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Workers’ Compensation Law

This motion raises the novel issue about whether a post judgment agreement assigning a defendant’s right to reimbursement from a third party defendant is void as against the public policy of the Workers’ Compensation Law (sometimes “WCL”) where the original plaintiff and the third party defendant are employee and employer. The material facts, although complicated, are not in dispute.

In 1981 TC was severely injured while he was performing demolition work as an employee of B.C. Enterprises, Inc. Mr. TG was precluded by the Workers’ Compensation Law from suing his employer for personal injury. Mr. TG did, however, bring a Supreme Court action in Bronx County against the City of New York, JLW and GKW (Bronx action). The Ws were the owners of the premises which were being demolished at the time of plaintiff’s injury.

Defendants each commenced third party actions against TG’s employer, B.C. Enterprises, Inc. There is no dispute that the third party actions were authorized pursuant to Dole v. Dow Chem. Co., 30 N.Y.2d 143, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972).

After a jury trial in the Bronx action, TC obtained a verdict in the amount of $1,223,787.50 against JLW and GKW. JLW and GKW obtained a verdict for 100% contribution from third party defendant B.C. Enterprises, Inc. The judgment for contribution was contingent upon the Ws actually paying out on the judgment rendered against them. The judgment, entered on July 28, 1992, provides in pertinent part: Adjudged, that the defendants, JLW and GKW, have judgment against the Third-Party defendant/Second Third-Party defendant, B.C. Enterprises, Inc. for the full amount of any monies paid by them to the plaintiff in satisfaction of this judgment.

In October 1994 TC, JLW, GKW and ZG (the plaintiff in this action) entered into an agreement (assignment agreement) which forms the basis for the action at bar. Under the material terms of the assignment agreement: 1. ZG loaned the Ws $10,000.00 which was to be repaid to ZG with interest calculated at 5%. The loan was guaranteed by TG. 2. The Ws agreed to pay the entire $10,000.00 to TG in partial satisfaction of TG’s judgment against them in the Bronx action. Upon receipt of the $10,000.00 TG was to deliver a partial satisfaction of judgment to the Ws. 3. The Ws assigned the partial satisfaction of judgment to ZG. In addition the Ws assigned all of their rights and interest in the Bronx action judgment, including the judgment for contribution, to ZG. 4. To the extent that ZG had any recovery against B.C. Enterprises under the assignment, ZG would retain the first $10,000.00 of the recovery with the remainder to go to TG.

Pursuant to the assignment agreement, the $10,000 loan was made; the monies were immediately turned over to TG; TG delivered a partial satisfaction of judgment and the partial satisfaction and assignment of judgment were turned over to ZG.

Defendant State Insurance Fund (SIF) is a New York State agency which provides employers with insurance pursuant to WCL sec. 76. SIF issued an insurance policy to B.C. Enterprises, Inc. against personal liability or injury sustained by B.C. Enterprises, Inc.’s employees.

Defendant Atlanta International Insurance Company (“AIIC”) is a private insurance company. AIIC issued an insurance policy to B.C. Enterprises, Inc. against liability for personal injury claims.

To Be Cont…

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