On November 10, 2009, both the New York State Senate and Assembly passed Senate Bill S66002, as substituted for Assembly Bill A40002. The bill was delivered to Governor Paterson, who signed it today, November 12, 2009.
Comprising six separate parts, A through F, the bill is self-described as:
It is Part F that will affect the prospective handling of tort claims in New York State. The nine sections of Part F of the bill are:AN ACT to amend the insurance law, in relation to municipal cooperative health benefit plans, a study of community rating and the provision of claims experience to a municipality (Part A); to amend the general municipal law and the highway law, in relation to mutual aid (Part B); to amend the public health law, in relation to the composition of county and part-county boards of health (Part C); to amend the general municipal law, in relation to purchasing requirements (Part D); to amend the public authorities law and the local finance law, in relation to authorizing certain bonds to be issued or purchased by the municipal bond bank agency (Part E); and to amend the civil practice law and rules, in relation to treating public and private defendants equally when considering the impact of collateral source payments in tort claims for personal injury, property damage or wrongful death; to amend the general obligations law, in relation to protecting parties to the settlement of a tort claim from certain unwarranted lien, reimbursement and subrogation claims; and to repeal certain provisions of the civil practice law and rules relating to collateral source payments (Part F)
- § 1 -- repeals subdivisions (a) and (b)of CPLR § 4545
- § 2 -- amends subdivision (c) and reletters it as subdivision (a) of CPLR § 4545
- § 3 -- reletters subdivision (d) and as subdivision (b) of CPLR § 4545
- § 4 -- repeals subdivision (e) of CPLR Rule 4111
- § 5 -- amends subdivision (f) and reletters it subdivision (e) of CPLR Rule 4111
- § 6 -- amends subdivision (b) of CPLR § 4213
- § 7 -- adds a new subdivision 4 to General Obligations Law § 5-101
- § 8 -- adds new section 5-335 to General Obligations Law
- § 9 -- provides for the effective dates of these amended and new statutes
19 Section 1. Subdivisions (a) and (b) of section 4545 of the civil prac- 20 tice law and rules are REPEALED. 21 § 2. Subdivision (c) of section 4545 of the civil practice law and 22 rules, as added by chapter 220 of the laws of 1986, is amended to read 23 as follows: 24 [Effective Dates:
(c)] (a) Actions for personal injury, injury to property or wrongful 25 death. In any action brought to recover damages for personal injury, 26 injury to property or wrongful death, where the plaintiff seeks to 27 recover for the cost of medical care, dental care, custodial care or 28 rehabilitation services, loss of earnings or other economic loss, 29 evidence shall be admissible for consideration by the court to establish 30 that any such past or future cost or expense was or will, with reason- 31 able certainty, be replaced or indemnified, in whole or in part, from 32 any collateral source [ such as insurance (], except for life insur- 33 ance[ ), social security (except those benefits provided under title34 XVIII of the social security act), workers' compensation or employee35 benefit programs (except such collateral sources entitled by law to36 liens against any recovery of the plaintiff)] AND THOSE PAYMENTS AS TO 37 WHICH THERE IS A STATUTORY RIGHT OF REIMBURSEMENT. If the court finds 38 that any such cost or expense was or will, with reasonable certainty, be 39 replaced or indemnified from any SUCH collateral source, it shall reduce 40 the amount of the award by such finding, minus an amount equal to the 41 premiums paid by the plaintiff for such benefits for the two-year period 42 immediately preceding the accrual of such action and minus an amount 43 equal to the projected future cost to the plaintiff of maintaining such 44 benefits. In order to find that any future cost or expense will, with 45 reasonable certainty, be replaced or indemnified by the collateral 46 source, the court must find that the plaintiff is legally entitled to 47 the continued receipt of such collateral source, pursuant to a contract 48 or otherwise enforceable agreement, subject only to the continued 49 payment of a premium and such other financial obligations as may be 50 required by such agreement. ANY COLLATERAL SOURCE DEDUCTION REQUIRED BY 51 THIS SUBDIVISION SHALL BE MADE BY THE TRIAL COURT AFTER THE RENDERING OF 52 THE JURY'S VERDICT. THE PLAINTIFF MAY PROVE HIS OR HER LOSSES AND 53 EXPENSES AT THE TRIAL IRRESPECTIVE OF WHETHER SUCH SUMS WILL LATER HAVE 54 TO BE DEDUCTED FROM THE PLAINTIFF'S RECOVERY. S. 2 19 A. 2 1 § 3. Subdivision (d) of section 4545 of the civil practice law and 2 rules is relettered subdivision (b). 3 § 4. Subdivision (e) of rule 4111 of the civil practice law and rules 4 is REPEALED. 5 § 5. Subdivision (f) of rule 4111 of the civil practice law and rules, 6 as amended by chapter 100 of the laws of 1994, is relettered subdivision 7 (e) and amended to read as follows: 8 (e) Itemized verdict in certain actions. In an action brought to 9 recover damages for personal injury, injury to property or wrongful 10 death, which is not subject to [ subdivisions] SUBDIVISION (d) [ and (e)] 11 of this rule, the court shall instruct the jury that if the jury finds a 12 verdict awarding damages, it shall in its verdict specify the applicable 13 elements of special and general damages upon which the award is based 14 and the amount assigned to each element including, but not limited to, 15 medical expenses, dental expenses, loss of earnings, impairment of earn- 16 ing ability, and pain and suffering. Each element shall be further item- 17 ized into amounts intended to compensate for damages that have been 18 incurred prior to the verdict and amounts intended to compensate for 19 damages to be incurred in the future. In itemizing amounts intended to 20 compensate for future damages, the jury shall set forth the period of 21 years over which such amounts are intended to provide compensation. In 22 actions in which article fifty-A or fifty-B of this chapter applies, in 23 computing said damages, the jury shall be instructed to award the full 24 amount of future damages, as calculated, without reduction to present 25 value. 26 § 6. Subdivision (b) of section 4213 of the civil practice law and 27 rules, as separately amended by chapters 485 and 682 of the laws of 28 1986, is amended to read as follows: 29 (b) Form of decision. The decision of the court may be oral or in 30 writing and shall state the facts it deems essential. In [ a medical,31 dental or podiatric malpractice action or in an action against a public32 employer or a public employee who is subject to indemnification by a33 public employer with respect to such action or both, as such terms are34 defined in subdivision (b) of section forty-five hundred forty-five, for35 personal injury or wrongful death arising out of an injury sustained by36 a public employee while acting within the scope of his public employment37 or duties, and in] any [ other] action brought to recover damages for 38 personal injury, injury to property, or wrongful death, a decision 39 awarding damages shall specify the applicable elements of special and 40 general damages upon which the award is based and the amount assigned to 41 each element, including but not limited to medical expenses, dental 42 expenses, podiatric expenses, loss of earnings, impairment of earning 43 ability, and pain and suffering. In a medical, dental or podiatric malp- 44 ractice action, [ and in any other action brought to recover damages for45 personal injury, injury to property, or wrongful death, each element46 shall be further itemized into amounts intended to compensate for47 damages which have been incurred prior to the decision and amounts48 intended to compensate for damages to be incurred in the future. In49 itemizing amounts intended to compensate for future damages, the court50 shall set forth the period of years over which such amounts are intended51 to provide compensation. In computing said damages, the court shall52 award the full amount of future damages, as calculated, without53 reduction to present value] COMMENCED ON OR AFTER JULY TWENTY-SIXTH, TWO 54 THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES SHALL BE ITEM- 55 IZED IN ACCORDANCE WITH SUBDIVISION (D) OF RULE FORTY-ONE HUNDRED ELEVEN 56 OF THIS CHAPTER. IN ANY ACTION BROUGHT TO RECOVER DAMAGES FOR PERSONAL S. 2 20 A. 2 1 INJURY, INJURY TO PROPERTY OR WRONGFUL DEATH, OTHER THAN A MEDICAL, 2 DENTAL OR PODIATRIC MALPRACTICE ACTION COMMENCED ON OR AFTER JULY TWEN- 3 TY-SIXTH, TWO THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES 4 SHALL BE ITEMIZED IN ACCORDANCE WITH SUBDIVISION (E) OF RULE FORTY-ONE 5 HUNDRED ELEVEN OF THIS CHAPTER. 6 § 7. Section 5-101 of the general obligations law is amended by adding 7 a new subdivision 4 to read as follows: 8 4. AS USED IN SECTION 5-335 OF THIS ARTICLE, THE TERM "BENEFIT PROVID- 9 ER" MEANS ANY INSURER, HEALTH MAINTENANCE ORGANIZATION, HEALTH BENEFIT 10 PLAN, PREFERRED PROVIDER ORGANIZATION, EMPLOYEE BENEFIT PLAN OR OTHER 11 ENTITY WHICH PROVIDES FOR PAYMENT OR REIMBURSEMENT OF HEALTH CARE 12 EXPENSES, HEALTH CARE SERVICES, DISABILITY PAYMENTS, LOST WAGE PAYMENTS 13 OR ANY OTHER BENEFITS UNDER A POLICY OF INSURANCE OR CONTRACT WITH AN 14 INDIVIDUAL OR GROUP. 15 § 8. The general obligations law is amended by adding a new section 16 5-335 to read as follows: 17 § 5-335. LIMITATION OF NON-STATUTORY REIMBURSEMENT AND SUBROGATION 18 CLAIMS IN PERSONAL INJURY AND WRONGFUL DEATH ACTIONS. (A) WHEN A PLAIN- 19 TIFF SETTLES WITH ONE OR MORE DEFENDANTS IN AN ACTION FOR PERSONAL INJU- 20 RIES, MEDICAL, DENTAL, OR PODIATRIC MALPRACTICE, OR WRONGFUL DEATH, IT 21 SHALL BE CONCLUSIVELY PRESUMED THAT THE SETTLEMENT DOES NOT INCLUDE ANY 22 COMPENSATION FOR THE COST OF HEALTH CARE SERVICES, LOSS OF EARNINGS OR 23 OTHER ECONOMIC LOSS TO THE EXTENT THOSE LOSSES OR EXPENSES HAVE BEEN OR 24 ARE OBLIGATED TO BE PAID OR REIMBURSED BY A BENEFIT PROVIDER, EXCEPT FOR 25 THOSE PAYMENTS AS TO WHICH THERE IS A STATUTORY RIGHT OF REIMBURSEMENT. 26 BY ENTERING INTO ANY SUCH SETTLEMENT, A PLAINTIFF SHALL NOT BE DEEMED TO 27 HAVE TAKEN AN ACTION IN DEROGATION OF ANY NONSTATUTORY RIGHT OF ANY 28 BENEFIT PROVIDER THAT PAID OR IS OBLIGATED TO PAY THOSE LOSSES OR 29 EXPENSES; NOR SHALL A PLAINTIFF'S ENTRY INTO SUCH SETTLEMENT CONSTITUTE 30 A VIOLATION OF ANY CONTRACT BETWEEN THE PLAINTIFF AND SUCH BENEFIT 31 PROVIDER. 32 EXCEPT WHERE THERE IS A STATUTORY RIGHT OF REIMBURSEMENT, NO PARTY 33 ENTERING INTO SUCH A SETTLEMENT SHALL BE SUBJECT TO A SUBROGATION CLAIM 34 OR CLAIM FOR REIMBURSEMENT BY A BENEFIT PROVIDER AND A BENEFIT PROVIDER 35 SHALL HAVE NO LIEN OR RIGHT OF SUBROGATION OR REIMBURSEMENT AGAINST ANY 36 SUCH SETTLING PARTY, WITH RESPECT TO THOSE LOSSES OR EXPENSES THAT HAVE 37 BEEN OR ARE OBLIGATED TO BE PAID OR REIMBURSED BY SAID BENEFIT PROVIDER. 38 (B) THIS SECTION SHALL NOT APPLY TO A SUBROGATION CLAIM FOR RECOVERY 39 OF ADDITIONAL FIRST-PARTY BENEFITS PROVIDED PURSUANT TO ARTICLE 40 FIFTY-ONE OF THE INSURANCE LAW. THE TERM "ADDITIONAL FIRST-PARTY BENE- 41 FITS", AS USED IN THIS SUBDIVISION, SHALL HAVE THE SAME MEANING GIVEN IT 42 IN SECTION 65-1.3 OF TITLE 11 OF THE CODES, RULES AND REGULATIONS OF THE 43 STATE OF NEW YORK AS OF THE EFFECTIVE DATE OF THIS STATUTE. 44 § 9. This act shall take effect immediately and shall apply to all 45 actions and proceedings commenced on or after such date; provided, 46 however, that sections four through eight of this act shall also apply 47 to any action or proceeding which was commenced prior to such effective 48 date where, as of such date, either (a) a trial of the issues has not 49 yet commenced, or (b) the parties have not yet entered into a stipu- 50 lation of settlement.
Sections 1, 2 and 3 of Part F of this act (the changes to CPLR § 4545) will take effect "immediately" upon the Governor's signature of this bill (which occurred on November 12, 2009) and will apply to all actions commenced on and after that date.
Sections 4, 5 (changes to CPLR Rule 4111), 6 (change to CPLR § 4213),7 (addition of General Obligations Law § 5-101), and 8 (addition of General Obligations Law § 5-335) will also apply to any applicable action or proceeding that was commenced prior to November 12, 2009, (Governor's signing date) if as of such date either the trial had not yet commenced or the parties had not "entered into" (settlement memorialized in writing or one "spread on the record") a stipulation of settlement.
For medical, dental, or podiatric malpractice actions commenced on and after July 26, 2003, the court's decision on future damages must be itemized in accordance with CPLR Rule 4111(d).
For actions brought to recover damages for personal injury, injury to property or wrongful death commenced on and after July 26, 2003, that are not medical, dental or podiatric malpractice actions, the court's decision on future damages must be itemized in accordance with the relettered CPLR Rule 4111(e).
Purpose of Part F:
When predecessor Senate Bill S6068 was passed by just the Senate back in July, the New York State Trial Lawyers Association website pronounced it a legislative victory:
APIP Subrogation Exempted:NYSTLA is proud to announce that the New York State Senate voted to pass a mandate relief bill, S.6068 (Sampson), on July 17th, 2009, which includes an anti-subrogation provision. This is a major victory for the civil justice system and injured New Yorkers. The anti-subrogation provision amends the general obligations law to protect all settling plaintiffs and defendants in a personal injury action from certain unwarranted reimbursement and subrogation claims.
This bill will remedy recent, ill-advised Court of Appeals decisions such as Teichman v. Community Hosp. of Western Suffolk , 87 N.Y.2d 514 (1996), and Fasso v. Doerr, 12 N.Y.3d 80 (Feb. 24, 2009). These decisions incorrectly opened the door to benefits providers, such as health insurers, "double-dipping" by seeking reimbursement from settling defendants who have caused personal injuries to a plaintiff who has health insurance.
Notice that the new GOL § 5-335 specifically exempts subrogation claims for recovery of "additional first-party benefits" as provided for in Insurance Law Article 51 and defined by the prescribed APIP endorsement found at 11 NYCRR § 65-1.3. This means that APIP subrogation claims are still fully viable.
Property Damage Subrogation Claims Unaffected:
On its face, the new GOL § 5-335 will apply only to and limit non-statutory reimbursement and subrogation claims in personal injury and wrongful death actions, and, as to such actions, only insurers or entities qualifying as a "benefit provider" will be affected. GOL § 5-101(4) will define a "benefit provider" as "any insurer, health maintenance organization, health benefit plan, preferred provider organization, employee benefit plan or other entity which provides for payment or reimbursement of health care expenses, health care services, disability payments, lost wage payments or any other benefits under a policy of insurance or contract with an individual or group."
GOL § 5-335 should not apply to insurers that afford first-party property coverage benefits to their insureds and then seek to exercise their subrogation rights because those insurers should not fall within the definition of a "benefit provider" under that section.
Common Law Anti-Subrogation Rule Unaffected:
The new law should not affect what has come to be known as New York's common law "antisubrogation rule". The common law rule operates as a party's liability defense based on coverage principles, not a recovery right of subrogation.