[*1]
Matter of Marwah v Hereford Ins. Co.
2014 NY Slip Op 51928(U) [46 Misc 3d 1220(A)]
Decided on January 29, 2014
Supreme Court, Queens County
McDonald, J.
Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431.
This opinion is uncorrected and will not be published in the printed Official Reports.


Decided on January 29, 2014
Supreme Court, Queens County


In the Matter of the Claim of, Ashish Marwah, Petitioner, For Leave to Obtain Permission to Settle the Workers' Compensation Claim with Respect to

against

Hereford Insurance Company, Respondent.




14279/2014
Robert J. McDonald, J.

The following papers numbered 1 to 13 were read on this petition for an order pursuant to Workers' Compensation Law § 29(5) approving and confirming the settlement of this case nunc pro tunc:

Papers



Numbered



Order to Show Cause-Petition-Exhibits................1 - 5



Affirmation in Opposition-Affirmation-Exhibits.......6 - 10



Reply Affirmation...................................11 - 13



_________________________________________________________________



Petitioner, Ashish Marwah, commenced this special proceeding seeking an order in accordance with Workers' Compensation Law §29(5) approving, nunc pro tunc, the settlement of the matter of ASHISH MARWAH v HANIS SARDAR and TAHRIR CAPRIC, settled in the [*2]Supreme Court, Queens County, under Index No. 14106/2011.



The underlying negligence action occurred on June 19, 2009. Petitioner, a taxi driver, was injured when the vehicle he was operating in the course of his employment was involved in an accident with a vehicle operated by Hanis Sardar and owned by Tahir Capric. The petitioner was employed at the time by All Taxi. As a result of the accident the petitioner allegedly sustained injuries to his cervical and lumbar spines. The petitioner filed a claim for Workers' Compensation benefits on July 30, 2009. Plaintiff was diagnosed at that time as having a 100% impairment for injuries sustained in the accident.



Plaintiff commenced the underlying third-party action by filing a summons and complaint on June 13, 2011. The matter was settled on January 28, 2013, prior to trial, for the amount of $7,500. Plaintiff was represented by Laurence L. Love, Esq. of Friedman & Simon L.L.P. At the time of the settlement, Mr. Love did not obtain consent to settle from the Workers' Compensation Board. In November 2013, the plaintiff's Workers' Compensation attorneys advised plaintiff's counsel that the Administrative Law Judge at the Workers' Compensation Board requested a copy of consent to settle. By letter to Hereford dated January 30, 2014, Friedman & Simon sought retroactive consent from the carrier. The carrier's consent was not obtained.



Plaintiff's counsel, Lauren Christofano, Esq., of Friedman & Simon, now seeks retroactive consent to settle from Hereford Insurance Company. Counsel claims that the underlying settlement was reasonable as there was no police report and conflicting pre-trial testimony as to which driver proceeded through a red traffic signal and which driver had the right of way. Counsel asserts that there is no evidence that the carrier has been prejudiced by the delay as the carrier has a potential offset against future Workers' Compensation benefits (citing Reynar v Village of Sloatsburg, 17 AD3d 601 [2d Dept. 2005]; Neblett v Davis, 260 AD2d 559 {2d Dept. 1999]).



In support of the motion, the petitioner submits an affidavit dated August 18, 2014, in which he states that as a result of the accident he suffered injuries to his neck, back, left shoulder and right knee. He treated from the time of the accident until February 2010. He filed for Workers' Compensation. He agreed to a settlement of $7,500.00 because he was informed by his counsel that there was a possibility he could lose the case on the issue of liability or on the issue of serious injury threshold.



In opposition, Lisa Levine, Esq., counsel for respondent Hereford Insurance Company (Hereford), the Worker's Compensation carrier, states that it undisputed that Hereford's consent was not sought or obtained prior to the court settlement. In May 2014 the Workers' Compensation case was closed by Administrative Law Judge Regenbogen based upon the failure to obtain consent to the third-party settlement.



Respondent argues that the application for retroactive consent should be denied because the petitioner failed to prove the settlement was reasonable especially in view of the tortfeasor's $100,000/$300,000 policy. Counsel argues that in view of the petitioner's ongoing disability, the need for further medical treatment, and the fact that the plaintiff's treating physician found a permanent disability, there is no proof that the $7,500.00 settlement was reasonable. Further, counsel asserts that pursuant to Workers' Compensation Law § 29(5), an employee may settle a claim arising from the same accident as a Workers' Compensation claim for less than the statutory amount of Worker's Compensation benefits to which he is entitled only if the employee receives written consent to the settlement from the Worker's Compensation carrier or if judicial approval is obtained within three months of the settlement. At the time of the settlement the petitioner had already received $10,808.46 in Workers' Compensation benefits which is greater than the third- party settlement.



The courts have held that if the recipient of Worker's Compensation benefits settles a third party claim without the prior written consent of the Workers' Compensation payor or without a compromise order from the court, he or she forfeits all future Workers' Compensation claims (see Singh v Ross, 12 AD3d 498 {2d Dept. 2004]; Furtado v Mario's Bakery, 17 AD3d 527 [2d Dept. 2005]). Respondent contends that the application for retroactive consent should be denied because petitioner did not move for court consent until September 2014, 22 months after the settlement of the third-party action without providing a reason for the lengthy delay. Respondent asserts that the petitioner has failed to prove that the delay in filing for a judicial order of approval was not caused by his fault or neglect or that Hereford was not prejudiced by the delay (see Stiffen v CNA Ins. Cos., 282 AD2d 991 [3rd Dept. 2001]; Taylor v Cont'l Ins. Co., 9 AD3d 657 [3d Dept. 2004][a petitioner who failed to obtain judicial approval within three months after the settlement is barred from receiving future Workers' Compensation benefits unless he or she can demonstrate that (1)the delay in submitting the application was not the result of the petitioner's fault or neglect, (2)the settlement is reasonable and (3)the carrier was not prejudiced by [*3]the delay]



Counsel asserts that the petitioner has offered no excuse as to why he waited more than 10 months after the third-party settlement to initially seek Hereford's consent or why when consent was not forthcoming in March 2014 he did not move the court until September 2014 to seek judicial approval(citing Rifenburgh v. James, 297 AD2d 901 [3rd Dept. 2002][nunc pro tunc judicial approval denied where not sought for at least two years after the settlement without adequate explanation]).



Further respondent contends that the petition is defective on its face as it does not contain all of the elements necessary as set forth in Workers' Compensation Law § 29(5).



In reply, the petitioner's counsel asserts that the settlement was reasonable as the defendant's examining physicians found that all of plaintiff's injuries were resolved. Counsel also submits an affidavit from trial counsel, Laurence Love, Esq. setting forth the reasons for the delay in seeking to obtain consent. In his affidavit, Mr. Love states that he was the trial counsel for the petitioner and he is currently a Judge in Queens County Civil Court having been sworn in on January 1, 2013. He states that the settlement was negotiated and obtained prior to trial and during the time he was winding down his law practice and preparing to take the bench. Consequently, he states, consent from the Workers' Compensation carrier was not obtained. He states that he believes the settlement was reasonable based upon the conflicting testimony of the two drivers as to who was at fault for the accident. In addition, he felt that based on the reports of the defendant's examining physicians that there was a possibility that the petitioner could lose the case on the issue of serious injury.



After reviewing the petition, the respondent's affirmation in opposition, and the petitioner's reply thereto, this court finds as follows:



"Pursuant to statute (Workers' Compensation Law § 29[5]), an employee may settle a lawsuit arising out of the same incident as his or her Workers' Compensation claim for less than the amount of compensation he or she has received only if the employee has obtained either written consent to the settlement from the compensation carrier, or judicial approval within three months after the case has been settled" (Matter of Williams v Orange & Sullivan Excavating Corp., 114 AD3d 802[2d Dept. 2014] "The failure to obtain either the insurance carrier's consent or court approval will bar the employee from receiving further Workers' [*4]Compensation benefits (see Matter of Johnson v Buffalo & Erie County Private Indus. Council, 84 NY2d at 19 [1994]; Matter of Stiffen v CNA Ins. Cos., 282 AD2d at 992 [3d Dept. 2001]).



However, a judicial order may be obtained nunc pro tunc approving a previously agreed-upon settlement, even where the application for approval is sought more than three months after the date of settlement, provided that the employee can establish that (1) the amount of the settlement is reasonable, (2) the delay in applying for a judicial order of approval was not caused by the employee's fault or neglect, and (3) the insurance carrier was not prejudiced by the delay (see Matter of Jackson v City of New York, 70 AD3d 694[2d Dept. 2010]; Matter of Stiffen v CNA Ins. Cos., 282 AD2d at 992 [3rd Dept. 2001]; Harosh v Diaz, 253 AD2d 850 [2d Dept. 1998]).



Here, this court finds that under the circumstances the amount of the settlement was reasonable given the potential for a defendant's verdict on liability or threshold. However, there was no reasonable excuse provided by the petitioner for the failure to seek judicial approval for 22 months after the settlement. Although trial counsel, Mr. Love, left the practice of law to become a Civil Court Judge on January 1, 2013, prior to the case being settled on January 28, 2013, there was no reason provided by any member of the petitioner's retained firm, Friedman & Simon, L.L.P., as to why they waited 22 months after the settlement to seek judicial approval. Further, petitioner's inability to gain the carrier's consent does not excuse him from timely seeking judicial approval (see Matter of Lautenschuetz v AP Greene Indus., Inc., 48 AD3d 948 [3d Dept. 2008]; Matter of Williams v. New York City Tr. Auth., 27 AD3d 302 [1st Dept. 2006]; Singh v Ross, 12 AD3d 498 [2d Dept. 2004]; Sarnelli v IPI Indus., 8 AD3d 357 [2d Dept. 2004]; Taylor v Cont'l Ins. Co., 9 AD3d 657 [3rd Dept. 2004]; Bernthon v Utica Mut. Ins. Co., 279 AD2d 728 [3d dept. 2001]). Therefore, this court finds that the petitioner has not shown any valid reason for the delay other than the neglect of the firm retained to prosecute the petitioner's case.



Accordingly, for all of the above stated reasons, it is hereby,



ORDERED, that the petition seeking an order approving and affirming the settlement in this case is denied.



Dated: January 29, 2014

Long Island City, NY



______________________________

ROBERT J. MCDONALD

J.S.C.