In this personal injury action, plaintiff claims that she tripped and fell on the steps of the Roadhouse Restaurant on October 19, 1999, thereby sustaining a sufficiently serious injury to require arthroscopic surgery on her left ankle and other therapeutic measures. Her tort action was commenced on or about October 4, 2002. Issue was subsequently joined; a bill of particulars was demanded; and on November 26, 2003, plaintiff served a verified bill of particulars (Plaintiff's Exhibit "E") upon the named defendants. A supplemental verified bill of particulars (Plaintiff's Exhibit "F") was served on March 18, 2005.

It is alleged by plaintiff's health care provider, Group Health Incorporated (GHI) that it did not become aware of plaintiff's lawsuit until early in 2005, at which point it contacted plaintiff's counsel in an effort to recoup some or all of the $134,085.29 in medical expenses which it had incurred on behalf of its insured pursuant to its policy provisions. While GHI claims that an agreement was reached early in 2006 to settle its claim against plaintiff for the sum of $89,390.00, this allegation is strongly disputed, and there is no legally sufficient evidence before the Court of any such binding agreement. In fact, the only documents pertinent to any settlement that have been submitted to the Court include (1) a copy of the General Release executed by plaintiff on or about February 1, 2006 (Plaintiff's Exhibit "G") and (2) a contemporaneously-executed pro forma Stipulation of Discontinuance (id.) Nevertheless, it is undisputed that plaintiff settled her tort action against defendants in February 2006 for the sum of $650,000.00. Disclaiming any prior notice of the proposed settlement, GHI asserted a purported lien against the settlement proceeds for the full amount of plaintiff's medical expenses, [*2]whereupon plaintiff moved, inter alia, for a declaration that GHI "ha[s] no valid claim upon the settlement proceeds". The sum of $134,085.29 is presently held in escrow pursuant to an order of this Court dated October 27, 2006. Although cast in terms of a declaratory judgment, this Court will treat the application as one to extinguish GHI's claim of right to any portion of the settlement proceeds (see Principe v City of New York, 11 Misc 3d 879 [S Ct Richmond Co. 2006] [Minardo, J.]).

The contract between plaintiff and Group Health Incorporated provides in pertinent part as follows:

"3. Recovery of Overpayments. If GHI pays benefits under this Plan for services incurred on your account and it is found that GHI paid more benefits than should have been paid because you were...(d) (d) payment was in an amount greater than that to which you were entitled because you were repaid for all or some of those expenses by another source, then GHI will have the right to a refund from you. You must return the amount of the overpayment within sixty (60) days of GHI's request."

In support of her motion, plaintiff argues that no part of the settlement represents the recovery of medical expenses paid by GHI, citing the so-called "collateral source rule" memorialized in CPLR 4545. To the extent applicable, subdivision (c) of that section provides that in an action to recover damages for personal injuries, any sum awarded to plaintiff must be reduced by the amount, if any, representing the recovery of medical expenses that have been paid on plaintiff's behalf from a collateral source, such as insurance. Plaintiff argues that since the foregoing statute precluded her retention of so much of any settlement amount as might represent reimbursement of covered medical expenses, no such sums were included in the settlement that she reached with the tortfeasors. Thus, there is no fund to which GHI's lien or subrogation rights may attach. Proof of this fact is said to be found in the supporting affirmations of the two attorneys (including plaintiff's former counsel) who allegedly negotiated the settlement and agree with plaintiff that "no part of the settlement was allocated to reimbursement for medical expenses paid by GHI because [of] the collateral source rule". In the alternative, plaintiff argues that none of the settlement amount could have been so-allocated, since she never sought to recover medical expenses in the action.

This Court cannot accept either argument.

As regards plaintiff's alternative contention, the Court of Appeals has held in the factually similar case of Teichman v Community Hosp. of Western Suffolk (87 NY2d 514, 523) that "CPLR 4545[c] does not compel the conclusion that medical expenses were necessarily excluded from [any pretrial] settlement", since the statute in question is inapplicable thereto. Moreover, such elements of damage were clearly sought in plaintiff's verified [*3]complaint (Plaintiff's Exhibit "D", para 20) and verified bill of particulars (Plaintiff's Exhibit "E"), both of which include medical expenses as an element of damages. In fact, plaintiff's bill of particulars specifically states that the amounts claimed, e.g., for "doctor's bills and medical expenses" (para 11), is "[t]o be provided" rather than being marked "[n]ot applicable", as was done in response to other demands of defendants' (id. paras 26-31) (cf. Teichman v Community Hosp. of Western Suffolk, 87 NY2d at 523)^[FN1]. A similar argument was rejected by this Court in Principe v City of New York (11 Misc 3d at 880).

As for the balance of plaintiff's argument, the representations made by the respective attorneys involved in the negotiations cannot be deemed conclusive on the matter of medical reimbursement since the recovery of said sums was clearly an element of the damages alleged in the complaint, and the release signed by plaintiff (Plaintiff's Exhibit "G") speaks broadly in terms of "all . . . causes of action . . . sum[s] of money . . . damages, judgment . . . claims and demands whatsoever in law . . . or equity . . . against the Releasee[s]", i.e., defendant-tortfeasors. Moreover, the release proclaims that the settlement to which it relates will constitute "complete payment[ ] for all damages and injuries . . . [attributable to] the Releasees and . . . all other tortfeasors liable or claimed to be liable jointly with them . . . whether presently known or unknown". Hence, the formal document, which can be presumed to constitute the complete agreement between the parties relative to the settlement of the tort action (see CPLR 2104) is ambiguous on this issue, while the question is not addressed in the accompanying Stipulation of Discontinuance (cf. Teichman v Community Hosp. of Western Suffolk, 87 NY2d at 522-523).

In view of all of the above, it is the opinion of this Court that here, as in Teichman, "there exists the possibility that the settlement did actually include some payment for medical expenses" (id. at 523). Thus, a hearing will be required in order to determine whether plaintiff is entitled to the declaration which she seeks.

Finally, since it was plaintiff herself who brought GHI into this action for the express purpose of adjudicating its rights vis-a-vis the settlement proceeds, her motion will be deemed to include a request that GHI be accorded intervenor status for this limited purpose. Thus viewed, leave to intervene is granted (id. at 518-519). As the Court of Appeals aptly observed in Teichman (id. at 523), allowing the insurer to pursue its contractual [*4]right to reimbursement for medical expenses serves a dual purpose not inconsistent with CPLR 4545, i.e., that of "prevent[ing] a potential double recovery by plaintiffs and assuring that tortfeasors, not ratepayers, will ultimately bear the expense" of medical care necessitated by their negligent acts or omissions.

Accordingly, it is

ORDERED that Group Health Incorporated and Healthcare Recoveries, Inc. are granted leave to intervene in this action for the limited purpose of pursuing their right, if any, to recoup covered medical payments as agreed or if not agreed, actually included as part of the financial settlement of the underlying tort action; and it is further

ORDERED that the question of whether plaintiff's prior attorney entered into a binding agreement with GHI to settle the disputed lien, and if not, whether plaintiff's settlement with defendants "did actually include some payment for medical expenses" and the amount, if any, thereof is referred to Hon. Vincent Pizzuto, Judicial Hearing Officer, to hear and report/determine with recommendations; and it is further

ORDERED that the Judicial Hearing Officer shall file his report with all due diligence; and it is further

ORDERED that if trial of the issue hereby referred is not begun within 60 days from the date of this order, or before such later date as the Judicial Hearing Officer may fix upon good cause shown, this order shall be cancelled and revoked, shall be remitted by the Judicial Hearing Officer to the Court from which it was issued, and the matter hereby referred shall immediately be returned to the Court for trial of those issues (22 NYCRR § 202.43[d]); and it is further

ORDERED that the sum of $134,085.29 continue to be held in escrow by the present custodian; and it is further

ORDERED that plaintiff's motion is held in abeyance pending receipt of the report and recommendations of the Judicial Hearing Officer and a motion pursuant to CPLR 4403.

E N T E R,

_______________________________

J.S.C.

Dated: January 31, 2007