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Defendant Moves for Summary Judgment Arguing Assignment Agreement is Unenforceable

ZG commenced this action against both SIF and AIIC claiming that pursuant to the Bronx judgment, the partial satisfaction of judgment, the assignment of judgment and the insurance policies each defendant issued, they are required to reimburse her for the $10,000 paid to TG in satisfaction of the judgment against the Ws.

SIF moves for summary judgment dismissing the complaint against it on the ground that the assignment agreement is void and unenforceable pursuant to the public policy of the Workers’ Compensation Law. ZG cross-moves for summary judgment against both defendants. SIF claims that in effect the assignment agreement is a scheme by which an employer (or its insurer) is forced to compensate its employee beyond that which is otherwise allowed under the Workers’ Compensation Law. ZG claims that the assignment agreement is a bona fide transaction, recognized as valid in the Court of Appeals in the case of Feldman v. New York City Health & Hosps.Corp.

AIIC also cross-moves for summary judgment dismissing the complaint against it on the same grounds as SIF and on the additional ground of late notice.

Although summary judgment is a drastic remedy because it deprives a litigant of a day in court, it should be granted where there are no disputed material issues of fact. The enforceability of an unambiguous contract is generally a question of law, appropriate for a court to determine. This case, which concerns the enforceability of the assignment agreement, is ripe for a summary judgment determination.

Preliminarily it is important to understand that although this injury concerns only $10,000.00 the parties acknowledge that the ultimate decision regarding the validity of the assignment agreement will affect the collectability of the entire $1.2 million dollar judgment. ZG intends to use any recovery made in this action to further satisfy TG’s judgment against the Ws creating a new enforceable debt against the defendants. These payments against the judgment and consequent indebtedness would continue until the judgment was paid or the insurance coverage was depleted.

It is well established that the legislature, in enacting the Workers’ Compensation Law, intended that the administrative proceeding under the statute be the sole and exclusive remedy of an employee against his or her employer for injuries sustained during the course of employment. Fixed compensation is guaranteed to the injured employee regardless of fault and in exchange for reducing the costs and risks of litigation.

In Dole v. Dow, 30 N.Y.2d 143, 151, 331 N.Y.S.2d 382, 282 N.E.2d 288 (1972) the Court of Appeals carved out an exception to the exclusivity provisions of the WCL. Dole v. Dow permits a defendant to recover contribution from a plaintiff’s employer for a work related injury. The exclusion, however, has been construed narrowly by the courts.

Notwithstanding the narrow construction of the Dole v. Dow exception to the exclusivity of remedies under the WCL, at the time the Ws sought contribution and obtained a third party judgment against TG’s employer, B.C. Enterprises, Inc., in the Bronx action, the narrow exception applied.

In a context wholly apart from the Workers’ Compensation Law, the Court of Appeals approved the validity of assignment agreements like the one between ZG, the Ws and TG. In Feldman v. NYCHHC, 56 N.Y.2d 1011, 453 N.Y.S.2d 683, 439 N.E.2d 398 (1982) the Court of Appeals upheld the validity of post judgment assignment agreements by reversing the Appellate Division and reinstating the order of the Supreme Court for the reasons stated in the opinion of Justice Irving S. Aronin. Mr. Feldman had loaned certain defendants money in order to satisfy a judgment that had been rendered against the defendants in a separate action. The defendants had obtained a judgment of contribution against third party defendant NYCHHC. In connection with the loan Feldman obtained an assignment of defendants’ rights under the third party judgment. Feldman sued NYCHHC for recovery. Justice Aronin held that the loan transaction was bona fide and enforceable. In so holding Justice Aronin expressly rejected any argument that the loan agreement violated the Court of Appeals decision in Klinger v. Dudley. Klinger prohibits a plaintiff from collecting against a third party judgment where the accident defendant has not paid the judgment in the first instance.

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