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 Office Index No. 100232/04 cteourt of ~ppeals ~tate of Jletu !@ork MARIAAUQUI, as Guardian of the Property of JOSE VERDUGO, and MARIA VERDUGO Plaintiffs-Appellants against SEVEN THIRTY ONE LIMITED PARTNERSHIP, BOVIS LEND LEASING LMB, INC., and NORTH SIDE STRUCTURES, INC. Defendants-Respondents BRIEF OF AMICUS CURIAE NEW YORK COMMUNITIES FOR CHANGE IN SUPPORT OF PLAINTIFFS-APPELLANTS Date Completed: October 10, 2013 Advocates for Justice 225 Broadway Suite 1902 New York, New York 10007 Telephone: (212) 285-1400 Arthur Z. Schwartz, Of Counsel Appearing on behalf of Amicus Curiae, New York Communities for Change TABLE OF CONTENTS TABLE OF CONTENTS .................................................................................. i TABLE OF AUTHORITIES ........................................................................... ii I. PRELIMINARY STATEMENT ................................................................... 1 II. STATEMENT OF THE CASE ................................................................... 2 IV. ARGUMENT ............................................................................................ 3 POINT I THECOURTERREDINAPPLTINGTHE COLLATERAL ESTOPPEL DOCTRINE BECAUSE THERE IS NO IDENTITY OF ISSUE BETWEEN THE PRIOR ACTION AND PRESENT ACTION ................................... 3 POINT II THECOURTERREDINAPPLTINGCOLLATERAL ESTOPPEL BECAUSE DURATION OF DISABILITY IS A MIXED QUESTION OF LAW AND FACT ..................................... 6 POINT III ALLOWING WCB DETERMINATIONS OF DURATION OF DISABILITY TO HAVE PRECLUSIVE EFFECT WILL DISPROPORTIONATELYIMPACTNEWYORK'S LOW-INCOME COMMUNITIES ........................................................ 8 V. CONCLUSION ......................................................................................... 11 TABLE OF AUTHORITIES Cases Auqui v. Seven Thirty One Ltd. P'ship, 20 N.Y.3d 1035 (2013) .................... 4 Balcerak v. County of Nassau, 94 N.Y.2d 253 (1999) ................................. 5 Brugman v. City of New York, 102 A.D.2d 413 (1st Dep't 1984), affd 64 N.Y.2d 1011 (1985) .................................................................. 4 Claim of Guimarales, 68 N.Y.2d 989 (1986) .............................................. 4 Crosby v. State, Workers' Compensation Bd., 57 N.Y.2d 305 (1982) ......... 8 Keeley v. Jamestown City Sch. Dist., 295 A.D.2d 876 (3d Dep't 2002) ....... 7 Matter of Evans v. Monaghan, 306 N.Y. 312 (1954) .................................... 4 Matt of Engel v. Calgon, 114 A.D.2d 108 (3d Dep't 1986) ............................ 6 Mitchell v. New York City Transit Authority, 244 A.D.2d 723 (3d Dep't 1997) .................................................................................................... 7 Shanahan v. Monarch Engineering Co., 219 N.Y. 469 (1916) .................... 9 ii PRELIMINARY STATEMENT Every day, thousands of low and moderate income families across New York wake up facing uncertainty: uncertainty about being able to send their children to quality schools; uncertainty about having a roof over their heads because of rising rents and skyrocketing interest rates on their home loans; uncertainty about earning a decent wage, and being able to afford to take their families to the doctor. New York Communities for Change is a grassroots organization that refuses to stand by idly and allow this uncertainty to control our lives. As an organization we monitors and weighs in on policy decisions affecting New York's working families. Given the critical importance of workers' compensation benefits as a mechanism to address the economic uncertainty that comes with a workplace injury, New York Communities for Change feels compelled to submit this brief outlining the reasons why this Court's present decision in Auqui should be set aside. In this third-party personal injury action, the Court is tasked with deciding if collateral estoppel should be applied to a determination of an administrative law judge ("ALJ") and an administrative agency, the Workers Compensation Board ("WCB"), as to the duration of plaintiffs disability. New York Communities for Change feels strongly that this Court's prior decision in Auqui should be set aside in favor of affirming the 1 decision of the majority in the Appellate Division's First Department. Auqui's wide reaching decision transforms an otherwise evidentiary determination imbued with policy considerations into a decision that enables collateral estoppel to take effect and wipe out injured workers' third-party claims for justice for the harms they suffer. STATEMENT OF THE CASE As accurately stated in the Court's majority opinion, plaintiff Jose Verdugo was injured on December 24, 2003 while working as a food service deliveryman when a piece of plywood from a building under construction fell on his head. The building was owned by defendant Seven Thirty One Limited Partnership. Plaintiff received workers compensation benefits for treatment of injuries to his head, neck and back, and for post-traumatic stress disorder and depression. Plaintiff commenced his third party personal injury action in Supreme Court, New York County in 2004 while receiving disability benefits. In December of 2005, the insurance carrier for plaintiffs employer moved to have the ALJ terminate plaintiffs disability benefits, which the ALJ did in fact terminate on January 24, 2006 after finding that plaintiff no longer suffered a disability. The WCB affirmed that decision on February 1, 2 2007, declaring that plaintiff no longer required further medical treatment after January 24, 2006, other than for post-traumatic stress disorder. In April of 2009, defendants moved to preclude plaintiffs from litigating the third party personal injury action on the grounds of collateral estoppel. The Supreme Court, New York County granted defendant's motion in a decision dated October 7, 2009. The First Department reversed the decision of the Supreme Court on April 5, 2011, holding that collateral estoppel did not apply because of mixed issue of law and fact. This Court, in a decision dated February 14, 2013, with Justice Pigott dissenting, reversed the First Department, holding that collateral estoppel precluded plaintiff from litigating the third party action. However, on June 27, 2013, this Court granted plaintiffs-appellants' motion for reargument. ARGUMENT POINT I THE COURT ERRED IN APPLYING COLLATERAL ESTOPPEL BECAUSE THERE IS NO IDENTITY OF ISSUE BETWEEN THE PRIOR ACTION AND PRESENT ACTION As this Court has correctly held, prior to its decision in Auqui, determinations made by quasi-judicial administrative agencies, including 3 the WCB, can be granted preclusive effect. Matter of Evans v. Monaghan, 306 N.Y. 312, 323-24 (1954); Brugman v. City of New York, 102 A.D.2d 413, 415 (1st Dep't 1984), aff'd 64 N.Y.2d 1011 (1985). Under the Court's two-part test, collateral estoppel applies when: (1) there is identity of issue between the earlier action and present action; and (2) where the party opposing preclusion had a full and fair opportunity to litigate the earlier action. Claim ofGuimarales, 68 N.Y.2d 989, 991 (1986). This Court in Auqui stated that the issue before the WCB was "whether Jose Verdugo had an ongoing disability after a certain date." Auqui v. Seven Thirty One Ltd. P'ship, 20 N.Y.3d 1035, 1037 (2013). New York Communities for Change respectfully disagrees that this was the actual issue determined by the WCB. Rather, the WCB determined whether Verdugo still had an ongoing disability that prevented him from returning to work, not whether he was cleared of all ongoing disability as of a certain date and required no further treatment. By comparison, the issue of fact that plaintiff submitted in his third party action to be determined by a jury was whether he still suffered from any disability, regardless of whether the injury affected his ability to work. The distinction is not trivial; it is the key to differentiating the issues confronting the WCB and the Court in this case. 4 In examining the case law, it is significant that neither the defendant nor this Court could cite to a case in support of the view that the issues at play in the WCB and in this third-party action were identical. However, this Court has examined identity of issues in other cases involving preclusion of WCB determinations. For example, in Balcerak v. County of Nassau, 94 N.Y.2d 253 (1999), the Court examined whether preclusive effect should be granted to a WCB determination that an injury was work- related in an administrative proceeding for General Municipal law§ 207-c benefits. General Municipal law§ 207-c benefits are somewhat analogous to workers' compensation benefits, although they apply to a narrower class of claimants, specifically corrections officers injured while on duty. The Court determined that the WCB ruling that the injury in question was work-related was not entitled to collateral estoppel effect. This ruling was based on the different ''burdens, procedures and prescribed benefits" applicable to each administrative hearing. Balcerak, 94 N.Y.2d at 261. Without going in to elaborate detail, if the "burdens, procedures and prescribed benefits" are sufficient to distinguish the issues at play between two quasi-judicial fora concerned solely with injuries in the workplace, it stretches credulity to suggest that there is an identity of issues between WCB rulings and those of the courts in third party actions. 5 POINT II THE COURT ERRED IN APPLYING COLLATERAL ESTOPPEL BECAUSE DURATION OF DISABILITY IS A MIXED QUESTION OF LAW AND FACT As this Court has articulated, mixed issues of law and fact are not entitled to preclusive effect. Matter of Engel v. Calgon, 114 A.D.2d 108, 110 (3d Dep't 1986), aff'd 69 N.Y.2d 753 (1987). Agency decisions of ultimate fact are "imbued with policy considerations as well as the expertise of the agency." I d. In Matter of Engel, the First Department held that the issue of employment was an ultimate fact and not based on evidentiary facts alone because each agency "determines which facts it considers most appropriate" for defining employment. Id. at 110-11. Respectfully, this Court misconstrued the WCB determination of no further causally related disability, relative to the plaintiff's disability (or duration of disability), as an evidentiary fact. The WCB decision at issue, however, is an ultimate fact because it is steeped with the policy considerations and expertise of the WCB's commissioners in implicitly determining whether plaintiff's injuries allow him to return to work. Unequivocally, the term "disability" as defined within we parlance is undoubtedly about the claimant's employability, 6 which the WC Guidelines further elucidates as a medico-legal determination. At the commencement of plaintiffs claim to the workers compensation administrative law judge ("ALJ"), the ALJ had to determine as a prerequisite whether plaintiffs disability was causally related to his employment. Keeley v. Jamestown City School District., 295 AD2d 876, 877 (3d Dept 2002). Once plaintiff satisfied his burden of proof showing the causal relationship and began receiving benefits, the ALI's determination of whether plaintiff continued to be disabled was placed in the context of being unable to work, and grounded in a legal determination based upon interpretation of the Workers Compensation Law, and imbued with policy considerations and the expertise of the WCB. Mitchell v. New York City Transit Authority, 244 AD.2d 723 (3d Dep't 1997). As such, the issues addressed by the ALJ are ones of mixed fact and law, and do not warrant preclusive effect. Prior to Auqui, a WCB finding that a worker was disabled, or alternatively not disabled, has always been accorded the status of "ultimate fact or a mixed question of fact or law," and therefore not subject to preclusive effect. After decades of litigation, and hundreds of case, revolving around WCB determinations, not a single case has been brought 7 forward by defendants, or this Court in its prior ruling in this case, to support the notion that said WCB determination of disability are binding upon the Plaintiff in third-party actions. POINT III ALLOWING WCB DETERMINATIONS OF DURATION OF DISABILI1Y TO HAVE PRECLUSIVE EFFECT WILL DISPROPORTIONATELY IMPACT NEW YORK'S LOW-INCOME COMMUNITIES The Court of Appeals has the unique role of setting sound public policy when addressing matters of law. More than the implications of this Court's prior ruling inAuqui to the fate of Verdugo's third-party action, the public policy implications of this case are of particular concern. New York Communities for Change believes that these concerns should properly be considered as part of this Court's decision-making process. The Workers' Compensation Law ("WCL") was enacted in the aftermath of the Triangle Shirtwaist Factory fire, a disaster that led to the deaths of 146 mostly immigrant workers. The WCL's purpose was to ensure "the provision of a swift and sure source of benefits to injured employees or the dependents of deceased employees." Crosby v. State, Workers' 8 Compensation Bd., 57 N.Y.2d 305, 313 (1982). Prior to the enactment of the WCL, if a worker injured in the course of their employment wished to be compensated for their injuries they would have to accept the risks and delays associated with litigating a claim against their employer. The WCL was enacted to eliminate those risk and delays. Shanahan v. Monarch Engineering Co., 219 N.Y. 469, 477 (1916). While workers compensation provides an important safety net for all members of the workforce, it is even more critical for low and moderate income families. When such a family's primary wage earner is injured during the course of their employment it is critically important that the Workers' Compensation benefits are available to cover medical expenses and lost income. Many New Yorkers, if they cannot work because of an injury, lack the resources to support themselves or their families, let alone pay sky high medical bills. Without Workers' Compensation they could well be forced to rely on taxpayer-funded aid. Sadly, this Court's ruling in Auqui will severely undermine the Workers' Compensation system. Often, when a worker is seriously injured in the workplace they will have the option of bringing a third-party personal injury action to recover damages in excess of the strictly limited benefits available under the WCL, as occurred in the Auqui case. However, by 9 allowing determinations of the WCB to have preclusive effect in a personal injury claim, this Court effectively placed the ability of an injured worker to seek justice into the hands of the administrative bureaucracy of the WCB. The Worker's Compensation system uses administrative proceedings to make limited determinations about an individual's ability to work. Workers' Compensation Law Judges are not bound by common law or statutory rules of evidence or by technical or formal rules of procedure; they have wide discretion to exclude evidence and decide which experts will be heard; and they can accept hearsay. Given these facts, a seriously injured worker who can obtain full and fair justice through a third-party action would be well advised to consider withdrawing from the Workers' Compensation system if their claim is challenged in any way. By pushing workers out of the Workers Compensation system, the Auqui returns the disenfranchised worker to the dark ages of the early part of the 2oth century. Withdrawing from the Workers' Compensation system requires foregoing the almost immediately available benefits including replacement of lost income and coverage of medical costs. Low income workers in particular are more likely to be uninsured with few financial resources, so are less likely to be able to shoulder this burden than other members of the workforce. Instead they will rely on taxpayer funded 10 benefits and emergency room care. To recover any compensation for their injuries, these injured workers will be subject to the risks and delays attendant to bringing a personal injury claim in the court system for their entire recovery - exactly the situation the enactors of the Workers' Compensation Law sought to avoid. CONCLUSION For the foregoing reasons, it is respectfully submitted that this Court enter an Order reversing this Court's Decision and Order dated February 14, 2013, and affirming the Decision and Order of the Appellate Division, First Department, dated Aprils, 2011. Dated: New York, New York: October 10, 2013 11 Respectfully submitted, ADVOCATES FOR rus~ By: ~Z. J__ ? Arthur Z. Schwartz, Esq. 225 Broadway Suite 1902 New York, New York 10007 Telephone: (212) 285-1400 Appearing on behalf of prospective amicus curiae, New York Communities for Change