Judge v. Motor Vehicle Acc. Indemnification Corp., 21 N.Y.2d 85 (1967)
Workmen’s compensation benefits paid to a decedent during their lifetime must be deducted from any award payable to the next of kin for wrongful death under the standard MVAIC endorsement, as the endorsement defines “bodily injury” to include death.
Summary
Edward Judge died from injuries sustained in a collision with an uninsured motorist. He had received over $10,000 in worker’s compensation benefits prior to his death. His estate sought to recover from the Motor Vehicle Accident Indemnification Corporation (MVAIC) for wrongful death. MVAIC argued that the worker’s compensation benefits should be deducted from any potential award, thus precluding recovery since the MVAIC limit was $10,000. The New York Court of Appeals held that the worker’s compensation benefits must be offset against any award for wrongful death, as the MVAIC endorsement language encompassed death as part of “bodily injury”. This offset rendered any arbitration futile, warranting a stay.
Facts
Edward Judge was injured in a car accident with an uninsured driver on September 19, 1964, during his employment.
He was hospitalized from the accident date until February 12, 1965, and then again for eight days before passing away on April 25, 1965; his death was allegedly a result of the accident.
Judge received more than $10,000 in worker’s compensation benefits from his employer’s insurance company.
His estate filed a claim with MVAIC seeking damages for wrongful death.
Procedural History
The estate filed a notice of intention to file a claim with MVAIC on May 26, 1965.
On November 5, 1965, the estate served MVAIC with a demand for arbitration.
MVAIC moved for a permanent stay of arbitration, arguing that the arbitrator could not make an award due to the worker’s compensation offset.
Special Term denied MVAIC’s application, stating that the issue was within the arbitrator’s purview.
The Appellate Division affirmed the Special Term’s decision.
MVAIC appealed to the New York Court of Appeals.
Issue(s)
Whether worker’s compensation benefits paid to the decedent during his lifetime should be offset against an award payable to the next of kin for wrongful death under the standard MVAIC endorsement.
Holding
Yes, because the language of the MVAIC endorsement defines “bodily injury” as including death resulting from the injury, and Condition 5(b) mandates that amounts payable due to bodily injury be reduced by worker’s compensation payments.
Court’s Reasoning
The Court of Appeals reversed the lower courts, holding that the issue of offsetting worker’s compensation benefits was a question of law, not fact, and thus not within the arbitrator’s jurisdiction. The court then addressed the legal issue directly to avoid further delays.
The court relied on the MVAIC endorsement language. Section 1 states that MVAIC will pay sums the insured or their legal representatives are legally entitled to recover as damages from the owner or operator of an uninsured automobile because of bodily injury, sickness, disease, including death resulting therefrom.
Condition 5(b) of the endorsement provides that any amount payable under the endorsement because of “bodily injury” shall be reduced by the amount payable on account of such bodily injury under worker’s compensation law.
Because the definition of “bodily injury” included death, the court reasoned that worker’s compensation benefits paid to the decedent during his lifetime must be deducted from any award made under the endorsement, whether for personal injury or wrongful death.
The court noted that no other construction of the endorsement was possible and that proceeding to arbitration would be futile given the offset.
Chief Judge Fuld concurred, acknowledging that the decision was compelled by prior precedent (Matter of Durant (MVAIC), 15 N.Y.2d 408) and the language of the standard uninsured motorist endorsement but suggesting legislative amendment to address the potential inequity to the injured person.
The court emphasized that it’s holding, coupled with its decision in Durant, renders the arbitrator powerless to make an award, making arbitration an exercise in futility.