James E. Freligh II, Appellant,v.Government Employees Insurance Company, Respondent.BriefN.Y.December 7, 2017To be argued by Daisy Ford Paglia, Esq. Time requested: 10 minutes APPELLATE DIVISION THIRD DEPARTMENT STATE OF NEW YORK SUPREME COURT JAMES E. FRELIGH, II, Plaintiff-Respondent,■) -against- GOVERNMENT EMPLOYEES INSURANCE COMPANY, Defendant-Appellant. APPELLANT’S REPLY BRIEF Ulster County Index No.: 14-1447 Respectfully submitted, THUILLEZ, FORD, GOLD, BUTLER & MONROE, LLP Attorneys for Defendant -Respondent Government Employees Insurance Company 20 Corporate Woods Boulevard, 3rd Floor Albany, New York 12211 Tel. No.: (518)455-9952 ) ) DONALD P. FORD, JR., ESQ. DAISY FORD PAGLIA, ESQ. ) ) J 3 TABLE OF CONTENTS3 Page TABLE OF AUTHORITIES ii 3 INTRODUCTION 1 ARGUMENT 1 POINT I 13 PLAINTIFF’S CLAIMED FUTURE EARNINGS WERE NOT REASONABLY PROJECTED AS A MATTER OF LAW. ) POINT II .4 PLAINTIFF’S LOST WAGE CLAIM WAS NOT VERIFIED. 3 CONCLUSION .4 3 ) ) i 3 ■) TABLE OF AUTHORITIES Page0 Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451 (1980) .1 Nvack Hosp. v. General Motors Acceptance Corp.. 8 N,Y.3d 294 (2007) .. .4 Sharpe v. Allstate Ins. Co.. 14 A,D.3d 774 (3d Dept. 2005) 1 11 N.Y.C.R.R. 65-3.8(f) .4 3 11 N.Y.C.R.R. 65-3.16 (b)(3) .1 j :> ii j INTRODUCTION The No-Fault Insurance Law is designed “to compensate the accident victim for the earnings he or she would have, in fact, realized” if she or she had not been injured. Kurcsics v. Merchants Mut. Ins. Co., 49 N.Y.2d 451, 457 (1980). Here, plaintiffs lost wage claim is based 3 on an alleged offer of future employment at a defunct car parts business whose owner hoped to establish a successful repair shop. It is respectfully submitted that plaintiffs claim for lost wages is not “reasonably projected” as required by No-Fault regulation 11 N.Y.C.R.R. 65-3.16 (b)(3).3 ARGUMENT POINT I ) PLAINTIFF’S CLAIMED FUTURE EARNINGS WERE NOT REASONABLY PROJECTED AS A MATTER OF LAW. As explained more fully in GEICO’s opening brief, the No-Fault regulations provide that 3 “[ljoss of earnings from work shall not necessarily be limited to the applicant’s actual level of earnings at the time of the accident, but may also include demonstrated future earnings reasonably projected.” 11 N.Y.C.R.R. 65-3.16 (b)(3) (emphasis added). This Court has stated that the No-Fault law “contemplates a degree of certainty in the calculation of lost wages.” Shame v. Allstate Ins. Co.. 14 A.D.3d 774, 775 (3d Dept. 2005). 3 Here, GEICO established prima facie that plaintiffs alleged future earnings from VW3 Parts, Inc. were not “reasonably projected.” In support of its summary judgment motion, GEICO submitted the deposition testimony of William Hrazanek, the owner of VW Parts. Mr. Hrazanek ) testified that he offered plaintiff a job as a mechanic/parts specialist at a salary of $2,000 per week. R 35. Mr. Hrazanek offered this salary because VW Parts “needed to expand the business and get back on track after the flood [caused by Hurricane Irene].” R 131. At the time Mr. Hrazanek allegedly made this job offer to plaintiff in December 2012, the business of VW Parts, 1 3 Inc. was limited to dismantling cars and selling the parts. R 12-13. Mr. Hrazanek testified that he “had plans” to open a repair shop (R 135), but he had not even chosen a location for the shop.3 R 375-376. VW Parts was “basing [its] future” on plaintiff. R 135- In further support of its motion for summary judgment, GEICO submitted certified 3 payroll records for VW Parts. These records revealed that VW Parts paid wages to three employees through the end of December 2012. VW Parts paid wages to one employee in January 2013 and thereafter did not pay any wages to employees in the year 2013. R 216-232.D Mr. Hrazanek testified that he sold VW Parts for $40,000 in 2014. R 126. GEICO’s summary judgment motion also included an affidavit signed by Mr. Hrazanek in December 2012, around the same time that he allegedly offered plaintiff the job at a salary of $2,000 per week. Mr. Hrazanek signed this affidavit in his capacity as the sole operating officer of VWP, Inc., which had filed a Chapter 11 bankruptcy proceeding. VWP, Inc. was a real estate 3 holding company which leased two properties to VW Parts. R 98-103. The affidavit signed by Mr. Hrazanek stated that those properties were “currently unoccupied due to the flood following Hurricane [Irene].” R233. The deposition testimony, payroll records and bankruptcy affidavit submitted by GEICO established that plaintiffs alleged future earnings from VW Parts were not “reasonably ) projected.” Plaintiffs employment was to commence on January 1, 2013. R 46, 134. At that time, the parts business was basically defunct; VW Parts paid wages to one employee in January 2013, and thereafter did not pay any wages to employees in the year 2013. Mr. Hrazanek merely “had plans” to open a new car repair business. He had not even chosen the location for the business. Mr. Hrazanek was hoping that plaintiff would be able to establish such a business and 2 J make it profitable. This speculation is insufficient to establish future lost wages with reasonable certainty.■) In his responding brief, plaintiff presses the contentions he made in his affidavit in opposition to GEICO’s summary judgment motion, He emphasizes that he had accepted a job 1 offer from VW Parts “and would have earned $2,000 per week if he had not been injured.” (Respondent’s Brief, at 13). Plaintiff argues that he “may have been able to keep the company afloat” and that he would have sought unspecified other employment if he lost his job at VW Parts. (Respondent’s Brief, at 13-14). It should be noted that plaintiff was unemployed for approximately seven months prior to the alleged job offer from VW Parts. He had closed his ) own repair shop specializing in Volkswagen and Audi vehicles due to financial problems. R 162-165. At the time plaintiff allegedly would have commenced employment with VW Parts in January 2013, the parts business was defunct and the repair business did not exist. There is no evidence to support plaintiffs assertions that he would have established a successful business ) while earning $2,000 per week or that he would have been able to secure alternative employment.) Plaintiff-respondent’s brief also raises for the first time the argument that he would have been eligible to collect unemployment benefits if he lost his job after he began working at VW ) Parts, and that GEICO would be obligated to pay the rate of unemployment benefits. (Respondent’s Brief, at 13). This argument is unpreserved, having been raised for the first time on appeal. Nor does plaintiff offer any evidence that VW Parts, Inc. carried unemployment insurance. Therefore, he cannot rebut GEICO’s prima facie showing of entitlement to summary judgment on this ground. j 3 POINT II PLAINTIFF’S LOST WAGE CLAIM WAS NOT VERIFIED. As explained fully in GEICO’s opening brief, “an insurer must pay or deny only a verified claim- that is, a claim that has been verified to the extent compliance with section 63- !) 3.5 dictates in the particular case.” Nvack Hosp. v. General Motors Acceptance Corp.. 8 N.Y.3d 294, 299 (2007). The regulations state that the insurer is “entitled to receive proper proof of claim.” N.Y.C.R.R. 65-3.8(f). In this case, once GEICO learned that plaintiffs claim for lost wages was based not on current employment but on an offer of future employment, GEICO was entitled to receive proper proof that the alleged lost wages were “reasonably projected.” ) Contrary to plaintiffs argument in his responding brief, GEICO did not rely solely on the absence of the NF-6 form. GEICO denied liability to the plaintiff it its answer dated June 27, 2014 because at that time GEICO had not received sufficient proof to evaluate the claim. This ) was not a straightforward lost wage claim because it was based on an offer of future employment at a company with an uncertain status. Under these circumstances, GEICO was not required to pay or deny the claim because it was not properly verified.) CONCLUSION It is respectfully submitted that the court should reverse Supreme Court’s order, grant ) GEICO’s motion for summary judgment and dismiss the complaint, together with such other and further relief as the court deems just and proper. . DATED: 7 Respectfully submitted, THUILLEZ, FORD, GOLD, BUTLER & MONROE, LLP 0X Donald P. Ford, Jr., Esq. 4 )