NY State Assembly Bill 2009-A7504

Assembly Bill A7504

2009-2010 Legislative Session

Provides for impact of collateral source payments upon tort claims for personal injury, property damage or wrongful death; repealer

download bill text pdf

Archive: Last Bill Status - Stricken

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 21, 2010	enacting clause stricken
Jan 06, 2010	referred to judiciary
Jun 17, 2009	amended on third reading 7504b
May 21, 2009	advanced to third reading cal.631
May 19, 2009	reported
Apr 20, 2009	print number 7504a
Apr 20, 2009	amend and recommit to judiciary
Apr 13, 2009	referred to judiciary

Bill Amendments

Original

B (Active)

2009-A7504 - Details

Laws Affected:: Rpld §4545 subs (a) & (b) & R4111 sub (e), amd §§4213 & 4545, R4111, CPLR; amd §5-101, add §5-335, Gen Ob L

2009-A7504 - Summary

Provides for the equal treatment of public and private defendants when considering the impact of collateral source payments in tort claims for personal injury, property damage or wrongful death; protects parties to the settlement of tort claims from certain unwarranted liens, reimbursements and subrogation claims.

2009-A7504 - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7504

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             April 13, 2009
                               ___________

Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
  Committee on Judiciary

AN ACT to amend the civil practice law and rules, in relation to  treat-
  ing  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

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions (a) and (b) of section 4545 of the civil prac-
tice law and rules are REPEALED.
  S  2.  Subdivision  (c)  of section 4545 of the civil practice law and
rules, as added by chapter 220 of the laws of 1986, is amended  to  read
as follows:
  [(c)]  (A) Actions for personal injury, injury to property or wrongful
death.  In any action brought to recover damages  for  personal  injury,
injury  to  property  or  wrongful  death,  where the plaintiff seeks to
recover for the cost of medical care, dental  care,  custodial  care  or
rehabilitation  services,  loss  of  earnings  or  other  economic loss,
evidence shall be admissible for consideration by the court to establish
that any such past or future cost or expense was or will,  with  reason-
able  certainty,  be  replaced or indemnified, in whole or in part, from
any collateral source [such as insurance  (],  except  for  life  insur-
ance[),  social  security  (except  those  benefits provided under title
XVIII of the social security act),  workers'  compensation  or  employee
benefit  programs  (except  such  collateral  sources entitled by law to
liens against any recovery of the plaintiff)]  AND THOSE PAYMENTS AS  TO
WHICH  THERE  IS A STATUTORY RIGHT OF REIMBURSEMENT.  If the court finds

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01597-06-9

A. 7504                             2

that any such cost or expense was or will, with reasonable certainty, be
replaced or indemnified from any SUCH collateral source, it shall reduce
the amount of the award by such finding, minus an amount  equal  to  the
premiums paid by the plaintiff for such benefits for the two-year period
immediately  preceding  the  accrual  of such action and minus an amount
equal to the projected future cost to the plaintiff of maintaining  such
benefits.  In  order  to find that any future cost or expense will, with
reasonable certainty, be  replaced  or  indemnified  by  the  collateral
source,  the  court  must find that the plaintiff is legally entitled to
the continued receipt of such collateral source, pursuant to a  contract
or  otherwise  enforceable  agreement,  subject  only  to  the continued
payment of a premium and such other  financial  obligations  as  may  be
required by such agreement.  ANY COLLATERAL SOURCE DEDUCTION REQUIRED BY
THIS SUBDIVISION SHALL BE MADE BY THE TRIAL COURT AFTER THE RENDERING OF
THE  JURY'S  VERDICT.    THE  PLAINTIFF  MAY PROVE HIS OR HER LOSSES AND
EXPENSES AT THE TRIAL IRRESPECTIVE OF WHETHER SUCH SUMS WILL LATER  HAVE
TO BE DEDUCTED FROM THE PLAINTIFF'S RECOVERY.
  S  3.  Subdivision  (d)  of section 4545 of the civil practice law and
rules is relettered subdivision (b).
  S 4. Subdivision (e) of rule 4111 of the civil practice law and  rules
is REPEALED.
  S 5. Subdivision (f) of rule 4111 of the civil practice law and rules,
as amended by chapter 100 of the laws of 1994, is relettered subdivision
(e) and amended to read as follows:
  (e)  Itemized  verdict  in  certain  actions.  In an action brought to
recover damages for personal injury,  injury  to  property  or  wrongful
death,  which is not subject to [subdivisions] SUBDIVISION (d) [and (e)]
of this rule, the court shall instruct the jury that if the jury finds a
verdict awarding damages, it shall in its verdict specify the applicable
elements of special and general damages upon which the  award  is  based
and  the  amount assigned to each element including, but not limited to,
medical expenses, dental expenses, loss of earnings, impairment of earn-
ing ability, and pain and suffering. Each element shall be further item-
ized into amounts intended to compensate  for  damages  that  have  been
incurred  prior  to  the  verdict and amounts intended to compensate for
damages to be incurred in the future. In itemizing amounts  intended  to
compensate  for  future  damages, the jury shall set forth the period of
years over which such amounts are intended to provide compensation.   In
actions  in which article fifty-A or fifty-B of this chapter applies, in
computing said damages, the jury shall be instructed to award  the  full
amount  of  future  damages, as calculated, without reduction to present
value.
  S 6. Subdivision (b) of section 4213 of the  civil  practice  law  and
rules,  as  separately  amended  by  chapters 485 and 682 of the laws of
1986, is amended to read as follows:
  (b) Form of decision. The decision of the court  may  be  oral  or  in
writing  and  shall  state  the facts it deems essential. In [a medical,
dental or podiatric malpractice action or in an action against a  public
employer  or  a  public  employee who is subject to indemnification by a
public employer with respect to such action or both, as such  terms  are
defined in subdivision (b) of section forty-five hundred forty-five, for
personal  injury or wrongful death arising out of an injury sustained by
a public employee while acting within the scope of his public employment
or duties, and in] any [other] action brought  to  recover  damages  for
personal  injury,  injury  to  property,  or  wrongful death, a decision
awarding damages shall specify the applicable elements  of  special  and

A. 7504                             3

general damages upon which the award is based and the amount assigned to
each  element,  including  but  not  limited to medical expenses, dental
expenses, podiatric expenses, loss of earnings,  impairment  of  earning
ability, and pain and suffering. In a medical, dental or podiatric malp-
ractice  action, [and in any other action brought to recover damages for
personal injury, injury to property, or  wrongful  death,  each  element
shall  be  further  itemized  into  amounts  intended  to compensate for
damages which have been incurred  prior  to  the  decision  and  amounts
intended  to  compensate  for  damages  to be incurred in the future. In
itemizing amounts intended to compensate for future damages,  the  court
shall set forth the period of years over which such amounts are intended
to  provide  compensation.  In  computing  said damages, the court shall
award  the  full  amount  of  future  damages,  as  calculated,  without
reduction to present value] COMMENCED ON OR AFTER JULY TWENTY-SIXTH, TWO
THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES SHALL BE ITEM-
IZED IN ACCORDANCE WITH SUBDIVISION (D) OF RULE FORTY-ONE HUNDRED ELEVEN
OF  THIS CHAPTER.  IN ANY ACTION BROUGHT TO RECOVER DAMAGES FOR PERSONAL
INJURY, INJURY TO PROPERTY OR WRONGFUL  DEATH,  OTHER  THAN  A  MEDICAL,
DENTAL  OR PODIATRIC MALPRACTICE ACTION COMMENCED ON OR AFTER JULY TWEN-
TY-SIXTH, TWO THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE  DAMAGES
SHALL  BE  ITEMIZED IN ACCORDANCE WITH SUBDIVISION (E) OF RULE FORTY-ONE
HUNDRED ELEVEN OF THIS CHAPTER.
  S 7. Section 5-101 of the general obligations law is amended by adding
a new subdivision 4 to read as follows:
  4. AS USED IN SECTION 5-335, THE TERM  "BENEFIT  PROVIDER"  MEANS  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.
  S  8.  The  general obligations law is amended by adding a new section
5-335 to read as follows:
  S 5-335. LIMITATION OF  NON-STATUTORY  REIMBURSEMENT  AND  SUBROGATION
CLAIMS  IN  PERSONAL INJURY AND WRONGFUL DEATH ACTIONS. WHEN A PLAINTIFF
SETTLES WITH ONE OR MORE DEFENDANTS IN AN ACTION  FOR  PERSONAL  INJURY,
MEDICAL, DENTAL OR PODIATRIC MALPRACTICE, OR WRONGFUL DEATH, IT SHALL BE
CONCLUSIVELY  PRESUMED  THAT THE SETTLEMENT DOES NOT INCLUDE ANY COMPEN-
SATION FOR THE COST OF HEALTH CARE SERVICES, LOSS OF EARNINGS  OR  OTHER
ECONOMIC  LOSS  TO  THE EXTENT THOSE LOSSES OR EXPENSES HAVE BEEN OR ARE
OBLIGATED TO BE PAID OR REIMBURSED BY A  BENEFIT  PROVIDER,  EXCEPT  FOR
THOSE  PAYMENTS AS TO WHICH THERE IS A STATUTORY RIGHT OF REIMBURSEMENT.
BY ENTERING INTO ANY SUCH SETTLEMENT, A PLAINTIFF SHALL NOT BE DEEMED TO
HAVE TAKEN AN ACTION IN DEROGATION OF ANY  NON-STATUTORY  RIGHT  OF  ANY
BENEFIT  PROVIDER  THAT  PAID  OR  IS  OBLIGATED  TO PAY THOSE LOSSES OR
EXPENSES; NOR SHALL A PLAINTIFF'S ENTRY INTO SUCH SETTLEMENT  CONSTITUTE
A  VIOLATION  OF  ANY  CONTRACT  BETWEEN  THE PLAINTIFF AND SUCH BENEFIT
PROVIDER. EXCEPT WHERE THERE IS A STATUTORY RIGHT OF  REIMBURSEMENT,  NO
PARTY  ENTERING INTO SUCH A SETTLEMENT SHALL BE SUBJECT TO A SUBROGATION
CLAIM OR CLAIM FOR REIMBURSEMENT BY A BENEFIT PROVIDER,  AND  A  BENEFIT
PROVIDER  SHALL  HAVE  NO  LIEN OR RIGHT OF SUBROGATION OR REIMBURSEMENT
AGAINST SUCH SETTLING PARTY, WITH RESPECT TO THOSE  LOSSES  OR  EXPENSES
THAT HAVE BEEN OR ARE OBLIGATED TO BE PAID OR REIMBURSED BY SAID BENEFIT
PROVIDER.
  S  9.  This  act  shall take effect immediately and shall apply to all
actions and proceedings commenced  on  or  after  such  date;  provided,

A. 7504                             4

however,  that  sections four through eight of this act shall also apply
to any action or proceeding which was commenced prior to such  effective
date  where,  as  of such date, either (a) a trial of the issues has not
yet  commenced,  or  (b)  the parties have not yet entered into a stipu-
lation of settlement.

2009-A7504A - Details

Laws Affected:: Rpld §4545 subs (a) & (b) & R4111 sub (e), amd §§4213 & 4545, R4111, CPLR; amd §5-101, add §5-335, Gen Ob L

2009-A7504A - Summary

2009-A7504A - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7504--A

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             April 13, 2009
                               ___________

Introduced  by  M.  of  A.  WEINSTEIN  --  read once and referred to the
  Committee on Judiciary -- committee discharged, bill amended,  ordered
  reprinted as amended and recommitted to said committee

AN  ACT to amend the civil practice law and rules, in relation to treat-
  ing 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

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions (a) and (b) of section 4545 of the civil prac-
tice law and rules are REPEALED.
  S 2. Subdivision (c) of section 4545 of the  civil  practice  law  and
rules,  as  added by chapter 220 of the laws of 1986, is amended to read
as follows:
  [(c)] (A) Actions for personal injury, injury to property or  wrongful
death.    In  any action brought to recover damages for personal injury,
injury to property or wrongful  death,  where  the  plaintiff  seeks  to
recover  for  the  cost  of medical care, dental care, custodial care or
rehabilitation services,  loss  of  earnings  or  other  economic  loss,
evidence shall be admissible for consideration by the court to establish
that  any  such past or future cost or expense was or will, with reason-
able certainty, be replaced or indemnified, in whole or  in  part,  from
any  collateral  source  [such  as  insurance (], except for life insur-
ance[), social security (except  those  benefits  provided  under  title
XVIII  of  the  social  security act), workers' compensation or employee
benefit programs (except such collateral  sources  entitled  by  law  to
liens  against any recovery of the plaintiff)]  AND THOSE PAYMENTS AS TO

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD01597-08-9

A. 7504--A                          2

WHICH THERE IS A STATUTORY RIGHT OF REIMBURSEMENT.  If the  court  finds
that any such cost or expense was or will, with reasonable certainty, be
replaced or indemnified from any SUCH collateral source, it shall reduce
the  amount  of  the award by such finding, minus an amount equal to the
premiums paid by the plaintiff for such benefits for the two-year period
immediately preceding the accrual of such action  and  minus  an  amount
equal  to the projected future cost to the plaintiff of maintaining such
benefits. In order to find that any future cost or  expense  will,  with
reasonable  certainty,  be  replaced  or  indemnified  by the collateral
source, the court must find that the plaintiff is  legally  entitled  to
the  continued receipt of such collateral source, pursuant to a contract
or otherwise  enforceable  agreement,  subject  only  to  the  continued
payment  of  a  premium  and  such other financial obligations as may be
required by such agreement.  ANY COLLATERAL SOURCE DEDUCTION REQUIRED BY
THIS SUBDIVISION SHALL BE MADE BY THE TRIAL COURT AFTER THE RENDERING OF
THE JURY'S VERDICT.   THE PLAINTIFF MAY PROVE  HIS  OR  HER  LOSSES  AND
EXPENSES  AT THE TRIAL IRRESPECTIVE OF WHETHER SUCH SUMS WILL LATER HAVE
TO BE DEDUCTED FROM THE PLAINTIFF'S RECOVERY.
  S 3. Subdivision (d) of section 4545 of the  civil  practice  law  and
rules is relettered subdivision (b).
  S  4. Subdivision (e) of rule 4111 of the civil practice law and rules
is REPEALED.
  S 5. Subdivision (f) of rule 4111 of the civil practice law and rules,
as amended by chapter 100 of the laws of 1994, is relettered subdivision
(e) and amended to read as follows:
  (e) Itemized verdict in certain  actions.  In  an  action  brought  to
recover  damages  for  personal  injury,  injury to property or wrongful
death, which is not subject to [subdivisions] SUBDIVISION (d) [and  (e)]
of this rule, the court shall instruct the jury that if the jury finds a
verdict awarding damages, it shall in its verdict specify the applicable
elements  of  special  and general damages upon which the award is based
and the amount assigned to each element including, but not  limited  to,
medical expenses, dental expenses, loss of earnings, impairment of earn-
ing ability, and pain and suffering. Each element shall be further item-
ized  into  amounts  intended  to  compensate for damages that have been
incurred prior to the verdict and amounts  intended  to  compensate  for
damages  to  be incurred in the future. In itemizing amounts intended to
compensate for future damages, the jury shall set forth  the  period  of
years  over which such amounts are intended to provide compensation.  In
actions in which article fifty-A or fifty-B of this chapter applies,  in
computing  said  damages, the jury shall be instructed to award the full
amount of future damages, as calculated, without  reduction  to  present
value.
  S  6.  Subdivision  (b)  of section 4213 of the civil practice law and
rules, as separately amended by chapters 485 and  682  of  the  laws  of
1986, is amended to read as follows:
  (b)  Form  of  decision.  The  decision of the court may be oral or in
writing and shall state the facts it deems  essential.  In  [a  medical,
dental  or podiatric malpractice action or in an action against a public
employer or a public employee who is subject  to  indemnification  by  a
public  employer  with respect to such action or both, as such terms are
defined in subdivision (b) of section forty-five hundred forty-five, for
personal injury or wrongful death arising out of an injury sustained  by
a public employee while acting within the scope of his public employment
or  duties,  and  in]  any [other] action brought to recover damages for
personal injury, injury to  property,  or  wrongful  death,  a  decision

A. 7504--A                          3

awarding  damages  shall  specify the applicable elements of special and
general damages upon which the award is based and the amount assigned to
each element, including but not  limited  to  medical  expenses,  dental
expenses,  podiatric  expenses,  loss of earnings, impairment of earning
ability, and pain and suffering. In a medical, dental or podiatric malp-
ractice action, [and in any other action brought to recover damages  for
personal  injury,  injury  to  property, or wrongful death, each element
shall be further  itemized  into  amounts  intended  to  compensate  for
damages  which  have  been  incurred  prior  to the decision and amounts
intended to compensate for damages to be  incurred  in  the  future.  In
itemizing  amounts  intended to compensate for future damages, the court
shall set forth the period of years over which such amounts are intended
to provide compensation. In computing  said  damages,  the  court  shall
award  the  full  amount  of  future  damages,  as  calculated,  without
reduction to present value] COMMENCED ON OR AFTER JULY TWENTY-SIXTH, TWO
THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES SHALL BE ITEM-
IZED IN ACCORDANCE WITH SUBDIVISION (D) OF RULE FORTY-ONE HUNDRED ELEVEN
OF THIS CHAPTER.  IN ANY ACTION BROUGHT TO RECOVER DAMAGES FOR  PERSONAL
INJURY,  INJURY  TO  PROPERTY  OR  WRONGFUL DEATH, OTHER THAN A MEDICAL,
DENTAL OR PODIATRIC MALPRACTICE ACTION COMMENCED ON OR AFTER JULY  TWEN-
TY-SIXTH,  TWO THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES
SHALL BE ITEMIZED IN ACCORDANCE WITH SUBDIVISION (E) OF  RULE  FORTY-ONE
HUNDRED ELEVEN OF THIS CHAPTER.
  S 7. Section 5-101 of the general obligations law is amended by adding
a new subdivision 4 to read as follows:
  4. AS USED IN SECTION 5-335 OF THIS ARTICLE, THE TERM "BENEFIT PROVID-
ER"  MEANS  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.
  S 8. The general obligations law is amended by adding  a  new  section
5-335 to read as follows:
  S  5-335.  LIMITATION  OF  NON-STATUTORY REIMBURSEMENT AND SUBROGATION
CLAIMS IN PERSONAL INJURY AND WRONGFUL DEATH ACTIONS. WHEN  A  PLAINTIFF
SETTLES  WITH  ONE  OR MORE DEFENDANTS IN AN ACTION FOR PERSONAL INJURY,
MEDICAL, DENTAL OR PODIATRIC MALPRACTICE, OR WRONGFUL DEATH, IT SHALL BE
CONCLUSIVELY PRESUMED THAT THE SETTLEMENT DOES NOT INCLUDE  ANY  COMPEN-
SATION  FOR  THE COST OF HEALTH CARE SERVICES, LOSS OF EARNINGS OR OTHER
ECONOMIC LOSS TO THE EXTENT THOSE LOSSES OR EXPENSES HAVE  BEEN  OR  ARE
OBLIGATED  TO  BE  PAID  OR REIMBURSED BY A BENEFIT PROVIDER, EXCEPT FOR
THOSE PAYMENTS AS TO WHICH THERE IS A STATUTORY RIGHT OF  REIMBURSEMENT.
BY ENTERING INTO ANY SUCH SETTLEMENT, A PLAINTIFF SHALL NOT BE DEEMED TO
HAVE  TAKEN  AN  ACTION  IN DEROGATION OF ANY NON-STATUTORY RIGHT OF ANY
BENEFIT PROVIDER THAT PAID OR  IS  OBLIGATED  TO  PAY  THOSE  LOSSES  OR
EXPENSES;  NOR SHALL A PLAINTIFF'S ENTRY INTO SUCH SETTLEMENT CONSTITUTE
A VIOLATION OF ANY CONTRACT  BETWEEN  THE  PLAINTIFF  AND  SUCH  BENEFIT
PROVIDER.  EXCEPT  WHERE THERE IS A STATUTORY RIGHT OF REIMBURSEMENT, NO
PARTY ENTERING INTO SUCH A SETTLEMENT SHALL BE SUBJECT TO A  SUBROGATION
CLAIM  OR  CLAIM  FOR REIMBURSEMENT BY A BENEFIT PROVIDER, AND A BENEFIT
PROVIDER SHALL HAVE NO LIEN OR RIGHT  OF  SUBROGATION  OR  REIMBURSEMENT
AGAINST  SUCH  SETTLING  PARTY, WITH RESPECT TO THOSE LOSSES OR EXPENSES
THAT HAVE BEEN OR ARE OBLIGATED TO BE PAID OR REIMBURSED BY SAID BENEFIT
PROVIDER.

A. 7504--A                          4

  S 9. This act shall take effect immediately and  shall  apply  to  all
actions  and  proceedings  commenced  on  or  after such date; provided,
however, that sections four through eight of this act shall  also  apply
to  any action or proceeding which was commenced prior to such effective
date  where,  as  of such date, either (a) a trial of the issues has not
yet commenced, or (b) the parties have not yet  entered  into  a  stipu-
lation of settlement.

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2009-A7504B (ACTIVE) - Details

Laws Affected:: Rpld §4545 subs (a) & (b) & R4111 sub (e), amd §§4213 & 4545, R4111, CPLR; amd §5-101, add §5-335, Gen Ob L

2009-A7504B (ACTIVE) - Summary

2009-A7504B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:A7504B                REVISED 6/22/09

TITLE OF BILL:  An act to amend the civil practice law and rules, in
relation to treating public and private defendants equally when consid-
ering 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 subroga-
tion claims; and to repeal certain provisions of the civil practice law
and rules relating to collateral source payments

PURPOSE OF BILL:  This legislation seeks to resolve certain significant
problems that have arisen in the context of the settlement of personal
injury and wrongful death actions. In addition, there is an exception in
the treatment of collateral sources in tort actions in that, unlike
private employers and all other defendants, public employers, when sued
by their employees, are not entitled to have awards for lost future
earnings offset by collateral sources of compensation, such as an acci-
dent disability pension, that the plaintiff will receive to replace
those same lost earnings.

SUMMARY OF PROVISIONS OF BILL:  This measure would amend CPLR § 4545 and
enact a new section 5-335 of the General Obligations Law so as to effect
the following changes:

1) it will now be conclusively presumed that, except with respect to

payments made by a benefit provider for which there is a statutory right
of reimbursement, the money paid in settlement of any personal injury or
wrongful death action did not include compensation for the losses or
expenses that were or will be paid by benefit providers;

2) a plaintiff in a personal injury or wrongful death action who settles
with one or more of the defendants in the action could henceforth not be
charged with thereby violating the provisions of any contract between
the plaintiff and a benefit provider;

3) except for those payments made by a benefit provider for which there
is a statutory right of reimbursement, no defendant that enters into a
settlement with the personal injury or wrongful death plaintiff shall be
thereafter subject to any benefit provider's claim for subrogation or
reimbursement; and,

4) those defendants who are "public employers" would now have the same
rights as all other defendants to reduce their liability by virtue of
collateral source payments that the plaintiff is reasonably certain to
receive.

In addition to those principal changes, the bill would codify the case
law permitting the plaintiff to prove his or her full damages at the
trial, this because the presence or absence of substantial medical or
other expenses may constitute telling circumstantial proof as to the
nature or severity of the injury for which compensation is sought.

The bill would also effect changes in CPLR Rule 4111 (concerning the
form of the jury verdict sheet), CPLR § 4213 (concerning the form of the
judge's decision in non jury cases) and CPLR § 4545. Most notably,
because all tort defendants would now stand equal in terms of the right
to deduct collateral source payments, the special provisions that
formerly governed medical malpractice defendants and public employer
defendants would be repealed.

One standard that would not change is that, as before, no defendant
would be permitted to reduce its damages by virtue of a prospective
collateral source payment unless that defendant established that the
plaintiff was "reasonably certain" to receive such payment. This has
always been intended to pose a high bar so as to assure that the most
seriously injured and deserving plaintiffs are not compelled to become
public charges by virtue of speculative or overly optimistic assumptions
regarding the availability of collateral resources. This long-existing
safeguard is even more important in this era in which few would regard
most prospective payments, especially payments that would allegedly be
made decades in the future, as "reasonably certain" to be received.

JUSTIFICATION:  CPLR § 4545 generally provides that a plaintiff who has
a personal injury, wrongful death or property damage action cannot
recover damages for any expense or loss that was or will be covered by a
collateral source, such as his or her health insurance. The statute,
which for historical reasons has three different subdivisions (one for
medical malpractice actions, one for actions against public employers,
and one for all other actions), exempts those collateral sources that
constitute liens against the plaintiffs recovery (e.g.  workers' compen-
sation payments).

As a separate matter, there is currently no statute that addresses or
limits the extent to which a benefit provider that paid for some of the
plaintiffs medical or other expenses can claim contractual reimbursement
or subrogation with respect to funds that it paid pursuant to an insur-
ance contract or other agreement. Nor, in the situation in which a
personal injury or wrongful death action is commenced to obtain compen-
sation for the same injuries that gave to the medical or other expenses
paid by the benefit provider, is there any statute that specifies wheth-
er or under what circumstances such a benefit provider can intervene as
a party in the personal injury or wrongful death actions.

Both of those statutory gaps have now become more critical in light of
the Court of Appeals' recent decision in Fasso v. Doerr, N.Y.3d, 2009
NYSlipOp 01320 (Feb. 24, 2009). Although CPLR § 4545 provides, in part,
tort defendants with the right to reduce their liability to plaintiff
with respect to those damages for which plaintiff has already been
compensated by virtue of insurance or other payments, Fasso makes any
such savings illusory. Under Fasso, the health insurer, FIMO, or other
benefit provider that paid for the loss in issue is entitled to sue the
tort defendant for the very damages that the plaintiff would be statuto-
rily barred from recovering. Fasso also suggests that benefit providers
may now be permitted to intervene en masse for that purpose, a state of

affairs that would delay disposition of such actions and also make such
actions much more expensive to litigate.

CPLR § 4545 originally was enacted in response to the medical malprac-
tice crisis of the 1980's, and represented legislative abrogation of the
longstanding "collateral source" rule at common law. It was hoped that
by precluding plaintiffs from recovering for those damages that were
compensated by other sources tort recoveries could be reduced and malp-
ractice premiums lowered. The legislature also sought to prevent
so-called "double recoveries" in which a plaintiff whose expense or loss
was covered by insurance or some other payor nonetheless recovered
compensation for the same "loss" from the defendant. Later, because
those goals were considered salutary in other types of cases, the legis-
lature made the statute applicable to all previously unaddressed proper-
ty damage, personal injury, and wrongful death actions.

For the most part, the statute has worked fairly well in the small
minority of cases that actually go all the way to verdict and judgment.
However, the absence of any statute defining or limiting subrogation and
reimbursement rights has created problems in the context of settlements,
problems that have been exacerbated by two Court of Appeals decisions.

                              I

One significant problem arises from the Court of Appeals decision in
Teichman v. Community Hosp. Of Western Suffolk, 87 N.Y.2d 514 (1996).
As a practical matter, because no defendant will ever knowingly pay more
in settlement than it would have to pay if the case went to trial and
the plaintiff won, no settlement will ever include compensation for
expenses that were paid by the plaintiffs insurance and which the plain-
tiff could therefore not recover at trial. Yet, the Court of Appeals
ruled in Teichman that an insurer that had paid some of the plaintiffs
or decedent's pre-trial medical or other expenses could in some
instances intervene in the personal injury or wrongful death action for
the purpose of seeking "reimbursement" from the plaintiffs settlement
funds.

The ruling in Teichman is problematic in three respects. First, in
preventing "double recoveries," the legislature certainly did not mean
to ensure that plaintiffs with meritorious claims were undercompensated
and did not intend that a the plaintiff who had the good fortune or
foresight to have insurance coverage should do worse than a plaintiff
who had no resources at all. But that is precisely the result that
Teichman engenders. When the plaintiffs insurer is allowed to force the
plaintiff to pay "reimbursement" from a fund that did not include any
compensation for the expense in issue, the plaintiff is effectively
being compelled to "reimburse" the insurer from settlement funds that
were provided to compensate for a different loss or expense, such as
non-economic loss, i.e. pain and suffering. This means that the plain-
tiff has become undercompensated for that other expense, as well as
being undercompensated overall.

Ironically, by allowing an insurer to obtain "reimbursement" from
settlement proceeds that as a practical matter would never include
compensation for the payments made by that insurer, the plaintiff who
settles his or her case and was "fortunate" enough to have insurance
coverage effectively becomes a self-insurer who ultimately winds up with
lesser compensation than if he or she had no insurance at all. More
accurately, such can occur if the plaintiff in fact settles, which leads
to the second problem.

Because this reimbursement problem in which the plaintiff effectively
becomes a self-insurer is limited to those cases in which the plaintiff
settles, the plaintiff is encouraged not to settle. Simply stated, the
Teichman rule concerning settlements makes it more difficult to settle
cases.

Finally, the very idea that any insurer that has paid a bill should be
permitted to intervene in the personal injury or wrongful death action
is itself a procedural nightmare to be avoided. Even in the simplest
case involving a single plaintiff and a single defendant, there may have
been several different insurers or other benefit providers that each
paid part of the plaintiffs medical or other expenses. The notion that
each and every such insurer can or should join the lawsuit is one that
will make litigation exponentially more expensive and more time-consum-
ing than ever before.

The problems engendered by the ruling in Teichman would be solved by a
new statute, section 5-335 of the general obligations law, that would
define and limit the rights of benefit providers, in particular by
recognizing the reality that tort settlements do not in fact include
compensation for previously covered losses and expenses. In recognizing
that to be so, the bill would assure that plaintiffs who had insurance
coverage are not penalized by being made into self-insurers and thus
denied a fair settlement. In precluding such factually unfounded claims
for reimbursement, the bill would secondarily preclude insurer inter-
ventions for reimbursement.

                                       II

The Court of Appeals' recent decision in Fasso creates a different prob-
lem, one that relates to subrogation rights.

When the legislature allowed defendants to avoid liability for those
expenses and losses for which the plaintiff had already been compen-
sated, the intent was not merely that defendants would not have to pay
the plaintiffs for those losses or expenses, but rather that the defend-
ants would not have to pay anyone for such already-covered losses or
expenses.

Although there is no statute that expressly says that the plaintiffs
insurer would be barred from recovering for a loss or expense that the
plaintiff was barred from recovering at trial, the assumption was that

the insurance company stood "in the shoes" of its insured and could have
no greater rights than its insured.

That assumption had become problematic in recent years, with some courts
indicating that such was the case and others indicating the opposite.
Now, with the Court of Appeals' February 2009 decision in Fasso, the
matter is no longer unclear.

Fasso holds that the insurer does not stand in the shoes of its insured
and that such assumption "misapprehends the nature of the equitable
subrogation doctrine." Fassor also holds that the plaintiffs insurer can
pursue its claim for subrogation even if, as actually was the case in
Fasso, the plaintiffs settlement provided only partial compensation for
the plaintiffs damages.

Although the Fasso Court acknowledged the principle that the plaintiff
should be "made whole" before the plaintiffs insurer can recover for its
out-of-pocket expense, the Court construed that principle to apply only
where the defendant lacked sufficient resources to pay the plaintiffs
entire damages and not when questionable liability or other circum-
stances (perhaps a significant comparative negligence defense, or
perhaps dire financial needs) induced the plaintiff to settle for
partial compensation of his or her damages.

By virtue of the recent ruling in Fasso, doctors, hospitals, or other
defendants who settle with the plaintiff remain liable for that which it
was not liable to pay plaintiff expenses or losses paid by benefit
providers -rendering the savings illusory. For example, in the hypothet-
ical case in which the plaintiff incurred $200,000 in medical expenses
that were fully covered by the plaintiffs insurance, the defendant would
"save" $200,000 in the settlement, but only to then pay the $200,000 to
the plaintiffs insurer. Thus, the Court's holding in Fasso effectively
nullifies the near-total abrogation of the collateral source rule as
enacted in the 1980's, as embodied in CPLR 4545, with respect to past
covered losses and expenses.

The ruling in Fasso also means that the plaintiffs insurer can insist
upon the defendant fully paying for the expense in issue even when the
plaintiff is only partially compensated by the settlement for his or her
losses. Thus, an insurer that was paid to assume the risk of loss can
insist on payment for 100% of its outlay even where the plaintiff-in-
sured was compensated for only 50% or even 20% of his or her loss.

Under this bill, a benefit provider would have no right of reimbursement
or subrogation against a settling defendant for those benefits paid to
or on behalf of plaintiff, unless set forth by statute. In thus limiting
the plaintiffs' insurers' rights to sue the tort defendants, the bill
would make the savings to such defendants a real one. The limitation on
subrogation provided for in section eight of this bill is applicable to
an action for personal injuries, medical, dental, or podiatric malprac-
tice, or wrongful death and is inapplicable to the subrogation of prop-
erty damage claims.

                                     III

The bill would also bring an end to the exception discussed in the Court
of Appeals' decision in Iazzetti v. City of New York, 94 N.Y.2d 183
(1999).

Due to the statutory history that is well described in the Iazzetti
decision, CPLR § 4545 currently allows all defendants other than "public
employers" to deduct further collateral source payments that the plain-
tiff is reasonably certain to receive. By contrast, defendants who are
"public employers" can deduct only past payments, not future payments.

The bill would provide "public employer" defendants 'lie same rights as
other defendants.

                                   IV

Although the bill would thus effect some substantial changes, the over-
riding intent is to close certain statutory gaps that were highlighted
by the Court of Appeals in Teichman and Fasso.

The understandable desire to prevent "double recoveries" would no longer
complicate and deter the settlement of personal injury and wrongful
death actions, and would no longer result in undercompensation of plain-
tiffs who had their own insurance coverage.

Actions would not become geometrically more complex with the inter-
vention of waves of insurers.

Any "savings" that the settling tort defendant might realize from the
circumstance that plaintiff had insurance would be a real savings, and
not one that is passed on to the plaintiffs' insurers.

All defendants would henceforth stand equal for purposes of collateral
source set-offs.

                                  V

This bill is similar, in substance, to one that had been previously
proposed by the Office of Court Administration's Advisory Committee for
Civil Practice. There are three principal differences.

First, although the Advisory Committee's bill contained the same main
features, this bill is limited in scope to the settlement of lawsuits
inasmuch as this has been the context in which the current problems
arise.

Second, the provisions limiting insureds' rights of subrogation and
reimbursement (which was also a component of the Advisory Committee's
proposal) were moved from the Civil Practice Law and Rules to the Gener-
al Obligations Law. This was done because most other statutory limits
upon contractual rights generally appear in the General Obligations Law,

whereas Article 45 of the CPLR deals with evidence and verdicts, not
settlements.

Finally, the effective date was altered so that the new sections of the
General Obligations Law would apply to as many post-enactment settle-
ments as possible. While legislative action was certainly warranted
post-Teichman, as was illustrated by the recommendations of the Advisory
Committee, the Court's recent holding in Fasso makes legislative action
all the more imperative. The Court in Fasso recognized this, and indeed
urged legislative re-examination of this area of law.

LEGISLATIVE HISTORY:  2008: A8364-B/S.5128-A - Passed Assembly/ S.Codes
2007; A.8364-A/S.5128- A. Cal/S.Cal

FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:  There will be a
positive impact on State and Local governments.

EFFECTIVE DATE:  Immediately and shall apply to all actions and
proceedings commenced on or after such date, provided, however, that
sections four through eight shall also apply to any action or proceeding
which was commenced prior to such effective date where, as of such date,
either (a) a trial of the issues has not yet commenced, or (b) the
parties have not yet entered into a stipulation of settlement.

2009-A7504B (ACTIVE) - Bill Text download pdf

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 7504--B
                                                        Cal. No. 631

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                             April 13, 2009
                               ___________

Introduced by M. of A. WEINSTEIN, RAIA -- Multi-Sponsored by -- M. of A.
  GORDON  --  read  once  and  referred to the Committee on Judiciary --
  committee discharged, bill amended, ordered reprinted as  amended  and
  recommitted  to said committee -- reported from committee, advanced to
  a third reading, amended and ordered reprinted, retaining its place on
  the order of third reading

AN ACT to amend the civil practice law and rules, in relation to  treat-
  ing  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

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivisions (a) and (b) of section 4545 of the civil prac-
tice law and rules are REPEALED.
  S  2.  Subdivision  (c)  of section 4545 of the civil practice law and
rules, as added by chapter 220 of the laws of 1986, is amended  to  read
as follows:
  [(c)]  (A) Actions for personal injury, injury to property or wrongful
death.  In any action brought to recover damages  for  personal  injury,
injury  to  property  or  wrongful  death,  where the plaintiff seeks to
recover for the cost of medical care, dental  care,  custodial  care  or
rehabilitation  services,  loss  of  earnings  or  other  economic loss,
evidence shall be admissible for consideration by the court to establish
that any such past or future cost or expense was or will,  with  reason-
able  certainty,  be  replaced or indemnified, in whole or in part, from
any collateral source [such as insurance  (],  except  for  life  insur-
ance[),  social  security  (except  those  benefits provided under title

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.

                                                           LBD01597-10-9

A. 7504--B                          2

XVIII of the social security act),  workers'  compensation  or  employee
benefit  programs  (except  such  collateral  sources entitled by law to
liens against any recovery of the plaintiff)]  AND THOSE PAYMENTS AS  TO
WHICH  THERE  IS A STATUTORY RIGHT OF REIMBURSEMENT.  If the court finds
that any such cost or expense was or will, with reasonable certainty, be
replaced or indemnified from any SUCH collateral source, it shall reduce
the amount of the award by such finding, minus an amount  equal  to  the
premiums paid by the plaintiff for such benefits for the two-year period
immediately  preceding  the  accrual  of such action and minus an amount
equal to the projected future cost to the plaintiff of maintaining  such
benefits.  In  order  to find that any future cost or expense will, with
reasonable certainty, be  replaced  or  indemnified  by  the  collateral
source,  the  court  must find that the plaintiff is legally entitled to
the continued receipt of such collateral source, pursuant to a  contract
or  otherwise  enforceable  agreement,  subject  only  to  the continued
payment of a premium and such other  financial  obligations  as  may  be
required by such agreement.  ANY COLLATERAL SOURCE DEDUCTION REQUIRED BY
THIS SUBDIVISION SHALL BE MADE BY THE TRIAL COURT AFTER THE RENDERING OF
THE  JURY'S  VERDICT.    THE  PLAINTIFF  MAY PROVE HIS OR HER LOSSES AND
EXPENSES AT THE TRIAL IRRESPECTIVE OF WHETHER SUCH SUMS WILL LATER  HAVE
TO BE DEDUCTED FROM THE PLAINTIFF'S RECOVERY.
  S  3.  Subdivision  (d)  of section 4545 of the civil practice law and
rules is relettered subdivision (b).
  S 4. Subdivision (e) of rule 4111 of the civil practice law and  rules
is REPEALED.
  S 5. Subdivision (f) of rule 4111 of the civil practice law and rules,
as amended by chapter 100 of the laws of 1994, is relettered subdivision
(e) and amended to read as follows:
  (e)  Itemized  verdict  in  certain  actions.  In an action brought to
recover damages for personal injury,  injury  to  property  or  wrongful
death,  which is not subject to [subdivisions] SUBDIVISION (d) [and (e)]
of this rule, the court shall instruct the jury that if the jury finds a
verdict awarding damages, it shall in its verdict specify the applicable
elements of special and general damages upon which the  award  is  based
and  the  amount assigned to each element including, but not limited to,
medical expenses, dental expenses, loss of earnings, impairment of earn-
ing ability, and pain and suffering. Each element shall be further item-
ized into amounts intended to compensate  for  damages  that  have  been
incurred  prior  to  the  verdict and amounts intended to compensate for
damages to be incurred in the future. In itemizing amounts  intended  to
compensate  for  future  damages, the jury shall set forth the period of
years over which such amounts are intended to provide compensation.   In
actions  in which article fifty-A or fifty-B of this chapter applies, in
computing said damages, the jury shall be instructed to award  the  full
amount  of  future  damages, as calculated, without reduction to present
value.
  S 6. Subdivision (b) of section 4213 of the  civil  practice  law  and
rules,  as  separately  amended  by  chapters 485 and 682 of the laws of
1986, is amended to read as follows:
  (b) Form of decision. The decision of the court  may  be  oral  or  in
writing  and  shall  state  the facts it deems essential. In [a medical,
dental or podiatric malpractice action or in an action against a  public
employer  or  a  public  employee who is subject to indemnification by a
public employer with respect to such action or both, as such  terms  are
defined in subdivision (b) of section forty-five hundred forty-five, for
personal  injury or wrongful death arising out of an injury sustained by

A. 7504--B                          3

a public employee while acting within the scope of his public employment
or duties, and in] any [other] action brought  to  recover  damages  for
personal  injury,  injury  to  property,  or  wrongful death, a decision
awarding  damages  shall  specify the applicable elements of special and
general damages upon which the award is based and the amount assigned to
each element, including but not  limited  to  medical  expenses,  dental
expenses,  podiatric  expenses,  loss of earnings, impairment of earning
ability, and pain and suffering. In a medical, dental or podiatric malp-
ractice action, [and in any other action brought to recover damages  for
personal  injury,  injury  to  property, or wrongful death, each element
shall be further  itemized  into  amounts  intended  to  compensate  for
damages  which  have  been  incurred  prior  to the decision and amounts
intended to compensate for damages to be  incurred  in  the  future.  In
itemizing  amounts  intended to compensate for future damages, the court
shall set forth the period of years over which such amounts are intended
to provide compensation. In computing  said  damages,  the  court  shall
award  the  full  amount  of  future  damages,  as  calculated,  without
reduction to present value] COMMENCED ON OR AFTER JULY TWENTY-SIXTH, TWO
THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES SHALL BE ITEM-
IZED IN ACCORDANCE WITH SUBDIVISION (D) OF RULE FORTY-ONE HUNDRED ELEVEN
OF THIS CHAPTER.  IN ANY ACTION BROUGHT TO RECOVER DAMAGES FOR  PERSONAL
INJURY,  INJURY  TO  PROPERTY  OR  WRONGFUL DEATH, OTHER THAN A MEDICAL,
DENTAL OR PODIATRIC MALPRACTICE ACTION COMMENCED ON OR AFTER JULY  TWEN-
TY-SIXTH,  TWO THOUSAND THREE, THE COURT'S DECISION AS TO FUTURE DAMAGES
SHALL BE ITEMIZED IN ACCORDANCE WITH SUBDIVISION (E) OF  RULE  FORTY-ONE
HUNDRED ELEVEN OF THIS CHAPTER.
  S 7. Section 5-101 of the general obligations law is amended by adding
a new subdivision 4 to read as follows:
  4. AS USED IN SECTION 5-335 OF THIS ARTICLE, THE TERM "BENEFIT PROVID-
ER"  MEANS  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.
  S 8. The general obligations law is amended by adding  a  new  section
5-335 to read as follows:
  S  5-335.  LIMITATION  OF  NON-STATUTORY REIMBURSEMENT AND SUBROGATION
CLAIMS IN PERSONAL INJURY AND WRONGFUL DEATH ACTIONS.  (A) WHEN A PLAIN-
TIFF SETTLES WITH ONE OR MORE DEFENDANTS IN AN ACTION FOR PERSONAL INJU-
RIES, MEDICAL, DENTAL, OR PODIATRIC MALPRACTICE, OR WRONGFUL  DEATH,  IT
SHALL  BE CONCLUSIVELY PRESUMED THAT THE SETTLEMENT DOES NOT INCLUDE ANY
COMPENSATION FOR THE COST OF HEALTH CARE SERVICES, LOSS OF  EARNINGS  OR
OTHER  ECONOMIC LOSS TO THE EXTENT THOSE LOSSES OR EXPENSES HAVE BEEN OR
ARE OBLIGATED TO BE PAID OR REIMBURSED BY A BENEFIT PROVIDER, EXCEPT FOR
THOSE PAYMENTS AS TO WHICH THERE IS A STATUTORY RIGHT OF  REIMBURSEMENT.
BY ENTERING INTO ANY SUCH SETTLEMENT, A PLAINTIFF SHALL NOT BE DEEMED TO
HAVE  TAKEN  AN  ACTION  IN  DEROGATION OF ANY NONSTATUTORY RIGHT OF ANY
BENEFIT PROVIDER THAT PAID OR  IS  OBLIGATED  TO  PAY  THOSE  LOSSES  OR
EXPENSES;  NOR SHALL A PLAINTIFF'S ENTRY INTO SUCH SETTLEMENT CONSTITUTE
A VIOLATION OF ANY CONTRACT  BETWEEN  THE  PLAINTIFF  AND  SUCH  BENEFIT
PROVIDER.
  EXCEPT  WHERE  THERE  IS  A STATUTORY RIGHT OF REIMBURSEMENT, NO PARTY
ENTERING INTO SUCH A SETTLEMENT SHALL BE SUBJECT TO A SUBROGATION  CLAIM
OR  CLAIM FOR REIMBURSEMENT BY A BENEFIT PROVIDER AND A BENEFIT PROVIDER
SHALL HAVE NO LIEN OR RIGHT OF SUBROGATION OR REIMBURSEMENT AGAINST  ANY

A. 7504--B                          4

SUCH  SETTLING PARTY, WITH RESPECT TO THOSE LOSSES OR EXPENSES THAT HAVE
BEEN OR ARE OBLIGATED TO BE PAID OR REIMBURSED BY SAID BENEFIT PROVIDER.
  (B)  THIS  SECTION SHALL NOT APPLY TO A SUBROGATION CLAIM FOR RECOVERY
OF  ADDITIONAL  FIRST-PARTY  BENEFITS  PROVIDED  PURSUANT   TO   ARTICLE
FIFTY-ONE  OF  THE INSURANCE LAW. THE TERM "ADDITIONAL FIRST-PARTY BENE-
FITS", AS USED IN THIS SUBDIVISION, SHALL HAVE THE SAME MEANING GIVEN IT
IN SECTION 65-1.3 OF TITLE 11 OF THE CODES, RULES AND REGULATIONS OF THE
STATE OF NEW YORK AS OF THE EFFECTIVE DATE OF THIS STATUTE.
  S 9. This act shall take effect immediately and  shall  apply  to  all
actions  and  proceedings  commenced  on  or  after such date; provided,
however, that sections four through eight of this act shall  also  apply
to  any action or proceeding which was commenced prior to such effective
date where, as of such date, either (a) a trial of the  issues  has  not
yet  commenced,  or  (b)  the parties have not yet entered into a stipu-
lation of settlement.

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Assembly Bill A7504

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