LODESTRO v. New York State Insurance Fund, Appellant. (2007)

Plaintiff sustained injuries as the result of a fall during the course of her employment with the New York State Department of Agriculture and Markets and received workers' compensation benefits from the New York State Insurance Fund (Fund).   Thereafter, plaintiff commenced a negligence action against defendants seeking damages for her injuries, which the parties agreed to settle for $20,000.   At the time of the proposed settlement, the Fund had paid benefits to plaintiff in excess of $196,000.

Supreme Court erred in granting that part of the motion of plaintiff seeking distribution to her of $6,105.85, approximately one third of the net settlement funds after the deduction of costs.   Where, as here, an injured employee settles an action for less than the amount of compensation paid, “the carrier assumes the entire cost of obtaining the recovery and is entitled to recover the net amount remaining after deducting the cost of obtaining the recovery” (Martin v. Agway Petroleum Corp., 161 A.D.2d 1129, 1130, 555 N.Y.S.2d 946, citing Matter of Kelly v. State Ins. Fund, 60 N.Y.2d 131, 138-139, 468 N.Y.S.2d 850, 456 N.E.2d 791).   Thus, the Fund is entitled to recover $12,211.65, the net amount remaining after deducting attorney's fees of $6,105.80 and costs of $1,682.55.   We therefore modify the order accordingly.

It is hereby ORDERED that the order so appealed from be and the same hereby is unanimously modified on the law by denying the motion in part, vacating the distribution of the net settlement funds to plaintiff and the fifth ordering paragraph, and increasing the distribution to the New York State Insurance Fund to $12,211.65 and as modified the order is affirmed without costs.

MEMORANDUM: