Johnson v. Buffalo & Erie County Private Industry Council, 84 N.Y.2d 13 (1994)
Workers’ compensation benefits paid beyond three years do not constitute payment for basic economic loss, and a carrier’s consent is required for a claimant to settle a third-party action and continue receiving benefits.
Summary
Johnson, an employee of Buffalo and Erie County Private Industry Council, sustained injuries in a car accident in 1986 and received workers’ compensation benefits. He also filed a third-party lawsuit which he settled for $10,000 without the carrier’s consent. The Workers’ Compensation Board later suspended Johnson’s payments because of the unapproved settlement. The Court of Appeals reversed the Appellate Division’s decision, holding that benefits paid beyond three years are not for “basic economic loss” under the Insurance Law, and the carrier’s consent was required for the settlement to preserve Johnson’s eligibility for continued benefits. The court emphasized the importance of carrier consent in third-party settlements under Workers’ Compensation Law § 29(5).
Facts
Johnson sustained compensable injuries in a 1986 car accident during his employment.
He filed for workers’ compensation benefits and commenced a civil suit against the other driver.
Johnson settled the civil suit for $10,000 without the workers’ compensation carrier’s consent.
A State Medical Examiner determined Johnson had a permanent partial disability, leading to a compensation rate of $82.97 per week.
Procedural History
The Workers’ Compensation Law (WCL) Judge adopted the determination of permanent partial disability.
The State Insurance Fund suspended claimant’s payments due to the unapproved third-party settlement and requested the file be closed.
The WCL Judge directed the carrier to continue payments, considering the settlement for pain and suffering.
The Workers’ Compensation Board modified, precluding further benefits after April 23, 1990, due to the unauthorized settlement.
The Appellate Division reversed, finding no distinction between disability awards and weekly awards for “basic economic loss.”
The Court of Appeals granted leave to appeal.
Issue(s)
1. Whether workers’ compensation benefits paid to a claimant beyond three years may properly be construed as payment for