RECENT DECISIONS

*Empire Blue Cross/Blue Shield a/s/o Giovannetti v. Linens & Things (Sup. Ct. Westchester Cty, 2006)
The insured was injured in a trip and fall accident in defendant’s store in New York State. Her attorney made it clear to the health insurer that its subrogation and recovery interests would not be protected. Korybski & Levinson was retained to protect those interests. A subrogation lawsuit was started on behalf of the health plan directly against the alleged tortfeasor, who then filed a motion for summary judgment seeking to have the complaint dismissed. Based upon our opposition, that motion was denied.

Defendant claimed that the health insurer had no right to institute a separate action for medical expenses incurred by the health insurer because the personal injury action of the injured insured was still pending and included a claim for medical expenses. In opposing that motion, K&L advised the Court of the law supporting the right of a health plan to bring an independent subrogation action to recover the medical outlays incurred on behalf of its insured.

The Court was clearly persuaded by our arguments, and held that “[i]t is well settled that an insurer may recoup medical expenses paid in a separate action against the actual tortfeasor.” (Citing Winkelmann v. Excelsior Ins. Co. and Excellus Health Plan, Inc. v. Federal Express Corp.)

*Principe v. City of New York, et al , 813 NYS2d 872 (Sup. Ct. Richmond Cty, 2006)
This case involved a self-funded ERISA plan issued by the injured plaintiff’s employer. The insured in this case was injured in a trip and fall accident. The insured thereafter brought suit to recover for the personal injuries he sustained in that accident. After a settlement agreement was reached in that action, plaintiff filed a motion seeking to extinguish the health plan’s subrogation and recovery right. Korybski & Levinson LLP opposed that motion and argued the matter before the court.

In support of the motion, plaintiff relied almost primarily on law set forth by the Appellate Division, Second Department, that New York’s collateral source rule precluded any recovery of medical expenses paid by health insurance and therefore precluded the health plan from enforcing alleged subrogation and recovery rights.

Korybski & Levinson opposed by successfully distinguishing the facts of this case from that case heard by the Appellate Division. We also advised the Court of the current state of the law as announced by the New York Court of Appeals.

In denying plaintiff’s motion, the Court noted with favor the cases cited by our firm in our submitted briefs as well as during oral argument. A settlement was eventually reached between the plaintiff and our client for reimbursement.

We view this as an important decision upholding subrogation rights. Significantly, the Court not only relied upon the greater rights afforded to self-funded ERISA plans, but also found the New York Court of Appeals ruling regarding the non-applicability of New York’s collateral source rule to pre-trial settlements as prevailing.

* Reiss v. Roadhouse Restaurant (Sup. Ct. Richmond Cty, 2007)
The insured plaintiff in this case sustained severe injuries in a trip and fall, requiring significant medical expenses to be incurred by her health insurer. Plaintiff’s personal injury lawsuit settled in early 2006. Prior to that settlement an agreement was reached with the health plan to pay two-thirds of the total claim as reimbursement to the plan. The insured thereafter retained new counsel and refused to honor that agreement and also denied that any part of the insured’s settlement included medical expenses. That attorney then brought a motion by way of Order to Show Cause seeking to extinguish the health plan’s claim, at which point Korybski & Levinson was retained to defend the rights of the health insurer.

The insured argued that the health plan’s claim was barred by New York’s collateral source and also contended that no part of the underlying settlement included medical expenses. Additionally, it was claimed that the settlement “agreement” between the insured and the health plan was never memorialized in writing and that the failure of the health plan to bring a timely action directly against the defendant tortfeasors constituted a waiver.

In opposing the motion, this firm set out a detailed recitation of the facts, the pleadings, the ongoing settlement discussions, the notice given to all sides and the law. Korybski & Levinson relied on and successfully argued all pertinent case law, including pointing out several unpublished decisions that our firm had obtained.

In a detailed seven page decision, the Court (by Judge Minardo, Richmond County Supreme Court) was clearly persuaded by Korybski & Levinson’s arguments and denied plaintiff’s motion, finding that there existed an issue of fact as to whether the underlying settlement included medical expenses and as to whether there was an agreement to pay a sum of money to the health plan out of that settlement. Additionally, the Court deemed plaintiff’s motion to include a request for intervention by the health plan and granted leave to intervene (even though the applicable statute of limitations had expired) for the purpose of pursuing the health plan’s right to recoup medical payments that were actually included in the settlement of the underlying action. Significantly, this appears to be the first time intervention has been granted in a case such as this in New York’s Second Department in the past 10 years.