Monday, June 16, 2008

Court Denies No-Fault Insurer's Motion for Summary Judgment Based on Workers' Compensation Board Subject Matter Jurisdiction Defense

Jing Huo LAc a/a/o Maria Acosta v. American Tr. Ins. Co.
(Civil Ct., Richmond Co., decided 6/12/2008)

New York's Workers' Compensation Law §142 (7) provides that "(w)here there has been a motor vehicle accident which caused personal injury and there is a dispute as to whether the injury occurred in the course of employment, the Workers' Compensation Board shall... hold an expedited hearing on... whether the accident occurred within the course of employment[.]"

The New York courts have consistently ruled that the Legislature has vested "primary jurisdiction" in the Workers' Compensation Board over the issue of the availability of coverage under the Workers' Compensation Law, and that a plaintiff has "no choice but to litigate this issue before the Board". Where a case is likely to fall within the exclusive jurisdiction of the Board, the plaintiff bears the burden of pleading and proving the absence of compensation. The plaintiff must demonstrate either that: (1) no compensation policy covering the plaintiff was in existence; (2) plaintiff was not an employee of the defendant; or (3) the injury did not arise out of and in the course of plaintiff's employment.

American Transit denied no-fault coverage and payment to plaintiff medical provider on the ground that the assignor was in the course of his employment as a taxi cab/car service driver at the time of the accident and, as such, workers' compensation coverage was primary for health care expenses relating to the assignor's reported injuries. Plaintiff sued for payment, and American Transit moved for summary judgment, contending that the court lacked jurisdiction to hear the complaint because the Workers' Compensation Board had primary jurisdiction over the issues of coverage.

In denying American Transit's motion for summary judgment, Richmond County NYC Civil Court Judge Katherine A. Levine held that American Transit had failed to show that there was potential merit to its claim that the assignor was employed at the time of the accident so as to trigger a determination of employment status by the Workers' Compensation Board. Judge Levine found that the police accident report, although identifying the license plate of the vehicle the assignor was driving as having been authorized by the New York City Taxi & Limousine Commission, was not sufficient by itself "to raise a complicated factual question on employment so as to warrant the intercession of the Workers Compensation Board."

The court, however, granted American Transit's motion to amend its answer to assert a lack of subject matter affirmative defense, noting:
While the court, as set forth above, has serious doubts about the viability of defendant's argument that this court lacks subject matter jurisdiction, both parties will have an opportunity, at trial, to present their positions as to whether, as a matter of law, there is Workers Compensation insurance coverage for the assignor and whether the assignor falls within the statutory definition of an employee under the Workers Compensation Law. This court reserves a decision on whether plaintiff has proven its prima facie case until trial.

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