New York Law Review

Tag: lien

  • Baker v. Sterling, 39 N.Y.2d 397 (1976): Recovery of Public Assistance from Infant’s Personal Injury Settlement

    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.

  • Ryan v. General Electric Co., 26 N.Y.2d 6 (1970): Lien on Military Claims Act Settlements in Workers’ Compensation Cases

    Ryan v. General Electric Co., 26 N.Y.2d 6 (1970)

    A workers’ compensation insurance carrier has a lien on payments made to dependents by the United States Government under the Military Claims Act for death caused by noncombat activities of the armed forces, to the extent of the compensation awarded.

    Summary

    This case addresses whether a workers’ compensation insurance carrier has a lien on settlement payments received by a widow under the Military Claims Act for the death of her husband. The husband, an airplane pilot, was killed when his plane was struck by a Navy jet. The widow received workers’ compensation benefits and later a settlement under the Military Claims Act. The court held that the carrier had a lien on the Military Claims Act payments. The court reasoned that these payments were a substitute for a tort recovery, even without a showing of negligence, and should be subject to the lien under Section 29 of the Workers’ Compensation Law to reimburse the carrier.

    Facts

    The claimant’s husband, an airplane pilot employed by General Electric, was killed when his airplane was struck by a Navy jet towing a practice target. The Navy jet had reported difficulty reeling in its target and was in a steep dive at the time of the collision. There were no survivors. The claimant, as the surviving widow, received workers’ compensation death benefits. Subsequently, she negotiated a settlement with the Department of the Navy under the Military Claims Act and received $5,000, followed by an additional $120,000 award by special act of Congress.

    Procedural History

    The Workmen’s Compensation Board reversed the referee and held that the settlement and award were a “recovery” covered by Section 29 of the Workmen’s Compensation Law. The Appellate Division affirmed the Board’s decision by a divided court. The claimant widow appealed to the New York Court of Appeals.

    Issue(s)

    Whether payments received from the United States Government under the Military Claims Act constitute a “recovery” for “negligence or wrong” that is subject to a lien under Section 29 of the Workers’ Compensation Law, or whether such payments are a gratuity.

    Holding

    Yes, the payments were in the nature of a recovery for negligence or wrong, even though not necessarily in settlement of a judicially cognizable cause of action, because the Military Claims Act serves as a substitute for a tort recovery and Section 29 should be broadly read to cover a Federally authorized substitute for any possible tort recovery.

    Court’s Reasoning

    The court reasoned that the Military Claims Act provides for administrative settlements for injuries or death arising from “noncombat” activities of the armed services. These activities, such as operating aircraft, often involve inherently dangerous activities that, if conducted by private persons, would likely result in liability even without proof of negligence. While awards under the Military Claims Act are not explicitly conditioned on a showing of negligence, claimants must be free of contributory negligence.

    The court emphasized that the Military Claims Act serves as a substitute for a tort recovery, even if it’s unclear whether a claimant would have an action at law under common-law principles. The requirement that the claimant accept the amount tendered in “full satisfaction” suggests that the payment isn’t a mere gratuity but is connected to possible liability.

    The court referenced Matter of Petterson v. Daystrom Corp. (17 Y 2d 32, 39), stating that Section 29 is designed “to provide for reimbursement of the compensation carrier whenever a recovery is obtained in tort for the same injury that was a predicate for the payment of compensation benefits.” The court concluded that this legislative design is best effected by allowing reimbursement where the recovery, although perhaps not a traditional tort, is based on some kind of wrong resulting from hazardous activities. Thus, the order of the Appellate Division was affirmed.