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Court Decides Personal Injury Case Stemming from Car Accident

On July 20, 2001, an employee was operating a 1996 Honda motorcycle which was involved in a car accidentwith one of the accused parties, a delivery truck of the courier company at the intersection of New York State and Connors Road in the Town of Van Buren, County of Onondaga. The accused was the operator of the delivery vehicle in the course of his employment for the courier company. The motorcycle driver sustained severe personal injuries in the motor vehicle accident and required substantial health care and medical services thereafter.

Based on records, prior to the employee’s accident, a Corporation had issued a group contract for HMO medical care coverage to the man’s employer and he was at all relevant times an eligible member under the HMO contract. By the terms of the HMO contract, the Corporation provided coverage to the man for certain medically necessary hospitalization and health care services. The cost of the benefits provided to the man and paid for by the Corporation presently exceeds the sum of $100,000.

In July 30, 2001, the man commenced a civil action against the operator of the delivery truck and the courier company seeking to recover monetary damages for the injuries he sustained. There is no factual dispute that the man is not seeking and has not advanced a claim for the recovery of past or future medical expenses.

The HMO contract contains succession language that provides in the event that the insured suffer an injury or illness for which another party may be responsible, such as someone injuring the insured in an accident, and the HMO pay benefits as a result of that injury or illness, the HMO will be superseded and succeed to the right of recovery against the party responsible to the extent of benefits they have paid.

A New York Injury Lawyer said that on April 17, 2003, the Corporation commenced the action against the operator of the delivery vehicle and the courier company and advanced one cause of action, which alleged standing as representative of the man under the applicable HMO contract language and sought recovery of the cost of benefits paid to him on the ground that the accused parties’ negligence was the proximate cause of his personal injuries and the medical expenses he incurred. The accused parties commenced a third-party action against the Town where the accident happen, seeking contribution or remuneration. The Town has taken no position in reference to the issues presented by the motion and has not submitted any papers to the court relative to the motion.

The Corporation and the accused parties both have taken the position that there are no material issues of fact that would preclude the granting of conclusion without trial and that the accused parties’ summary judgment motion presents a pure issue of law for the court to determine. Neither side has advanced an argument that the motion is premature or must await the completion of discovery.

A Manhattan Personal Injury Lawyer said that the accused parties’ primary argument in support of the summary judgment motion is founded upon admissibility of collateral source of payment. he said evidentiary statute provides that in a personal injury action wherein the complainant seeks and recovers compensatory damages for medical expenses, the court must reduce the award for certain categories of damages, including the cost of medical care, where it is determined that the cost of such expense will, with reasonable certainty, be replaced or reimbursed by any collateral source. The statute provides a list of collateral sources which includes insurance such as that provided under the HMO contract involved.

The accused parties’ argue that the Corporation, as a representative, has no greater rights than that possessed by its insured employee. According to the accused parties, since the employee would have no right of recovery against the alleged wrongdoers, the Corporation could have no greater right against the wrongdoers and may not recover under a succession theory that would be barred to the employee. The accused parties’ also argue that the Corporation is subject to whatever defenses the alleged wrongdoers could assert against the employee.

A Suffolk County Personal Injury Lawyer said that the Corporation argues that the law does not revoke or apply to a health insurer’s succession claim. ccording to the Corporation, the collateral source rule serves only to prevent a double recovery by an injury complainant and the real issue is whether the health insurer stands to obtain a double recovery through its succession claim, which does not apply to the case.

It appears to the court that no other court has confronted and decided a collateral source succession dispute under the same facts as presented. However, there are a number of cases which have addressed similar claims in differing realistic settings.

The case, however, involves an attempt by the insurer to directly enforce its succession rights against the alleged wrongdoer to recover amounts paid to the insured and, because of the manner in which the insured’s injury action has been pleaded and prosecuted then, there is no possibility of the wrongdoer having to pay twice and there is no need to await settlement.

The accused parties provide the court with a letter from the Superintendent of Insurance to the Counsel for the Governor regarding the proposed amendments to the law and enacting a new section with more expansive collateral source provisions. The accused parties cite to specific language in the letter which provides that finally, the Insurance Counsel believe that reduction of recoveries by collateral sources would have some effect upon the succession rights of insurers, and the effective date provision which affects existing occurrences would, therefore, impair existing rights, raising legal questions.

In response, the Corporation submits a letter from the New York State Insurance Department which discusses the Department’s approval of succession language in group accident and health contracts. The letter provides in pertinent part that the State Insurance Department’s position on succession provisions is based upon a determination that such a provision is appropriate in group contracts to eliminate duplicative payments.

Again, the focus and emphasis by those evaluating succession provisions and the law issues seem to be upon the necessity to put in place a monitoring scheme to prevent double recovery by the injured complainant insured and, to a lesser degree, the question of who should bear the cost of paying once for the injured complainant’s medical costs.

The court turns to the question of whether the application of the law as advanced by the accused parties would result in an undeserved windfall to the accused parties. Clearly, in the absence of the Corporation medical insurance coverage, which paid the insured complainant’s medical bills, the accused parties would be exposed to the potential liability for all of the costs in the insured complainant’s direct action against the accused. Obviously, the employee’s counsel made a strategic decision not to include a claim for the costs in the insured complainant’s personal damages action because of the prohibition against double recoveries embodied in the law.

However, in the absence of such insurance, assuming the insured complainant was successful in suing a claim for past and future medical expenses in the personal injury action without apportionment of liability to the insured complainant, the accused parties would be responsible for every dime of such costs. There can be no double recovery to the insured complainant.

At least one federal court has analyzed and applied the New York law to a similar claim by an accused that the law bars succession claims by insurers to recover the cost of benefits paid to insured parties resulting from the accused parties’ wrongful conduct. The accused parties argued that the collateral source rule prevented the insurer from recovering anything more than what the insured could have recovered from the accused party in a direct action.

The accused parties also argue that the procedural pathway chosen by the Corporation has the potential to result in inconsistent verdicts or multiple judgments against the accused parties for the same items of damage. The court finds little merit in the argument. Initially, there is only one claim for medical expenses being advanced against the accused parties. The employee is not advancing such claim in his personal damages action and there will be no verdict or judgment awarding medical expenses to the employee in the personal injury action. Secondly, to the extent that one action results in a finding of liability as against the accused before the other action is reduced to verdict or judgment, traditional principles of determination and permanent ruling, if applicable, will come into play to resolve or harmonize the two actions.

In conclusion, the court finds that the law is not a bar to the Corporation’s contractual succession action against the accused parties to the extent that such action alleges that the accused are the responsible parties and seeks to recover the cost of medical expenses paid by the Corporation on behalf of its insured employee. The accused parties’ motion to dispose the case without trial is denied in its entirety.

One of the most common scenarios in the road is an accident and it is the most unpleasant scene that no one wants to encounter. If someone in your family gets involved in a car accident, a skilled lawyer will be guiding your steps in pursuing your legal complaints. If you lose your job or you are not compensated after the accident, please call Stephen Bilkis and Associates.

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