New York Hospital Medical Center of Queens, Appellant,v.Microtech Contracting Corp., Respondent.BriefN.Y.January 6, 2014APL-2013-00073 Suffolk County Clerk’s Index No. 35567/10 Appellate Division, Second Department Docket No. 2011-08990 Court of Appeals STATE OF NEW YORK THE NEW YORK HOSPITAL MEDICAL CENTER OF QUEENS, Plaintiff-Appellant, against MICROTECH CONTRACTING CORP., Defendant-Respondent. >> >> To Be Argued By: Dennis M. Wade Time Requested: 15 Minutes BRIEF FOR DEFENDANT-RESPONDENT WADE CLARK MULCAHY Attorneys for Defendant-Respondent 111 Broadway, 9th Floor New York, New York 10006 212-267-1900 Of Counsel: Dennis M. Wade Cheryl D. Fuchs Date Completed: July 16, 2013 i STATE OF NEW YORK COURT OF APPEALS __________________________________________x THE NEW YORK HOSPITAL MEDICAL CENTER, 2013-00073 OF QUEENS Plaintiff-Appellant, Defendant-Respondent’s Statement Pursuant to - against- 22 N.Y.C.R.R. 500.1(f) MICROTECH CONTRACTING CORP., Defendant-Respondent. _____________________________________________x Defendant-Respondent Microtech Contracting Corp. has no subsidiaries and no affiliates. Dated: New York, NY July 16, 2013 WADE CLARK MULCAHY By:_____________________ Dennis M. Wade, Esq. Cheryl D. Fuchs, Esq. Attorneys for Defendant-Respondent Microtech Contracting Corp. 111 Broadway, 9 th Floor New York, New York 10006 (212) 267-1900 ii TABLE OF CONTENTS DEFENDANT-RESPONDENT’S STATEMENT PURSUANT TO N.Y.C.R.R. 500.1(F) ..................................................................................................................... i TABLE OF AUTHORITIES ................................................................................... iv PRELIMINARY STATEMENT ............................................................................... 1 COUNTER QUESTION PRESENTED FOR REVIEW .......................................... 4 COUNTER STATEMENT OF FACTS .................................................................... 5 ARGUMENT ............................................................................................................. 7 POINT I ...................................................................................................................... 7 IT IS NOT THE ROLE OF THE JUDICIARY TO READ AN EXCEPTION INTO THE WORKERS’ COMPENSATION LAW WHEN THE LEGISLATURE HAS CLEARLY SPOKEN AS EVIDENCED BY THE CLEAR WORDING OF THE STATUTE. ............................................................ 7 POINT II ..................................................................................................................11 THE HOSPITAL’S CLAIM IS BARRED BY THE WORKERS’ COMPENSATION LAW BECAUSE THE LANGUAGE OF THE LAW IS UNAMBIGUOUS AND DOES NOT CONTAIN AN EXCEPTION WHERE THE EMPLOYEE IS AN ILLEGAL IMMIGRANT. .........................................11 POINT III .................................................................................................................14 THIS COURT HAS ALREADY RULED THAT THE WORKERS’ COMPENSATION LAW APPLIES WHERE THE EMPLOYEE IS AN ILLEGAL IMMIGRANT. ....................................................................................14 POINT IV .................................................................................................................18 THE WORKERS’ COMPENSATION BAR APPLIES EVEN IF THE EMPLOYMENT IS “ILLEGAL,” AND AN ALLEGED VIOLATION OF IMMIGRATION LAW DOES NOT DEFEAT THE APPLICATION OF WCL § 11. .........................................................................................................................18 iii POINT V ..................................................................................................................21 COURTS APPLY THE WORKERS’ COMPENSATION BAR EVEN WHERE THE EMPLOYER VIOLATES FEDERAL LAW. .............................................21 POINT VI .................................................................................................................25 THE HOSPITAL’S ARGUMENT IS PREMISED ON AN “ILLEGAL” CONTRACT. BUT THE WCL APPLIES EVEN WITHOUT A CONTRACT. MICROTECH IS NOT ASKING THIS COURT TO ENFORCE A CONTRACT, LET ALONE AN ILLEGAL ONE. ..............................................25 A. WCL § 11 Applies Regardless of Whether There is a Contract Between the Employer and Employee. ............................................................................25 B. Microtech Does Not Need This Court to Enforce An “Illegal Contract” for the WCL §11 Bar to Apply. ..............................................................................27 POINT VII ...............................................................................................................31 NO PUBLIC POLICY REASON EXISTS TO SUPPORT A REWRITING OF THE WORKERS’ COMPENSATION LAW. .....................................................31 POINT VIII ..............................................................................................................35 THE HOSPITAL RIGHTLY ABANDONS ITS ARGUMENT THAT THE WORKERS’ COMPENSATION LAW IS PREEMPTED BY IRCA BECAUSE THIS COURT HAS ALREADY RULED THAT IRCA DOES NOT PREEMPT STATE LAW. .......................................................................................................35 CONCLUSION ........................................................................................................36 iv TABLE OF AUTHORITIES CASES Amoah v. Mallah Management, 57 A.D.3d 29 (3d Dept. 2008) ................ 17, 23, 35 Balbuena v. IDR Realty LLC, 6 N.Y.3d 338 (2006) ........... 16, 17, 22, 24, 28, 30, 35 Barker v. Kallash, 63 N.Y.2d 19 (1984) ..................................................................27 Blanchard v. Integrated Food Systems, 220 A.D.2d 895 (3d Dept. 1995) .............19 Braschi v. Stahl Associates Co., 74 N.Y.2d 201 (1989) ........................................7, 8 Carmine v. Murphy, 285 N.Y. 413 (1941) ...............................................................27 Charlebois v. Weller Assocs., 72 N.Y.2d 587 (1988) ..............................................22 Clarke v. Town of Russia, 283 N.Y. 272 (1940) ......................................................27 Coque v. Wildflower Estates Developers, Inc., 31 A.D.3d 484 (2d Dept. 2006) ....16 DeCanas v. Bica, 424 U.S. 351 (1976) ....................................................................24 Decker v. Pouvailsmith Corp., 207 A.D. 853 (2d Dept. 1923) ...............................19 Herbold v. Neff, 200 A.D. 244 (3d Dept. 1922) ......................................................29 International Spangels Corp. v. Marrow Manufacturing Corp., 294 N.Y. 295 (1945) ....................................................................................................................27 Lawrence Const. Corp. v. State, 293 N.Y. 634 (1944) .............................................. 9 Lloyd Capital Corp. v. Pat Henchar, Inc., 80 N.Y.2d 124 (1992) . 21, 22, 23, 24, 33 Madiera v. Affordable Hous. Found., Inc., 469 F.3d 219 (2d Cir. 2006) ................35 Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577 (1998) .........8, 33 v Majlinger v. Cassino Contracting Corp, 25 A.D.3d 14 (2d Dept. 2005) ................30 Martinkowski v. Carborundum Co./Electro-Mineral Div., 108 Misc. 2d 184 (Sup. Ct. Niagara Co. 1981) .................................................................................... 19, 20 Matter of Post v. Burger & Gohlke, 216 N.Y. 544 (1916) ......................................16 McConnell v. Commonwealth Pictures Corporation, 7 N.Y.2d 465 (1960) ...........27 Monteleone v. Center Storage Warehouses, 68 N.Y.S.2d 369 (Sup Ct. Kings Co. 1946) .............................................................................................................. 19, 20 Morales v. County of Nassau, 94 N.Y.2d 218 (1999) .............................. 8, 9, 31, 34 Morales v. Gross, 230 A.D.2d 7 (2d Dept. 1997) ............................................ 33, 34 Morgan Munitions Supply Co. v. Studebaker Corp., 226 N.Y. 94 (1919) ..............27 Murphy v. Elmwood Country Club, 183 Misc. 332 (Sup. Ct. Westchester Co. 1944) ..............................................................................................................................29 Noreen v. William Vogel & Bros., 231 N.Y. 317 (1921) .................................. 18, 19 People v. Friedman, 302 N.Y. 75 (1950) ............................................................8, 31 Ramroop v. Flexo-Craft Printing, Inc., 11 N.Y.3d 160 (2008) .. 7, 14, 15, 16, 22, 35 Reiner v. N. Am. Newspaper Alliance, 259 N.Y. 250 (1932) ..................................27 Richards Conditioning Corp. v. Oleet, 21 N.Y.2d 895 (1968) ................................27 Robitzek v. Reliance Intercontinental Corp., 7 A.D.2d 407 (1st Dept. 1959) .........27 Rosasco Creameries v. Cohen, 276 N.Y. 274 (1937) ..............................................22 Sackolwitz v. Charles Hamburg & Co., 295 N.Y. 264 (1946) ................................31 vi Spivak v. Sachs, 16 N.Y.2d 163 (1965) ............................................................ 27, 28 Sprung v. Jaffe, 3 N.Y.2d 539 (1957) ......................................................................27 Stone v. Freeman, 298 N.Y. 268 (1948) ..................................................................28 Swihura v. Horowitz, 242 N.Y. 523 (1926) .............................................................29 Testa v. Sorrento Rest., Inc. (Tagminco Corp.), 10 A.D.2d 133 (3d Dept. 1960), lv denied 8 N.Y.2d 705 (1960) .................................................................................16 Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 (1991) ..........................26 Ulrich v. Terminal Operating Corp., 186 Misc. 145 (Sup. Ct. Orange Co. 1945) aff'd sub nom. 271 A.D. 930 (2d Dept. 1947) ......................................................29 Vanderwerff v. Victoria Home, 299 A.D.2d 345 (2d Dept. 2002) ...........................26 STATUTES 22 N.Y.C.R.R. §670.10.3(f) .....................................................................................37 N.Y. C.P.L.R. § 1602 ................................................................................................. 8 Immigration and Control Act of 1986, 8 U.S.C. § 1324a (“IRCA”) ... 14, 22, 23, 24, 25, 32, 35 N.Y. Lab. Law § 861................................................................................................13 N.Y. Stat. Law § 240................................................................................................12 Omnibus Workers' Compensation Reform Act of 1996 ..........................................11 N.Y. Workers' Compensation Law § 11… .. 7, 10, 11, 14, 17, 18, 20, 25, 26, 27, 30, 31, 32, 34, 35 vii N.Y. Workers' Compensation Law § 15(3)(v) .........................................................14 N.Y. Workers' Compensation Law § 17 ..................................................................15 N.Y. Workers' Compensation Law § 2 ............................................................. 12, 13 OTHER AUTHORITIES HR Rep No. 99-682, part I, 99th Cong, 2d Sess, at 46, reprinted in 1986 US Code Cong & Admin News .................................................................................... 22, 23 NY Assembly Mem in Support, 1996 McKinney's Session Laws of NY ...............34 CONSTITUTIONAL PROVISIONS Eighteenth Amendment of the United States Constitution ......................................29 1 PRELIMINARY STATEMENT The issue here is simple. Appellant The New York Hospital Medical Center of Queens and Respondent Microtech Contracting Corp. agree on the facts. The Hospital, an owner of a jobsite, sued Microtech, a contactor at the jobsite, for contribution and common law indemnification arising out of injuries to Microtech’s employees -- Gerardo Lema and Luis Lema. Microtech paid insurance premiums to cover injuries to its employees, and, in exchange, Microtech is immune from third-party claims for common law indemnification. The New York Workers’ Compensation Law protects all employers from claims based on liability for injuries to all employees acting within the scope of their employment, except in two cases -- which the Hospital agrees are not at issue in this case. The Hospital admits that the Lemas were Microtech’s employees, and admits that the Lemas were injured during the course of their employment for Microtech. This Court should therefore uphold the clear language of the WCL and affirm the Second Department’s decision which affirmed the trial court’s dismissal of this lawsuit. In seeking reversal of the trial court’s and Second Department’s decisions, the Hospital advances an argument that is at odds with settled law and contravenes the public policy of this state. The Hospital argues that (1) the Lemas were illegal immigrants and under federal immigration law their contract with Microtech was 2 illegal. Because the contract was “illegal,” the Hospital contends, (2) the Court should not enforce it to benefit Microtech. Thus, even if undocumented workers are insured, the WCL bar is a nullity. In essence, the Hospital is asking this Court to read an exception into the WCL that does not exist. Microtech submits that it is not the role of the judiciary to read exceptions into a statute when the language is clear and unambiguous. Moreover, this Court has already applied the WCL in cases where the employee is an illegal immigrant, and has applied the WCL bar in cases where the employer illegally hired underage employees. This Court has also upheld state statutes, even where a federal statute was violated. Further, the Hospital’s contention that this Court should not enforce an illegal employment contract is irrelevant. The WCL applies even when no contract exists between the employer and employee, let alone whether there is a “legal” contract. As such, it is a not a matter of enforcing an “ illegal contract.” It is a matter of affirming the lower courts’ decisions applying the WCL bar to defeat this lawsuit. Finally, there is no public policy reason to deviate from the clear wording of the WCL. As required by the WCL, Microtech purchased workers’ compensation insurance and paid premiums so that the Lemas would receive the benefits to which they were entitled and received. In addition, federal immigration statutes 3 already impose civil penalties on employers who violate the law. Accordingly, there is no reason for this Court to carve out an exception to the WCL that was not envisioned by the legislature. For all of these reasons, this Court should affirm the Second Department’s order affirming the dismissal of this lawsuit. 4 COUNTER QUESTION PRESENTED FOR REVIEW Question: When it is agreed that an employee was injured during the course of his employment and where the New York Workers’ Compensation Law bars claims by third parties against the employer for contribution and common law indemnification, does the employee’s status as an illegal immigrant abrogate the explicit terms of the WCL and the legislature’s intention that employers be protected from third-party claims? Answer: No. As this Court has ruled previously, the WCL applies even when the employee is an illegal immigrant, and thus this Court should rule, as the courts did below, that the WCL applies to all employees and employers regardless of the employee’s status. 5 COUNTER STATEMENT OF FACTS On March 6, 2008, Gerardo Lema and Luis Lema were injured during the course of their employment for Microtech at the Hospital. (R.37). The Hospital admits that the Lemas were employed by Microtech and that they were injured during the course of their employment. (R.51-52). Indeed, the Hospital’s entire claim for indemnification from Microtech is premised on these facts. The Hospital also acknowledges that the Lemas’s injuries were not “grave injuries” under the WCL, and that there was no contractual indemnification agreement between it and Microtech. See the Hospital’s brief at page 2. Although the Lemas were illegal immigrants, they collected workers’ compensation benefits. (R.73). The Lemas commenced a lawsuit in New York Supreme Court, Queens County, captioned Gerardo Lema and Luis Lema v. The New York Hospital Medical Center of Queens, under index no. 20562/2008. (R. 34-41). Thereafter, the Hospital brought this action against Microtech on September 21, 2010, seeking indemnification and contribution from Microtech for the underlying lawsuit and the Lemas’s injuries. (R.47-55). Microtech moved to dismiss this action because Section 11 of the WCL bars third-party claims for common law indemnification and contribution. (R.12-64). The lower court granted Microtech’s motion and dismissed this action. (R.5-9). The Hospital appealed the ruling and the Appellate Division, Second Department 6 affirmed the dismissal. (R.110-116). The Hospital then moved to reargue or for leave to appeal to the Court of Appeals. The Second Department denied the Hospital’s motion to reargue, but granted leave to appeal to this Court. (R.108). 7 ARGUMENT POINT I IT IS NOT THE ROLE OF THE JUDICIARY TO READ AN EXCEPTION INTO THE WORKERS’ COMPENSATION LAW WHEN THE LEGISLATURE HAS CLEARLY SPOKEN AS EVIDENCED BY THE CLEAR WORDING OF THE STATUTE. On appeal, the Hospital asks this Court to read into the WCL an exception that is not there. To be precise, the Hospital claims that the clear provisions of WCL § 11 that afford protection to employers against third-party claims, should not apply to employers of illegal immigrants despite the fact that the statute does not contain such an exception, and despite the fact that the Legislature did not intend such an exception. This Court should decline the Hospital’s invitation to change the clear wording of WCL § 11 and rule that the law applies regardless of the immigration status of the employee. The “court's role is not to delve into the minds of legislators, but rather to effectuate the statute by carrying out the purpose of the statute as it is embodied in the words chosen by the Legislature.” See Braschi v. Stahl Associates Co., 74 N.Y.2d 201, 208 (1989) (citations omitted). This Court in Ramroop v. Flexo-Craft Printing, Inc., 11 N.Y.3d 160 (2008) explained: As the clearest indicator of legislative intent is the statutory text, the starting point in any case of interpretation must 8 always be the language itself, giving effect to the plain meaning thereof. . . In construing statutes, it is a well- established rule that resort must be had to the natural signification of the words employed, and if they have a definite meaning, which involves no absurdity or contradiction, there is no room for construction and courts have no right to add to or take away from that meaning. See id. at 166 (quoting Majewski v. Broadalbin-Perth Cent. School Dist., 91 N.Y.2d 577, 583 (1998)). Moreover, as this Court stated: We are bound to construe statutes as we find them and may not sit in review of the discretion of the Legislature or determine the expediency, wisdom or propriety of its action on matters within its powers. A plea that a statute imposes inconvenience or hardship upon a litigant should be addressed to the Legislature; we may not usurp its functions by legislating judicially. See People v. Friedman, 302 N.Y. 75, 79 (1950) (citations omitted). Further, when the Legislature has chosen not to include an exception or variance in a statute, the courts may not create one to address public policy or equitable concerns. See Morales v. County of Nassau, 94 N.Y.2d 218, 224 (1999). In Morales, the plaintiff sought to create an exception to CPLR § 1602 for cases involving domestic violence victims. CPLR § 1602 allows a joint tortfeasor to limit its liability to its proportional share of the damage if it proves that it is less that 50% culpable. In that case, the plaintiff sued Nassau County claiming that its police officers were negligent in failing to arrest her husband after she told them 9 that her husband was threatening her with a knife. At trial, the lower court declined to instruct the jury that liability for the plaintiff's injuries could be apportioned between her husband and the county. The lower court held that the public policy that favors enforcement of orders of protection created an exception to the general rule. This Court ruled that it was wrong to create an exception to the CPLR provision where the wording of the rule did not provide such an exception. This Court stated: This Court has repeatedly declined to interfere with the Legislature's policy choices as beyond the realm of judicial authority. Where the Legislature has spoken, indicating its policy preferences, it is not for courts to superimpose their own. See Morales, 94 N.Y.2d at 224. In fact, even if the Legislature could not have contemplated all of the future problems that would arise, the court must still decline to write into the statute its belief of what the Legislature would have enacted had it known of the problem. As this Court ruled in Lawrence Const. Corp. v. State, 293 N.Y. 634 (1944): A statute must be read and given effect as it is written by the Legislature, not as the court may think it should or would have been written if the Legislature had envisaged all the problems and complications which might arise in the course of its administration. Id. at 639. 10 In this case, as discussed more fully below, this Court should not read an exception into WCL § 11 that simply does not exist. In addition, the Legislature’s intent to protect all employers is clear and the Hospital does not point to any statements or findings by the legislature in the history of the enactment of WCL § 11 that supports its position that WCL § 11 applies only when the employee is a legal worker. As such, this Court should not create an exception and should affirm the lower courts’ dismissal. 11 POINT II THE HOSPITAL’S CLAIM IS BARRED BY THE WORKERS’ COMPENSATION LAW BECAUSE THE LANGUAGE OF THE LAW IS UNAMBIGUOUS AND DOES NOT CONTAIN AN EXCEPTION WHERE THE EMPLOYEE IS AN ILLEGAL IMMIGRANT. The New York State Legislature enacted the Omnibus Workers' Compensation Reform Act of 1996 to add the following language to WCL § 11: An employer shall not be liable for contribution or indemnity to any third person based upon liability for injuries sustained by an employee acting within the scope of his or her employment for such employer unless such third person proves through competent medical evidence that such employee has sustained a “grave injury. . .” For purposes of this section the terms “indemnity” and “contribution” shall not include a claim or cause of action for contribution or indemnification based upon a provision in a written contract . . . See WCL § 11. Here, the Hospital concedes that the two exceptions for “grave injuries” and contractual indemnification claims do not apply in this case. The Lemas did not suffer “grave injuries,” as defined in the statute, and there was no contract between Microtech and the Hospital. See the Hospital’s brief at page 2. The fact that the WCL contains only two exceptions demonstrates that there are no other exceptions to the bar for third-party claims. It is a basic doctrine of 12 statutory interpretation that expressio unis est exclusio alterius -- an expression of one thing excludes others. N.Y. Stat. Law § 240 provides: The maxim expressio unius est exclusio alterius is applied in the construction of the statutes, so that where a law expressly describes a particular act, thing or person to which it shall apply, an irrefutable inference must be drawn that what is omitted or not included was intended to be omitted or excluded. Id. Here, the WCL specifies two exceptions to the bar for third-party claims which creates an “irrefutable inference” that there are no other exceptions to that provision. The WCL does not contain wording that limits its application to employers of legal workers. Therefore, the law applies to the benefit of both the employee and employer, regardless of the employee’s immigration status. Further, the WCL contains clear definitions of the terms “employee” and “employer” and does not create exceptions for employees who are illegal immigrants and employers who hire illegal immigrants. Workers’ Compensation Law § 2 defines the term “employee” as: 4. . . . “employee” shall also mean for the purposes of this chapter any individual performing services in construction for a contractor who does not overcome the presumption of employment as provided under section eight hundred sixty- one-c of the labor law; 13 See WCL § 2 (emphasis added). 1 Workers’ Compensation Law § 2 (3) defines the term “employer”: 3. “Employer,” except when otherwise expressly stated, means a person, partnership, association, corporation, and the legal representatives of a deceased employer, or the receiver or trustee of a person, partnership, association or corporation, having one or more persons in employment. . . (emphasis added). Therefore, the language of the statute is clear and applies regardless of whether the employee is an illegal immigrant and this Court should not read any exception into the clear wording of the statute. 1 N.Y. Lab. Law § 861-c provides exceptions to the presumption of employment for independent contractors and others that do not apply in this case. 14 POINT III THIS COURT HAS ALREADY RULED THAT THE WORKERS’ COMPENSATION LAW APPLIES WHERE THE EMPLOYEE IS AN ILLEGAL IMMIGRANT. Under the Hospital’s theory, a violation of the federal Immigration and Control Act of 1986, 8 U.S.C. § 1324a (“IRCA”) bars the applicability of WCL § 11 when it comes to employment of illegal immigrants. But that simply is not the case. This Court has recognized that WCL § 11 applies when an employee is an illegal immigrant and has permitted the employee to collect workers’ compensation benefits for personal injuries sustained on the job. In Ramroop, 11 N.Y.3d 160, an illegal immigrant was injured and received workers’ compensation benefits under his employer’s policy. The illegal immigrant then sought additional benefits for impairmant of his future wage earning capacity pursuant to WCL § 15(3)(v). That section allows an injured employee to obtain benefits for lost earning capacity provided that the employee participates in a rehabilitation program. This Court ruled that the illegal immigrant was not permitted to recover additional benefits because the rehabilitation program was available only to those 15 who were “lawfully employed,” which the plaintiff was not. See Ramroop, 11 N.Y.3d at 167. If the Hospital were correct in taking the position that the WCL does not apply where the employee is an illegal immigrant, this Court in Ramroop would have ruled that the claimant was not entitled to any benefits under the WCL. Instead, this Court addressed the specific language of § 15 regarding lost earning capacity to determine whether the employee was able to attend a rehabilitation program. This Court, in effect, ruled that the WCL applies where the employee is an illegal immigrant. This Court in Ramroop also addressed WCL § 17 which states that compensation “to aliens not residents or about to become nonresidents of the United States or Canada, shall be the same in amount as provided for residents.” WCL § 17. This Court indicated that this section applies to undocumented immigrants: By its plain terms, section 17 is concerned solely with the treatment of aliens (not just undocumented aliens) who reside, or are about to reside, somewhere other than the United States or Canada. Ramroop, at 168 (emphasis added). Although this Court ultimately ruled that § 17 did not apply in that case, it is clear from this Court’s careful analysis that the WCL applies even where the employee is an undocumented alien. 16 Indeed, this Court stated that “some workplace protections and primary workers' compensation benefits have been held to be available to injured workers who cannot demonstrate legal immigration status.” Id. at 168, 168 fn.4 (citing Testa v. Sorrento Rest., Inc. (Tagminco Corp.), 10 A.D.2d 133 (3d Dept. 1960), lv denied 8 N.Y.2d 705 (1960)). The court in Testa allowed an illegal immigrant to recover under the WCL because “[w]orkmen's compensation is given without reservation and wholly regardless of any question of wrongdoing of any kind.” See Testa, at 135 (quoting Matter of Post v. Burger & Gohlke, 216 N.Y. 544, 550 (1916)). See also Coque v. Wildflower Estates Developers, Inc., 31 A.D.3d 484 (2d Dept. 2006) (the court did not take the injured worker’s immigration status into account where there was a third-party claim against the employer). This Court in Ramroop, also cited Balbuena v. IDR Realty LLC, 6 N.Y.3d 338 (2006), in support of its holding that undocumented workers are entitled to workplace protections and benefits. In Balbuena, this Court ruled that an illegal immigrant was permitted to receive an award of lost future wages under the Labor Law. The decision in Balbuena involved two cases. In the first, Balbuena illegally entered the country and was injured while working at a job site. Balbuena sued the owner of the site alleging Labor Law violations and sought damages and future lost wages. In the 17 second, Majlinger was a Polish citizen who remained in the country after his visa expired. Majlinger was injured while working at a building project and sued the property owners and contractors seeking damages under the Labor Law including future lost wages. This Court ruled that the illegal immigrants were entitled to recover lost wages, and that federal and state law did not preclude recovery. This Court in Balbuena also stated that “[i]n the related context of workers' compensation statutes, also enacted for the benefit of employees, courts have found such statutes applicable to all persons within the state's borders, even those who are not entitled to be here.” Balbuena, 6 N.Y.3d at 359 fn. 6 (emphasis added) (citations omitted). See also Amoah v. Mallah Management, 57 A.D.3d 29 (3d Dept. 2008) (holding that an illegal worker was permitted to recover benefits under the WCL). Based on this clear case law, the WCL applies without regard to the employee’s immigration status. Accordingly, WCL § 11 applies to bar the Hospital’s claims against Microtech. 18 POINT IV THE WORKERS’ COMPENSATION BAR APPLIES EVEN IF THE EMPLOYMENT IS “ILLEGAL,” AND AN ALLEGED VIOLATION OF IMMIGRATION LAW DOES NOT DEFEAT THE APPLICATION OF WCL § 11. Courts regularly apply the WCL where the employer hires an employee in violation of law. In Noreen v. William Vogel & Bros., 231 N.Y. 317 (1921), the claimant was a minor illegally hired by the employer in violation of labor and employment statutes. This Court ruled that the workers’ compensation bar prevented the suit against the employer regardless of the violation. This Court stated that irrespective of the violation: [w]hen plaintiff entered upon the service of the defendant in consideration of a compensation to be paid him therefor the relation of employer and employee existed between them. In the absence of the Workmen's Compensation Law, the plaintiff having been injured in such service, if he brought a common-law action to recover damages for such injuries, would seek a recovery upon the ground that he was an employee and as such entitled to assert the applicability of the rules of law relating to the duty imposed upon a master towards a servant. . . . When the employment is entered upon, the law determines the relations, rights and remedies of the parties. Here the relation of employer and employee existed within the spirit and letter of the Workmen's Compensation Law. 19 Id. at 322. See also Decker v. Pouvailsmith Corp., 207 A.D. 853 (2d Dept. 1923) (the court followed Noreen where the employee was a minor and the employment was in violation of federal law, and nonetheless applied the WCL). In Blanchard v. Integrated Food Systems, 220 A.D.2d 895, 896 (3d Dept. 1995), the employer hired a minor and required her to work past the lawful working hours for minors. The minor was shot while working late. Nevertheless, the court applied the workers’ compensation bar to proscribe the suit against the employer. Similarly, in Monteleone v. Center Storage Warehouses, 68 N.Y.S.2d 369 (Sup Ct. Kings Co. 1946), the decedent was injured while working for Russian War Relief, Inc. At the time of his employment, the decedent was illegally employed because he was underage. The decedent’s estate sued, and Russian War Relief moved to dismiss the action because the WCL bars suits by employees against their employers. The court ruled that the illegal employment “does not ipso facto render the workers’ compensation law inapplicable” and that the employer was protected from the claim under the WCL. Id. at 371. Courts also apply the WCL where the employer violated a statute, and where that violation directly caused the employee’s injury. In Martinkowski v. Carborundum Co./Electro-Mineral Div., 108 Misc. 2d 184 (Sup. Ct. Niagara Co. 1981), the employee died of carbon monoxide asphyxiation. Federal Occupational 20 Safety and Health Administration inspectors investigated the incident and found that the employer had failed to provide sufficient carbon monoxide monitors. OSHA issued citations to the employer for willful violation of federal law. The administrator of the employee’s estate argued that the employer’s willful violation of the law was an intentional tort and that the protection afforded to employers by WCL § 11 did not apply. The court disagreed and ruled that the employer’s actions were not intentional and it therefore upheld the WCL § 11 bar for claims against the employer. See Martinkowski, 108 Misc. 2d at 186. This ruling shows that WCL § 11 applies even if the employer violates federal law, and even where the violation causes the injury. In this case, the fact that the Lemas’s employment for Microtech may have been illegal does not “ipso facto render the workers’ compensation law inapplicable.” Monteleone, at 371. As such, it is clear that just as the workers’ compensation bar applies to underage employment cases and violations of federal law, the lower and appellate courts in this case correctly concluded that WCL § 11 applies to bar suit against employers of illegal immigrants. 21 POINT V COURTS APPLY THE WORKERS’ COMPENSATION BAR EVEN WHERE THE EMPLOYER VIOLATES FEDERAL LAW. This Court has enforced state laws even where there is a violation of federal law. In Lloyd Capital Corp. v. Pat Henchar, Inc., 80 N.Y.2d 124 (1992), an investment company loaned $64,000 to the defendant, a small business, secured by a mortgage on the business owner’s home. The loan bore an annual interest rate of 20.75% with a commitment fee, which violated the Federal Small Business Administration law. The SBA set the interest ceiling at 20.125% and barred the use of a commitment fee. After the business defaulted on the loan, the investment company sought to foreclose on the house. The business owner argued that the loan was in violation of federal law and that the loan therefore was unenforceable under state foreclosure law. This Court ruled that the violation of federal law did not bar the application of state law: If the statute does not provide expressly that its violation will deprive the parties of their right to sue on the contract, and the denial of relief is wholly out of proportion to the requirements of public policy the right to recover will not be denied.” 22 Lloyd Capital, 80 N.Y.2d at 127, quoting Rosasco Creameries v. Cohen, 276 N.Y. 274, 278 (1937) (seller of milk without a license was permitted to recover contract price). This Court in Lloyd Capital also held that the federal law was not concerned with public health or safety, but with advancing small business policy. See Lloyd Capital, at 128. This Court concluded that federal law’s sanctions “'quite complementarily and proportionately protect the underlying public policy.'” Id. at 128-129 (quoting Charlebois v. Weller Assocs., 72 N.Y.2d 587 at 595 (1988) (involving an unlicensed engineer)). This Court therefore declined to read into the state law greater rights and remedies than those provided by federal law. See Lloyd Capital, at 129. In this case, as in Lloyd Capital, the Hospital alleges a violation of federal law. As in Lloyd Capital, the federal law in this case, IRCA, is not concerned with the health and safety of the public. Rather, IRCA’s purpose is to curtail illegal immigration to the United States. See Balbuena, 6 N.Y.3d at 353 (quoting HR Rep No. 99-682, part I, 99th Cong, 2d Sess, at 46, reprinted in 1986 US Code Cong & Admin News, at 5650). IRCA also does not provide that a violation of the statute will bar the application of a workers’ compensation statute or that parties may “interpose illegality” as a legal theory to avoid the provisions of the WCL, or any other state law. See Lloyd Capital, at 128. Indeed, in Ramroop, discussed in Point 23 III supra, this Court recognized that IRCA did not preempt the WCL and allowed an illegal immigrant to recover under the WCL. See 11 N.Y.3d at 168. The Hospital seeks to distinguish Lloyd Capital by arguing that the purpose of IRCA “is not merely to adjust the legal relationships between employers and potential employees who are not citizens, but to address the entire subject of immigration into this country and nothing less than the type of society that we are going to be in the future.” See the Hospital’s brief at page 21. But, the Hospital offers no support for its claim that IRCA’s purpose is to “adjust the legal relationships” between employers and employees. In addition, the Hospital does not claim, nor can it, that IRCA was intended to affect the employment relationship under a state’s workers’ compensation statute. Indeed, the Congressional record indicates that IRCA is not intended “to undermine or diminish in any way labor protections in existing law.” See Amoah, 57 A.D.3d at 32-33 (quoting HR Rep 99- 682 [I], 99th Cong, 2d Sess, at 58, reprinted in 1986 US Code Cong & Admin News, at 5662). Moreover, this Court has already ruled that IRCA does not preempt state worker protection laws because “notwithstanding the federal government's exclusive control over immigration and naturalization, the ‘States possess broad authority under their police powers to regulate the employment relationship to 24 protect workers within the State[.]’” Balbuena, 6 N.Y.3d at 358 (quoting DeCanas v. Bica, 424 U.S. 351, 356 (1976)). It is evident from the legislative history of IRCA that, as with the federal statute in Lloyd Capital, IRCA has its own “regulatory sanctions, reinforced by [] potential civil liability.” Lloyd Capital, 80 N.Y.2d at 128-129. IRCA is designed to deter employers from hiring undocumented immigrants, and to deter undocumented immigrants from working in the country. Yet, once an undocumented immigrant is working and is injured, the WCL provides workers the ability to obtain necessary benefits and protects the employer who has obtained insurance for that employee. The two statutes have different aims and the WCL should not be misread as a means to enforce federal law. The WCL must be enforced and serves as a complete bar to the Hospital’s claim. 25 POINT VI THE HOSPITAL’S ARGUMENT IS PREMISED ON AN “ILLEGAL” CONTRACT. BUT THE WCL APPLIES EVEN WITHOUT A CONTRACT. MICROTECH IS NOT ASKING THIS COURT TO ENFORCE A CONTRACT, LET ALONE AN ILLEGAL ONE. A. WCL § 11 Applies Regardless of Whether There is a Contract Between the Employer and Employee. The Hospital argues that the bar for third-party claims against an employer under WCL § 11 does not apply here because there was an illegal contract between Microtech and the Lemas under IRCA, and that this Court should not enforce an illegal contract. But the Hospital’s entire premise is wrong. WCL § 11 applies regardless of whether there is a contract between the employer and employee, let alone whether there is a “legal” contract. The WCL applies whenever an employee/employer relationship exists. The statute does not contain any language that requires that the relationship be governed by a contract. Here, there is no dispute that the Lemas and Microtech had an employee/employer relationship. Indeed, the Hospital’s entire claim against Microtech is premised on the facts that the Lemas were Microtech’s employees and were injured while working for Microtech. (R.51 at ¶13; R.52 at ¶¶ 19 & 20). 26 Because the WCL does not require that a contract exist for the workers’ compensation bar to apply, this Court has applied WCL § 11 in cases where there was no contract between the employer and employee. See, e.g., Thompson v. Grumman Aerospace Corp., 78 N.Y.2d 553 (1991). In Thompson, a staffing agency agreed to provide workers to Grumman Aerospace Corp. to work at Grumman’s facility and agreed that the workers would remain the employees of the staffing agency. One of the employees, Thompson, was injured while working at Grumman’s facility and sued Grumman. Grumman argued that it was protected from suit under WCL § 11 because it supervised Thompson’s work even though the staffing agency, not Grumman, paid Thompson’s wages. Thompson argued that Grumman was not his employer because it had agreed with the staffing agency that the workers would not be Grumman’s employees. This Court dismissed Thompson’s claims because what mattered was that Grumman controlled and directed the “manner, details and ultimate result of the employee's work,” not whether it paid wages and benefits and maintained workers' compensation for that employee. Id. at 558. Therefore, Thompson was Grumman’s “special employee” and WCL § 11 applied. This Court applied the WCL even though there clearly was no contract between Grumman and Thompson. See also Vanderwerff v. Victoria Home, 299 A.D.2d 345 (2d Dept. 2002) (holding that WCL applied to special employers). 27 Here, there is no doubt that there was an employment relationship between Microtech and the Lemas. Thus, for the WCL §11 bar to apply, the Court need not enforce any employment contract, let alone an illegal contract. B. Microtech Does Not Need This Court to Enforce An “Illegal Contract” for the WCL §11 Bar to Apply. In support of its argument that the Court should not apply WCL § 11, the Hospital cites a litany of cases where courts refused to enforce illegal contracts between the litigants. But, those cases are irrelevant because they involve one contracting party seeking to enforce an illegal contract against the other contracting party. 2 Here, Microtech is not seeking to enforce a contract and the Hospital makes no claim that a contract existed. For example, the Hospital cites to Spivak v. Sachs, 16 N.Y.2d 163 (1965) in support of its position. There, a California attorney, not licensed in New York, sued his client for unpaid legal fees. The attorney had provided advice to his client regarding a matrimonial action and had proposed a draft of a settlement agreement. 2 See, e.g., cases cited by the Hospital: McConnell v. Commonwealth Pictures Corporation, 7 N.Y.2d 465 (1960) (party committed bribery); International Spangels Corp. v. Marrow Manufacturing Corp., 294 N.Y. 295 (1945) (sales price was illegal under wartime price controls); Carmine v. Murphy, 285 N.Y. 413 (1941) (unlicensed seller of alcoholic beverages); Richards Conditioning Corp. v. Oleet, 21 N.Y.2d 895 (1968) (unlicensed worker); Reiner v. N. Am. Newspaper Alliance, 259 N.Y. 250 (1932) (providing news updates was unlawful under another contract); Sprung v. Jaffe, 3 N.Y.2d 539 (1957) (assignment of a loan unlawful due to attorney-client relationship); Clarke v. Town of Russia, 283 N.Y. 272 (1940) (town board member was not an employee); Morgan Munitions Supply Co. v. Studebaker Corp., 226 N.Y. 94, 98 (1919) (misrepresentation in forming contract); Robitzek v. Reliance Intercontinental Corp., 7 A.D.2d 407 (1st Dept. 1959) (same); Barker v. Kallash, 63 N.Y.2d 19 (1984) (injuries directly caused by illegal conduct). 28 This Court ruled that these acts constituted the illegal practice of law and the attorney could not recover fees for his illegal actions. See Spivak, at 168. That is not the case here because Microtech is not seeking to recover anything under a contract and, in any event, has not been accused of wrongdoing. The Hospital cites Stone v. Freeman, 298 N.Y. 268 (1948), in which a broker arranged a sale between his client, as seller, and a third-party purchaser. The broker and his client had earlier agreed that the client would give the broker money to bribe the purchaser’s agent to close the deal. The broker, however, failed to give all of the bribe money to the purchaser. This Court refused to allow the client to recover the unpaid bribe from its broker because a court is not required to serve as “paymaster of the wages of crime, or referee between thieves.” Id. at 270- 271. This plainly is not the case here. Microtech is not seeking to recover anything from anybody, let alone “wages of crime.” 3 There are two cases that involve the applicability of workers’ compensation benefits and illegal employment. But those cases involve work that violated the United States Constitution and criminal laws, unlike this case in which the Hospital 3 Although the dissent in Balbuena cited Spivak and Stone in stating that the Court should not have allowed the illegal immigrants to recover lost earnings, the dissent’s reasoning does not apply to this case. In Balbuena, the illegal immigrants were seeking to recover future lost earnings. But, the only way the immigrants would have been able to earn those wages in the future was if they violated the law. The dissent therefore held that granting the immigrants affirmative relief would in effect be giving them “illegal wages.” See Balbuena, 6 N.Y.3d at 364, 367. In this case, Microtech is not seeking to recover anything, let alone illegal monies, and is not seeking to profit from a crime. 29 alleges a violation of a civil statute. The case of Swihura v. Horowitz, 242 N.Y. 523 (1926), involved a claimant who was injured while delivering alcohol during Prohibition. This Court ruled that the employee was not entitled to benefits because the acts of delivering alcohol were illegal and, therefore, so was the employment. In Herbold v. Neff, 200 A.D. 244, 245 (3d Dept. 1922), a saloon employee sustained a cut from a broken bottle and died from an infection. The court ruled that workmens’ compensation benefits were not available because the serving of liquor was a criminal offense. The decisions in Herbold and Swihura were rendered while the sale of alcohol was a violation of the Eighteenth Amendment of the United States Constitution and was a criminal offense. See Murphy v. Elmwood Country Club, 183 Misc. 332, 338 (Sup. Ct. Westchester Co. 1944) (distinguishing Herbold and Swihura because the constitutional and criminal violations in those cases were malum per se, a wrong in their own right); Ulrich v. Terminal Operating Corp., 186 Misc. 145, 146 (Sup. Ct. Orange Co. 1945) aff'd sub nom. 271 A.D. 930 (2d Dept. 1947) (distinguishing Herbold and Swihura as involving situations where the employment was void ab initio). Unlike the Prohibition cases of Herbold and Swihura, Microtech is not seeking protection from patently illegal conduct. The actual work in the Prohibition cases, was the sale and delivery of alcohol. Here, even if Microtech was attempting to recover from the Lemas’s under a contract, the Lemas’s 30 construction work was itself legal, unlike the sale and delivery of alcohol during Prohibition. See Majlinger v. Cassino Contracting Corp, 25 A.D.3d 14, 29 (2d Dept. 2005) (construction work performed by an illegal immigrant is “lawful and legitimate”), aff’d by Balbuena, 6 N.Y.3d 338. In short, Microtech is not seeking to enforce a contract. Rather, it asks that this Court affirm the lower courts’ decisions applying the clear mandate of WCL § 11 as a bar to this lawsuit. Applying the statute as intended by the Legislators renders the Hospital’s entire argument regarding illegal contracts irrelevant. 31 POINT VII NO PUBLIC POLICY REASON EXISTS TO SUPPORT A REWRITING OF THE WORKERS’ COMPENSATION LAW. When the New York State Legislature has chosen not to include an exemption or variance in a statute, the courts may not create one to address public policy or equitable concerns. See Morales, 94 N.Y.2d at 224. See also Sackolwitz v. Charles Hamburg & Co., 295 N.Y. 264, 270 (1946) (regarding the workers’ compensation scheme, “[i]f the Legislature had intended to except such a situation as is presented by this case, it could have said so”). An argument that the statute, as currently written, does not adequately address an issue “should be addressed to the Legislature[. W]e may not usurp its functions by legislating judicially.” See Friedman, 302 N.Y. at 79. The Hospital wrongly seeks to create an exception to WCL § 11 for illegal immigrants, despite the fact that the law clearly does not contain such an exception. There can be no doubt as to what the Hospital is asking this Court to do. The Hospital asks that this Court “refuse[] to give effect to Microtech’s illegal contract” hoping that “the Legislature might choose to amend the Workers’ Compensation Law.” See the Hospital’s brief at pages 25-26. The Hospital, has it wrong. If the Hospital desires an exception to the statute, it must address its 32 concerns to the Legislature which is able to amend the statute -- not to this Court which must enforce the law as written. In any event, public policy does not favor the Hospital’s position but undermines it. The Hospital’s position would provide greater benefits to illegal immigrants than those benefits provided to legal workers. The Hospital would have this Court interpret “employees” in the WCL to mean employees who are not illegal immigrants. But the term “employees” in WCL §11 is also used as a bar to direct suits by an employee against an employer. See WCL § 11. If illegal immigrants are not included in the term “employees,” as the Hospital would have it, the immigrants would be entitled to receive workers’ compensation benefits and will also be able to sue their employers. This cleary was not the intention of the Legislators in enacting WCL § 11. Further, upholding the clear wording of WCL § 11 would have no impact on further IRCA violations. Simply put, providing the same protection to employers of illegal immigrants that is provided to employers of legal workers will not make it more likely that employers will hire illegal immigrants in the future. There is no advantage to hiring illegal immigrants when it comes to protection provided to the employer under § 11 for third-party claims. The Hospital claims that creating an exception to WCL § 11 will provide an additional disincentive to employers from hiring illegal immigrants. But it is not 33 this Court’s role to ignore clear statutes to support a federal law that already has enforcement mechanisms. As this Court in Lloyd Capital ruled, violations of federal law that are reinforced by civil liability under that law adequately protect the public policy underlying the federal law. A court should not ignore clear language in a state law in an attempt to provide support for a federal law that already has sufficient methods of enforcement. See Lloyd Capital, 80 N.Y.2d at 128-129. Moreover, this Court should support the Legislature’s clear policy goal in creating the bar for third-party claims. In enacting the bar for third-party claims, the Legislature found that premiums for workers’ compensation insurance in New York State were the highest in the country because employers were subject to third-party contribution and indemnification claims. See Majewski, 91 N.Y.2d at 589 (citing Morales v. Gross, 230 A.D.2d 7, 11 (2d Dept. 1997)). The court in Morales v. Gross cited a report in the Legislative Record that noted that increased workers’ compensation insurance premiums cost thousands of jobs, particularly jobs in small businesses and that reform was necessary to keep New York competitive with other states. See Morales, 230 A.D.2d at 11. The purpose of the third-party claim bar was to reduce premium costs by shifting liability from employers to third parties without diminishing an employee’s rights 34 against those third parties. Id. (citing NY Assembly Mem in Support, 1996 McKinney's Session Laws of NY, at 2565). The Legislature has clearly set forth the public policy behind the third-party claim bar, and enacted WCL § 11 to further that policy. This Court should not ignore the clear wording of the statute and the Legislature’s explicit public policy goal to substitute a different policy goal. As this Court stated in Morales v. County of Nassau, This Court has repeatedly declined to interfere with the Legislature's policy choices as beyond the realm of judicial authority. Where the Legislature has spoken, indicating its policy preferences, it is not for courts to superimpose their own. Morales, 94 N.Y.2d at 224. For these reasons, this Court should enforce the clear wording of WCL § 11 and support the Legislature’s intent in enacting the law. 35 POINT VIII THE HOSPITAL RIGHTLY ABANDONS ITS ARGUMENT THAT THE WORKERS’ COMPENSATION LAW IS PREEMPTED BY IRCA BECAUSE THIS COURT HAS ALREADY RULED THAT IRCA DOES NOT PREEMPT STATE LAW. The Hospital has abandoned its argument that IRCA preempts the WCL. In the Hospital’s words: “In the lower courts the parties had joined issue on the question of whether IRCA preempts the provision in WCL § 11 barring an action by the Hospital against Microtech in these circumstances . . . (The Hospital does not present that argument to this Court.).” See the Hospital’s brief at page 7. In any event, there is no preemption as indicated by the many cases discussed above which applied the WCL without finding that the statute was preempted by IRCA. See, e.g., Ramroop, 11 N.Y.3d at 167; Amoah, 57 A.D.3d at 34 (specifically ruling that IRCA does not preempt the WCL). See also Balbuena, 6 N.Y.3d at 358-59 (IRCA does not preempt N.Y. Labor Law); Madiera v. Affordable Hous. Found., Inc., 469 F.3d 219 (2d Cir. 2006). Therefore, the Hospital correctly concedes that the lower and appellate courts rightly dismissed the Hospital’s argument that IRCA preempts WCL § 11 and that this Court need not address this issue. 36 CONCLUSION Microtech respectfully requests that this Court affirm the lower and appellate court decisions dismissing this lawsuit because Section 11 of the Workers’ Compensation Law bars the Hospital’s contribution and common-law indemnification claims against Microtech. Dated: New York, New York July 16, 2013 Respectfully Submitted, WADE CLARK MULCAHY ________________________ Dennis M. Wade, Esq. Cheryl D. Fuchs, Esq. Attorneys for Defendant-Respondent Microtech Contracting Corp. 111 Broadway, 9th Floor New York, New York 10006 (212) 267-1900 Our File #: 150.6782.2MB