New York Law Review

Tag: worker’s compensation law

  • People v. D. H. Productions, Inc., 41 N.Y.2d 906 (1977): Strict Liability for Corporate Officers Failing to Secure Worker’s Compensation

    People v. D. H. Productions, Inc., 41 N.Y.2d 906 (1977)

    Corporate officers, specifically the president, secretary, and treasurer, are strictly liable for a corporation’s failure to secure worker’s compensation insurance, reflecting a legislative intent to ensure payment to injured employees.

    Summary

    This case addresses the criminal liability of corporate officers for failing to secure worker’s compensation insurance for their employees. The Court of Appeals affirmed the lower court’s decision, holding that the statute imposes strict liability on the president, secretary, and treasurer of a corporation for such failures. This decision is based on the legislative intent to ensure that injured employees receive compensation and the historical context of the statute’s amendment, which specifically targeted responsible corporate officers while excluding directors from such strict liability.

    Facts

    D.H. Productions, Inc. failed to secure worker’s compensation insurance as required by New York law. As a result, the corporation and its president were charged with a misdemeanor under Section 52 of the Worker’s Compensation Law.

    Procedural History

    The lower court convicted the corporation’s president. The Appellate Term affirmed the conviction. The case then came before the New York Court of Appeals.

    Issue(s)

    Whether Section 52 of the Workers’ Compensation Law imposes strict liability on corporate officers (president, secretary, and treasurer) for the corporation’s failure to secure worker’s compensation insurance.

    Holding

    Yes, because the legislative intent and the purpose of the law indicate a desire to ensure that injured employees receive compensation, and the legislative history shows a deliberate choice to hold specific officers responsible for the corporation’s compliance.

    Court’s Reasoning

    The Court reasoned that Section 52 of the Workers’ Compensation Law clearly penalizes the “failure to secure the payment of compensation,” indicating a legislative intent to impose strict liability. This interpretation is supported by the statute’s purpose of assuring payment to injured employees. The Court examined the legislative history of the 1926 amendment to Section 52, which added the provision imposing liability on corporate officers. An initial draft included “executive officers and directors,” but the Committee on Criminal Courts Law and Procedure of the Association of the Bar of the City of New York objected, arguing that directors often lack direct involvement in the corporation’s day-to-day business and may be unaware of the failure to secure compensation. The legislature heeded these concerns and excluded directors from the final draft. The Court inferred that the legislature intended to apply strict liability to the named corporate officers, who are “likely to have responsibility for the day-to-day operation and management of the corporate enterprise,” but not to directors. The court referenced Matter of Aioss v. Sardo, 223 App. Div. 201, 203, aff’d 249 N.Y. 270 to support the purpose of the law in assisting and assuring payment to an injured employee.

  • Kelly v. New York City Transit Authority, 33 N.Y.2d 373 (1974): Substantial Evidence and the Standard for Rebutting Presumptions in Worker’s Compensation Cases

    Kelly v. New York City Transit Authority, 33 N.Y.2d 373 (1974)

    Testimony regarding statements made by a third party, even if an employee, does not require corroboration under Section 118 of the Workers’ Compensation Law, and the determination of whether such testimony constitutes substantial evidence depends on its inherent reliability, not on corroboration.

    Summary

    This case addresses whether statements made by a non-deceased third-party witness (the assailant) in a worker’s compensation case require corroboration under Section 118 of the Workmen’s Compensation Law, and whether the statements constituted substantial evidence to rebut the presumption that the employee’s death arose out of employment. The Court of Appeals held that corroboration was not required for such statements and that the police officer’s testimony regarding the assailant’s statements was inherently insubstantial, affirming the award of death benefits to the claimant. The court emphasized that the focus should be on the inherent insubstantiality of the testimony rather than the absence of corroboration.

    Facts

    Samuel Kelly, a motorman for the New York City Transit Authority, was resting in the crew room between assignments when Henry Hathaway, another motorman, attacked and killed him. Hathaway was taken into custody and interrogated. He stated that Kelly, a member of the Black Muslims, had harassed, annoyed, terrorized, and blackmailed him. Initially, the referee excluded the police officer’s testimony regarding Hathaway’s statements, citing Hathaway’s incoherent state and subsequent commitment to a psychiatric hospital. Later, the referee admitted the testimony but concluded it did not constitute substantial evidence to rebut the presumption that Kelly’s death arose out of his employment.

    Procedural History

    The Workmen’s Compensation Board initially disallowed the claim for death benefits. The Appellate Division reversed the Board’s decision, holding that there was insufficient evidence to overcome the presumption that the killing arose out of the decedent’s employment. The Transit Authority appealed to the Court of Appeals, which affirmed the Appellate Division’s reversal, albeit based on different reasoning.

    Issue(s)

    1. Whether Section 118 of the Workmen’s Compensation Law requires corroboration of statements made by a non-deceased third-party witness, specifically the assailant, in a worker’s compensation case.
    2. Whether the testimony of the police officer regarding the assailant’s statements constituted substantial evidence to rebut the statutory presumptions in favor of the claimant.

    Holding

    1. No, because Section 118 applies to declarations of deceased employees, and there was no proof that Hathaway was deceased. Further, even if Hathaway were deceased, Section 118 requires corroboration only for declarations of the deceased employee on whose account the claim is made, not third parties.
    2. No, because under the circumstances, the testimony of the police officer as to statements made by Hathaway during the course of his interrogation did not constitute substantial evidence to support any conclusion that Kelly’s death occurred in consequence of personal animosity outside the scope of his employment.

    Court’s Reasoning

    The Court of Appeals reasoned that Section 118 of the Workmen’s Compensation Law serves two purposes. The first sentence addresses admissibility of evidence, relieving the Board from strict evidentiary rules. The second sentence pertains to the quantum of evidence, requiring corroboration only for declarations of the deceased employee on whose behalf the claim is made. The court found it illogical to extend the corroboration requirement to declarations of any and all deceased employees of the employer, stating that the fact of employment or lack of it has no rational bearing on the weight to be given third-party testimony.

    The court emphasized that its affirmance was based on the inherent insubstantiality of the testimony rather than the absence of corroboration. The court considered the circumstances under which Hathaway’s statements were made, noting that he was described as rambling and incoherent and had been committed to a psychiatric hospital. The court focused on the reliability and probative value of the evidence, rather than imposing a blanket requirement of corroboration for third-party statements.

    The Court explicitly rejected the Appellate Division’s apparent reliance on lack of corroboration, clarifying that the focus should instead be on the inherent substantiality of the evidence presented. The court highlighted the importance of evaluating the credibility and reliability of the witness testimony based on the specific facts and circumstances of the case.

    The court quoted section 118: “The chairman or board in making an investigation or inquiry or conducting a hearing shall not be bound by common law or statutory rules of evidence or by technical or formal rules of procedure…but may make such investigation or inquiry or conduct such hearing in such manner as to ascertain the substantial rights of the parties. Declarations of a deceased employee concerning the accident shall be received in evidence and shall, if corroborated by circumstances or other evidence, be sufficient to establish the accident and the injury.”

  • Matter of Empire Mutual Insurance Company, 27 N.Y.2d 146 (1970): Reimbursement from Special Disability Fund After Waiver of Lien

    Matter of Empire Mutual Insurance Company, 27 N.Y.2d 146 (1970)

    An insurance carrier that waives its lien on a third-party settlement as part of its contribution to the settlement cannot then seek reimbursement from the Special Disability Fund for payments made beyond the statutory retention period.

    Summary

    Empire Mutual, acting as both the workmen’s compensation carrier and the employer’s liability carrier, sought reimbursement from the Special Disability Fund for payments made to a claimant beyond 104 weeks after the claimant settled a third-party action. Empire Mutual had waived its compensation lien and contributed $29,000 towards the settlement. The court held that because Empire Mutual effectively received reimbursement for its compensation payments by reducing its liability carrier contribution, it was not entitled to reimbursement from the Special Disability Fund. Allowing such reimbursement would constitute a windfall.

    Facts

    In 1960, a claimant sustained severe injuries. The claimant had a pre-existing physical handicap due to a prior injury while working for the same employer. Empire Mutual Insurance Company was the workmen’s compensation carrier for the employer. Empire Mutual made compensation payments to the claimant for 186-4/5 weeks.

    Procedural History

    The Workmen’s Compensation Board directed the Special Fund to reimburse Empire Mutual for payments made beyond 104 weeks. The Appellate Division affirmed the Board’s decision. The Special Fund appealed to the New York Court of Appeals.

    Issue(s)

    Whether an insurance carrier, acting as both compensation and liability carrier, is entitled to reimbursement from the Special Disability Fund for payments made to a claimant beyond the statutory retention period, when the carrier waived its lien on the proceeds of a third-party settlement and contributed to the settlement as the employer’s liability carrier.

    Holding

    No, because the insurance carrier, in voluntarily waiving its lien for the total amount of the compensation paid to the claimant and contributing to the settlement, is effectively reimbursed for its compensation payments, making it ineligible for further reimbursement from the Special Disability Fund.

    Court’s Reasoning

    The court reasoned that generally, a carrier can exercise its statutory rights as a lienor to recover payments made to the claimant from a third-party recovery, and then turn to the Special Fund for any deficiency arising after the 104th week. However, in this case, Empire Mutual acted in dual capacities: as the workmen’s compensation carrier and as the employer’s liability carrier. Empire Mutual actively participated in the third-party settlement by contributing $29,000 and waiving its lien for compensation payments.

    The court found that Empire Mutual’s cash settlement as liability carrier was reduced by the amount of payments made previously as compensation carrier. If two separate carriers had been involved, the liability carrier would have had to contribute a greater amount to satisfy the compensation carrier’s lien. In effect, Empire Mutual was already reimbursed for its compensation payments by having its payments as liability carrier reduced.

    The court emphasized that allowing further reimbursement from the Special Disability Fund would constitute a windfall for Empire Mutual. The court stated, “Here, Empire Mutual, acting in dual capacities, was fully reimbursed for its compensation payments to claimant by having its payments as liability Carrier correspondingly reduced. To allow Empire Mutual reimbursement under such circumstances would be, in effect, a windfall.”

    The court reversed the Appellate Division’s order and dismissed the claim for reimbursement from the Special Disability Fund.

  • 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.

  • Paider v. Park East Movers, 19 N.Y.2d 373 (1967): Defining ‘Occupational Disease’ Under Workers’ Compensation Law

    19 N.Y.2d 373 (1967)

    An occupational disease, for purposes of workers’ compensation, is an ailment resulting from a distinctive feature of the work performed, not merely from the specific location of work or contact with a co-worker.

    Summary

    This case addresses the definition of “occupational disease” under New York’s Workers’ Compensation Law. Two separate claims were consolidated: one from a cashier exposed to cold drafts, and another from a truck driver who contracted tuberculosis from a co-worker. The Court of Appeals held that neither claimant suffered from an occupational disease because the cashier’s ailment was due to the specific workplace, not the nature of the job, and the truck driver’s illness stemmed from contact with a co-worker, not a distinctive risk of truck driving. This case clarifies that an occupational disease must be intrinsically linked to the nature of the employment itself.

    Facts

    In Matter of Snir, the claimant was a cashier at a department store exposed to cold drafts from air conditioning at her register, resulting in chronic muscle strain. In Matter of Paider, the claimant was a truck driver who contracted tuberculosis from his assigned helper, with whom he shared the truck cab.

    Procedural History

    In Matter of Snir, the Workmen’s Compensation Board found the cashier’s condition to be an occupational disease, which the Appellate Division affirmed. In Matter of Paider, the Board found the truck driver’s tuberculosis to be an occupational disease, but the Appellate Division reversed. Both cases were appealed to the Court of Appeals.

    Issue(s)

    1. Whether a cashier’s muscle strain, caused by cold drafts at her specific workstation, constitutes an occupational disease.

    2. Whether a truck driver’s tuberculosis, contracted from a co-worker in the truck cab, constitutes an occupational disease.

    Holding

    1. No, because the cashier’s ailment was caused by the specific location of her work, not by an inherent risk of being a cashier.

    2. No, because the truck driver’s illness resulted from contact with a fellow employee and not from a distinctive feature of the occupation of truck driving.

    Court’s Reasoning

    The Court of Appeals relied on Goldberg v. 954 Marcy Corp., defining occupational disease as one resulting from the nature of the employment, a hazard distinguishing it from the usual run of occupations. The court reasoned that the cashier’s condition was due to the employer’s failure to provide a safe workplace, not the inherent nature of the cashier job itself. As the court stated regarding the Snir case, “Cashiers as a class are not hired with the expectation that the work will be performed in front of a cold air ventilator.” Similarly, the court found the truck driver’s tuberculosis was due to contact with an infected co-worker, not a peculiar risk of truck driving, citing Harman v. Republic Aviation Corp., which held that contracting tuberculosis from a co-worker was a general risk, not an occupational disease. The dissent argued that the majority’s interpretation was too restrictive, conflicting with the intent of the Workers’ Compensation Law and previous decisions like Roettinger v. Great Atlantic & Pacific Tea Co., where a butcher’s lung condition was deemed an occupational disease due to temperature extremes, even though such diseases aren’t naturally incident to butchering. The dissent contended that a “recognizable link” between the work environment and the disease should suffice, while the majority emphasized the need for a distinctive risk inherent to the occupation itself, not just the workplace.