Wade Clark Mulcahy LLP

<p style="text-align: justify;">Last month <a href="https://www.wcmlaw.com/2019/12/benefits-and-burdens-of-the-workers-compensation-bar-ny/">we discussed the case of <em>Bello v. City of New York</em></a> which barred plaintiff from commencing a direct personal injury suit against his employer.  Of note, the court found that once the Worker’s Compensation Board has made a finding that the plaintiff is an employee of a party, that party is collaterally estopped from arguing to the contrary in a personal injury action.</p>
<p style="text-align: justify;">In <em><a href="https://www.wcmlaw.com/wp-content/uploads/2020/01/Martinez-v-250-W.-43-Owner-LLC-2020-NY-Slip-Op-00058.pdf">Martinez v 250 W. 43 Owner, LLC,</a> </em>however, the First Department reiterated that in order for estoppel to attach, the party must have had an opportunity to participate in the Worker’s Compensation hearing.   In <em>Martinez</em>, third-party defendant, I&amp;G Group, Inc., moved for summary judgment dismissing the third-party claims in common law and contribution based on the worker’s compensation board finding that it was the plaintiff’s employer.</p>
<p style="text-align: justify;">The Supreme Court granted the motion, and defendants appealed.  The First Department reversed because, “where a defendant was not afforded an opportunity to cross-examine witnesses or present evidence at the prior hearing, the outcome of the hearing cannot have preclusive effect on that party.”  While the Worker’s Compensation Board has primary jurisdiction, it is not exclusive.  The Worker’s Compensation judge precluded defendants’ participation at the hearing because they were not parties in interest and as such, they were not able to present evidence challenging the identity of plaintiff’s employer.  The Court noted that, “”unless the Legislature expands the definition of parties in interest, the unfortunate result will be that a duplicative proceeding must be held and the issue of compensability adjudicated a new because defendants never had a full and fair opportunity to litigation the question.”</p>
<p style="text-align: justify;">As a practice point, it is always key to thoroughly investigate the Worker’s Compensation Board’s findings when formulating defenses.  Whether or not a party will be bound by the Worker’s Compensation Board’s findings is fact intensive and may create or eliminate potential affirmative defenses.</p>
<p style="text-align: justify;"><span>Thanks to Mehreen Hayat for her contribution to this post.  Please email <a href="mailto:mgauvin@wcmlaw.com">Michael Gauvin </a></span><span>with any questions.</span></p>
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