RILEY v. RUPP (2024)

MEMORANDUM AND ORDER

Appeal from an order of the Supreme Court (Jeffrey A. Tait, J.), entered June 23, 2023 in Broome County, which denied defendants’ motion for partial summary judgment.

In this action for wrongful birth, plaintiff seeks to recover for the extraordinary care and treatment required by her child, who was born with trisomy 18 after defendant Melinda B. Rupp allegedly failed to timely diagnosis the genetic condition.  Following joinder of issue and an unsuccessful attempt to dismiss the wrongful birth claim, defendants moved for partial summary judgment dismissing any aspect of the claim that sought extraordinary care and treatment expenses that were or will be covered by Medicaid.  Acknowledging a departmental split on the issue and relying on this Court's precedent, Supreme Court denied the motion.  Defendants appeal.

In Becker v. Schwartz, 46 N.Y.2d 401, 413 N.Y.S.2d 895, 386 N.E.2d 807 (1978), the Court of Appeals “recognized a new, narrow cause of action permitting parents to recover the extraordinary care and treatment expenses ‘accruing as a consequence of the birth’ of a child with a disability” (B.F. v. Reproductive Medicine Assoc. of N.Y., LLP, 30 N.Y.3d 608, 613–614, 69 N.Y.S.3d 543, 92 N.E.3d 766 [2017], quoting Becker v. Schwartz, 46 N.Y.2d at 412, 413 N.Y.S.2d 895, 386 N.E.2d 807).  This so-called “wrongful birth” cause of action “is restricted to those instances in which the plaintiff[ ] can demonstrate ‘that but for the defendants’ breach of their duty to advise plaintiff[ ], the latter would not have been required to assume these [extraordinary financial] obligations’ ” (B.F. v. Reproductive Medicine Assoc. of N.Y., LLP, 30 N.Y.3d at 614, 69 N.Y.S.3d 543, 92 N.E.3d 766, quoting Becker v. Schwartz, 46 N.Y.2d at 412–413, 413 N.Y.S.2d 895, 386 N.E.2d 807).  Thus, parents who successfully prosecute a claim for wrongful birth are entitled to damages only for “ ‘the increased financial obligation arising from the extraordinary medical treatment rendered the child during minority’ ” (Foote v. Albany Med. Ctr. Hosp., 16 N.Y.3d 211, 215, 919 N.Y.S.2d 472, 944 N.E.2d 1111 [2011], quoting Bani–Esraili v. Lerman, 69 N.Y.2d 807, 808, 513 N.Y.S.2d 382, 505 N.E.2d 947 [1987];  see B.F. v. Reproductive Medicine Assoc. of N.Y., LLP, 30 N.Y.3d at 614, 69 N.Y.S.3d 543, 92 N.E.3d 766).

The question posed here is whether that increased financial obligation excludes plaintiff's expenses that have been or will be paid by Medicaid.  This Court has previously held that, “as with any tort action in which damages for economic losses are sought, the availability of another source of compensation does not obviate [the plaintiff's] injury,” further recognizing that “Medicaid is a payor of last resort[,] and recoupment from responsible third parties is necessary to ensure that the Medicaid program remains” as such (Foote v. Albany Med. Ctr. Hosp., 71 A.D.3d 25, 28, 892 N.Y.S.2d 203 [3d Dept. 2009] [internal citations, quotation marks and brackets omitted], affd 16 N.Y.3d 211, 919 N.Y.S.2d 472, 944 N.E.2d 1111 [2011]).¹  The First Department has similarly reasoned that “Medicaid is merely a secondary means of providing necessary medical care, which is furnished by the [s]tate in loco parentis,” and that there is “no reason why such cost should be borne as a public expense where judgment may be recovered against the culpable party” (Germosen v. Gupta, 237 A.D.2d 121, 121, 654 N.Y.S.2d 746 [1st Dept. 1997];  see Mercado v. Institute for Urban Family Health, 39 A.D.3d 409, 409–410, 835 N.Y.S.2d 87 [1st Dept. 2007]).  In contrast, the Second Department has held, with somewhat limited analysis, that, because a parent's recovery in a wrongful birth claim “is limited to their personal pecuniary loss, expenses covered by other sources, such as private insurance or public programs, are not recoverable” (Kubik v. Erhart, 78 A.D.3d 905, 906, 911 N.Y.S.2d 456 [2d Dept. 2010];  see Mickens v. LaSala, 8 A.D.3d 453, 454, 779 N.Y.S.2d 115 [2d Dept. 2004], lv denied 4 N.Y.3d 705, 792 N.Y.S.2d 898, 825 N.E.2d 1093 [2005];  see also Vasiu v. Berg, 192 A.D.3d 1060, 1061, 145 N.Y.S.3d 83 [2d Dept. 2021];  Mayzel v. Moretti, 105 A.D.3d 816, 817, 962 N.Y.S.2d 656 [2d Dept. 2013]).

We discern no reason to depart from our precedent.  Substantively, the collateral source rule codified at CPLR 4545, which authorizes a court to find that certain awarded damages were or will be, with reasonable certainty, replaced or indemnified from another source, applies to “any action brought to recover damages for personal injury, injury to property or wrongful death” – that is, actions sounding in tort – “where the plaintiff seeks to recover for the cost of medical care, dental care, custodial care or rehabilitation services, loss of earnings or other economic loss” (CPLR 4545[a]).  These provisions must be strictly construed as they are in derogation of the common law (see Oden v. Chemung County Indus. Dev. Agency, 87 N.Y.2d 81, 86, 637 N.Y.S.2d 670, 661 N.E.2d 142 [1995]),² and neither defendants nor the Second Department cases upon which they rely provide justification for treating wrongful birth claims – which are essentially medical malpractice claims – differently than all other torts for which economic damages are sought (see Becker v. Schwartz, 46 N.Y.2d at 412, 413 N.Y.S.2d 895, 386 N.E.2d 807;  see generally Teichman v. Community Hosp. of W. Suffolk, 87 N.Y.2d 514, 522, 640 N.Y.S.2d 472, 663 N.E.2d 628 [1996]).

Procedurally, the Legislature has amended CPLR 4545 to clarify the process a court is to follow to apply a collateral source deduction (see L 2009, ch 494, § 2;  Andino v. Mills, 31 N.Y.3d 553, 557 n. 2, 81 N.Y.S.3d 331, 106 N.E.3d 714 [2018]).  The statute now clearly mandates that any such deduction “shall be made by the trial court after the rendering of the jury's verdict,” and, thus, “[t]he plaintiff may prove his or her losses and expenses at the trial irrespective of whether such sums will later have to be deducted from the plaintiff's recovery” (CPLR 4545[a];  see Liciaga v. New York City Tr. Auth., 231 A.D.3d 250, 257, 218 N.Y.S.3d 359 [2d Dept. 2024];  Blanche, Verte & Blanche, Ltd. v. Joseph Mauro & Sons, 79 A.D.3d 1082, 1083, 913 N.Y.S.2d 342 [2d Dept. 2010]).  We recognize that it would greatly enhance the potential of settlement here if the collateral source question were resolved sooner, rather than later.  Nonetheless, in view of this plain statutory language, in addition to our precedent, we reject any argument that the damages allegedly sustained by plaintiff are diminished by the alleged existence of a collateral source payor.  Supreme Court therefore properly denied defendants’ motion (see CPLR 4545[a];  Foote v. Albany Med. Ctr. Hosp., 71 A.D.3d at 28, 892 N.Y.S.2d 203).

In view of defendant's remaining contentions, it further bears noting that the sort of facts and arguments typically marshaled posttrial in a collateral source hearing are not established in this record.  For example, similar to the situation in Foote, plaintiff reports that the Broome County Department of Social Services holds a lien for the Medicaid benefits that have been paid for the child's care and treatment (see Foote v. Albany Med. Ctr. Hosp., 71 A.D.3d at 28, 892 N.Y.S.2d 203;  see generally Social Services Law §§ 104, 104–b;  Sizemore v. Heavy Transp., 199 A.D.2d 969, 969–970, 607 N.Y.S.2d 509 [4th Dept. 1993]).  Defendants urge that said lien is invalid;  however, proof of such lien and the legal basis for asserting it are not contained within defendants’ submissions.  Defendants also assert that plaintiff's child will continue to be entitled to the Medicaid benefits he is presently receiving regardless of plaintiff's income or assets if she prevails in this action.  Again, there is no factual predicate in defendants’ papers regarding the nature of the subject benefits, nor is there any meaningful information concerning the specific statutory provisions underlying their argument (cf.  Matter of Rensselaer County Sheriff's Dept. v. New York State Div. of Human Rights, 131 A.D.3d 777, 783–784, 15 N.Y.S.3d 227 [3d Dept. 2015], lv dismissed & denied 26 N.Y.3d 1128, 26 N.Y.S.3d 757, 47 N.E.3d 88 [2016];  see generally Bryant v. New York City Health & Hosps. Corp., 93 N.Y.2d 592, 609–610, 695 N.Y.S.2d 39, 716 N.E.2d 1084 [1999]).  It must also be emphasized that the parties have not addressed whether the subject Medicaid payments fall within the statutory exception for payments “as to which there is a statutory right of reimbursement” (CPLR 4545[a]).  Ultimately, the papers before us are wholly inadequate for resolution of defendants’ collateral source contentions, even if they were procedurally proper.

ORDERED that the order is affirmed, with costs.

FOOTNOTES

1.   In reviewing this Court's precedent, the Court of Appeals left open the question as to whether the availability of another source of compensation obviates a parent's injury in a wrongful birth action, as it was not necessary to address that issue (see Foote v. Albany Med. Ctr. Hosp., 16 N.Y.3d at 216, 919 N.Y.S.2d 472, 944 N.E.2d 1111).

2.   CPLR 4545(a) modifies the common-law collateral source rule (see Andino v. Mills, 31 N.Y.3d 553, 560, 81 N.Y.S.3d 331, 106 N.E.3d 714 [2018]), which traditionally sought “to ensure that tortfeasors pay for all damages caused by their tortious conduct” (Inchaustegui v. 666 5th Ave. Ltd. Partnership, 96 N.Y.2d 111, 115, 725 N.Y.S.2d 627, 749 N.E.2d 196 [2001]) and thus prohibited tortfeasors from “reduc[ing] [their] liability by the proceeds of insurance or some other source to which [they] ha[d] not contributed” (Oden v. Chemung County Indus. Dev. Agency, 87 N.Y.2d at 85, 637 N.Y.S.2d 670, 661 N.E.2d 142).  The principle goal of the statutory rule was to do away with the duplicative recoveries that the common-law rule accepted, “[t]o assure that plaintiffs are fully compensated – but not overcompensated” (Fisher v. Qualico Contr. Corp., 98 N.Y.2d 534, 538, 749 N.Y.S.2d 467, 779 N.E.2d 178 [2002]).

Garry, P.J.

Lynch, Reynolds Fitzgerald, Fisher and Powers, JJ., concur.