Baker v. Sterling, 39 N.Y.2d 397 (1976)
When an infant recipient of public assistance receives a personal injury settlement, the Department of Social Services can only recover the portion of the settlement that specifically reimburses medical expenses already paid by the Department, as that constitutes “excess property” of the infant.
Summary
This case addresses whether the Department of Social Services can place a lien on an infant’s personal injury settlement to recover medical expenses it had previously paid on the infant’s behalf. The Court of Appeals held that while the Department can recover funds specifically designated to reimburse medical expenses (considered “excess property”), it cannot recover from the portion of the settlement compensating the infant for personal injuries. The court reasoned that section 104-b of the Social Services Law is procedural, and therefore limited by the restrictions in section 104 regarding recovery from infants.
Facts
Shirley Baker, a 16-year-old public assistance recipient, was injured by a car and incurred $10,579 in hospital expenses, paid by the Department of Social Services of the City of New York (the Department). Baker sued for personal injuries, including a claim for hospital expenses. The Department filed a lien against the lawsuit under Social Services Law § 104-b to recover the hospital expenses. Baker moved to vacate the lien after settling the case for $175,000.
Procedural History
The trial court initially granted Baker’s motion to vacate the Department’s lien. The Appellate Division reversed, reinstating the lien and remanding for a determination of whether the settlement included reimbursement for medical expenses and the reasonableness of the lien. The Appellate Division then granted the Department’s motion for leave to appeal to the Court of Appeals and certified a question for review.
Issue(s)
Whether the Department of Social Services can enforce a lien under Social Services Law § 104-b against an infant’s personal injury settlement to recover medical expenses it previously paid on the infant’s behalf, when Social Services Law § 104 limits recovery from infants to “excess” property.
Holding
Yes, but only to the extent that the settlement includes reimbursement for medical and hospital expenses, because that portion of the award constitutes “excess property” under Social Services Law § 104.
Court’s Reasoning
The Court reasoned that Social Services Law § 104-b, which establishes the lien mechanism, is procedural in nature and does not create an independent right of recovery. It simply provides a remedy for the right to recover public assistance already established under Social Services Law § 104. Section 104 contains limitations on recovery from infants, stating that no right of action accrues against an infant unless they possessed money or property in excess of their needs when assistance was granted.
The Court determined that an award for personal injuries compensates the infant for their loss, covering anticipated needs caused by the injury. Such funds cannot be considered “money or property in excess of his reasonable requirements.” However, medical expenses already paid by the Department are different. The court stated, “[A]lthough medical expenses are a necessary item (Social Services Law, § 363) once the expenses have been paid by the Department, there is no ‘need’ for the infant to retain the amount received in reimbursement.” Therefore, the portion of the settlement representing reimbursement for medical expenses constitutes “excess” funds and is subject to the Department’s lien.
The Court emphasized the importance of the trial court determining whether the settlement included reimbursement for medical expenses. If the settlement did not include such reimbursement, the lien should be vacated. The Court noted the confusion in the law due to piecemeal legislation and suggested comprehensive legislative treatment or Law Revision Commission review to clarify the matter.
The Court also referenced Social Services Law § 369, which generally prohibits recovery for medical assistance from a recipient’s property, but clarifies that this does not affect the right to recover under § 104-b. The Court concluded that a personal injury cause of action is not the type of “property” intended to be protected by § 369.
The Court ultimately affirmed the Appellate Division’s order, remanding the case to the trial court to determine whether the settlement included reimbursement for medical expenses and, if so, the reasonableness of the lien.