Carrier Permitted to Consolidate its APIP Subrogation Action With its Insured's Personal Injury Action

A court may, in its discretion, consolidate two lawsuits and have the two cases go before the same jury.  Under New York’s civil practice laws and rules, [1]  a judge may order consolidation where two lawsuits “involve[e] a common question of law or fact” and are pending before the same court.   Consolidation is “discretionary,” meaning the judge is not obligated to order two cases consolidated, but may do so if the circumstances warrant.

In June 2008, a vehicle struck an infant as he was crossing the street.  The infant’s father owned a car that was insured by Hanover Insurance.  Hanover paid Additional Personal Injury Protection (“APIP”) benefits toward the medical treatment for the infant. [2] The injured infant (through his parents) brought a personal injury lawsuit against the driver and owner of the vehicle that hit him (“Action No. 1).  Hanover filed its own lawsuit (“Action No. 2”) as subrogee of the injured plaintiff against the same driver and owner of the vehicle that hit the infant, seeking to recoup the APIP benefits Hanover had paid.  (NOTE:  New York’s high court has ruled that a subrogation suit seeking recoupment of APIP benefits must be filed within three (3) years of the date of the accident (not three years from the date first payment is made) or the claim is barred by the statute of limitations! ). [3]

Hanover filed a motion asking the court to consolidate its subrogation action (Action No. 2) with the personal injury lawsuit (Action No. 1).  The attorneys for the driver and owner of the vehicle opposed the motion, arguing that if the two lawsuits were tried before the same jury it would bring to the jury’s attention the existence of insurance.  (Normally a jury is not supposed to know that any party had insurance and is supposed to determine liability without regard to whether anyone has insurance.)   The court rejected this argument, finding that any possibility of prejudice to the defendants was outweighed by the possibility that there could be inconsistent verdicts if there were two separate jury trials.  The court found that the possibility of prejudice to the defendants could be mitigated by an appropriate jury instruction from the court.  The defendants appealed and the appellate court affirmed the lower court, allowing the two cases to be consolidated into one trial before one jury.

Bottom Line:  If you have an APIP claim, you should consider consolidating your claim with any pending personal injury action.  That way, the APIP carrier’s attorneys can work in conjunction with the personal injury attorney toward establishing liability of the third-parties, the two cases will run on the same track, and any settlement negotiations will of necessity involve  settling both the APIP claim and the personal injury claim.

[1] CPLR 602(a)
[2]APIP is an optional coverage that a motorist can purchase which provides additional coverage up to $100,000 above and beyond the mandatory PIP ($50,000) limits.
[3]Allstate a/s/o Walker v. Stein, 1 NY3d 416 (2004)