MUELLER, KATHLEEN P. v. ELLIOTT, MARCUS J. , 31 N.Y.S.3d 346 ( 2016 )

SUPREME COURT OF THE STATE OF NEW YORK
Appellate Division, Fourth Judicial Department
188
CA 15-00833
PRESENT: CARNI, J.P., LINDLEY, DEJOSEPH, AND TROUTMAN, JJ.
KATHLEEN P. MUELLER, PLAINTIFF-RESPONDENT,
V MEMORANDUM AND ORDER
MARCUS J. ELLIOTT, ET AL., DEFENDANTS.
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SEDGWICK CLAIMS MANAGEMENT, INTERESTED
PARTY-APPELLANT.
HAMBERGER & WEISS, BUFFALO (SUSAN R. DUFFY OF COUNSEL), FOR INTERESTED
PARTY-APPELLANT.
Appeal from an order of the Supreme Court, Erie County (Patrick
H. NeMoyer, J.), entered August 11, 2014. The order granted
plaintiff’s application for an order approving the stipulation of
discontinuance of the action, nunc pro tunc.
It is hereby ORDERED that the order so appealed from is
unanimously reversed on the law without costs and the matter is
remitted to Supreme Court, Erie County, for further proceedings in
accordance with the following Memorandum: Plaintiff was injured while
working as a school bus driver when a driver lost control of his
vehicle on a slippery road and struck the bus, causing plaintiff to be
thrown from her seat into the bus stairwell. Plaintiff commenced this
action against both the driver and the owner of the vehicle that
struck the bus, but subsequently discontinued the action. Interested
party Sedgwick Claims Management (Sedgwick), the workers’ compensation
administrator for plaintiff’s employer, notified plaintiff that future
workers’ compensation benefits would be denied on the ground that
Sedgwick did not consent to the stipulation of discontinuance.
Sedgwick now appeals from an order granting plaintiff’s application
for judicial approval of the discontinuance, nunc pro tunc.
We agree with Sedgwick that, pursuant to Workers’ Compensation
Law § 29 (5), either carrier consent or judicial approval is required
where, as here, a plaintiff voluntarily discontinues a third-party
action (see Matter of Duffy v Fuller Co., 21 AD2d 725, 726; see
generally Matter of Roach v Hastings Plastics Corp., 57 NY2d 293, 295-
296; Shumski v Loya, 55 AD3d 716, 717). We further agree with
Sedgwick that plaintiff failed to include an affidavit of a physician
and omitted certain required information in her application seeking
judicial approval (see Workers’ Compensation Law § 29 [5] [a] - [e]),
but we conclude that such omissions did not require denial of the
application (see generally Manning v Peerless Ins. Co., 265 AD2d 900,
-2- 188
CA 15-00833
901; Merrill v Moultrie, 166 AD2d 392, 392, lv denied 77 NY2d 804).
Sedgwick further contends that Supreme Court’s approval of the
voluntary discontinuance was not reasonable and was prejudicial to
Sedgwick. It is well settled that “[a] motion for judicial approval
pursuant to Workers’ Compensation Law § 29 (5) is addressed to the
sound discretion of the . . . [c]ourt” (Shumski, 55 AD3d at 717). The
court must determine whether the carrier was prejudiced by the
settlement or discontinuance, which depends on whether the settlement
or discontinuance was “reasonable” (Buchanan v Scoville, 241 AD2d 965,
965; see McNally v Workers’ Compensation Bd., 103 AD3d 1236, 1236;
Matter of Gregory v Aetna Ins. Co., 231 AD2d 906, 906). On this
record, however, we cannot determine whether Sedgwick was prejudiced
by the discontinuation or otherwise assess the reasonableness of the
discontinuation (see McNally, 103 AD3d at 1236; Buchanan, 241 AD2d at
965-966; Matter of Dauenhauer v Continental Cas. Ins. Co., 217 AD2d
943, 944). We therefore reverse the order and remit to Supreme Court
for a hearing on that issue (see Buchanan, 241 AD2d at 965;
Dauenhauer, 217 AD2d at 944; see also McNally, 103 AD3d at 1236-1237).
Entered: May 6, 2016 Frances E. Cafarell
Clerk of the Court