URENA v. PARKCHESTER SOUTH CONDOMINIUM INC (2021)

This is an action to recover damages arising out of a construction accident pursuant to Labor Law sections 240(1), 241(6) and 200. Plaintiff, Jose Urena, now seeks to extinguish $50,000 of a lien claimed by non-party AIG Global Recovery Services (“AIG”), “in lieu of” alleged no-fault first party benefits, for a motor vehicle accident and to compel AIG to issue an interim consent to settle the third-party action in the amount of $625,000 pending the determination of plaintiff's right to the $50,000 set-off of his worker's compensation lien.

Plaintiff was allegedly injured on July 9, 2014 when he fell from the flatbed truck registered to B & A Restoration Contractors (“B & A”), plaintiff's employer. According to plaintiff's deposition, plaintiff was loading materials onto a flatbed truck while standing on a pile of construction material, i.e., pallets that he stacked to elevate himself. Plaintiff had also lowered the side of the truck as he loaded materials off of and onto the truck. Plaintiff lost his balance as he tried to avoid being hit by other construction materials and slipped off the pallets and onto a pipe that was lying on the truck, thereby falling off of the truck. As a result of his alleged injuries, plaintiff filed claims against defendant Parkchester South Condominium Inc.(“Parkchester”) under a theory of labor law violations (failure to provide proper and/or safe equipment) for a work-related accident. Parkchester later impleaded B & A as third-party defendant in December 2016.

By letter dated October 24, 2018, AIG advised plaintiff that Granite State Insurance Company, the Worker's Compensation insurance carrier for B & A, claimed a lien against any potential third-party settlement in the total amount of $221,536.15.

By letter dated September 11, 2020, plaintiff advised the worker's compensation carrier, AIG that plaintiff had received an offer to settle the case in the amount of $625,000. Plaintiff requested the carrier's consent to settle and reduce the worker's compensation lien by taking $50,000 off the lien in consideration that it was paid in lieu of first party benefits as the first $50,000 would have been paid by no-fault insurance if this matter had not been a work-related accident.

On October 8, 2020, AIG advised plaintiff that it refused plaintiff's request to eliminate $50,000 from the worker's compensation lien as to the proceeds that were paid in lieu of first party no-fault benefits. As AIG refused to reduce the lien amount, plaintiff now brings this Order to Show Cause.

Plaintiff contends that he is entitled to the $50,000 reduction because the alleged injury arose out of the use or operation of a motor vehicle. By describing the accident as related to the use of a motor vehicle, plaintiff asserts that a Worker's Compensation carrier may not assert a lien against proceeds received pursuant to Insurance Law § 5104(a) “for compensation and/or medical benefits paid which were in lieu of first party benefits which another insurer would otherwise have been obligated to pay under the No-Fault Automobile Insurance Law. Plaintiff further contends that under Insurance Law 5102, he would be entitled to first party benefits, which is defined under the No-Fault Insurance Law as payments to reimburse a person for basic economic loss on account of personal injury arising out of the use or operation of a motor vehicle.

In opposition, AIG contends that plaintiff's injuries were not caused by his use or operation of the flatbed truck. AIG also argues that plaintiff has only made this insurance claim at the time of settlement. AIG asserts that it is a settled and basic principle of law that “where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position” citing Environmental Concern, Inc. v. Larchwood Const. Corp., 101 A.D.2d 591, 593, 476 N.Y.S.2d 175 (2d Dept. 1984), quoting Davis v. Wakelee, 156 U.S. 680, 689, 15 S.Ct. 555, 39 L.Ed. 578 (1895).

Workers' Compensation Law 29 (1) provides that a workers' compensation carrier has the right to assert a lien against the proceeds of a claimant's third-party action. However, the carrier may not assert a lien against proceeds received pursuant to Insurance Law 5104 (a) “for compensation and/or medical benefits paid which were in lieu of first party benefits which another insurer would have otherwise been obligated to pay under [the No-Fault Automobile Insurance Law]” (see Dietrick v. Kemper Ins. Co., 76 N.Y.2d 248, 557 N.Y.S.2d 301, 556 N.E.2d 1108 [1990]). First party benefits are payments of up to $50,000 intended to reimburse the injured person for his or her basic economic loss, including lost wages and medical expenses (Insurance Law 5102 [a], [b]; see also Matter of Figelman v. Goldfarb, 257 A.D.2d 721, 722, 682 N.Y.S.2d 482 [1999]).

Thus, the initial issue in this matter is whether the plaintiff was using or operating the vehicle at the time of his accident. Here, plaintiff's injuries occurred when he was engaged in the process of loading construction material within the confines of the flatbed truck and when plaintiff lost his balance, he came down upon a rebar pipe, and was caused to fall out of the vehicle injuring himself.

AIG does not dispute that plaintiff was inside the truck and loading it when the accident occurred. The law is clear that a person such as plaintiff who is loading or unloading a parked vehicle is “using” the vehicle within the meaning of Insurance Law article 51 (see, Kessler v. Liberty Mut. Ins. Co., 158 A.D.2d 974, 551 N.Y.S.2d 722 [4th Dept. 1990]; see also Ellis v. United Financial Cas. Co., 39 Misc. 3d 1242[A], 2013 WL 3119027 [Sup. Kings 2013]).

There is, however, a line of cases that hold that the mere fact that a plaintiff was loading or unloading a vehicle when injured does not in itself entitle the plaintiff to no-fault benefits if the proximate cause of the injury was an instrumentality other than the vehicle itself (see Walton v. Lumbermens Mutual, 88 N.Y.2d 211, 644 N.Y.S.2d 133, 666 N.E.2d 1046 [1996]) (truck driver injured, while outside the truck, when supermarket's levelator collapsed while he was unloading his insured truck at supermarket's loading dock. As the collapse of the levelator was the undisputed proximate cause of his injuries, plaintiff was not entitled to recover first party no-fault benefits).

The present case is clearly distinguishable from Walton (supra), where the injuries were caused by the levelator while standing outside the truck. Here, the plaintiff was unloading his vehicle while standing on the insured truck, and the injuries were sustained as a result of his being struck while on this truck and falling off of this vehicle (see Kessler v. Liberty Mut. Ins. Co., 158 A.D.2d 974, 551 N.Y.S.2d 722 [4th Dept. 1990]) (plaintiff entitled to first-party no-fault benefits when injured as he was standing on his flatbed truck, stacking bales of hay that were being loaded on and tossed to him by a co-worker and one bale struck him).

This court is also unpersuaded by AIG's contention that plaintiff is now changing his theory of the accident and should therefore be barred from seeking the $50,000 set-off of his worker's compensation claim. Throughout this litigation, plaintiff has always maintained that he was injured while loading a truck.

Under the circumstances of this case, and for the reasons explained above, this court concludes that plaintiff was using the insured vehicle within the meaning of section 5102 (b) of the Insurance Law at the time he sustained injury, and that his injuries were proximately caused by his fall from the flatbed truck.

Accordingly, it is

ORDERED that plaintiff's application is granted, extinguishing the purported worker's compensation lien to the extent of the first $50,000 paid by AIG in lieu of first party benefits.

This is the Decision and Order of the Court.

Adrian Armstrong, J.