Governor Signs Law Affecting Health Care Subrogation

In 2009, New York passed a law whose intent was to eliminate the right of health care insurers to subrogate and assert a lien or otherwise encumber a personal injury or wrongful death action.  The law did not affect the ability of property insurance carriers to subrogate.  In the opinion of the New York Assembly, health insurers were “imperiling and preventing” the settlement of lawsuits by accident victims and others, which in turn “caus[ed] undue burdens and pressures upon the court system.”   Consequently, this 2009 legislation added provisions to New York’s General Obligations Law [1] to “protect parties to a personal injury or wrongful death settlement from lien, reimbursement and subrogation claims.”  The law contained an exception for “payments as to which there is a statutory right of reimbursement.”  Thus, for example, workers compensation carriers could still assert liens on tort actions notwithstanding the 2009 law, because the NY workers compensation law contains a statutory right of reimbursement.

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Statute of Limitations and the “Relation Back” Doctrine

Last month’s newsletter discussed a recent case out of Westchester Supreme Court involving a puff back that occurred at the home of Victoria Subin.  Ms. Subin thought she had retained Castle Oil to perform service work on her oil boiler and burner prior to the loss; but in fact, Castle Oil had made arrangements to have a separate company, “Dynamic Plumbing and Heating Incorporated” (“Dynamic”) to actually do the work.   Dynamic was instructed to use an unmarked vehicle when performing its service work (presumably, so as to keep Dynamic’s name a secret to the customer).

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Recovering from the General Contractor for Negligence of a Subcontractor

The rule in New York is that “Generally, a party who retains an independent contractor, as distinguished from a mere employee or servant, is not liable for the independent contractor’s negligent acts.” [1]   However, fortunately for the subrogation practitioner in New York, there are many exceptions to this general rule, as we will see in a moment.

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