estopping plaintiff from proving damages occurring after the date of the WCB decision. Answer: No. Defendants were not entitled to an Order collaterally estopping plaintiffs from proving injuries in the Supreme Court after the date the WCB cut-off plaintiff’s disability benefits for the reasons stated in the dissenting opinion of Hon. Eugene F. Piggott (i.e. that this ultimate determination necessarily involved mixed questions of law and fact and that there were substantial differences governing both forums). If this Court’s existing Decision and Order to the contrary remains in place, the workers’ compensation system will be undermined with far-reaching negative consequences for injured workers. 4 POINT I WCB DETERMINATIONS OF FURTHER CAUSALLY RELATED DISABILITY SHOULD NOT HAVE PRECLUSIVE EFFECT Neither the parties nor the NYSBA dispute that the doctrine of collateral estoppel is “applicable to determinations of administrative agencies rendered pursuant to their adjudicatory functions.” Brugman v. City of New York, 102 A.D.2d 413, 415 (1st Dep’t 1984), see also, Werner v. State, 53 N.Y.2d 346, 424 (1981). Nor is there dispute that determinations of the WCB fall within this category of determinations by administrative agencies that may be given preclusive effect. See, e.g., O’Connor v. Midiria, 55 N.Y.2d 538 (1982). However, the doctrine of collateral estoppel is not applied to all administrative determinations. Courts have accorded estoppel to factual determinations that had been “necessarily decided” in an administrative proceeding, but the “agency’s final conclusion, characterized as an ultimate fact or a mixed question of fact and law, [was] not entitled to preclusive effect.” O’Gorman v. Journal News Westchester, 2 A.D.3d 815, 817 (2d Dep’t 2003), quoting Akgul v. Prime Time Transp., 293 A.D.2d 631, 633 (2d Dep’t 2002); Matter of Engle v. Calgon Corp., 114 A.D.2d 108, 111 (3d Dep’t 1986), aff’d “for the reasons stated” below, 69 N.Y.2d 753 (1987). This Court, in Auqui, accepted these parameters for the application of collateral estoppel. 5 In Auqui, the defendants seek to give preclusive effect to the determination of the WCB as to Mr. Verdugo’s ongoing disability. Findings regarding disability involve a factual determination based on medical evidence and the application of that factual determination to the legal rules that govern whether and to what extent an injured worker is disabled. See, Workers’ Compensation Law §15. The WCB’s conclusion that Mr. Verdugo was not disabled is therefore a mixed question of law and fact that should not be given preclusive effect. Prior to the Auqui case, a finding by the WCB that a worker was disabled, or alternatively that a worker was not disabled, has always been accorded the status of “ultimate fact or a mixed question of fact or law,” and therefore not entitled to preclusive effect. An exhaustive search of the case law reveals that there is not one reported case holding to the contrary. Notably, defendant-respondent has not cited a single instance in which any of the thousands of prior WCB determinations of “disability” or “no disability” was deemed conclusive in a personal injury action. Nor did this Court, in its February 14, 2013 Decision and Order, cite any prior cases or precedent as support. Even if the WCB decision on disability could be considered a factual determination, an administrative agency’s ruling can only have preclusive effect when two conditions are met: (1) the issue sought to be precluded is identical to a material issue necessarily decided by the administrative agency in a prior 6 proceeding; and (2) there was a full and fair opportunity to contest this issue in the administrative tribunal. Jeffreys v. Griffin, 1 N.Y.3d 34, 39 (2003) In reaching a decision as to Mr. Verdugo’s disability, or lack thereof, the WCB only looks at whether he could return to work at that moment. Workers’ Compensation Law §123 grants the WCB continuing jurisdiction over a claim, absent a final settlement. A claim can be reopened at any time for a variety of reasons including deterioration in the injured workers condition. Thus, the issues addressed in a WCB ruling are distinct from the issues addressed by a court rendering a decision in a third-party personal injury action. There, assuming a finding of liability, the Court will look to make the injured party whole considering, in part, all future medical expenses or lost income based on the lifetime effect of the injury. The broad determination made in a personal injury action, when compared to the narrow assessment of the WCB, leads inevitably to the conclusion that there is not sufficient identity of issues to apply collateral estoppel in this case. An analogous assessment was made by this Court in the case of Balcerak v. County of Nassau, 94 N.Y.2d 253 (1999). In Balcerak, the Court ruled that a WCB determination that an injury was work-related was not entitled to preclusive effect in an administrative proceeding for General Municipal Law §207-c benefits (that section provides for payment of benefits to corrections officers injured while 7 on duty). See, Balcerak, supra, 94 N.Y.2d at 261. The Court reached this decision on the basis of a lack of identity of issues, despite the obvious overlap between these two statutory benefits programs available to injured corrections officers. The Court highlighted the significant distinction between the “burdens, procedures and prescribed benefits” applicable in Workers’ Compensation and §207-c hearings, distinctions which are even more apparent when comparing Workers’ Compensation hearings and court proceedings in a personal injury action. Balcerak, supra, 94 N.Y.2d at 261. Lastly, “a general prerequisite to invocation of…collateral estoppel is the existence of a final judgment.” Ott v. Barash, 109 A.D.2d 254, 262 (2d Dep’t 1985) (emphasis added). As noted above, the WCB has continuing jurisdiction under Workers’ Compensation Law §123, which necessarily renders decisions of the WCB non-final. Granting preclusive effect to any one decision of the WCB under these circumstances is contrary to prior case law and leads to unjust results. For example, a court could grant preclusive effect to a decision of the WCB thereby barring a plaintiff’s recovery in a third-party action, only to have the WCB later reverse its determination. As things now stand, if the WCB were to reverse Mr. Verdugo’s claim after a final judgment in the third-party action, he could not re-address these issues in court and would be denied his right to be made whole through the civil justice system. 8 In fact, just such a scenario has already played out in a case that relied, in part, on this Court’s ruling in Auqui. In Casas v. Consolidated Edison Co. of New York, Inc., 105 A.D.3d 471, 472 (1st Dep’t 2013), the First Department ruled that a WCB determination that plaintiff had no accident-related disability was entitled to preclusive effect. Casas, supra, 105 A.D.3d at 471. Within a few months of that ruling, the WCB re-opened the case and found plaintiff to be permanently totally disabled, and awarded benefits dating back to the original, negative determination. Casas, W.C.B. Case #00401727 (Aug. 6, 2013). The Casas case aptly demonstrates the lack of finality that should preclude the application of collateral estoppel to WCB determinations. POINT II ALLOWING THE AUQUI DECISION TO STAND AS DECIDED WOULD UNDERMINE THE WORKERS’ COMPENSATION SYSTEM We respectfully urge this Court to reverse its February 14, 2013 Decision and Order. The ramifications of this decision, as written, extend far beyond the instant case and will literally undermine the workers’ compensation system. The key purpose of the Workers’ Compensation Law is “the provision of a swift and sure source of benefits to injured employees or the dependents of deceased employees.” Crosby v. State Workers’ Compensation Bd., 57 N.Y.2d 305, 313 (1982). The law achieved this goal by eliminating the risks and delays associated with litigating a claim against an injured worker’s employer. Shanahan 9 v. Monarch Engineering Co., 219 N.Y. 469, 477 (1916). By granting decisions of the WCB preclusive effect, this Court’s ruling in Auqui will frustrate the purposes of the Workers’ Compensation Law. In the majority of cases involving serious injuries or long-term disability, a recipient of workers’ compensation benefits will receive regular requests from their employer’s insurance carrier for medical examination to determine the degree and nature of ongoing disabilities. After each examination, there is the possibility that the insurance carrier will reduce or stop payment of the injured worker’s benefits. Prior to the Auqui decision, the injured worker could readily appeal the carrier’s determination. However, in light of Auqui, the injured worker and his or her attorney are placed in the untenable position of having to decide whether to accept without challenge the insurance carrier’s decision or risk a determination of the WCB that would have a preclusive effect on any third-party action the worker may be pursuing. As a result, in many instances the best choice for an injured worker may be to bypass the Workers’ Compensation system altogether, or to withdraw at the first sign of a carrier’s challenge to benefits. Few injured workers have the resources to pay their own medical bills or to forego any substitute for wages which would be the natural consequences of declining to dispute a carrier’s position on benefits. 10 This is the very reason the Workers’ Compensation Law was enacted in the first place. We believe that this consequence was not intended by the Court. CONCLUSION WHEREFORE, for the foregoing reasons, it is respectfully submitted that this Court enter an Order vacating the Decision and Order dated February 14, 2013, and affirming the Decision and Order of the Appellate Division, First Department, dated April 5, 2011, together with such other and further relief as the Court deems just and proper. Dated: Albany, New York October 4, 2013 Respectfully submitted, NEW YORK STATE BAR ASSOCIATION By: David M. Schraver, President 11 TO: Clerk of the Court of Appeals 20 Eagle Street Albany, New York 12207 Annette G. Hasapidis Law Offices of Annette G. Hasapidis Attorney for Plaintiffs-Appellants Post Office Box 827 South Salem, New York 10590 T: (914) 533-3049 Matthew W. Naparty Mauro Lilling Naparty, LLP Attorney for Defendants-Respondents 130 Crossways Park Drive, Suite 100 Woodbury, New York 11797 T: (516) 487-5800